Governor: Aceh Is Safe For Investment

20 May 2014

Governor Aceh, Zaini Abdullah, welcomed domestic and foreign investment in this province as Aceh is very safe and convenience for it.

“We will seek for domestic and foreign investment for Aceh. Sometimes, misleading news about Aceh threatens our attempt,” the Governor said during the opening of Aceh Investment Promotion in Banda Aceh on Tuesday (20/5).

Governor said that in the past five years, Aceh’s economy performance is very good. On 2013, the realization of investment in Aceh was IDR 5.2 trillion (USD 447million). And for the first quarter of 2014, the realization had reached Rp. 1.5 trillion (USD 129 million), ranked sixth in Indonesia for investment realization.

He said that there are misunderstanding on the condition in Aceh that creates unsecure and not conducive image especially for investment and business.

“The most recent issue is about the implementation of Shari-a Islam that was thought will disturbed Human Rights and security condition to the business world,” he said.

He explained that the implementation of Shari-a Islam in Aceh had gone well and had blend into the people’s culture. The implementation of Shari-a Islam only applies to the Muslim, not for the non-Muslim.

“In fact, the people of Aceh respected and protected the rights of non-Muslim. But the people of Aceh hoped that people that came to this province will respect the people of Aceh’s traditions,” he said.

Security Issue

In regarding to security issue, Zaini Abdullah repeatedly reminds that Aceh is a safe and convenience investment destination. The event was attended by business players that had invested in Aceh for some time.

“We will listen to their experience,” he said.

He added that during an investment forum in Jakarta, in April 2014, the Head of Army Staff (Kasad) General Budiman, said that investment in Aceh is safe and stable.

General Budiman added that the role to protect business investors belongs to Provincial and Regional Government. So, the government should be able to solve the disturbance towards the investors.

“As the Head of Governance in Aceh, I would like to state it again, we are determined to provide security to the investors either domestic or foreign investor in doing business in Aceh,” he said.

On that occasion, Zaini also said that they have conducted various attempts to support and realize investment in Aceh. The main focus of the investment is to create job opportunities that will support the economy development and to improve the people’s prosperity.

Government of Aceh had also come up with several plans such as development of detailed project to support investment and to shift the investment focus from primary focus to secondary and tertiary sector that will add value to the product.

They also planned to develop industrial zone and specialized strategic investment zone to expedite the investment development; development of economy corridor through upstream-downstream that connects to production central.

“We are aiming to prioritize the finalization the development of six lanes of roads in the remote areas of Aceh within the next three years,” he said.

Government of Aceh also prioritizes improvement of investment climate by revising regulations and policies.

“At the moment we had finalized the discussion on general budget through Governor’s decree number 17/2012 and we are finalizing the Governor’s decree on investment incentive,” he said.

Meanwhile, the Head of Investment and Promotion for Aceh, Ir Iskandar MSc, in his opening speech said that the event’s goal is economy development in the future.

Besides business forum, this event was also used for Aceh’s product exhibition, Iskandar said.

Singapore And Malaysia Dominated Foreign Investment in North Sumatra

28 May 2014

Investors from Singapore and Malaysia dominated foreign investment in North Sumatra although investors from China are also very interested to invest this this province. This issue was brought up by the Head of Investment and Promotion Board for North Sumatra - Indonesia, Purnama Dewi.

From the total realization of Foreign Investment (PMA) on first quarter 2014 IDR 1.286 trillion (USD 110.5 million), Singapore had been contributing to 47% and Malaysia with 20%. The rest are Thailand, Taiwan, South Korea, Hong Kong, England and several other countries, Purnama Dewi said in Medan on Tuesday.

“Although Singapore and Malaysia are dominating, but investors from other countries such as China are regularly seeking for investment opportunities in North Sumatra,” Purnama Dewi said.

Investors from China are interested in industries and service sectors such as highway and energy infrastructures development,” she said.

They also expect for domestics investors to realize domestic investment (PMDN) although the value will be relatively smaller than foreign investment.

The realization of PMDN for first quarter 2014 is IDR 559 billion (USD 48 million) or almost 50% from the PMA value.

