Tulisan 10 (Corporate Access to Forex Expanded)

Corporate Access to Forex Expanded

Bank Indonesia again gives more room for the corporate sector to access forex at banks after previously revoking the regulation that once limited those top debtors early this year.The provision was contained in Bank Indonesia Regulation (PBI) No: 13/4/PBI/2011 on the Repeal of PBI No.10/22/PBI/2008 on the Fulfillment of Domestic Corporate Needs for Forex at Banks.In the previous regulation, PBI No.10/22/PBI/2008, the access to forex at banks by those debtors were somehow limited. Banks even can propose for the forex needs against rupiah to BI for those domestic corporate.Head Public Relations Bureau of Bank Indonesia, Difi A. Johansyah addressed such revocation aimed to show that Indonesias economy is already normal, enabling those corporate to directly access forex . Thus, the companies can now access forex at domestic market instead of going to BI, he said to Bisnis yesterday.He further added that such provision is also issued to anticipate the economic condition amidst the crisis specifically and to avoid speculative forex loans which may trigger currency fluctuation.Prior to his, PBI [Fulfillment of Domestic Corporate Needs for Forex at Banks) aims as an anticipative measure so that companies not rush for forex which may destabilize the currency, he said.Difi added that at the moment, central bank believes that the current economic condition is relatively normal, thus such provision needs to be revoked as the forex availability domestically is rather sufficient along with the excessive foreign inflow.During the 2008 crisis, rupiah touched IDR12,000 per US dollar following the rising forex needs either for corporate interest, capital accumulation or only for speculation.

Preventing speculationThus, BI issued such regulation to anticipate the currency speculation that may worsen rupiah even more. In such regulation, bank may propose forex needs against rupiah to BI as it only applies for governmental institutions.Besides, bank is prohibited to propose forex needs for any domestic corporate related to the bank. Any proposal relating to forex must have underlying economic activities in Indonesia.Underlying economic activities include forex debt settlement, import payment, and any other needs supported by legal documents or as long as the company exploits it neither for any transactions nor investment in the money market. Director of Bank Mutiara, Benny Purnomo supported such revocation since it may increase the corporate access to forex loan. The bank once named Century recorded an intensified forex transaction in its core business.By such revocation, the domestic company has more choices in fulfilling its funding needs. They can use both dollar and rupiah, he said. (T02/NOM)

Sumber : http://news.bisnis.com/read/20110201/186/21372/corporate-access-to-forex-expanded

Tulisan 9 (The Economy is Strong, The Future is Young)

Indonesia: The Economy is Strong, The Future is Young

When Tony Abbott declared the Coalition’s foreign policy would be “more Jakarta and less Geneva,” those of us with an interest in Indonesia/Australia relations were skeptical about how a party that has been so dedicated to politicising and catastrophising high profile aspects of the relationship could now be committed to strengthening it.

To the world, Indonesia is positioning itself as a vibrant, capable power, ready to take its legitimate place as a leading economic power. Yet the foreign policy of its nearest neighbour remains stuck in decades-old rhetoric that still fails to properly understand how to meaningfully and effectively engage.

Australia continues to characterise Indonesia through a colonialistic lens, evidenced by simplistic and unilateral rhetoric and policy on issues such as asylum seekers, the cattle trade and even aid.

This characterisation fails to recognise that Indonesia is Southeast Asia's largest economy and in the coming years will wield considerably more political and economic clout globally than Australia.

Over two 5-year terms, President Susilo Bambang Yudhoyono has made great diplomatic strides in reaching out to key international partners and positioning Indonesia as a significant global player with a key role in securing regional stability.

If Abbott is serious about positioning Indonesia as a central anchor for Australia’s foreign policy in the region, he should begin by paying attention to how much Indonesia has changed - and how little it really needs Australia.

Australia can no longer expect Indonesia to play nice when we implicate it in our politically inconvenient issues such as asylum seekers, or when we unilaterally suspend a significant export without warning or consultation. Abbott seems to have learnt this lesson after Indonesia’s very public smack down of the Coalition’s policy on turning back asylum seeker boats - so chastened was the new government that Immigration Minister Scott Morrison soon denied the tow-back policy had ever existed.

In this context, it seems the purported robustness of high level government links between the two countries has either been overestimated or is irrelevant in engendering broader engagement and understanding. Clearly something isn’t working.

Abbott must ultimately recognise that Australia needs Indonesia - economically, politically, diplomatically - more than Indonesia needs Australia.

