materials for my guest lecture in graduate class for asian studies, tamkang university, taipei, 20...

8/13/2019 Materials for my Guest Lecture in Graduate class for Asian Studies, Tamkang University, Taipei, 20 Nov 2013,

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Accelerating Indonesias EconomicTransformation Through MP3EI


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OUTLINEC

KP3EI

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VJ E$"0C 7E1 H0T0P)M*0%- )% 2;B'7Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025


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KP3EI

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025


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,*E). ?6K )L8M;86N 1?;856?> *>?6686N

Medium Term Nat. Plan

(Pres.Regulations)Medium Term Nat. Plan

(Pres.Regulations)

Longterm Nat. Plan

Law 17/2007

Medium Term Nat.

Plan

(Pres.Regulations)

Medium Term Nat. Plan

(Pres.Regulations)Medium Term Nat. Plan

(Pres.Regulations)

(Pres.Regulations)

Nat. Annual Plan

,*E).

17

M j di hif i MP3EI


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Major paradigm shift in MP3EIprojects planning and implementation

Projects can no longer be developed with a

Silo mindset

Projects will be developed to support the maineconomic activitys growth through supporting KPI

(group of investment activities)

Private sectorinvestment

Connectivity RegulationHR/

ScienceTech

Maineconomic

activity A

Maineconomicactivity B

Maineconomicactivity C

Maineconomicactivity D

Maineconomicactivity E

Maineconomic

activity X

Private sectorinvestment

Connectivity RegulationHR/

ScienceTech

Maineconomic

activity A

Maineconomicactivity B

Maineconomicactivity C

Maineconomicactivity D

Maineconomicactivity E

Maineconomic

activity X

All projects should be

developed to support

the development of

production centers in

each of the main

economic activities

KP3EI

18


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Strategic Focus Areas to Boost Reg Development

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Actual percentage of GB 2011 based onthe value of the investment (not the

number of projects)

Actual Groundbreaking Value based oninvestment (in Trillion Rupiah)

Papua - Maluku

Not yetAlready Groundbreaked

80100%

Bali - NT 40100%

Sulawesi 6418%

Kalimantan 2695% 5%

Jawa 17198%

Sumatera 9097% 3%

100%

Total

Investment

411,63

Mixed

Governmen

t

77,14

94,46

Private

80,24

SOE

159,78

Sulawesi Economic Corridor has as manyas 7 of the 11 GB projects, but the projectsthat have not been Groundbreaked worthquite large (in the mineral mining sector).

So far, 92% projects have been realized for theGB projects list in 2011. Only in Sulawesi, therealization of the total project remaining 63% %

TotalInvestmentRp Triliun

37

projects

42

projects

22

projects

10

projects

111

projects

27


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6% 35,594%

100%

Bali - NT 4,437% 63%

Sulawesi 10,4100%

Kalimantan 99,3100%

Jawa 92,6100%

Sumatera 37,817% 83%

Papua - Maluku

Private

115,56

Mixed

13,07

SOE Government

42,00

41,65

Total

Investments

212,28

These indicates high value projects that havenot been groundbreaked on Sumatera dnPapua-Kep.Maluku Economic Corridors(Sumatra: toll roads, state-owned investmenton fertilizer; Papua: Freeport).

So far 81% have been realized for the GBprojects in 2012. Java and Sulawesi GB is100%.

TotalInvestmentRp Triliun

20

projects

28

projects

21

projects

4

projects

71

projects

Actual percentage of GB 2011 based onthe value of the investment (not the

number of projects)

Actual Groundbreaking Value based oninvestment (in Trillion Rupiah)

28

Not yetAlready Groundbreaked


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Economic Corridors

Total ProjectsInvestment Value

(Billion Rupiahs)Total

InfrastructureReal

SectorsInfrastructure Real Sectors Projects

InvestmentValue

(Billion

Rp.)

