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SECTION C

David P. Norton: Master of Business StrategyA frequent lecturer and author, Dr. Norton is best known for his work The Balanced Scorecard, which has been the subject of many conferences and articles.

PAGE A3

INTERVIEW

RI Investment Up 27% in Q1 this YearIndonesia`s potentials mainly come from natural resources, such as geothermal energy source which comprise 40% of the world`s geothermal source and coal reserves which are huge.

PAGE B4

INVESTMENT

IDR 20,000

THE WORLD

50 Years of NAM and Its Future ChallengesThe Non-Aligned Movement (NAM) celebrated its 50th anniversary in an event that was commemorated in Bali in May.

PAGE A4

“Through the internet, and so-cial media networks such as Face-book and Twitter, the youths are developing a sense of trans-gen-erational consciousness, a feeling of mutual empathy and shared hopes,” he said.

The President also said “the world economy cannot afford to rely on strong growth in emerging economies alone. We need healthy growth globally, including in the

developed world. One way or an-other, we all need to make struc-tural adjustments to correct the global imbalances. Asia -- more than any other region -- can help achieve a strong, sustainable and balanced world economy.”

However, he reminded that needs to anticipate and address the growing pressures that will come from food, energy and water insecurity. He said of the 7 billion

people that now inhabit the plan-et, 60% among them live in Asia. As their economies grow, they would seek and compete for finite natural resources.

“[This is] A pattern that in pre-vious centuries led to wars, con-quest, exploitation and untold suffering,” he said.

“Asia should not just try to catch up, it can leapfrog into the future. And these days, innovation and technology can come from any-where. There is a growing force of innovators and techies, from Bangalore to Bandung, from Sin-gapore to Shenzhen that can pro-duce homegrown innovation with global application,” he said.

Yudhoyono also said that Asia’s growth would put it at the heart of

the global economy.“Asia, more than any other re-

gion, can help achieve a strong, sustainable and balanced world economy,” he said.

One key issue up for discussion at the forum, which is being held for the first time in Indonesia, is food security.

“Every six seconds a child dies because of a lack of food. We need to find sustainable food security system,” WEF co-chairman Paul Polman, also the CEO of Unilever, told reporters.

Among the heads of govern-ment attending the forum are Sin-gapore Prime Minister Lee Hsien Loong, and his counterpart from Thailand, Abhisit Vejjajiva.

WEF on Wednesday released

The government is considering the application of a profit-sharing split of 70% for the state and 30% for contractors in production-sharing contracts, a senior ener-gy official said.

Director General of Gas and Oil Affairs at the Ministry of En-ergy and Mineral Resources Evi-

ta Legowo said here last week the 70:30 split was to be applied to contractors who conducted deep-sea explorations, especially in eastern Indonesia regions, Antara reports.

“We want more investors to be-come interested in the exploita-tion of oil fields in the eastern re-gions,” she said.

She said the idea to introduce the 70:30 split system was devel-oped by a team of engineers and university representatives.

“It should be a fair deal be-cause the team that formulat-

ed it consisted of people from dif-ferent disciplines such as experts in geology, production and infra-structure,” Evita said.

Govt Mulls 70:30 Oil Production Sharing Split

President: Asia’s Young“More Open, More Creative”

its first-ever Indonesia Competi-tiveness Report saying the archi-pelago of 240 million people had showed the strongest progress among the Group of 20 countries.

Ranked 44th of 139 economies in the Global Competitiveness In-dex, Indonesia “has done remark-ably well in the past decade and has proven very resilient during the global economic crisis,” WEF economist and the report’s au-thor, Thierry Geiger, said.

The WEF is an independent or-ganization bringing together top business leaders, governments and academics to discuss re-sponses to challenges facing the world.Its highly publicized annu-al meeting is held in the Swiss mountain resort of Davos.

JAKARTA (TPP) – President Susilo Bambang Yudhoyono in his speech on Sunday at the opening ceremony of the World Economic Forum (WEF) on East Asia here praised the young people in the region who he said are “much more connected, more open, more creative, and more active”.

President Susilo Bambang Yudhoyono received an Open Let-ter from the secretary general of the United Nations World Tour-ism Organization (UNTWO), Taleb Rifai, that acknowledges In-donesia’s commitment to progress in the tourism sector.

