Subscribers Copy, Not for Distribution GENERAL NEWS AND
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Subscribers copy, not for distribution Friday, September 7th, 2018 g GENERAL NEWS AND HEADLINES Following his success of organizing the successful 2018 Asian Games, business tycoon Erick Thohir is very likely to Erick likely to fill an even higher position, namely the chairman of spearhead Jokowi President Joko “Jokowi” Widodo’s reelection campaign team. The speculation so far has been confirmed by campaign Jokowi’s running mate Ma’ruf Amin and also the United Development Party (PPP) secretary-general Arsul Sani. Erick is the president director of PT Mahaka Media, which (The Jakarta Post, p.1) counts Islamic daily newspaper Republika, local television station JakTV and popular radio station GenFM among its holdings. He also owns shares in several international sports team, including Italian soccer team Inter Milan, US soccer club DC United and the NBA’s Philadelphia 76ers. As explained by Arsul, Erick’s close ties with the millennials, coupled with his proven track record in managerial positions, makes him an attractive candidate to spearhead Jokowi campaign team. Candidates to rally for President Jokowi – Ma’ruf Amin and challenger Prabowo Subianto – Sandiaga Uno are scrambling for housewives’, housewives’ support or popularly known as “emak-emak”, support. In order to win the housewives’ votes, Jokowi – Ma’ruf’s camp reportedly established a cross-party female group, while (Republika, p.3) Prabowo – Sandiaga allegedly appointed a spokesperson specifically representing housewives. Aria Bima, program director of Jokowi – Ma’ruf National Campaign Team (TKN), said that the presence of female volunteers in the team would be significantly beneficial as the majority of voters are female. Similarly, Gerindra deputy chairman Arif Puyono said that housewives would spur Prabowo – Sandiaga’s campaign and their focus would be the skyrocketing price of basic needs. Cases reveal rampant The Jakarta Police has uncovered a case pertaining to the issuance of fake land certificates in East Jakarta and graft in land Bekasi, West Java, demonstrating how graft prevails in certificate issuance the metropolitan area where land prices continue to soar. In East Jakarta, suspects are alleged to have faked documents claiming ownership of a plot of land on Jl. DI Panjaitan to sue the Jakarta administration for Rp 340 billion (US$22.8 million) in compensation. Sudarto, who allegedly masterminded the scheme, was reportedly (The Jakarta, p.2) assisted by state officials. Similarly, in Bekasi, the police identified 11 people, including Segara Makmur village and Tarumajaya district heads and their staff members in Subscribers copy, not for distribution Bekasi, as suspects in case pertaining to the issuance of fake land certificates to a resident named Lilis Suryani. Indonesian Ombudsman commissioner Alamsyah Saragih said the case was just few of many examples of similar graft cases implicating state officials. Some cases even indicate that the land mafia continues to infiltrate up to the courts. All Jambi councilors Every councilor in Jambi Legislative Council (DPRD) for the period 2014 to 2019 reportedly accepted a bribe from accept bribe non-active Jambi Governor Zumi Zola in exchange for the councilors’ support for Zumi’s proposal of 2018 regional budget (RAPBD). Zumi allegedly obtained Rp (Kompas, p.3) 16.4 billion from private sector and distributed it as “legalization fee” among the councilors. According to one witness, Jambi Legislative head Cornelis Buston accepted a bribe of Rp 1 billion, while Deputy Head Syahbandar accepted Rp 600 million. On the other hand, each member of every faction in the Council accepted Rp 200 million, added with Rp 175 million “bonus” for members of Commission III. Administrative Deemed disadvantageous for the country, civil servants (PNS) who are embroiled in corruption cases may be punishment looms ordered to return the monthly income they have over regional heads received. In addition, officers of staffing (PPK), including governor, regents or mayors, who have been remiss in supervising the corrupt civil servants will be sanctioned (Media Indonesia, as well for maladministration. To avoid further maladministration, the National Civil Service Agency headline) (BKN) has blocked the access to data on corrupt civil servants’ income. Previously, it was reported that 2,357 out of 2,674 corrupt civil servants were still employed and received monthly income. Regions with highest number of active corrupt civil servants include Pekanbaru (301), Medan (298), Denpasar (292) and Jakarta (265). House questions the Ramson Siagian, a member of the House of Representatives (DPR) Commission VII on energy affairs, delay of power questioned the government’s decision to