Sumatera 32 725.814,9 36.719,0

39 62.533,9

Jawa 13 31

74.840,0 40.934,0

44 115.774,0

Kalimantan 9 1114.628,0 94.250,7

20 108.878,7

Sulawesi 9 77.880,0 2.858,0

16 10.738,0

Bali-NT 5 416.838,0 26.435,0

9 43.273,0

Papua-Kep.Maluku 14 4 3.085,0 201.480,0 18 204.565,0

Total 82 64143.085,9 402.676,7

146 545.762,6

The project plans value will be very high, compared to 2012s GB list, with investment value abouttwice from 2012.* December 2012 29

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Kalimantan

Sumatra

Java

Bali NusaTenggara

Sulawesi

Papua-Maluku

SumatraInvestment

Value(US$ Mill)

Toll Roads

MedanBinjai (15.8 km)210.4PalembangIndralaya (22 km) 179.6

PekanbaruKandisDumai (135 km) 1,529.9BakauheniTerbanggi Besar (150 km) 2,372.4Tebing TinggiKisaranRantau Prapat (178 km) 1,396.2PanimbangSerang (83 km)** 1,191.0Lubuk PakamTebing Tinggi (43.5 km)* 707.8

Seaports

Hub Kuala Tanjung 2,794.5Tanjung Sauh at Batam Not yet available

JavaInvestment

Value

(US$ Mill)

Access Road to Purwakarta Industrial Area (7.8km)* 71.2Umbulan Water Supply* 211.3Cilamaya Port and Access Road (30km) 4,175.6Karawang Airport & Access Road 3,746.5Railway MadiunSurabaya (165 km Double Track) 429.5Coal-Fired Power Plant Indramayu 4 (1 x 1000 MW)* 2,116.0

KalimantanInvestment

Value

(US$ Mill)

Toll Road Balikpapan-Samarinda

(99.02 km)

:IBNEPM

PurukcahuBangkuangMangkatip Railway (290 km)

BIBKKPE

Coal-Fired Power Plant

Asamasam 5-6 (2x100 MW)*99:PB

SulawesiInvestment

Value

(US$ Mill)

Road PaluParigi (37.4 km) 103.5

Toll Road ManadoBitung (46 km) 353.International Hub Bitung 3,208.4Railway MakassarPare-Pare (136.3

km)*621.0

Hydro Electric Power Plant Karama(4x112.5 MW)*

1,375.5

Bali-NTInvestment

Value

(US$ Mill)

Water Supply South Bali** 282.2

Papua-MalukuInvestment

Value

(US$ Mill)

Road EnarotaliTiom (240 km)** 173.

Notes: Blue-marked projects are potential PPP-projects. All projects are expected to groundbreak (GB) in 2017, except: *) GB in 2015 and **) GB in 2016

THESE PROJECTS HAVE POTENTIAL TO BE FUNDED THROUGH A

PPP SCHEME.

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Into MP3EI

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39

g y p yprojects to ensure accelerated delivery (as early as 2014)

Kuala Tanjung Port*(US$ 600M) Palu Parigi Rass

(US$ 100M)

Trans SumateraHigh Grade Highway(US$ 6180.1M)

Coal-Fired PowerPlant PangkalanSusu 2 x 200 MW(US$ 417.2M)

Coal-Fired Power

Plant Indramayu 2 x1000 MW(US$ 2044.5M)

Lembar BayPort (US$ 39M)

Enarotali Tiom Road(US$ 168M)

Coal-Fired PowerPlant Asamasam 2x 100 MW (US$320M)

Coal-Fired Power PlantTakalar 2 x 100 MW

(US$ 280M)

Balang IslandBridge (S157.2M)

Makassar Pare-Pare Railway(US$ 600M)

Medan KualanamuDouble Track Railway(US$ 78.8M)

Water SupplyJatiluhur (US$ 189M)

Sorong Port(US$ 160.9M)

Access Road toPurwakartaIndustrial Area (US$68.8M)

Dam Kolhua & Dam

Raknamo(US$ 100M)

Notes: Exchange rate IDR/US$= 10.000; Palapa Ring (US$ 280M) is a priority project but not displayed (multi-corridor scale project)*) development of existing port

Following the 3 pillars of MP3EI, the entire process of selecting priority infrastructure projects is based on:# Urgency of the project; ease of implementation (readiness level); social, economic, and environmental effects; Supporting Production Centers or Investment-Focused Areas with strategic value, coupled with a high level of investment readiness, for example: Sei Mangkei,

Maloy, Bitung, Karawang.# Project's contribution to strengthening National Connectivity

Solo Madiun (US$ 223.7 M) Madiun Surabaya (US$415 M)

Double Track Railway

39

Another 32 projects (US$29 Billion in total) located in the main economic growth


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40

centers are selected as priority projects to be offered under PPP-scheme (2017)

Following the 3 pillars of MP3EI, the entire process of selecting priority infrastructure projects is based on:# Urgency of the project; ease of implementation (readiness level); social, economic, and environmental effects; Supporting Production Centers or Investment-Focused Areas with strategic value, coupled with a high level of investment readiness, for example: Sei Mangkei,

