Category Archives: News

Indonesia urges ASEAN countries to improve maritime security

Foreign Affairs Minister Retno LP Marsudi urged the Association of Southeast Asian Nations (ASEAN) members to improve security in the regions waters during the ASEAN Ministerial Meeting (AMM) Retreat in Boracay, the Philippines, on Feb 20-21.

“Every country has the main responsibility of securing its waters. Hence, Indonesia calls on the ASEAN countries to take steps to improve maritime security, especially in the Sulu Sea, Sabah waters, and the surrounding areas,” Minister Marsudi stated during her visit to the Philippines, as quoted by a release on Tuesday.

The two maritime areas are prone to crimes at sea, since within the last two years, several Indonesian citizens had become victims of kidnapping in those waters, Minister Marsudi remarked.

Hence, Indonesia has taken several initiatives to help improve maritime security in the ASEAN waters through coordinated patrols, she noted.

Indonesia and the Philippines will also launch a roll-on/roll-off route serving Bitung in North Sulawesi and General Santos and Davao of the Philippines. The sea route is expected to improve connectivity and economic integration in the ASEAN region.

The AMM Retreat is the first foreign ministerial meeting of the ASEAN under the chairmanship of the Philippines in 2017.

The Philippines has set six priorities for the ASEAN during its chairmanship: People-Oriented, People Centered ASEAN; Peace and Stability in the Region; Maritime Security and Cooperation; Inclusive, Innovation-led Growth; ASEANs Resiliency; and ASEAN: A Model of Regionalism, A Global Player.

During the meeting, Minister Marsudi addressed several issues, such as the follow-up of the 28th and 29th ASEAN summits, the Philippines priorities in 2017, external relations of the ASEAN, and several regional and international issues.

Indonesia also highlighted the importance of ASEAN member countries to deliver concrete results to society.

The ASEAN should also strengthen its unity and centrality in facing regional and global challenges.

Several issues to be put forth by Indonesia are maritime security, counterterrorism, ASEAN economic cooperation, and protection of migrant workers, among others.

Source: Antara News

Indonesia-US want cooperation based on bilateral agreements

Industry Minister Airlangga Hartarto has said Indonesia will try to strengthen bilateral cooperation with the United States to boost trade between the two countries.

“For Indonesia, America is one of our strategic markets. Therefore, trade between the two countries should be increased,” Airlangga said in a statement after meeting with US Ambassador to Indonesia Joseph R. Donovan Jr. on Monday.

During the meeting, the minister said he was informed that the US government preferred to cooperate with countries through bilateral agreements.

The US is Indonesia’s third largest trading partner after China and Japan. The trade value from January to July last year reached US$13.2 billion, with Indonesian trade posting a surplus of $5.23 billion.

Airlangga said bilateral agreements between the two countries needed to be expanded because Indonesia wanted to increase textile exports to the country.

“Currently, the tariff on our textiles is 12.5 percent, while for Vietnamese textiles it is zero percent because the two countries have a bilateral agreement with one another,” he added.

Airlangga said US investors were expected to invest money in several industrial zones such as the Dumai zone in Riau, the Berau zone in East Kalimantan, the Gresik zone in East Java and the Kendal zone in Central Java. (bbn)

Source: The Jakarta Post

Fintech lending opens up opportunities for SMEs

The Indonesian Financial Services Authority (OJK) has just released a regulation on financial technology (fintech) lending, which stipulates rules in the provision of lending services based on information technology.

This fintech-based lending will not only play an important role in supporting the financial inclusion program that the government has recently promoted, but will also become an important alternative for unbankable individuals and micro, small and medium enterprises (MSMEs) to access funds to start and develop their businesses.

According to the World Bank, only 36 percent of Indonesians have access to banking services and merely 13 percent borrow from formal financial institutions. While there are almost 60 million MSMEs, which provide over 100 million jobs in the country. Most of them cannot get the financing they need to expand.