delay a number projects of National Strategic Projects (PSN), specifically power projects. According to Ramson, such decision may decrease the reliability of power plants, particularly considering that in Java there has been power failure. Ramson further said that the government has not coordinated with his Commission on this matter, and (Koran Tempo) that a meeting will be convened once the government has decided which PSN will be postponed. Subscribers copy, not for distribution State-owned electricity company PLN corporate planning director Syofvi Relienty Roekman said that power projects which would be delayed were coal-fired power plant (PLTU) projects and diesel-fueled power plant (PLTD) projects, yet she did not specify which PLTU and PLTD projects that would be delayed. BUSINESS AND ECONOMICS NEWS AND HEADLINES Several property developers are acquiring land Developers choose surrounding Jakarta despite the market’s lethargy. PT long-term plan Hanson International, Ciputra Group, PT MNC Land, PT Surya Semesta Internusa and PT Metropolitan Land all agreed that land acquisition is a good long-term investment, particularly to stimulate corporate (Bisnis Indonesia, development. For example, PT Hanson International just headline) bought 4,700 hectares of land between Maja and Serpong and plans to add another 5,300 hectares to develop a new city that is similar to BSD Serpong. Ciputra Group is also securing 8,000 hectares of land around Jakarta for housing projects. House yet to approve The House of Representatives Commission VII’s meeting 2019 draft state with the Energy and Mineral Resources Ministry on budget energy Thursday ended with questions as House members demanded a deeper explanation on energy assumptions assumptions in the 2019 draft state budget. Commission VII members expressed concern about RON 88 fuel (Premium) sales, the US$70 (per barrel) oil price assumption and a decline in oil lifting. Maman Abdulrahman of the Golkar Party said (Bisnis Indonesia, p.3) the government should calculate the global oil price’s uncertainty and its impact on RON 88 sales, which would not be subsidized. The meeting will continue on Sept. 10. JCI, rupiah rebound The Jakarta Composite Index (JCI) and the rupiah rebounded by 1.63 percent to 5,776 and 0.24 percent to Rp 14,891 per US dollar after an emerging market crisis sentiment drove them downward. Tradenologi analyst Sathya Pras said the release of the monthly consumer confidence index and next week’s implementation of the (Investor Daily, import income tax (PPh import) contributed to the headline) technical rebound. However, Sathya also explained that the situation was temporary given Indonesia’s widening current account deficit and the fear of a widespread emerging market crisis. Pertamina begins State-owned oil and gas company Pertamina became the Southeast Sumatra Southeast Sumatra Block operator after completing Block operation participating interest negotiations with the government and the previous operator, CNOOC SES Ltd. The block is Subscribers copy, not for distribution expected to boost national oil lifting by 200,000 barrels (Investor Daily, p.9) per day and Pertamina’s financial capacity. According to the Upstream Oil and Gas Regulatory Special Task Force, the block owned 55 million barrels of oil reserves and 238 billion metric tons of gas reserves per January 2017. Rupiah to face debt The debt payment period may fuel further currency payment period depreciation if more money is taken out of the country. According to the Indonesia Stock Exchange (IDX), from October to December, there are at least 40 upcoming debt payment deadlines totaling Rp 2.2 trillion for Indonesian companies. However, Samuel International managing director and head of equity capital market Harry Su said the public should not worry too much as companies usually rolled over their debt when the rupiah (Kontan, headline) depreciated. The effect would not hurt the rupiah too much, even if they decide to make payments, since the majority of companies have followed Bank Indonesia’s hedging recommendation. House wants House of Representatives members have suggested that obligatory foreign the government issue a regulation in lieu of law obliging exchange conversion that foreign exchange revenue from exports be converted to rupiah. The recommendation was given as the prevailing Regulation No. 24/1999 on foreign exchanges from exports was considered ineffective as it was unable to push exporters to convert their revenues to rupiah. (Kontan, p.2) Bank Indonesia recorded US$34.7 billion in export revenue in the second quarter of 2018, but only $4.4 billion was converted to rupiah. Disclaimer: Tenggara Strategics always aims to use reliable sources in providing our best analysis to our clients, and is not responsible for any errors, inaccuracies