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Indonesian Bonds Offers the Highest Yield

Indonesia's local-currency bonds have handed investors a 10 percent gain this year, the best performance among 10 local- currency Asian debt indexes compiled by HSBC Holdings Plc. Investors snapped up the debt as a 9 percent rally in the rupiah since Jan. 1 and $5.5 billion in standby loans from multilateral lenders boosted confidence in the nation's finances. Moody's Investors Service on June 11 raised Indonesia's credit rating outlook to "positive," which may lead to an increase in credit rating in the next 18 months. Moody's rates Indonesia Ba3, the third highest non-investment-grade rating.

The central bank, which started cutting rates in December, will lower the reference rate tomorrow by a quarter-percentage point to 6.75 percent, 16 of 20 economists predicted in a Bloomberg survey. Four predicted no change. Indonesia's bonds will extend a rally that pushed yields to a 16-month low as cooling inflation allows the central bank to cut interest rates, ING Groep NV, PT Mandiri Sekuritas and Australia & New Zealand Banking Group Ltd. said. Yields on 10-year notes will drop 1.5 percentage points to 9.5 percent by the end of this year, the lowest level since November 2007, said Handy Yunianto, a Jakarta-based bond analyst at Mandiri. Five-year bond yields will drop 70 basis points to 9 percent, ING said. "Falling inflation is positive for bonds," Prakash Sakpal, an economist in Singapore at ING, the largest Dutch financial- services company, said in an interview yesterday. Sakpal said Bank Indonesia will lower borrowing costs at a meeting tomorrow.

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Hot Emergent Market: Indonesia

Southeast Asia's largest economy may grow 60 percent in the next five years to $800 billion due to a stable administration, lower capital costs and a government plan to spend as much as $34 billion to build roads, ports and power plants by 2017, Morgan Stanley said. Leaders of the nations known as BRIC will meet this week in the Russian city of Yekaterinburg.

Southeast Asia's largest economy may grow 60 percent in the next five years to $800 billion due to a stable administration, lower capital costs and a government plan to spend as much as $34 billion to build roads, ports and power plants by 2017, Morgan Stanley said. Leaders of the nations known as BRIC will meet this week in the Russian city of Yekaterinburg. Indonesia may expand as much as 4 percent this year, making it the fastest-growing major economy in Southeast Asia, according to the International Monetary Fund. Morgan Stanley expects 3.7 percent growth this year.

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Rupiah and Korean Won rose this week, leading Asian currencies

The rupiah extended this quarter's gain, the best performance in Asia. The MSCI Asia Pacific Index of stocks climbed for a fourth day as Australia's economy unexpectedly expanded in the first quarter. The Philippine peso strengthened on speculation falling borrowing costs will help revive economic growth.

The Indonesian rupiah and the Korean Won gained after data from the U.S. and Australia added to signs of a global economic recovery, giving investors the confidence to buy emerging-market assets.

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Indonesia cut its interest rate

The Bank Indonesia cut its benchmark rate by 25 basis points to an all-time low of 7% in June.

The rate cut came in line with expectations. This is the lowest level since July 2005, when the measure was first introduced. In May, the central bank had slashed its benchmark rate by a quarter point to 7.25%.

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Indonesia Casts Doubt On ASEAN Integrated Capital Market

Indonesia expressed their doubts on the viability of an integrated capital market among ASEAN member states by 2015.

Indonesia expressed their doubts on the viability of an integrated capital market among ASEAN member states by 2015. The chairman of the capital market and financial institution supervisory agency (Bapepam-LK) Fuad Rahmany said that there is a lack of a common regulatory framework shared between the countries for the region to implement an integrated capital market by 2015. He also added that the region has the problem of synchronizing the regulations that were issued by each member country particularly because most of the ASEAN member states have inherited deep-rooted legal systems from their former colonial occupiers, making it difficult to adopt a single regulation to suit all needs.

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Indonesia Eyes More Currency Swap Agreements

Indonesia is looking to forge more bilateral currency swap agreements with other countries to bolster confidence and ease volatility of the rupiah against the US dollar.

Indonesia is looking to forge more bilateral currency swap agreements with other countries to bolster confidence and ease volatility of the rupiah against the US dollar. This comes after the country signed a Rp 175 trillion or 100 billion yuan ($15 billion) currency swap agreement with China to provide short-term foreign exchange liquidity and help boost bilateral trade and investment. Currency swap agreements would eventually reduce the need for US dollars because bilateral trade between the two agreeing nations could use the currency under the swap deal.

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Indonesia Not To Let Rupiah Fall To Help Export

Bank Indonesia said it will not let the rupiah fall against the dollar to make exports more competitive amid slumping global demand, arguing that such a move carries risks as well.

Bank Indonesia said it will not let the rupiah fall against the dollar to make exports more competitive amid slumping global demand, arguing that such a move carries risks as well. These risks include further exposing local companies to overseas debts. Most of Indonesia's debts, both in the private and the public sectors, are denominated in US dollars. The rupiah has already weakened 7.3 percent this year and is one of the worst performing currencies in Asia against the US dollar.

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Corporate Overseas Debt Poses Risk to Indonesian Reserves

The Bank of Indonesia revealed that over $22.6 billion worth of overseas debts, or about 42 percent of the country's existing foreign exchange reserves, are set to mature by the end of this year, which poses a threat to the country's economy.

The Bank of Indonesia revealed that over $22.6 billion worth of overseas debts, or about 42 percent of the country's existing foreign exchange reserves, are set to mature by the end of this year, which poses a threat to the country's economy. The bank, however, was quick to assure that the maturing debt amount was 'still within safe limits according to World Bank criteria'. But these overseas debts were among the factors that might lead to the weakening of the rupiah against the dollar.

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Indonesia To Get $1b Standby Loan

Indonesia is finalizing an agreement to get a $1 billion (Rp 12 trillion) standby loan from the Islamic Development Bank (IDB) and the French government to help prop up its economy during the global financial crisis.

Indonesia is finalizing an agreement to get a $1 billion (Rp 12 trillion) standby loan from the Islamic Development Bank (IDB) and the French government to help prop up its economy during the global financial crisis. It is expected that the country will get $500 million from the IDB and $500 million from the French government. Prior to this agreement, Indonesia already received $5.5 billion.

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Indonesia, Malaysia Push For Sub-Regional Cooperation

Indonesia and Malaysia are pushing the region's private sectors and administrations to initiate sub-regional development cooperation.

Indonesia and Malaysia are pushing the region's private sectors and administrations to initiate sub-regional development cooperation. The two countries pledged to work together within the sub-regional framework of the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA). They argue that there are good opportunities for cross-border sub-regional economic development and cooperation in energy, agriculture, agribusiness, mining and forestry.

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Indonesian Government Gears Up To Limit Free Trade Deal Adversities

The Indonesian government is preparing to provide financial and technical support for the country's meat and tropical fruit businesses ahead of the ASEAN-Australian and ASEAN-New Zealand free trade agreements (FTA).

The Indonesian government is preparing to provide financial and technical support for the country's meat and tropical fruit businesses ahead of the ASEAN-Australian and ASEAN-New Zealand free trade agreements (FTA). The Ministry of Agriculture proposed to use Rp 145 billion (US$12.18 million) from this year's stimulus package to help boost their competitiveness against foreign competitors. These businesses are expected to face problems after the FTA's are implemented. Under the FTA, Indonesia will completely remove its import duties on fourth beef products from Australia and New Zealand by 2020 and on seven dairy products between 2017 and 2019.

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Indonesian Banks Starting to Lend Less

Latest data from the central bank of Indonesia shows that the country's banks are starting to reduce lending to seek safety in short-term central bank certificates as the global economic downturn continues to unravel.

Latest data from the central bank of Indonesia shows that the country's banks are starting to reduce lending to seek safety in short-term central bank certificates as the global economic downturn continues to unravel. Outstanding loans fell from Rp 1,307.69 trillion in December to Rp 1,289.84 trillion ($107.26 billion) in January. Placements by banks at the central bank rose from Rp 322.33 trillion in December to Rp 346.84 trillion. This decline in loans is seen as a wake up call for the economy as companies now have less room to expand due to lower demand and interests on loans by banks are still considered to be too expensive.

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Total Indonesian Workers Laid Off Reach Over 200,000

Over 237,500 workers in Indonesia have been laid off between October 2008 and March 2009.

Over 237,500 workers in Indonesia have been laid off between October 2008 and March 2009. The Indonesian Employers Association (Apindo) reported that the actual total for job layoffs due to the impact of the global economic downturn was a lot higher than the government's latest figure of about 30,000 workers. Most of the workers currently being laid off are either daily or outsourced workers, not permanent staff. Laid off workers come from a variety of industries, including the textile and garment industry, the shoes sector, the automotive and spare parts industry, construction sector, palm oil plantations and the pulp and paper industry. Apindo urged the government to immediately disburse the already agreed Rp73 trillion ($6.8 billion) stimulus package to reduce layoffs.

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Kadin Calls On Banks To Cut Rates To Boost Real Sector

The Indonesian Chamber of Commerce and Industry (Kadin) has renewed its calls on banks to follow the central bank and cut their lending rate to provide support for the real sector.

The Indonesian Chamber of Commerce and Industry (Kadin) has renewed its calls on banks to follow the central bank and cut their lending rate to provide support for the real sector. The country's central bank cut its benchmark rate by 50 basis points to 7.75 percent last week, its lowest in five years. Normally, banks need two to three months to adjust to the central bank's benchmark rate. But the severity of the current global economic downturn prompted for more direct and immediate action. The Kadin wants the government to help businesses to stimulate the domestic market, especially because of the significant decline in the country's exports.

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Indonesian Rupiah Posts Eight Weekly Loss On Risk Aversion

The Indonesian rupiah declined for the eight straight week, the longest stretch since June 2004, on concerns that the global recession is discouraging foreign investors from buying risky assets.

The Indonesian rupiah declined for the eight straight week, the longest stretch since June 2004, on concerns that the global recession is discouraging foreign investors from buying risky assets. The rupiah has lost 7.5 percent of its value this year, the third worst performing currency among the ten most active currencies in Asia outside Japan. The currency dropped 0.2 percent to12,000 as of March 6.

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Indonesia: State-Funded Projects To Roll In Next Two Weeks

Indonesia's massive infrastructure program will be kick-started by the beginning of the construction of state-funded projects in the next two weeks.

Indonesia's massive infrastructure program will be kick-started by the beginning of the construction of state-funded projects in the next two weeks. The projects are financed by the Rp 12.2 trillion fund for infrastructure, which is part of the Rp 73.3 trillion stimulus package. The government expects to start feeling the effects of the infrastructure stimulus by June. The infrastructure stimulus will finance many projects, including those involving public works, transportation, energy and mineral resources, and people's housing.

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Indonesia Gets $5.5 Billion In Loans

Indonesia has officially agreed to receive $5.5 billion of loans from Australia, Japan, the World Bank, and the Asian Development Bank to help plug the budget deficit and to stimulate the weakening economy.

Indonesia has officially agreed to receive $5.5 billion of loans from Australia, Japan, the World Bank, and the Asian Development Bank to help plug the budget deficit and to stimulate the weakening economy. Australia will give $1 billion, Japan $1.5 billion, the World Bank $2 billion and the Asian Development Bank $1 billion. The loans will go under the Public Expenditure Support Facility and will only be used if the government does not raise enough funds from bonds and other borrowing. Details of the loan will be finalized this month and funds will be available in April.

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Indonesia: Four Preliminary Deals Worth $3 Billion Signed at WIEF

Four Memorandum of Agreements (MoAs) worth over $3 billion were signed on the first day of the fifth World Islamic Economic Forum (WIEF).

Four Memorandum of Agreements (MoAs) worth over $3 billion were signed on the first day of the fifth World Islamic Economic Forum (WIEF). The first is between Bank Muamalat, Indonesia's largest sharia financing provider, with National Commercial Bank Saudi Arabia on strategic business collaboration on remittance services, and Islamic Payment System Sdn berhad with PT Pos Indonesia on an Islamic payment system network. The second MoAi s between PT Garuda Indonesia and Dubai Aerospace Enterprises for the sale and leaseback of eight new B737-800 aircraft. The third MoA is between Indonesia's East Kutai Regency of East Kalimantan province and the United Arab Emirates' Ras Al Khaimah Investment Authority for social and economic programs for the region. The fourth MoA is between state oil and gas firm Pertamina, the ETA Star Group Dubai and Itochu Corporation of Japan to upgrade Pertamina's Balikpapan refinery. State Minister for State Enterprises Sofyan Djalil said, "The realization of these agreements are still dependent on further studies and competitive tenders. It can be higher or lower than the estimated value [of $3 billion]".

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Indonesian Economy To Get Boost In March

The Indonesian government is set to unveil a RP 73 trillion ($5.8 billion) stimulus package this month to give the economy a boost.

The Indonesian government is set to unveil a RP 73 trillion ($5.8 billion) stimulus package this month to give the economy a boost. The stimulus package includes subsidizing businesses for their import duties, waiving income taxes for people earning less than Rp 5 million ($415) per month, and providing an additional Rp 12.2 trillion ($1 billion) for rehabilitating and maintaining existing facilities. The government stated that the stimulus package, which was passed in the House of Representatives last week, is crucial for achieving a 4.5 percent growth this year.

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Indonesian Investment Jumps 61% In January

Data from the Investment Coordination Board (BKPM) shows that foreign direct investment (FDI) into Indonesia in January increased by 61 percent, reaching $710 million compared to $440 million in the same period in 2007.

Data from the Investment Coordination Board (BKPM) shows that foreign direct investment (FDI) into Indonesia in January increased by 61 percent, reaching $710 million compared to $440 million in the same period in 2007. BKPM stated that they will continue to attract FDI into the country by reducing bureaucratic constraints and modernizing and simplifying investment processes. Domestic investment also rose by 33.3 percent from Rp 0.57 trillion a year earlier to Rp. 0.76 trillion this year. As a whole, realized investment increased by 57.8 percent, from Rp 4.53 trillion to Rp 7.15 trillion. Most of the domestic investment went to West Java while most of the FDI went to Jakarta. South Koreans gave the most FDI into Indonesia followed by the Seychelles and the U.K.

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Indonesia: House Approves More Budget Allocation On Stimulus Package

Indonesia's House of Representatives approved the government's request to add Rp 10.2 trillion to the economic stimulus package that will be release on infrastructure projects this year.

Indonesia's House of Representatives approved the government's request to add Rp 10.2 trillion to the economic stimulus package that will be release on infrastructure projects this year. The added money brings up the total amount of the budget allocated for the stimulus package to Rp 71.3 trillion. To make sure the stimulus package is properly implemented, the House will be directly monitoring the government's financial report

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Japan Guarantees Indonesia's First Samurai Bond

Japan and Indonesia agreed on a deal during the ASEAN+3 Finance Minister's meeting in Phuket, Thailand where Japan will provide financial support worth $1.5 billion for guaranteeing Indonesia's planned yen-denominated bond, called the samurai bond.

Japan and Indonesia agreed on a deal during the ASEAN+3 Finance Minister's meeting in Phuket, Thailand where Japan will provide financial support worth $1.5 billion for guaranteeing Indonesia's planned yen-denominated bond, called the samurai bond. Indonesia needed to link the samurai bond with the Japanese Bank for International Cooperation because its sovereign investment rating is too low for the issue. The bond aims to help the government to limit this year's widening budget deficit after it planned to provide more money to stimulate the economy. The proceeds from the bond will also go to finance Japanese-related trade and projects. Besides the bond guarantee, the deal also saw an agreement by Japan to increase the existing bilateral swap arrangement to help stabilize Indonesia's economy.

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Indonesian Exporters To Get Help

Indonesian exporters, particularly labor-intensive ones, may be getting much-needed support from the government to help them cope with rapidly deteriorating global demand.

Indonesian exporters, particularly labor-intensive ones, may be getting much-needed support from the government to help them cope with rapidly deteriorating global demand. They are expected to get relief on debt payments and capital expenditure subsidies. The Coordinating Ministry for the Economy will be holding a three-way meeting with the central bank and representatives of export-intensive companies. This move comes after exports plunged by 20 percent in December 2008 and is expected to decrease further this year.

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Indonesian Government Proposes to Increase Fuel Subsidies

The Energy and Mineral Resources Ministry is proposing Rp 37 trillion ($3.1 billion) in subsidies for the distribution of fuel, an increase of 46.8 percent of the initial plan.

The Energy and Mineral Resources Ministry is proposing Rp 37 trillion ($3.1 billion) in subsidies for the distribution of fuel, an increase of 46.8 percent of the initial plan. The large increase reflects the Ministry's intention to apply a fixed payment indexed to ICP oil prices. The Finance Ministry's director general for budgetary affairs will look at the proposed increase and examine the effects of the state's budget before any decision is made. Among the subsidized fuels are premium gasoline, kerosene and diesel.

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Bank Indonesia Cuts Interest Rate for Third Month

Amid slowing inflation and signs of a worsening economy, Indonesia's central bank, Bank Indonesia, cut its interest rate in order to stimulate growth.

Amid slowing inflation and signs of a worsening economy, Indonesia's central bank, Bank Indonesia, cut its interest rate in order to stimulate growth. The 50 basis points slash lowered the rate to 8.25 percent. Since December, when Indonesia started feeling the effects of the global financial crisis, Bank Indonesia has lowered the rate by 1.25 percent. The central bank said it lowered the rate by 50 basis points because the global economic outlook was worse than expected, particularly in sectors related to foreign trade. Exports have already fallen 20 percent from last year.

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Indonesia Exports Plunge 20.6% in December

Indonesia exports dropped over 20 percent in December from one year ago, the fastest fall in seven years.

Indonesia exports dropped over 20 percent in December from one year ago, the fastest fall in seven years. The news highlights the slowing demand of Indonesia's key exports such as palm oil and rubber. However, unlike its neighbors, Singapore and Malaysia, Indonesia is less reliant on its exports, accounting for only a third of GDP. But the decline in exports is significant enough that analysts believe the government should increase its fiscal spending in order to stimulate the economy. The Central Bank responded by reducing its policy rate for the third straight month to 8.75 percent.

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Indonesia's Bank Negara Plans to Issue Bonds to Boost Liquidity

In an effort to boost liquidity and lending, Bank Negara Indonesia (BNI) will be issuing bonds worth between $200 million and $300 million.

In an effort to boost liquidity and lending, Bank Negara Indonesia (BNI) will be issuing bonds worth between $200 million and $300 million. The exact dates for the issuing of the bonds has not been decided, but it could be sometime during the first half of 2009. Moreover, BNI is also looking at securing bilateral loans, also in an effort to increase its liquidity.

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Indonesia to Meet Investors for $4 Billion Debt Sale

Indonesia's government plans to raise $4 billion in debt this year to build roads, ports and power plants, amid the global financial recession. Indonesian officials will meet investors in Asia, Europe and the U.S. from next week. Barclays Plc and UBS AG are in charge of the debt sale.

Indonesia's government plans to raise $4 billion in debt this year to build roads, ports and power plants, amid the global financial recession. Indonesian officials will meet investors in Asia, Europe and the U.S. from next week. Barclays Plc and UBS AG are in charge of the debt sale.

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Indonesia Starts Cutting Exports to Prop Up Rubber

Indonesia, currently the world's second largest producer of rubber, has began to cut exports in order to support prices.

Indonesia, currently the world's second largest producer of rubber, has began to cut exports in order to support prices. The cut in exports is a result of a pact between the world's three largest rubber producers - Indonesia, Malaysia and Thailand- in an effort to curb production and prices amid the global economic crisis. Indonesia will reduce exports by 116,000 tonnes during the first quarter, equivalent to 40% of the total in January, 35% in February and 25% in March. Rubber was severely affected by the global financial crisis, as the product's total value fell by half from a 56-year high in July. Output of rubber is expected to stay flat in 2008.

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Indonesia: Local Users Will Get More Gas

Indonesia's government plans to prioritize its gas supply for domestic consumption instead of overseas buyers.

Indonesia's government plans to prioritize its gas supply for domestic consumption instead of overseas buyers. The government expects domestic oil consumption to rise as the country continues to see growth in the local production and middle class. Gas producers are urged to raise production in order to meet domestic and international demand. Indonesia expects local demand for gas to increase at an annual rate of 2.8%, reaching 6 billion cubic feet per day by 2020. This new policy will mainly affect Indonesia's main gas markets who rely heavily on the country's exports such as Japan and South Korea. Authorities also stress that adjustments should be made in gas distribution infrastructure and pricing in order to efficiently respond to the country's rapidly growing demand for energy.

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Indonesia: Banks Cut Lending Rates

Indonesia's Bank Mandiri and Bank BNI have started to cut lending rates in order to accelerate the country's real sector.

Indonesia's Bank Mandiri and Bank BNI have started to cut lending rates in order to accelerate the country's real sector. The cut was a response to the central bank's recent 50 basis points rate cut to 8.75%. Bank Mandiri will cut lending rates up to 0.5%. Bank BNI will cut lending rates to between 0.5% and 1% for all segments. BNI will also cut deposit rates by 0.5%. Indonesia's economy relies on the continuance of loan channellings in order to reach expect growth of 4.5% this year.

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Indonesia: Qatar to Grab More Indosat Shares

Qatar Telecom Q.S.C.(Qtel), will begin to buy shares of PT Indoset, Indonesia's second largest telecom firm, this week.

Qatar Telecom Q.S.C.(Qtel), will begin to buy shares of PT Indoset, Indonesia's second largest telecom firm, this week. Qtel is a Middle Eastern telecommunications group that enjoys around 55 million costumers. Qtel aims to reach a 65% ownership of the Indonesian company. The Middle Eastern company seeks to push ahead development plans for PT Indoset as soon as the process is done.

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Indonesia's Govt to Cut Electricity Rates Amid Declining Crude Oil Prices

Due to declining crude oil prices, the Indonesian government has cut oil prices twice in the last month and now expects to cut electricity tariffs as well.

Due to declining crude oil prices, the Indonesian government has cut oil prices twice in the last month and now expects to cut electricity tariffs as well. The government will first determine the impact of the declining crude oil prices on the production cost of the state-owned power firm, PT PLN, the country's only supplier of electricity. Businesses in Indonesia have been criticized for not lowering product cost even though production costs have dropped substantially. The government hopes to push ahead with electricity price cuts combined with further oil price cuts during the next couple weeks.

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Luxembourg Lobbies Indonesia for ArcelorMittal-Krakatau Merger

Luxembourg, home to ArcelorMittal Steel company, is lobbying the Indonesian government to create a joint-venture between ArcelorMittal and the state steel producer PT Krakatau Steel(KS).

Luxembourg, home to ArcelorMittal Steel company, is lobbying the Indonesian government to create a joint-venture between ArcelorMittal and the state steel producer PT Krakatau Steel(KS). AcelorMittal is the largest steel producer in the world, producing 10 percent of the total global steel production last year. ArcelorMittal is looking to invest in Asia and hopes to boost the capacity of Indonesia's local steel makers to meet growing domestic demand.

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Bank of Indonesia Holds Rate to Keep Rupiah Attractive

After having increased its interest rate six times this year, the central bank of Indonesia decided to maintain its key interest rate at 9.5%.

After having increased its interest rate six times this year, the central bank of Indonesia decided to maintain its key interest rate at 9.5%. The bank wants to balance economic growth and keep the rupiah attractive, controlling monetary stability and attracting investors.

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Bayan Signs $300m Mining Deal with Petrosea

PT Bayan Resources has struck a mining deal with PT Petrosea worth $300 million.

PT Bayan Resources has struck a mining deal with PT Petrosea worth $300 million. The deal involves removal of overburden, the rock and soil above the coal seam. PT Bayan Resources is Indonesia's eighth largest coal producer.

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Indonesia’s Former Central Bank Governor Jailed

Indonesia's former central bank governor, Burhanuddin Abdullah, received a five year jail sentence and was fined US$23,500 for bribing members of the parliament to pass legislation

Indonesia's former central bank governor, Burhanuddin Abdullah, received a five year jail sentence and was fined US$23,500 for bribing members of the parliament to pass legislation. For years Indonesia has been considered one of the world's most corrupt countries. This conviction however, represents the country's success in their efforts to increase transparency and end corruption.

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Central Bank to Provide Emergency Support for Banks

To prepare for a potential global liquidity crisis, Indonesia's central bank has begun preparing an emergency liquidity support package for local banks.

To prepare for a potential global liquidity crisis, Indonesia's central bank has begun preparing an emergency liquidity support package for local banks. The support will probably be in the form of high quality commercial papers or treasury bills.

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Gas Shortage in Indonesia Could Cripple Industries

Some experts estimate that Indonesian industries may suffer a gas deficit of up to 200 billion British thermal units per day in 2009.

Some experts estimate that Indonesian industries may suffer a gas deficit of up to 200 billion British thermal units per day in 2009. This may cause industries to lower output and layoff staff.

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Subsidy for Indonesia's Sugar Industry Revitalization Program Cut

The proposed Rp 160 billion subsidy budget for the revitalization of sugar mills in 2009 has been cut to Rp 50 billion.

The proposed Rp 160 billion subsidy budget for the revitalization of sugar mills in 2009 has been cut to Rp 50 billion. Indonesia produced 2.44 million tons of sugar in 2007, about half a million tons short of domestic demand. The proposed budget is pending approval from Indonesia's House of Representatives.

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Indonesia's State Budget to Allocate Rp 100.6 Trillion on Fuel Subsidies

Harry Azhar Azis, vice chairman of a working committee on the 2009 state budget bill, has announced that the state budget will allocate Rp 100.6 trillion on fuel subsidies.

Harry Azhar Azis, vice chairman of a working committee on the 2009 state budget bill, has announced that the state budget will allocate Rp 100.6 trillion on fuel subsidies.

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Indonesia's Tax Rate to Blame for Drop in Local Investment

Realized local investment decreased 70% in the first half as compared to the first six months of last year.

Realized local investment decreased 70% in the first half as compared to the first six months of last year. To avoid paying Indonesia's taxes, local investors have begun to invest in global legal entities. In the first half, realized foreign investment increased 153% as compared to the first half of last year.

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Indonesia's BNI to Form Sharia Banking Joint Venture with Saudi-Based ICD

Bank Negara Indonesia (BNI), a state-owned lender, will spin off its sharia unit into a joint-venture with Saudi Arabia-based Islamic Corporation for the Development of the Private Sector (ICD).

Bank Negara Indonesia (BNI), a state-owned lender, will spin off its sharia unit into a joint-venture with Saudi Arabia-based Islamic Corporation for the Development of the Private Sector (ICD). BNI will probably get a 20 to 30% stake while ICD will have the remainder. Due to this joint-venture, BNI should increase the number of customers in the Middle East.

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Indonesian Govt may not raise tobacco excise

The Indonesian government may leave unchanged excise duty for cigarettes and tobacco next year to protect the cigarette industry's employment rate amid sluggish growth in other labor-intensive sectors.

Indonesia, Southeast Asia's largest economy, has the lowest average price of cigarettes in the world, and analysts believe the livelihoods of 12 million people are directly or indirectly dependent on the country's tobacco and cigarette sector. Finance Ministry's Director General of Customs and Excise Anwar Surpijadi said he was concerned a further rise in the excise would hurt the cigarette industry and risk the jobs of its millions of workers. He also disagreed with analysts who believe a 60 percent rise in excise duty would boost state revenue, cut the number of smokers and retain a robust cigarette industry.

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Indonesian Entrepreneurs Voice that Infrastructure Spending is Not Enough

According to Indonesia's business community and entrepreneurs, the state budget allocation for infrastructure is insufficient.

According to Indonesia's business community and entrepreneurs, the state budget allocation for infrastructure is insufficient. The allocated budget for infrastructure is 3%. Many believe that it should be at least doubled to 6%. The lower budget reflects a cautious move in light of unstable oil prices.

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Full-Year Bank Lending Growth in Indonesia 'to Exceed Target'

According to the central bank, lending should expand by 27 to 30% this year.

According to the central bank, lending should expand by 27 to 30% this year. The bank had previously estimated that it would grow by only 24%. Agribusiness and trade and industries are expected to demand the most loans. Banks usually increase lending in the second half because firms need funds to materialize the business ventures they began at the start of the year.

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Indonesia's wood exports to EU to enjoy lower duties

Indonesia Wood Products to get tax cut in EC

The European Commission (EC) will get a tax cut on wood products imported from Indonesia starting in 2009 and lasting until 2011. The European Commission (EC) will get a tax cut between 3 percent and 6 percent on wood products such as sheets, while tax on plywood and boards will be reduced by 3.5 percent.

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indonesia

Bank Indonesia Raises Key Rate; Bank Loans Still Robust

Amid soaring inflation, Bank Indonesia (BI) raised its benchmark rate to 9%.

Amid soaring inflation, Bank Indonesia (BI) raised its benchmark rate to 9%. BI's rate increase is the fourth consecutive hike as inflation rose to a 22-month high of 11.9% in July. BI claimed that the increased rates had not affected Indonesia's economy thus far. At the end of June, bank lending grew to 31.6%, higher than the expected 22 to 26%.

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Indonesia's Bluechips Survive Turbulence

Indonesia's bluechip companies gained sizable profits in the first half of the year.

Indonesia's bluechip companies gained sizable profits in the first half of the year. Seven publicly listed hotshot companies recorded an average of 52.1% increase in profits compared to the first half of 2007. Mining giant PT Bumi Resources had the highest increase in profit, probably due to surging coal prices and increase demand from China and India.

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Oil in Indonesia Falls Below $122

Due mostly to a decrease in the United States' demand for oil, Indonesia's September delivery of oil dropped more than half a dollar to $121.68 a barrel.

Due mostly to a decrease in the United States' demand for oil, Indonesia's September delivery of oil dropped more than half a dollar to $121.68 a barrel. The price of oil is down 17% from its peak of over $147 a barrel earlier this month. Even with falling prices, oil is still 60% more expensive than it was one year ago.

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indonesia

Bank Central Asia Lending, Profit Up in First Semester

In the first half of the year, Bank Central Asia (BCA) distributed Rp 95.6 trillion, a 49.6% growth compared to the first half of 2007.

In the first half of the year, Bank Central Asia (BCA) distributed Rp 95.6 trillion, a 49.6% growth compared to the first half of 2007. The growth in lending helped to increas total profits by 11.6%. Corporate loans grew by 64.5% due to a higher demand from companies in agriculture, mining, telecommunications, and plantations. BCA is Indonesia's second largest lender by assets.

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indonesia

Indonesia Raises Key Rate a Third Time to Cool Prices

Indonesia's central bank increased interest rates for the third consecutive month, in an effort to fight the highest level of inflation in nearly two years.

Indonesia's central bank increased interest rates for the third consecutive month, in an effort to fight the highest level of inflation in nearly two years. The rate was increased to 8.75 percent from 8.5 percent. Inflation for June stood at 11 percent.

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indonesia

Yudhoyono Says World Oil Price Could Reach US$200 per Barrel

Indonesian President Susilo Bambang Yudhoyono expressed concern that oil might pass USD 200 per barrel before the end of the year.

Indonesian President Susilo Bambang Yudhoyono expressed concern that oil might pass USD 200 per barrel before the end of the year. He also stressed, however, that the government could not increase domestic fuel oil prices again and again.

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indonesia

Indonesia Inflation Accelerates Further in June, Led by Higher Transport Costs

Indonesia's consumer price index (CPI) rose 2.46 percent from May to April, and 11.03 percent from a year ago, marking the highest level of inflation since September 2006.

Indonesia's consumer price index (CPI) rose 2.46 percent from May to April, and 11.03 percent from a year ago, marking the highest level of inflation since September 2006. The year-on-year inflation number was actually lower than most analysts had forecast. Among the component of CPI, transportation, communication and financial services rose the most, 8.72 percent from a month earlier.

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indonesia

'Inflation Not Hamper SUN Attraction to Foreign Parties'

Inflation has not dampened foreign investors' interest in long-term tenured Indonesian bonds, although it has corrected the prices of some bonds.

Inflation has not dampened foreign investors' interest in long-term tenured Indonesian bonds, although it has corrected the prices of some bonds. The interest in long-term bonds reflects confidence among outside investors that the Indonesian economy is healthy at its core and will continue to be so for a long time.

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indonesia

Indonesian Investment Chief Backs Massive BHP Nickel Project

A joint venture to pursue nickel mining between Anglo-Australian giant BHP Billiton and Indonesian firm Antam got a strong endorsement today from Indonesia's investment chief.

A joint venture to pursue nickel mining between Anglo-Australian giant BHP Billiton and Indonesian firm Antam got a strong endorsement today from Indonesia's investment chief. The partnership would involve investments of around four billion dollars.

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indonesia

Indonesian Company Begins Exporting Fire Trucks

Indonesian company PT New Sentosa shipped 4 fire trucks to Tanzania, as part of a larger order for 15 fire trucks to the east African nation.

Indonesian company PT New Sentosa shipped 4 fire trucks to Tanzania, as part of a larger order for 15 fire trucks to the east African nation. The maiden shipment was the centerpiece of a ceremony attended by Trade Minister Mari Elka Pangestu. The same company is also exporting over Euro 1 million worth of fire trucks to Sudan.

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indonesia

Number of State Companies to be Slashed to 25

An Indonesian presidential instruction was issued to cut the number of state companies from 139 to 25 by 2010.

An Indonesian presidential instruction was issued to cut the number of state companies from 139 to 25 by 2010. The move is intended to improve efficiency and competitiveness.

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indonesia

RI, Iran Discuss Lowering of Trade Tariffs

Indonesia and Iran have discussed a plan to lower tariffs between their countries by 50 percent, as part of the Preferential Trade Agreement (PTA) now under discussion.

Indonesia and Iran have discussed a plan to lower tariffs between their countries by 50 percent, as part of the Preferential Trade Agreement (PTA) now under discussion. Indonesia's trade minister said Jakarta had proposed lowering import duties by 50 percent from their current levels of 15-25 percent.

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indonesia

Govt Preparing Policy on Investment in Food Sector

The Indonesian government is preparing to being a food sector investment policy to increase production of important staples such as rice and corn.

The Indonesian government is preparing to being a food sector investment policy to increase production of important staples such as rice and corn. The program will all medium- and large-scale investments in the food sector.

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indonesia

Indonesia, Philippines Raise Rates to Fight Inflation

Indonesia and the Philippines raised interest rates in response to the growing inflation brought on by rising food and energy prices.

Indonesia and the Philippines raised interest rates in response to the growing inflation brought on by rising food and energy prices. The Bank of Indonesia raised rates to 8.5, from 8.25, while the Bangko Sentral ng Philipinas raised its rate to 5.25, from 5, which was the first increase in over two years. These moves came a month after Vietnam and Pakistan raised their rates. Many analysts believe India and Malaysia will raise rates today. Eleven of 13 Asian nations still have borrowing costs below the rate of inflation.

