TPP 3rd Edition

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ViewpointThe President Post www.thepresidentpost.comNovember 13, 20092

PLN electricity substation Photo: www.vivanews.com

The Indonesian YoungEntrepreneurs Associ-ation (HIPMI) Chair-man Erwin Aksa said

the power crisis could undermineefforts to accelerate national eco-nomic growth and prompt for-eign investors to flee the country

for other ASEAN countries suchas Vietnam and Malaysia.Aksa warned that the govern-

ment could miss the economicgrowth target if it failed to over-come the crisis soon. He said thatpower shortage could trigger in-vestors to relocate their plantsto countries that are consideredmore efficient and provide cheapand sufficient energy supplies.

He added that Indonesia ispoised to post strong growth

with the success of the presiden-tial election and its entry into theG20 as well as growing foreignconfidence in the countrys econ-omy.

It is unfortunate that this mo-mentum is marred by insuffi-cient electricity supplies both forhousehold and industrial needs,

Aksa said in a press release lastweek.

Aksa pointed out that variousproblems still impede investmentsuch as red tape, unneccessaryregulations, infrastructure, andlegal uncertainties that made in-vestors to think twice before do-ing business in Indonesia.

Insufficient energy supplieswould also make national indus-tries become less competitive as it

will stop them from meeting pro-duction target and thereby dis-rupt the distribution of goods.This will in turn swell the pro-duction cost that would eventu-ally be passed on to consumers,making it difficult for Indone-sian products to compete bothdomestically and overseas.

Foreign investors in the coun-try have also expressed their dis-appointment over the powercrisis. The Japanese business del-egation Kankeiren told IndustryMinister MS Hidayat in a meet-

ing on 9 November 2009 that thepower outage has disrupted pro-duction of Japanese companies.

The power deficit is hurtingthe industry because it is disrupt-ing production. If production isdisrupted, they cannot deliver ontime. They feel really disadvan-taged by this and I have apolo-gized to them, said Hidayat.

Textile producers in Jakartaand Tangerang alone will be fac-ing up to Rp1 trillion in losses ifthe government fails to overcomethe power shortage by the end ofthe year.

Power Crisis Feared to Slow Down Growth,Drive Away InvestorsThe power crisis that has been hitting the capital city in recent weeks is fearedto slow down the countrys economic growth and drive investors away, aprominent business association has warned.

By Vidya Dahlan

Apindo Chairman Sofyan Wa-nandi said businessmen in Jakar-ta are incurring up to Rp10 bil-lion loss each day.

To find solution to the prob-lem, Vice President Boediono hascalled a meeting between StateMinister for State Enterprises

Mustafa Abubakar, state electric-ity power company PLN Pres-ident Director Fahmi Mochtarand Energy and Mineral Re-sources Minister Darwin ZahedySaleh.

During the meeting, Boedionoasked PLN directors to quick-ly respond to the publics com-plaints over insufficient powersupplies. He also apologized tothe public for the inconvenienceand vowed to do his best to over-come the crisis.

Energy and Mineral ResourcesMinister Darwin Zahedy Salehcalled on PLN to be more trans-parent regarding the blackoutrotation in Jakarta and the sur-rounding areas.

Rotating blackout in the shortterm is unavoidable but we will

work hard to prevent this fromrecurring, he said.

PLN Chief Fahmi Mochtar

said he expects to overcome theenergy supply deficit by the firstweek of December.

The Cawang Baru electricitysubstation exploded on Sept. 29after fire razed two output trans-formers. Police are still investigat-ing the cause of the fire.

The state utility company iscurrently fixing its infrastructure.PLN has ordered for two gas in-sulated lines (GIL) from Franceand Japan and bought electricityfrom Cikarang Listrindo, BekasiPower Jababeka and Argopantes.

For the medium-term solu-tion, PLN needs to strengthenthe network structure in Jakartaand its surrounding areas by bol-stering the capacity of its substa-tions. The program is estimatedto cost about Rp5.6 trillion andPLN has allocated Rp800 billionof its own funds to finance theproject, with the remaining sup-

plied by the government and Rp3trillion from export credits.

SOE Minister Abubakarthreatened to take disciplinaryaction if PLNs management failsto address the problem in onemonth. He said the disciplin-ary actions would vary, with theharshest being demotion. How-ever, the minister promised to re-

ward those who meet the dead-line target, including a bonus inthe form of promotion.

Meanwhile, Japanese giantsMitsui & Co. Ltd. and Marubeni

Corp. have expressed interest inconstructing two power plants tohelp the Indonesian governmentaddress the electricity deficit.

Industry Minister Hidayat saidMitsui plans to build an 800-megawatt power plant in Paiton,East Java, while Marubeni would

build a 600-MW power plant inCirebon, West Java.

He added the companies willbecome independent power pro-ducers (IPPs) and hoped that theprojects can start by the end ofthis year.

Meanwhile, PLNs thermalpower plant (PLTU) in Labuhan

Angin, Sibolga, North Sumatra,will also start operation at the endof this year.

PLN director for outside Java-Bali distribution networks, Mur-taqi Syamsuddin, said that the2x115 MW PLTU Labuhan An-gin would increase the volume of

The power deficitis hurting theindustry becauseit is disruptingproduction. Ifproduction isdisrupted, theycannot deliver ontime. They feelreally disadvantagedby this and I haveapologized to them.

M.S. HidayatIndustry Minister

Disciplinary actionwill be taken, ifPLN managementfailed to addressthe problem inone month. Thedisciplinary actionswould vary, withthe harshest beingdemotion.

Mustafa AbubakarSOE Minister

Rotating blackoutin the short termis unavoidable butwe will work hardto prevent this fromrecurring.

Darwin Zahedy SalehEnergy and MineralResources Minister

We expects toovercome theenergy supply deficitby the first week ofDecember.

Wimar Witoelar

Power shortagecould triggerinvestors to relocatetheir plants tocountries that areconsidered moreefficient that providecheap and sufficientenergy supplies.

Erwin AksaChairman of Indonesia YoungEntrepreneurs Association (HIPMI)

electricity supply in North Suma-tra.

This is an addition to anoth-er 105-MW power plant whichis also expected to be operated inthe same year, he was quoted assaying by Antara.

He said that the additionalpower supply will be able to over-

come power outage in North Su-matra, although the electricitysupply is actually still not suffi-cient.

Murtagi said in February nextyear, the 2x90 MW Asahan Ihydro power plant (PLTA) wouldalso be integrated into the NorthSumatra electricity power distri-bution network system.

The other one, namely thePLTU Bangkalan Susu, whichis part of the 10,000 MW powerproject, is also expected to comeon stream.

Japanese giants Mitsui & Co. Ltd. and MarubeniCorp., have expressed interest in constructing twopower plants to help the Indonesian government

address the electricity deficit.


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The President Postwww.thepresidentpost.com November 13, 2009 3

Opinion

I

t needs to steer the coursefor the countrys security,defense, political develop-ment and foreign policy.

Indonesias foreign policy affectsalmost every aspect of our dai-ly lives. The prices of consum-er goods, job creation, and sup-ply of gasoline, to mention just afew, are subject to how we inter-act with the rest of the world.

As an instrument to promoteand articulate our national inter-ests abroad, our post-2009 elec-tion foreign policy must be builtupon pragmatic, realistic and ra-tional thoughts. These should betranslated into a foreign policyagenda oriented toward overcom-ing our domestic problems. Thus,the new foreign policy team mustunderstand the importance of in-ternational links with regards tothe search for solutions to our do-mestic problems.

The foreign policy agendamust cover the wide spectrumof our national and international

interests; it should be able to ac-commodate the current and fu-ture needs of our country and avariety of interests. That is to say,the future foreign policy agendamust reflect the national com-mitment to tackle effectively ourdomestic problems and promotelong-term interests. But such apolicy agenda is reliable, accept-able and qualitatively good only ifit is comprehensive in scope, real-istic and modest in its objectivesand reflects the countrys long-term needs.

What the new governmentneeds beyond 2009 is perhaps astronger sense that what happensinside the country, as well as inour immediate region, affects ourdestiny too. Thus, our foreignpolicy beyond such a timeframeshould not only demonstrate ourpolitical existence and credibil-ity in dealing with national and

international problems, but alsoour commitment to continuallybe a part of international collab-oration in establishing a more se-cure and stable international en-vironment. Significant policyinitiatives on the regional as well

STRENGTH, CAPACITY AND CREDIBILITY:

Indonesias Foreign Policy 2009-2014

on the global level have been tak-en by the government in the pastfive years.

But a more proactive and wellthought out foreign policy shouldbe initiated if Indonesia is to becontinually seen as meaningful,both strategically and political-ly, for the stability of its imme-diate region and the globe. It is

therefore imperative for the newto formulate a new foreign policyin such a way as to help promotedomestic political stability andstrengthen our international po-sition. Therefore, the foreign pol-icy of our new government mustbe as adaptive as possible to thechanged external environment as

well as unpredictable events.

Foreign policy challenges donot arise in five-year cycles. Ev-ery administration inherits prob-lems it must manage. Ours is nodifferent. We have a host of unre-solved national issues which haveto be addressed immediately by

way of collaborating with othermembers of the international so-ciety.

We should not be too compla-cent with what we have gainedfrom the positive image withinthe international community, but

rather show confidence in our ap-proach to global problems thatcould have immediate and long-term impacts on the stability ofthe country. It is especially im-portant for Indonesia to remainpragmatic but cogent in its for-

eign policy. As our foreign policychallenges are set to become evenmore enormous in the future, In-donesia needs to make constantadjustments to reflect the realitiesof tomorrows challenges, includ-ing on domestic, regional andglobal scenes. What must remainunchanged is Indonesias interna-tional engagement. Indonesias

membership in G20 is a clear re-flection of the countrys attemptto be continually part of the glob-al collaboration in solving globaleconomic problems.