Indonesia was the first Asian country to receive the letter, Tourism and Culture Minister Jero Wacik told the press follow-ing a meeting between President Yudhoyono and UNWTO Sec-retary General Taleb Rifai at Laguna Hotel here Saturday.

“UNWTO considers In-donesia a country that has a very high commit-ment to promoting tour-ism. And according to the UNWTO secretary gener-al, Indonesia is the first Asian nation the UNWTO has presented with the `Commitment Letter ,” the minister said.

Indonesia views the tourism sector as an in-dustry which can cre-ate jobs, boost econom-ic growth, reduce poverty and is friendly to the envi-ronment.

UNWTO also recog-nized that Indonesia’s tourism sector has devel-oped significantly over the past ten years, he added.

“He (Rifai) said there is a golden opportunity for Indonesia because many investors want to come to Indonesia to do business or engage in productive activities,” Jero Wacik said.

Rifai was in Bali to speak at a three-day Seminar on “Tour-ism Ethics For Asia And The Pacific” participated in by around 160 delegates from Asia and Pacific countries.

UNWTO and the World Travel and Tourism Council (WTTC) are jointly presenting the Open Letter to heads of state and gov-ernment around the world, calling on political leaders to ac-knowledge tourism’s role in facing global challenges and priori-tize the sector high in national policies in order to maximize its potential to deliver on sustained and balanced growth.

Travel and Tourism currently accounts directly and indirect-ly for about 3% to 5% of global GDP, as well as 30% of the world’s export of services.

The total contribution of Travel & Tourism to employment - including jobs indirectly supported by the sector - is estimat-ed at 7% to 8%.

World Body PraisesRI’s Commitment to Progress in TourismIndonesia views the tourism sector as an industry which can create jobs, boost economic growth, reduce poverty and is friendly to the environment.

“UNWTO considers Indonesia a country that has a very high

commitment to promoting tourism.

And according to the UNWTO secretary

general, Indonesia is the first Asian nation the

UNWTO has presented with the Commitment

Letter .”

United Nations World Tourism Organization (UNTWO) Secretary General Taleb Rifai.

Tourism and Culture MinisterJero Wacik

www.evisaasia.com

www.presidensby.info/Abror

From right to left: President Susilo Bambang Yudhoyono, Executive Chairman of the World Economic Forum Klaus Schwaab, Singapore Prime Minister Lee Hsien Loong, Trade Minister Mari Elka Pangestu, and Coordinating Minister for Economic Affairs Hatta Rajasa.

In general, the current produc-tion sharing split ratio is 80-85 percent for the state and 15-20 percent for contractors.

The new production sharing split was calculated after deduct-ing operating costs (cost recov-ery).

The government will offer 20 oil and gas blocks in the first stage of an auction with the blocks mostly located in eastern Indonesia seas.

Of the 20 blocks on offer in the first round auction, nine would be awarded through regular tenders and 11 through direct bids.

In general, the current production sharing split ratio is 80-85 percent for the state and 15-20 percent for contractors.

Evita Legowo

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On April 4, 2011, the Washington state

legislature passed a bill making it a violation of the state’s unfair

competition laws for a business to sell

products in Washington “while using stolen or misappropriated

information technology in its business

operations”.

OpinionThe President Post www.thepresidentpost.comJune 12, 2011A2

Usually when a law has a title like ‘The Unfair Competi-tion Act’ (UCA), most export-ers from Asia are

uncomfortable. And when that comes from the US, a major trad-ing partner, they shudder.

On April 4, 2011, the Washing-ton state legislature passed a bill making it a violation of the state’s unfair competition laws for a busi-ness to sell products in Washing-ton “while using stolen or misap-propriated information technology in its business operations”. Al-though this is not a US Federal law, it does matter for Asia, sim-ply because of the fact that Seattle is a major port of entry in Wash-ington State for goods from Asia. Seattle ranks as the 7th largest US port by trade volume, it ranks second for good imported from Asia behind Long Beach. There-fore, this law will apply to many imports from Asia, including In-donesia.

Four of the top 10 trading part-ners of the US are in Asia; of these China is by far the largest, with In-donesia being the US’s 25th larg-est trading partner, vs. 35th with the EU, for perspective.

The US is Indonesia’s third largest trading partner after Ja-pan and China (2009 figures, ex-cluding transshipments via Sin-

gapore). In March 2011 Indonesia exported $1758m to the US and imported $725m, giv-ing a trade balance in goods of over a billion dol-lars in Indonesia’s favour. Based on 2010 figures, Indonesia has balance of trade of almost $9.5 Bn in its favour.