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indonesia

President Asks Banks to Increase People`s Business Credits to IDR 15 Trillion

President Yudhoyono asked Indonesian banks to increase the distribution of people's business credits to boost economic growth and reduce poverty.

President Yudhoyono asked Indonesian banks to increase the distribution of people's business credits to boost economic growth and reduce poverty. The business credits program is very important for such small businesspeople as handicraft dealers. Currently, the value of the program stands at IDR 1.4 trillion.

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indonesia

Govt to Cut CPO Export Duty To 15% in May

Because of a decline in the commodity price in the international market, the government will cut the crude palm oil (CPO) export duty for May to 15 percent.

Because of a decline in the commodity price in the international market, the government will cut the crude palm oil (CPO) export duty for May to 15 percent. This is because the price of CPO is now at a lower average, so the export tariff is lower as well.

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indonesia

Foreign Investors to Have Access to State Exports Financing

The state exports financing will be accessible to foreign investment.

The state exports financing will be accessible to foreign investment.In accordance with Bachrul Chairi, the head of the National Agency for Exports Development, domestic and foreign investors had the same right to export financing on condition that they were registered under Indonesian companies.

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indonesia

Tourism Offers Unmissable Business Opportunities For Indonesia

Indonesia is lagging behind its Asian neighbors in tourism.

Indonesia is lagging behind its Asian neighbors in tourism. Most Indonesians do not travel, which is understandable considering the long distances, the availability and cost of transportation, and the fact that the people do not know anyone outside their immediate area. Because of this, regional and local airlines are working the hardest to develop travel and tourism in Indonesia.

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indonesia

Q1 Economic Growth In 2008 To Drop Below 6% : BI

The Indonesian economy is predicted to grow at less than 6% in the first quarter of the year.

The Indonesian economy is predicted to grow at less than 6% in the first quarter of the year. Originally, it was predicted to be over 6%. The slowing down is due to the status of the global economy.

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indonesia

Economic Growth Fails to Spur Employment: ADB

Inflation is likely to rise again in Indonesia, making the population susceptible to shocks.

Inflation is likely to rise again in Indonesia, making the population susceptible to shocks. The inflation will come from a rise in domestic demand and global commodity prices. The people of Indonesia are vulnerable because of the lack of adequately paid jobs, which shows how important it is to improve the economy for employment.

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indonesia

BRI Targets 22 Percent Increase in Lending

The Bank Rakyat Indonesia (BRI) expects an increase of more than 22 percent in new loans this year.

The Bank Rakyat Indonesia (BRI) expects an increase of more than 22 percent in new loans this year. Rising prices in agricultural commodities, lending demands for the agriculture and small and medium enterprise sectors, are main indicators of the bank's assumption.

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indonesia

Bank Mega Sees 40 Percent Increase in Profit

Bank Mega, a publicly listed mid-size bank in Indonesia, projects a net profit of USD 79.6 million, an increase of 40 percent year on year.

Bank Mega, a publicly listed mid-size bank in Indonesia, projects a net profit of USD 79.6 million, an increase of 40 percent year on year. The Bank expects a higher growth in lending from third party funds, which mainly come from accounts, savings, and deposits. Third party funds are expected to increase INR 35.1 trillion this year.

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indonesia

Taiwanese Firms to Invest in Labor-Intensive Sectors

Taiwanse SMEs could look to relocate and invest in Indonesia if the labor regulations are improved, according to the Indonesian Employers Association.

Taiwanse SMEs could look to relocate and invest in Indonesia if the labor regulations are improved, according to the Indonesian Employers Association. China's new labor law in effect since January 1st has tightened restrictions on labor intensive work. In a move to ease business, Taiwanese businesses are looking to Indonesia to relocate in such areas as consumer electronics, textiles, and retail.

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indonesia

Govt May Further Cut Budget for State Offices

The Indonesian Government might further cut budget spending for state offices to thwart off increasing oil subsidy costs.

The Indonesian Government might further cut budget spending for state offices to thwart off increasing oil subsidy costs. Sectors such as education, public works, defense, health, agriculture and transportation might be affected. Under the new budget for 2008, oil subsidy costs have risen to IDR 208.6 trillion, more than double the initial estimate.

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indonesia

Crude Palm Oil Exports Jump 27 Percent in 2008

Crude Palm Oil (CPO) exports have increased 27 percent in 2008 despite new tariffs and restrictions on export regulation according to the Indonesian Palm Oil Association.

Crude Palm Oil (CPO) exports have increased 27 percent in 2008 despite new tariffs and restrictions on export regulation according to the Indonesian Palm Oil Association. The estimated production of CPO is expected to be 18.4 million tons this year, with 4 million tons consumed domestically. CPO oil exports were down in 2007, with exports around 11 million tons. The government recently issued a new tariff on export duties which states that CPO priced between USD 1,100 and USD 1,200 per ton will be charged a duty of 15 percent per ton. The duty will increase to 20 percent and $1,300 and to 30 percent as the price increases. CPO producers currently complain that the tariffs have lead to an increase in CPO smuggling.

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indonesia

Indonesia Books USD 1.3 Billion from Tin Exports

Despite restrictive regulation on tin exports, Indonesia booked a total of USD 1.34 billion from tin exports in the last year.

Despite restrictive regulation on tin exports, Indonesia booked a total of USD 1.34 billion from tin exports in the last year. The Trade Ministry of Indonesia reported that 15 companies had exported 93,735 tons of tin bars. The export of unprocessed tin bars in 2005 mostly went to Singapore, Thailand and Malaysia, while processed tin bars went to China, Japan and Singapore.

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indonesia

Thailand and Philippines Considered Most Corrupt Asian Economies according to Survey

According to the Political and Economic Risk Consultancy (PERC), the Philippines, Thailand, Indonesia and China are among the most corrupt Asian economies.

According to the Political and Economic Risk Consultancy (PERC), the Philippines, Thailand, Indonesia and China are among the most corrupt Asian economies. Singapore and Hong Kong retained their standing as the cleanest economies in Asia. The survey only covers 13 countries and does not include countries notorious for corruption such as Bangladesh and Myanmar. The poll consisted of nearly 1,400 expatriate businessmen and was conducted in January and February of this year.

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indonesia

Bad Roads Slow Indonesian Growth, Hurt Competitiveness

In a survey by the World Economic Forum, Indonesia was ranked 91st out of 131 in transportation infrastructure, down from 89th last year.

In a survey by the World Economic Forum, Indonesia was ranked 91st out of 131 in transportation infrastructure, down from 89th last year. The deputy to the Infrastructure and Regional Development Minister cited Java's northern coastal highway as one of the main problems, causing constant bottlenecks and delays in logistic deliveries along the route.

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indonesia

Manulife Insurance Premiums Grow by 88 percent

PT Manulife Indonesia, a life insurance company, reported that their total insurance premiums increased by 88 percent last year.

PT Manulife Indonesia, a life insurance company, reported that their total insurance premiums increased by 88 percent last year. Insurance premiums raked in IDR 767 billion up from IDR 419 billion last year.

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indonesia

President Delays Fuel Restrictions

President Yudhoyono postponed a plan to limit public fuel intake until further studies are undertaken.

President Yudhoyono postponed a plan to limit public fuel intake until further studies are undertaken. The government doubled the fuel subsidy this year to IDR 106.2 trillion up from the original IDR 45.87 planned for the 2008 state budget. Under the proposed program, low-income households would be limited to 12.5 liters per month. Motorists in Java and Bali would be affected too; to limit consumption of subsidized fuel, cars and motorcycles can only consume 5 liters and 1 liters of fuel per day respectively.

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indonesia

Indonesia's Car Exports to Rise

Indonesia's auto export industry is expected to grow by 40 percent in 2008.

Indonesia's auto export industry is expected to grow by 40 percent in 2008. Exports of finished cars, kits for car assembly and components were $2.1b in 2007 and projected to reach $2.9 in 2008 according to Indonesia's Industry Ministry. Part of this rise can be attributed to a new car port in Tanjung Priok .

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indonesia

Indonesian Exports Up

Exports from Indonesia increased 13.09 percent in 2007 to $114b.

Exports from Indonesia increased 13.09 percent in 2007 to $114b. The main commodities exported were crude oil, Fat and animal/vegetable oils, machineries/electrical appliances, mineral fuel, and rubber and rubber-related products. Indonesia's main export partners were the United States, Japan, and Singapore.

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indonesia

Indonesia Captures Cambodian Flagged Ship

The Indonesian navy captured a Cambodian flagged motor tanker on Jan 27.

The Indonesian navy captured a Cambodian flagged motor tanker on Jan 27. The tanker was believed to be carrying illegally-transferred diesel oil and was in the process of fleeing to Australian waters when captured by the warship, the KRI Tjiptadi.

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indonesia

US Rate Cuts Help Indonesian Inflation Plans

The Jan 22 rate cuts by the US government will assist Indonesia to achieve its 2008 inflation rate target of 5 percent according to Indonesia's central bank.

The Jan 22 rate cuts by the US government will assist Indonesia to achieve its 2008 inflation rate target of 5 percent according to Indonesia's central bank. Reducing inflation is dependent on Indonesia stabilizing its currency, made easier by lower interest rates in the US.

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indonesia

Indonesia to Publish ICT Book

The Indonesian government will release a book on information and communication technology (ICT) macro indicators on Jan 31, 2008.

The Indonesian government will release a book on information and communication technology (ICT) indicators on Jan 31, 2008. The move is designed to encourage financial stakeholders and the government to continue the development of Indonesia's ICT sector and to attract foreign investment in the area.

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indonesia

Indonesia to Diversify Export Partners

Indonesia is planning to diversify its export trade markets in 2008 according to Trade Minister Mari Elka Pangestu.

Indonesia is planning to diversify its export trade markets in 2008 according to Trade Minister Mari Elka Pangestu. This plan is driven by reduced demand from the US and will focus on exporting to China, India, Russia and the Middle East.

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indonesia

Indonesia's Government to Take Soybean Related Actions

Indonesia's government will take action to address increased soybean prices and dependence of foreign suppliers.

Indonesia's government will take action to address increased soybean prices and dependence of foreign suppliers. The past seven months has seen soybean prices climb 100%, with over half of all soybeans imported, mostly from the US. Planned actions include reducing import duties from 10% to either %5 or 0% and moving the timetable for a national soybean planting drive from 2015 to 2010.

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indonesia

Inflation May Influence Indonesian Bank Rates

Due to inflationary pressures Indonesia's central bank is unlikely to reduce the 8.0% benchmark interest in the first half of 2008.

Due to inflationary pressures Indonesia's central bank is unlikely to reduce the 8.0% benchmark interest in the first half of 2008. Prices of oil, rice, wheat and soybean rose sharply at the end of 2007 and will contribute heavily to the inflationary pressure. These predictions all come from the Econit Advisory Group, an Indonesian economic research institute.

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indonesia

Car Exports From Indonesia to Increase 70% in 2008

Expansion of production capacity for automobiles in Indonesia will cause an estimated 70% increase in exports for 2008.

Expansion of production capacity for automobiles in Indonesia will cause an estimated 70% increase in exports for 2008. The increased production comes after recent investments by the Astra Group and PT Astra Daihatsu Motor to increase the production of Toyota and Daihatsu vehicles.

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indonesia

Indonesia's Inflationary Future

Inflation in Indonesia is expected to increase in 2008 from 2007's 6.59%.

Inflation in Indonesia is expected to increase in 2008 from 2007's 6.59%, Anton Gunawan, an economist with Citibank, said on Jan 11, 2008. Contributing factors include currency fluctuations, growth of money supplies, inefficient goods and services distribution and poor infrastructure.

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indonesia

Indonesia Expands Eco-Friendly Power Generation

Indonesian president Susilo Bambang Yudhoyono announced $236m in spending on four eco-friendly power projects Dec 11, 2007.

Indonesian president Susilo Bambang Yudhoyono announced $236m in spending on four eco-friendly power projects Dec 11, 2007. These include: a 60MW addition to a geothermal plant in Laksana Village, a 40 MW steam field in North Sulawesi, a 10 MW steam field in North Sumatra, and drilling for a well needed for a 110 MW plant in West Java.

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indonesia

Indonesia's Plan for Pro-Environment Public/Private Partnerships

The Chief of the Indonesia's Investment Coordinating Board, Muhammad Lutfi, stated that Indonesia is planning a series of incentives to foster environmental stewardship by companies.

The Chief of the Indonesia's Investment Coordinating Board, Muhammad Lutfi, stated that Indonesia is planning a series of incentives to foster environmental stewardship by companies. While speaking at the United Nations Framework Convention on Climate Change Mr. Lufti described how Indonesia's geothermal power plants, a zero waste technique for energy generation, have been built because of government cost sharing programs, programs that he implied will be expanded to other projects.

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indonesia

Indonesia's Surprise Rate Cut

Indonesia's central bank reduced its main interest rate from 8.25% to 8% on Thursday December 6th, 2007.

Indonesia's central bank reduced its main interest rate from 8.25% to 8% on Thursday December 6th, 2007. The move came as surprise, a Reuters survey indicated that 10 of 15 analyst respondents expected the rate to remain unchanged. The move comes after news of lower than expected inflation in November.

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indonesia

Concerns Raised at the United Nations Framework Convention on Climate Change

The need for a binding agreement of carbon emissions and concerns about the commitment of nations to previous environmental agreements were raised at this week's United Nations Framework Convention on Climate Change (UNFCCC).

The need for a binding agreement of carbon emissions and concerns about the commitment of nations to previous environmental agreements were raised at this week's United Nations Framework Convention on Climate Change (UNFCCC). An Indonesian negotiator stated that a binding carbon emission agreement, to indicate the seriousness of developed nations, should be a primary goal of the conference. This sentiment was echoed by several NGOs. Statements by the Japanese government regarding moving from the Kyoto framework to a different one also raised concerns from many NGOs.

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indonesia

UN Conference on Climate Convenes

The largest climate conference in history convened Monday December 3, 2007 in Bali, Indonesia. Nearly 190 countries sent over 10,000 participants and journalists to the two week United Nations sponsored conference.

The largest climate conference in history convened Monday December 3, 2007 in Bali, Indonesia. Nearly 190 countries sent over 10,000 participants and journalists to the two week United Nations sponsored conference. The primary goals of the conference will be to create a new pact to replace the Kyoto Protocol, which expires in 2012, and to include the US in future agreements. Other issues to be discussed include managing the economic and pollution growth of developing nations, particularly China and Asia.

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indonesia

Cambodia's National Airline Back in the Air

In 1994 Cambodia formed a national airline, but in 2001 it went bankrupt. A recent deal will resurrect the national airline.

In 1994 Cambodia formed a national airline, but in 2001 it went bankrupt. The Cambodian government has reached a deal with two Indonesian airlines to form a new national airline. Although the Cambodian government will have a majority ownership share (51%), the majority of the revenue (70%) will go to two Indonesian airlines; the Rajawali Group and PT Ancora International. The airline should be in the air by the second half of 2008.

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indonesia

Central Bank of Indonesia on Interest Rate Cuts, Not in "Very Near Future"

Despite concerns about inflation due to higher oil prices Indonesia's central bank has decided to wait and see whether they will reduce interest rates.

Despite concerns about inflation due to higher oil prices Indonesia's central bank has decided to wait and see whether they will reduce interest rates. Although food and oil prices have been increasing, creating an inflationary pressure, the decision mirrors recent similar decisions by Thailand and Malaysia. The Indonesian currency the rupiah, gained slightly on the news.

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indonesia

USD 200 Billion in Losses Because of Illegal Logging Practices

According to government appointed researchers, 14 companies have cost the state more than USD 200 billion in losses for illegal logging practices.

According to government appointed researchers, 14 Indonesian companies have cost the state more than USD 200 billion in losses for illegal logging practices. Indonesia's agriculture institute in Bogar (IPB) determined the losses by calculating the ecological damage, economic damage and the cost of rehabilitating the resources. The 14 companies are subsidiaries or joint venture partners of two of the countries biggest pulp companies, Indah Kiat Pulp and Paper and Riau Andalan Pulp and Paper, subsidiaries of Asia Pulp and Paper and Asia Pacific Resources International Holdings.

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indonesia

Indonesia Lion Air Increases Its Boeing Purchase

Indonesia local low cost air transportation, Lion Air, is increasing it purchase of Boeing 737 to 122 planes. The Lion Air company is planning to expand its air industry to the next level of opportunity and to become the best local low-cost air transportation.

Indonesia local low cost air transportation, Lion Air, is increasing it purchase of Boeing 737 to 122 planes. The Lion Air company is planning to expand its air industry to the next level of opportunity and to become the best local low-cost air transportation. Earlier this year, the company had purchased 60 737-900ERs and had acquired airplanes from different countries like Vietnam, Thailand and Bangladesh.

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indonesia

Indonesia Central Bank Foresees Inflation Threat

Even though Indonesia is expecting its next year's economy to improve and inflation rate to decrease, Bank Indonesia (BI) is worried that global increase in oil prices will have an impact on the inflation rate.

Even though Indonesia is expecting its next year's economy to improve and inflation rate to decrease, Bank Indonesia (BI) is worried that global increase in oil prices will have an impact on the inflation rate. BI strongly suggests that Indonesia has to be extremely cautious and take measure on this problem if they want to improve its economy. Some Indonesian business communities suggest that Indonesia should take precautions by reducing oil prices and taxes on unsubsidized fuel. Looking to this issue, the government is finding possible ways that are best for the country's short and long term opportunities.

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indonesia

Indonesia Inviting Experts to Help Build the Longest Suspension Bridge

Indonesia is planning to pursue its 40- year dream of building the World's longest suspension bridge between its country's island of Java and Sumatra.

Indonesia is planning to pursue its 40- year dream of building the World's longest suspension bridge between its country's island of Java and Sumatra. The cost of the project is estimated to be around U$10 billion and has been agreed by both countries' provinces. In order to carry on with this project, Indonesia is accumulating strength by inviting international professionals to participate in the study, design and construction of the "Sunda Strait Bridge" project.

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indonesia

Indonesia Will Sign Energy Agreement

During the opening of the Asia Pacific Oil and Gas Conference and Exhibition 2007, the Indonesian government will be signing a set of energy agreements with a number of foreign companies.

During the opening of the Asia Pacific Oil and Gas Conference and Exhibition 2007, the Indonesian government will be signing a set of energy agreements with a number of foreign companies. The $10 billion worth energy contract includes the financial and development areas of the oil and gas industries projects. During the meeting, Indonesia state-owned electrical industry, PLN, will also be purchasing five power contracts with self-governing power producers and the contract to build five coaled power plant outside Java.

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indonesia

Indonesia Certain on its Economic Growth

Indonesia is convinced that its economic growth will reach this year's national target of 6.3 percent despite of the current soaring global oil prices.

Indonesia is convinced that its economic growth will reach this year's national target of 6.3 percent despite of the current soaring global oil prices. Chief of the Minister of Economics, Boediono, is confident that the increasing oil prices will also lead to the increase in the price of exports of commodities and minerals, such as palm oil. Despite of escalating its economic growth for this year, Indonesia is also planning to decrease its unemployment rate and reduce its extensive poverty.

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indonesia

Indonesia-French signed a Memorandum of Understanding

The Indonesia Young Entrepreneurs Associations has signed a trade and investment agreement with the French Associations to improve the economic collaboration of both countries.

The Indonesia Young Entrepreneurs Associations has signed a trade and investment agreement with the French Associations to improve the economic collaboration of both countries. The Memorandum of Understanding (MOU) agreement is intended to allow easier access for Indonesia to establish a new market for small medium enterprises in the agricultural, energy and infrastructure industry areas.

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indonesia

Indonesia PLN Plans to Reduce Fuel Cost to Increase Next Year’s Consumptions

Indonesian state-owned electric company, PT. Perusahaan Listrik Negara(PLN) is planning to reduce its fuel cost to meet next year's electricity growth target rate.

Indonesian state-owned electric company, PT. Perusahaan Listrik Negara(PLN) is planning to reduce its fuel cost to meet next year's electricity growth target rate. The firm will cut its fuel spending by $185 million and will also substitute the use of high speed diesel (HSD) into a cheaper medium fuel oil (MFO). The consumption of HSD will be reduced by 10%, from 50% consumption this year

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indonesia

Indonesia Businesses Still Unclear on Trade Liberalization Plan Benefits

Indonesian businesses are ignorant on the benefits of trade liberalization plan offered by the DHA as they are still hugely uncertain that liberalization can actually sort out the economic conditions in Indonesia.

Indonesian businesses are ignorant on the benefits of trade liberalization plan offered by the Doha Development Agenda(DHA)as they are still hugely uncertain that liberalization can actually sort out the economic conditions in Indonesia.Instead of using the trade liberalization system, most businesses still prefer to use trade and investments as a plan to conduct their businesses. According to the committee head on the WTO, Oalan Siahaan, trade liberalization will not be giving much benefits to businesses that are indirectly affected by the lowering of tax barriers.

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indonesia

Indonesia Endorse 2008 Economic Budget

The Indonesian legislature has approved the 2008 economic budget for Indonesia. Under the 2008 budget, the state budget discrepancy for 2008 is increased by 0.20 percent of GDP

The Indonesian legislature has approved the 2008 economic budget for Indonesia. The state budget discrepancy for 2008 is increased by 0.20 percent of GDP and the revenue is set at 781.35 trillion rupiah (US$86.14 billion). Due to the economic deficit, the government believes that higher economic spendings will actually help to increase the financial growth in Indonesia. Indonesia is confident that its economic growth will further increase due to higher consumer spendings and an increasing investment rates.

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indonesia

Indonesia Stocks Hit Record Level

Last week Indonesia shares rose to a new record. The Jakarta's marekt rose 1.11 percent to top 2,500 points for the first time in history and ended at 2500.58 points.

Last week Indonesia shares rose to a new record. The Jakarta's marekt rose 1.11 percent to top 2,500 points for the first time in history and ended at 2500.58 points. Indonesia shares' record level were led by gains of blue chips such as PT Telekomunikasi Indonesia and Astral International. Indonesia's record level was reflective of high performance in other Asia stock markets. Singapore's market hit a recored closing high, the Manila index closed at a 3-month high, and Malaysian stocks were up .2 percent.

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indonesia

Indonesia New Franchise Regulations Hurt Franchising Businesses

Trade Ministry of Indonesia has imposed a new franchise regulation that may hurt small and medium-size franchising businesses. The new franchising regulations demand all franchisers to provide business financial information which at least consists of two years financial statements

Trade Ministry of Indonesia has imposed a new franchise regulation that may hurt small and medium-size franchising businesses. The new franchising regulations demand all franchisers to provide business financial data which at least consists of two years financial statements. Under the new policy, both franchisers and franchisees are also required to prioritize the use of local goods and resources under appropriate conditions. As the newly introduced franchising regulations are too rigid and restraining, some franchising companies are planning to follow a different available regulation system that works similarly as the franchising system. The "Licensing Scheme" regulation, imposed by Justice and Human Rights Ministry, gives better flexibility for companies to carry out their business.

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indonesia

Mandala Airlines To Spend USD 4 Billion on 30 Airbus Airplanes

Warwick Brady, CEO of Mandala Airlines, announced that Mandala Airlines of Indonesia will spend USD 4 billion on 30 new Airbus A310 and A320 aircraft over the next 5 years.

Warwick Brady, CEO of Mandala Airlines, announced that Mandala Airlines of Indonesia will spend USD 4 billion on 30 new Airbus A310 and A320 aircraft over the next 5 years. One of the aircraft has been delivered and three others will be delivered before the end of the year. Mandala plans to serve regional routes to Macao, Singapore, Malaysia, Hong Kong and Australia

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indonesia

Strong Exports Increase Indonesia's Balance of Payments to Surplus

Strong exports have increased Indonesia's 2nd quarter balance of payments to a surplus of U$3.63 billion.This tremendous increase is due to strong products exports,

Strong exports have increased Indonesia's 2nd quarter balance of payments to a surplus of U$3.63 billion. This tremendous increase is due to strong products exports, which mostly come from non- oil and gas exports, and a growing entry of foreign finances into the local capital markets. A boost in investors' purchasing power on Indonesian assets has improved the overall balance of Indonesia's capital and financial account to $2.21 billion. Adding up the 2007's first quarter figures, Indonesia is enjoying overall strong growth of $8 billion, and will be anticipating its growth to reach $11.49 billion by the end of the year.

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indonesia

Four State Indonesian Banks To Write Off Loans To Small and Medium-Sized Firms

Four state lenders have agreed to write off loans, i.e., give "loan haircuts" worth Rp 17.9 trillion (US$2 billion) to one million of their small and medium-sized enterprises (SMEs) clients.

Four state lenders have agreed to write off loans, i.e., give "loan haircuts" worth Rp 17.9 trillion (US$2 billion) to one million of their small and medium-sized enterprises (SMEs) clients. The haircuts will apply to the principle payments of loans less than Rp 5 billion, and those covered by collateral, Bank Negrar Indonesia (BNI) president Sigit Pramono told reporters on Monday.

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indonesia

Leading Cement Producer Indocement To Raise Production Capacity

Leading Cement producer PT Indocement Tunggal Prakarsa is set to gradually increase it's production capacity to 20 million tons a year by 2009. Indocement is one of Indonesia top three cement producers, currently operating three plants with a total capacity of 15 million tons.

Leading Cement producer PT Indocement Tunggal Prakarsa is set to gradually increase it's production capacity to 20 million tons a year by 2009. Indocement is one of Indonesia top three cement producers, currently operating three plants with a total capacity of 15 million tons. The Indonesian goverment has made infrastructure development one of its main priorities for the next few years in order to meet its economic growth targets of above six percent per year. This will lead to an increase in cement demand.

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indonesia

Indonesia LPG Conversion Program Impacts The Poor

The Indonesian government's program to convert from kerosene to LPG is running into difficulties among the Indonesian populace, and most adversely affecting the poor.

The Indonesian government's program to convert from kerosene to LPG is running into difficulties among the Indonesian populace, and most adversely affecting the poor. Last year, the government started its kerosene-to-LPG conversion program wi the goal of slashing its subsidy spending on kerosene, which costs the Indonesian goverment about Rp 40 trillion (USD $43.3 billion) a year. State-owned oil and gas company Pertamina is the operation of the new conversion program. The implementation of the conversion program has faced widespread public opposition because it has caused serious shortages in kerosene supply. In many parts of the country, people have to spend the major portion of their day in line just to purchase a few liters of kerosene.

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indonesia

JPEPA Compared to Japanese Trade Agreements With Indonesia and Malaysia

IBON Foundation Inc, and independent research institution, has examined the Japan-Philippines Economic Partnership Agreement (JPEPA) and found that it compares poorly to trade agreements Japan has formed with Malaysia and Indonesia. Japan's other trade pacts were used as comparisons because of the similar conditions for the trade deals, but IBON research head Sonny Africa has cited that the other countries were able to retain tariff protections on many more products and investment controls than the Philippines has under the JPEPA.

IBON Foundation Inc, and independent research institution, has examined the Japan-Philippines Economic Partnership Agreement (JPEPA) and found that it compares poorly to trade agreements Japan has formed with Malaysia and Indonesia. Japan's other trade pacts were used as comparisons because of the similar conditions for the trade deals, but IBON research head Sonny Africa has cited that the other countries were able to retain tariff protections on many more products and investment controls than the Philippines has under the JPEPA.

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indonesia

ASEAN, Japan Now Keen on Free Trade Area by November

After nearly four years of talks, Japan and the Association of Southeast Asian Nations (Asean) may come to terms by November to form a free-trade area.

After nearly four years of talks, Japan and the Association of Southeast Asian Nations (Asean) may come to terms by November to form a free-trade area. As part of Asean's annual summit of dialogue between trade ministers, Japan's Trade and Industry Minister Akira Amari held meetings over the weekend in Manila with his Asean counterparts. Currently, Japan is Asean's largest source of foreign direct investment (FDI) with direct spending rising 50 percent last year to USD 10.8 billion. According to Asean data, Asean-Japan trade totaled USD 154 billion in 2005, which accounted for 13 percent of the groups total exports and imports. Asean members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

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indonesia

Japan-ASEAN Free Trade Agreement Reached

Japan has reached a trade agreement with the Association of Southeast Asian Nations (ASEAN) known as the ASEAN-Japan Comprehensive Economic Partnership Agreement. Under the free trade agreement, Japan will immediately repeal 90 percent of its import tariffs from ASEAN in order to be able to compete with China and South Korea. Japan and ASEAN will sign the agreement in Singapore when the leaders meet in November.

Japan has reached a trade agreement with the Association of Southeast Asian Nations (ASEAN) known as the ASEAN-Japan Comprehensive Economic Partnership Agreement. Under the free trade agreement, Japan will immediately repeal 90 percent of its import tariffs from ASEAN in order to be able to compete with China and South Korea. Japan and ASEAN will sign the agreement in Singapore when the leaders meet in November.

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indonesia

Chinese Companies Seeking Local Jakarta Joint Venture Partners For Factories To Produce Technical Equipment

At least five Chinese companies are exploring the possibility of entering into joint ventures with partners to build factories to pruduce technical equipment for both local and international markets.. This announcement was made on Monday by Wang Qing Jang, senior director for Shanghai's foreign economic relations and trade commission. Speaking at a media conference to mark the sixth Chinese technical equipment exhibition in Jakarta, Jang stated the Chinese companies would make use of the exhibition to met and discuss with local partners interesting in cooperating with them.

At least five Chinese companies are exploring the possibility of entering into joint ventures with partners to build factories to pruduce technical equipment for both local and international markets.. This announcement was made on Monday by Wang Qing Jang, senior director for Shanghai's foreign economic relations and trade commission. Speaking at a media conference to mark the sixth Chinese technical equipment exhibition in Jakarta, Jang stated the Chinese companies would make use of the exhibition to met and discuss with local partners interesting in cooperating with them.

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indonesia

Japan and Indonesia Sign Bilateral Agreement

Japan and Indonesia signed a bilateral agreement yesterday to expand their economic ties. Under the agreement, Japan and Indonesia will cut tariffs 90 percent and 93 percent, respectively. The pact will greatly improve trade and investment between the two countries, and will also enable semiprofessional Indonesian workers to enter Japan.

Japan and Indonesia signed a bilateral agreement yesterday to expand their economic ties. Under the agreement, Japan and Indonesia will cut tariffs 90 percent and 93 percent, respectively. The pact will greatly improve trade and investment between the two countries, and will also enable semiprofessional Indonesian workers to enter Japan.

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indonesia

Indonesia and Japan Sign Free Trade Pact

After a negotiation period that spanned two years, Indonesia and Japan signed a wide-ranging free trade pact today, during a visit by Japanese Priminister Shinzo Abe to Indonesian Pressident Susilo Bambang Yudhoyono. The Indonesia-Japan Economic Partnership Agreement will see reductions to zero for more than 90% of Japan's tariff's on 9,275 items.

After a negotiation period that spanned two years, Indonesia and Japan signed a wide-ranging free trade pact today, during a visit by Japanese Priminister Shinzo Abe to Indonesian Pressident Susilo Bambang Yudhoyono. The Indonesia-Japan Economic Partnership Agreement will see reductions to zero for more than 90% of Japan's tariff's on 9,275 items.

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indonesia

Bank Negara Indonesia Shares Drop

After selling a stake of as much as USD 870 million, the shares of Indonesia's third largest lender, Bank Negara Indonesia, dropped 7 percent yesterday. The sale is part of the biggest privatization in Indonesia so far and created a revenue worth USD 1.31 billion to the state and the bank.

After selling a stake of as much as USD 870 million, the shares of Indonesia's third largest lender, Bank Negara Indonesia, dropped 7 percent yesterday. The sale is part of the biggest privatization in Indonesia so far and created a revenue worth USD 1.31 billion to the state and the bank.

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indonesia

Bank Indonesia Urged to Take Action to Prevent Market Panic

Bank Indonesia must take a more proactive role in controlling the market fluctuations of the Rupiah to prevent investors from panicking. Emphasis was placed on controlling banks, particularly foreign banks, which have been active in speculative buying.

Bank Indonesia must take a more proactive role in controlling the market fluctuations of the Rupiah to prevent investors from panicking. Emphasis was placed on controlling banks, particularly foreign banks, which have been active in speculative buying.

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indonesia

Indonesian Banks to Determine Capital Adequacy Ratios Themselves

According to the Deputy Governor of Bank Indonesia (BI), Indonesian banks will be allowed to determine their capital adequacy ratios themselves as of 2009. In the past, the calculations had been processed according to a standard model that had been implemented by BI. This model will be replaced by the internal models for the respective banks, starting at major banks with branches abroad and banks that provide foreign exchange operations.

According to the Deputy Governor of Bank Indonesia (BI), Indonesian banks will be allowed to determine their capital adequacy ratios themselves as of 2009. In the past, the calculations had been processed according to a standard model that had been implemented by BI. This model will be replaced by the internal models for the respective banks, starting at major banks with branches abroad and banks that provide foreign exchange operations.

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indonesia

Indonesia and Vietnam to Cooperate on Anti-Corruption

The Indonesian government and the Vietnamese government have agreed to cooperate on fighting against corruptions in both countries. The Indonesian Foreign Affairs Minister hopes that this cooperation will not only strengthen bilateral cooperation, but also to effectively reduce the corruption cases in both Countries. This cooperation will be based on the exchange of both countries' experiences in handling various corruption cases.

The Indonesian government and the Vietnamese government have agreed to cooperate on fighting against corruptions in both countries. The Indonesian Foreign Affairs Minister hopes that this cooperation will not only strengthen bilateral cooperation, but also to effectively reduce the corruption cases in both Countries. This cooperation will be based on the exchange of both countries' experiences in handling various corruption cases.

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indonesia

Businesses Hope Indonesia-China Relation Remains Good

Business organizations in Indonesia hope, despite the recent trade conflict between China and Indonesia, that both countries still maintain their bilateral economic cooperation. An official of the Indonesian Chamber of Commerce and Industry said China and Indonesia could develop a beneficial relationship in various economic sectors to be competitive in the global market. One particular sector is manufacturing, in which China with its cheap supply of labor can cooperate with Indonesia that has cheap supply of raw materials.

Business organizations in Indonesia hope, despite the recent trade conflict between China and Indonesia, that both countries still maintain their bilateral economic cooperation. An official of the Indonesian Chamber of Commerce and Industry said China and Indonesia could develop a beneficial relationship in various economic sectors to be competitive in the global market. One particular sector is manufacturing, in which China with its cheap supply of labor can cooperate with Indonesia that has cheap supply of raw materials.