The PM would also do well to pay attention to Indonesian greatest asset: its youth.

Half of Indonesia’s population is under the age of 30. After 4 decades of authoritarian rule, this generation will have the momentous task of consolidating Indonesia’s young democracy - a considerable undertaking encompassing 250 million people sprawled across the world's largest archipelagic state.

Much needs to be done in the area of education in both countries. Many more Indonesians are studying in Australia than vice-versa, creating an imbalance in the people-to-people exchange. Indonesia - and particularly its youth – has a greater depth and breadth of cross-cultural understanding and Australia is not particularly well poised to hook into Indonesia’s burgeoning economy.

In 2014 Indonesia will elect a new President in a test of the tension between the country’s authoritarian past and a burgeoning democracy: among the leading contenders for the election are aging ex-army generals accused of human rights violations. These remnants of former authoritarian rule will go up against the Governor of Jakarta Joko Widodo, whose style of “street democracy” is the antithesis of leaders of the past. Jokowi, as he is known, is popular with young people and widely seen as the front-runner without even being nominated yet.

    Indonesia is a country in flux between the old and new, still coming to terms with its young, unwieldy democracy. If Australia is to truly engage with Indonesia it must stop using the same old tired approaches, ditch the rhetoric, and fundamentally rethink its colonialistic framing of foreign policy.

Sumber : http://www.sbs.com.au/news/article/2013/10/25/comment-indonesia-economy-strong-future-young

Tulisan 8 (Indonesia's Strong Economic Growth Lures Property Investment)

Indonesia's Strong Economic Growth Lures Property Investment

With China's economic growth stalling and regulators there and in Hong Kong and Singapore trying to restrain their property markets, investors are turning their attention to Southeast Asia, and particularly Indonesia.

John van Oost, managing partner of Singapore-based Yishan Capital Partners, visited Hong Kong recently on a fund-raising mission. His company has launched a fund to invest in Southeast Asia, targeting US$250 million in assets, and has already committed US$25 million.

There are good reasons for that kind of optimism, particularly in Indonesia. It has stabilised politically and its fundamentals look strong, with real estate brokerage Jones Lang LaSalle calling it "one of the bright spots in the regional economy".

Chinese investors are often attracted by the way Chinese Indonesians control large parts of the economy, while Dutch investors like their historic connections to the former colony.

The country posted 6.2 per cent GDP growth in the third quarter, only marginally lower than in the previous three months. Exports are slowing but domestic demand provides a strong underpinning.

IHS Global Insight is forecasting growth of about 6 per cent both this year and next, thanks to buoyant consumer demand and investment spending. That's the second-fastest economic growth in Asia, behind only China.

It is partly because China's growth is slowing that Indonesia has started to attract institutional investors. Both the rents and capital values of office property are rising in Jakarta, with rents up 26.6 per cent this year alone.

The Indonesian capital has an investment-grade supply of 1.5 million square metres, with the WTC II project having just been completed and the DBS Tower due to finish construction shortly. Jones Lang LaSalle says there are only three investment-grade projects scheduled for completion next year and 2014, although there are more due the year after that.

Van Oost also likes investments in warehouses, which benefit from Indonesia's strong domestic demand and growth in consumer spending. His fund has invested in logistics centres in Jakarta and Surabaya, as well as a residential project in the capital and a shopping centre in Bali, just south of the airport at Denpasar.

Not everybody agrees that Indonesia holds great potential. The Asia Pacific office of Grosvenor, the property investment arm of the Duke of Westminster, has expanded rapidly in Asia, including Hong Kong residential projects in Repulse Bay, on Castle Peak Road, and at Jardine's Lookout. It had HK$7.6 billion in assets under management at the end of last year, and aims to increase its allocation to Asia to 20 per cent of Grosvenor's portfolio.

When it comes to investing in Indonesia "Good luck" is the comment from Nicholas Loup, chief executive of Grosvenor's Asia Pacific office. From his Hong Kong base, he prefers more established markets.

Van Oost agrees that Indonesia isn't for everybody, given the lack of understanding of its property market and economy. "People have a lot of preconceived ideas," he said. "People either love it or don't. Even if they like it, it's often for no real reason."

Slowing growth in China is creating the interest in Indonesia, according to John Saunders, the Hong Kong-based chief executive for Asia of MGPA, a private-equity property specialist in opportunist investments.