According to the Secretary of Employers Association (Apindo) North Sumatra, Laksamana Adiyaksa, Investors from North Sumatra prefers to expand their business than realizing new investment as the permit is easier.

He also admitted that business owners also prefer to invest in service sector due to the promising market.

“We hope that domestic investors are supported so that the PMDN value could catch up with PMA value,” she said.

Indonesia Food Security Lag Behind Singapore

26 May 2014

Indonesia lag behind from Singapore and the other South-east Asian countries in term of food security rating for year 2014. The rating was compiled by The Economist and it was made according to three indicators such as: consumer’s purchasing power, food availability and the quality and safety of the food. They recorded Indonesia has several weakness such as in budget for agriculture research, corruption, and gross domestic product.

Gustami Harahap, Lecturer of Agriculture Faculty in Medan Area University (UMA), said that this fact is very disappointing as Indonesia is an agriculture country that had huge natural resources. He said that Indonesia may face food crisis as the food supply in this nation drops from time to time. “As our birth rate is very high, it will automatically affect to food consumption rate. People been moving from villages to the cities, poverty rate has increased, the land that could be cultivated decreased. This is the biggest humanity problem in Indonesia and in the world,” he said during the API (Planter Association Indonesia) seminar on Saturday (24/5).

He believed that Indonesia’s rank was a reflection of internal and external factor. Internal factor correlated with issues such as land conversion, mobilization of work for the farmers and seasonal crops. “The government is not strict enough to set agriculture priority areas, people’s understanding on this issue is decreasing, pressures of life, farmers’ social economy condition and government’s negligence,” he said.

As for external factors, he said that the situation that Indonesia faced is also being affected by free market, revitalization of agriculture and utilization of research and technology. In regarding to free market, he said that although it is important for distribution of food, the farmers may not be able to compete against the pressure of international market. Besides that, he also said that free market and revitalization are usually dominated by several people’s importance such as the companies and government officials that only prioritized themselves.

“Import cases that involve politicians in this country proved that there is something wrong. Trade system in this country is similar to ‘moneylenders’. What is Bulog’s (Indonesian National Logistic Agency) role? They should be the price controller. But now they were the cheap rice distributors. I am confused, had their role changed?” he asked.

In regarding to the utilization of research and technology, he said the availability of supportive equipment at laboratories in Indonesian Universities is far from adequate. He questioned the Research and Technology Institution’s (Litbang) role. Besides that he also questioned the Ministry, Agencies of Agriculture and Plantation’s role that are not good enough. “Government loves discourses, but the implementation is not as good,” he said.

Agriculture Downstream

Gustami Harahap highlighted the importance of agriculture downstream. He said that the government should support the farmers to promote investors to invest in downstream industries. “If the government wanted to increase revenue in real sectors, they should ease the regulations so that the business world could develop. If they only prioritized income from non-real sector such as tax, then poverty and unemployment rate will increase,” he said.

Kasyful Mahalli, economy observer, had similar view to Gustami Harahap. One issue that he wanted to highlight is: the government should come up with master plan and to think about the future of the farmers and the students in agriculture majors. “Students that graduated from agriculture sectors now work at banking, capital market and other sectors. This is because the government could not provide jobs for them. They were also reluctant to become a farmer so they prefer to work in such sectors,” he said.

North Sumatra Import in January Increased By 7.98%

6 March 2014

North Sumatra’s import in January 2014 increased by 7.98% with most of the imports came from Singapore, China and Malaysia; especially for raw material product.

“On January 2014, the import value had reaches US$ 437.660 million increases from the same period in 2013 at US$ 405.327 million,” the Head of Statistic Distribution under the Central Statistical Body (BPS) North Sumatra, Bismark Saor Pardamean, said in Medan on Wednesday.

The increasing import rate came from Singapore. North Sumatra import from Singapore has increased by 63.49%.

On January 2013, import value from Singapore was around 80.877 million US dollar and it had increased to 132.228 million US dollar in 2014.

Import from Malaysia and China on January had decreased by 19.59% and 8.71%.