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indonesia

Indonesian Government Fights Illiteracy

Indonesian government has allocated IDR 600 billion for the eradication of illiteracy. The total of IDR 470 billion is used for operational fees, tutor payment, books and stationary procurement; in addition the allocated funds for textbooks totals IDR 30 billion. Currently 12.88 million people, about 8.07 percent of total population in Indonesia, cannot read. The government plans to reduce the illiteracy level to 5 percent by late 2009. Based on the national percentage, the highest number of illiterate people are in East Java, Central Java, South Sulawesi, and West Nusa Tenggara.

Indonesian government has allocated IDR 600 billion for the eradication of illiteracy. The total of IDR 470 billion is used for operational fees, tutor payment, books and stationary procurement; in addition the allocated funds for textbooks totals IDR 30 billion. Currently 12.88 million people, about 8.07 percent of total population in Indonesia, cannot read. The government plans to reduce the illiteracy level to 5 percent by late 2009. Based on the national percentage, the highest number of illiterate people are in East Java, Central Java, South Sulawesi, and West Nusa Tenggara.

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indonesia

Oil Companies in Vietnam, Indonesia, and Malaysia Form Joint Stock Company

Oil companies in Vietnam, Indonesia, and Malaysia are expected to sign a contract today to explore oil and gas reserves in Block Randu Gunting, Indonesia. The three oil companies are forming a joint venture company, Joint Operating Company (PCPP), to extract energy resources from the region in Indonesia but also plan on expanding their business into Vietnam and Malaysia.

Oil companies in Vietnam, Indonesia, and Malaysia are expected to sign a contract today to explore oil and gas reserves in Block Randu Gunting, Indonesia. The three oil companies are forming a joint venture company, Joint Operating Company (PCPP), to extract energy resources from the region in Indonesia but also plan on expanding their business into Vietnam and Malaysia.

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indonesia

Indonesia Out of Poverty by 2030

Mohammad Yunus, who received Nobel Peace Price in 2006, believes that Indonesia could be free from poverty by 2030. In the lecture attended by both the Indonesian President and Vice President, Yunus said that Indonesia's efforts in reducing the poverty level are in line with the Millennium Development Goals (MDG) program, which aims to reduce the poverty level down to 50 percent by 2015. To reduce poverty, he proposed the following methods: distributing soft loans to the poor without any collateral and creating the legal standing that can produce micro banks for poor people.

Mohammad Yunus, who received Nobel Peace Price in 2006, believes that Indonesia could be free from poverty by 2030. In the lecture attended by both the Indonesian President and Vice President, Yunus said that Indonesia's efforts in reducing the poverty level are in line with the Millennium Development Goals (MDG) program, which aims to reduce the poverty level down to 50 percent by 2015. To reduce poverty, he proposed the following methods: distributing soft loans to the poor without any collateral and creating the legal standing that can produce micro banks for poor people.

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indonesia

Malaysia Deported 900 Indonesian Illegal Workers

Until July, Malaysia has deported 900 Indonesian migrant workers through the Entikong checkpoint in West Kalimantan for not having the required immigration documents, such as passport and working permit visa. The workers had generally entered Malaysia through unofficial channels relying only on the tourist visa to work in Malaysia; without any working permit, the workers are not legal to work in Malaysia.

Until July, Malaysia has deported 900 Indonesian migrant workers through the Entikong checkpoint in West Kalimantan for not having the required immigration documents, such as passport and working permit visa. The workers had generally entered Malaysia through unofficial channels relying only on the tourist visa to work in Malaysia; without any working permit, the workers are not legal to work in Malaysia.

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indonesia

Number of Life Insurance Holders in Indonesia Increases

The number of life insurance policy holders in Indonesia increased to 94 percent in the first half of 2007; 30 percent of the total number comprising unit link product subscriber. The Chairman of the Indonesian Life Insurance Companies Association (AAJL) said that many people have transfered their money from banks to insurance due to a decrease in bank interest rates and in deposit insurance. AAJL has 6 million of personal life insurance holders and 25 million insurance groups with a total asset of IRP 80 trillion.

The number of life insurance policy holders in Indonesia increased to 94 percent in the first half of 2007; 30 percent of the total number comprising unit link product subscriber. The Chairman of the Indonesian Life Insurance Companies Association (AAJL) said that many people have transfered their money from banks to insurance due to a decrease in bank interest rates and in deposit insurance. AAJL has 6 million of personal life insurance holders and 25 million insurance groups with a total asset of IRP 80 trillion.

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indonesia

No Trade War Between Indonesia and China

The Indonesian Minster of Economic Affairs, Boediono, said that there is no trade war between Indonesia and China following these incidents: a ban of aquatic product from Indonesia, and ban of candies from China. The quarantine officials of both countries found that the imported products contained dangerous substances. In addition, Boediono said that these are common issues in trading between countries, and he hoped that both countries could give and receive explanations in order to resolve the trade issue between China and Indonesia.

The Indonesian Minster of Economic Affairs, Boediono, said that there is no trade war between Indonesia and China following these incidents: a ban of aquatic product from Indonesia, and ban of candies from China. The quarantine officials of both countries found that the imported products contained dangerous substances. In addition, Boediono said that these are common issues in trading between countries, and he hoped that both countries could give and receive explanations in order to resolve the trade issue between China and Indonesia.

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indonesia

Indonesia and Iran to Build USD 5.6 Billion Oil Refinery

Indonesia and Iran have agreed to build USD 5.6 billion oil refinery in Bojanegara, Banten, Indonesia. The plant, with a processing capacity of 300,000 barrels of crude oil per day, will be constructed next year and will be completed in 2012. Officials from both countries will meet this August in Teheran, Iran to discuss the project.

Indonesia and Iran have agreed to build USD 5.6 billion oil refinery in Bojanegara, Banten, Indonesia. The plant, with a processing capacity of 300,000 barrels of crude oil per day, will be constructed next year and will be completed in 2012. Officials from both countries will meet this August in Teheran, Iran to discuss the project.

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indonesia

Mutual Imports Ban Threatens Indonesia - China Relation

The Indonesia-China Institute of Cultural and Socio-Economic Cooperation Chairman said that the Indonesia - China bilateral cooperation which is based on strategic partnership could be threatened if the government of two countries don't resolve this mutual import ban soon. Around 2 weeks ago, the Indonesian Drugs and Food Control Agency found candies imported from China containing formaldehyde. In addition, the Chinese Quarantine Agency announced a ban on Indonesian fishery products imports because the products contain dangerous substances such as mercury and cadmium.

The Indonesia-China Institute of Cultural and Socio-Economic Cooperation Chairman said that the Indonesia - China bilateral cooperation which is based on strategic partnership could be threatened if the government of two countries don't resolve this mutual import ban soon. Around 2 weeks ago, the Indonesian Drugs and Food Control Agency found candies imported from China containing formaldehyde. In addition, the Chinese Quarantine Agency announced a ban on Indonesian fishery products imports because the products contain dangerous substances such as mercury and cadmium.

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indonesia

Indonesian Workers in Syria to be Legalized

As many as 45,000 Indonesian workers in Syria will be legalized next September. Syria is not yet a destination for Indonesian workers placement because of the country's minimum wage has not met the standard set by the National Agency for Indonesian Workers Placement and Protection (BNP2TKI). However, because a lot of workers has left for Syria since 5 years ago, starting this year the BNP2TKI regards Syria as one of the placement destination countries for Indonesian workers.

As many as 45,000 Indonesian workers in Syria will be legalized next September. Syria is not yet a destination for Indonesian workers placement because of the country's minimum wage has not met the standard set by the National Agency for Indonesian Workers Placement and Protection (BNP2TKI). However, because a lot of workers has left for Syria since 5 years ago, starting this year the BNP2TKI regards Syria as one of the placement destination countries for Indonesian workers.

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indonesia

Italy to Debt Swap with Indonesia

Italy plans to follow Germany's measure of debt swap for Indonesian government's debt. The value of debt to be swapped will be IDR 250 billion. The plan is to use the debt to finance reconstruction programs in Aceh and Nias, which were devastated by tsunami several years ago. Earlier, the German government conducted the similar policy when Indonesia's debt of IDR 250 billion was swapped to finance the education and environment sectors. Indonesian government continues to campaign for debt swap to creditor countries.

Italy plans to follow Germany's measure of debt swap for Indonesian government's debt. The value of debt to be swapped will be IDR 250 billion. The plan is to use the debt to finance reconstruction programs in Aceh and Nias, which were devastated by tsunami several years ago. Earlier, the German government conducted the similar policy when Indonesia's debt of IDR 250 billion was swapped to finance the education and environment sectors. Indonesian government continues to campaign for debt swap to creditor countries.

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indonesia

Indonesia - Japan EPA Implementation to Begin in November

The Indonesia-Japan Economic Partnership Agreement (EPA), which is scheduled to be signed on August 20 is expected to be implemented in November, said the Trade Minister of Indonesia, Mari Elka Pangestu. With the agreement Indonesia hopes to increase its export market share for a variety of its products in Japan. At present Japan contributes to 20 percent of Indonesia's total exports. Japan also agrees to assist Indonesia on various sectors (energy, manufacturing, agriculture, fishery) and in export promotion and promotion of small and medium enterprises.

The Indonesia-Japan Economic Partnership Agreement (EPA), which is scheduled to be signed on August 20 is expected to be implemented in November, said the Trade Minister of Indonesia, Mari Elka Pangestu. With the agreement Indonesia hopes to increase its export market share for a variety of its products in Japan. At present Japan contributes to 20 percent of Indonesia's total exports. Japan also agrees to assist Indonesia on various sectors (energy, manufacturing, agriculture, fishery) and in export promotion and promotion of small and medium enterprises.

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indonesia

Indonesia: IDB to Finance Infrastructure in Jakarta

The Jeddah-based Islamic Development Bank (IDB) is exploring the possibility to finance infrastructure developments in Jakarta with loans amounting up to USD 100 million. Yousof Khan, a representative of IDB, said that the bank is interested in financing several projects, such as the city's monorail project, the capacity enlargement of her water waste, and also the garbage treatment installations. The governor of Jakarta, Sutiyoso is doubtful that the IDB would provide such financing because its service were based on a shariah system that involves procedures Indonesia was legally still unable to follow.

The Jeddah-based Islamic Development Bank (IDB) is exploring the possibility to finance infrastructure developments in Jakarta with loans amounting up to USD 100 million. Yousof Khan, a representative of IDB, said that the bank is interested in financing several projects, such as the city's monorail project, the capacity enlargement of her water waste, and also the garbage treatment installations. The governor of Jakarta, Sutiyoso is doubtful that the IDB would provide such financing because its service were based on a shariah system that involves procedures Indonesia was legally still unable to follow.

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indonesia

Indonesia: Entrepreneurs Protests Over New Merger Regulations

Entrepreneurs in Indonesia that previously complained over the law that requires company to allocate funds for Corporate Social Responsibility (CSR) are now facing a new dilemma. The new merger law requires companies to disclose in writing their plan of the merger to the companies' employees at least 30 days in advance prior to the shareholders' meeting. The head of APINDO, Sofjan Wanani, argues that this merger law is unreasonable because it seems that the companies' merger need to be approved by a trade union.

Entrepreneurs in Indonesia that previously complained over the law that requires company to allocate funds for Corporate Social Responsibility (CSR) are now facing a new dilemma. The new merger law requires companies to disclose in writing their plan of the merger to the companies' employees at least 30 days in advance prior to the shareholders' meeting. The head of APINDO, Sofjan Wanani, argues that this merger law is unreasonable because it seems that the companies' merger need to be approved by a trade union.

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indonesia

Indonesian Central Bank to Hold Interest rates

Indonesian Central Bank (BI) has decided to hold interest rates steady at the moment. The rationale behind this monetary policy is that the year on year and month to month inflation rate until July was high. The year on year inflation rate has reached 6.6 percent and the July inflation rate touched 0.72 percent. An economist at PT Bank Mandiri said that domestic and international market players are looking for stability, so it's not the right moment for the Central Bank to slash the interest rate.

Indonesian Central Bank (BI) has decided to hold interest rates steady at the moment. The rationale behind this monetary policy is that the year on year and month to month inflation rate until July was high. The year on year inflation rate has reached 6.6 percent and the July inflation rate touched 0.72 percent. An economist at PT Bank Mandiri said that domestic and international market players are looking for stability, so it's not the right moment for the Central Bank to slash the interest rate.

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indonesia

Russia Subsidizes Wheat Flour to Indonesia

The Russian Federation had subsidized wheat flour worth of USD 2 million for Indonesian children; this assistance was handed over the Indonesian government through the World Food Program (WFP). The Deputy Director of WFP said that the wheat flour would later be processed into biscuit for distribution to 216 thousand children in Indonesia under the school food aid program. The school food program goal is to encourage attendance of students and improve their concentration in the classroom.

The Russian Federation had subsidized wheat flour worth of USD 2 million for Indonesian children; this assistance was handed over the Indonesian government through the World Food Program (WFP). The Deputy Director of WFP said that the wheat flour would later be processed into biscuit for distribution to 216 thousand children in Indonesia under the school food aid program. The school food program goal is to encourage attendance of students and improve their concentration in the classroom.

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indonesia

Indonesia's Central Bank to Control the Currency

A Financial market analyst has reminded the Central Bank of Indonesia to control the Indonesian Rupiah exchange rate that continues to decrease against US dollar. If panic selling keeps on occurring in the stock market, then the Rupiah will continue to be depressed. According to Financial market analyst Farial Anwar, investors' potential losses due to the Rupiah exchange rate slide have already been higher than those in neighboring countries, like Malaysia, Singapore, and even Thailand.

A Financial market analyst has reminded the Central Bank of Indonesia to control the Indonesian Rupiah exchange rate that continues to decrease against US dollar. If panic selling keeps on occurring in the stock market, then the Rupiah will continue to be depressed. According to Financial market analyst Farial Anwar, investors' potential losses due to the Rupiah exchange rate slide have already been higher than those in neighboring countries, like Malaysia, Singapore, and even Thailand.

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indonesia

Indonesia: Exports and Imports Decrease in June

Indonesia exports during June 2007 decreased by 2.98 percent to USD 9.42 billion compared to May. In addition, the value of imports in June 2007 amounted to USD 5.943 billion or a 8.57 percent decrease compared to the previous month's figure of USD 6.49 billion. Despite this decrease, the cumulative value of exports and imports in June 2007 went up.

 

Indonesia exports during June 2007 decreased by 2.98 percent to USD 9.42 billion compared to May. In addition, the value of imports in June 2007 amounted to USD 5.943 billion or a 8.57 percent decrease compared to the previous month's figure of USD 6.49 billion. Despite this decrease, the cumulative value of exports and imports in June 2007 went up.

 

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indonesia

Russia's Interests in Oil and Gas blocks in Indonesia

A number of Russian oil and gas companies such as Sevitech and LukOil are interested in the oil and gas blocks, in eastern Indonesia, that will be offered in a working area auction this August. This is the first time the Russia has entered into the oil and gas industry in Indonesia. The Indonesian Department of Energy and Mineral Resources will put 25 working areas for gas and oil up for auction this month.

A number of Russian oil and gas companies such as Sevitech and LukOil are interested in the oil and gas blocks, in eastern Indonesia, that will be offered in a working area auction this August. This is the first time the Russia has entered into the oil and gas industry in Indonesia. The Indonesian Department of Energy and Mineral Resources will put 25 working areas for gas and oil up for auction this month.

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indonesia

Indonesia to Extend Rice Import Window

The Indonesian government has approved the time extension to import rice until 2008. Bayu Krisnamurthi, Deputy for Marine and Agriculture Affairs to the Coordinating Minister for the Economy, stated that this decision is mainly for an anticipatory purpose if there is any shortage during this period. However, the Logistics Bureau (Bulog) must still prioritize domestic supply over imports of rice.

The Indonesian government has approved the time extension to import rice until 2008. Bayu Krisnamurthi, Deputy for Marine and Agriculture Affairs to the Coordinating Minister for the Economy, stated that this decision is mainly for an anticipatory purpose if there is any shortage during this period. However, the Logistics Bureau (Bulog) must still prioritize domestic supply over imports of rice.

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indonesia

Indonesia: Government Issues IRP 773.023 Trillion Bonds

According to the Directorate General of Debt Management at the Finance Ministry, the Indonesian Government has issued IRP 773.023 Trillion worth of bonds until July 17, 2007, consisting of tradeable notes worth IRP 512.590 trillion and non-tradeable notes worth IRP 260.433 trillion. By floating these bonds, the Indonesian government is able to create an opportunity for the private sector to invest in secure government bonds while finance the government's expeditures.

According to the Directorate General of Debt Management at the Finance Ministry, the Indonesian Government has issued IRP 773.023 Trillion worth of bonds until July 17, 2007, consisting of tradeable notes worth IRP 512.590 trillion and non-tradeable notes worth IRP 260.433 trillion. By floating these bonds, the Indonesian government is able to create an opportunity for the private sector to invest in secure government bonds while finance the government's expeditures.

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indonesia

Indonesian Minister Embarks on Nuclear Energy Mission to South Korea and Japan

Dr. Carunia Mulya Firdausy, the Indonesian Minister of Research and Technology, has embarked on a 10-day working mission with the Ministry of Economic, Trade and Industrial Affairs (METI) to oversee Japanese and Korean nuclear energy development and control. Dr. Firdausy stated that this is the time for Indonesia to learn from both South Korea and Japan in order to implement the development of a nuclear energy program. Through scouring new forms of renewable energy, Dr. Firdausy commented that Indonesia can no longer depend simply on oil and alternative sources of energy need to be explored.

Dr. Carunia Mulya Firdausy, the Indonesian Minister of Research and Technology, has embarked on a 10-day working mission with the Ministry of Economic, Trade and Industrial Affairs (METI) to oversee Japanese and Korean nuclear energy development and control. Dr. Firdausy stated that this is the time for Indonesia to learn from both South Korea and Japan in order to implement the development of a nuclear energy program. Through scouring new forms of renewable energy, Dr. Firdausy commented that Indonesia can no longer depend simply on oil and alternative sources of energy need to be explored.

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indonesia

Indonesia: The Rise in July's Inflation Rate Means No Change in Interest Rate

An economist of Bank International Indonesia (BII) said that the faster than expected increase in Indonesia's consumer inflation rate could mean that the Central Bank would keep its benchmark interest rate steady in August. An economist expects the consumer inflation rate to ease in August as the pressure caused by higher costs of education and recreation diminishes.

An economist of Bank International Indonesia (BII) said that the faster than expected increase in Indonesia's consumer inflation rate could mean that the Central Bank would keep its benchmark interest rate steady in August. An economist expects the consumer inflation rate to ease in August as the pressure caused by higher costs of education and recreation diminishes.

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indonesia

Indonesia's Inflation Rate Increases in July

The Central Bureau of Statistics has reported that Indonesia monthly inflation rate rose to 0.72 percent in July, bringing the calendar inflation rate to 2.81 percent and the year-on-year inflation rate to 6.06 percent. Several factors that contribute to this inflation rate increase are the increase in educational, foodstuffs, recreation, sports, and crude palm oil costs.

The Central Bureau of Statistics has reported that Indonesia monthly inflation rate rose to 0.72 percent in July, bringing the calendar inflation rate to 2.81 percent and the year-on-year inflation rate to 6.06 percent. Several factors that contribute to this inflation rate increase are the increase in educational, foodstuffs, recreation, sports, and crude palm oil costs.

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indonesia

Indonesia Crude Palm Oil's Export Increases in June

The Central Bureau of Statistics (BPS) reported Indonesia's crude palm oil (CPO) exports increased 19.23 percent from USD 669.6 million in May to USD 798.4 million in June. The exports mainly went to China and Singapore. Indonesian economic observer, Poltak Hotradero said that the increase in CPO export had proven that the imposition of a higher export tax on the commodity was ineffective.

The Central Bureau of Statistics (BPS) reported Indonesia's crude palm oil (CPO) exports increased 19.23 percent from USD 669.6 million in May to USD 798.4 million in June. The exports mainly went to China and Singapore. Indonesian economic observer, Poltak Hotradero said that the increase in CPO export had proven that the imposition of a higher export tax on the commodity was ineffective.

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indonesia

Indonesia: Provincial Regulations Delay Investment in East Java

As many as 368 Provincial regulations in the province of East Java are considered to have a negative effect on business development, especially concerning investment in the region. A member of East Java Regional House of Representatives advised the local government to revoke the regulations as soon as possible in order to establish a conducive business environment and to attract new investors.

As many as 368 Provincial regulations in the province of East Java are considered to have a negative effect on business development, especially concerning investment in the region. A member of East Java Regional House of Representatives advised the local government to revoke the regulations as soon as possible in order to establish a conducive business environment and to attract new investors.

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indonesia

Indonesian Government Sets the CPO Export Tax Rate at 6.5 Percent

The government will maintain the Crude Palm Oil (CPO) export tax rate at 6.5 percent. Fahmi Idris, Industry Minister considers the current rate is idea with respect to the market; he further added that the rate has been imposed in order to keep cooking oil price at a moderate level and to guarantee supply in the market. However, some executive directors of vegetable oil companies in Indonesia feel that this rate would weaken the competitive edge of national CPO product.

The government will maintain the Crude Palm Oil (CPO) export tax rate at 6.5 percent. Fahmi Idris, Industry Minister considers the current rate is idea with respect to the market; he further added that the rate has been imposed in order to keep cooking oil price at a moderate level and to guarantee supply in the market. However, some executive directors of vegetable oil companies in Indonesia feel that this rate would weaken the competitive edge of national CPO product.

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indonesia

Shoes Industry in Indonesia Continues to Attracts Investors

Despite the fact that many shoe companies have closed their businesses, many investors are still interested in Indonesia's shoe industry. Capital Investment Coordinating Board (BKPM) Chairman M Lutfi said that the shoe industry is very labor intensive, and thus Indonesia with its cheap and large supply of labor fit for operational sites.

Despite the fact that many shoe companies have closed their businesses, many investors are still interested in Indonesia's shoe industry. Capital Investment Coordinating Board (BKPM) Chairman M Lutfi said that the shoe industry is very labor intensive, and thus Indonesia with its cheap and large supply of labor fit for operational sites.

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indonesia

Jakarta Share's Outlook

Indonesian share prices look promising and are expected to open higher on Tuesday as investors continue to accumulate stocks they have sold down recently. Telkom (a state-owned telecommunication company) shares increased 1.9 percent on Monday. A Market analyst said that the market is bouncing back from recent falls.

Indonesian share prices look promising and are expected to open higher on Tuesday as investors continue to accumulate stocks they have sold down recently. Telkom (a state-owned telecommunication company) shares increased 1.9 percent on Monday. A Market analyst said that the market is bouncing back from recent falls.

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Indonesia: Decrease in SBI's Foreign Funds

The Indonesian Central Bank (BI) has reported that the amount of foreign funds placed in Bank Indonesia Certificates (SBI) has continued to decrease. Despite this drop, the amount of foreign funds in Indonesian Rupiah and the stock market increased. As reason for the decrease in foreign funds is considered that markets in other countries are more interesting; in addition to this, there have been changes in the portfolio management of foreign investments.

The Indonesian Central Bank (BI) has reported that the amount of foreign funds placed in Bank Indonesia Certificates (SBI) has continued to decrease. Despite this drop, the amount of foreign funds in Indonesian Rupiah and the stock market increased. As reason for the decrease in foreign funds is considered that markets in other countries are more interesting; in addition to this, there have been changes in the portfolio management of foreign investments.

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Telecommunication Companies Cannot Be Financial Institutions

The Senior Deputy Governor of the Indonesian Central Bank, Miranda S. Goeltom said that telecommunication operator companies cannot play the role of financial institutions. The reason behind this is that only financial institutions, including banks, can collect funds and distribute them as loans. However, telecommunication companies in Indonesia are allowed to providie financial services such as electronic payment devices (e-money).

The Senior Deputy Governor of the Indonesian Central Bank, Miranda S. Goeltom said that telecommunication operator companies cannot play the role of financial institutions. The reason behind this is that only financial institutions, including banks, can collect funds and distribute them as loans. However, telecommunication companies in Indonesia are allowed to providie financial services such as electronic payment devices (e-money).

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Indonesian Governement Plans to Secure Energy Supply

Indonesian governement plans to secure energy supply by creating a Strategic Petroleum Reserves (SPR). Securing these petroleum reserves, the Minister of Energy and Mineral Resources hopes that if there is any energy shortage in the future, it would not disrupt the country's economic activities.

Indonesian governement plans to secure energy supply by creating a Strategic Petroleum Reserves (SPR). Securing these petroleum reserves, the Minister of Energy and Mineral Resources hopes that if there is any energy shortage in the future, it would not disrupt the country's economic activities.

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Jakarta to Invest IDR 144 Billion on Monorail Project

Jakarta City Adminstration plans to invest IDR 144 billions in the development of a monorail system. This monorail will not only reduce heavy traffic jam in Jakarta, but also make travelling across the regions in Jakarta more accessible to people that don't have automobiles. The local private banks are very supportive of the project as they plan to invest millions of rupiahs on this monorail project.

Jakarta City Adminstration plans to invest IDR 144 billions in the development of a monorail system. This monorail will not only reduce heavy traffic jam in Jakarta, but also make travelling across the regions in Jakarta more accessible to people that don't have automobiles. The local private banks are very supportive of the project as they plan to invest millions of rupiahs on this monorail project.

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Swedish Firm Invests IDR 1.3 Trillion in Indonesian Biofuel Sector

Sweden Bio Energy will invest IDR 1.3 trillion in the development of processing plants for biofuel in East Nusa Tenggara province (NTT), Indonesia. The Indonesian Minister of Energy said that Sweden Bio Energy will be the first private Swedish company and the largest investment that has been infused in the Indonesian biofuel sector. Sweden Bio Energy executives see the bright future for the development of biofuel in Indonesia.

Sweden Bio Energy will invest IDR 1.3 trillion in the development of processing plants for biofuel in East Nusa Tenggara province (NTT), Indonesia. The Indonesian Minister of Energy said that Sweden Bio Energy will be the first private Swedish company and the largest investment that has been infused in the Indonesian biofuel sector. Sweden Bio Energy executives see the bright future for the development of biofuel in Indonesia.

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Indonesian Rupiah's Fall Does Not Reflect Economic Apprehension

According to analysts, the depreciation of the Indonesian rupiah was not caused by decreased confidence in the Indonesian economy. Many money market observers in Indonesia, including Senior Deputy Governor of Indonesian Central Bank Miranda S. Goeltom, believe that the weakening of the rupiah was caused by external factors as opposed to internal factors. Market pressure on the rupiah began when the dollar strengthened against the yen after foreign investors bought dollars in the wake of its overnight plunge in New York.

According to analysts, the depreciation of the Indonesian rupiah was not caused by decreased confidence in the Indonesian economy. Many money market observers in Indonesia, including Senior Deputy Governor of Indonesian Central Bank Miranda S. Goeltom, believe that the weakening of the rupiah was caused by external factors as opposed to internal factors. Market pressure on the rupiah began when the dollar strengthened against the yen after foreign investors bought dollars in the wake of its overnight plunge in New York.

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Australia-Indonesia: Free Trade Agreement Feasibility

Indonesia and Australia have agreed to launch a feasibility study on a free trade agreement (FTA). The Australian Prime minister, John Howard said that this free trade pact will tighten the bond between the two nations. Indonesian President, Susilo Bambang Yudhoyono has also agreed upon the free trade pact considering that not only has Australia been increased imports of Indonesian merchandise, foodstuffs and beverages, but also Australia has been playing a positive role in the economic development of Indonesia.

Indonesia and Australia have agreed to launch a feasibility study on a free trade agreement (FTA). The Australian Prime minister, John Howard said that this free trade pact will tighten the bond between the two nations. Indonesian President, Susilo Bambang Yudhoyono has also agreed upon the free trade pact considering that not only has Australia been increased imports of Indonesian merchandise, foodstuffs and beverages, but also Australia has been playing a positive role in the economic development of Indonesia.

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Indonesian Food Producers are Unable to Compete in Global Market

The rejection of China's food import into the European Union and the United States can not yet elevate Indonesia's food and beverage market for competition on a global scale. Regulations governing food and beverage imports in the United States and the European Union are very tight. Mostly food and beverages in Indonesia have not met the standard sanitary reqirements. Only few varieties of produces, such as coffee and tea, can be exported to the United States, European Union, and many other countries.

The rejection of China's food import into the European Union and the United States can not yet elevate Indonesia's food and beverage market for competition on a global scale. Regulations governing food and beverage imports in the United States and the European Union are very tight. Mostly food and beverages in Indonesia have not met the standard sanitary reqirements. Only few varieties of produces, such as coffee and tea, can be exported to the United States, European Union, and many other countries.

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Indonesian Governement Distributes Free Money

The Indonesian Governement has extended free money to families in the regions in which the poverty rate is high, such as in Gorontalo, West Java, East Java, East Nusa Tenggara, North Sulawesi and West Sumatra. This aid will cover approxiamtely 500,000 families in the targeted regions above, and each family member will also receive between 200,000 to 800,000 Indonesian Rupiahs per year. The government hopes that this aid will help these families escape poverty for good.

The Indonesian Governement has extended free money to families in the regions in which the poverty rate is high, such as in Gorontalo, West Java, East Java, East Nusa Tenggara, North Sulawesi and West Sumatra. This aid will cover approxiamtely 500,000 families in the targeted regions above, and each family member will also receive between 200,000 to 800,000 Indonesian Rupiahs per year. The government hopes that this aid will help these families escape poverty for good.

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BHP Billiton, Miners Pace Asia-Pacific Index Losses

Slumping metal prices led Australian mining giant BHP Billiton Ltd. to complete its largest 2-day drop in nearly 5 months, joining miners across the region as the industry dragged down the regional benchmark index. Japan's Nippon Electric Glass Co. and Advantest Corp. fell as well, hurt by a downward adjustment in their earnings reports. The Morgan Stanley Capital International Asia-Pacific Index declined by 1.2 percent, hitting 158.64 at 6:04 pm in Tokyo. The key indexes of Australia, Hong Kong, Singapore and Indonesia, all posters of record highs earlier in the week, declined on Thursday. Benchmarks in South Korea and Taiwan suffered their largest declines in over 4 months.

Slumping metal prices led Australian mining giant BHP Billiton Ltd. to complete its largest 2-day drop in nearly 5 months, joining miners across the region as the industry dragged down the regional benchmark index. Japan's Nippon Electric Glass Co. and Advantest Corp. fell as well, hurt by a downward adjustment in their earnings reports. The Morgan Stanley Capital International Asia-Pacific Index declined by 1.2 percent, hitting 158.64 at 6:04 pm in Tokyo. The key indexes of Australia, Hong Kong, Singapore and Indonesia, all posters of record highs earlier in the week, declined on Thursday. Benchmarks in South Korea and Taiwan suffered their largest declines in over 4 months.

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Vietnam Increases Exports to Indonesia

Vietnam expects exports to Indonesia to reach USD 1.3 billion by the end of 2007 and USD 1.75 billion per year by 2010. Although Vietnam has exported 838,000 tons of crude oil and 644,000 tons of rice to Indonesia in the first six months of this year, Vietnam should increase the diversity of the exports to ensure earning levels stay high. Currently, Vietnam's major imports from Indonesia include animal feed, petroleum, clinker, and construction glass.

Vietnam expects exports to Indonesia to reach USD 1.3 billion by the end of 2007 and USD 1.75 billion per year by 2010. Although Vietnam has exported 838,000 tons of crude oil and 644,000 tons of rice to Indonesia in the first six months of this year, Vietnam should increase the diversity of the exports to ensure earning levels stay high. Currently, Vietnam's major imports from Indonesia include animal feed, petroleum, clinker, and construction glass.

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Singapore's Minister Predicts Indonesian Economic Prospect is Good

Lee Kuan Yew, Singapore's Senior Minister, said that the economic prospect in Indonesia is bright for the next two years, considering the Indonesian government will be able to achieve economic growth tallying 7 percent in 2007 and 9 percents by 2008. The Indonesian government plans to implement its commercial laws to provide legal certainty that will attract more foreign direct investments.

Lee Kuan Yew, Singapore's Senior Minister, said that the economic prospect in Indonesia is bright for the next two years, considering the Indonesian government will be able to achieve economic growth tallying 7 percent in 2007 and 9 percents by 2008. The Indonesian government plans to implement its commercial laws to provide legal certainty that will attract more foreign direct investments.

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Manpower Minister Approves Job Training Camp in Indonesia

Indonesian Manpower Minister, Erwin Suparno has just inaugurated the first job training center located in Bandung, West Java. This training center provides training, certification, and also placement services for would-be workers (three in one kiosk). The minister hopes that this training will prepare college graduates in their first jobs, and also will ease employers seeking good candidates to match for available positions.

Indonesian Manpower Minister, Erwin Suparno has just inaugurated the first job training center located in Bandung, West Java. This training center provides training, certification, and also placement services for would-be workers (three in one kiosk). The minister hopes that this training will prepare college graduates in their first jobs, and also will ease employers seeking good candidates to match for available positions.

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New Steps in Indonesia-South Korea Energy Cooperation

Indonesian President Susilo Bambang Yudhoyono and South Korean President Roh My-Hun have just signed a bilateral cooperation agreement at the Presidential Palace, Seoul. The agreement comprises not only cooperation in the energy sector, but also business development cooperation, including the target to increase South Korea's investment in Indonesia by 2012. Many corporations in South Korea have shown interest in investing in businesses in Indonesia because the country is now politically stable and has a cheap supply of laborers and land.

Indonesian President Susilo Bambang Yudhoyono and South Korean President Roh My-Hun have just signed a bilateral cooperation agreement at the Presidential Palace, Seoul. The agreement comprises not only cooperation in the energy sector, but also business development cooperation, including the target to increase South Korea's investment in Indonesia by 2012. Many corporations in South Korea have shown interest in investing in businesses in Indonesia because the country is now politically stable and has a cheap supply of laborers and land.

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Private Company Collaborates to Develop Nuclear Plants in Indonesia

Medco Energy International, Inc (Indonesia) is collaborating with Korea Hydro and Nuclear Power Co. to construct a nuclear powered electricity-generating plant project. This collaboration has been approved by both governments. Many Indonesian trained scientists and engineers are inexperienced in the development of nuclear plants, so with the combination of a large supply of laborers and lands in Indonesia with nuclear experts in Korea, this collaboration should be very fruitful.

