INDONESIA A NEWS

Draft legislation to redenominate Indonesia's currency is expected to gain momentum this year as lawmakers and monetary authorities push to drop the last three zeros from the nominal value of the rupiah. While the paper change will be largely cosmetic, analysts are divided on whether a redenomination could spark inflation and sow confusion among the public.  The rupiah currently trades at 9,200 to the US dollar and is the second-lowest priced currency in the world, trailing only the Vietnamese dong. The rupiah collapsed amid the 1997-1998 Asian financial crisis and despite economic and financial recovery still trades at a fraction of its pre-crisis value.  Finance Minister Agus Martowardojo said last month that the government was prepared to submit the draft law to the House of Representatives (DPR) for approval. The central bank, Bank Indonesia, has backed the move for various reasons, including the need to simplify accounting standards for transactions that now often excee...

At age 17 Djoko Susanto started managing his parents' modest 560-foot stall inside Pasar Arjuna, a traditional market in Jakarta. The stall, called Sumber Bahagia ("source of happiness"), sold groceries at the time, but soon Djoko decided there was a bigger opportunity peddling cigarettes. Business was brisk as not only smokers but also small wholesalers and retailers became frequent customers.  His gamble on smokers paid off in a bigger way than the enterprising shopkeeper could have imagined, attracting notice from Putera Sampoerna (No. 9 on our list of Indonesia's richest), whose own company was then one of the nation's largest makers of clove and tobacco cigarettes. The two met in the early 1980s and agreed in 1985 to build 15 similar stalls in several areas of Jakarta. The venture was successful and inspired the two to open a discount supermarket store named Alfa Toko Gudang Rabat. That same year Djoko became the sales and distribution director at Sampoerna...

Indonesia, the most populous Muslim country and potentially the largest market for Islamic finance, has received a major boost to press ahead with the issuance of its proposed benchmark global Islamic trust certificates (sukuk) which will be issued by Perusahaan Penerbit SBSN Indonesia II (PPSI II), a special purpose vehicle (SPV) on behalf of the Ministry of Finance of Indonesia.  The issuance, which has been assigned a “BB+” long-term foreign currency issue rating by Standard and Poor's and a provisional rating of Ba1 by Moody's Investors Service, was subject to the right market conditions, especially pricing. In fact, there was talk of a delay because of the volatility in the global markets as a result of the European sovereign debt crisis and the economic recession especially in the West where economies are struggling even to achieve a 1 percent GDP growth rate.  The boost came from neighboring Malaysia, where Khazanah Nasional Berhad, the country's sovereign wealth f...

JULIA Gillard is preparing for her first contact with Indonesian President Susilo Bambang Yudhoyono since the live cattle row.  The Prime Minister is organising a telephone call to Dr Yudhoyono ahead of leaders' summits in Cannes and Bali next month and the visit of US President Barack Obama to both Australia and Indonesia. Ms Gillard has not spoken to Dr Yudhoyono since the Australian government suspended live cattle shipments without warning in June after ABC1's Four Corners' coverage of the abuse of Australian cattle in Indonesian abattoirs. The failure to alert Jakarta to the suspension of the $330 million trade damaged relations between Australia and Indonesia. Ms Gillard also caused resentment in Indonesia last year by announcing her plan to establish an offshore processing centre for asylum-seekers in East Timor, without alerting Jakarta to the significant change to policy. As she prepared to repair leader-to-leader relations, she welcomed the beginning of the I...

Indonesian President Susilo Bambang Yudhoyono outlined plans to lift the country's growth rate to a level on par with emerging-market superstars like China, even as the country faces criticism from some economists who believe it is failing to reach its economic potential. In a major speech on Friday to the nation, he outlined what he called a "master plan" to boost investment and lower government barriers to growth, which some analysts say have kept Indonesia from rising to the ranks of the world's most dynamic emerging markets. The plan would push annual economic growth in the world's fourth-most populous country after China, India and the U.S. to between 8% and 9%, he said. Indonesia's gross domestic product climbed 6.1% last year and economists expect it to clock another 6.5% in growth this year. "With strong economic growth, we will reduce poverty and unemployment rates," he said in the televised speech Friday. "It is impossible to achiev...