It is against such a backgroundthat the new government shouldsubscribe to a foreign policy thatbrings hope and light to pertinentpolicy areas. The economy is def-initely one of them and perhapsalso health, education, food andenergy security. The new govern-

ment must draw a clear plan onhow to spread prosperity and se-curity around the world, often re-ferred to as a free and active for-eign policy.

With the increasing complex-

ity of international relations andthe severe problems we mightface in the international arena inthe next five years, it is perhaps

wise to remind the new govern-ment of the nature of change thatsurrounds us, in the sense that ina rapidly changing and interde-pendent world the separation ofnational and international affairs

is becoming blurred if not prob-lematic.A more severe global financial

crisis and a serious impact it mighthave on the countrys stability is

bound to slow, if not halt, the ex-ecution of our national econom-ic programs already in place. Itis therefore highly important forthe new administration to reallytouch upon the strategic issues inour foreign policy in a way that

will help solve the countrys eco-

nomic problems, strengthenedits international standing andensure that Indonesia would notbe follow but lead changes. Theessence of such an assumption isnational interest because of theconsiderably close link between

stated national goals and changesin the international milieu.

Leadership in foreign policy isimperative. It means more thanresponding to current global eco-nomic crisis and problems of theday. This leads us to the stagethat the next governments for-eign policy team would need tocraft a strategic plan in anticipat-

ing the problems the country willface down the road.

Herein lies the importance ofidentifying strategic issues in our

foreign policy in order for thenew administration to deal com-prehensively with Indonesias ex-ternal relations in the next fiveyears. The next administrationshould be aware that the greaterregional and global complexitiesof the 21st century demand stra-

tegic, outside-of-the-box think-ing.Strategic issues are strategic by

nature and have a major impacton the course and direction ofthe countrys international rela-tions. It probably relates directly

The new government will definitely face more severe, if not new, challenges - bothdomestic and international - given the continued financial global crisis.

to one or more of our foreign pol-icys fundamental strategic ques-tions: what and to whom are wegoing to promote, and how willIndonesia in the next five yearscompete in a more severe strate-gic milieu.

The main programs of our for-eign policy referred to in the Mid-

term National Development Planyear 2004-2009 are the strength-ening of foreign policy and max-imizing Indonesian diplomacy;pursuing international coopera-tion to maximize opportunitiesand reaffirming the countryscommitment to maintain worldpeace. Assuming that the 2009-2014 program of our foreign pol-icy remains or at least continuesto reflect its basic ideas, it is not

wrong to suggest that strategic is-sues lies at the heart of that pro-gram.

Here are just some of the for-eign policy (related) strategic is-sues the new administration

would have to deal with:Democratic transition;Border diplomacy;Political history of a certainprovinces, specifically referredhere as the Papuan problem;Sustain international links so

as to better and effectively se-cure our resources abroad;Building a stronger shieldagainst forces of destruction.

The steps dealing with suchstrategic foreign policy issues lies

at the heart of foreign policy plan-ning, meaning that the new gov-ernment needs to design long-term strategic plan in the field of

foreign policy for the country tosurvive or what President Yud-hoyono describes as navigatingthe turbulent ocean.

There are still unresolved prob-lems to be addressed by the nextadministration. The foreign poli-cy of the new government cannotserve to protect the countrys in-terests and to strengthen its inter-national position unless the newgovernment is pursuing morestrategic, creative and forward-looking foreign policy goals.This is not an option but a strate-gic necessity if Indonesia is not tosink in the turbulent ocean.

At the time when we are high-ly praised by the internation-al community for our constantcontribution to maintaining in-ternational peace and stabilityand for our development towarda full-f ledged democracy, the for-

eign policy team of the new gov-ernment should demonstrate itsability to discuss convincinglyforeign policy and other Indone-sian-related international affairs.This helps the public to under-stand better how important it isfor the country to maintain inter-national links, both for the sakeof our economic recovery and tosupport our new administration,particularly at the time when weinternationally come under thespotlight due to our democraticprocess.

Indonesia is now an outwardlooking country eager to shaperegional and international or-der and intent on having its voiceheard. History has destined thecountry to lead; it needs the ca-pacity to lead be taken serious-ly. Indonesians want to see thecountry become a participant

with strong principles in worldpolitics.

Bantarto Bandoro is a Researcherof Indonesian Institute for Strate-gic Studies (IISS) and a Lecturer atPresident University

By Bantarto Bandoro

The main programs of our foreign policy referred to in the Mid-termNational Development Plan year 2004-2009 are the strengtheningof foreign policy and maximizing Indonesian diplomacy; pursuing

international cooperation to maximize opportunities and reaffirming thecountrys commitment to maintain world peace.


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The RegionThe President Post www.thepresidentpost.comNovember 13, 20094

On the day I wasabout to leave HongKong for Jakartain some time mid-

October, the citys major dai-lies reported in their front pag-es that the once British colonyhas 38,000 US-dollar million-aires whose combined net worthis US$181 billion.

In fact, the number used to behigher. As The Standard wrote,Hong Kong millionaires havebeen hard-hit by the financialcrisis, with their numbers fallingmore than 60%.

But, as Merrill Lynch pointedout on the same day, the averagenet worth of Hong Kong million-aires still tops the Asia-Pacific re-gion at US$4.9 million, with theaverage Asia-Pacific at US$3.1million and the global average atUS$3.8 million.

Meanwhile, China is reportedto have 139 US-dollar billionaires,one of whom is Wang Chuanfu,the founder of the company BYDthat makes rechargeable batteriesand electric cars. His net worth:US$5.1 billion.

Not bad at all for a business-man whose country only lastOctober celebrated 60 years as amodern republic.

Wangs feat is even more re-markable as it was only four de-cades ago that China, under par-amount leader Deng Zhaoping,introduced a hybrid economyof combining market capitalism

with the principles of commu-nism.

The decision by Deng provedto have far-reaching global im-plications, as China managed toemerge within a short period oftime as an economic and politi-cal powerhouse.

So strong is its economy; lastyears financial crisis that causeda global financial downturn hashad little effect on the country.

Bloomberg recently reportedthat by the end of the third quar-ter Chinas growth rate has al-ready reached 7.7%, not too farfrom its projected annual rate of8%.

Chinas statistics bureau has

disclosed that household con-sumption contributes 4% of thatfigure. The figure outpaced theaverage rate of any other coun-try, thanks to the Chinese gov-ernments quick response to theglobal crisis by unleashing a seriesof economic stimulus packages.

Just how pivotal the role of con-sumers in the nations economy iscan be gauged by the fact that

in one month alone (September)over one million cars were soldin China. If you factor in the saleof buses and trucks, the figure is1.33 million.

Not surprisingly, many eco-nomic experts are already pre-dicting that China will soonleave Japan behind and becomethe worlds largest economy after

the US. They vividly recall thatduring the period of 2003-2007the World Bank recorded Chinaexperienced double-digit growthfigures. In the first quarter of lastyear, in fact, the country also re-peated that fantastic feat as itsGDP reached US$4,3 trillion.

(The US and Japan last year re-corded GDPs worth, respectively,US$14.2 trill ion and US$4.9 tril-lion.)

But as China is all set to en-ter the full recovery phase, offi-cials are at the same cautioningagainst excessive growth in or-der to rein in inflation.

The countrys chief econo-mist at the state statistics bureau,

Yao Jingyuan, last week toldBloomberg that the focus shouldbe more on rebalancing and re-structuring of the economy nowthat its desired growth rate is as-sured.

Chinas foreign exchange re-serves of US$2.1 trillion (and stillincreasing at a rapid pace) has al-lowed it to embark on a glob-al buying and lending spree. Ac-cording to reports, China has

within the past decade spentUS$115 billion on foreign acqui-sitions. In 2008 alone the coun-try spent US$50 billion to buyforeign companies and lent Bra-

zils oil company US$10 billion.How does all this relate to In-

donesia?The situation is not so encour-

aging, actually, as Indonesianbusinessmen seem rather late inrecognizing Chinas potential asa market as well as a source offunds. But this does not includePT Bumi Resources, the nations

largest coal mining company interms of production and a mem-ber of the Bakrie Group that isowned by a former minister andnow chairman of the Golkar Par-ty, Aburizal Bakrie.

China Investment Corp., thecountrys investment arm, lastmonth agreed to lend US$1.9 bil-lion to Bumi mainly to help the

company refinance its debt.Bumi is also Indonesias largestthermal coal producers, while In-donesia is the worlds largest ther-mal coal exporter.

Last year, the international fi-nancial crisis caused the compa-nys shares to fall by about 90%.This year, with the gradual re-covery in the global economy,the companys shares are up near-ly 270%, far beyond the Indone-sian stock markets gains.

Another company that hasbenefited from the Chinese eco-nomic miracle is PT DayaindoResources International, which

in September signed a 10-yearcontract with the Chinese com-pany Guangdong Zhenrong En-ergy, requiring the former to sup-ply one million tons of coal a s of2012.

This is the second contract thetwo companies signed, the first of

which is in force for five years.Shipment commenced in Oc-

tober amounting to 125,000 tonsof coal, the companys corporatesecretary, Endang Wiijaya, toldKontan recently.

Shenzhen is a city of sub-pro-vincial administrative status insouthern Chinas Guangdongprovince, situated immediately

north of Hong Kong, from wherea 20-minute train ride brings youto one of Chinas most moderncities.

Its exciting and modern cit-yscape owes a lot to the vibranteconomy due to rapid foreigninvestment since the late 1970s,

when it was a small fishing vil-lage.

No one wanted to live here, as

the place was desolate and unl iv-able says Kenny Lai, an Indone-sian who became a Chinese cit-izen some four decades ago andnow manages the Hong Kong-based travel agency Kent Holi-days, told me.