Conventional micro credit and the government-subsidized micro lending scheme micro credit program (KUR) have not been able to boost up young entrepreneurs and MSMEs on a massive scale. Despite the government’s guarantee, banks are still reluctant about lending to these potential borrowers, mainly due to administrative issues.

Inexperienced aspiring entrepreneurs and micro-scale enterprises often have neither sufficient collateral to secure a bank loan nor the financial track records for lenders to evaluate. Geographical constraints also remain a challenge that has hindered people in rural and eastern part of the archipelago to get access to traditional bank services. KUR loans are provided by only a small number of banks, which rely on their limited branches, thus financial access remains pretty low in remote areas.

Fintech lending could definitely address these issues. Through leveraging technology, fintech makes capital available to the underbanked and unleashes potential economic activity, creates job opportunities and generates growth in a more inclusive manner.

Fintech-based lending can potentially fill the country’s existing financing gap of almost Rp 1 quadrillion (US$75 billion). In addition, peer-to-peer lending and crowdfunding fintech particularly can tap into the MSMEs, of which only 20 percent are currently bankable. Giving them access to initial or additional funding will definitely enable them to launch or to expand their business.

OJK has also previously promoted branchless banking system, locally known as Laku Pandai, which enables banks and financial service firms to reach out to new customers without having to open physical branches.

While Laku Pandai has increased access to saving in rural areas, its services unfortunately have not included lending. The agents still require a borrower to apply through the bank’s local branch. The OJK argues though that Laku Pandai agents will soon be able to administer lending.

With its less bureaucratic style, fintech also offers innovative methods to evaluate its prospective creditors. Tala Mobile, for instance, comes up with an alternative for creditworthiness evaluation for traditionally unbankable population in various countries. Its smartphone app evaluates daily mobile activities of potential borrowers, from simply making frequent calls to parents to paying bills on time, to determine their reliability.

Once a potential borrower is approved, the money will be delivered digitally in minutes.

Smartphones are inevitably enabling capabilities in the lending industry. With Indonesia’s rapid mobile penetration and growing online commerce, fintech lending increases financial accessibility to the unreachable and accelerates financial inclusion.

M-Shwari in Kenya, for example, leverages the success of mobile money, M-Pesa, to offer paperless and branchless banking services, ranging from saving to accessing micro credit.

Indonesia’s smartphone owners are flourishing and are able to access the mobile internet. These are the perfect infrastructures for fintech lending to explore and expand throughout the archipelago.

Peer-to-peer lending can also open up economic opportunities for women. Social norms, like the burden of domestic chores and property ownership, are most of the time unfavorable to women, leaving them with limited access to capital.

Darrell West from the Brookings Institute argues on his book,

Going Mobile, that smartphones have significantly enabled women and minorities to obtain a broader range of financial access. Fintech lending lets women make their own economic decisions.

On the other hand, with the newly launched regulation, fintech lending provides investors with access to an alternative investment portfolio and within a safe and regulated setting.

Modalku, a local peer-to-peer lending platform, for instance now offers individual investors to chance to provide funding to chosen MSMEs with a deposit as low as Rp 10 million.

Diversifying one’s investment portfolio, even if only within one platform, by lending small amounts to as many different borrowers as possible, will diversify an investor’s risk.

It is expected that this fintech lending regulation will create a more conducive regulatory environment for both existing and upcoming fintech players. Fintech can potentially help the government to achieve its goals, producing 1,000 technopreneurs and digitizing 8,000 MSMEs by 2020. These are the areas where fintech has the potential to have a major impact.

Through fintech, MSMEs will be more administratively neat and transparent, thus it enables the government to better oversee their commercial activities and eventually generate more tax revenue. Conventional banks or the government collaborating with fintech firms could also increase the number of governmentbacked loans KUR being delivered.