Maloy, Bitung, Karawang.# Project's contribution to strengthening National Connectivity

Note: Exchange rate IDR/US$= 10.000*) expansion of current Padang Water Supply facilities

International HubKuala Tanjung(US$ 2700M)

Maloy CPO Port(US$178M)

International HubBitung Port(US$ 3100M)

Manado BitungTollroad(US$ 341.2M)

Cilamaya Port &Access Road(US$ 4034.5M)

Makassar NewPort (US$ 360M)

Karawang Airport(US$ 3619.9M)

Puruk CahuBangkuang Railway(US$2200M)

Balikpapan Samarinda TollRoad(US$1217.9M)

Panimbang-Serang TollRoad (US$ 1150.7)

Water Supply SouthBali (US$ 272.7M)

Jakarta Wastewater Disposal System(US$ 431.9M)

Pondok Gede Water Supply (US$ 20M) Tanjung Priok Access Road (US$

612.5)

Umbulan Water Supply(US$ 204.2M) Lamongan Regency

Water Supply (US$ 16.7M

Padang Water Supply*(US$ 28M)

East Agam &Bukittinggi WaterSupply (US$ 17M)

Batam Municipal SolidWaste Disposal (US$ 100M)

Tanjung Sauh Port in Batam(US$ 756M, Phase I)

Coal-Fired PowerPlant Karama4 x112.5 MW(US$ 1329M)

Consolidated Urban

Development in BandaAceh (US$ 21M)

Karya Jaya Integrated TerminalPalembang (US$ 75M)

Monorail South Sumatera(US$ 515.5M)

Pandaan-Malang TollRoad (US$ 420M)

Solid WasteDisposal &Treatment Surakarta((US$ 30M)

Pasir Koja-Soreang Toll Road (US$ 210M) Cisumdawu Toll Road (US$ 1015.8M) Integrated Railway Terminal Gedebage (US$133M) Kertajati Airport (US$ 112.5M)

Revitalization of Rail Station &Pedestrianization Malioboro(US$ 870M)

Muara Enim-Pulau BaaiRailway (US$ 3000M)

40

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Project/ Investor Bottleneck issues

! Sei MangkeiIndustrial Estate

! Delay in land acquisitionprocessdue to delay in the

issuance of Provincial SpatialPlanning State Law (Perda

RTRWP)! Infrastructure availability in

time of the investment(Kuala Tanjung seaportexpansion, road, railway and

Kuala Namu airport)

;1;4 777

Debottlenecking effort and result

! Enhance coordination between lineministries/agencies, other government

entities and stakeholders, whichresulted in acceleration of RTRW

finalization! KP3EI ensures additional budget is

provided and allocated to supportinfrastructure projects implementationin timely manner

'()%)*#( ,0(-)D" H0T0P)M*0%- W$(#P#-$-0/ N+ 3;B'7 [A\

! Bangko TengahRailway forcoaltransportation

! Railway area overlaps withforest area

! Delay in issuance of IPPKH(Forest land area use permit)

! Coordination is conducted up toMinistrial level, resulted in clearance ofdispute settlement

! KP3EI facilitated the provision of ~9.881ha forest area to be used by PT BukitAsam

41

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Project/ Investor Bottleneck issues

! ANTAMInvestment FocusedArea of North Konawe

! Mining Permit (Ijin UsahaPertambangan) unilaterally

repealed by Bupati of NorthKonawe

! Mining Permit overlappedwith PT Duta Perkasa Inti

Minerals

Debottlenecking effort and result

! KP3EI facilitated a meeting with Bupatiof North Konawe for accelerated

mining permit issuance! The result is still awaiting the re-

issuance of PT Antams Mining Permitfrom Bupati of North Konawe

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! PT Vale IndonesiaInvestment Focused Area

of Morowali and Palopo

! Delays in the issuance ofIPPKH by the Ministry of

Forestry, because therecommendation letter from

Bupati of Luwu and fromGovernor of Center

Sulawesi is not yet being

sent to Ministry of Forest

! KP3EI facilitated the meeting with PTSCM and PT Vale regarding the Mining

Permit issues! The resul was the publication of IPPKH

from Ministry of Forestry to PT ValeIndonesia. Yet, on the website of

Ministry of Forestry, the IPPKH are still

on process.