Then the Chinese govern-ment sent in troops to work to-gether with the local people andturned the place into an embry-onic city that later developed intoone of the most modern cities inChina.

Foreign companies have sinceinvested over US$30 billion onfactories and joint ventures, mak-

ing it one of the fastest growingcities in the world. It is home tothe headquarters of numeroushigh-tech companies, and thesecond busiest port in mainlandChina after Shanghai.

Shenzhen was chosen by thelate Chinese leader Deng Xiaop-ing to be the first of the SpecialEconomic Zones (SEZ) in Chi-na. It was formally establishedin 1979, due to its proximity toHong Kong, to be an experimen-tal site for the practice of marketcapitalism within a communityguided by the ideals of socialism

with Chinese characteristics,Kenny recalls.

The concept proved success-ful and encouraged the Chineseleadership to further open up thecountry and continue economicreform.

Shenzhen (population: ninemillion) is ranked fourth in GDP

among mainland Chinese cities,and in the 1990s was known asa city that builds one high-risea day, one boulevard every threedays. The skyline abounds withat least 13 buildings with a heightof over 200 metres, including theShun Hing Square, the ninthtallest building in the world.

Taiwans largest company, HonHai Group, has a manufacturing

China:A Truly AsianPowerhouse

plant based in Shenzhen whichmakes most of the iPods, iPhonesand notebooks for Apple Inc.

Lenovo, the Chinese conglom-erate that bought the person-al computing division of IBMin 2005, manufactures its line ofThinkPad notebook computersin Shenzhen.

If that is not enough to impressyou, the Sichuan TengzhongHeavy Industrial Machinery isset to take over General Motorss(GM) Hummer SUV brand forUS$150 million.

Meanwhile, the second tallestbuilding in Shenzhen is SEG Pla-

za at a height of 356 meters.Shenzhen also has some of thelargest public projects in China.The International Trade Cen-ter, built in 1985, was the tallestbuilding in China when built,and the aforementioned ShunHing building was also the tall-est in Asia when it was built (nowstill the tallest steel building inthe world).

The Macau Special Adminis-trative Region is one of the twospecial administrative regions ofChina the other being HongKong and thrives on industriessuch as textiles, electronics andtoys, and tourism, making it oneof the richest cities in the world.

Situated 60 kilometres south-west of Hong Kong and 145 ki-lometres from Guangzhou, itborders the Zhuhai Special Eco-nomic Zone in mainland China.

The clothing industry hasprovided about three quarters ofexport earnings, and the gam-ing, tourism and hospitality in-dustry is estimated to contributemore than 50% of Macaus GDP,and 70% of Macau governmentrevenue, says Kenny, who accom-panied me to Macau the formerPortuguese colony.

The World Bank classifies

Macau as a high income econo-my and the GDP per capita of theregion in 2006 was US$28,436.Its tourism sector is booming,

with 9.1 million visitors in 2000,rising to 18.7 million in 2005and 22 million in 2006.

In 2007 the figure reached24 million visitors, as Indonesia,

which is endowed with naturalbeauty, exotic culture and upscaleresorts, struggles to attract sevenmillion foreign tourists.

In 1962, the gambling indus-try made its entry under a gov-ernment-issued monopoly licenseby tycoon Stanley Hos com-pany. The monopoly ended in2002, and with the opening ofthe Sands Macau, the largest ca-sino in the world in terms of totalnumber of table games, in 2004and Wynn Macau in 2006, gam-bling revenues from Macaus ca-

sinos were for the first time great-er than those of Las Vegas (eachabout $6 billion), making Macauthe highest-volume gamblingcentre in the world.

Now, 16 casinos operated inMacau, making it an industry inits own right.

But that is not Macaus onlycharm, as what is known as theold part of the city clean and

Photos:Chinas infrastructure takes1.center stage as the countrybuilds its economy.Consumer spending level in2.China is among the highest inthe world.Oce buildings rise in every3.corner of Chinas major cies.Shenzhen features their4.version of Miniature IndonesiaPark (TMII)Macau is a good example5.of how cies preserve theirheritageThe Venean is a hotel6.cum casino with classicalcharacteriscs

Editors notes:President Post contributor Taufik Darusman last month

visited Hong Kong, Shenzhen and Macau in a blitz five-dayvisit that left him very much impressed with Chinas rapideconomic progress.

It was his first visit to China which led him to the be-lief that Indonesians have much to learn from their north-ern neighbors in terms of human resolve, work ethos and dis-cipline.

The following are his general impressions from the (very)short visit to what many have predicted will soon overtake Ja-

pan to become the worlds second most powerful economicpower after the US.

1

2 3

54

6

well-maintained is a tourist at-traction in its own right. Indeed,it could be a model for municipalofficials of, for example, Jakartaand Semarang, to copy in theirnever-ending but failed quest to

preserve their cities respectiveheritage.Indeed, Macau is not just

about business only but also cul-ture. And that, perhaps, sums upsuccinctly what the Chinese are:a people with natural business in-stincts wrapped under a remark-able culture and now entering themodern age in which commercetakes center stage.

Indeed, Macau is not just about business onlybut also culture. And that, perhaps, sums upsuccinctly what the Chinese are: a people with

natural business instincts wrapped undera remarkable culture and now entering the

modern age in which commerce takes centerstage.

All photos by Duta Images


5/16


Maritime

Sunda Kelapa Waterfront Proposed Plan Image: URBANE Indonesia

Every nation has the right tomaintain its culture. It is alwaysassociated with the preservationof identity, personality and noblecharacter of a nations ancestors.

In the context of the preserva-tion of maritime history of theRepublic of Indonesia, the na-tions cultural right is related toefforts to maintain dignity ac-cording to the mandate of the

founding fathers.In fact, this has its roots in cul-tural values and practices of theKingdom of Sriwijaya, the Ma-

japahit Empire as well as Pa-sai, Goa Talau, Ternate, Demak,Cirebon, and many more. In-donesia used to consist of manykingdoms and historical relicsare prevalent, a testimony to thegreatness of the nations past.

Now, behind every nations vi-sion of development emerges anew phenomenon, emphasizingthe need to uphold human (cul-tural) rights. This is apparent inalmost every corner of the globe.

Globalization is now a fact oflife in human civilization. Na-tional borders are being slowlytorn down as if no border shouldexist to separate even big nations.

Amidst that situation there nowemerges an aura of competitionfor world status. Nations com-

pete against each other to retaintheir world status by strength-ening their respective competi-tive positions. This is part of theirsurvival strategies.

But the simple historical factis that globalization will in turngive birth to national pride, asthe rise of the spirit of patriotismin Asia, Europe and America at-tests.

ASIAN PHENOMENONDuring the early part of Japans

modernization drive, known asthe Meiji Restoration, the nationopened itself up to the outside

world by sending off many of itsstudents to the United States.

Initially, this policy wasstaunchly opposed by the sho-gun samurais who maintainedthat sending the younger genera-tion off to a foreign culture wouldresult in the degradation of Jap-

anese cultural values, and thiswould in turn weaken Japans na-tional resilience.

Katsumoto, a patriotic shogun,committed suicide while return-ing his samurai to the emperorin protest against the policy. Herefused to take part in a move tooverthrow Japans dignity and na-tional identity through the MeijiRestoration.

By Martono Yuwono

EUROPEAN PHENOMENONThe Japanese phenomenon

deeply affected global tenden-cies. In a different form after

Word War II, Poland came intobeing through the restoration ofnationalism in the aftermath ofthe collapse of the Warsaw Pactin 1960s. A similar situation oc-curred in England in the 1980s.

Under the spirit of British pa-

triotism, the country, long rec-ognized as a maritime power, re-built the London Dockland inorder to perpetuate the memoryof British maritime supremacy ofthe past. The British rule seven

waves, they say.Apart from the restoration of

London Dockland, there werealso the Albert Dock (in Liver-pool) as well as Black Country,Cardiff, Teeside, Trafford Park,and Tyne.

All these magnificent projectswere planned by Margaret IronLady Thatcher under a crashprogram marking the Decade of

Achievements 1980-1990.

AMERICAN PHENOMENON American history has perpet-

uated the memory of the res-toration of the Inner HarborBaltimore as a way to arouse pa-triotism in facing economic re-

cession in the 1970s.This was recognized as a suc-cessful project which tells of therevival of the American economy.It also was seen as the laboratoryfor the revival of states as it thenbecame the barometer of success.Not surprisingly, similar projects

Back to the Sea:Redefining the Spirit of Nation Building

emerged afterward in Port Vell,Barcelona, Kop van Zuid, Rot-terdam, Darling Harbor, in Syd-ney, Alloha Tower in Honolulu,Boat & Clarke Quay in Singa-pore, Minato Mirai in Yokoha-ma, and many others.

Twenty years later the patriot-ic spirit reemerged as marked bythe destruction of the Twin Tow-er but this was the work of terror-

ists that recognized no nationalboundaries.

In order to restore its imagein the aftermath of the 9/11 at-tacks, the United States rebuiltthe landmark at Ground Zerocalled The Freedom Tower, mea-

suring 1,776 meters, representingthe year of Americas establish-ment as a sovereign nation.

Then President George W.Bush launched the Patriot Act in2001 as a way to ensure non-re-currence of the tragedy.

All these phenomena teach usthat the spirit of nationalism isneeded as a last resort, an incom-

parable national asset to strength-en our national identity and char-acter and in the process ensuresour national dignity.

Development efforts based onpatriotism are needed to strength-en our resilience as a nation. Weneed such efforts to meet toughglobal challenges ahead.

UNIVERSAL PHENOMENONCultural right is a political

soft power to promote the strate-gic aspirations of a nation. Indo-nesia has the unparalleled moralstrength to preserve such rights.

As the largest maritime na-tion in the world, Indonesia has astrong social capital to foster self-confidence and optimism of thefuture.