“If our import from Malaysia and China to North Sumatra increased like Singapore, then our import value will increase significantly,” he said.

The Secretary of Indonesian Exporters Association (GPEI) North Sumatra, Sofyan Subang, said that most of the product North Sumatra imported is supporting raw materials, so the increase in import will not be dangerous.

Raw material import showed that the industries’ performance in North Sumatra had been going well.

“But I hoped that the supporting raw materials for our industries could be fulfilled by North Sumatra or domestic,” he said.

Minister of Agriculture Confused 'Why Indonesia Import Garlic From Singapore?'

5 March 2014

On January 2014, the Statistical Centre Body (BPS) recorded that Indonesia imported 6,427 tons of garlic that worth US$ 3.1 million. The data also showed that Indonesia imported 55.8 tons of garlic or around US$ 24,000 from Singapore. Minister of Agriculture (Mentan) Suswono was confused to that fact.

“What have Singapore planted?” Suswono asked to the reporters in his office in South Jakarta on Tuesday (4/3).

Although so, Suswono admitted that Indonesia had been importing garlic up to the moment. “Yes, we had been importing garlic up to the moment,” Suswono said.

In the same location, the Director General of Horticulture under the Ministry of Agriculture, Hasanuddin Ibrahim said that according to import’s certificate of origin, import of garlic from Singapore is not true. The garlic was imported from China.

“This garlic was imported from China. Singapore does not have agriculture land. Singapore is a city, they are planting buildings, not crops,” Hasanuddin said.

Previously, the Head of Indonesia’s Horticulture Farmers Community (HKTI) Benny Kusbini said that Singapore is a hub port in of Southeast Asia and International trade. So it is not weird if Singapore is able to export agriculture product such as garlic that was not produced in Singapore.

“I had confirmed that the garlic was imported from China, not Singapore. The ship transported the goods from China, to Hanoi then transit in Singapore. Singapore does not have this product. It is absolutely wrong, we are not importing garlic from Singapore,” Benny said.

According to Benny, transshipment is common issues in order for maintain efficiency in goods distribution. Usually the cargo ships from China will transport product that they exported to Europe or Middle East at the same time with the product that they will export to Southeast Asian countries such as Indonesia.

During the transshipment in Singapore, the cargo ships will unload containers with destination to Indonesia. The containers of garlic and salt from China will be shipped to Indonesian ports by using smaller ships as Indonesia is not able to take such container ships due to the depths of the ports.

Kuala Namu Airport Aerotropolis Concept Designed By USA Expert

13 May 2014.

Medan. Angkasa Pura II as the operator of Kuala Namu airport, in North Sumatra, Indonesia, said that the ‘aerotropolis’ concept for the airport was designed by a citizen of Unites States of America (USA). This issue was brought up by the Public Relation of Kuala Namu airport, Bambang when he was contacted on Monday (12/5).

According to Bambang, the concept had been approved by the government. "It was being designed by a USA citizen, and the concept had only been implemented by several countries. I will give you the details tomorrow," Bambang said.

As reported previously, the Management of Kuala Namu airport, Angkasa Pura II, planned to fly the Head of Villages in Beringin and Pantailabu sub-district, Deliserdang to Singapore. They will be visiting Singapore on a Benchmarking activity at Changi Airport. This activity is part of the development of Airport City or ‘Aetropolis’ Kuala Namu.

Bambang added that the ‘aerotropolis’ will be built just like a city, whereby there will be entertainment venues, malls, hotels that will be integrated and it will be developed around the airport.

"On the development side, Angkasa Pura had full rights to determine on the development process. The local government will support them on the permit issue," Bambang said.

He believed that the implementation of ‘aerotropolis’ concept will affect to the economy development. On the other hand, the people of Beringin and Pantailabu sub-district questioned Angkasa Pura II's intention to bring every Head of Villages to have a comparative study in Changi Airport in Singapore.

Erikson (45 years old), citizen of Durian village, Pantailabu sub-district hoped that the visit to Singapore is not a form of gratification.

He hoped that after the visit, the Head of Villages will still protect the people's importance.