To take into account, MSMEs now contribute to around 60 percent of Indonesia’s gross domestic product (GDP). This suggests that these micro, small and medium sized companies are in fact the backbone of the Indonesian economy, and in the event that they grow rapidly, then the economy of the whole country will accordingly develop more rapidly.

Indeed, digitalized lending is not a simple quick fix to the issue of financial inclusion. Fintech needs to further improve customer experience while maintaining its prudential responsibility. The government also needs to adapt its policy and administration to provide a more accommodating environment following fintech dynamics. Simplification and responsiveness should be key for the government to help fintech grow. By doing so, the government would facilitate MSME expansion and eventually create a more inclusive economic development.

Source: The Jakarta Post

Ambassador Donovan encourages more Indonesian students to study in the U.S.

US Ambassador to Indonesia Joseph R Donovan has encouraged more Indonesian students to study in the US, and vice versa, as a medium of better understanding.

Speaking to hundreds of students of Daar el-Qolam Islamic boarding school, Tangerang, Banten, on Monday, Donovan said that both nations unfortunately lacked sufficient historical people-to-people relations across generations.

He explained that Indonesia and the US have so much in common as diverse nations whose tolerance and respect are the sources of strength and inspiration.

“In America, these values had been questioned from time to time; but like Indonesia, I am confident that they will always prevail,” he noted.

Donovan previously discussed the positive impression of foreign students in the US, while speaking to groups of Indonesian students who just returned after their study in the US.

The advantage of studying overseas is to get new experiences. Such unique experiences might not always be good, because as in many parts of the world, there are also some intolerant people who have negative attitudes, he added.

Donovan was also impressed by the efforts taken by the students to help American students get a better knowledge of Indonesia.

“I believe they taught the beauty and tolerance of our country to their American friends. Hopefully, they will encourage more American students to come to Indonesia,” former Managing Director of the Washington Office of the American Institute in Taiwan stated.

According to Donovan, the US Embassy in Indonesia has been working hard to increase the number of Indonesian students studying in US universities, community colleges and high schools.

After having achieved success with almost 7 percent growth in the number of Indonesian students studying in US last year, the embassy will continue to encourage more Indonesians to pursue their study in US by holding the upcoming education fairs in Jakarta, Surabaya and Medan.

Donovan suggested that Indonesians who are interested to pursue their studies in the US should not only consider the university or colleges location, size, and focus of the study but also get the right combination offered by the university that really meets the students need.(*)

Source: Antara News

PLN to tap biomass energy in Papua

The state-owned electricity company PT PLN’s Papua and West Papua Region (WP2B) has been considering biomass-fueled power plants to produce sustainable electricity in Merauke regency, Papua.

The electricity company has signed an agreement with a private partner, PT Merauke Narada Energi, which developed the technology.

“PT Merauke Narada Energi will develop the power plant using biomass, which will be tested this year,” PLN WP2B general manager Yohanes Sukrislismono said in a release made available on Saturday.

He said PT Merauke Narada Energi was currently developing the biomass-fueled power plant with a capacity of 3.5 MW in Wapeko, Merauke. This supply is to be distributed to a special economic zone (KEK) in Salor, Merauke.

With the supply, the electricity in the regency, which has a peak load of 19.1 MW, is expected to be more reliable.

“We have an area of 250,000 hectares producing woodchips,” said Budi Basuki of PT Medco Energi.

He said his company had previously conducted research on the use of woodchips to fuel power plants. “This is just the first step,” Budi said.

The plant is the first to develop using forest-based renewable energy in the eastern Indonesian region.

The wood waste used for the plant comes from plantations of acacia, eucalyptus and meulaluca, which will be processed into fuel for the power plant. (wit)

Source: The Jakarta Post

70 percent of Indonesian villages have access to internet

The Indonesian Ministry of Village, Disadvantaged Region Development and Transmigration stated that approximately 70 percent of more than 74 thousand villages in the country had access to the Internet.