Medco Energy International, Inc (Indonesia) is collaborating with Korea Hydro and Nuclear Power Co. to construct a nuclear powered electricity-generating plant project. This collaboration has been approved by both governments. Many Indonesian trained scientists and engineers are inexperienced in the development of nuclear plants, so with the combination of a large supply of laborers and lands in Indonesia with nuclear experts in Korea, this collaboration should be very fruitful.

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Indonesia Spends Big on Social Welfare and Infrastructure

Indonesian government makes a smart move by cutting back on bureaucracy spending and allocating more money to infrastructure and social welfare. The Vice President, Jusuf Kalla, said that the government will fix most bridges, roads and interstate highways, mainly in Kalimantan (Borneo island), Java, Sumatra and Papua. In addition to this, the government also plans to improve public health care services, fund rural development programs, and provide rice and other subsidized goods to the poor.

Indonesian government makes a smart move by cutting back on bureaucracy spending and allocating more money to infrastructure and social welfare. The Vice President, Jusuf Kalla, said that the government will fix most bridges, roads and interstate highways, mainly in Kalimantan (Borneo island), Java, Sumatra and Papua. In addition to this, the government also plans to improve public health care services, fund rural development programs, and provide rice and other subsidized goods to the poor.

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Reduction in Palm Oil Biofuel in Indonesia

Indonesian government officials have decided to reduce the development of palm oil biofuel due to the price hike in crude palm oil. Energy and Natural Resource minister Purnomo Yusgiantoro seeks other alternative resources for the development of biofuel. He says that many scientists from the leading universities in the country have been researching biofuel development using corn, soybeans, and other natural resources. With an increase in foreign investment and extensive government funding, the prospect of biofuel development is very bright in Indonesia.

Indonesian government officials have decided to reduce the development of palm oil biofuel due to the price hike in crude palm oil. Energy and Natural Resource minister Purnomo Yusgiantoro seeks other alternative resources for the development of biofuel. He says that many scientists from the leading universities in the country have been researching biofuel development using corn, soybeans, and other natural resources. With an increase in foreign investment and extensive government funding, the prospect of biofuel development is very bright in Indonesia.

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Diminishing Threat of Economic Crisis in Indonesia

Stephen Schwartz, IMF senior representative in Indonesia, said that countries in the Asian region have learned from bitter experiences in the past and now have applied many economic improvements. Indonesia, for instance, has a more solid macroeconomic framework compared to 10 years ago. This is seen through the decreasing of interest and poverty rates, banking sector improvements, and conducive government policy issuing.

Stephen Schwartz, IMF senior representative in Indonesia, said that countries in the Asian region have learned from bitter experiences in the past and now have applied many economic improvements. Indonesia, for instance, has a more solid macroeconomic framework compared to 10 years ago. This is seen through the decreasing of interest and poverty rates, banking sector improvements, and conducive government policy issuing.

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Indonesia Goes Green

Indonesian government has enacted a new energy law that aims to reduce the reliance on the refined oil and increase the use of other energy sources, such as natural gas, biofuels, and geothermal supplies. Companies operating in Indonesia have to obey this new energy regulations otherwise a penalty will be imposed. The president hopes that by using other types of energy resources, the country can reserve the conventional fossil-fuels, and can reduce the pollution nationwide. However, more progress is needed in the development of biofuels before this alternative energy could satisfy the domestic demand of conventional fossil-fuels.

Indonesian government has enacted a new energy law that aims to reduce the reliance on the refined oil and increase the use of other energy sources, such as natural gas, biofuels, and geothermal supplies. Companies operating in Indonesia have to obey this new energy regulations otherwise a penalty will be imposed. The president hopes that by using other types of energy resources, the country can reserve the conventional fossil-fuels, and can reduce the pollution nationwide. However, more progress is needed in the development of biofuels before this alternative energy could satisfy the domestic demand of conventional fossil-fuels.

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Indonesia Plans to Tighten Bureaucratic Spending

President Susilo Bambang Yudhoyono of Indonesia plans to allocate more budget in the infrastructure of the country rather than in bureaucratic spending. This is a move in order to create more employment, reduce poverty, and also increase the country's economic growth. However, many economists in Indonesia believe that this allocation would have minimal impact in the economy, since the decision appears to be political rather than economical in nature.

President Susilo Bambang Yudhoyono of Indonesia plans to allocate more budget in the infrastructure of the country rather than in bureaucratic spending. This is a move in order to create more employment, reduce poverty, and also increase the country's economic growth. However, many economists in Indonesia believe that this allocation would have minimal impact in the economy, since the decision appears to be political rather than economical in nature.

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South Korea Invests in Oil, Gas and Mining in Indonesia

South Korea has recently signed a contract with Indonesia regarding investment in oil, gas and mining (mainly coal mining). Being the world's fourth largest crude oil importing country, South Korea plans to secure more energy resources in order to meet domestic demand. This agreement will also strengthen overall bilateral relations between the two countries.

South Korea has recently signed a contract with Indonesia regarding investment in oil, gas and mining (mainly coal mining). Being the world's fourth largest crude oil importing country, South Korea plans to secure more energy resources in order to meet domestic demand. This agreement will also strengthen overall bilateral relations between the two countries.

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Positive Economic Growth in Indonesia

Is Indonesia now entering an economic recession? Many economists and market analysts in Indonesia is analyzing various factors, such as the growth of foreign investments, the currency stability of Indonesian Rupiahs against US Dollars, and the growth in bank lending. They are confident that Indonesian economy is in good shape and is recovering from the monetary crisis.

Is Indonesia now entering an economic recession? Many economists and market analysts in Indonesia is analyzing various factors, such as the growth of foreign investments, the currency stability of Indonesian Rupiahs against US Dollars, and the growth in bank lending. They are confident that Indonesian economy is in good shape and is recovering from the monetary crisis.

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Indonesia Suffering from Poor Natural Resource Management

Indonesia, a country with various abundant natural resources, such as oil, gold, silver, spices, and so on, has in fact been suffering from poor management in the natural resources it has. The Indonesian government mainly controls and regulates production and distribution of these natural resources. With corruption and poor management of these resources, Indonesians suffer from low income and high debt per capita growth.

Indonesia, a country with various abundant natural resources, such as oil, gold, silver, spices, and so on, has in fact been suffering from poor management in the natural resources it has. The Indonesian government mainly controls and regulates production and distribution of these natural resources. With corruption and poor management of these resources, Indonesians suffer from low income and high debt per capita growth.

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Asian Stocks Rise for First Time in Four Days

Asian stocks gained for the first time in four days, as price gains in copper, gold and oil helped BHP Billiton Ltd. and Zijin Mining Group Co. pace risers on the day. Growing demand in emerging markets, particularly China, continues to drive the global economy and corporate profits. The Morgan Stanley Capital International Asia-Pacific Index advanced 0.6 percent to close at 158.69, with 9 of 10 industry groups rising. The Jakarta Composite index led all index gains in the region with a jump of 1.7 percent. The Karachi Stock Exchange 100 Index (KSE 100) lost 3.4 percent, the sharpest decline in the region.

Asian stocks gained for the first time in four days, as price gains in copper, gold and oil helped BHP Billiton Ltd. and Zijin Mining Group Co. pace risers on the day. Growing demand in emerging markets, particularly China, continues to drive the global economy and corporate profits. The Morgan Stanley Capital International Asia-Pacific Index advanced 0.6 percent to close at 158.69, with 9 of 10 industry groups rising. The Jakarta Composite index led all index gains in the region with a jump of 1.7 percent. The Karachi Stock Exchange 100 Index (KSE 100) lost 3.4 percent, the sharpest decline in the region.

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Strong Asia-Pacific Currencies Lead to Slip in Regional Stocks

The Morgan Stanley Capital International Asia-Pacific Index slipped 0.1 percent on Tuesday to close at 157.81, as Asia-Pacific currencies such as the yen and Australian dollar traded strong. The Aussie dollar traded near an 18-year high while the yen experienced a pause in its weakening trend as it strengthened against both the US dollar and the euro. Markets dropped across the region except in Taiwan, Hong Kong, Indonesia and Thailand. Thailand's SET index was the region's biggest gainer, jumping 1.7 percent.

The Morgan Stanley Capital International Asia-Pacific Index slipped 0.1 percent on Tuesday to close at 157.81, as Asia-Pacific currencies such as the yen and Australian dollar traded strong. The Aussie dollar traded near an 18-year high while the yen experienced a pause in its weakening trend as it strengthened against both the US dollar and the euro. Markets dropped across the region except in Taiwan, Hong Kong, Indonesia and Thailand. Thailand's SET index was the region's biggest gainer, jumping 1.7 percent.

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Abe Visit in August to Cement Japanese-Indonesian FTA

Japan and Indonesia have agreed in principle to sign a free trade agreement that will eliminate tariffs on 92 percent of bilateral trade, create an energy security partnership, and immediately remove Indonesian tariffs on high-grade Japanese steel. The deal is expected to be finalized upon Japanese Prime Minister Shinzo Abe's visit to Jakarta in August.

Japan and Indonesia have agreed in principle to sign a free trade agreement that will eliminate tariffs on 92 percent of bilateral trade, create an energy security partnership, and immediately remove Indonesian tariffs on high-grade Japanese steel. The deal is expected to be finalized upon Japanese Prime Minister Shinzo Abe's visit to Jakarta in August.

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Malaysia-Indonesia Trade Grows

Prima, the association for Malaysian-Indonesian friendship, announced that bilateral trade between Malaysia and Indonesia increased over the last year to USD 8.6 billion. Malaysia is the largest foreign investor in Indonesia, with an investment of USD 2.6 billion last year. The Indonesian workforce in Malaysia contributes significantly to the Malaysian economy.

Prima, the association for Malaysian-Indonesian friendship, announced that bilateral trade between Malaysia and Indonesia increased over the last year to USD 8.6 billion. Malaysia is the largest foreign investor in Indonesia, with an investment of USD 2.6 billion last year. The Indonesian workforce in Malaysia contributes significantly to the Malaysian economy.

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Indonesia Predicts Economic Growth Up to 6.4-6.6 Percent

Finance Minister Sri Mulyani Indrawati stated that the "Indonesian government expects the economy to have grown at a rate of 6-6.1 percent year-on-year in the first half and the growth pace to accelerate to 6.4-6.6 percent in the second half." If these expectations are met, the government's target full-year GDP growth of 6.3 percent "should be achievable."

Finance Minister Sri Mulyani Indrawati stated that the "Indonesian government expects the economy to have grown at a rate of 6-6.1 percent year-on-year in the first half and the growth pace to accelerate to 6.4-6.6 percent in the second half." If these expectations are met, the government's target full-year GDP growth of 6.3 percent "should be achievable."

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Indonesian Government Cracks Down on Illegal Timber Exports

The Indonesian government cracked down on its smugglers feeding China's demand for timber. Lumber prices in China surged as the government's efforts had an immediate impact. The previous crackdown occurred two years ago and the Indonesian government continues to take illegal timber exports seriously.

The Indonesian government cracked down on its smugglers feeding China's demand for timber. Lumber prices in China surged as the government's efforts had an immediate impact. The previous crackdown occurred two years ago and the Indonesian government continues to take illegal timber exports seriously.

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Bank of Indonesia to Continue Interest Rate Cut

The stable Indonesian consumer price index in June has encouraged Bank Indonesia (BI) to cut down the interest rate, also known as BI rate, by 25 basis points. The interest policy for this month will be set on Thursday. Danareksa economist Purbaya Yudhi Sadewa stated "It is certainly better than the market expected."

The stable Indonesian consumer price index in June has encouraged Bank Indonesia (BI) to cut down the interest rate, also known as BI rate, by 25 basis points. The interest policy for this month will be set on Thursday. Danareksa economist Purbaya Yudhi Sadewa stated "It is certainly better than the market expected."

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Uzbek-Indonesian Business Forum Held in Tashkent

On Friday, industry heads, diplomats, and entrepreneurs alike began a dialogue in a business circle forum at the International Business Center in Tashkent to discuss Uzbek-Indonesian relations. The participants drew attention to the potential for trade and economic cooperation between the two nations, specifically in the light industry, transportation, finance, energy, medical and pharmaceutical sectors. Currently, Uzbekistan exports raw cotton fiber, metals, and vegetation whereas Indonesia exports medicine, transportation equipment, and timber products to the Central Asian nation.

On Friday, industry heads, diplomats, and entrepreneurs alike began a dialogue in a business circle forum at the International Business Center in Tashkent to discuss Uzbek-Indonesian relations. The participants drew attention to the potential for trade and economic cooperation between the two nations, specifically in the light industry, transportation, finance, energy, medical and pharmaceutical sectors. Currently, Uzbekistan exports raw cotton fiber, metals, and vegetation whereas Indonesia exports medicine, transportation equipment, and timber products to the Central Asian nation.

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Indonesia Relaunches Privatisation Drive

Indonesia is relaunching efforts to privatise dozens of state-owned companies. Sofyan Djalil, the minister for state-owned enterprises (SOEs), made this announcement on June 7 at a meeting of the Jakarta Foreign Correspondents Club. This is being done to improve performance and reduce the influence of political corruption. The Indonesian goverment will begin this privatisation program with a public offering in August of one of the country's largest state-owned banks, the Bank Negara Indonesia.

Indonesia is relaunching efforts to privatise dozens of state-owned companies. Sofyan Djalil, the minister for state-owned enterprises (SOEs), made this announcement on June 7 at a meeting of the Jakarta Foreign Correspondents Club. This is being done to improve performance and reduce the influence of political corruption. The Indonesian goverment will begin this privatisation program with a public offering in August of one of the country's largest state-owned banks, the Bank Negara Indonesia.

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Timor Leste Considers Building New Military

Timor Leste is considering the creation of a new national army, a missile-equipped navy, and an air force in order to protect oil and gas interests in the Timor Sea. The idea was first put forward in a recommendation by Timorese defense planners along with their Portuguese and Malaysian advisers. Australia and Indonesia were uninformed about the plan until its limited diplomatic release and will most likely not look favorably on this report, which is entitled Force 2020.

Timor Leste is considering the creation of a new national army, a missile-equipped navy, and an air force in order to protect oil and gas interests in the Timor Sea. The idea was first put forward in a recommendation by Timorese defense planners along with their Portuguese and Malaysian advisers. Australia and Indonesia were uninformed about the plan until its limited diplomatic release and will most likely not look favorably on this report, which is entitled Force 2020.

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Korea Criticizes 3 ASEAN Nations Over FTA Treaty

The new free trade agreement between South Korea and the Association of Southeast Asian Nations (ASEAN) has hit a road block as three ASEAN countries have failed to implement the necessary legal measures on time. The South Korean government strongly urged Indonesia, Myanmar, and Vietnam to correct the problem and refund the tariffs levied against Korean products since June 1, when the FTA treaty went into effect. Korea also threatened that, if the necessary changes were not implemented, Korea would exercise its rights under the agreement against them.

The new free trade agreement between South Korea and the Association of Southeast Asian Nations (ASEAN) has hit a road block as three ASEAN countries have failed to implement the necessary legal measures on time. The South Korean government strongly urged Indonesia, Myanmar, and Vietnam to correct the problem and refund the tariffs levied against Korean products since June 1, when the FTA treaty went into effect. Korea also threatened that, if the necessary changes were not implemented, Korea would exercise its rights under the agreement against them.

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Indonesian Mining Stocks Fall on Government's Possible Rescission of Mining Concessions

Indonesian mining shares fell tlhis week upon the government announcing it may rescind parts of mining concessions previously made, in order to secure national reserves for future generations. The government may take this action if mining companies don't have clear development plans.

Indonesian mining shares fell tlhis week upon the government announcing it may rescind parts of mining concessions previously made, in order to secure national reserves for future generations. The government may take this action if mining companies don't have clear development plans.

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Malaysia's Maxis Launches Groundbreaking Money Transfer Service

Maxis, Malaysia's number one telecommunication services provider, has launched the world's first international mobile to mobile money transfer service. Under a partnership with Philippines' Globe Telecom, this service will allow Filipino workers to transfer Ringgits to Pesos across the border instantly. Maxis is hoping to extend this service to Indonesia by the end of the month, thus capitalizing on the USD 4.2 billion a year that Filipino and Indonesian workers send home from Malaysia.

Maxis, Malaysia's number one telecommunication services provider, has launched the world's first international mobile to mobile money transfer service. Under a partnership with Philippines' Globe Telecom, this service will allow Filipino workers to transfer Ringgits to Pesos across the border instantly. Maxis is hoping to extend this service to Indonesia by the end of the month, thus capitalizing on the USD 4.2 billion a year that Filipino and Indonesian workers send home from Malaysia.

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indonesia

US Imposes Anti-dumping Duties on Gloss Paper Import

The US Department of Commerce has announced that it made a preliminary decision to impose duties of 23.19 percent to 99.65 percent on gross paper imports from China, South Korea, and Indonesia. The Chinese Ministry of Commerce has not made any comment on the new charge. According to the statistics from the Department of Commerce, the value of Chinese gloss paper imports in 2006 was $224 million, only 5 percent of the total US market.

The US Department of Commerce has announced that it made a preliminary decision to impose duties of 23.19 percent to 99.65 percent on gross paper imports from China, South Korea, and Indonesia. The Chinese Ministry of Commerce has not made any comment on the new charge. According to the statistics from the Department of Commerce, the value of Chinese gloss paper imports in 2006 was $224 million, only 5 percent of the total US market.

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indonesia

APEC to Study State-Owned Oil Firms

Asia-Pacific Economic Cooperation (APEC) energy ministers plan to study the impact of state ownership of oil and gas companies among its 21-member body by focusing on their trade and investment. The study expects to form partnerships between state-controlled and private oil companies in order to efficiently develop reserves.

Asia-Pacific Economic Cooperation (APEC) energy ministers plan to study the impact of state ownership of oil and gas companies among its 21-member body by focusing on their trade and investment. The study expects to form partnerships between state-controlled and private oil companies in order to efficiently develop reserves.

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indonesia

Indonesian Economy Expected to Grow 7-8 percent in 2007

At an investor forum this Tuesday, Indonesian Vice-President Jusuf Kalia stated Indonesia's economy could grow 7-8 percent this year. To achieve this growth rate, Vice-President Kalia stated that a lot of investment would be needed, and that the capital market, the banking sector, and other investors would play a key role in achieving that growth rate goal.

At an investor forum this Tuesday, Indonesian Vice-President Jusuf Kalia stated Indonesia's economy could grow 7-8 percent this year. To achieve this growth rate, Vice-President Kalia stated that a lot of investment would be needed, and that the capital market, the banking sector, and other investors would play a key role in achieving that growth rate goal.

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indonesia

Singapore's Temasek Under Investigation in Indonesia

Investment firm Temasek Holdings is under investigation by an Indonesian anti-monopoly watchdog for its alleged cross-ownership of two major Indonesian phone companies, Indosat and Telkomsel. Temasek has a 56 percent stake in SingTel Group, and wholly owns Singapore Technologies Telecom, which each have considerable holdings in Telkomsel and Indosat respectively. If cross-ownership evidence is found, Temasek could potentially face a cease-operations order.

Investment firm Temasek Holdings is under investigation by an Indonesian anti-monopoly watchdog for its alleged cross-ownership of two major Indonesian phone companies, Indosat and Telkomsel. Temasek has a 56 percent stake in SingTel Group, and wholly owns Singapore Technologies Telecom, which each have considerable holdings in Telkomsel and Indosat respectively. If cross-ownership evidence is found, Temasek could potentially face a cease-operations order.

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indonesia

Indonesian Shares Rise on Favorable Inflation Expectations

With encouraging inflation estimates announced for the month of May, trading was healthy on the Jakarta Stock Exchange as traders are optimistic that the central bank will cut interest rates soon. The Composite index increased by 1.2 percent to close at 2,104.246 points, paced by heavyweights Telkom and Astra, which gained by 3.1 percent and 4 percent respectively.

With encouraging inflation estimates announced for the month of May, trading was healthy on the Jakarta Stock Exchange as traders are optimistic that the central bank will cut interest rates soon. The Composite index increased by 1.2 percent to close at 2,104.246 points, paced by heavyweights Telkom and Astra, which gained by 3.1 percent and 4 percent respectively.

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indonesia

Indonesian Officials Worried Over Lending Target

The government's expectations that the banking industry would be able to increase lending by 33 percent by 2008 may be overly ambitious according to the Bank of Indonesia's Governor. He noted that the highest level ever achieved was 24 percent. The government wishes to achieve a growth target between 6.6 and 7 percent, part of which is expected to be financed by the country's commercial banks. Despite the relaxation of lending rules, last year's bank lending only grew at 14 percent and is expected to only reach 18 percent this year.

The government's expectations that the banking industry would be able to increase lending by 33 percent by 2008 may be overly ambitious according to the Bank of Indonesia's Governor. He noted that the highest level ever achieved was 24 percent. The government wishes to achieve a growth target between 6.6 and 7 percent, part of which is expected to be financed by the country's commercial banks. Despite the relaxation of lending rules, last year's bank lending only grew at 14 percent and is expected to only reach 18 percent this year.

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indonesia

Incentives Sought For Indonesian Companies To Go Public

The government of Indonesia is seeking to expeditiously enact taxation regulation aimed toward providing incentives for companies to go public. Their purpose is to ease up on foreign capital's excess demand for companies to invest in. There are concerns however that lowering the fees for going public may not be enough for many companies who wish to remain private because of their unwillingness to publicly reveal their business situations.

The government of Indonesia is seeking to expeditiously enact taxation regulation aimed toward providing incentives for companies to go public. Their purpose is to ease up on foreign capital's excess demand for companies to invest in. There are concerns however that lowering the fees for going public may not be enough for many companies who wish to remain private because of their unwillingness to publicly reveal their business situations.

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Indonesia Special Economic Zone Rules to Be Finalized

In a move likely to please potential investors, Indonesian officials have announced that the long-delayed legal structure for its special economic zone (SEZ) will be ready by the end of May. Despite the decision to bypass the legislature and enact the rules via government regulation, there is optimism that the establishment of SEZs will lead to increased investment and a decline in unemployment and poverty.

In a move likely to please potential investors, Indonesian officials have announced that the long-delayed legal structure for its special economic zone (SEZ) will be ready by the end of May. Despite the decision to bypass the legislature and enact the rules via government regulation, there is optimism that the establishment of SEZs will lead to increased investment and a decline in unemployment and poverty.

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indonesia

ILO Urges ASEAN Members to Boost Productivity Growth

The International Labor Organization (ILO) is urging the Association of Southeast Asian Nations (ASEAN) to increase productivity growth rates if it has any hopes of remaining competitive with its powerhouse neighbors China and India. Furthermore, the ILO warns that failure to lift productivity growth, even in instances of overall economic growth, will add to the already severe levels of poverty most of the ASEAN member nations face, while simultaneously widening the economic gap amongst them.

The International Labor Organization (ILO) is urging the Association of Southeast Asian Nations (ASEAN) to increase productivity growth rates if it has any hopes of remaining competitive with its powerhouse neighbors China and India. Furthermore, the ILO warns that failure to lift productivity growth, even in instances of overall economic growth, will add to the already severe levels of poverty most of the ASEAN member nations face, while simultaneously widening the economic gap amongst them.

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indonesia

US$4 Billion Investment in Asia Planned by Chevron Corp.

Focusing on petroleum expansion and production in Asia, Chevron Corp. will invest about US$4 billion in a number of Asian nations this year, worth 20 percent of their projected global spending. Chevron's major endeavors include an offshore liquefied natural gas (LNG) project in Australia, petroleum production in Indonesia and Thailand, and enhanced exploration drilling in Bangladesh, Vietnam, and Cambodia. In addition, Chevron has slated five exploration and production projects in China.

Focusing on petroleum expansion and production in Asia, Chevron Corp. will invest about US$4 billion in a number of Asian nations this year, worth 20 percent of their projected global spending. Chevron's major endeavors include an offshore liquefied natural gas (LNG) project in Australia, petroleum production in Indonesia and Thailand, and enhanced exploration drilling in Bangladesh, Vietnam, and Cambodia. In addition, Chevron has slated five exploration and production projects in China.

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indonesia

Indonesian President Reaches Out to Foreign Energy Investors

In desperate need of foreign private investment in his nation's steadily declining oil and gas industry, Indonesian president Susilo Bambang Yudhoyono has begun an aggressive campaign to make Indonesia more hospitable to foreign capital. Revamped taxation and production sharing contracts as well as the elimination of monopolies are just a few of the measures Yudhoyono unveiled at the 31st annual Indonesian Petroleum Association Convention and Exhibition in Jakarta.

In desperate need of foreign private investment in his nation's steadily declining oil and gas industry, Indonesian president Susilo Bambang Yudhoyono has begun an aggressive campaign to make Indonesia more hospitable to foreign capital. Revamped taxation and production sharing contracts as well as the elimination of monopolies are just a few of the measures Yudhoyono unveiled at the 31st annual Indonesian Petroleum Association Convention and Exhibition in Jakarta.

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Indonesia's Government Plans to Privatize State Companies to Fix Budget Deficit

The government of Indonesia hopes to add several additional state-owned companies (SOEs) to help the budget deficit the country faces. So far, the government has listed nine SOEs for the 2007 privatization program. The government also plans to sell a 15 per cent stake in publicly listed shares with Bank Negara Indonesia (BNI). Currently, they hold 99.12 per cent of the bank's shares.

The government of Indonesia hopes to add several additional state-owned companies (SOEs) to help the budget deficit the country faces. So far, the government has listed nine SOEs for the 2007 privatization program. The government also plans to sell a 15 per cent stake in publicly listed shares with Bank Negara Indonesia (BNI). Currently, they hold 99.12 per cent of the bank's shares.

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indonesia

ADB Reform Questions Produce Tension, Not Answers

The Asia Development Bank (ADB) seeks to enact reforms after their initial mission of poverty eradication in the region seems to be coming to a close. Richer members argue for a diversification of their interests to environmental preservation and sustainable development, while poorer nations insist that economic development in their countries is no where near finished.

The Asia Development Bank (ADB) seeks to enact reforms after their initial mission of poverty eradication in the region seems to be coming to a close. Richer members argue for a diversification of their interests to environmental preservation and sustainable development, while poorer nations insist that economic development in their countries is no where near finished.

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indonesia

ASEAN+3 Agree to Establish Foreign Reserves Pool

The finance ministers of ASEAN plus Japan, China and the Republic of Korea have agreed on setting up a pooling fund from their foreign reserves. This self-managed reserve pooling will be conducted by a single contractual agreement with a gradual approach to ensure the liquidity for currencies and protect the Asian economy against a possible future crisis. Additionally, all ministers announced to accelerate and deepen structural reforms and implement macro-economic policies in order to strengthen cooperation and to support sustainable economic growth.

The finance ministers of ASEAN plus Japan, China and the Republic of Korea have agreed on setting up a pooling fund from their foreign reserves. This self-managed reserve pooling will be conducted by a single contractual agreement with a gradual approach to ensure the liquidity for currencies and protect the Asian economy against a possible future crisis. Additionally, all ministers announced to accelerate and deepen structural reforms and implement macro-economic policies in order to strengthen cooperation and to support sustainable economic growth.

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indonesia

ASEAN-EU Launch Free Trade Negotiations

Free trade negotiations were launched by Southeast Asian states and the European Union. The agreement was made when EU Trade Commissioner Peter Mandelson reached an agreement with the Association of Southeast Asian Nations (AESEAN) economic ministers. The ASEAN-EU free trade zone will cover one billion people and will be one of the largest free trade zones in the world.

Free trade negotiations were launched by Southeast Asian states and the European Union. The agreement was made when EU Trade Commissioner Peter Mandelson reached an agreement with the Association of Southeast Asian Nations (AESEAN) economic ministers. The ASEAN-EU free trade zone will cover one billion people and will be one of the largest free trade zones in the world.

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indonesia

Indonesia Sets up Three Scenarios to Boost Production

In order to boost the national oil and gas production and increase it by 30 percent, Indonesia's government has prepared three scenarios combining pessimistic and optimistic targets in oil and gas output. The government will also try to solve the obstacles to reach the production goal.

In order to boost the national oil and gas production and increase it by 30 percent, Indonesia's government has prepared three scenarios combining pessimistic and optimistic targets in oil and gas output. The government will also try to solve the obstacles to reach the production goal.

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indonesia

Asian Financial Chiefs Meet to Discuss Financial Cooperation

The Finance ministers from ASEAN plus Japan, China and South Korea will hold a conference on Saturday in Kyoto to discuss ways to improve financial cooperation, including a deal on multilateral currency swaps. During the meeting, all the issues being discussed are ways to ensure necessary liquidity in a prompt manner in the event of a crisis and to enhance the capabilities of local rating organizations and securitization.

The Finance ministers from ASEAN plus Japan, China and South Korea will hold a conference on Saturday in Kyoto to discuss ways to improve financial cooperation, including a deal on multilateral currency swaps. During the meeting, all the issues being discussed are ways to ensure necessary liquidity in a prompt manner in the event of a crisis and to enhance the capabilities of local rating organizations and securitization.

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indonesia

ASEAN Regional Financial System to be Established

The Association of Southeast Asian Nations (ASEAN) has published its plan to develop a regional financial system to "contribute to a prosperous and competitive ASEAN region". As ASEAN capital markets have tripled their size since 1997, the main goals of the yet to be established financial system include the harmonization of standards, rules and regulations; the mobilization of capital and savings for regional infrastructural development; the facilitation of greater capital flows within the region, and the participation of the private sector.

The Association of Southeast Asian Nations (ASEAN) has published its plan to develop a regional financial system to "contribute to a prosperous and competitive ASEAN region". As ASEAN capital markets have tripled their size since 1997, the main goals of the yet to be established financial system include the harmonization of standards, rules and regulations; the mobilization of capital and savings for regional infrastructural development; the facilitation of greater capital flows within the region, and the participation of the private sector.

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indonesia

Poverty in Indonesia

AS SOUTHEAST ASIA EXPANDS and dips its hands into the global economic arena, many in the country look to the possibilities of a better life and future riches as capital is pumped into their country and foreign investors flock to their cities. Everywhere, signs of economic growth are prevalent. However, there are also signs of turmoil beneath the calm surface.

The Mask of Economic Growth

Specifically, in Indonesia, the economy is growing, but unfortunately, so is poverty. After the number of poor people in Indonesia has declined for six years, it has increased sharply. According to data released by the government's statistics bureau, 18% of the population of 220 million are now officially poor, 4 million more than in 2005. Furthermore, the Urban Poor Consortium believes that the number of people falling into poverty in Jakarta has risen by almost twice as much as officially stated by government statisticians. Many academics agree with this claim. The government's definition of poverty consists of $16.80 a month, less than enough to sustain a diet of 2,100 calories a day. This measure is well below the more widely used marker of 1 dollar a day.

A Change of Plans

In order to reach their target of a poverty level of 8.2% by 2009, the government must make changes. The current GDP growth rate of 5.2% in 2006 with an estimated 6.0% growth rate in 2007 is impressive, but it is still insufficient to provide a sufficient amount of new jobs to make a dent in Indonesia's huge unemployment numbers. An extra $1.4 billion will be distributed through a community empowerment program for poverty alleviation in 2007, up 18% from 2006. Each village will be given funds to create jobs in the way it sees fit.

Although the Indonesian government has implemented community programs to aid in poverty alleviation and development, many times these top-down programs have proved to be inefficient and inflexible. The World Bank provides evidence that the activities communities initiate and implement themselves succeeded more often than the top-down government programs. Community action alone, however, is not the answer to poverty alleviation. Communities generally lack information, skills, and access to technical assistance. Government, especially at the local level, will need to change the way it works with local communities; it will need to channel technical support and facilitation to leverage the stronger track record of local initiative. Therefore, in order for the government to be effective and to concoct a successful recipe for change, policymakers must keep in mind Indonesia's diverse regions and rely on local ingredients. Understanding the strengths and weaknesses of past approaches will help the Indonesian government and citizens find their own way forward in reducing poverty. Success rides on three key points: the free flow of information to create more awareness among target groups, providing a voice for the poor, and the accountability of decision makers in terms of transparent laws and enforcement as well as maintained public services.

These issues are apparent in the rise of rice prices in Indonesia. Most poor people spend a quarter of their earnings on rice, which has risen in price by more than a third in the past year. Keeping domestic rice prices higher than international prices by limiting imports makes little sense and severely hurts Indonesia's poorest. Furthermore, the government must also retain the state of economic growth. Economic growth and foreign investment will help to create jobs and hence, a source of income for the poor. Poverty will be reduced most easily in a thriving economy that has stable macroeconomic fundamentals, as well as internal and external openness. But while economic growth is very important to reducing poverty, if gains solely favor the elites, rapid growth will fail to help the poor.

The government must also take steps to reduce social instability; specifically, the government must maintain the security of person and property. The current breakdown of order in Indonesia, and the absence of local conflict resolution institutions are most tragic for the poor. Some of these problems are the legacy of suppressed freedoms and the capricious use of state power in the past, which contributed to insecure land and resource tenure and access. Other problems relate to longstanding issues of identity and autonomy or ethnic and cultural conflicts. In all cases of poverty worldwide, social upheaval and displacement hurt the poor most of all. And, as lawlessness increases uncertainty, investors go elsewhere, as do jobs and other income opportunities for the poor.

AS SOUTHEAST ASIA EXPANDS and dips its hands into the global economic arena, many in the country look to the possibilities of a better life and future riches as capital is pumped into their country and foreign investors flock to their cities. Everywhere, signs of economic growth are prevalent. However, there are also signs of turmoil beneath the calm surface.

The Mask of Economic Growth

Specifically, in Indonesia, the economy is growing, but unfortunately, so is poverty. After the number of poor people in Indonesia has declined for six years, it has increased sharply. According to data released by the government's statistics bureau, 18% of the population of 220 million are now officially poor, 4 million more than in 2005. Furthermore, the Urban Poor Consortium believes that the number of people falling into poverty in Jakarta has risen by almost twice as much as officially stated by government statisticians. Many academics agree with this claim. The government's definition of poverty consists of $16.80 a month, less than enough to sustain a diet of 2,100 calories a day. This measure is well below the more widely used marker of 1 dollar a day.

A Change of Plans

In order to reach their target of a poverty level of 8.2% by 2009, the government must make changes. The current GDP growth rate of 5.2% in 2006 with an estimated 6.0% growth rate in 2007 is impressive, but it is still insufficient to provide a sufficient amount of new jobs to make a dent in Indonesia's huge unemployment numbers. An extra $1.4 billion will be distributed through a community empowerment program for poverty alleviation in 2007, up 18% from 2006. Each village will be given funds to create jobs in the way it sees fit.