The Archipelago Concept(Wawasan Nusantara) was bornfrom the experience of seven cen-

turies of struggle to build andmaintain the unity of the Indo-nesian Archipelago.

This has now been trans-formed into a spirit of nationalpower that is sustainable andlong-lasting.

I have been proposing the dis-

Cultural right of a nation is the right of every nation to maintain its culture. Itis always associated with the preservation of identity, personality and noblecharacter of a nations ancestors.

course to enhance awareness forthe spirit of going back to the seabecause we are an archipelago.Our nationhood is built on theconcept of a nation sitting on anarchipelago; this must be accom-modated as a grand strategy fornational unity.

CULTURAL RIGHTS APPROACHIn every development policy,

the maritime sector must be giv-en special emphasis because ofthe very fact that we are an archi-pelago. In the process there mustbe emphasis on the promotionand execution of cultural rightsas a moral force.

SUNDA KELAPA OLD HARBORThe position of the old port of

Sunda Kelapa is strategic in everysense of the wordit is a silent

witness to Indonesias long pa-triotic struggle to maintain prideand dignity.

The fort or castle of Bataviaand Fort Iacatra at the old har-bor need to be refurbished as pre-cious cultural heritage that storesmemories of many centuries ofIndonesias experience with colo-nial powers.

This includes four layers of work, the most prominent be-ing the fourth, which is the site

marking the liberation fromDutch colonialism. It is aboutthe memory of Indonesian inde-pendence fighters attacks on theCastle of Batavia during whichtime the commander of the Cas-tle, Jaan Pieterzoon Coen, died.This is also the place where Su-karno landed to prepare for theIndonesian struggle for indepen-dence.

I would propose restoration ofall historical sites to rekindle thespirit of patriotism from Sabangto Merauke, thereby making In-donesia a country with a patriot-ic belt of historical struggle thatserves as a wake-up call for the

nation to return to the sea.Indonesia is indeed a maritimenation. It has been so since manycenturies ago; we need to givemore emphasis to development ofthe maritime sector, including allthe cultural values that link ourmany islands into a chain of har-mony.

We need to realize the mandateof our ancestors to elevate Indo-nesia into a global maritime pow-er. For this, our motto remainsthe same: Jalesveva Jayamahe (onland we are the winners; at sea weare the victors).

The Phinisi Ships at Sunda Kelapa Harbor

In everydevelopment policy,the maritime sector

must be givenspecial emphasis

because of the veryfact that we are anarchipelago. In theprocess there must

be emphasis onthe promotion and

execution of culturalrights as a moral

force.

Our nationhood isbuilt on the conceptof a nation sittingon an archipelagoso this must beaccommodated asa grand strategy fornational unity.

Martono Yuwono


6/16

The EconomyThe President Post www.thepresidentpost.comNovember 13, 20096

In its quarterly report ofSeptember 2009 on theIndonesian economy, the

World Bank mentionedthe Clearing Skies of the coun-try. As the report states, Indone-sia has made a solid recovery andhas gained steam following theturbulence at the start of the year.This trend of gradual recovery isprojected to continue into 2011.

ADB (Asian Development Bank)also states that Indonesias econ-

omy is edging up while other fi-nancial institutions also predictbetter years for the country.

The reasons of Indonesias solidrecovery (compared to many oth-er countries) are, among others,as follows:

Domestic demand and con-sumption remain robust al-though prices have increased.The large domestic market hasremained active, which impliesthat domestic purchasing pow-er has not been affected by theglobal downturn.The banking sector is generallyin good health; in many coun-tries, especially in the UnitedStates, more than 100 bankshave collapsed and needed tobe bailed out, costing trillionsof dollars. There was only onecase of failure in Indonesia,namely Century Bank.

At the beginning of the crisis

Indonesias stock market suf-fered big losses due to hugeoutflow of funds. But soon itrecovered and progress in fi-nancial markets is takingplace. Portfolio and direct in-vestments have returned.Government and private sectorspending is supporting growth.Stimulus programs in the areaof infrastructure are on track,but they face difficulties dueto, among others, land clear-ings which are often rejectedby local people.Lately the improved external(international) environmenthas had a positive impact onthe countrys growth, in partic-ular in the area of trade. Thisis an important developmentas the world needs to be backon track.

These factors contribute to the

rise of the Indonesian economy.But it should not be forgottenthat Indonesia has one importantasset aside from sound econom-ic policies, namely, the philoso-phy of ketahanan nasional (na-tional resilience) which has keptIndonesia afloat since its inde-pendence 64 years ago. Peoplesresilience, particularly in the ru-ral areas is remarkable.

Indonesias resilience come tothe fore at times when the coun-try is hit by disasters or in timesof crisis. It is amazing to note thatin the wake of the recent WestSumatra quake, President BarackObama cited Indonesias resil-ience in overcoming critical situ-ations. This is quite an encour-agement to the government and

By Atmono Suryo

people of Indonesia.In the past few years Indone-

sia found itself in a crisis cycle.Natural disasters continued tohit parts of the country: from the

Aceh tsunami to the Yogyakarta,Sukabumi and Sumatra quakes.

In the area of economics was

the Asian financial crisis of1997/98 which started in Thai-land to the present global reces-sion commencing in the UnitedStates.

Despite all the hardships thepeople managed to withstandthem and continued with theirdaily lives. The fact that thecountry continues to struggle

and grow shows that it, especiallyin rural areas, still retains a highdegree of resilience. However, inthis modern world marked bydifferent lifestyles and differentdogmas, the old philosophy of re-silience is easily forgotten.

Only senior citizens and peoplein rural areas still recognize theold philosophy of maintainingnational resilience. Such philoso-phy is needed to keep the countryalive in times of hardship; to de-velop the right mindset and thestrong spirit (which is now lack-ing) to move the country aheadin this competitive world.

Good ratingDespite its many challenges,

Indonesia is rated (16th) by theWorld Bank among the 20 larg-est economies in the world interms of GDP. In terms of poli-tics the country is the third dem-ocratic country after the Unit-ed States and India. In the areaof global policies the country has

been chosen to be in the G20 andamong emerging countries it is inthe Top Ten with BRIC (Brazil,Russia, India and China as thecore countries). Now, Indonesiaand South Africa are set to be-come a part of BRIC.

These are positive develop-ments which take the country to

a highly respected place in inter-national economic and politicalforum.

DOMESTIC CONSUMPTIONIt seems that never before was

consumption regarded as a plusfactor but more as a minus one,reducing our wealth or our as-sets. It is better to safe than to

consume as the people in Asiausually argue. But, presently theconsumption factor can be ofcritical importance to the coun-trys growth.

To cope with the global crisis itis strongly recommended by the

G20 to work out stimulus pro-grams to increase global demandswhich, in fact, mean to increaseworld consumption and consum-ers spending.

In the case of Indonesia, do-mestic consumption continues togrow though this is not the casefor the poor. On the other hand,in urban areas and in big cit-ies peoples spending is amazing.The impact of world recession onconsumption is hardly felt in thiscountry. This in turn is stimulat-ing economic recovery during thefirst part of 2009.

As can be seen in the graph, In-donesias domestic consumptionhas supported the services sec-tor which has increased at high-

er rates than the industrial sec-tor, agriculture and mining. It israther unfortunate that the threesectors are not growing as theyshould, as they represent strategicand real sectors of the economy.These three sectors are importantfrom the point of view of produc-tion, exports, employment and,

most importantly, contributors tocentral and regional governmentrevenues.

The term domestic consump-tion refers to the private and pub-lic (government) sectors, withthe private sector consisting ofthe peoples and business sectors.Their spending power has stim-ulated growth, preventing thecountry from being incapacitatedby the global downturn. In oth-er words, Indonesias resilienceis, for the greater part, supportedby the peoples purchasing pow-er and small and medium enter-prises.

As shown by China and India,large populations can be a greatasset. These countries and othercountries in Asia, including In-donesia, are now considered to bethe driving force to pull the worldtowards recovery and growth. For

that matter, it is important for In-donesia to retain the peoples con-fidence and to increase their pur-chasing power.

Domestic demand and con-sumption are strong, retail andvehicle sales, in particular motorcycles, are going up. Soon com-puters will be found everywherein the country. Progress is beingmade in this country, but it is notspread evenly. The upper class isswimming in wealth but the verypoor are suffering.

One weakness of globalizationis that the problem of disparitiesis increasing, not only at the in-ternational level but also at thedomestic level. This is causingenvy among the people, which

The Skies are Clearing

in turn brings social unrest. Theold theory of trickle-down effectis not working. There is the need

for improvements in our devel-opment strategies by giving pro-poor policies high priority.

MACROECONOMIC INDICATORSThe world economy will start

to approach the normal lev-els of growth in 2011. Indone-sias economy is also expected toapproach the potential levels ofaround 5.4% in 2010 to around6 to 6.5% in 2011. The following

World Bank projections on Indo-nesias macroeconomic indicatorsare presented below to serve as acomparison to the governmentsindicators.

As can be seen in the table, sev-eral points of growth are:

GDP growth is expected tocontinually increase, distrib-uted equally in agriculture,industry, and services. From2009 to 2011, GDP growth isprojected at 4.3%, 5.4%, and

6%. Nevertheless, this is stillbelow the average level of na-tional GDP growth before the1997-1998 Asian Crisis.Growth in agriculture is ex-pected to rise from 3% in 2009to 4.3% in 2011.Industrys growth is expect-ed to gradually increase from2.8% 2009 to 3.8% 2011.Growth in services will reach6.2% in 2009, 8% in 2010and slightly increase to 8.7%in 2011.

An important development towatch is exports. In 2009, the val-ue of merchandise exports wentdown significantly, but in 2010the skies are clearing up for ex-ports and are expected to reach9% and 11.4% in 2011.

It appears that the new govern-ment can look forward to goodyears ahead, at least in 2010-2011.