“Only 30 percent of the total villages in Indonesia have not had access to the Internet. We hope that all villages across Indonesian territory will have access to the Internet this year,” Indonesian Minister of Village, Disadvantaged Region Development and Transmigration Eko Putro Sandjojo stated after the launch of an application for discussing ways to develop the village on Tuesday.

The application is android based and can be accessed as a forum of communication between village officials and facilitators for rural development. The application was created under cooperation between the ministry and the Australian government.

Through the application, village officials and facilitators can share information about the management of the village. As many as four provinces have become models for implementing the application, namely Aceh, West Java, East Java and West Nusa Tenggara, the minister said.

“In future, this application will be accessed by the local community, so that they can also monitor the management of the village,” he noted.

Sandjojo added that the application was expected to enable the facilitators to provide support and ideas more efficiently and effectively for rural development. The application will particularly provide the latest data and information to the ministry.

“Using the right data, it is expected to establish the right policy anyway,” he added.

The ministry can also use the application to monitor and analyze problems faced by every village to be discussed further. Through the application, the ministry can identify villages that require further support in implementing the Village Act.

The ministry can also use the application to provide guidance, regulatory updates and information to the village facilitators and authorities directly.

Source: Antara News

Indonesia remains optimistic about bilateral ties with the US

The Indonesian government remains optimistic about its bilateral relations with the US following Donald Trump’s inauguration as the 45th president of the global superpower, as Indonesia’s main concern is its exports to the US.

While the US trade policy under President Trump might potentially lead to protectionism, it will not significantly affect Indonesian exports to the US, according to Director of the Executive Center of Reform on Economics Mohammad Faisal.

The US was Indonesia’s major trading partner, with trade balance reaching US$19.27 billion during the January-October 2016 period.

Indonesia’s export products to the US are mostly sought-after commodities, such as rubber, shrimp, and furniture, and it also includes manufactured products, such as footwear and textiles, he pointed out.

“The US is forecast to maintain its importation of products, including textiles, garments, and footwear, from countries that use cheap labor force, such as Vietnam and Indonesia,” he added.

Following his telephonic conversation to congratulate Trump, President Joko Widodo (Jokowi) expressed optimism that bilateral relations between Indonesia and the US will remain sound.

“I am optimistic that the relations between Indonesia and the US will be better, but it should be based on mutual benefits,” the president stated in Bogor, West Java, on January 22, 2017.

Jokowi recalled that during their telephone conversation, Trump told him that he had several friends and businesses in Indonesia.

Earlier, following the election of Republican candidate Trump, the government said Indonesia was preparing a set of foreign policies to enable the country to adjust to the change in the US government.

“The Indonesian government is currently involved in planning and preparations in response to the new political situation (in the US),” Johan Budi, President Jokowi’s special staff for communications, stated in Jakarta on Friday.

He also made assurance that the relationship between both nations would remain on good terms.

Jokowi had earlier noted that regardless of the candidate that the US public elects to be their next president, the bilateral relations between Indonesia and the US would continue to be close and warm.

Budi also remarked that the Indonesian government will continue to closely follow Trumps foreign policies in a bid to maintain sound relations between Indonesia and the US.

“We look at this as an anticipatory measure to prepare us for potential global changes, not only with regard to changes in the US foreign policy but also a general shift in global politics. This is something that the Indonesian government needs to do,” he affirmed.

In the economic field, Indonesia should aim for more business opportunities with the US, as Trump is a businessman, noted Rony Mamur Bishry, lecturer of American Studies at the University of Indonesia.

At a forum organized by the Habibie Alumni Program titled “Trump Presidency and its Impact to Indonesia” held on Jan 21, Bishry stated that Indonesia had to be more aware of potential business partnerships with the US industry, such as with its technology sector.

Due to his background in business rather than politics, Trump is expected to prioritize US economic interests over political formalities.

“He is a realistic businessman. As long as we can find intelligent businessmen to negotiate with him, I think Indonesias economic position with the US will be safe,” Bishry noted.