Washington State is often referred to as the most trade dependent of all the US States. This is why the UCA matters to Indone-sia. So, is this law positive or nega-tive? Or perhaps a better way to look at it is to look at what the law is intended to achieve and then examine the oppor-tunities.

Accord-ing to an i ndust r y association, The Business Software Alliance, the use of illegal software (that is the originator received no pay-ment) costs copyright owners some $59bn in 2010. In commer-cial software the value of illegal software interestingly, was high-est in the US, but second came China at $7.78bn, with Indone-sia ranking 11that $1.3bn, but it

should be noted that Japan, Germa-ny, the UK and Brazil are all higher than Indonesia in terms of unpaid or copied software.

From the per-spective of trans

Pacific trade, based on US Census figures as China ex-ported $27.6 bn in March to the

US, it could be argued that on a weighted basis, a greater pro-

portion of exports may have been produced that are not in compliance with the UCA. Although the law does not explicit-ly target China or any other country, it will naturally mean that imports will be looked at closer by Washing-ton state authorities for compliance from major trading part-ners.

With software that has not been paid for being some 6 times higher in China than Indone-sia, this gives Indonesian companies a

significant incentive to work w i t h -in with

the UCA, by satisfy-

ing their custom-ers concerns, therefore

gaining an advantage, if they can ensure compliance. This is per-haps where there is an unreal-ized opportunity: seize the advan-tage and encourage companies to make sure they are in compliance with the UCA.

Industry Associations and

Chambers therefore have an in-terest in ensuring their members are aware of the law and its effect beyond just the borders of Wash-ington State and the Port of Seat-tle, and may take this as a wake-up call to seize this opportunity.

Mike Mudd is the Senior Partner of Asia Policy Partners, LLC (www.asiapolicypartners.com) an Asian based technology consultancy specializing in trade related business and has represented SME’s at APEC events for the past 5 years. He is also the chief representative of the Open Computing Alliance (www.opencomputingalliance.org) in the Asia Pacific region. He may be contacted at mmudd@asiapolicypartners.com

Trade and Competition:

A Chance for RI to Compete Against China?By Michael Mudd Four of the top 10

trading partners of the US are in Asia; of these China is by far the largest, with Indonesia being the US’s 25th largest trading partner, vs. 35th with the EU, for perspective.

The President Postwww.thepresidentpost.com June 12, 2011 A3

Interview

than one million copies in 23 dif-ferent languages.

The Balanced Scorecard con-cept was selected by the editors of the Harvard Business Review as “One of the most influential management ideas of the past 75 years.” Dr. Norton was also vot-ed as one of the “World’s 12 Most Influential Management Think-ers” by Sun Top Media’s Thinkers 50. Drs. Norton and Kaplan were honored with the “Champion of Workplace Learning and Perfor-mance Award” by the The Amer-ican Society for Training and De-velopment (ASTD).

Dr. Norton is the preeminent au-thority, along with Robert Kaplan, on how to institutionalize strate-gic thinking using The Balanced Scorecard (BSC). Dr. Norton co-developed this extraordinary tool for defining and executing busi-ness strategy. He co-authored with Kaplan, the three essential books on The Balanced Score-card.

In his presentations, Dr. Nor-ton helps companies make effec-tive strategic thinking and exe-cution an essential part of their business, both at the top (through the equivalent of a Chief Strategy Officer) and throughout the orga-nization.

Utilizing the Balanced Score-card concept, Dr. Norton allows

complex organizations to effec-tively clarify, manage and imple-ment their business strategies with a rigor never possible be-fore. Dr. Norton’s first book, The Balanced Scorecard: Translating Strategy Into Action, shows man-agers how to use this revolution-ary tool to guide their strategic investments in people, systems and new products for long-term growth. Dr. Kaplan and Dr. Nor-ton describe a multistage system that enables organizations to gain measurable benefits from care-fully formulated business strat-egies. Together, these books and the presentations based on them, represent some of the most valu-able breakthroughs in business strategy in recent times.

Dr. Norton’s research and lec-tures have tremendous value for any company seeking to plan and sustain value creation over the long term. Dr. Norton has ex-tremely broad and practical expe-rience working with companies of all kinds and at all levels on their strategic capabilities. And he has unusual depth in developing the strategic potential of human re-sources.