With the domestic economy ongood track Indonesia will havethe opportunity to take advan-tage of the recovery of the glob-al economy in the areas of trade,services and portfolio investmentas well as, hopefully, the inflowof foreign direct investment tostrengthen the real sector of do-mestic economy.

Indonesia has made a solid recovery and has gained steam following theturbulence at the start of the year. This trend of gradual recovery is projectedto continue into 2011.

Source: BPS, CEIC, and World Bank

FIGURE 1: IndonEsIas GRowth (annUal pERcEntaGE chanGE)

Source: BI via CEIC

FIGURE 2: CONSUMERS INDICATORS UP

Source: BPS via CEIC

FIGURE 3: SERVICES IS THE LARGEST CONTRIBUTOR TO GDP GROWTH

Contribution to YoY Growth

Annual Ye ar to December Quarter

2008 2009 2010 2011 2008 2009 2010 2011

1. Main economic indicators

Total consumption expenditure 5.9 5.2 5.0 4.9 6.4 3.2 5.4 5.2

Private consumption expenditure 5.3 4.5 4.7 5.0 4.8 3.4 5.1 5.1

Government consumption 10.4 10.8 6.2 4.7 16.4 3.8 7.5 5.8

Gross fixed capital formation 11.7 2.7 8.1 6.8 9.1 2.8 8.7 5.7

Exports of goods and services 9.5 -12.2 9.6 11.4 1.8 -4.0 7.7 13.6

Imports of goods and services 10.0 -18.4 13.2 11.7 -3.5 -7.0 9.3 12.9

Gross Domestic Product 6.1 4.3 5.4 6.0 5.2 5.2 5.0 6.1

Agriculture 4.8 3.0 2.8 4.3 4.7 2.3 4.4 3.5

Industry 3.7 2.8 3.4 3.8 2.6 3.5 3.9 4.0

Services 8.9 6 .2 8 .0 8 .7 7 .8 5 .8 8 .0 10.32. External indicators

Trade balance (USD bn) 10.2 16.9 11.9 11.2 n/a n/a n/a n/a

Merchandise export (values) 26.8 -11.4 10.4 19.8 14.9 -8.1 14.3 23.0

Me rc ha nd ise i mp or t (v al ue s) 41 .3 - 18 .6 1 3. 6 22 .8 26 .6 - 15 .5 1 6. 0 26 .5

Balance of payments (USD bn) -1.9 12.0 8.0 2.2 n/a n/a n/a n/a

Financial account balance (USD bn) -1.6 3.5 5.5 3.1 n/a n/a n/a n/a

3. Other economic measures

Consumer price index 9.8 4.7 5.6 6.5 11.5 2.4 6.8 6.0

Poverty basket index 11.6 5.7 5.7 6.3 13.5 2.9 6.4 6.2

GDP deflator 18.2 9.0 11.3 10.0 17.1 9.2 12.9 7.2

Nominal GDP 25.4 13.8 17.2 16.5 23.1 14.8 18.5 13,7

4. Economic assumptions

Exchange rate ( IDR/USD) 9,757 10,516 10,000 10,000 11,365 10,000 10,000 10,000

Interest rate (SBI, 1 month) 8.7 7.4 7.0 7.0 9.4 7.0 7.0 7.0

Oil price (Indonesian crude price)(USD/bl)

97.0 60.2 74.1 75.8 52.8 70.4 75.6 75.6

Major trading partner growth 2.1 -1.8 3.3 3.4 -1.6 1.7 3.0 3.6

Source: Asian Development Bank

IndonEsIas macRoEconomIc and FIscal IndIcatoRs (% chanGE UnlEss othERwIsE IndIcatEd)

Indonesia Stock Exchange Building Photo: www.skyscrapercity.com

Despite its many challenges, Indonesia is rated(16th) by the World Bank among the 20 largest

economies in the world in terms of GDP.


7/16


Education

As of this month, accord-ing to official statistics,more than 600,000university graduates

are still unemployed becausetheir qualificationsas stated ontheir diplomasdo not meet therequirements of various institu-tions they wish to work for.

Indonesian graduates low lev-el of employability is caused bymany factors. Firstly, the teach-ing-learning process in most

schools has for decades beencharacterized by teacher-centeredactivities.

Teachers impart knowledgeonto students and the latter ac-cept it even blindly, regardless of

whether or not it suits their needand environment.

As a result, the rhythm ofteaching is nothing more thanthe teacher being the speaker, thestudents the listerners; the teacheris active, but the students remainpassive.

Rote memorization dominatesthe entire teaching-learning pro-cess. Consequently, at the end ofthe process, graduates emerge asgatherers of data and informa-tion, but not as people who un-derstand and make use of theprocess of learning to suit theirorientation of study.

Secondly, changes in education

policy have been so frequent thatit is not easy to plan a child s edu-cation based on a clear vision. Forone thing, every child needsasof the day s/he enters elementaryschoolat least 16 years to com-plete undergraduate studies, butduring the period s/he will comeunder, and be influenced by, thepolicies of four government cabi-nets which could mean four dif-

SBY Government Moves to Create Job CreatorsBy Robert Pede

ferent people sitting in the chairof the Minister of Education.

If these four successive policy-makers execute programs under

a unified long-term plan, there wouldnt be a problem, becausethere will be consistency and clar-ity in the direction, emphasis, ori-entation, and priority of educa-tion policy.

The problem is, they usuallydont do so. Indonesias traditionis that whenever a new ministertakes office, s/he will almost cer-tainly introduce new policies and

refuse to carry on with previousprograms.

Because of frequent policychanges, the logical outcome is

that education output suffers alack of quality, market adaptabil-ity, and capability in adjustingto market needs. This is the rea-son why many university gradu-ates have difficulty finding a suit-able job.

The third culprit to blame isa tragic lack of synergy betweenschool curricula and actual needs

of employers. Universities and in-dustry do not commonly talk toone another. Universities dontknow what market and indus-trial needs are and industry lead-ers dont know what universitiescan offer. Only in recent yearshave there been scant attemptsto set up the so-called link-and-match schemes, but the resultsare still limited.

All these unhelpful situations

emerge from one source: wrongmethodology of education.In short, the longer Indonesia

holds on to such teacher-centerededucation, the bigger the numberof incapable graduates it will pro-duce only to lengthen the queuesof frustrated job-seekers.

The longer Indonesian schoolshold on to rote memorizationmethods, the fewer job creatorsthe nation will have.

The need of the hour todayaccording to education ana-lystsis not to produce more

job-seeking scholars, but to pro-duce scholars who can create jobsfor themselves and for others.

So, in essence what PresidentYudhoyono is trying to do is toturn Indonesian schools into in-stitutions which can empowergraduates to live as independentcitizens who can support them-

selves and in the process build abetter future for the nation.

With this in mind, Minis-ter Mohammad Nuh is work-ing hard to redefine the curriculafrom kindergarten to high schoollevel of education.

Even from kindergarten lev-el, children will be trained to becreative so that as they grow older

they will have the ability to comeup with new inventions and prac-tices that may benefit their futureand that of the society at large.

I want the Minister of Edu-cation to conduct an overhaul ofteaching methodology from KGto high school levels, so that it isthe students instead of the teach-ers who will be the center of ac-tivities at school, President SBYsays.

Entrepreneurial education is

needed now. Students must betrained to become creative andinnovative and not just to focuson results of the final exams, thePresident adds.

President SBY believes that ifentrepreneurial education can re-place rote memorization meth-odology, Indonesia will in thenot-so-distant future see newgenerations emerge as job cre-ators to strengthen the economyand society at large.

The good news is that the newdirection the President wantsschools to take is in fact in line

with the aspirations of Indone-sias private sector leaders.

Before making the remark re-cently, President SBY had in factreceived a letter from two pub-lic figuresJacob Oetama, thechairman of Kompas-Grame-dia Group, and Dr. Ciputra, the

chairman of Ciputra Group.The duo had urged the Presi-dent to give more emphasis onentrepreneurial education as a

way to boost Indonesias ability tocompete in the global market.

Ciputra, whose many schoolsspecialize in entrepreneurial ed-ucation, believes that an entre-preneur is a person who can turn

In a move that demonstrates his vision for the future, President Susilo Bambang Yudhoyono has instructed Minister of EducationProf. Mohammad Nuh to revamp the teaching methodology in Indonesian schools in order to empower graduates to become job

creators instead of job-seekers.

garbage into gold. Likewise, anentrepreneurial scholar is an in-tellectual who can create greatsources of income for himself as

well as for otherseven fromscratch.

The governments resolve to en-hance entrepreneurial educationis best understood in the remark

presented recently by the educa-tion minister: We want universi-ty graduates to emerge as part ofthe solution; therefore they mustbe empowered with entrepre-

neurial ability in order to reduceunemployment and poverty.

To realize this, the Ministryof National Education (MONE)has established at least 300 cen-ters for entrepreneurial studiesacross Indonesia. In 2009 thegovernment spent at least Rp100billion for this and the year 2010

will see a similar amount of fundbeing allocated for this project.The fund goes for both state-owned and private universities.

The government has includ-ed entrepreneurial study in thecurriculum of every state-owneduniversity so students are free totake it as either a major or mi-nor subject. In this way, studentsfrom non-economics facultiescan also learn to become entre-preneurs.

Given this big dream, a bigchallenge the government has toovercome is to provide a suffi-cient number of entrepreneurialteachers and empower them withfacilities and networks needed togroom Indonesias new genera-tion of entrepreneurs.

The Indonesian president maynot see the desired results duringhis term of office that will endin 2014, but the foundation andnew direction of education he hasnow laid down will mean a lot forIndonesias future.

The reason, observers say, isthat emphasis on entrepreneurialeducation will transform Indone-sian society in a very remarkable

way. And SBY will some day beremembered as Indonesias fa-ther of transformational educa-tion if he can push the endeav-or forward and make it a nationalmovement.