"There is certainly an interesting property story going on in Indonesia at the moment," he said. "My slight concern is that in some of these markets there is a lot of land available. The rents will go up and then everybody starts building because there is not too much of a constraint on supply. But it doesn't have the constraints of Hong Kong or Singapore."

MGPA has a US$3.9 billion Asia-focused opportunity fund, as well as a core-plus fund that raised €85 million (HK$837 million) in its first close, and expects to have a second close at the end of this year at €100 million.

But Indonesia is a market that Saunders is watching for potential future investment, while he seeks more reliable office and shopping-centre investments in Japan, Australia and China.

Sumber : http://www.scmp.com/property/international/article/1081716/indonesias-strong-economic-growth-lures-property-investment

Tulisan 7 (Indonesian Economy Faces Continuing Economic Turbulence)

Indonesian Economy Faces Continuing Economic Turbulence

On Wednesday, the US Federal Reserve announced that its “quantitative easing” (QE) policy of pumping $US85 billion a month into financial markets would continue. The decision was greeted with sighs of relief among the South East Asian finance ministers gathered at the Asia Pacific Economic Cooperation (APEC) meeting in Bali, Indonesia.

No national delegation was more pleased than that of the host country Indonesia, where the expectation that the Fed would begin “tapering” its quantitative easing has hit the currency, shares and financial markets. On Wednesday’s news, the Jakarta stock exchange rose almost 5 percent and the embattled rupiah gained 4 percent.

The QE decision was unexpected. On May 22, when Fed chief Ben Bernanke hinted that tapering would start, Indonesian shares and the rupiah suffered. Indonesia had been a significant recipient of short term capital inflows spurred by the QE funds in the US. According to International Monetary Fund estimates, around $1.1 trillion has flowed into so-called emerging economies.

Indonesia is among the most vulnerable to changes in global capital flows because of its relatively high current account deficit. In the June quarter, the deficit was 4.4 percent of gross domestic product. In July, its trade deficit reached $2.3 billion. Net oil imports contributed to 83 percent of the deficit. The inflow of funds generated by the QE policy covered Indonesia’s trade deficit and the interest on its foreign borrowing.

Since May, the Indonesian stock market has been hit by a large outflow of portfolio investment that wiped out big gains made in the previous five months. In the month from July to August, share values fell 11.6 percent.

Indonesia has benefited from large direct foreign investment inflows, with this realised investment hitting a record of $32.4 billion on 2012. However, the government of President Susilo Bambang Yudhoyono has predicted a fall in foreign investment, pointing to a decline in capital-goods imports in the last quarter by 16.3 percent year-on-year.

The Bank of Indonesia has been forced to defend the rupiah. The currency has declined 18 percent against the US dollar since May. Its fall in the June quarter was the worst of the 24 emerging markets, and nearly seven times that of the Philippines peso.

On September 12, the Bank of Indonesia raised its key interest rate by 0.25 percent to 7.25 percent. This was the highest level since 2009, and marked the fourth increase this year. The central bank had previously lifted the rate by 0.5 percent just a fortnight ago. In its statement, the bank also revised estimated gross domestic product growth for the year down from 5.8 to 6.2 percent, to the range of 5.5 to 5.0 percent.

Only a year ago, Indonesia was touted in the international financial press and among investment fund managers as an example of how emerging economies would counteract economic stagnation in Europe and the US and the developing slowdown in China. The main factor, however, was the large inflow of speculative, short-term funds.

From 2000 to 2012, according to a Bloomberg report published in the Jakarta Globe on September 11, the emerging economies grew at an annual rate of 5.9 percent, compared with 1.8 percent for the US. Speculative capital also helped keep commodity prices high until 2012.

Finance ministers at this week’s APEC meeting signalled their own onslaught on the working class. South Korean finance minister Hyun Oh-seok told the meeting that major structural reforms were needed in emerging economies to prepare for future Fed action. Former Indonesian Finance Minister Sri Mulyani Indrawati declared: “We at least know how the market will react (to tapering if that happens)... so they can have six months to prepare.”

On Friday, Bank of Indonesia governor Agus Martowardojo warned that Indonesia must prepare. “We must be able to use the time frame provided by the Fed’s tapering delay to conduct structural reforms of monetary and fiscal aspects,” he said. One of the areas for “reform” he targeted was labour costs. The central banker’s comments foreshadow further deep inroads into the living standards of working people, with cuts to real wages and food subsidies in particular.

Sumber : http://www.wsws.org/en/articles/2013/09/21/indo-s21.html