Although the Indonesian government has implemented community programs to aid in poverty alleviation and development, many times these top-down programs have proved to be inefficient and inflexible. The World Bank provides evidence that the activities communities initiate and implement themselves succeeded more often than the top-down government programs. Community action alone, however, is not the answer to poverty alleviation. Communities generally lack information, skills, and access to technical assistance. Government, especially at the local level, will need to change the way it works with local communities; it will need to channel technical support and facilitation to leverage the stronger track record of local initiative. Therefore, in order for the government to be effective and to concoct a successful recipe for change, policymakers must keep in mind Indonesia's diverse regions and rely on local ingredients. Understanding the strengths and weaknesses of past approaches will help the Indonesian government and citizens find their own way forward in reducing poverty. Success rides on three key points: the free flow of information to create more awareness among target groups, providing a voice for the poor, and the accountability of decision makers in terms of transparent laws and enforcement as well as maintained public services.

These issues are apparent in the rise of rice prices in Indonesia. Most poor people spend a quarter of their earnings on rice, which has risen in price by more than a third in the past year. Keeping domestic rice prices higher than international prices by limiting imports makes little sense and severely hurts Indonesia's poorest. Furthermore, the government must also retain the state of economic growth. Economic growth and foreign investment will help to create jobs and hence, a source of income for the poor. Poverty will be reduced most easily in a thriving economy that has stable macroeconomic fundamentals, as well as internal and external openness. But while economic growth is very important to reducing poverty, if gains solely favor the elites, rapid growth will fail to help the poor.

The government must also take steps to reduce social instability; specifically, the government must maintain the security of person and property. The current breakdown of order in Indonesia, and the absence of local conflict resolution institutions are most tragic for the poor. Some of these problems are the legacy of suppressed freedoms and the capricious use of state power in the past, which contributed to insecure land and resource tenure and access. Other problems relate to longstanding issues of identity and autonomy or ethnic and cultural conflicts. In all cases of poverty worldwide, social upheaval and displacement hurt the poor most of all. And, as lawlessness increases uncertainty, investors go elsewhere, as do jobs and other income opportunities for the poor.

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indonesia

Small Businesses in Indonesia Fail to Survive

Low consumer purchasing power has forced many small businesses in Medan to close down over the last six months. It is estimated that 25,000 businesses have already closed down with the expectation that these numbers could rise due to increasing losses.

Low consumer purchasing power has forced many small businesses in Medan to close down over the last six months. It is estimated that 25,000 businesses have already closed down with the expectation that these numbers could rise due to increasing losses.

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indonesia

Indonesia Lowers Interest Rates to Prevent Slow Growth

Weak domestic demand in Indonesia has banks in favor of cutting rates to speed up private consumption. Indonesia's central bank hopes that cutting its key interest rate will help promote growth, with Bank Indonesia lowering it's BI rate by a quarter point to 12.5 percent. Hopes in lower interest rates to stir up consumer spending and investment in the $276 billion economy may prevent slow growth for the first time in Indonesia in five years.

Weak domestic demand in Indonesia has banks in favor of cutting rates to speed up private consumption. Indonesia's central bank hopes that cutting its key interest rate will help promote growth, with Bank Indonesia lowering it's BI rate by a quarter point to 12.5 percent. Hopes in lower interest rates to stir up consumer spending and investment in the $276 billion economy may prevent slow growth for the first time in Indonesia in five years.

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Indonesia Passes Law to Revive Foreign Investments

After 11 years of planning the Indonesian Parliament has passed an investment bill that ensures the equal government treatment of domestic and foreign investors. Thereby Jakarta hopes to increase its share of Asia directed foreign investments as China still holds the major share.

After 11 years of planning the Indonesian Parliament has passed an investment bill that ensures the equal government treatment of domestic and foreign investors. Thereby Jakarta hopes to increase its share of Asia directed foreign investments as China still holds the major share.

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indonesia

Third Day Rise for Asia Stocks -- Record Highs in China, South Korea and Indonesia Indexes

Asia stocks rose for a third day, with some indexes reaching record highs. Advances were seen in the technology, transportation and mining sectors.

Asia stocks rose for a third day, with some indexes reaching record highs. Advances were seen in the technology, transportation and mining sectors.

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indonesia

Indonesia and Japan Partner on Ethanol Plants

A Japanese and Indonesian firm are partnering to build two ethanol plants in Indonesia next year. Each $25 million plant will be capable of producing 50,000 kilolitres of ethanol a year. The move is part of Indonesia's larger plan to attract investment to industries producing fuel from palm oil, cassava, and other crops. The country hopes to create 5 million new jobs in the alternative energy sector. Japan hopes to increase its ethanol usage in order to meet Kyoto Protocol emmissions targets.

A Japanese and Indonesian firm are partnering to build two ethanol plants in Indonesia next year. Each $25 million plant will be capable of producing 50,000 kilolitres of ethanol a year. The move is part of Indonesia's larger plan to attract investment to industries producing fuel from palm oil, cassava, and other crops. The country hopes to create 5 million new jobs in the alternative energy sector. Japan hopes to increase its ethanol usage in order to meet Kyoto Protocol emmissions targets.

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indonesia

Lending Growth in Indonesia

Several major Indonesian banks reported profit growth for 2006 largely because of an increase in lending. Despite inflation fueled by high energy prices, lendings increased by 14% in 2006. In February, the key interest rate was dropped from 12.75% to 9% after the inflation rate slowed to and on-year 6.3% from previous double-digit figures.

Several major Indonesian banks reported profit growth for 2006 largely because of an increase in lending. Despite inflation fueled by high energy prices, lendings increased by 14% in 2006. In February, the key interest rate was dropped from 12.75% to 9% after the inflation rate slowed to and on-year 6.3% from previous double-digit figures.

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Singapore Works with Malaysia and Indonesia

Foreign Minister George Yeo announced yesterday that Singapore will work to strengthen ties to both Indonesia and Malaysia. Among the plans for Malaysian cooperation is a planned Iskandar Development Region (IDR) and a consulate in Johor Baru. Singapore also plans to settle several ongoing issues, including an extradition treaty, with Indonesia. Minister Yeo emphasized that a strong and united ASEAN is needed to be an effective negotiator with major trading partners.

Foreign Minister George Yeo announced yesterday that Singapore will work to strengthen ties to both Indonesia and Malaysia. Among the plans for Malaysian cooperation is a planned Iskandar Development Region (IDR) and a consulate in Johor Baru. Singapore also plans to settle several ongoing issues, including an extradition treaty, with Indonesia. Minister Yeo emphasized that a strong and united ASEAN is needed to be an effective negotiator with major trading partners.

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indonesia

Indonesia Cuts Interest Rate

The Bank of Indonesia cut interest rates to a 19-month low today after inflation was lower than expected in February. Inflation rose only 6.3% in February compared to a year earlier even though many experts were predicting a sharper increase because of recent flooding that could have driven up prices. This was the 10th rate reduction since May.

The Bank of Indonesia cut interest rates to a 19-month low today after inflation was lower than expected in February. Inflation rose only 6.3% in February compared to a year earlier even though many experts were predicting a sharper increase because of recent flooding that could have driven up prices. This was the 10th rate reduction since May.

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Indonesian Securities Popular with Foreign Investors

Foreign-owned scripless shares in the Indonesian Stock Market increased by 37.7% in value in 2006. Treasury bill investment by foreigners increased by over 56%. The capital inflows are in large part due to Indonesia's high interest rates and the situation is drawing parallels to recent inflows into Thailand. The Bank of Indonesia is currently considering different options to avoid capital flight.

Foreign-owned scripless shares in the Indonesian Stock Market increased by 37.7% in value in 2006. Treasury bill investment by foreigners increased by over 56%. The capital inflows are in large part due to Indonesia's high interest rates and the situation is drawing parallels to recent inflows into Thailand. The Bank of Indonesia is currently considering different options to avoid capital flight.

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APEC's Free Trade Area Woes

The Asia Pacific Economic Cooperation (APEC) forum held in Hanoi from November 17 to 19 resulted in renewed discussions on trade. APEC leaders drafted a statement on the WTO's Doha Development Agenda and the Hanoi Action Plan. The leaders agreed on the need to continue the stalled round of Doha trade negotiations. However, they refuse to empower negotiators to execute this goal until all members are better prepared for liberalization.

The longer APEC nations put off negotiating a multilateral agreement, the more difficulties they are likely to face. It will be considerably harder to catch up with developed nations and trade blocs such as the EU. APEC will also be losing potential profits. To prevent unequal economic gains, protection of smaller, vulnerable nations is necessary. However, all will lose if Asian economies continue to interact with one another as inefficiently as they currently do. If these nations are going to remain internationally competitive, they must consolidate economic power.

The slow pace of progress invites criticism. Is APEC really as inefficient as its detractors claim? APEC allows smaller nations to balance against stronger players such China and the US, while still cooperating with them for economic gain. With the kinds of obstacles that the leaders face, some wariness is justified. A free trade area only has potential if developing countries in APEC take necessary precautions. They must be strong enough to withstand fluctuations in international markets before they open their economies to free trade. Capacity-building measures and the flexibility for leaders in determining national trade policies will prevent an agreement from benefiting members unequally.

APEC nations should not delay too long, or they risk lagging behind economically. A free trade agreement between APEC nations would facilitate trade within the bloc and internationally. These countries already control nearly half the world's trade and 56 percent of global gross domestic product. WTO negotiations had come to a halt because of disagreement on subsidies. In Hanoi, the US and Japan did not complete unfinished discussions on reductions in agricultural subsidies. China and Australia also have yet to consider further tariff cuts on industrial goods. The conference, however, did open debate for the first time since Doha and concessions are likely to follow. The Hanoi Action Plan outlines details of a multinational agreement. The agreement will streamline the negotiation process and replace 50 bilateral treaties. It proposes that members institute measures which will prepare economies for trade liberalization. The Plan also identifies corruption as an obstacle to growth. The leaders also focused on energy security. Development of renewable technologies and cleaner use of fossil fuels are among the issues of concern. The difficulties in WTO negotiations have made leaders wary.

The chances for success may be higher for a regional trade area. The EU for instance has proved more successful, but APEC will face different challenges. Singapore's Prime Minister Lee Hsien Loong thinks that the EU trade bloc was easier to create because of greater political similarities between nations. APEC includes some of the world's richest and poorest countries. The disparity in economic backgrounds also makes it difficult to find common ground. The conference agenda included discussions of pandemic diseases such as AIDS and disaster response plans. Vietnamese President Nguyen Minh Triet issued a statement on North Korea's nuclear arsenal. Some are critical of the meeting's success since no declaration was issued. APEC does provide a forum for world leaders to discuss pressing concerns, but international security is not the organization's primary focus. Those types of discussions would diffuse its main purpose which is to discuss economic development and trade.

APEC should begin negotiations much sooner than it plans. It can simultaneously help its smaller members strengthen their economies. The bloc could integrate weaker economies, seeking to strengthen vulnerable industries, at a slower pace. Other necessary measures include improving infrastructure and reforming laws. Meanwhile, nations can continue to sign bilateral or even smaller multilateral agreements. They can also provide aid to some of the lesser developing nations. APEC should also begin to develop enforcement procedures. As a trade bloc, the organization could later leverage its influence to more effectively address security and health issues.

 

The Asia Pacific Economic Cooperation (APEC) forum held in Hanoi from November 17 to 19 resulted in renewed discussions on trade. APEC leaders drafted a statement on the WTO's Doha Development Agenda and the Hanoi Action Plan. The leaders agreed on the need to continue the stalled round of Doha trade negotiations. However, they refuse to empower negotiators to execute this goal until all members are better prepared for liberalization.

The longer APEC nations put off negotiating a multilateral agreement, the more difficulties they are likely to face. It will be considerably harder to catch up with developed nations and trade blocs such as the EU. APEC will also be losing potential profits. To prevent unequal economic gains, protection of smaller, vulnerable nations is necessary. However, all will lose if Asian economies continue to interact with one another as inefficiently as they currently do. If these nations are going to remain internationally competitive, they must consolidate economic power.

The slow pace of progress invites criticism. Is APEC really as inefficient as its detractors claim? APEC allows smaller nations to balance against stronger players such China and the US, while still cooperating with them for economic gain. With the kinds of obstacles that the leaders face, some wariness is justified. A free trade area only has potential if developing countries in APEC take necessary precautions. They must be strong enough to withstand fluctuations in international markets before they open their economies to free trade. Capacity-building measures and the flexibility for leaders in determining national trade policies will prevent an agreement from benefiting members unequally.

APEC nations should not delay too long, or they risk lagging behind economically. A free trade agreement between APEC nations would facilitate trade within the bloc and internationally. These countries already control nearly half the world's trade and 56 percent of global gross domestic product. WTO negotiations had come to a halt because of disagreement on subsidies. In Hanoi, the US and Japan did not complete unfinished discussions on reductions in agricultural subsidies. China and Australia also have yet to consider further tariff cuts on industrial goods. The conference, however, did open debate for the first time since Doha and concessions are likely to follow. The Hanoi Action Plan outlines details of a multinational agreement. The agreement will streamline the negotiation process and replace 50 bilateral treaties. It proposes that members institute measures which will prepare economies for trade liberalization. The Plan also identifies corruption as an obstacle to growth. The leaders also focused on energy security. Development of renewable technologies and cleaner use of fossil fuels are among the issues of concern. The difficulties in WTO negotiations have made leaders wary.

The chances for success may be higher for a regional trade area. The EU for instance has proved more successful, but APEC will face different challenges. Singapore's Prime Minister Lee Hsien Loong thinks that the EU trade bloc was easier to create because of greater political similarities between nations. APEC includes some of the world's richest and poorest countries. The disparity in economic backgrounds also makes it difficult to find common ground. The conference agenda included discussions of pandemic diseases such as AIDS and disaster response plans. Vietnamese President Nguyen Minh Triet issued a statement on North Korea's nuclear arsenal. Some are critical of the meeting's success since no declaration was issued. APEC does provide a forum for world leaders to discuss pressing concerns, but international security is not the organization's primary focus. Those types of discussions would diffuse its main purpose which is to discuss economic development and trade.

APEC should begin negotiations much sooner than it plans. It can simultaneously help its smaller members strengthen their economies. The bloc could integrate weaker economies, seeking to strengthen vulnerable industries, at a slower pace. Other necessary measures include improving infrastructure and reforming laws. Meanwhile, nations can continue to sign bilateral or even smaller multilateral agreements. They can also provide aid to some of the lesser developing nations. APEC should also begin to develop enforcement procedures. As a trade bloc, the organization could later leverage its influence to more effectively address security and health issues.

 

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indonesia

Indonesian and Malaysian Currencies Sag

The Indonesian rupiah and the Malaysian ringgit both declined significantly Thursday as fund managers trimmed back riskier investments in the wake of the stock plunge on Tuesday. The rupiah hit a 5-month low while the ringgit closed at its lowest this year. South Korea's won hit a low and then rebounded slightly for a net loss 0.3%.

The Indonesian rupiah and the Malaysian ringgit both declined significantly Thursday as fund managers trimmed back riskier investments in the wake of the stock plunge on Tuesday. The rupiah hit a 5-month low while the ringgit closed at its lowest this year. South Korea's won hit a low and then rebounded slightly for a net loss 0.3%.

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indonesia

Asian Markets Fall Again After Rebound

Chinese stocks fell again after rebounding Wednesday from their biggest drop in a decade. Elsewhere, Japan, Taiwan, Hong Kong, Singapore, Australia, and New Zealand markets were all down. The Philippines, India, Pakistan, Thailand and Indonesia indices were up, with the Philippines' rise as the region's biggest gain of the day after seeing Asia's biggest drop Wednesday at 7.9 percent.

Chinese stocks fell again after rebounding Wednesday from their biggest drop in a decade. Elsewhere, Japan, Taiwan, Hong Kong, Singapore, Australia, and New Zealand markets were all down. The Philippines, India, Pakistan, Thailand and Indonesia indices were up, with the Philippines' rise as the region's biggest gain of the day after seeing Asia's biggest drop Wednesday at 7.9 percent.

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indonesia

Indonesia to Separate Financial Sectors

The government and the House of Representatives' working committee (Panja) on drafting capital investment law have agreed to separate the Capital Investment Coordinating Board (BKPM) from the Trade Ministry and to make it fully responsible to the president. Panja member Zukiflimansyah announced that the promotion of BKPM's status was intended to ensure the maximum coordination of government agencies in dealing with investment affairs. Furthermore, he claimed whether or not the BKPM chief will be made a minister will be dependent upon the president's endorsement.

The government and the House of Representatives' working committee (Panja) on drafting capital investment law have agreed to separate the Capital Investment Coordinating Board (BKPM) from the Trade Ministry and to make it fully responsible to the president. Panja member Zukiflimansyah announced that the promotion of BKPM's status was intended to ensure the maximum coordination of government agencies in dealing with investment affairs. Furthermore, he claimed whether or not the BKPM chief will be made a minister will be dependent upon the president's endorsement.

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indonesia

The State of Labor Migration in Southeast Asia

The migration of people to other countries in search of employment has occurred throughout history, and is by no means a new occurrence. This phenomenon has become especially prevalent in Southeast Asia. In the Philippines for instance, human resources is the main export. In year 2000, more than 1 million Filipinos left home to seek work abroad as sailors, maids, nurses, and in other low-paying jobs.1 More and more South-east Asians have become wandering workers, moving out of their countries to work for their better-off neighbors.

The Case of the Philippines

Many overseas workers eventually return to their home countries—but not before sending home substantial sums. In the case of the Philippines, remittances from abroad account for over 10% of its GDP, enough to compensate for the opportunity cost of having over 8 million of its best and brightest workers abroad. From January to November of 2006, remittances summed to $11.4 billion, up 18% from the same period during 2005.2 This does not include the wads of cash returning in workers' luggage. Although poverty and unemployment are still a source of serious concern in the Philippines and many other labor-exporting countries, their situation would be far worse if the outflow of bodies and immense inflow of capital did not occur.

Labor Migration in South East Asia

Out of the ten ASEAN countries, the Philippines, Indonesia, Myanmar, Vietnam, Laos, and Cambodia export labor while Singapore and Brunei import it. The UN's International Labor Organization believes that the total labor force of the worker exporting countries should grow by about a third within the next ten years. However, labor migration, both legal and illegal, is growing twice as fast. A 2005 study estimated that over 8.4 million Southeast Asians worked outside their home country.3 This figure fails to include the large number of illegal and undocumented workers. To combat the growing problem of illegal and undocumented workers, the leaders of ASEAN met on January 13th and signed an agreement to aid and regulate migrant workers. Although the agreement is full of loopholes, it is a first step for governments to guarantee workers' rights and welfare services.4

Negative Reception by the Locals

Labor-importing nations are terrified that attempts to improve immigrant circumstances will only encourage more masses to enter their countries. Competition for jobs is creating a negative response to the establishment of welfare structures for immigrant workers in these nations. Malaysians believe that foreign workers have worsened crime rates. Additionally, over 59% of Thais believe that their government should stop admitting foreign workers, and even in Singapore, over half of the population opposes more foreign workers.5

Conclusion

Opinions might change if the public receives a more balanced picture of the pros and cons of importing labor to do the jobs that none of the locals would ever consider taking. Locals need to realize that their economies are dependent on the foreign workers for stability. These large migrations should not be thought of as a transient or temporary phenomenon. Labor receiving countries should attempt to formulate a suitable migration policy based on longer run considerations of their labor market needs and the basic human rights of migrant workers rather than ad hoc decisions. Incentives and taxes may be levied on enterprises to discourage the perpetuation of unproductive non-competitive industries based on cheap unskilled foreign workers. At the same time, migrant-exporting countries should attempt to reduce undue dependence on overseas employment through efforts to reduce labor-outflow pressure at home. It is a delicate balance that Southeast Asia has yet to strike.

 

This article was originally published in Asia Economic Institute Vol. 1 No. 5.

 

Tell us what you think about this issue by adding a comment.

The migration of people to other countries in search of employment has occurred throughout history, and is by no means a new occurrence. This phenomenon has become especially prevalent in Southeast Asia. In the Philippines for instance, human resources is the main export. In year 2000, more than 1 million Filipinos left home to seek work abroad as sailors, maids, nurses, and in other low-paying jobs.1 More and more South-east Asians have become wandering workers, moving out of their countries to work for their better-off neighbors.

The Case of the Philippines

Many overseas workers eventually return to their home countries—but not before sending home substantial sums. In the case of the Philippines, remittances from abroad account for over 10% of its GDP, enough to compensate for the opportunity cost of having over 8 million of its best and brightest workers abroad. From January to November of 2006, remittances summed to $11.4 billion, up 18% from the same period during 2005.2 This does not include the wads of cash returning in workers' luggage. Although poverty and unemployment are still a source of serious concern in the Philippines and many other labor-exporting countries, their situation would be far worse if the outflow of bodies and immense inflow of capital did not occur.

Labor Migration in South East Asia

Out of the ten ASEAN countries, the Philippines, Indonesia, Myanmar, Vietnam, Laos, and Cambodia export labor while Singapore and Brunei import it. The UN's International Labor Organization believes that the total labor force of the worker exporting countries should grow by about a third within the next ten years. However, labor migration, both legal and illegal, is growing twice as fast. A 2005 study estimated that over 8.4 million Southeast Asians worked outside their home country.3 This figure fails to include the large number of illegal and undocumented workers. To combat the growing problem of illegal and undocumented workers, the leaders of ASEAN met on January 13th and signed an agreement to aid and regulate migrant workers. Although the agreement is full of loopholes, it is a first step for governments to guarantee workers' rights and welfare services.4

Negative Reception by the Locals

Labor-importing nations are terrified that attempts to improve immigrant circumstances will only encourage more masses to enter their countries. Competition for jobs is creating a negative response to the establishment of welfare structures for immigrant workers in these nations. Malaysians believe that foreign workers have worsened crime rates. Additionally, over 59% of Thais believe that their government should stop admitting foreign workers, and even in Singapore, over half of the population opposes more foreign workers.5

Conclusion

Opinions might change if the public receives a more balanced picture of the pros and cons of importing labor to do the jobs that none of the locals would ever consider taking. Locals need to realize that their economies are dependent on the foreign workers for stability. These large migrations should not be thought of as a transient or temporary phenomenon. Labor receiving countries should attempt to formulate a suitable migration policy based on longer run considerations of their labor market needs and the basic human rights of migrant workers rather than ad hoc decisions. Incentives and taxes may be levied on enterprises to discourage the perpetuation of unproductive non-competitive industries based on cheap unskilled foreign workers. At the same time, migrant-exporting countries should attempt to reduce undue dependence on overseas employment through efforts to reduce labor-outflow pressure at home. It is a delicate balance that Southeast Asia has yet to strike.

 

This article was originally published in Asia Economic Institute Vol. 1 No. 5.

 

Tell us what you think about this issue by adding a comment.

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indonesia

The Asian Stock Markets: Boom or Bust?

The year 2006 for the Asian stock markets saw unprecedented gains of the kind rarely witnessed. The stock markets of China, Hong Kong, Singapore, India, Indonesia, Malaysia, New Zealand and Vietnam hit record highs while Japan, South Korea and Taiwan also posted muted though respectable gains. With this state of affairs, it was perhaps unsurprising that global investors flocked to the Asian markets just hoping to reap some of the big rewards. However, some people feel that the amazing growth of these stock markets needs to be tempered with a healthy dose of caution since the nightmarish memories of the 1997-meltdown in the region's equity markets just refuse to die out. This has raised a few doubts among analysts studying the region and has prompted many to be skeptical about the potential growth prospects of these markets in the future.

A Year of Skyrocketing Growth

During the last few years, many stock markets in Asia have been rising rapidly. In China, during 2006, stocks in the home market sizzled, at long last reflecting the country's gathering economic might after years of paltry returns. The MSCI China A, an index of domestically listed stocks, soared 128 percent.1 The scenario was also quite rosy in India when the Bombay stock exchange rocketed another 46.7 percent in 2006.2 Elsewhere in the region, markets bolted ahead on sound economic fundamentals, with markets in Indonesia, the Philippines and Singapore returning 55.3 percent, 42.3 percent and 27.2 percent, respectively.3 Even the so-called stragglers, Taiwan and Malaysia, clocked returns of 19.5 percent and 21.8 percent in 2006, a reflection of just how turbo-charged the growth trend has been. The only disappointments were South Korea which rose by a modest 4 percent last year and Japan, which, contrary to expectations, managed to end the year up only 6.9 percent. This is creditable given that these enormous returns occurred despite a plunge in the region's stock markets during May and June, when foreign investors were spooked by the prospect of rising interest rates and fled riskier assets.4 With massive investor confidence and a huge amount of global liquidity, it is no wonder that there has been a mad rush by global investors to invest in the region.

Factors Driving the Growth

Many changes have transformed the domestic economies of the Asian region radically over the last decade. Many market watchers believe that these emerging economies are on a much surer financial footing than in the past. Many have pared their deficits, increased their reserves and reduced their dependence on exports to the US, thereby decreasing their vulnerability to a potential US economic slowdown.5 Some investors believe that these countries are finally beginning to decouple from the US economy either by trading more among themselves or relying more on local consumer demand.6 Skeptics discount this hypothesis and consider it too early to draw conclusions. A slow US economy could still trigger a region-wide recession in the near future.

Impediments to Sustainable Growth

Despite all the hype and hoopla surrounding the Asian economies and their booming stock markets, the future growth outlook for these economies is strangely benign. Experts believe that even though Asia is presently more resilient to a US slowdown than in the past, a drastic slowdown to the US economy might seriously upset the status quo. Currently, investor sentiment remains strong as evidenced by several positive factors like lower international oil prices and a recovery staged by Wall Street after the mid-year slump in 2006. However, financial markets might feel the impact if institutional investors in the US and Europe become more risk-averse, or if the global liquidity that has been funding portfolio investment in Asia dries up.7 The region is still highly export-dependent and vulnerable to developments in the US. In fact, many of the goods traded within Asia are still used as inputs for products that are ultimately sold to the US and other OECD economies.8 These emerging economies are currently characterized by weak inflation levels, strong growth, solvent governments and a lesser degree of dependence on foreign money to finance their investment requirements.9 Although the domestic economies in Asia seem to be in impressive shape, they remain vulnerable to disruption if investment-positive factors begin to wane. Potential investors should exercise a significant degree of caution and restraint while deciding whether or not to invest their money in Asia's growing bourses.

 

This article was originally published in Asia Economic Institute Vol. 1 No. 5.

 

Tell us what you think about this issue by adding a comment.

The year 2006 for the Asian stock markets saw unprecedented gains of the kind rarely witnessed. The stock markets of China, Hong Kong, Singapore, India, Indonesia, Malaysia, New Zealand and Vietnam hit record highs while Japan, South Korea and Taiwan also posted muted though respectable gains. With this state of affairs, it was perhaps unsurprising that global investors flocked to the Asian markets just hoping to reap some of the big rewards. However, some people feel that the amazing growth of these stock markets needs to be tempered with a healthy dose of caution since the nightmarish memories of the 1997-meltdown in the region's equity markets just refuse to die out. This has raised a few doubts among analysts studying the region and has prompted many to be skeptical about the potential growth prospects of these markets in the future.

A Year of Skyrocketing Growth

During the last few years, many stock markets in Asia have been rising rapidly. In China, during 2006, stocks in the home market sizzled, at long last reflecting the country's gathering economic might after years of paltry returns. The MSCI China A, an index of domestically listed stocks, soared 128 percent.1 The scenario was also quite rosy in India when the Bombay stock exchange rocketed another 46.7 percent in 2006.2 Elsewhere in the region, markets bolted ahead on sound economic fundamentals, with markets in Indonesia, the Philippines and Singapore returning 55.3 percent, 42.3 percent and 27.2 percent, respectively.3 Even the so-called stragglers, Taiwan and Malaysia, clocked returns of 19.5 percent and 21.8 percent in 2006, a reflection of just how turbo-charged the growth trend has been. The only disappointments were South Korea which rose by a modest 4 percent last year and Japan, which, contrary to expectations, managed to end the year up only 6.9 percent. This is creditable given that these enormous returns occurred despite a plunge in the region's stock markets during May and June, when foreign investors were spooked by the prospect of rising interest rates and fled riskier assets.4 With massive investor confidence and a huge amount of global liquidity, it is no wonder that there has been a mad rush by global investors to invest in the region.

Factors Driving the Growth

Many changes have transformed the domestic economies of the Asian region radically over the last decade. Many market watchers believe that these emerging economies are on a much surer financial footing than in the past. Many have pared their deficits, increased their reserves and reduced their dependence on exports to the US, thereby decreasing their vulnerability to a potential US economic slowdown.5 Some investors believe that these countries are finally beginning to decouple from the US economy either by trading more among themselves or relying more on local consumer demand.6 Skeptics discount this hypothesis and consider it too early to draw conclusions. A slow US economy could still trigger a region-wide recession in the near future.

Impediments to Sustainable Growth

Despite all the hype and hoopla surrounding the Asian economies and their booming stock markets, the future growth outlook for these economies is strangely benign. Experts believe that even though Asia is presently more resilient to a US slowdown than in the past, a drastic slowdown to the US economy might seriously upset the status quo. Currently, investor sentiment remains strong as evidenced by several positive factors like lower international oil prices and a recovery staged by Wall Street after the mid-year slump in 2006. However, financial markets might feel the impact if institutional investors in the US and Europe become more risk-averse, or if the global liquidity that has been funding portfolio investment in Asia dries up.7 The region is still highly export-dependent and vulnerable to developments in the US. In fact, many of the goods traded within Asia are still used as inputs for products that are ultimately sold to the US and other OECD economies.8 These emerging economies are currently characterized by weak inflation levels, strong growth, solvent governments and a lesser degree of dependence on foreign money to finance their investment requirements.9 Although the domestic economies in Asia seem to be in impressive shape, they remain vulnerable to disruption if investment-positive factors begin to wane. Potential investors should exercise a significant degree of caution and restraint while deciding whether or not to invest their money in Asia's growing bourses.

 

This article was originally published in Asia Economic Institute Vol. 1 No. 5.

 

Tell us what you think about this issue by adding a comment.

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indonesia

Indonesia to Push Steel Production

The Indonesian government would like the growing steel industry to meet more of the domestic demand, an official said over the weekend. Though Indonesia is a net exporter of steel, it imported nearly $5.4 billion worth of metal products last year. The Industry Ministry is planning resaerch into increasing capacity while a new $50 million plant is being planned. The industry grew 4.73% last year after contracting 3.7% in 2005.

The Indonesian government would like the growing steel industry to meet more of the domestic demand, an official said over the weekend. Though Indonesia is a net exporter of steel, it imported nearly $5.4 billion worth of metal products last year. The Industry Ministry is planning resaerch into increasing capacity while a new $50 million plant is being planned. The industry grew 4.73% last year after contracting 3.7% in 2005.

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indonesia

Large Mining Firms Invest in Asia

The world's largest and third-largest mining companies announced dual projects to develop nickel mining operations in Indonesia and the Philippines repsectively. Rio Tinto Group announced plans to invest $2 billion to develop its first nickel project in Indonesia while BHP Bilton Ltd. announced plans to invest $1.5 billion in a nickel project in the Philippines. Both moves come as worldwide nickel prices soar due to increased demand primarily from China.

The world's largest and third-largest mining companies announced dual projects to develop nickel mining operations in Indonesia and the Philippines repsectively. Rio Tinto Group announced plans to invest $2 billion to develop its first nickel project in Indonesia while BHP Bilton Ltd. announced plans to invest $1.5 billion in a nickel project in the Philippines. Both moves come as worldwide nickel prices soar due to increased demand primarily from China.

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indonesia

Indonesia's Flood Could Stall Growth

The economic growth rate in Indonesia, projected to be 6.3% this year, could slow due to recent flooding. The floods that killed 79 people earlier this month, are expected to cause economic losses of $884 million. The National Planning Minister announced that the floods had the potential to lower the growth rate by 0.59%.

The economic growth rate in Indonesia, projected to be 6.3% this year, could slow due to recent flooding. The floods that killed 79 people earlier this month, are expected to cause economic losses of $884 million. The National Planning Minister announced that the floods had the potential to lower the growth rate by 0.59%.

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indonesia

Indonesia's Nationalized Firms to be Cut in Half

The Indonesian government announced plans to cut the number of nationalized firms from 139 to 69 over the next 3 years. The move is intended to make state firms more competitive and efficient in an increasingly competitive global market. The changes are going to be implemented through a combination of mergers, privatization, and liquidations.

The Indonesian government announced plans to cut the number of nationalized firms from 139 to 69 over the next 3 years. The move is intended to make state firms more competitive and efficient in an increasingly competitive global market. The changes are going to be implemented through a combination of mergers, privatization, and liquidations.

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indonesia

GDP Growth Best in 2 Years

Indonesia's fourth quarter GDP grew at 6.1%, the fastest growth rate in two years. That follows the 5.9% growth seen in the third quarter for Southeast Asia's largest economy. High consumer spending as well as rising demand for raw materials from China and India spurred the growth.

Indonesia's fourth quarter GDP grew at 6.1%, the fastest growth rate in two years. That follows the 5.9% growth seen in the third quarter for Southeast Asia's largest economy. High consumer spending as well as rising demand for raw materials from China and India spurred the growth.

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indonesia

World Bank to Extend $123 Million Loan to Indonesia

The World Bank has agreed to provide a $123 million loan to Indonesia to help improve its farmers' capacity through a project called Agricultural Technology and Information. According to the lender, this project will help farmer families to increase their productivity and income in the next 5 years.

The World Bank has agreed to provide a $123 million loan to Indonesia to help improve its farmers' capacity through a project called Agricultural Technology and Information. According to the lender, this project will help farmer families to increase their productivity and income in the next 5 years.

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indonesia

Indonesia to Import More Rice

The Indonesian government will import around 500,000 tons of rice to avoid possible price increases on the staple food due to the monsoonal flooding that struck the nation. The rice will be imported in March and April. This decision came after prices for the commodity rose to Rp 5,000 a kilogram in December and January, threatening a possible surge in inflation.

The Indonesian government will import around 500,000 tons of rice to avoid possible price increases on the staple food due to the monsoonal flooding that struck the nation. The rice will be imported in March and April. This decision came after prices for the commodity rose to Rp 5,000 a kilogram in December and January, threatening a possible surge in inflation.

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indonesia

Jakarta's Flood Zone Warrants US$3 Million in Foreign Aid

After devestating flood damage, Jakarta is recieving over US$3 Million in humanitarian aid. Notable contributions include US$1.2 million donation from the Dutch, and US$800,000 from the Europen Union.