Dr. Norton earned a BS in elec-trical engineering from Worces-ter Polytechnic Institute, an MS in operations research from the Florida Institute of Technology, an

MBA from Florida State Universi-ty, and his doctorate in business administration from Harvard Business School.

An effective speaker who loves doing keynotes, Dr. Norton is one of the most significant figures transforming business today.

The President Post’s Filly Su-mayku recently interviewed Dr. Norton when he visited Indonesia in June.

What is needed by Indonesia to improve its business sector?

The success of a country is al-ways determined by the success of its private sector, as it creates jobs, jobs value, ultimately allow-ing its GDP/capita to rise. So the government can start by making it easier for to companies to grow. We can see the best example in Japan. In 1960s Japan was a poor economy and still recovering from World War II. Some private sector companies introduced total quali-ty of management (TQM) and they succeeded very well. The govern-ment saw that and picked that idea and spread it across Japan to all companies. In ten years Japan became a leading force in man-ufacturing in the world because they mastered quality. I think the opportunity here is very sim-ilar, instead of quality we’re talk-ing about execution, the ability to execute strategy. It’s more compli-

Master of Business StrategyBy Filly Sumayku

The success of a country is always

determined by the success of its private

sector, as it creates jobs, jobs value,

ultimately allowing its GDP/capita to rise.

So the government can start by making

it easier for to companies to grow.

A frequent lecturer and author, Dr. Norton is best known for his work The Balanced Scorecard, which has been the subject of

many conferences and articles. He is the co-author, with Robert S. Kaplan, of eight Harvard Business Review (HBR) articles

and five books: The Balanced Scorecard, The Strategy Focused Organization, Strategy Maps, Alignment and The Execution

Premium. Dr. Norton’s books have sold more than one million copies in 23 different languages.

cated than quality but the meth-od that we develop works in any kind of organization from the gov-ernment to non-government, prof-it and non-profit organization.

We can use these ideas on com-panies in Indonesia to make them more effective, become better ex-porters and so forth.

Is your concept on business strategy also applicable in Indo-nesian SMEs?

Every business, whether large or small, has customers that they have to understand. Every busi-ness like manufacturing, engi-neering, big or small, has people and has money invested by share-holders. All businesses have the same structure. You must try to develop your people to improve the way they work so they can sat-isfy customers.

How would you motivate start-up companies or young entrepre-neurs?

When you are a beginner, one of the things you are looking for is investors to give you money to help your business. The inves-tors will not give you money un-less they believe you can manage money.

For small businesses or entre-preneurs trying to become big businesses you got to build a pic-ture of where you are today and

a picture of where you want to be three years from now. And then you show how you are going to get there, what you must do with your people, how you exercise leader-ship and so on.

You create this path to the fu-ture then you sit down with the investors and explain to them what you are trying to do.

The most important thing to all business players is to have a vi-sion, and communicate it to the organization, and focus, focus, fo-cus.

David P. Norton is a found-er and direc-tor of several organizations specializing in systems and process-

es to improve the execution of business strategy, including Pal-ladium Group, Balanced Score-card Collaborative, and Renais-sance Worldwide.

Dr. Norton has founded and built a series of professional ser-vice firms during the course of his career, each focused on lead-ing edge issues of management, from information technology and knowledge management to the discipline of strategy manage-ment.

A frequent lecturer and au-thor, Dr. Norton is best known for his work The Balanced Score-card, which has been the subject of many conferences and articles. He is the co-author, with Robert S. Kaplan, of eight Harvard Business Review (HBR) articles and five books: The Balanced Scorecard, The Strategy Focused Organiza-tion, Strategy Maps, Alignment and The Execution Premium. Dr. Norton’s books have sold more

DAVID P. NORTON

For small businesses or entrepreneurs trying to become big businesses you got to build a picture of where you are today and a picture of where you want to be three years from now. And then you show how you are going to get there, what you must do with your people, how you exercise leadership and so on.

The WorldThe President Post www.thepresidentpost.comJune 12, 2011A4

The NAM was found-ed during the col-lapse of the colonial system and the in-dependence strug-gles of the peoples

of Africa, Asia, Latin America and other regions of the world, and at the height of the Cold War. Dur-ing the early days of the Move-ment, its actions were a key fac-tor in the decolonization process, which led later to the attainment of freedom and independence by many countries and peoples and to the founding of tens of new sov-ereign States. Throughout its his-tory, NAM countries have played a fundamental role in the preserva-tion of world peace and security.