42

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Project/ Investor Bottleneckissues Debottleneckingeffort and result

!Jakarta MRT !Jakarta MRT project hasbeen discussed for ~20years with no significant

progress, while financialloss due to traffic has

reached IDR 12.8 T in

2012

! GOI encouraged Local Government toproceed with the plan as per initialtimeline

! The recent development is that CentralGovernment accelerating their supportand plans to increase Central

Government funding portion from thecurrent 42% to >48% for MRT project

43

! Central Java IPP ! Location permit has notbeen issued by local

government due to different

interpretations of the powerplant

! Requires acceleration forland acquisition and

certification

! The location permit that was stuck for 2months was unlocked in 3 months

following KP3EI involvement! KP3EI continues support of de-bottlenecking for land acquisition proces

to reach financial close by Oct 2013

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Improving Investment Climate

!44 regulations have been completed,!16 regulations are being revised,!28 regulations to be revised.Revisions, corrections, and improvement made on the regulation comprise of : Law

(UU); Government Regulation; Presidential Decree; Draft of Law, Draft of

Government Regulation; and Ministerial Decree. Some are sectors , others are cross-

sectoral or regional basis.

As of April 2013

44

(Stabilization Policy and Economic Growth Package)


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45

No. (Policy Substance) Instrument

A. (Fixing current balance account and maintaining exchange rate)

1(Reducing oil and gas import increasing biodiesel portion in diesel fuel by10% as mandatory requirement)

(Min of Energy and MineralResources Decree)

2 (Increasing export by relaxing the mineral export procedure)(Min of Energy and MineralResources DecreeCircularNotes)

3(Tight Fiscal Policy by applying additional VAT on Luxury Goods for CBU

car and branded products)(Goverment regulation)

B. (Maintain Economic Growth and Purchasing Power)

1 (Guidence on the Minimum Wage Policy) (Presidential Instruction)

2 (Classification of labor intensive and medium industries) (Min of Industry Decree)

3(Reducing the income tax rate of article 25 and postpoing the payment of

income tax of article 29 for selected industrial tax payer)(Min of Finance Decree)

4

(Relaxing regulation for Bonded Zone)a.(Up to 50% of Domestic Sales)b.(Above 50% of Domestic Sales can be provided by DG Custom on behalf of

MOF and based on the recommendation from related ministries)

(Min of Finance Decree)

45



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46

NO. (Policy Substance) (Instrument)

B. (Maintain Economic Growth and Purchasing Power)

5 (Waiver facility on VAT for imported books) (Gov Reg and MoF Reg)

6

(Fiscal Relaxation Reducing and/or Waiver on VAT for LuxuryGoods which are no longer considered as luxuries good e.g.Electronics (Television, Refrigerator, Air Conditioner, Water Heater,Camera and Sanitary Equipment)

(Gov Reg and MoF Reg)

C. (Maintaining inflation rate)

1Deregulate trading rules for meat and horticultural products fromusing quantity based to references price mechanism

(Min of Trade and Min of AgricultureReg)

D. (Accelerating Investment)

1 Reduction of Negative Investment List DNI (Presidential Decree)

2

(License simplification)

1.(Reducing number and type of license)2.(Grouping similar license)

3.(For the 1ststage, it will be applied in mainstream sector ofmineral and gas by reducing 69 license to 8 (similar group)license)

(SLA for implementation of licensesimplification)

46



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47

No. (Policy Substance) (Instrument)

D. (Accelerating Investment)

3 (Debottleneck obstacles in strategic investment projects)

a. (Finalize renegosiation for Contract of Works - Kontrak Karyaand PKP2B)

(Revision of Gov Reg no 24/2012 onDivestation, Mainstreaming on MineralSector) and Gov Reg no 9/2012 onRoyalty

b. (Finalize financial closing of PLTU Batang 2x1000 MW) (Pres Reg)

47


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COORDINATING MINISTRY FOR ECONOMIC AFFAIRS

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Recent publications are available on:eddysatriya.wordpress.com

kolom.pacific.net.id

1989 :Graduated from Bandung Institute of Technology(Telecommunication Engineering)

1997 :Graduated from University of Connecticut (MA in Economics)

1989-90: Program Management Consultancy (PMC-IV) forTelecommunication Development

1990-2005: Working in Bappenas (The National Development PlanningAgency).

1995 : Secretary to Board of Commissioners of PT.Telkomsel 1997- present: Visiting Lecturer in University of Indonesia, University of

Pelita Harapan, and ITB

2002-present : Actively writes various article and column in nationalpapers and magazines.

2005 (Dec)-present: Working in Coordinating Ministry forEconomics Affairs

2011 - Present: Head of International Cooperation Division,Secretariat of KP3EI

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