After devestating flood damage, Jakarta is recieving over US$3 Million in humanitarian aid. Notable contributions include US$1.2 million donation from the Dutch, and US$800,000 from the Europen Union.

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indonesia

Political Parties in Post-Suharto Indonesia: Between politik aliran and ’Philippinisation’

Surprisingly, the outcome of the 1999 and 2004 elections in Indonesia and the resultant constellation of political parties are reminiscent of the first Indonesian parliamentary democracy of the 1950s. The dynamics of party politics are still marked by aliran (‘streams'), i.e. some of the biggest political parties still have a mass base and are embedded in specific milieus. But politik aliran has lost a lot of its significance and re-emerged in a quite different form after the fall of Suharto in 1998. Starting with this observation, it is argued that parties are still socially rooted, so a modified aliran approach still has its analytical value. However, one can also witness a weakening of aliran (dealiranisasi) and a concomitant ‘Philippinisation', which is indicated by the rise of presidential or presidentialised parties, growing intra-party authoritarianism, the prevalence of ‘money politics', the lack of meaningful political platforms, weak loyalties towards parties, cartels with shifting coalitions and the upsurge of new local elites.

Surprisingly, the outcome of the 1999 and 2004 elections in Indonesia and the resultant constellation of political parties are reminiscent of the first Indonesian parliamentary democracy of the 1950s. The dynamics of party politics are still marked by aliran (‘streams'), i.e. some of the biggest political parties still have a mass base and are embedded in specific milieus. But politik aliran has lost a lot of its significance and re-emerged in a quite different form after the fall of Suharto in 1998. Starting with this observation, it is argued that parties are still socially rooted, so a modified aliran approach still has its analytical value. However, one can also witness a weakening of aliran (dealiranisasi) and a concomitant ‘Philippinisation', which is indicated by the rise of presidential or presidentialised parties, growing intra-party authoritarianism, the prevalence of ‘money politics', the lack of meaningful political platforms, weak loyalties towards parties, cartels with shifting coalitions and the upsurge of new local elites.

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indonesia

Emerging Asia’s Growth and Integration - How Autonomous are Business Cycles?

Against the background of the rapid integration of emerging Asia into the global economy, this paper investigates the role of domestic and external factors in driving individual emerging economies in Asia. We estimate VAR models for ten countries over the period 1979Q1-2003Q4, controlling for external factors, and use sign restrictions to identify structural domestic shocks. Variance decompositions indicate that Asian emerging economies are to a large part driven by external developments, and even more so employing a more recent sample. We analyse to what extent structural domestic shocks exhibit a regional dimension by comparing shocks across countries using correlation and principal component analysis. The extent of regional co-movement between structural shocks is relatively limited. While the principal components analysis indicates a moderate increase in co-movement over time, the correlation analysis finds a decline. This may reflect a broadening of regional integration at the expense of bilateral economic ties.

Against the background of the rapid integration of emerging Asia into the global economy, this paper investigates the role of domestic and external factors in driving individual emerging economies in Asia. We estimate VAR models for ten countries over the period 1979Q1-2003Q4, controlling for external factors, and use sign restrictions to identify structural domestic shocks. Variance decompositions indicate that Asian emerging economies are to a large part driven by external developments, and even more so employing a more recent sample. We analyse to what extent structural domestic shocks exhibit a regional dimension by comparing shocks across countries using correlation and principal component analysis. The extent of regional co-movement between structural shocks is relatively limited. While the principal components analysis indicates a moderate increase in co-movement over time, the correlation analysis finds a decline. This may reflect a broadening of regional integration at the expense of bilateral economic ties.

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indonesia

Competition and Inter-Firm Credit: Theory and Evidence from Firm-level Data in Indonesia

Using firm-level data we investigate the relationship between trade credit and suppliers' market structure and find an inverted U-shaped relationship between competition and trade credit, with a discontinuous increase in credit provision between monopoly and duopoly. This "big jump" arises because monopolists are more likely to not offer any trade credit than firms in competitive environments. Our model exploits the fundamentally different nature between cash and trade credit sales, arguing that firms are unable to commit ex ante to a trade credit price. We show that monopolists will often sell only on cash, while credit is always provided in competitive environments.

Using firm-level data we investigate the relationship between trade credit and suppliers' market structure and find an inverted U-shaped relationship between competition and trade credit, with a discontinuous increase in credit provision between monopoly and duopoly. This "big jump" arises because monopolists are more likely to not offer any trade credit than firms in competitive environments. Our model exploits the fundamentally different nature between cash and trade credit sales, arguing that firms are unable to commit ex ante to a trade credit price. We show that monopolists will often sell only on cash, while credit is always provided in competitive environments.

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indonesia

Exchange Rate Pass-Through in ASEAN: Implications for the Prospects of Monetary Integration in the Region

This paper investigates, for the first time, the degree of exchange rate pass-through to domestic prices in all five founding members of ASEAN. For this purpose, a three variable recursive VAR model was applied which uses the Choleski decomposition method along the distribution chain of pricing, using data for the period 1968 to 2001. The results show that a strong case for entering a currency union can only be made for the cases of Singapore and Malaysia as in these countries there appears to be a case of exchange rate disconnect. A case for a common currency can also be made for Indonesia but for entirely different reasons. For this country, an independent monetary policy is a clear source of shocks to the economy and therefore a currency union would tend to eliminate then. A weaker case for a common currency can be made for the Philippines as evidence of some exchange rate pass-through to inflation was found but not to import prices. Finally, Thailand exhibits a clear case of exchange rate pass-through to import prices (but not to inflation) and thus evidence that a flexible exchange rate might be preferable as it provides the means to improve the country's price competitiveness.

This paper investigates, for the first time, the degree of exchange rate pass-through to domestic prices in all five founding members of ASEAN. For this purpose, a three variable recursive VAR model was applied which uses the Choleski decomposition method along the distribution chain of pricing, using data for the period 1968 to 2001. The results show that a strong case for entering a currency union can only be made for the cases of Singapore and Malaysia as in these countries there appears to be a case of exchange rate disconnect. A case for a common currency can also be made for Indonesia but for entirely different reasons. For this country, an independent monetary policy is a clear source of shocks to the economy and therefore a currency union would tend to eliminate then. A weaker case for a common currency can be made for the Philippines as evidence of some exchange rate pass-through to inflation was found but not to import prices. Finally, Thailand exhibits a clear case of exchange rate pass-through to import prices (but not to inflation) and thus evidence that a flexible exchange rate might be preferable as it provides the means to improve the country's price competitiveness.

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indonesia

Currency Futures Volatility During the 1997 East Asian Crisis: An Application of Fourier Analysis

We analyze a recently proposed method to estimate volatility and correlation when prices are observed at a high frequency rate. The method is based on Fourier analysis and does not require any data manipulation, leading to more robust estimates than the traditional methodologies proposed so far. In the first part of the paper, we evaluate the performance of the Fourier algorithm to reconstruct the time volatility of simulated univariate and bivariate models. In the second part, the Fourier method is used to investigate the volatility and correlation dynamics of futures markets over the Asian crisis period, with the purpose of detecting possible interdependencies and volatility transmissions across countries amid a period of financial turmoil.

We analyze a recently proposed method to estimate volatility and correlation when prices are observed at a high frequency rate. The method is based on Fourier analysis and does not require any data manipulation, leading to more robust estimates than the traditional methodologies proposed so far. In the first part of the paper, we evaluate the performance of the Fourier algorithm to reconstruct the time volatility of simulated univariate and bivariate models. In the second part, the Fourier method is used to investigate the volatility and correlation dynamics of futures markets over the Asian crisis period, with the purpose of detecting possible interdependencies and volatility transmissions across countries amid a period of financial turmoil.

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indonesia

Progress toward a Common Currency Basket System in East Asia

Ogawa and Shimizu (2005, 2006a) have proposed a possible way to create an Asian Monetary Unit (AMU) as a weighted average of the thirteen East Asian currencies (ASEAN + China, Japan, and Korea) and developed AMU Deviation Indicators for a surveillance process under the Chiang Mai Initiative. Both the AMU and the AMU Deviation Indicators are important in helping the countries in the region to recognize the necessity of moving toward a common currency basket system. However, there remains an open question about how to implement this system in East Asian countries. The purpose of this paper is to compile the latest issues of currency basket itself and to develop concrete steps toward a common currency basket system in East Asia. Particularly, we simulate possible individual currency basket weights based on trade shares of each East Asian country and convert them to G3 currency (the US dollar, the euro, and the Japanese yen) basket weights. We also investigate the discrepancies between the converted G3 currency basket weight of the AMU and the weights of the common G3 currency basket, which is to illustrate the reality of implementing a common currency basket system. We propose a possible way to shift from an individual G3 currency basket system to the AMU currency basket system. In this process, we expect that the Japanese yen would play a varying role at each stage toward monetary coordination in East Asia.

Ogawa and Shimizu (2005, 2006a) have proposed a possible way to create an Asian Monetary Unit (AMU) as a weighted average of the thirteen East Asian currencies (ASEAN + China, Japan, and Korea) and developed AMU Deviation Indicators for a surveillance process under the Chiang Mai Initiative. Both the AMU and the AMU Deviation Indicators are important in helping the countries in the region to recognize the necessity of moving toward a common currency basket system. However, there remains an open question about how to implement this system in East Asian countries. The purpose of this paper is to compile the latest issues of currency basket itself and to develop concrete steps toward a common currency basket system in East Asia. Particularly, we simulate possible individual currency basket weights based on trade shares of each East Asian country and convert them to G3 currency (the US dollar, the euro, and the Japanese yen) basket weights. We also investigate the discrepancies between the converted G3 currency basket weight of the AMU and the weights of the common G3 currency basket, which is to illustrate the reality of implementing a common currency basket system. We propose a possible way to shift from an individual G3 currency basket system to the AMU currency basket system. In this process, we expect that the Japanese yen would play a varying role at each stage toward monetary coordination in East Asia.

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indonesia

Indonesia Increases Bond Sales

Indonesia's government doubled the size of a planned bond sale to 2 billion U.S. dollars to raise money for infrastructure spending. Indonesia, the largest country in Southeast Asia, needs 5 billion dollars annually to build ports, roads and power plants, according to the World Bank. Citigroup Inc will arrange the sale globally.

Indonesia's government doubled the size of a planned bond sale to 2 billion U.S. dollars to raise money for infrastructure spending. Indonesia, the largest country in Southeast Asia, needs 5 billion dollars annually to build ports, roads and power plants, according to the World Bank. Citigroup Inc will arrange the sale globally.

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indonesia

Indonesia Bans Sand Exports to Singapore

Indonesia has banned all further sand exports, citing environmental concerns and the need to protect its borders. Indonesia's sand trade with Singapore, worth hundreds of millions of dollars a year, has been criticized by environmentalists who said sand mining had led to erosion and even the disappearance of some Indonesian islands.

Indonesia has banned all further sand exports, citing environmental concerns and the need to protect its borders. Indonesia's sand trade with Singapore, worth hundreds of millions of dollars a year, has been criticized by environmentalists who said sand mining had led to erosion and even the disappearance of some Indonesian islands.

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indonesia

Financial Constraints on Investment in an Emerging Market Crisis: An Empirical Investigation of Foreign Ownership

JEL classification codes: O16, F23, E32, O12Abstract:We investigate whether capital market imperfections constrain investment during an emerging market financial crisis. Both large currency devaluations and widespread collapse of the banking sector characterize recent crises. Although a currency devaluation should increase exporters' competitiveness and investment, a failing banking system may limit credit to these firms. Foreign-owned firms, which have greater access to overseas financing but otherwise face the same investment prospects, provide an ideal control group for determining the effect of liquidity constraints. We test for liquidity constraints in Indonesia following the 1997 East Asian financial crisis, a period when the issuance of new domestic credit declined rapidly. Exporters' value added and employment increased after the crisis, suggesting that they profited from the devaluation and had sufficient cash flow to finance more workers. However, only exporters with foreign ownership increased their investment significantly. The failure of domestic firms to invest under profitable conditions suggests that they may have faced liquidity constraints. Investment by foreign-owned firms increased post-crisis capital stock by about 4% more than would have occurred if all the firms were domestically owned.

JEL classification codes: O16, F23, E32, O12Abstract:We investigate whether capital market imperfections constrain investment during an emerging market financial crisis. Both large currency devaluations and widespread collapse of the banking sector characterize recent crises. Although a currency devaluation should increase exporters' competitiveness and investment, a failing banking system may limit credit to these firms. Foreign-owned firms, which have greater access to overseas financing but otherwise face the same investment prospects, provide an ideal control group for determining the effect of liquidity constraints. We test for liquidity constraints in Indonesia following the 1997 East Asian financial crisis, a period when the issuance of new domestic credit declined rapidly. Exporters' value added and employment increased after the crisis, suggesting that they profited from the devaluation and had sufficient cash flow to finance more workers. However, only exporters with foreign ownership increased their investment significantly. The failure of domestic firms to invest under profitable conditions suggests that they may have faced liquidity constraints. Investment by foreign-owned firms increased post-crisis capital stock by about 4% more than would have occurred if all the firms were domestically owned.

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indonesia

An Empirical Study of Asian Stock Volatility Using Stochastic Volatility Factor Model: Factor Analysis and Forecasting

This paper is an empirical study of Asian stock volatility using stochastic volatility factor (SVF) model of Cipollini and Kapetanios (2005). We adopt their approach to carry out factor analysis and to forecast volatility. Our results show some Asian factors exhibit long memory that is in line with existing empirical findings in financial volatility. However, their local-factor SVF model is not powerful enough in forecasting Asian volatility. This has led us to propose an extension to a multi-factor SVF model. We also discuss how to produce forecast using this multi-factor model.

This paper is an empirical study of Asian stock volatility using stochastic volatility factor (SVF) model of Cipollini and Kapetanios (2005). We adopt their approach to carry out factor analysis and to forecast volatility. Our results show some Asian factors exhibit long memory that is in line with existing empirical findings in financial volatility. However, their local-factor SVF model is not powerful enough in forecasting Asian volatility. This has led us to propose an extension to a multi-factor SVF model. We also discuss how to produce forecast using this multi-factor model.

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indonesia

Real Estate and the Asian Crisis

This paper suggests that activities in the real estate markets in Southeast and East Asian economies were an important contributing force to the financial crises of 1997 in the Asian economies. The analysis relies upon unpublished data reported contemporaneously by financial institutions and market watchers to document the extent of the imbalances in the real property market that were evident to informed observers at the time of the financial collapse. The analysis argues that a series of reforms in the regulation of the property market and the treatment of real property loans by financial institutions are necessary to prevent the recurrence of the kind of speculative bubble that contributed to the financial crises in Asia. Given the recentness of the crisis, the nature of the data and the absence of definitive statistical sources, the results are tentative, but they are certainly consistent with a financial collapse whose proximate cause was unchecked activity in the property market.

This paper suggests that activities in the real estate markets in Southeast and East Asian economies were an important contributing force to the financial crises of 1997 in the Asian economies. The analysis relies upon unpublished data reported contemporaneously by financial institutions and market watchers to document the extent of the imbalances in the real property market that were evident to informed observers at the time of the financial collapse. The analysis argues that a series of reforms in the regulation of the property market and the treatment of real property loans by financial institutions are necessary to prevent the recurrence of the kind of speculative bubble that contributed to the financial crises in Asia. Given the recentness of the crisis, the nature of the data and the absence of definitive statistical sources, the results are tentative, but they are certainly consistent with a financial collapse whose proximate cause was unchecked activity in the property market.

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indonesia

Monetary and Exchange Rate Stability in South East Asia

Regaining exchange rate stability has been a major monetary policy goal of East Asian countries in the aftermath of the 1997/98 currency crisis. While most countries have abstained from re-establishing a formal US Dollar peg, they have typically managed the US Dollar exchange rate de facto. We show that most of these countries were able to regain their monetary credibility within a relatively short time period. The Argentine crisis in 2001 caused a minor setback in this process for some countries. We measure the credibility of monetary policy by separating the fundamental and excess volatility of the exchange rate on the basis of a chartist fundamentalist model. The degree of excess volatility is interpreted as the ability of the central bank to manage the exchange rate via the coordination channel.

Regaining exchange rate stability has been a major monetary policy goal of East Asian countries in the aftermath of the 1997/98 currency crisis. While most countries have abstained from re-establishing a formal US Dollar peg, they have typically managed the US Dollar exchange rate de facto. We show that most of these countries were able to regain their monetary credibility within a relatively short time period. The Argentine crisis in 2001 caused a minor setback in this process for some countries. We measure the credibility of monetary policy by separating the fundamental and excess volatility of the exchange rate on the basis of a chartist fundamentalist model. The degree of excess volatility is interpreted as the ability of the central bank to manage the exchange rate via the coordination channel.

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indonesia

Post-crisis Exchange Rate Regimes in ASEAN:A New Empirical Test Based on Intra-daily Data

The purpose of this paper is to investigate what affected the post-crisis exchange rates of three ASEAN countries: Singapore, Thailand, and Malaysia. Our critical departure from previous studies is the use of intra-daily exchange rates. The use of the intra-daily data is useful in removing possible estimation biases which the choice of numeraire may cause. It can also contrast exchange rate movements during the time zone when the government intervention is active with those when the intervention is not active. We examine how and when the ASEAN currencies changed their correlations with the U.S. dollar and the Japanese yen. We find significant structural breaks in the correlations during the time zone when East Asian market is open. In the post-crisis period, the first structural break happened when Malaysia adopted the fixed exchange rate and the second break happened when some East Asian countries introduced inflation targeting. The structural breaks suggest strong monetary and real linkages among the ASEAN countries.

The purpose of this paper is to investigate what affected the post-crisis exchange rates of three ASEAN countries: Singapore, Thailand, and Malaysia. Our critical departure from previous studies is the use of intra-daily exchange rates. The use of the intra-daily data is useful in removing possible estimation biases which the choice of numeraire may cause. It can also contrast exchange rate movements during the time zone when the government intervention is active with those when the intervention is not active. We examine how and when the ASEAN currencies changed their correlations with the U.S. dollar and the Japanese yen. We find significant structural breaks in the correlations during the time zone when East Asian market is open. In the post-crisis period, the first structural break happened when Malaysia adopted the fixed exchange rate and the second break happened when some East Asian countries introduced inflation targeting. The structural breaks suggest strong monetary and real linkages among the ASEAN countries.

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indonesia

Knowledge and Innovation in the Indonesian Artisanal Furniture Industry

In developed countries, localized learning in clusters of small and medium-sized firms is seen as beneficial for innovation in these firms. This paper questions whether such a situation is also true for small firms in developing countries. By examining 90 furniture manufacturers in the district of Jepara (Indonesia) we observe knowledge access mainly through one-sided local learning mechanisms, e.g. in-house learning-by-doing and informal contacts with buyers (contractors). This pattern tends to cause a dominance of product innovation (changes in design) and low levels of newness, and points to a lack of advantages from local learning. The major principle behind this is the way in which subcontracting relations are structured. However, the furniture manufacturers in Jepara are willing to connect with global knowledge, but financial obstacles prevent a change. This situation calls for the establishment of centres or renewal of existing centres where global knowledge can be accessed e.g. through the Internet, and support can be given in absorption of the new knowledge.

In developed countries, localized learning in clusters of small and medium-sized firms is seen as beneficial for innovation in these firms. This paper questions whether such a situation is also true for small firms in developing countries. By examining 90 furniture manufacturers in the district of Jepara (Indonesia) we observe knowledge access mainly through one-sided local learning mechanisms, e.g. in-house learning-by-doing and informal contacts with buyers (contractors). This pattern tends to cause a dominance of product innovation (changes in design) and low levels of newness, and points to a lack of advantages from local learning. The major principle behind this is the way in which subcontracting relations are structured. However, the furniture manufacturers in Jepara are willing to connect with global knowledge, but financial obstacles prevent a change. This situation calls for the establishment of centres or renewal of existing centres where global knowledge can be accessed e.g. through the Internet, and support can be given in absorption of the new knowledge.

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indonesia

Proposed Rules of Origin in Emerging Asia-Pacific Preferential Trade Agreements: Will PTAs Promote Trade and Development?

World trade is increasingly being dominated by preferential trade agreements that have taken precedence over multilateral trade negotiations. Within Asia and the Pacific an explosion of bilateral deals is taking place that seems likely to produce a tangle of hub-spoke trade blocs centered on major Asian or Pacific countries.

World trade is increasingly being dominated by preferential trade agreements that have taken precedence over multilateral trade negotiations. Within Asia and the Pacific an explosion of bilateral deals is taking place that seems likely to produce a tangle of hub-spoke trade blocs centered on major Asian or Pacific countries.

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indonesia

Indonesia’s Debt Ratio Drops to 35% in 2006

On Tuesday, Muhammad Al Arif, a World Bank official, said the ratio of Indonesia's debt to its gross domestic product (GDP) in 2006 declined to 35 percent from 47 percent in 2005. He said he was optimistic Indonesia's debts would continue to decrease in the future.

On Tuesday, Muhammad Al Arif, a World Bank official, said the ratio of Indonesia's debt to its gross domestic product (GDP) in 2006 declined to 35 percent from 47 percent in 2005. He said he was optimistic Indonesia's debts would continue to decrease in the future.

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indonesia

Indonesian Vice President to Visit India; Strengthen Economic Ties

Indonesian Vice President Jusuf Kalla will lead a delegation to visit India's two biggest cities, Mumbai and New Delhi. The Indonesian delegation's purpose is to deepen the bilateral corporationin with India in manufacture and tourism industry during the five days visit.

Indonesian Vice President Jusuf Kalla will lead a delegation to visit India's two biggest cities, Mumbai and New Delhi. The Indonesian delegation's purpose is to deepen the bilateral corporationin with India in manufacture and tourism industry during the five days visit.

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indonesia

ASEAN Summit Comes to a Close

The 12th association of South East Asian Nations (ASEAN) summit being held at Cebu, Philippines drew to a close yesterday. The North Korean nuclear situation was one of the biggest issues discussed during these meetings. ASEAN is highly involved in the effort to denuclearize North Korea. Also discussed was the idea of economic integration in Southeast Asia and an overall community building in the region. The next ASEAN summit meeting will be held on Nov. 21st in Singapore.

The 12th association of South East Asian Nations (ASEAN) summit being held at Cebu, Philippines drew to a close yesterday. The North Korean nuclear situation was one of the biggest issues discussed during these meetings. ASEAN is highly involved in the effort to denuclearize North Korea. Also discussed was the idea of economic integration in Southeast Asia and an overall community building in the region. The next ASEAN summit meeting will be held on Nov. 21st in Singapore.

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indonesia

Big Weekly Plunge in JSX

Jakarta Stock Index posted Friday the biggest weekly loss in five months triggered by investors' selling activities on PT Perusahaan Gas Negara shares due to delays on the opening of its key pipeline. The Jakarta Composite Index lost 25.80, or 1.5 percent, to 1,678, the lowest since Nov. 17. The index dropped 8.4 percent this week, the biggest slump since the period to May 19.

Jakarta Stock Index posted Friday the biggest weekly loss in five months triggered by investors' selling activities on PT Perusahaan Gas Negara shares due to delays on the opening of its key pipeline. The Jakarta Composite Index lost 25.80, or 1.5 percent, to 1,678, the lowest since Nov. 17. The index dropped 8.4 percent this week, the biggest slump since the period to May 19.

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indonesia

India Expands Trade Ties with ASEAN

India said on Thursday it was close to reaching a free-trade agreement with the Association of Southeast Asian Nations (ASEAN) and expected to have it wrapped up by July. India, an emerging economy which adopted a free-market policy in the early 1990s, is keen to expand in the global market.

India said on Thursday it was close to reaching a free-trade agreement with the Association of Southeast Asian Nations (ASEAN) and expected to have it wrapped up by July. India, an emerging economy which adopted a free-market policy in the early 1990s, is keen to expand in the global market.

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indonesia

Asian Stock Markets Fell

Asian stocks and regional currencies declined due to the proposed nationalization of Venezuela's utilities and the fall of oil prices to a 15-month low. Among the Asian stock markets, Jakarta was hard-hit losing 3.96% or 70.51 points to 1710.36. In addition, the country's currency also fell 0.55 percent to a two-week low. Other bursars in the region also did not perform well.

Asian stocks and regional currencies declined due to the proposed nationalization of Venezuela's utilities and the fall of oil prices to a 15-month low. Among the Asian stock markets, Jakarta was hard-hit losing 3.96% or 70.51 points to 1710.36. In addition, the country's currency also fell 0.55 percent to a two-week low. Other bursars in the region also did not perform well.

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indonesia

Crude Palm Oil to Increase in 2007

An Indonesian official said that the price of crude palm oil (CPO) will likely rise this year due to the surging demand for the product in the world market, while supply is limited. India, China, and European nations are the countries with the possible high demand for CPO. CPO has great demand lately since countries use it not only as a raw material in the food industry but also used in the biofuel production.

An Indonesian official said that the price of crude palm oil (CPO) will likely rise this year due to the surging demand for the product in the world market, while supply is limited. India, China, and European nations are the countries with the possible high demand for CPO. CPO has great demand lately since countries use it not only as a raw material in the food industry but also used in the biofuel production.

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indonesia

Black Market and Official Exchange Rates: Long-Run Equilibrium and Short-Run Dynamics

This paper presents further empirical evidence on the relationship between black market and official exchange rates in six emerging economies (Iran, India, Indonesia, Korea, Pakistan, and Thailand). First, it applies both time series techniques and heterogeneous panel methods to test for the existence of a long-run relationship between these two types of exchange rates. Second, it tests formally the validity of the proportionality restriction implying a constant black-market premium. Third, it also analyzes the short-run dynamic responses of both markets to shocks. Finally, it tries to shed some light on the determinants of the market premium. Evidence of slow reversion to the long-run equilibrium is found. Further, it appears that capital controls and expected currency devaluation are the two main factors affecting the size of the premium and determining the breakdown in the proportionality relationship.

This paper presents further empirical evidence on the relationship between black market and official exchange rates in six emerging economies (Iran, India, Indonesia, Korea, Pakistan, and Thailand). First, it applies both time series techniques and heterogeneous panel methods to test for the existence of a long-run relationship between these two types of exchange rates. Second, it tests formally the validity of the proportionality restriction implying a constant black-market premium. Third, it also analyzes the short-run dynamic responses of both markets to shocks. Finally, it tries to shed some light on the determinants of the market premium. Evidence of slow reversion to the long-run equilibrium is found. Further, it appears that capital controls and expected currency devaluation are the two main factors affecting the size of the premium and determining the breakdown in the proportionality relationship.

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indonesia

Understanding the Latest Wave and Future Shape of Regional Trade and Cooperation Agreements in Asia

Asia accounts for more than 30% of world GDP and contributes half of the global growth in recent years. Despite high growth rates, Asia is still facing considerable socio-economic challenges. If Asia is to reemerge as a major power in the global economy and in order for the region to successfully address its own challenges and issues there is a need to make the region's economies more integrated regionally and internationally. Following the recent global trend, Asia witnessed a wave of subregional and bilateral trade agreements. This paper analyzes the recent trends and patterns and nature of regional trade and cooperation agreements (RTCAs) in Asia and associated problems and prospects. It also attempts to understand the latest wave and the future shape of RTCAs and examines if these RTCAs provide the basis for a new Asia-wide cooperation or for the emergence of new regional trade in blocs of several subregional groupings.

Asia accounts for more than 30% of world GDP and contributes half of the global growth in recent years. Despite high growth rates, Asia is still facing considerable socio-economic challenges. If Asia is to reemerge as a major power in the global economy and in order for the region to successfully address its own challenges and issues there is a need to make the region's economies more integrated regionally and internationally. Following the recent global trend, Asia witnessed a wave of subregional and bilateral trade agreements. This paper analyzes the recent trends and patterns and nature of regional trade and cooperation agreements (RTCAs) in Asia and associated problems and prospects. It also attempts to understand the latest wave and the future shape of RTCAs and examines if these RTCAs provide the basis for a new Asia-wide cooperation or for the emergence of new regional trade in blocs of several subregional groupings.

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indonesia

Asian Economic Integration: ASEAN+3+1 or ASEAN+1s?

In this paper an attempt is made to evaluate the most efficient approach to regional economic integration in Asia. For the purpose, Asia is defined as inclusive of ASEAN, the plus three economies of China, Japan, Korea and India that is the ASEAN plus four. Given that ASEAN is an existing regional bloc in Asia, alternative approaches to the alignment of the plus four economies with ASEAN for the formation of the ASEAN+4 trade bloc have been evaluated to determine if there are efficiency costs by way of distortion in the patterns of trade away from those expected on the basis of comparative advantage. The findings of our analysis underscore the efficiency of a prior alignment with ASEAN for all the plus four economies.

In this paper an attempt is made to evaluate the most efficient approach to regional economic integration in Asia. For the purpose, Asia is defined as inclusive of ASEAN, the plus three economies of China, Japan, Korea and India that is the ASEAN plus four. Given that ASEAN is an existing regional bloc in Asia, alternative approaches to the alignment of the plus four economies with ASEAN for the formation of the ASEAN+4 trade bloc have been evaluated to determine if there are efficiency costs by way of distortion in the patterns of trade away from those expected on the basis of comparative advantage. The findings of our analysis underscore the efficiency of a prior alignment with ASEAN for all the plus four economies.

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indonesia

The Evolution of the East Asian Currency Baskets – Still Undisclosed and Changing

Both before and after the Asian crisis, the dollar has been the dominant anchor and reserve currency in East Asia. Due to underdeveloped capital markets and the limited international role of their domestic currencies, the East Asian countries (except Japan) are likely to continue to stabilize exchange rates and to accumulate international reserves. Yet expectations of further dollar depreciation may trigger a re-orientation of exchange rate policies based on basket strategies. Rolling econometric estimations of the basket structures in East Asia suggest growing weights for the Japanese yen in most East Asian currency baskets. The role of the euro as a reserve currency in East Asia remains uncertain.

Both before and after the Asian crisis, the dollar has been the dominant anchor and reserve currency in East Asia. Due to underdeveloped capital markets and the limited international role of their domestic currencies, the East Asian countries (except Japan) are likely to continue to stabilize exchange rates and to accumulate international reserves. Yet expectations of further dollar depreciation may trigger a re-orientation of exchange rate policies based on basket strategies. Rolling econometric estimations of the basket structures in East Asia suggest growing weights for the Japanese yen in most East Asian currency baskets. The role of the euro as a reserve currency in East Asia remains uncertain.

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indonesia

Asian Equity Markets: Growth,Opportunities, and Challenges

Asian equity markets have grown significantly in size since the early 1990s, driven by strong international investor inflows, growing regional financial integration, capital account liberalization, and structural improvements to markets. The development of equity markets provides a more diversified set of channels for financial intermediation to support growth, thus bolstering medium-term financial stability. At the same time, as highlighted by the May-June 2006 market corrections, the increasing role of stock markets potentially changes the nature of macroeconomic and financial stability risks, as well as the policy requirements for dealing with these risks.

Asian equity markets have grown significantly in size since the early 1990s, driven by strong international investor inflows, growing regional financial integration, capital account liberalization, and structural improvements to markets. The development of equity markets provides a more diversified set of channels for financial intermediation to support growth, thus bolstering medium-term financial stability. At the same time, as highlighted by the May-June 2006 market corrections, the increasing role of stock markets potentially changes the nature of macroeconomic and financial stability risks, as well as the policy requirements for dealing with these risks.

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indonesia

Is Asia Prepared for an Aging Population?

Many Asian countries (such as China, Singapore, Korea, Thailand, Malaysia, Indonesia, India, and the Philippines) will experience a significant aging of their populations during the next several decades. This paper explores how these aging Asian countries are addressing and anticipating the challenges of an aging society. It suggests that Asia's preparedness for an aging population is decidedly mixed. While growth policies have been successful, much work is still needed in many countries to establish an adequate and farsighted policy framework in the areas of pensions, health insurance, and labor market policies.

Many Asian countries (such as China, Singapore, Korea, Thailand, Malaysia, Indonesia, India, and the Philippines) will experience a significant aging of their populations during the next several decades. This paper explores how these aging Asian countries are addressing and anticipating the challenges of an aging society. It suggests that Asia's preparedness for an aging population is decidedly mixed. While growth policies have been successful, much work is still needed in many countries to establish an adequate and farsighted policy framework in the areas of pensions, health insurance, and labor market policies.

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indonesia

Indonesia Cut Rates to Stimulate Economic Growth

In order to spur economic growth, the Central Bank of Indonesia cut its interest rate by a quarter percentage point to 9.5 percent. BI Governor Abdullah said that Indonesia's economy was resilient last year despite economic threats such as increasing oil prices, transportation costs, and electricity prices. The country managed to lower its inflation rate to about 8 percent last year, hence, for the start of 2007, the country is expecting faster economic growth and a stable macroeconomic environment.

In order to spur economic growth, the Central Bank of Indonesia cut its interest rate by a quarter percentage point to 9.5 percent. BI Governor Abdullah said that Indonesia's economy was resilient last year despite economic threats such as increasing oil prices, transportation costs, and electricity prices. The country managed to lower its inflation rate to about 8 percent last year, hence, for the start of 2007, the country is expecting faster economic growth and a stable macroeconomic environment.

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indonesia

IBOR Rates in Asia

Inter Bank Offered Rates (Ibor Rates), Benchmark Rates, and Date Last Changed.

Inter Bank Offered Rates (Ibor Rates), Benchmark Rates, and Date Last Changed.

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indonesia

Indonesia and South Korea Sign Bilateral Swap Agreement

The Bank of Korea and Bank Indonesia signed a bilateral swap agreement which allows both countries to secure short-term loans from each other. In addition, both countries can use the swap facilities when they need short-term liquidity.

The Bank of Korea and Bank Indonesia signed a bilateral swap agreement which allows both countries to secure short-term loans from each other. In addition, both countries can use the swap facilities when they need short-term liquidity.