The Indonesian government plans to create a vast agricultural estate in the restive province of Papua, sparking fears of environmental destruction and a return of mass migration policies that have done much to antagonise the indigenous population. Launched last month and already piquing the interest of foreign investors, the Merauke Integrated Food and Energy Estate (MIFEE) will initially earmark 1.6 million hectares of land for development but could expand to 2.5 million hectares, or about half the area of Merauke district, in south-east Papua. The ambitious proposal marks a return to the huge agricultural developments promoted by the former dictator Suharto, some of which were spectacular failures, such as the 1 million hectare ''mega rice'' project in central Kalimantan that devastated peatland forests and did not produce a bushel of rice. But Indonesian officials insist the land around Merauke is suitable for agriculture and that the new estate will help the world...

These days taxi driver Rusdi often earns little more than 50,000 rupiah (US$5.50) for driving a 17-hour shift through Jakarta's congested traffic. The increased cost of petrol is stealing a large chunk of his income. The Indonesian government decided in May to raise fuel prices by 30 percent, forcing Rusdi to spend significantly more on petrol, but the taxi company for which he works has neither increased fares nor reduced his daily fee to drive the taxi. "My company doesn't care about our problems," he told IRIN. "Now we're the ones who have to subsidise fuel for the company." The additional charges for petrol, plus the costs of repairs and the daily cab rental fee, are forcing taxi drivers like Rusdi to work longer and longer hours. When the government raised fuel prices, the move sparked protests throughout the country where millions of poor people were already hit by rising food prices. An increase in fuel costs means higher prices of essential commo...

INDONESIAN politics was in uproar yesterday after a parliamentary vote on the controversial Bank Century bailout revealed almost all support had ebbed from President Susilo Bambang Yudhoyono's ruling coalition. After a marathon sitting, the house declared by 325 votes to 212 on Wednesday night that last year's 6.7 trillion rupiah (about $800 million) bailout was illegal. Dr Yudhoyono's Democrat Party and the uninfluential National Mandate Party of former "reformasi" hero Amien Rais had been the only ones pushing a resolution backing the bank rescue deal. However, despite wild fisticuffs on the floor of the house preceding the decision, and a sense of gloom pervading analysts' views of it yesterday, there were also warnings that the development was "entirely meaningless" ."This has no legal import whatsoever, and is simply an argument that the people in the (parliament) are having with themselves," said Australian academic and Indonesia law ...

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American companies this week made a commitment to invest more in Indonesia provided that the government can guarantee legal certainty and security.During a meeting with President Megawati Soekarnoputri 10 American companies, mainly oil and gas enterprises, made a commitment for new investment totaling US$2 billion, according to presidential economic adviser Frans Seda. Seda, however, declined to elaborate. Nonetheless, executives of Conoco Oil and Freeport Mc Moran, both with strong interests in Indonesia, expressed their intention to increase their investment in the country. Conoco senior vice president J. Michael Stinson said that his company, with interests in the West Natuna gas field in Riau, intended to join the bidding for 17 new oil and gas blocks offered by the government during the meeting. Freeport chairman and chief executive officer James R. Moffet, said that the company had invested a total of $6 billion in its giant copper and gold mines in Irian Jaya alone and was prepa...

Has failed to introduce enough security to prevent more terrorist attacks and remains the region's prime target, according to General I Made Mangku Pastika, the island's former police chief, who captured the Bali bombers. After launching his campaign to become Bali's first directly elected governor, General Pastika vowed to upgrade security throughout the island to international standards, but also called on Australians to defy terrorists by continuing to visit."The terrorists still consider Bali is the best place to do their activity and send a message to the world," he saidHighly respected in Bali and across Indonesia, General Pastika is almost certain to win next month's poll. Victory would give him powers equivalent to a state premier under Indonesia's decentralised political system.His comments are likely to ease pressure on Australia to lift its warning against travel to Indonesia, which remains the biggest irritant in the Australia-Indonesia relatio...

Have you ever noticed how some businesses seem to do extremely well, and go from strength to strength, whilst the majority just seem to muddle along? Since starting my own business I've met many small business owners and what I've noticed is that the vast majority of them seem to just about get by, but few reach the level of success that they're actually capable of. Some of them end up failing altogether, some lurch from project to project, and some do OK, but never really achieve the success or lifestyle they envisioned when they started their business. On the other hand, I know a handful of extremely successful service business owners, who are making high 6 and 7 figure incomes every year (and rising) - and yet they don't work longer hours, their products and services are not magnitudes better than their competitors and they aren't geniuses! So what is the difference between the successful businesses and the struggling businesses? In a word: Marketing Whilst there...