The US is ranked as the 10th-largest investor in Indonesia, with a total value of $430.40 billion in 2016, which is mostly in mining projects.

As the US is very competitive in the field of modern technology, he suggested that Indonesia should form partnerships with major US companies for developing knowledge and boosting its technology sector in fields, such as software, gaming, and animation.

Bishrys recommendations were in line with the governments goal of producing 1,000 technology-based entrepreneurs and 8,000 micro, small and medium enterprises by 2020. The digital technology sector, particularly financial technology, has the potential to have a major impact on the countrys economic development.

Meanwhile, Hikmahanto Juwana, an international law professor at the University of Indonesia, viewed Trump as being quite bold while mentioning terrorism by using the terms “radical Islamic terrorism.”

Trump implied that only “Islamic” terrorist groups would be wiped out, he pointed out.

“This can trigger both public and official discontent in the Islamic world against the US,” he added.

Maswadi Rauf, another professor from the University of Indonesia, pointed out that the Indonesian government should not harbor high hopes from the US government under President Trump, as he prefers to work with other Western countries rather than with developing nations, such as Indonesia.

He added that Trumps earlier comments, which could be perceived by some as being racist and anti-Islamic, would also affect Indonesia.

In December 2015, Trump had called for barring all Muslims from entering the US.

“Donald J. Trump is calling for a total and complete shutdown of Muslims entering the US until our countrys representatives can figure out what is going on,” his campaign press release was quoted as saying by CNN.

Trump had earlier also called for surveillance against mosques and said he was open to establishing a database of all Muslims living in the US.

“If Trumps anti-Islamic stance continues during his administration, the political turmoil it will cause to global politics will inevitably affect Indonesia,” Rauf concluded.

Source: Antara News.

Indonesia hopes to produce 9,500 MW of geothermal power in 2025

Geothermal power is expected to contribute 9,500 megawatts to the country’s energy requirement in 2025 when oil contribution is to be cutback by 30 percent.

Stability of production of geothermal power is more reliable as it is not affected by weather, Deputy Minister for Energy and Mineral Resources (ESDM) Arcandra Tahar said when visiting Pertamina Geothermal Energi (PGE) of Kamojang Area on Sunday (1/8).

The superiority in production stability makes geothermal power base load in electricity provision by state electricity company PLM for the public, Arcandra said.

Production of geothermal power as a base load would continue at full capacity when the use of power at its lowest level, he said.

“Geothermal power plants (PLTP) could continue to operate at full capacity while oil fueled and coal fired power plants have to be shut down as bad weather,” he said.

He said the challenge in the development of geothermal power is competitiveness of the geothermal power price.

The production cost of geothermal power is high making it less competitive in price facing power produced from other facility such as, gas, oil and coal fired power plants.

Data at the Geology department of the ESDM Ministry showed that Indonesia holds the largest reserve of geothermal in the world.

The data said Indonesia has known geothermal reserves of 29 GWe found in 265 locations in the country or around 40 percent of the worlds reserves.

If the potential could be fully converted into reality, the country would save 1.2 million barrels per day needed to generate energy, Arcandra said.

Meanwhile, Operation Director of PGE Ali Mundakir said by the end of 2016, the installed capacity of PGE was 537 MW electricity equivalent. Four of 14 Geothermal Working Area (WKP), have been in operation by PGE. They are Kamojang Area in West Java, Sibayak in North Sumatra, Lahendong in North Sulawesi, and Ulubelu in Lampung.

Five other WKP are operated by its partners including Sarulla in North Sumatra, Gunung Salak, Darajat, Wayang Windu, all three in West Java and Bedugul in Bali, Ali said.

He said the Kamojang Area is the first WKP in Indonesia producing geothermal power. It started commercial operation with PLTP Monoblok built in 1987 with a capacity of 250 kWe officially commissioned by then Mining and Energy Minister Subroto.