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indonesia

Economic Integration in Asia: Bilateral Free Trade Agreements Versus Asian Single Market

Institutional regionalisation has come late to East Asia compared to Europe, but its pace has accelerated since the mid-1990s. Many agreements, including bilateral ones such as those signed between Singapore and Japan, and plurilateral ones such as those between ASEAN countries (e.g. ASEAN Free Trade Agreement (AFTA below)), cover an ever-increasing portion of the East Asian region, including China. We first analyse regional economic integration in East Asia, questioning the notion of open regionalism. In a second part we explore the possible consequences of different kind of agreements. We rely on the CEPII's CGE model (MIRAGE), adapted to the specificity of Asia's economic integration. As regards the geometry of the agreement(s), two sets of scenarios are considered, following a Hub-and-Spoke versus a Full-FTA assumption, with or without sensitive products inclusion.
Among the main results, we find that Asian countries do have diverging interests. While ASEAN maximises its benefit in the bilateral scenario including agricultural liberalisation (SC1); Japan and Korea are the best in the Asia global agreement scenario, including sensitive products for Japan (SC2) but excluding these products for Korea (SC 4). For EU- 25, it appears that increased competition within Asia has a negative impact on its goods exports but positive impact on its service exportations. The main losers are the close countries and primary goods producers such as Taiwan, South Asia (excluding India), North of Africa, South America.

Institutional regionalisation has come late to East Asia compared to Europe, but its pace has accelerated since the mid-1990s. Many agreements, including bilateral ones such as those signed between Singapore and Japan, and plurilateral ones such as those between ASEAN countries (e.g. ASEAN Free Trade Agreement (AFTA below)), cover an ever-increasing portion of the East Asian region, including China. We first analyse regional economic integration in East Asia, questioning the notion of open regionalism. In a second part we explore the possible consequences of different kind of agreements. We rely on the CEPII's CGE model (MIRAGE), adapted to the specificity of Asia's economic integration. As regards the geometry of the agreement(s), two sets of scenarios are considered, following a Hub-and-Spoke versus a Full-FTA assumption, with or without sensitive products inclusion.
Among the main results, we find that Asian countries do have diverging interests. While ASEAN maximises its benefit in the bilateral scenario including agricultural liberalisation (SC1); Japan and Korea are the best in the Asia global agreement scenario, including sensitive products for Japan (SC2) but excluding these products for Korea (SC 4). For EU- 25, it appears that increased competition within Asia has a negative impact on its goods exports but positive impact on its service exportations. The main losers are the close countries and primary goods producers such as Taiwan, South Asia (excluding India), North of Africa, South America.

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indonesia

USAID to Provide Financial Help to Indonesia's Agribusiness Sector

United States Agency for International Development (USAID) will provide help worth US$13.75 million over the next three years to Indonesia. The aid will provide technical and equipment assistance to help the government develop its agribusiness sector. A program called Agribusiness Market and Support Activities (AMARTA) is created to implement projects for the agribusiness sector. The main goal is to improve productivity and quality of agribusiness products as well as ensure better market access.

United States Agency for International Development (USAID) will provide help worth US$13.75 million over the next three years to Indonesia. The aid will provide technical and equipment assistance to help the government develop its agribusiness sector. A program called Agribusiness Market and Support Activities (AMARTA) is created to implement projects for the agribusiness sector. The main goal is to improve productivity and quality of agribusiness products as well as ensure better market access.

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indonesia

RP's Peso and other Asian Currencies Recover

The peso and other Asian currencies bounced back on Wednesday from a fall Tuesday after Thailand decided to backtrack on its plan to restrict capital flows to temper baht's rise. The peso closed stronger at 49.375 against the US dollar, 34.5 centavos higher than the previous day. The euphoria in Thailand's market had a domino effect on other Asian markets, specifically, Indonesia and the Philippines, because the three markets are usually treated by investors as one basket. Hence, it is no coincidence that euphoria in one market quickly spilled over to the others, Anton Periquet, a Deutsche Bank strategist said.

The peso and other Asian currencies bounced back on Wednesday from a fall Tuesday after Thailand decided to backtrack on its plan to restrict capital flows to temper baht's rise. The peso closed stronger at 49.375 against the US dollar, 34.5 centavos higher than the previous day. The euphoria in Thailand's market had a domino effect on other Asian markets, specifically, Indonesia and the Philippines, because the three markets are usually treated by investors as one basket. Hence, it is no coincidence that euphoria in one market quickly spilled over to the others, Anton Periquet, a Deutsche Bank strategist said.

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indonesia

Regional Intergration and Industrial Growth Among Developing Countries - three case of three ASEAN members

Has the revival of the Association of Southeast Asian Nations (ASEAN) in the early 1990s affected the industrial growth of Indonesia, Malaysia, and the Philippines? The author uses two mechanisms to capture this potential impact: scale effects, and intermediate imports variety. She performs the analysis on twenty two industries (at the three-digit level of the International Standard Industrial Classification) over the period 1971-95. The results show significant heterogeneity in industry-level returns to scale. Moreover, the three ASEAN members have very small, mostly negative cross-industry scale effects. As a result, they may not achieve large, or across-the-board gains from their regional arrangement through scale effects. The author finds unexpected results with respect to the role of intermediate imports variety in industrial growth. She finds no support for the hypothesis that non-regional (rest of the world) suppliers, and goods variety have a positive effect on ASEAN industries through the channel of imported intermediate inputs. The regional variety measure, however, seems to have a positive effect on the output growth of a handful of industries. This result seems due to the fact that these countries have long had a strong intra-regional, and intra-industry trade, whose history predates, and outweighs the ASEAN revival.

Has the revival of the Association of Southeast Asian Nations (ASEAN) in the early 1990s affected the industrial growth of Indonesia, Malaysia, and the Philippines? The author uses two mechanisms to capture this potential impact: scale effects, and intermediate imports variety. She performs the analysis on twenty two industries (at the three-digit level of the International Standard Industrial Classification) over the period 1971-95. The results show significant heterogeneity in industry-level returns to scale. Moreover, the three ASEAN members have very small, mostly negative cross-industry scale effects. As a result, they may not achieve large, or across-the-board gains from their regional arrangement through scale effects. The author finds unexpected results with respect to the role of intermediate imports variety in industrial growth. She finds no support for the hypothesis that non-regional (rest of the world) suppliers, and goods variety have a positive effect on ASEAN industries through the channel of imported intermediate inputs. The regional variety measure, however, seems to have a positive effect on the output growth of a handful of industries. This result seems due to the fact that these countries have long had a strong intra-regional, and intra-industry trade, whose history predates, and outweighs the ASEAN revival.

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indonesia

The Predictability of ASEAN-5 Exchange Rates

In an attempt to determine the predictability of ASEAN exchange rates, five currencies including Malaysian ringgit, Thailand baht, Singapore dollar, Indonesian rupiah and the Philippines peso, denominated in US dollar as well as Japanese yen, were modeled using advanced time series analysis. Results suggested that Singapore exchange rate could be better predicted when denominated in US dollar, most probably because the East Asian Financial Crisis did not affect them both. On the other hand, other Asean exchange rates were better predicted when denominated in Japanese yen, as they had closer economic ties with Japan. However, while Japan had undergone serious recession after the crisis, it did not experience dramatic political instability as experienced by Indonesia, hence Indonesian rupiah remained unpredictable by yen. These results show that although advanced time series analysis dealt with economic fundamentals implicitly; it still could be a powerful tool for exchange rates modeling and forecasting, especially in the medium to long term.

In an attempt to determine the predictability of ASEAN exchange rates, five currencies including Malaysian ringgit, Thailand baht, Singapore dollar, Indonesian rupiah and the Philippines peso, denominated in US dollar as well as Japanese yen, were modeled using advanced time series analysis. Results suggested that Singapore exchange rate could be better predicted when denominated in US dollar, most probably because the East Asian Financial Crisis did not affect them both. On the other hand, other Asean exchange rates were better predicted when denominated in Japanese yen, as they had closer economic ties with Japan. However, while Japan had undergone serious recession after the crisis, it did not experience dramatic political instability as experienced by Indonesia, hence Indonesian rupiah remained unpredictable by yen. These results show that although advanced time series analysis dealt with economic fundamentals implicitly; it still could be a powerful tool for exchange rates modeling and forecasting, especially in the medium to long term.

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indonesia

Counterfeit Products Hurt Indonesia ---New Research

Indonesia has lost over Rp 219 billion in potential tax revenue annually due to counterfeiting, according to the research conducted by the Institute for Economics and Social Research at the University of Indonesia. The research showed that the illegal products are sold at the same prices as the genuine ones. The research was only performed on fake products that were nearly impossible for customers to detect

Indonesia has lost over Rp 219 billion in potential tax revenue annually due to counterfeiting, according to the research conducted by the Institute for Economics and Social Research at the University of Indonesia. The research showed that the illegal products are sold at the same prices as the genuine ones. The research was only performed on fake products that were nearly impossible for customers to detect

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Hong Kong, Singapore And The East Asian Crisis: A First Look At The Importance Of Trade Spillovers

The literature on the East Asian crisis has concentrated almost exclusively on the five crisis-hit econmoies of Indonesia, Korea, Malaysia, Thailand and the Philippines (Asia-5). Relatvely scant attention has been paid to Hond Kong and Singapore, both of which also suffered from contagious fallout from the crisis despite being well acknowledged as having relatively sound finacial and economical fundamentals.This paper examines the extent to wihich trade spillovers, both direct and indirect, have been impprtant in transmitting the regional downturn from the Asia-5 economies to Kong Kong and Singapore.

The literature on the East Asian crisis has concentrated almost exclusively on the five crisis-hit econmoies of Indonesia, Korea, Malaysia, Thailand and the Philippines (Asia-5). Relatvely scant attention has been paid to Hond Kong and Singapore, both of which also suffered from contagious fallout from the crisis despite being well acknowledged as having relatively sound finacial and economical fundamentals.This paper examines the extent to wihich trade spillovers, both direct and indirect, have been impprtant in transmitting the regional downturn from the Asia-5 economies to Kong Kong and Singapore.

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Regional Responses To The Southeast Asian Economic Crisis:A Case Of Self-Help Or No Help?

The currency crises of the 1990s, particularly the one that hit Southeast Asia since the devaluation of the Thai baht on July 2, 1997, are suggestive of the relevance and pervasiveness of contagion or negative spillover effects that are largely regional in scope. As such, one of the mantras since the onset of the Southeast Asian economic crisis has been the need for "regional solutions to regional problems". Given that the two focal institutions in Southeast Asia, viz. the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) were perceived as being successful in their past attempts in problem-solving, there were high expectations
that such regionalism would be key in finding solutions to the Southeast Asian economic crisis and mitigating the after-shocks. Accordingly, this paper evaluates the regional responses to the crisis, taking stock of both preventive and curative initiatives of significance. While the focus is on ASEAN and APEC, consistent with the concept of ‘loose' or ‘non-institutionalised' regionalism in Southeast Asia and the larger Asia-Pacific region, other ad hoc unilateral or bilateral initiatives of significance by other Asian member countries in APEC are also examined, particularly those
by the region's dominant economic power, Japan.

The currency crises of the 1990s, particularly the one that hit Southeast Asia since the devaluation of the Thai baht on July 2, 1997, are suggestive of the relevance and pervasiveness of contagion or negative spillover effects that are largely regional in scope. As such, one of the mantras since the onset of the Southeast Asian economic crisis has been the need for "regional solutions to regional problems". Given that the two focal institutions in Southeast Asia, viz. the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) were perceived as being successful in their past attempts in problem-solving, there were high expectations
that such regionalism would be key in finding solutions to the Southeast Asian economic crisis and mitigating the after-shocks. Accordingly, this paper evaluates the regional responses to the crisis, taking stock of both preventive and curative initiatives of significance. While the focus is on ASEAN and APEC, consistent with the concept of ‘loose' or ‘non-institutionalised' regionalism in Southeast Asia and the larger Asia-Pacific region, other ad hoc unilateral or bilateral initiatives of significance by other Asian member countries in APEC are also examined, particularly those
by the region's dominant economic power, Japan.

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Implications of the Economic Rise of the PRC for ASEAN and India: Trade and Foreign Direct Investment

An important and vigorous policy debate ongoing in Asia concerns the impact of
the economic rise of the PRC on the rest of the region. This paper examines the relative
performances of the PRC, selected ASEAN countries (Indonesia, Malaysia, the
Philippines, Singapore and Thailand), and India over time, as well as the intensity and
changing dynamics of their intra-regional economic interactions. Focus is on trends and
patterns in merchandise trade, trade in commercial services, and FDI flows the last two
decades and potential impact of the PRC's continued economic emergence on ASEAN
and India.

An important and vigorous policy debate ongoing in Asia concerns the impact of
the economic rise of the PRC on the rest of the region. This paper examines the relative
performances of the PRC, selected ASEAN countries (Indonesia, Malaysia, the
Philippines, Singapore and Thailand), and India over time, as well as the intensity and
changing dynamics of their intra-regional economic interactions. Focus is on trends and
patterns in merchandise trade, trade in commercial services, and FDI flows the last two
decades and potential impact of the PRC's continued economic emergence on ASEAN
and India.

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Building an East Asian community through trade and investment integration

In the Fifth Summit of the ASEAN Plus Tree (APT) Leaders, the vision for an East Asian community — i.e., an East Asia that moves "from a region of nations to a bona fide regional community with shared challenges, common aspirations, and a parallel destiny" was articulated. Various motivations underlie this effort, namely, the need to establish a regional (institutional) identity in view of other existing regional arrangements; the need to amplify an East Asian voice on regional and global issues; and the need to promote regional peace and prosperity through cooperation, given the region's own internal dynamics.

Yet, this effort faces various obstacles. Among others, three are identified: great diversities and the large gaps in levels of economic development; the lack of a mechanism for regional cooperation in Northeast Asia, and the prevailing politico-security problems in the region. This paper analyses possible ways to go about this obstacles through the economic means of trade and investment integration.

In the Fifth Summit of the ASEAN Plus Tree (APT) Leaders, the vision for an East Asian community — i.e., an East Asia that moves "from a region of nations to a bona fide regional community with shared challenges, common aspirations, and a parallel destiny" was articulated. Various motivations underlie this effort, namely, the need to establish a regional (institutional) identity in view of other existing regional arrangements; the need to amplify an East Asian voice on regional and global issues; and the need to promote regional peace and prosperity through cooperation, given the region's own internal dynamics.

Yet, this effort faces various obstacles. Among others, three are identified: great diversities and the large gaps in levels of economic development; the lack of a mechanism for regional cooperation in Northeast Asia, and the prevailing politico-security problems in the region. This paper analyses possible ways to go about this obstacles through the economic means of trade and investment integration.

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Challenges to APEC trade policy: The Doha development agenda and RTAs/FTAs

Recent development in global trade saw countries moving in multiple fronts in liberalising trade, utilising multilateral, regional and bilateral trade agreements to promote trade. This paper examines the issues surrounding this latest trend, noting the opportunities as well as dangers to global free trade associated with such an approach. In particular, it investigates implications of the the growing numbers of regional trade agreements (RTAs) and free trade agreements (FTAs) within the APEC region, particularly in light of the Doha development agenda.

Recent development in global trade saw countries moving in multiple fronts in liberalising trade, utilising multilateral, regional and bilateral trade agreements to promote trade. This paper examines the issues surrounding this latest trend, noting the opportunities as well as dangers to global free trade associated with such an approach. In particular, it investigates implications of the the growing numbers of regional trade agreements (RTAs) and free trade agreements (FTAs) within the APEC region, particularly in light of the Doha development agenda.

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indonesia

Economic recovery and reform in Indonesia

Recent development in global trade saw countries moving in multiple fronts in liberalising trade, utilising multilateral, regional and bilateral trade agreements to promote trade. This paper examines the issues surrounding this latest trend, noting the opportunities as well as dangers to global free trade associated with such an approach. In particular, it investigates implications of the the growing numbers of regional trade agreements (RTAs) and free trade agreements (FTAs) within the APEC region, particularly in light of the Doha development agenda.

Recent development in global trade saw countries moving in multiple fronts in liberalising trade, utilising multilateral, regional and bilateral trade agreements to promote trade. This paper examines the issues surrounding this latest trend, noting the opportunities as well as dangers to global free trade associated with such an approach. In particular, it investigates implications of the the growing numbers of regional trade agreements (RTAs) and free trade agreements (FTAs) within the APEC region, particularly in light of the Doha development agenda.

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ASEAN: Regional economic cooperation and its institutionalization

This paper discusses the need to beyond the old ‘ASEAN way' and suggests the importance of further institutional deepening of economic cooperation in ASEAN, especially in the aftermath of the recent financial crisis. Hence, it suggests the need to develop of a ‘Common Market minus', in which ASEAN brings in areas or sectors that are excluded from liberalization under the umbrella of the integration project and let them be managed through a common policy approach by newly created 'regional units.' Yet, such a development need to be carefully crafted, based on clear principles.

This paper discusses the need to beyond the old ‘ASEAN way' and suggests the importance of further institutional deepening of economic cooperation in ASEAN, especially in the aftermath of the recent financial crisis. Hence, it suggests the need to develop of a ‘Common Market minus', in which ASEAN brings in areas or sectors that are excluded from liberalization under the umbrella of the integration project and let them be managed through a common policy approach by newly created 'regional units.' Yet, such a development need to be carefully crafted, based on clear principles.

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Indonesia in crisis: A macroeconomic perspective

This paper presents an illustrative analysis of the crisis from a macroeconomic perspective, by focusing on the various economic adjustments both in the real and monetary sectors. It argues that the complex nature of the political and economic reform process has resulted in sub - optimal growth rates. The paper discusses, first, the evolution of the crisis. Then it provides an account of the developments in the real sector and growth in general. The authors then present monetary adjustments, including inflation, exchange rate, and other issues related to the banking and financial sectors. The fourth section discusses the balance of payment trends, by focusing more on the adjustments of exports and imports. This is followed by a discussion on debt issues and fiscal sustainability, while the last part concludes with the prospect of achieving macroeconomic stability.

This paper presents an illustrative analysis of the crisis from a macroeconomic perspective, by focusing on the various economic adjustments both in the real and monetary sectors. It argues that the complex nature of the political and economic reform process has resulted in sub - optimal growth rates. The paper discusses, first, the evolution of the crisis. Then it provides an account of the developments in the real sector and growth in general. The authors then present monetary adjustments, including inflation, exchange rate, and other issues related to the banking and financial sectors. The fourth section discusses the balance of payment trends, by focusing more on the adjustments of exports and imports. This is followed by a discussion on debt issues and fiscal sustainability, while the last part concludes with the prospect of achieving macroeconomic stability.

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Economic crisis and trade liberalization: A CGE analysis on the forestry sector

This paper uses simulations based on a GTAP model to reproduce the economic crisis in Southeast Asia, and in particular in Indonesia. The model is a static-real sector model, so the focus of the simulation is on the declining investment and the declining prices of non-traded goods during the crisis. The simulation is conducted by creating an exogenous shock on risk premium in Indonesia, Thailand and Malaysia, which leads to smaller allocation of regional investment in these countries, lower stock of capital goods, and lower production. The second shock, which is the declining price of land and natural resource, opens the possibility of resource allocation between sectors in the economy.

This paper uses simulations based on a GTAP model to reproduce the economic crisis in Southeast Asia, and in particular in Indonesia. The model is a static-real sector model, so the focus of the simulation is on the declining investment and the declining prices of non-traded goods during the crisis. The simulation is conducted by creating an exogenous shock on risk premium in Indonesia, Thailand and Malaysia, which leads to smaller allocation of regional investment in these countries, lower stock of capital goods, and lower production. The second shock, which is the declining price of land and natural resource, opens the possibility of resource allocation between sectors in the economy.

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Sustaining East Asia's economic dynamism: How aid worked

This paper examines the role of foreign aid or development assistance in helping sustain East Asia's economic dynamism. The first section discusses the changing landscape of development assistance and examines the place of East Asia in it. The second section focuses on the recent evolution of Japan's development assistance policy. Japan is singled out as it has been the most important donor for countries in East Asia and is likely to remain so for many years to come. The third section looks at Japan's ODA (official development assistance) from the perspective of selected East Asian countries and highlights the issues, lessons and the recommendations that have emerged in the region on how aid could work to help meet the challenges faced by the region.

This paper examines the role of foreign aid or development assistance in helping sustain East Asia's economic dynamism. The first section discusses the changing landscape of development assistance and examines the place of East Asia in it. The second section focuses on the recent evolution of Japan's development assistance policy. Japan is singled out as it has been the most important donor for countries in East Asia and is likely to remain so for many years to come. The third section looks at Japan's ODA (official development assistance) from the perspective of selected East Asian countries and highlights the issues, lessons and the recommendations that have emerged in the region on how aid could work to help meet the challenges faced by the region.

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Accelerating ASEAN economic integration

Progress and realisation of the ASEAN Economic Community (AEC) can only be achieved if there is a clear blueprint, which identifies the end goal, the process to reach the end goal and a framework for proper assessment of the costs and benefits of an ASEAN Economic Community. AEC should not be based on the AFTA in which an agreement was reached first and the details negotiated afterwards earning it the nickname of "Agree First Talk After". A "new ASEAN way" will have to be developed and accepted as the rule of the game before the AEC has any serious chance of fulfilling the role of making ASEAN more competitive and attractive for world business.

Progress and realisation of the ASEAN Economic Community (AEC) can only be achieved if there is a clear blueprint, which identifies the end goal, the process to reach the end goal and a framework for proper assessment of the costs and benefits of an ASEAN Economic Community. AEC should not be based on the AFTA in which an agreement was reached first and the details negotiated afterwards earning it the nickname of "Agree First Talk After". A "new ASEAN way" will have to be developed and accepted as the rule of the game before the AEC has any serious chance of fulfilling the role of making ASEAN more competitive and attractive for world business.

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Integration and trade specialization in East Asia

The 1990s saw East Asia becoming more integrated as trade barriers fell, trade intensity and intra-industry trade increased, and production networks formed. This greater integration has resulted in changing patterns of trade specialization in the region, as different economies adjust. Some economies (especially resource-rich economies) maintain their top trade-specialty products, while others move towards higher-productivity manufacturing goods. Nonetheless, we observe in all East Asian countries in our study a trend towards specializing in products with higher "sophistication" and technological intensity. Meanwhile, our examination of the product specialization mobility and our empirical analysis suggest no indication of East Asian countries being in a "low-productivity specialization trap" which would disable them from shifting their specialization towards higher-productivity and higher-value goods.

The 1990s saw East Asia becoming more integrated as trade barriers fell, trade intensity and intra-industry trade increased, and production networks formed. This greater integration has resulted in changing patterns of trade specialization in the region, as different economies adjust. Some economies (especially resource-rich economies) maintain their top trade-specialty products, while others move towards higher-productivity manufacturing goods. Nonetheless, we observe in all East Asian countries in our study a trend towards specializing in products with higher "sophistication" and technological intensity. Meanwhile, our examination of the product specialization mobility and our empirical analysis suggest no indication of East Asian countries being in a "low-productivity specialization trap" which would disable them from shifting their specialization towards higher-productivity and higher-value goods.

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Asian Economic Integration: ASEAN +3+1 or ASEAN +1s?

In this paper an attempt is made to evaluate the most efficient approach to regional economic integration in Asia. For the purpose, Asia is defined as inclusive of ASEAN, the plus three economies of China, Japan, Korea and India that is the ASEAN plus four. Given that ASEAN is an existing regional bloc in Asia, alternative approaches to the alignment of the plus four economies with ASEAN for the formation of the ASEAN+4 trade bloc have been evaluated to determine if there are efficiency costs by way of distortion in the patterns of trade away from those expected on the basis of comparative advantage. The findings of our analysis underscore the efficiency of a prior alignment with ASEAN for all the plus four economies.

In this paper an attempt is made to evaluate the most efficient approach to regional economic integration in Asia. For the purpose, Asia is defined as inclusive of ASEAN, the plus three economies of China, Japan, Korea and India that is the ASEAN plus four. Given that ASEAN is an existing regional bloc in Asia, alternative approaches to the alignment of the plus four economies with ASEAN for the formation of the ASEAN+4 trade bloc have been evaluated to determine if there are efficiency costs by way of distortion in the patterns of trade away from those expected on the basis of comparative advantage. The findings of our analysis underscore the efficiency of a prior alignment with ASEAN for all the plus four economies.

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Indonesian Gov't. Awards Exploration Rights to New Oil Blocks

Indonesian government awarded contracts to explore new oil blocks to 18 companies to boost the declining oil production in the country. Among the companies granted contracts were made up of US' ConocoPhillips, and Norway's Statoil ASA, and China's CNOOC. Other winners were local companies such as PT Mosesa Petroleum, PTKencana Surya Perkasa, and PT Petross. Next year, Indonesia will offer 20 more oil and gas blocks through an open tender.

Indonesian government awarded contracts to explore new oil blocks to 18 companies to boost the declining oil production in the country. Among the companies granted contracts were made up of US' ConocoPhillips, and Norway's Statoil ASA, and China's CNOOC. Other winners were local companies such as PT Mosesa Petroleum, PTKencana Surya Perkasa, and PT Petross. Next year, Indonesia will offer 20 more oil and gas blocks through an open tender.

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Indonesia's Budget Deficit Estimated at 1.0-1.1% of GDP

Indonesia's budget deficit is projected to be between 1-1.1 percent of the gross domestic product. Finance Minister Indrawati said that government expenditures not reaching 100 percent is one of the reasons of the low budget deficit. Moreover, income tax receipts are expected to reach the goal of the Indonesian government which also helped lowering the budget deficit.

Indonesia's budget deficit is projected to be between 1-1.1 percent of the gross domestic product. Finance Minister Indrawati said that government expenditures not reaching 100 percent is one of the reasons of the low budget deficit. Moreover, income tax receipts are expected to reach the goal of the Indonesian government which also helped lowering the budget deficit.

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Indonesia is Ready to Take 60,000 Jobs in South Korea

South Korea has 60,000 jobs offered in the industry, manufacturing, construction, fisheries, agriculture and stock breeding sectors, which gives Indonesian workers the opportunity to work in the country. With the signed Memorandum of Understanding between two countries, prospective workers will not have to pay any registration fees and will receive their wages on the basis of minimum wages in South Korea. In addition, South Korean government stressed that they only accommodate direct employment and doesn't want to go through third parties to avoid levies.

South Korea has 60,000 jobs offered in the industry, manufacturing, construction, fisheries, agriculture and stock breeding sectors, which gives Indonesian workers the opportunity to work in the country. With the signed Memorandum of Understanding between two countries, prospective workers will not have to pay any registration fees and will receive their wages on the basis of minimum wages in South Korea. In addition, South Korean government stressed that they only accommodate direct employment and doesn't want to go through third parties to avoid levies.

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Indonesia and Malaysia Agreed to Collaborate on Palm Oil Development

Some Malaysian and Indonesian businessmen have agreed to work together on palm oil development. The goal of the cooperation is to minimize, and if possible, to eliminate all kinds of obstacles that may hinder the two countries' efforts to make palm oil as the foundation of their main export, according to the chairman of the combined Indonesian Palm oil Producers Deron Bangun. He also said that serious attention is badly needed to develop palm oil in order to revive the growth of this export commodity.

Some Malaysian and Indonesian businessmen have agreed to work together on palm oil development. The goal of the cooperation is to minimize, and if possible, to eliminate all kinds of obstacles that may hinder the two countries' efforts to make palm oil as the foundation of their main export, according to the chairman of the combined Indonesian Palm oil Producers Deron Bangun. He also said that serious attention is badly needed to develop palm oil in order to revive the growth of this export commodity.

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Asean-India Trade Agreement Expected by June

India is expecting to sign a free trade pact with the Association of Southeast Asian Nations (ASEAN) by June next year after both sides failed to meet the December deadline due to some conflicts on goods to be excluded from the agreement. Both parties are in disagreement on items such as agricultural products that India wants to exclude from tariff cuts. If the free trade agreement will push through, ASEAN will open up new overseas market for India's software and other services. In turn, the pact will give ASEAN more access to the world's second fastest growing economy.

India is expecting to sign a free trade pact with the Association of Southeast Asian Nations (ASEAN) by June next year after both sides failed to meet the December deadline due to some conflicts on goods to be excluded from the agreement. Both parties are in disagreement on items such as agricultural products that India wants to exclude from tariff cuts. If the free trade agreement will push through, ASEAN will open up new overseas market for India's software and other services. In turn, the pact will give ASEAN more access to the world's second fastest growing economy.

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Manila Postpones ASEAN Summit to January

An official announcement released by Ambassador Marciano Paynor, head of the Philippine organizing committee, said that the 12th Association of Southeast Asian Nations (ASEAN) summit, scheduled next week in Cebu, has been postponed to January due to a strong storm heading the island. The ambassador also denied reports that the postponement was made due to possible terrorist attacks at the site of the summit.

An official announcement released by Ambassador Marciano Paynor, head of the Philippine organizing committee, said that the 12th Association of Southeast Asian Nations (ASEAN) summit, scheduled next week in Cebu, has been postponed to January due to a strong storm heading the island. The ambassador also denied reports that the postponement was made due to possible terrorist attacks at the site of the summit.

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ADB: Economic Growth in East Asia to Remain Strong in 2007

Asian Development Bank (ADB) predicted that East Asia's economic growth will continue to be strong next year after the expected robust performance of East Asian economies this year. However, the bank warned that the danger of financial market turbulence which could affect Asia is also increasing. Also, ADB suggested that there could be a slight decrease on the demand for East Asia's exports, due to an expected slowdown in growth in the US and euro area. Coupled with strong domestic consumption, this should maintain economic expansion across the East Asian region, the lender bank argued.

Asian Development Bank (ADB) predicted that East Asia's economic growth will continue to be strong next year after the expected robust performance of East Asian economies this year. However, the bank warned that the danger of financial market turbulence which could affect Asia is also increasing. Also, ADB suggested that there could be a slight decrease on the demand for East Asia's exports, due to an expected slowdown in growth in the US and euro area. Coupled with strong domestic consumption, this should maintain economic expansion across the East Asian region, the lender bank argued.

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World Bank: Reducing Poverty Still a Challenge for Indonesia

Despite Indonesia's progress in recovering from the economic crisis in 1998, about 50 percent of the country's population still lives on less than two dollars a day. World bank stated in its report that reducing poverty still remains a challenge for Indonesia. Furthermore, the bank said that many poor people remain in a vicious cycle of inter-generational poverty because they cannot provide education to their children. Hence, spreading poverty from one generation to the next. To combat poverty, World Bank outlined three priorities to help the poor take advantage of economic growth. These priorities include improvement of infrastructure, creation of network of rural roads, and provision of microfinance.

Despite Indonesia's progress in recovering from the economic crisis in 1998, about 50 percent of the country's population still lives on less than two dollars a day. World bank stated in its report that reducing poverty still remains a challenge for Indonesia. Furthermore, the bank said that many poor people remain in a vicious cycle of inter-generational poverty because they cannot provide education to their children. Hence, spreading poverty from one generation to the next. To combat poverty, World Bank outlined three priorities to help the poor take advantage of economic growth. These priorities include improvement of infrastructure, creation of network of rural roads, and provision of microfinance.

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Indonesia's Realized Investment Continues to Fall

Figures for Indonesia's actual investment continues to drop despite all the efforts to improve the investment climate. The realized overseas investment for the eleven month period dropped by 46 percent in value compared to last year's figures. Furthermore, actual domestic investment also decreased by 37 percent in value compared the previous year. This puts Indonesia's realized investment on a declining curve for the fifth straight month since June. Despite the declining realized investments, Indonesia's foreign and local direct investment approvals increased during this period. However, it's the investment realization that actually translates into economic growth and job creation.

Figures for Indonesia's actual investment continues to drop despite all the efforts to improve the investment climate. The realized overseas investment for the eleven month period dropped by 46 percent in value compared to last year's figures. Furthermore, actual domestic investment also decreased by 37 percent in value compared the previous year. This puts Indonesia's realized investment on a declining curve for the fifth straight month since June. Despite the declining realized investments, Indonesia's foreign and local direct investment approvals increased during this period. However, it's the investment realization that actually translates into economic growth and job creation.

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Indonesia and South Korea Agreed to Boost Bilateral Trade and Investment

Indonesian President Yudyohono and his South Korean counterpart Moo-Hyun have agreed to heighten bilateral trade and South Korean investment in Indonesia. The Indonesian President wants to further increase trade because his country sees Korea as a strategic partner in the econmic field. Furthermore, South Korea was the fifth largest source of investment for the country with a total 655 million dollars invested. Also, President Moo-Hyun said that the two countries could further develop cooperation in IT, forestry, military modernization, and infrastracture expansion.

Indonesian President Yudyohono and his South Korean counterpart Moo-Hyun have agreed to heighten bilateral trade and South Korean investment in Indonesia. The Indonesian President wants to further increase trade because his country sees Korea as a strategic partner in the econmic field. Furthermore, South Korea was the fifth largest source of investment for the country with a total 655 million dollars invested. Also, President Moo-Hyun said that the two countries could further develop cooperation in IT, forestry, military modernization, and infrastracture expansion.

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indonesia

Indonesia's Machines and Production Tools Import Up by Average 10%

Indonesia's imports of machines and production tools continue to increase by an average of more than 10 percent per annum since the country is not yet able to produce most of these products locally. Director General for Metal Textile Machinery Industry mentioned that the country is not yet able to meet its need for these products in its effort to develop its industries.

Indonesia's machine and tool imports stood at US$7.09 billion in 2005, up from US$5.52 billion a year earlier.

Indonesia's imports of machines and production tools continue to increase by an average of more than 10 percent per annum since the country is not yet able to produce most of these products locally. Director General for Metal Textile Machinery Industry mentioned that the country is not yet able to meet its need for these products in its effort to develop its industries.

Indonesia's machine and tool imports stood at US$7.09 billion in 2005, up from US$5.52 billion a year earlier.

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Russian and Indonesian Presidents Widen Energy and Arms Ties

Russian President Putin and Indonesian counterpart Yudyohono agreed to expand their energy ties and arms trade. Both presidents would like to strengthen cooperation between the two countries. During their talks in Moscow, both sigend several agreements including on cooperation in space technology, nuclear energy, military purchases and tourism.

Russian President Putin and Indonesian counterpart Yudyohono agreed to expand their energy ties and arms trade. Both presidents would like to strengthen cooperation between the two countries. During their talks in Moscow, both sigend several agreements including on cooperation in space technology, nuclear energy, military purchases and tourism.

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Indonesia's Husbandry Industry Lost Rp1.1 Trillion due to Bird Flu

The world's animal husbandry industry suffered a material loss of US$2 billion in the September 2005-September 2006 period due to bird flu (Avian Influenza). Particularly in Indonesia, the country suffered a total loss of Rp1.1 trillion. Aside from the huge losses suffered by husbandry businessmen, the country's toursim industry is also affected by this disease. Due to bird flu, turnover of Indonesia's tourism industry decreased by up to 40 percent.