"It is very important for the Head of Villages to keep protecting the villagers and to help the people in working at the airport. We had been facing difficult times in working at the airport. The Head of Villages must be brave to bring this issue to Angkasa Pura," he said.

Sumatra Electricity Condition Is Far Worse Than Java

16 May 2014

Jakarta. Blackout that happened in Jakarta two days ago due to problems with the Muara Karang Gas and Steam Power Plant (PLTGU) had annoyed people in Jakarta. But this condition is still far better than the condition in Sumatra.

According to the Operational Director of PLN for Sumatra, Java and Bali, Ngurah Adnyana, the electricity condition in North part of Sumatra faced a deficit of 150 – 200 megawatt (MW) everyday, this should receive serious attention. Blackout happens every day.

“The condition in Sumatra is far worse than in Java. In North Sumatra the electricity deficit is 150-200 MW. The public will not face it. Only those with power generators will face blackouts. So the condition is much worse that in Java,” Adnyana said to detikFinance on Tuesday evening (13/5).

So what had PLN done? Adnyana said that PLN had rented 150 MW power generators to help the electricity demand in Northern part of Sumatra. But this issue had not solved the electricity crisis.

There are plan for BUMN (State Owned Enterprise) to build electricity transmission to transfer electricity from Southern part of Sumatra that had surplus of energy to Northern part of Sumatra.

Adnyana said that the transmission project was late as local citizens did not allow the usage of their land for the development of transmission.

“Our plan is to build a project similar to Java-Bali transmission. In Java, the power plant in Surabaya could transfer the electricity to Paiton. We also wanted to build similar project like that,” Adnyana said.

He said that to support the economy of Indonesia, the government must prepare good infrastructure including electricity. “Infrastructure had to be prepared and it requires investment,” he said.

Consumer Protection Agency in Medan (LPKM) Refused Increment of Kuala Namu Airport Tax

19 May 2014.

Medan, North Sumatra. The Consumer Protection Agency in Medan Medan (LPKM) refused the increment of passenger service charge (PJP2U) or usually known as airport tax in Kuala Namu International Airport that was planned by PT Angkasa Pura II on 19 May 2014 as it will be a burden to the consumer.

“The increment of airport tax will be a burden to the consumer, especially those from middle lower economy class,” the Head of LPKM K Anwar, SH, M.Si, on Sunday (18/5).

According to him, although PT Angkasa Pura II had the authority to increase the airport tax tariff but they should consider the people’s financial condition.

He said that management of Angkasa Pura II should conduct a study that involves the local government and consumer agency to understand the people’s respond so that they could answer to the people’s complaints.

Anwar said that not every passenger that departed from Kuala Namu airport will agree with the new airport tax that Angkasa Pura II set for domestic flight for Rp. 35,000 to Rp. 60,000 per person.

He said that not every passenger that left from Kuala Namu airport came from decent financial status.

He said that air transportation had been the main alternative for transportation to the people either for domestic route or international route.

Therefore, they urged PT Angkasa Pura II to re assess their decision to increase the airport tax tariff for Kuala Namu airport. “If the airport tax was implemented without taking into the consumer’s rights into consideration, we will proceed to take legal action for the consumers’ sake that had been neglected by PT Angkasa Pura II,” Anwar said.

Service Quality

Beside refusing increment of airport tax, they also criticized the quality of service and the price of products sold inside the airport.

“The price of foods and drinks within the airport are up to three times the normal price,” he said.

Anwar said that the operator of Kuala Namu airport should take into consideration the people’s purchasing power and providing cheaper food that is reachable to every element of the people.

Previously the Corporate Secretary of PT Angkasa Pura II, Daryanto said that the increment of airport tax will be implemented in three airports, they are Kuala Namu airport, Sultan Syarif Kasim II in Pekanbaru and H. A. S. Hanandjoeddin airport in Tanjung Pandan.

The airport tax in those three airports will be increased for return of investment during the development of the airport.

Although the airport had only been opened in mid-2013, the revision of tariff had been implemented.

He said that the increment of airport tax had been planned for some time as up to the moment, the new airport is still using the old tariff that was previously implemented in Polonia Airport in Medan.