We want universitygraduates toemerge as partof the solution;therefore they mustbe empowered withentrepreneurialability in orderto reduceunemployment and

poverty.Prof. Dr. Ir. Muhammad NuhMinister of Education

Entrepreneurial education is needed now.Students must be trained to become creativeand innovative and not just to focus on resultsof the final exams.President Susilo Bambang Yudhoyono

The President Directorof PT Jababeka, Tbk,S. Darmono, recentlypaid a visit to his be-

loved son, President University,to deliver speeches to students,something that he does annual-ly since the university was first setup several years ago.

Top leaders, managers and lec-turers together with hundreds of

students attended the seminar.The seminar was divided intotwo sections, with two differenttopics for each batch of students.The first section was dedicatedto those who just became Presi-dent University students in Sep-tember.

As they have just started a whole new university life, PakDarmono had prepared a lecture

Think Big, Start Small,Move Fast

that they would not be able tofind anywhere outside PresidentUniversity: Learning to Win.

In his speech, Pak Darmonoemphasized that President Uni-versity is the land of opportuni-ties for students to become to-morrows leaders. However, he

added, the final result is up tothem.

Learning to be a winnermeans that students need to havethe will to learn and to achieve,

he pointed out.The first thing that students

have to achieve is knowledge, which can be obtained frombooks, lectures or other sources.

He told students stories onThe art of killing dragons andHands follow the mind to

open their minds on the virtuesof learning and achieving.

Learning always goes togetherwith doing, he said.

Furthermore, students also

have to build their own individ-ual characters to become lead-ers with K.A.S.H., which standsfor Knowledge, Attitude, Skills,Habits.

The second session was aboutHow to a Get Better Income,

which was for senior studentswho plan to undergo internshipsand are about to graduate.

Pak Darmono reminded them

that many universities in Indone-sia produce graduates that are notready to work. In contrast, Presi-dent University is committed toprovide students with jobs oncethey have graduated. However,they need to be well-prepared forthat.

To be prepared, he empha-sized, is to keep constantly inmind the issue of jobs aftergraduation.

Being well-prepared is not justabout learning from books andfollowing classes in ones ma-

jor but also to reach out to oth-er fields.

Do not wait until you areasked to do new things, PakDarmono said.

He also expressed his con-cern about Indonesian students

who seemed not as eager as theirChinese counterparts who work

while studying.He encouraged students towork and study at the same timein order to gain experience.

And while at work, studentsshould like and love their jobsso that they can learn more, hesaid.

On entrepreneurs, Pak Dar-mono stated that they are notborn, but made.

He shared his own experiencesand points of view on how to bea successful entrepreneur, sayingthat Think Big, Move Fast isthe motto of success. Accordingto Pak Darmono, an entrepre-neur is a professional who is ableto recognize opportunities to cre-ate new things and implement it.

An entrepreneur is also meantto be a lady/gentleman and a su-perman.

The answer to the question,How to Be a Successful Entre-

preneur, could be found righthere in this university, as studentsdo not just live and study in anacademic environment, but alsoright in the heart of the industrialzone, he said.

The seminar did really openstudents minds and inspiredthem to start thinking and choos-ing the right way to become to-morrows leaders.

Ialways say tovisitors fromChina thatIndonesia is

a very strong country inthis part of the world,she said during a recentvisit to the PresidentUniversity at Kota Ja-babeka.

Meanwhile, MorganStanley said Indonesia isready to become the fifthBRIC country, and pre-dicted that as of 2011 In-donesia will grow by 7%annually.

BRIC stands for Bra-zil, Russia, India andChina and is a term usedto refer to new industrialpowerhouses.

The Chinese ambas-sador added that Indo-nesia today accounts for45% of the populationin Southeast Asia and isthe strongest economyin the area, accountingfor about 41% of its totaleconomic strength.

With more than10 years of reform, weshould be very proudthat Indonesia is devel-oping steadily. When the

world was hit by the in-ternational financial cri-sis, Indonesia was still

able to achieve a positivegrowth of 4.5%, behindChina and India, she said.

She added that Indonesiahas every reason to be a strongdeveloping country in this re-gion, in fact in the world, dueto its large population, whichis number four in the world.

Indonesia is a VeryStrong Country

She also noted that education istaken very seriously in this coun-try as there are many excellent fa-cilities such as President Univer-sity.

She added that Indonesia alsohas an increasingly growing

role not only in South-east Asia but also in the

world as Indonesia is afull member of the G20,the group that deals withimportant issues such asthe international finan-cial crisis and climatechange.

On China-Indone-sia relations, the ambas-sador said it offers manygolden opportunities dueto the very long years ofrelationship between thetwo countries.

In recent years, espe-cially after 2005 whenwe signed the declarationon the establishment of astrategic partnership, ourrelationship has startedto soar very high.

She noted that bilat-eral trade between thetwo countries reachedUS$31.5 billion last year,a record high that is setto reach new heights dueto the vast potentials ofthe economies of bothcountries.

Last year, about 2,000Chinese tourists came toIndonesia but the am-bassador hoped to boostthe figure through jointefforts.

There are a lot ofgood places to see in thiscountry such as Bali, Jakarta,Surabaya, Medan, Manadoand many others, she said.

Meanwhile, both countriesare set to mark the 60th an-niversary of bilateral relationsnext year.

Furthermore, students also have to build their

own individual characters to become leaders withK.A.S.H., which stands for Knowledge, Attitude,Skills, Habits.

Chinas Ambassador to Indonesia, H.E. Mrs. Zhang Qiyue -has said Indonesia has a golden opportunity to develop and

that it is set to surge ahead in the coming years.

With more than 10 yearsof reform, we should bevery proud that Indonesia isdeveloping steadily. Whenthe world was hit by theinternational financial crisis,Indonesia was still able toachieve a positive growthof 4.5%, behind China andIndia.H.E. Mrs. Zhang QiyueChinas Ambassador to Indonesia

One of the founders of President University, Juwono Sudarsono Photo: www.dailytimes.com


8/16

8EducationThe President Post www.thepresidentpost.comNovember 13, 2009

8

Educators have wel-comed this plan asit proves the govern-ments seriousness in

upgrading the quality of human

resources and promoting nation-al equity in the sector of educa-tion.

The hundred-day period ac-tually began on November 1and will end on January 1, 2010.During the period the Ministryof National Education (MONE)

will make strenuous efforts to im-prove educational facilities, set upstrategic plans for the 2010-2014period, and conduct an overhaulof the system of education in or-der to contribute much more tonational development, says Min-ister of Education Prof. Moham-mad Nuh.

The following are the eightpriority programs being imple-mented by Minister MohammadNuhs office:

Provision of massive Internet1.connections at as many schoolsas possible;

Upgrading of the capacity of2.school headmasters and in-spectors;Provision of scholarships for3.talented high school studentsfrom poor families to enterstate-owned universities;Provision of special incentives4.for teachers in frontline and re-mote areas;

Adoption of a comprehensive5.2010-2014 strategic plan fornational education;

Adoption of guidelines for de-6.veloping national culture andcharacter;Overhauling of teaching-learn-7.ing methodology; and

Adoption of a synergy of pol-8.icies of the ministry of educa-tion and ministry of religiousaffairs on one hand and syner-gy with the need of institution-al employers on the other. Inthis way it is hoped that high

school and university gradu-ates will have a higher level ofemployability once they havecompleted their studies.

But what the SBY Govern-ment aims to do is more than justto launch the attractive political-ly-oriented measures. It actuallyaims to lay the right foundationfor what Minister Nuh refers toas the second chapter of Indone-sias educational reform.

The education minister is wellaware of the fact that in order topromote quality in education,key is to promote the quality ofteachers, followed by a focus on

ways to distribute teachers moreevenly across this sprawling ar-chipelago.

Under this, qualification ofteachers will be upgraded soteachers will have at least an S1(university degree) to be acceptedin any school. Teachers certifica-tion programa tight process toscreen professional teacherswillbe enhanced for the purpose.

In another development, Min-ister Nuh has made it clear thatthe government will abolish theentrance tests requirement forstate-run universities and will re-place this with an integrated sys-tem of evaluation that combinesthe results of exams conductedat lower levels and the results of

state-sponsored exams at the highschool level.This, educators say, is a good

maneuver to terminate com-mercialization of campus seatsby brokers and at the same timeprovide easier access for studentsfrom all walks of life to enroll atstate-run universities.

Minister Nuhs policy on thisissue represents a daring move to

By Robert Pede

simplify the procedures for en-tering university. This is why hesays, If we can make it simple,

why make it so complicated?But education observers say the

minister needs to work very hardto realize this idea given that therecruitment standards differ from

one university to another. Theminister believes that in simpli-fying the procedures, the country

will save a great deal of money.To students from poor families,

perhaps the biggest news today isthat the government will provide10,000 scholarships for generaland vocational high school stu-dents who are academically out-standing. This will be disbursedduring 2010-2012 academicyears, the minister says.

Prof. Mohammad Nuh is Indo-nesias first education minister tohave announced that there mustbe no discrimination betweenstate-run and private schools. Healso opposes discrimination intreatment of teachers in urbanand rural areas as well as discrim-

ination based on gender and pri-mordial considerations.

With all these important itemson his agenda, Minister Nuhis believed to be very well posi-tioned to deliver greater resultsthan what he saw during SBYsfirst cabinet.

His previous assignment asMinister of Communication andInformation (Com-Info) shouldhave given him all that is need-ed to bolster the performance ofIndonesian schools through uti-lization of the Information andCommunication Technology(ICT).

In fact, even when he was stillCom-Info Minister, he alreadyhad launched a pilot project toterminate isolation of Islamicboarding schools in Malang, East

Java, by providing broadband In-ternet connection which is nowvery useful for teachers, students,and even local residents.