Commercial operation of the PLTP in Kamojang started in 1983 with Kamojang Unit-1 coming on line (30 MW), followed by Unit-2 and Unit-3 in 1987 each with a capacity of 55 MW.

“The three units of PLTP are owned by Indonesia Power (IP), a subsidiary of PLN. PGE, therefore, sold geothermal steam to IP,” Ali said.

The Unit – 4 of PLTP Kamojang came on line in 2008 with a capacity of 60 MW and PLTP Unit-5 in 2015 with a capacity of 35 MW.

PGE handled the jobs from explorations to development of the field as well as the construction and operation of the power plants.

“The output in electricity is sold to PLN which deals with the end users,” Ali said.

Altogether the total installed capacity of the Kamojang Area is 235 MW electricity equivalent, supplied to the high voltage 150 KV cabel of the Java-Madura-Bali interconnection.

Ali said the Kamojang Area has received a citation of Proper Emas (Gold) from the Ministry of Environment and Forestry in six successive years from 2011 to 2016.

On that Sunday, Arcandra also visited Geothermal Information Center (GIC), PLTP operation areas, Kamojang Crater tourist area, and Kamojang Eagle Conservation Center (PKEK), built by PGE in cooperation with the Natural Resources Conservation Center (BBKSDA) of West Java.

Accompanying Arcandra included Director General for New and Conservation Energy (EBTKE) Ridha Mulyana and Geothermal Director Yunus Saefulhak.

Source: Antara News

Surabaya airport named world’s most on-time airport

Juanda International Airport in Surabaya, East Java, has been recognized as the world’s most on-time airport in 2016 by UK-based air travel intelligence company OAG.

According to OAG’s research, Juanda International falls in the large airport category, as the airport welcomes 10-20 million passengers per year with an average on-time performance (OTP) of 90.30 percent.

OTP refers to arrivals and departures within 15 minutes of the scheduled times.

Moreover, news agency Antara reported that Honolulu International Airport in the US state of Hawaii ranked second with an average OTP of 87.53 percent, while Salt Lake International Airport in Utah, US, ranked third with a score of 87.2 percent.

In addition to being the world’s most on-time airport, Juanda International Airport ranked third in the OAG Punctuality League 2016. In this category, Birmingham International Airport in the UK was named the world’s most punctual airport with an average OTP of 91.28 percent, followed by Newcastle International Airport with 90.94 percent.

The OAG Punctuality League was based on 54 million flight records in 2016, which divided airports and airlines’ performance into several categories.

State-owned airport operator Angkasa Pura I director Danang S. Baskoro said he hoped Juanda’s achievement would motivate other airports in the nation to improve their on-time performance. (jes/kes)

Source: The Jakarta Post

Indonesian Students See Off 300 International Competitors in Airbus Engineering Competition

Three Indonesian teams from two local universities have beaten 300 international competitors to progress to the second round of Airbus’ “Fly Your Ideas” competition.

Garuda Ganesha and Pocket Rocket from Bandung Institute of Technology and Swing from Diponegoro University impressed the competition’s judges which comprised 60 Airbus engineers from its factories in France, Germany, Spain and England.

The judges have selected the best 50 teams from 38 countries to compete in the second round of the competition in January.

Garuda Ganesha came up with an innovative way to increase space efficiency inside an airplane’s cabin, while compatriot Pocket Rocket designed a theme park filled with unused Airbus planes.

Swing meanwhile came up with the “Smart Winglet Controlled by Artificial Intelligence” concept, maximizing fuel efficiency and introducing a new aerodynamic shape for a plane’s winglet.

“‘Fly Your Ideas’ offers unique opportunities for students around the world to interact with our engineers, who would also have a chance to absorb fresh ideas from these young people,” Airbus executive vice president Charles Champion said in a statement.

The best team in the competition will receive $31,000 in prize money at the final in May 2017. The runner-up will get $15,600.

Source: Jakarta Globe