The world's animal husbandry industry suffered a material loss of US$2 billion in the September 2005-September 2006 period due to bird flu (Avian Influenza). Particularly in Indonesia, the country suffered a total loss of Rp1.1 trillion. Aside from the huge losses suffered by husbandry businessmen, the country's toursim industry is also affected by this disease. Due to bird flu, turnover of Indonesia's tourism industry decreased by up to 40 percent.

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US and Asian Economies Differ Over Free Trade Bloc Process

The United States and Asian economies are at odds on how to implement a plan to set up a Asia-Pacific free trade area. The Asian economies want to start a free trade area among themselves before considering a free trade area for the Asia-Pacific. However, the US government wants to implement these plans simulataneously. Washington is pushing a prompt implementation of the Asia-Pacific plan because it would jolt non-Apec members, such as Brazil and India, to restart talks for a new global trace pact.

The United States and Asian economies are at odds on how to implement a plan to set up a Asia-Pacific free trade area. The Asian economies want to start a free trade area among themselves before considering a free trade area for the Asia-Pacific. However, the US government wants to implement these plans simulataneously. Washington is pushing a prompt implementation of the Asia-Pacific plan because it would jolt non-Apec members, such as Brazil and India, to restart talks for a new global trace pact.

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indonesia

Japan and Indonesia Okay Bilateral FTA

Japan and Indonesia agreed to terms of a free trade pact that would lessen Indonesian tariffs on Japanese cars and auto parts and permit Indonesian nurses and care workers to work in Japan. Furthermore, the trade agreement will also remove Tokyo's tarriffs on almost all Indonesian industrial and forestry products, and reduce Jakarta's duties for some Japanese steel exports and all electronic products. The leaders of both countries have yet to formalize the trade agreement and haven't given the expected date to formalize the trade pact.

Japan and Indonesia agreed to terms of a free trade pact that would lessen Indonesian tariffs on Japanese cars and auto parts and permit Indonesian nurses and care workers to work in Japan. Furthermore, the trade agreement will also remove Tokyo's tarriffs on almost all Indonesian industrial and forestry products, and reduce Jakarta's duties for some Japanese steel exports and all electronic products. The leaders of both countries have yet to formalize the trade agreement and haven't given the expected date to formalize the trade pact.

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Integration of ASEAN Economies a Sound Way to Navigate Globalizing World

Economic ministers from the Association of Southeast Asian Nations are expected to endorse plans to step up regional economic integration and create a common market by 2015. ASEAN aims to eliminate tariffs by 2015 under the ASEAN Free Trade Area (AFTA). The free trade pact will provide members "a sound way to navigate" the rapidly globalizing world by liberalizing and integrating economies.

Economic ministers from the Association of Southeast Asian Nations are expected to endorse plans to step up regional economic integration and create a common market by 2015. ASEAN aims to eliminate tariffs by 2015 under the ASEAN Free Trade Area (AFTA). The free trade pact will provide members "a sound way to navigate" the rapidly globalizing world by liberalizing and integrating economies.

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Japan to Pour Millions into Indonesia's South Sulawesi Development

Japan International Cooperation Agency (JICA) is preparing numerous development projects valued at US$15 million in the province of South Sulawesi. The project will start next year with human resource and infrastructure development as the main focus. The province of South Sulawesi was chosen as the first recipient of JICA's development efforts since it was considered the hub and driving force of the development in the eastern Indonesia.

Japan International Cooperation Agency (JICA) is preparing numerous development projects valued at US$15 million in the province of South Sulawesi. The project will start next year with human resource and infrastructure development as the main focus. The province of South Sulawesi was chosen as the first recipient of JICA's development efforts since it was considered the hub and driving force of the development in the eastern Indonesia.

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indonesia

Revitalizing Indonesia's Real Sector the Main Challenge

The Institute for Development of Economics and Finance (Indef) stated that the economy's expansion has done little to help alleviate poverty in the country, since most of the growth has taken place in non-labor sectors. In fact, the country's latest poverty statistics show that as of the end of March, around 17.75 percent of the population or 39.05 million people were living below the poverty line, which is an increase of around 4 million from the previous year.

The Institute for Development of Economics and Finance (Indef) stated that the economy's expansion has done little to help alleviate poverty in the country, since most of the growth has taken place in non-labor sectors. In fact, the country's latest poverty statistics show that as of the end of March, around 17.75 percent of the population or 39.05 million people were living below the poverty line, which is an increase of around 4 million from the previous year.

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indonesia

Central Bankers Upbeat Over Global Growth Next Year

The world's top central bankers discussed the future of global growth. There seems to be a consensus that the global economy was strong and sustainable, but in order to mitigate risks banks would have to fix their attention on inflation. Some hint to continued raises in interest rates to offset "overly optimistic investment".

The world's top central bankers discussed the future of global growth. There seems to be a consensus that the global economy was strong and sustainable, but in order to mitigate risks banks would have to fix their attention on inflation. Some hint to continued raises in interest rates to offset "overly optimistic investment".

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indonesia

Consumer Spending Drives Indonesia's GDP Up

Indonesia's economy grew by 5.52 percent in the third quarter. Consumer spending and strong commodity exports drove the GDP increase. Higher personal consumption was partly the result of the easing of inflation and a series of cuts in the central bank's key interest rate. Personal consumption, which contributes 61 percent to GDP, grew by a quarterly 1.66 percent and an annual 2.99 percent.

Indonesia's economy grew by 5.52 percent in the third quarter. Consumer spending and strong commodity exports drove the GDP increase. Higher personal consumption was partly the result of the easing of inflation and a series of cuts in the central bank's key interest rate. Personal consumption, which contributes 61 percent to GDP, grew by a quarterly 1.66 percent and an annual 2.99 percent.

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indonesia

Analysts Remain Optimistic on Indonesia's Economy

Both local and foreign analysts are positive that Indonesia will be able to meet its targeted economic growth of 6.3 percent next year in spite of expected slowdown in world trade. Indonesia, as one of the world's largest commodity exporters, will gain from the expected increase in the international demand for commodities, in spite of the projected decline in overall trade as stated by UBS Investment Bank Global Economic managing director Paul Donovan. Furthermore, Donovan stated that China's economic growth next year is essential to Indonesia since its imports of raw materials will continue to increase.

Both local and foreign analysts are positive that Indonesia will be able to meet its targeted economic growth of 6.3 percent next year in spite of expected slowdown in world trade. Indonesia, as one of the world's largest commodity exporters, will gain from the expected increase in the international demand for commodities, in spite of the projected decline in overall trade as stated by UBS Investment Bank Global Economic managing director Paul Donovan. Furthermore, Donovan stated that China's economic growth next year is essential to Indonesia since its imports of raw materials will continue to increase.

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indonesia

APEC Shelves Free Trade Zone Plans

The Asian Pacific Economic Co-operation forum has shelved plans to create a "vast free trade area" that would aggregate the numerous bi-lateral and regional tarde agreements in the region. The ambitious proposal lost mometum to various side deals at the forum. APEC has shifted its focus to resurrecting talks on the Doha round of the WTO.

The Asian Pacific Economic Co-operation forum has shelved plans to create a "vast free trade area" that would aggregate the numerous bi-lateral and regional tarde agreements in the region. The ambitious proposal lost mometum to various side deals at the forum. APEC has shifted its focus to resurrecting talks on the Doha round of the WTO.

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indonesia

No Russia-ASEAN Summit This Year

The Russian President Vladimir Putin won't be coming to Cebu, the Philippines, and that's as good as official and final. The reason is, the second Russia-ASEAN Summit that could have been organized back-to-back with an annual ASEAN Summit in that city, is not fit for a show.

Officially in any Foreign Ministry worth its salt, be it Russian or Asian ministry, you may get a comment that there was no invitation for Mr. Putin to come to the summit, so we are talking about wrong assumptions and failed expectations. Besides, the first Russia-ASEAN summit in Kuala Lumpur on December 13th last year ended with an obligation to hold "regular", not "annual", summits.

But that's very feeble explanation, because there was a lot of unofficial talk about the Cebu summit. So what really happened? First of all, the Russian leader takes Moscow's ties to Asia in general, and the ASEAN 10 in particular, very close to his heart. You may say there's a lot of expectations in Moscow from everything and anything Asia-oriented (and we shall elaborate on that a bit later). But there is one thing that Mr. Putin hates, and that is "summits for summit's sake". The style of his presidency presumes that a presidential visit is a culmination of work of a lot of people, with serious agreements signed and shown to the voters. Making a trip across the globe and delivering a speech is definitely not enough to stir Mr. Putin's juices.

A year ago in KL three documents have been signed between Russia and ASEAN. These were: the Joint Declaration on progressive & comprehensive partnership; the Program of Action for 2005-2015 (mentioning trade, industry, energy, transport, antiterrorist cooperation, natural disaster prevention, etc); finally, the agreement on Economic and Development Cooperation. But nothing much happened in these 11 or so months after that summit.

On November 3 a joint committee on cooperation between Russia and ASEAN was hold in Moscow, the co-chairmen being the department heads of the Foreign Ministries. From the Russian side that was Mr. Bakhtiar Khakimov, from the ASEAN side Mr. Luis Cruz, the Philippines. The main issue was a cooperation fund – about 1 million US Dollars that Russia has to invest into a cooperation infrastructure. E-commerce development and studies of the Russian language – that's how some of this money will be spent. But in any case the programs will start only in 2007.

Several discussion groups are agreed to be set up – like, on transnational crime and technological cooperation. Energy security will also be under discussion, as well as many other subjects. But Moscow thinks that all this is not enough to justify a summit right now. You have to start carrying out the agreements reached at the previous summit, first.

The diplomatic sources are saying that the ASEAN side understands and even "respects" Moscow maximalism on the matter. To add, a lot of blame might be put on the Russian bureaucracy, too, and nobody is denying it.

You may feel, though, Russian leadership's deep dissatisfaction with its relations with ASEAN behind all the niceties. The reasons for this can be summed up as "too little, too slow" in business, in spite of almost complete harmony in political and diplomatic contacts.

Gone are the days when the Soviet Union was causing plenty of uneasy feelings in South East Asia. 10 years ago Russia has become ASEAN's Dialogue Partner, and 1 year ago it was elevated to the status of a Summit Partner. Look who is ASEAN's Summit Partner, and especially who is not, and you will see that Moscow is very, very close to ASEAN in global diplomacy and in its views on what the world should look like.

But thinking alike is not making us big trade partners, and that's the source of Moscow's frustration, and sometimes overreaction. The trade between Russia and ASEAN 10 has reached 4 billion dollars in 2004, 5 billion in 2005 and may touch 6 billion in 2006. It's a good show if you look at the growth rate, but a very weak one if you consider that it is still less than 1% of overall trade of both ASEAN and Russia. Moscow is trailing far behind US or China or Australia in that regard.

If you look close at the model of that trade, you will see that basically Russia is supplying ASEAN countries with metals, fertilizers and chemicals in exchange for purchases of commodities like the palm oil, and foodstuffs.

But this is definitely not what Russia wanted from that part of the world. Russia's basic economic problem is not unlike what Indonesia struggled with in the 70-s and 80-s – to diversify export, to eliminate dependence on oil and gas supplies to the world, to develop hi-tech export, be it in aerospace or nuclear power stations or anything else that the Russia researchers are good at.

You cannot hope for that with partners and regions where your hydrocarbon exports are bringing as much revenue as they do now to Russia. But Asia, notably in its South East, does not need Russia oil and gas. You just have to rely on hi-tech in all the exchanges with this area.

Essentially, Moscow was pinning high hopes on Asia to help diversify the Russian economy. And so far these hopes stay almost where they were.
Being a participant in the first and second Russia-ASEAN business forums, as well as in many similar meetings, I may say that we see some measure of success only in the aircraft sales – be it fighter jets or a wonderful Be-200 forest firefighter supplied to Indonesia. That's not enough, compared to the volume of offers made by the various Russian companies.

It's worth noting that anything good that happened to the Russian-ASEAN trade happened on bilateral basis, between businessmen of Russia and some particular countries, like Singapore, Malaysia and Vietnam as leaders. While the capabilities of ASEAN as an organization in facilitation of the hi-tech cooperation may be put in serious doubt. You may even say that the Russia-ASEAN relations history is the history of declarations signed. And you cannot really blame Mr. Putin for trying to change that situation, even by some rather dramatic gestures.

The Russian President Vladimir Putin won't be coming to Cebu, the Philippines, and that's as good as official and final. The reason is, the second Russia-ASEAN Summit that could have been organized back-to-back with an annual ASEAN Summit in that city, is not fit for a show.

Officially in any Foreign Ministry worth its salt, be it Russian or Asian ministry, you may get a comment that there was no invitation for Mr. Putin to come to the summit, so we are talking about wrong assumptions and failed expectations. Besides, the first Russia-ASEAN summit in Kuala Lumpur on December 13th last year ended with an obligation to hold "regular", not "annual", summits.

But that's very feeble explanation, because there was a lot of unofficial talk about the Cebu summit. So what really happened? First of all, the Russian leader takes Moscow's ties to Asia in general, and the ASEAN 10 in particular, very close to his heart. You may say there's a lot of expectations in Moscow from everything and anything Asia-oriented (and we shall elaborate on that a bit later). But there is one thing that Mr. Putin hates, and that is "summits for summit's sake". The style of his presidency presumes that a presidential visit is a culmination of work of a lot of people, with serious agreements signed and shown to the voters. Making a trip across the globe and delivering a speech is definitely not enough to stir Mr. Putin's juices.

A year ago in KL three documents have been signed between Russia and ASEAN. These were: the Joint Declaration on progressive & comprehensive partnership; the Program of Action for 2005-2015 (mentioning trade, industry, energy, transport, antiterrorist cooperation, natural disaster prevention, etc); finally, the agreement on Economic and Development Cooperation. But nothing much happened in these 11 or so months after that summit.

On November 3 a joint committee on cooperation between Russia and ASEAN was hold in Moscow, the co-chairmen being the department heads of the Foreign Ministries. From the Russian side that was Mr. Bakhtiar Khakimov, from the ASEAN side Mr. Luis Cruz, the Philippines. The main issue was a cooperation fund – about 1 million US Dollars that Russia has to invest into a cooperation infrastructure. E-commerce development and studies of the Russian language – that's how some of this money will be spent. But in any case the programs will start only in 2007.

Several discussion groups are agreed to be set up – like, on transnational crime and technological cooperation. Energy security will also be under discussion, as well as many other subjects. But Moscow thinks that all this is not enough to justify a summit right now. You have to start carrying out the agreements reached at the previous summit, first.

The diplomatic sources are saying that the ASEAN side understands and even "respects" Moscow maximalism on the matter. To add, a lot of blame might be put on the Russian bureaucracy, too, and nobody is denying it.

You may feel, though, Russian leadership's deep dissatisfaction with its relations with ASEAN behind all the niceties. The reasons for this can be summed up as "too little, too slow" in business, in spite of almost complete harmony in political and diplomatic contacts.

Gone are the days when the Soviet Union was causing plenty of uneasy feelings in South East Asia. 10 years ago Russia has become ASEAN's Dialogue Partner, and 1 year ago it was elevated to the status of a Summit Partner. Look who is ASEAN's Summit Partner, and especially who is not, and you will see that Moscow is very, very close to ASEAN in global diplomacy and in its views on what the world should look like.

But thinking alike is not making us big trade partners, and that's the source of Moscow's frustration, and sometimes overreaction. The trade between Russia and ASEAN 10 has reached 4 billion dollars in 2004, 5 billion in 2005 and may touch 6 billion in 2006. It's a good show if you look at the growth rate, but a very weak one if you consider that it is still less than 1% of overall trade of both ASEAN and Russia. Moscow is trailing far behind US or China or Australia in that regard.

If you look close at the model of that trade, you will see that basically Russia is supplying ASEAN countries with metals, fertilizers and chemicals in exchange for purchases of commodities like the palm oil, and foodstuffs.

But this is definitely not what Russia wanted from that part of the world. Russia's basic economic problem is not unlike what Indonesia struggled with in the 70-s and 80-s – to diversify export, to eliminate dependence on oil and gas supplies to the world, to develop hi-tech export, be it in aerospace or nuclear power stations or anything else that the Russia researchers are good at.

You cannot hope for that with partners and regions where your hydrocarbon exports are bringing as much revenue as they do now to Russia. But Asia, notably in its South East, does not need Russia oil and gas. You just have to rely on hi-tech in all the exchanges with this area.

Essentially, Moscow was pinning high hopes on Asia to help diversify the Russian economy. And so far these hopes stay almost where they were.
Being a participant in the first and second Russia-ASEAN business forums, as well as in many similar meetings, I may say that we see some measure of success only in the aircraft sales – be it fighter jets or a wonderful Be-200 forest firefighter supplied to Indonesia. That's not enough, compared to the volume of offers made by the various Russian companies.

It's worth noting that anything good that happened to the Russian-ASEAN trade happened on bilateral basis, between businessmen of Russia and some particular countries, like Singapore, Malaysia and Vietnam as leaders. While the capabilities of ASEAN as an organization in facilitation of the hi-tech cooperation may be put in serious doubt. You may even say that the Russia-ASEAN relations history is the history of declarations signed. And you cannot really blame Mr. Putin for trying to change that situation, even by some rather dramatic gestures.

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indonesia

US Businesses See Indonesia's Commercial Potential

In the past, Indonesia has not received attention that it deserved from US businesses, but the perception is changing according to Thomas Donohue, the president of the US Chamber of Commerce. The Chamber is considering Indonesia, apart from Singapore as a location for its proposed strategic branch office for Southeast Asia. US companies were impressed that Indonesia is making progress, despite turbulent events that occurred in the recent years, which include earthquakes, terrorist attacks, and a devastating financial crisis. Furthermore, the US delegation was impressed with the government's commitment to improving infrastructure, as well as taking positive steps to reform tax, investment and labor legislation.

 

In the past, Indonesia has not received attention that it deserved from US businesses, but the perception is changing according to Thomas Donohue, the president of the US Chamber of Commerce. The Chamber is considering Indonesia, apart from Singapore as a location for its proposed strategic branch office for Southeast Asia. US companies were impressed that Indonesia is making progress, despite turbulent events that occurred in the recent years, which include earthquakes, terrorist attacks, and a devastating financial crisis. Furthermore, the US delegation was impressed with the government's commitment to improving infrastructure, as well as taking positive steps to reform tax, investment and labor legislation.

 

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indonesia

Asian Market: Potential Risks Ahead

Although Asian stock markets have performed very well this past year, analysts foresee a risk ahead. The next 12 months are said to prove extremely volatile for equity markets in Asia, as regional instability increases.

Although Asian stock markets have performed very well this past year, analysts foresee a risk ahead. The next 12 months are said to prove extremely volatile for equity markets in Asia, as regional instability increases.

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indonesia

ASEAN Countries Discuss Open Skies

Singapore's Prime Minister proposed an open skies agreement between China and ASEAN countries to be implemented in the coming year. Along with other sets of open-transit initiatives that are being planned, ASEAN hopes to work towards a free trade agreement with China by year 2010. With 1.7 billion people, this could be the world's biggest free trade area.

Singapore's Prime Minister proposed an open skies agreement between China and ASEAN countries to be implemented in the coming year. Along with other sets of open-transit initiatives that are being planned, ASEAN hopes to work towards a free trade agreement with China by year 2010. With 1.7 billion people, this could be the world's biggest free trade area.

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indonesia

China to Lift Tariffs on Indonesian Cocoa

Beginning on January 1st next year, China will lift its 15% tariff on cocoa imported from Indonesia. In turn, Indonesia will lift a duty that it has levied on Chinese produced chili powder. This is good news for China's growing chocolate consumption, which increased by 9% to US $636.9 million in 2005. International demand for the beans is also growing as they cost about $200 less per tonne than from the top producer, Ivory Coast. Indonesia also carries the advantage of lower transport costs than competing nations.

Beginning on January 1st next year, China will lift its 15% tariff on cocoa imported from Indonesia. In turn, Indonesia will lift a duty that it has levied on Chinese produced chili powder. This is good news for China's growing chocolate consumption, which increased by 9% to US $636.9 million in 2005. International demand for the beans is also growing as they cost about $200 less per tonne than from the top producer, Ivory Coast. Indonesia also carries the advantage of lower transport costs than competing nations.

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indonesia

Asia: Stocks at a Five-Month High

Asian stocks were at a five-month high Monday as word spread that strong earnings would be reported for Toyota Motor and Hyundai Motor companies. Toyota advanced ¥80 to ¥6,960. Hyundai Motor climbed 1,300 won to 77,800 won.

Asian stocks were at a five-month high Monday as word spread that strong earnings would be reported for Toyota Motor and Hyundai Motor companies. Toyota advanced ¥80 to ¥6,960. Hyundai Motor climbed 1,300 won to 77,800 won.

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indonesia

Chevron to Invest $6 billion in Indonesia Gas Fields

Chevron Corp. plans to invest $6 billion to develop gas fields off the coast of Borneo.  Indonesia is the world's top liquefied natural gas (LNG) exporter but has recently encountered problems in fulfilling contractual commitments to traditional buyers such as Japan, South Korea, and Taiwan.  Chevron hopes to alleviate the production issues by boosting its output from the Gehem and Gendalo fields,  which they believe will offset the slowdown of other gas fields in the region.

Chevron Corp. plans to invest $6 billion to develop gas fields off the coast of Borneo.  Indonesia is the world's top liquefied natural gas (LNG) exporter but has recently encountered problems in fulfilling contractual commitments to traditional buyers such as Japan, South Korea, and Taiwan.  Chevron hopes to alleviate the production issues by boosting its output from the Gehem and Gendalo fields,  which they believe will offset the slowdown of other gas fields in the region.

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indonesia

Asian Bankers Push for Market Reforms

An Asian Development Bank official has stated that creating a region-wide free-trade area is a realistic goal in contrast to the hopes of establishing a common market, which is currently blocked by major obstacles.  According to the official, there are currently 183 free trade agreements either signed or in negotiation across Asia, where intra-regional trade has risen to 55% last year compared to ~40% in the early 1990's.  The ultimate goal would be "consolidating these various inter-Asian FTA's into a single, Asia-wide, best practices FTA."  Howeover, many domestic issues must be resolved before most countries would be able to fully open up their markets.

An Asian Development Bank official has stated that creating a region-wide free-trade area is a realistic goal in contrast to the hopes of establishing a common market, which is currently blocked by major obstacles.  According to the official, there are currently 183 free trade agreements either signed or in negotiation across Asia, where intra-regional trade has risen to 55% last year compared to ~40% in the early 1990's.  The ultimate goal would be "consolidating these various inter-Asian FTA's into a single, Asia-wide, best practices FTA."  Howeover, many domestic issues must be resolved before most countries would be able to fully open up their markets.

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indonesia

Australia's Santos Gas Supplies Indonesia

Australian oil and gas producer Santos Ltd. has started supplying industrial customers in Indonesia's East Java province with natural gas from its Madura block via a pipeline.  This is the result of a $550million deal signed in 2005 for Madura to supply East Java with gas for a period of eight to twelve years.  The contract could save Indonesia from burning 38 million barrels of diesel over this stretch of time.

Australian oil and gas producer Santos Ltd. has started supplying industrial customers in Indonesia's East Java province with natural gas from its Madura block via a pipeline.  This is the result of a $550million deal signed in 2005 for Madura to supply East Java with gas for a period of eight to twelve years.  The contract could save Indonesia from burning 38 million barrels of diesel over this stretch of time.

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indonesia

Oil Prices Fall Below $60 in Asia

Crude oil fell to below $60 a barrel this morning in the Asian markets. Oil prices have dropped nearly 25% since mid July. Experts say this is still a strong price, but some say its expected to rise before the end of the year.

Crude oil fell to below $60 a barrel this morning in the Asian markets. Oil prices have dropped nearly 25% since mid July. Experts say this is still a strong price, but some say its expected to rise before the end of the year.

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indonesia

Indonesia Signs Multiple Oil Contracts

Indonesia has been struggling to maintain its oil output over the last year. To help tap the oil reserves, Indonesia signed multiple contracts with companies including Exxon Mobile, ConocoPhillips and Malaysia Petronas.

Indonesia has been struggling to maintain its oil output over the last year. To help tap the oil reserves, Indonesia signed multiple contracts with companies including Exxon Mobile, ConocoPhillips and Malaysia Petronas.

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indonesia

Indonesia Shares Fall on Thai Coup

Indonesian telecommunications blue chips fell Wednesday after a military coup occured in nearby Thailand.  Additionally, overnight losses on Wall Street further lowered trader confidence and the Jakarta Stock Exchange Composite Index ended down 6.042 points (0.4%).  The Indonesian Rupiah also dropped in value versus the dollar, with it's ratio increasing from 9,155:1 up to 9,170:1.

Indonesian telecommunications blue chips fell Wednesday after a military coup occured in nearby Thailand.  Additionally, overnight losses on Wall Street further lowered trader confidence and the Jakarta Stock Exchange Composite Index ended down 6.042 points (0.4%).  The Indonesian Rupiah also dropped in value versus the dollar, with it's ratio increasing from 9,155:1 up to 9,170:1.

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indonesia

Morgan Stanley Suggests Southeast Asian Currency

Morgan Stanely's Chief Asia Economist Andy Xie suggests purchase of some Southeast Asian currencies, as he expect them to grow more quickly than North Asian currencies. By the end of the month, Xie expect the following gains:Indonesia's Rupiah is expected to gain 1.7% to 9,000 per US$ with 14.9% on-year inflation.Thailand's Baht is expected to gain 0.7% to 37.20 per US$ with 3.8% on-year inflation.Malaysia's Ringgit is expected to gain 0.7% to 3.65 per US$ with 4.1% on-year inflation.On the other hand, South Korea's Won is expected to grow only 0.5% relative to the US$.

Morgan Stanely's Chief Asia Economist Andy Xie suggests purchase of some Southeast Asian currencies, as he expect them to grow more quickly than North Asian currencies. By the end of the month, Xie expect the following gains:Indonesia's Rupiah is expected to gain 1.7% to 9,000 per US$ with 14.9% on-year inflation.Thailand's Baht is expected to gain 0.7% to 37.20 per US$ with 3.8% on-year inflation.Malaysia's Ringgit is expected to gain 0.7% to 3.65 per US$ with 4.1% on-year inflation.On the other hand, South Korea's Won is expected to grow only 0.5% relative to the US$.

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indonesia

Most Asian Markets Rise as Lower Oil Prices Boost Shares in Tokyo

Indices in Hong Kong and Japan rebounded from recent loss-streaks as a fall in crude oil prices has alleviated market tension, boosting investor confidence and increasing activity.  Most east-Asian exchanges shared similar change of pace while trade in Southeast Asia remained relatively flat or declined slightly.

Indices in Hong Kong and Japan rebounded from recent loss-streaks as a fall in crude oil prices has alleviated market tension, boosting investor confidence and increasing activity.  Most east-Asian exchanges shared similar change of pace while trade in Southeast Asia remained relatively flat or declined slightly.

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indonesia

ASIA DEVELOPMENT OUTLOOK 2007

Despite challenges from rising oil costs, commodity costs, and interest rates, the Asia Development Bank expects 7.7% growth for 2007.

Despite challenges from rising oil costs, commodity costs, and interest rates, the Asia Development Bank expects 7.7% growth for 2007.

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indonesia

Indonesian Government's Shares Of Bank Permata To Be Sold

The Indonesian Government is offering 25.9% of the total shares of the Permata Bank. The Permata bank was formed by the Ministry of Finance to manage the Asian financial crisis of 1997.  This move should help to aleviate some of Indonesia's budget defecit woes.

The Indonesian Government is offering 25.9% of the total shares of the Permata Bank. The Permata bank was formed by the Ministry of Finance to manage the Asian financial crisis of 1997.  This move should help to aleviate some of Indonesia's budget defecit woes.

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indonesia

Indonesia's President Announces Economic Plan For The Future

Indonesia's President Susilo Bambang Yudhoyono hopes to double the Indonesian economy during the next 10 years.  That goal would require 7.1% avg. growth per year.  Currently, Indonesia expects 5.9% growth for 2006.

Indonesia's President Susilo Bambang Yudhoyono hopes to double the Indonesian economy during the next 10 years.  That goal would require 7.1% avg. growth per year.  Currently, Indonesia expects 5.9% growth for 2006.

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indonesia

Asian Stocks Up During U.S. Trading

Asian stocks rose due to heavy US trading for third day in a row.  Precious Metals also rallied.

Asian stocks rose due to heavy US trading for third day in a row.  Precious Metals also rallied.

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indonesia

Indonesia shows accelerated economic growth for first time in 18 months

Indonesia posts 5.2% growth after 4.7% during the last three months. The growth mirrors increases in global commodity prices and increased domestic spending due to three interest rate cuts this year.

Indonesia posts 5.2% growth after 4.7% during the last three months. The growth mirrors increases in global commodity prices and increased domestic spending due to three interest rate cuts this year.

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editor picks 

Other Important News In Indonesia


Hot Emergent Market: Indonesia

Southeast Asia's largest economy may grow 60 percent in the next five years to $800 billion due to a stable administration, lower capital costs and a government plan to spend as much as $34 billion to build roads, ports and power plants by 2017, Morgan Stanley said. Leaders of the nations known as BRIC will meet this week in the Russian city of Yekaterinburg.

Southeast Asia's largest economy may grow 60 percent in the next five years to $800 billion due to a stable administration, lower capital costs and a government plan to spend as much as $34 billion to build roads, ports and power plants by 2017, Morgan Stanley said. Leaders of the nations known as BRIC will meet this week in the Russian city of Yekaterinburg. Indonesia may expand as much as 4 percent this year, making it the fastest-growing major economy in Southeast Asia, according to the International Monetary Fund. Morgan Stanley expects 3.7 percent growth this year.

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Rupiah and Korean Won rose this week, leading Asian currencies

The rupiah extended this quarter's gain, the best performance in Asia. The MSCI Asia Pacific Index of stocks climbed for a fourth day as Australia's economy unexpectedly expanded in the first quarter. The Philippine peso strengthened on speculation falling borrowing costs will help revive economic growth.

The Indonesian rupiah and the Korean Won gained after data from the U.S. and Australia added to signs of a global economic recovery, giving investors the confidence to buy emerging-market assets.

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Indonesia cut its interest rate

The Bank Indonesia cut its benchmark rate by 25 basis points to an all-time low of 7% in June.

The rate cut came in line with expectations. This is the lowest level since July 2005, when the measure was first introduced. In May, the central bank had slashed its benchmark rate by a quarter point to 7.25%.

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Indonesia Casts Doubt On ASEAN Integrated Capital Market

Indonesia expressed their doubts on the viability of an integrated capital market among ASEAN member states by 2015.

Indonesia expressed their doubts on the viability of an integrated capital market among ASEAN member states by 2015. The chairman of the capital market and financial institution supervisory agency (Bapepam-LK) Fuad Rahmany said that there is a lack of a common regulatory framework shared between the countries for the region to implement an integrated capital market by 2015. He also added that the region has the problem of synchronizing the regulations that were issued by each member country particularly because most of the ASEAN member states have inherited deep-rooted legal systems from their former colonial occupiers, making it difficult to adopt a single regulation to suit all needs.

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Indonesia Eyes More Currency Swap Agreements

Indonesia is looking to forge more bilateral currency swap agreements with other countries to bolster confidence and ease volatility of the rupiah against the US dollar.

Indonesia is looking to forge more bilateral currency swap agreements with other countries to bolster confidence and ease volatility of the rupiah against the US dollar. This comes after the country signed a Rp 175 trillion or 100 billion yuan ($15 billion) currency swap agreement with China to provide short-term foreign exchange liquidity and help boost bilateral trade and investment. Currency swap agreements would eventually reduce the need for US dollars because bilateral trade between the two agreeing nations could use the currency under the swap deal.

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Indonesia Not To Let Rupiah Fall To Help Export

Bank Indonesia said it will not let the rupiah fall against the dollar to make exports more competitive amid slumping global demand, arguing that such a move carries risks as well.

Bank Indonesia said it will not let the rupiah fall against the dollar to make exports more competitive amid slumping global demand, arguing that such a move carries risks as well. These risks include further exposing local companies to overseas debts. Most of Indonesia's debts, both in the private and the public sectors, are denominated in US dollars. The rupiah has already weakened 7.3 percent this year and is one of the worst performing currencies in Asia against the US dollar.

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Corporate Overseas Debt Poses Risk to Indonesian Reserves

The Bank of Indonesia revealed that over $22.6 billion worth of overseas debts, or about 42 percent of the country's existing foreign exchange reserves, are set to mature by the end of this year, which poses a threat to the country's economy.

The Bank of Indonesia revealed that over $22.6 billion worth of overseas debts, or about 42 percent of the country's existing foreign exchange reserves, are set to mature by the end of this year, which poses a threat to the country's economy. The bank, however, was quick to assure that the maturing debt amount was 'still within safe limits according to World Bank criteria'. But these overseas debts were among the factors that might lead to the weakening of the rupiah against the dollar.

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Indonesia To Get $1b Standby Loan

Indonesia is finalizing an agreement to get a $1 billion (Rp 12 trillion) standby loan from the Islamic Development Bank (IDB) and the French government to help prop up its economy during the global financial crisis.

Indonesia is finalizing an agreement to get a $1 billion (Rp 12 trillion) standby loan from the Islamic Development Bank (IDB) and the French government to help prop up its economy during the global financial crisis. It is expected that the country will get $500 million from the IDB and $500 million from the French government. Prior to this agreement, Indonesia already received $5.5 billion.

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Indonesia, Malaysia Push For Sub-Regional Cooperation

Indonesia and Malaysia are pushing the region's private sectors and administrations to initiate sub-regional development cooperation.

Indonesia and Malaysia are pushing the region's private sectors and administrations to initiate sub-regional development cooperation. The two countries pledged to work together within the sub-regional framework of the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA). They argue that there are good opportunities for cross-border sub-regional economic development and cooperation in energy, agriculture, agribusiness, mining and forestry.

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Indonesian Government Gears Up To Limit Free Trade Deal Adversities

The Indonesian government is preparing to provide financial and technical support for the country's meat and tropical fruit businesses ahead of the ASEAN-Australian and ASEAN-New Zealand free trade agreements (FTA).

The Indonesian government is preparing to provide financial and technical support for the country's meat and tropical fruit businesses ahead of the ASEAN-Australian and ASEAN-New Zealand free trade agreements (FTA). The Ministry of Agriculture proposed to use Rp 145 billion (US$12.18 million) from this year's stimulus package to help boost their competitiveness against foreign competitors. These businesses are expected to face problems after the FTA's are implemented. Under the FTA, Indonesia will completely remove its import duties on fourth beef products from Australia and New Zealand by 2020 and on seven dairy products between 2017 and 2019.

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