As former rector of Surabaya-based Sepuluh November Tech-

President Susilo Bambang Yudhoyono has spelled out eight priority programsto be implemented in the sector of education during the first 100 days of hissecond term.

nology University (ITS), Prof.Nuh knows very well what to doto upgrade university output dur-ing his cabinet term.

Nevertheless, educators say that

the most difficult part of the SBYgovernments short-term programis how to set up a comprehensiveset of guidelines for building na-tional culture and character at atime when the nation has neitherthe precedent nor the clear visionon the very def inition of nationalculture itself.

In an address to an internation-

al audience attending the 10th an-niversary of The Habibie Centerin Jakarta on November 10, for-mer president Prof. B.J. Habibieacknowledged that it is very dif-

ficult to define what is meant byIndonesian culture as every eth-nic group has its own culture andtraditions.

Apart from that, Indonesiansociety is becoming increasing-ly exposed to globalization to theextent that there are hardly anymore barriers that could preventthe influx of cultural information

from every corner of the globe. All these foreign values affect

the behavior of Indonesian soci-ety, including students at all lev-els of education and the young-er generation at large. Therefore,the government is trying to set upsome kind of guidelines to pro-

tect the nations culture from be-ing overthrown by negative prac-tices.

We have yet to wait for theminister to provide further de-tails on this particular topic.Many would agree that this is asignificant part of the national

Government SetsFoundation for FurtherReform of Education

Provision of massive1.Internet connections at asmany schools as possible;Upgrading of the capacity2.of school headmastersand inspectors;Provision of scholarships3.for talented high schoolstudents from poorfamilies to enter state-owned universities;Provision of special4.incentives for teachersin frontline and remoteareas;Adoption of a5.comprehensive 2010-2014 strategic plan fornational education;Adoption of guidelines6.for developing nationalculture and character;Overhauling of teaching-7.learning methodology;andAdoption of a synergy of8.policies of the ministry ofeducation and ministryof religious affairs on onehand and synergy withthe need of institutionalemployers on the other.In this way it is hopedthat high school anduniversity graduates willhave a higher level ofemployability once theyhave completed theirstudies.

8 EuPriorityPrograms

But what the SBY Government aims to do ismore than just to launch the attractive politically-

oriented measures. It actually aims to lay theright foundation for what Minister Nuh refers to

as the second chapter of Indonesias educationalreform.

President University Graduation Day Photo: President University

character building measures be-ing undertaken by the SBY gov-ernment. It remains to be seen

whether this noble idea will makeany headway henceforth. But atleast the governments resolve totackle this long-neglected area is

worth applauding, educators say.


9/16

The President Postwww.thepresidentpost.com

Display until November 26, 2009 // No. 03 9BusinessKrakatau Steel to SignJV Deal with Korea`s Pohang

State-owed company PT Krakatau Steel willsign a joint venture agreement with SouthKoreas steel giant Pohang Iron and Steel tobuild a US$5 billion steel plant in the country.

Krakatau President Fazwar Bujang said thecountrys largest steel maker would take up to45% stake in the venture.

The US$5 billion plant will be built in its vastCilegon Industrial Complex, Banten, and is saidto boost Krakataus producon capacity to 3.5million tons a year from 2.5 million tons atpresent.

The deal is expected to be nalized by the end of the month, The JakartaGlobe reported.

Summit to Boost Tourism Investment

The Associaon of the Indonesian Tour & Travel Agencies (Asita) has saidtourism investment in Indonesia is set to grow aer the holding of last month`snaonal summit.

The investment in the tourism sector will grow but not as rapid as expected,Asita Vice Chairman for Jakarta Jongki Adiyasa said here over the weekend.

He said that signicant growth could be expected from certain tourismsectors such as hotels and MICE (meeng, incenve, conference and exhibion)programs.

The Asita chairman said he was convinced that the investment in the hoteland MICE sectors would grow signicantly in line with the improvement of thecountry`s economic business climate. Jongki told Antara that many investorswere waing for consistent ocial policies before going ahead with makingserious investments in Indonesia.

Bappenas: Economic Growth Ratese Re 6% i 2011

State Minister of Naonal Development Planning/Head of the Naonal Development Planning Agency(Bappenas) Armida S Alisjahbana has said that in 2011the government will step up economic growth to 6%.

She made the statement at a meeng between themedia and Bappenas in Bogor Friday. She said that theacceleraon in 2011 was made as the world economymay have been restored to normal, increasing exportsand investments. In the meanme, most economicobstacles may have been overcome in 2010, meengthe inial targets of the new government, so that in 2010 economic growth mayat least reached 5.5%, she said.

The minister further said that the acceleraon can be successful if no externalshocks occur such as the price of oil increasing up to US$160 per barrel.

Armida said she will focus on creang a synergy of naonal development aswell as intensifying synergy between the dierent regions.

Newmont, NTB Sign Equity Agreement

The regional government of West Nusa Tenggara (NTB) and PT NewmontNusa Tenggara (NNT) have signed a sales and purchase agreement (SPA) on the10-percent divestment of the company`s equity.

It was signed just now, NTB Governor Zainul Majdi told Antara last week.The signing of the agreement was carried out in Jakarta between Newoment

and PT Mul Daerah Bersaing, a joint venture between PT Daerah Maju Bersaingand PT Mul Capital Indonesia, a subsidiary of the Bakrie Business Group. DaerahMaju Bersaing is a joint venture rm of three regional governments, namelythe regional government of NTB, the regional government of West Sumbawadistrict and the regional government of Sumbawa district.

Zainul said that the value of the 10% SPA transacon was US$391 millionand was paid in cash, but Newmont agreed to provide an addional corporatesocial responsibility (CSR) fund amounng to US$38 million.

NNT is US mining company which mines copper and gold deposit in BatuHijau region, West Sumbawa district, West Nusa Tenggara province.

A total of 80 percent of the company s stake was controlled by Nusa TenggaraPartnership which consisted of 45% under Newmont Indonesia and 35% ofNusa Tenggara Mining Corp and Sumitomo of Japan.

Govt Sets Aside Rp1 trillionTo Revitalize Sugar Mills

The government is set to earmark Rp 1 trillion as inial support for therevitalizaon of sugar mills under a subsidized interest scheme, a minister said.

The subsidized interest scheme will allow sugar mill companies to obtaincommercial credits from banks, State Owned Enterprises Minister MustafaAbubakar said here last week, news media reported.

Mustafa said revitalizaon of other sectors, namely ferlizer and saltindustries, is also in the plan.

But we will pay relavely greater aenon to the sugar and ferlizer sectors,he added.

The minister said there are seven sugar factories under the coordinaon ofthe State Enterprises Ministry that needed to be revitalized by renewing theirequipment or rebuilding their factories. The aim of the ferlizer industry`srevitalizaon is to increase producon of urea and organic ferlizers, he added.

Economic growth dur-ing the quarter wascontributed in part by agood crop harvest sea-

son, as well as an increase in non-oil and gas mining production.The latter is probably related tothe rise in exports of coal (+27%

YTD) and iron ore (+21.4%YTD) during the year, as shownby customs trade data.

With regards to manufactur-ing industries, q-o-q growth wasslightly lower compared to thesame period last year. But this

was mostly due to a decline infood and beverages production,

which is probably the residual ef-fect following the legislative elec-tion campaigns in April.

Whats more important is thatoutput growth from high-valueindustries such as motor vehiclemanufacturing continues to rise.

Industries such as textiles, ce-ment and metals manufacturingalso show further recovery. Onthe other hand, these industriesextensively use imported raw ma-terials. As such, imports may con-tinue to rise, increasing the risk toa drop in the trade surplus.

Meanwhile, growth in theconstruction sector was surpris-ingly high but consistent with theimproved figures for domestic ce-ment consumption, along withthe year-on-year rise in fixed cap-ital investments on expenditurebreakdown (Chart 3).

A closer look at the expendi-ture breakdown shows that year-on-year household consumptiongrowth was marginally lower.The growth in government ex-penditure also slowed down dur-ing the quarter, as less was spenton goods and services spending.

The good news is on the in-

vestment side. Although thepace of fixed capital investmentgrowth was still lower comparedto pre-crisis (2008) levels, it hasstarted to rise on a year-on-yearbasis. Apart from increased con-struction activities, this was dueto rising purchases of machineryand vehicles. Nonetheless, mostof the capital goods were import-ed, which again underscores therisk to a drop in trade surplus.

POLICY IMPLICATIONS ANDMARKET SIGNIFICANCE

With year-to-date GDP growthalso at 4.2%, there is the possibil-ity that in the entire year of 2009the GDP will slightly exceed our4.3% forecast.

However, the 3Q09 GDPnumbers ared more or less in-line

with BIs expectations. Thus, wedont think todays numbers jus-tify any substantial change in the

BI rate outlook. Economic recov-ery remains on track, with infla-tion pressures so far remainingmuted and inflation expectationsstill rising at a manageable pace.Our view remains that BI willprobably raise the rates next year(Mar-10) as inf lation pressures re-emerge amid a spate of adminis-tered price adjustments (e.g. elec-tricity & LPG prices).

With implications on inter-est rates expected to be minimal,the GDP release may have a lim-ited direct impact to the bondand FX markets. Bond yield andFX movements currently seem

Broad-based Recovery on Track

By Helmi Arman

more correlated to global risk ap-petites and broad dollar trends.

And with the Fed recently hav-ing reiterated its resolve to keepinterest rates low, the dollar in-dex has started to decline again.This may provide support for therupiah in the near term; the IDRbond yield curve may see a paral-lel shift downward.

The writer is an economist atTreasury & Capital Markets, PTBank Danamon Indonesia, Tbk.

The economy grew by 4.21% year-on-year in 3Q09, faster than our forecastand prediction. Similar to 2Q09, employment-absorbing industries (excludingagriculture) remain on the path of positive growth.