The NAM has its origin in the Asia-Africa Conference (AAC) held in Bandung, Indonesia, in 1955. Prime Minister Jawarahal Neh-ru, the Indian senior statesman, along with the presidents of Indo-nesia, Soekarno, and Egypt, Ab-

del Gamal Nasser, led the confer-ence. The principles that would govern relations among large and small nations, known as the “Ten Principles of Bandung”, were pro-claimed at that Conference.

In Africa at that time, out of 43 nations only five were inde-pendent, while the rest were still colonies of Britain, France, Bel-gium and Germany. The newly in-dependent states took the Band-ung Principles as their common ground and spirit to leverage up their bargaining power politically, socially and economically.

Six years after the AAC, the leaders of Asian and African coun-tries have reiterated their collec-tive commitment against global injustice and hegemony under the domination of the two superpow-ers (the US and Soviet Union).

This collective commitment was a determinant factor in the birth of the NAM during its first sum-mit in Belgrade (Sept 1-6, 1961), at

the initiative of a number of Third World leaders at that time. As the name implies, NAM member countries only have one single op-tion, which is not to be an instru-ment of any political interest or tool in service of either superpow-er. In the course of its long histo-ry of over five decades, howev-er, NAM experienced hard times, which likely caused them to lose clear orientation, especially af-ter the disintegration of the Soviet Union and the emergence of US as the world’s only superpower.

Indonesia’s key role to host the NAM golden jubilee may stand as a profound example. It can share its experiences and best prac-tices with the Middle East and North African countries on how to manage multidimensional cri-ses during the transition from an authoritarian, militaristic and centralistic regime to a decentral-ized and democratic system.

Prominent scholar Hikmahan-to Juwana said that there must be a reformulation of the NAM’s role because there are now no lon-ger western and eastern blocs, so that is what the NAM has to do to remain relevant. He added that NAM members, which are mostly developing countries, must show its stand and build a common view, which is one of NAM`s big-

gest challenges. The NAM had been unable to

play significant roles in the inter-national arena. It finally focused on issues that were not controver-sial, which among others includ-ed poverty, population, environ-ment, climate change, smuggling, narcotics and trans-national or-ganized crime. Nevertheless, af-ter 50 years of its birth, poverty, injustice, and backwardness are still prevalent in the world. The Millennium Development Goals Report 2010 says the gap between developed countries and under-developed has become wider, and that the population of developed

ways that could be done by the NAM countries to be able to make a contribution for the culture of peace and global security, devel-opment of politics as well as the improvement of democracy and good governance.

First, integrating the spirit of multilateralism within the NAM. This can be done by considering efforts to solve the challenges in the 21st century that require in-ternational cooperation. Several issues in the multilateral cooper-ation that need to be championed are, among others: reforms on the UN’s Security Council, revitaliza-tion of the UN’s General Assembly, and reforms on the global finance and economic architecture.

Second, partnership is key. Na-talegawa emphasized that inter-connected challenges and op-portunities in a more complex world demand a network of part-nerships. The NAM must build partnerships with regional orga-nizations and mechanisms. Re-garding issues of mutual concern in the partnership, Natalega-wa touched on issues of weapon disarmament, climate change as well as food and energy security as examples.

Third, the NAM must stride for-ward with sustainable efforts in strengthening its capacity. “We

need to ensure that the NAM is able to respond to the world’s chal-lenges effectively and efficient-ly coupled with coordinated mea-sures,” said Natalegawa. The NAM must also have added values and relevance for its member coun-tries. For example, he mentioned programs under the NAM Cooper-ation Centre, including the NAM Centre for South-South Technical Cooperation (NAM CSSTC) and the NAM Centre for Science and Technology of the Non-Aligned and Other Developing Countries (NAM S&T Centre).

Fourth, NAM must always firm-ly uphold truth and justice values. Palestine is the example of how the NAM needs to fight for those val-ues. Indonesia, according to Na-talegawa, would always be ready to support capacity improvement of the Palestinians. This is consid-ered important to support the Pal-estinians’ readiness so that in the future they can really enjoy their sovereignty.