Forecast*FY09

Actual3Q09

Forecast*3Q09

Consensus3Q09

2Q09 FY08

Real GDP (% y-o-y) 4.3 4.2 4.05 4.17 4.0 6.06

Consumption (% y-o-y) 5.1 4.8 5.0 n/a 4.8 5.3

Government (% y-o-y) 16.6 10.2 18.5 n/a 17.0 10.4

Fixed Investments (% y-o-y) 3.9 4.0 5.4 n/a 2.6 11.7

Net Exports (% y-o-y) 13.9 39.8 27.2 n/a 22.5 7.3

Source: CEIC, Bloomberg, *Danamon Estimates

Gdp by ExpEndItURE (% yoy)

Source: BPS, CEIC

CHART 1: INDONESIA GDP GROWTH, BY ExPENDITURES

Source: BPS, CEIC

CHART 2: INDONESIA MERCHANDISE TRADE

Source: BPS, CEIC

CHART 3: CEMENT CONSUMPTION, COMMERCIAL VEHICLE SALES,INVESTMENTS

Source: Bloomberg

CHART 4: IDR SOVEREIGN YIELD CURVE

G DP Con su mpti on G ov er nment F ix ed I nv estm en t Expor ts I mpor ts Domest ic D em an d N et Expor ts

1Q08 6.2 5.7 3.6 13.7 13.6 18.0 7.5 -1.7

2Q08 6.4 5.5 5.3 12.0 12.4 16.1 7.1 -1.9

3Q08 6.4 5.3 14.1 12.2 10.6 11.0 7.9 9.0

4Q08 5.2 4.8 16.4 9.1 1.8 -3.5 7.1 25.5

1Q09 4.4 6.0 19.2 3.5 -18.7 -26.0 6.3 12.1

2Q09 4.0 4.8 17.0 2.6 -15.5 -23.9 5.3 22.5

3Q09 4.2 4.7 10.2 4.0 -8.2 -18.3 5.0 39.8

Source: CEIC, BPS

Gdp by IndUstRy (% qoq) Source: CEIC, BPS

G DP Agr ic ul tu re M in in g &Quarrying

Manufacturing Utilities Construction Trade, Hotel,& Restaurant

Transport &Communication

Financial OtherServices

3Q07 3.7 8.6 -0.7 3.0 3.6 3.7 4.6 6.1 1.9 0.7

4Q07 -2.5 -23.8 0.0 -0.2 1.7 3.8 0.1 4.5 3.1 2.9

1Q08 2.4 19.2 -0.6 -0.1 1.6 -1.9 -0.1 1.4 1.9 0.5

2Q08 2.8 6.3 0.8 1.4 4.4 2.4 3.4 4.3 1.5 2.5

3Q08 3.7 7.2 1.9 3.1 2.3 3.2 4.9 4.5 1.8 1.1

4Q08 -3.6 -22.9 0.0 -2.5 0.8 1.9 -2.6 4.8 2.0 1.7

1Q09 1.7 19.8 -0.2 -0.5 3.6 -1.3 -4.8 2.5 0.8 1.3

2Q09 2.4 3.5 1.6 1.5 8.1 2.5 2.5 4.7 0.6 3.1

3Q09 3.9 7.3 5.1 2.8 1.6 5.5 4.6 5.1 1.4 -0.3


10/16

PropertyThe President Post www.thepresidentpost.comNovember 13, 200910

ECONOMIC REVIEWIndonesias improving economy

in the third quarter 2009 is attrib-uted to the positive impact of theglobal economic condition which isshowing a recovery

Bank Indonesia projected theeconomy to grow by as much as

4.2% this quarter in line with theglobal economic recovery, espe-cially in Asian countries like Chi-na and India.

In terms of domestic economy,sound economic growth is main-ly driven by higher domestic con-sumer demand, spurred by theseasonal Idul Fitri demand andconsumer confidence on expec-tation that the economy will posthigher growth and export reve-nues will increase compared tothe previous quarter.

The rupiah appreciated 5.6%during the third quarter to 9,681against the US$ from 10,225 inthe second quarter, contributedby positive global development,thus luring foreign investors backinto the country. The conditionis also helped by Indonesias sta-ble economic condition that con-tributed to the rupiah appreci-

ation. The strengthening of therupiah plus the sluggish glob-al commodity trading broughtthe inflation rate down to 2.83%(yoy) from 3.65% in the previousquarter.

Based on this positive domes-tic economic condition and BIsinflation projection of 4+1%, thecentral bank slashed its bench-mark rate in August 2009 to6.5% from 7% in the secondquarter. For 2009-2010, BI pre-dicted the economy to grow by4-4.5% at the end of 2009 and5-5.5% in 2010, higher than itsprevious projections. Meanwhile,Economist Intelligent Units pro-

jected the economy to grow by4.2% in 2009 and 4.5% in 2010on the prospect that the nation-al economy could still post morepositive growth.

The economy would still bepropelled by stronger domes-tic consumption, higher exportrevenues, and the governmentsstimulus package. In addition,growth in the development sectoris expected to reach 6.1-6.6% in2009, in line with stronger pub-lic purchasing power, improvedconsumer confidence, and lowBI rate.

With the sound economic con-dition expected to continue inline with stronger confidence onthe economy, property developers

will start playing their role in theproperty business.

thE pRocon REpoRt q3-2009:

Upbeat and Encouraging

CBD OFFICE MARKETImproved business confidence

has led to increased office leasingactivities in the CBD area in Ja-karta, marked with the growingnumber of tenants expressing theirintention to expand and relocate.

Additional supplies in the third

quarter reached 110.700 m2 withthe completion of two new build-ings, Cyber II in Kuningan andThe Plaza in Thamrin. The com-pletion of the two new buildingsbrings the total number of officespace supplies at CBD to 4.03million m2, up by 2.8%.

New supplies until 2011 areexpected to reach 367.000 m2, of

which about 60% of the total willbe available in 2010. Office spacedemand continued to rise in thethird quarter, continuing trendsfrom the second quarter. Netoccupancy rate reached 56,000m2, the highest occupancy ratesince the global crisis at the end

of last year. Despite higher oc-cupancy rate, additional suppliesslashed the occupancy rate by 1%to 85.6%.

Market absorption is main-ly seen in class A office segmentmarked with the large number oftenants wanting to increase thequality of their office buildings.In terms of width, demand in thethird quarter ranged from smallto medium. Similar to the previ-ous quarter, business expansionand relocation became the big-gest contributor for office spacedemand at CBD Jakarta. Leas-ing activities were also seen moreactive during this quarter in line

with the growing potential for

companies to expand and relo-cate.

Companies that previous-ly put their decision to lease of-fice space on hold have started tomaterialize their plans. Big de-mands from several foreign com-panies whose leases will expire inthe next two to three years havealso contributed to the growingleasing activities. They are hop-ing to make pre-commitment inprojects that are still under con-struction and even for those stillbeing planned.

Leasing prices did not increase

due to low occupancy rate andtight competition among officebuildings at CBD both for build-ings that have long existed andthose that have just entered themarket. In the next two years,demand is predicted to continuerising, but new supplies that willsoon be available will make leas-

ing prices to remain stable.RETAIL MARKET IN JAKARTA

Leasing prices of shopping cen-ters in the third quarter 2009 re-mained stable due to moderatedemand growth and tight compe-tition....

Additional space supplies forshopping centers are contribut-ed by Central Park, PodomoroCity in West Jakarta and Senen

Jaya Wholesale Market in Cen-tral Jakarta with total new sup-plies reaching 120,000 m2. Thenew addition brings the total cu-mulative supplies to 3.45 millionm2.

The biggest supply is contrib-uted by the retail space in CBDand North Jakarta by as muchas 734,600 and 766,480 m2 re-spectively, representing about21% - 22% of the total supplies.Shopping centers that are up forlease take up the biggest portionof the total supplies, accountingfor 60% with the remaining be-ing supplied by the retail space instrata-title shopping malls. Onenew project that is slated for com-pletion at the end of 2009 willbe contributed by Rasuna Epi-centrum (Epi-walk) at the CBDarea.

Occupancy rate in Jakartareached 76.5%, down 1.5% in

the previous quarter. Leasing ac-tivities for shopping centers fellslightly to 84.1% in contrast withstrata-title retail space that en-

joyed growth of up to 65.1%.

During July to October 2009period, the total number of retailspace supplies that were occupied

was dominated by old and newF&B retail players, while sever-al major tenants preferred to takeretail space in newly operatedshopping centers. Overall, retailprojects in Procons research bas-ket offered leasing prices in rupi-ah. Estimated gross leasing price

transaction in the retail market was relatively unchanged com-pared to the previous quarter, atRp590,000/m2/month in Jakar-ta.

The number of new suppliesavailable from the fourth quar-ter 2009 until 2011 will be quite

significant at about 44%, whichare expected to be ready in 2010.Mix-use construction is expect-ed to dominate the retail marketfor the 2010-2011 period fromGandaria City, Kota Kasablan-ka, Kuningan City and Ciputra

World. Occupancy rate in thisperiod is predicted to increase to76% and 77% respectively withexpected net occupancy rate of80,000 m2 each.

CONDOMINIUM MARKETIn line with improved econom-

ic condition and low interest rate,demand for condominium in themedium segment increased signif-icantly.

Total condominium suppliesin Jakarta in the third quarterthis year reached 69,900 units,up 2.6% compared to the previ-ous quarter with 1,740 addition-

al units from condominiums inthe CBD area, South Jakarta andCentral Jakarta. Newly launchedcondominium projects in thisquarter include Pulomas Parkand Signature Park which areslated for completion in 2012.

Overall, condominium salessoared by up to 96.9% with only2,240 units still remained to besold.

The biggest demand contri-bution came

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