Fifth, the NAM must be more responsive to bring the benefits for the interest of the people in member countries. The sectors that could be immediately felt by the people are social and econom-ic development as well as the im-provement of democracy and good governance.

50 Years of NAM and Its Future Challenges

countries has average incomes 72 times the population of developing countries.

On its 50th anniversary a col-lective dream has to be renewed to address the existing global in-justice, extreme gap between countries and the existing politi-cal crises and social. The NAM’s values and principles, combined with a new, forward-looking pos-ture, which are more focused and action-oriented, should be able to strengthen the NAM’s role in the next 50 years.

Indonesian Foreign Minister Marty Natalegawa identified five

The President PostOFFICEMenara Batavia 25th Fl. Jl. K.H. Mas Mansyur Kav. 126Jakarta 10220, IndonesiaPhone : (021) 572 7337Fax : (021) 572 7338Email : ceo@thepresidentpost.comWeb : www.thepresidentpost.com

PUBLISHED BYPT Sarana Pratama Pengembangan Kota

CEO & EDITOR IN CHIEFAli Basyah Suryo

CONTRIBUTORSAtmono SuryoCyrillus Harinowo HadiwerdoyoThomas W. ShreveJeannifer Filly SumaykuEka Putri

EDITORIAL & CIRCULATION DEPARTMENTSrimay Noviani

LAYOUT & DESIGNMohamad Akmal

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PHOTOGRAPHERNandi Nanti

The Non-Aligned Movement (NAM) celebrated its 50th anniversary in an event that was commemorated in Bali in May. The golden jubilee presented a momentum of reflection to determine the direction of NAM for the next 50 years and beyond based on its vision, basic principles and experience since the Cold War era.

Indonesian Foreign Minister Marty Natalegawa identified five ways that could be done by the NAM countries to be able to make a contribution for the culture of peace and global security, development of politics as well as the improvement of democracy and good governance.

www.lensaindonesia.com

The President Postwww.thepresidentpost.com June 12, 2011 A5

ASEAN

This South-South Investment trend could open up a new chapter

and a new niche in the global economy. This will be the big

challenge ahead for the developing countries.

The East Asian countries and ASEAN (including Indonesia)

could increasingly play a leading role in that

respect.

SOUTH-SOUTH INVESTMENT

A most important de-velopment is tak-ing place in the area of FDI (foreign direct investment): the ear-ly signs of a “South-

South” cooperation. South-South interactions will no longer be con-fined to trade but also gradual-ly to encompass investment. This growth among developing coun-tries in the FDI area is of great in-terest to East Asian countries, in-cluding ASEAN. This will open up a new chapter in the relations among developing countries.

This trend is already at work in East Asia thanks to China, India, South Korea and Taiwan and to a smaller degree also within ASE-AN. For example, investment is already coming to Indonesia, the Philippines and Vietnam from neighboring ASEAN countries. Other investors from East Asia, namely China, India and South Korea, are actively offering their investments to ASEAN countries. And in a big way to Indonesia Bra-zil has already set its investment in Indonesia in the area of min-ing.

There are presently two trends at work in the development of South-South cooperation in the area of FDI:

Firstly, according to UNCTAD (United Nations Conference on Trade and Development) in Gene-va there was a strong rebound in FDI flows to developing countries in Asia and Latin America, offset-ting the decline in inflows to ad-vanced countries.

Flows to the developing coun-tries increased substantially from $275 billion in 2004 (representing 27% of total flows) to $620.7 bil-lion in 2008 (representing 37%) with the largest share going to Asia, particularly to China, ASE-AN and India.

Secondly, there is the substan-tial increase of outward FDI flows from emerging countries, includ-ing East Asian countries such as China, India and South Ko-rea. This is primarily due to the strength of their economies. Their outward FDI flows are reaching a total of $377 billion with the lion’s share directed to the South (devel-oping countries).

Another push factor is that emerging countries are success-ful in developing their own multi-national companies. Their trans-national corporations (TNC’s) are investing also in other coun-

lion 4) RO Korea $1,4 billion. Chi-na and India came at a later stage namely in 2010-2011. They are not yet registered in the ASEAN statistics (see Figure 1).

It should be noted that ASE-AN has become the third larg-est source of FDI flows. This in-tra-ASEAN investment flows is a highly important trend in the de-velopment of the ASEAN econo-my. ASEAN is not only on the re-ceiving end but it can also be on the supplying side. Singapore and Malaysia have become prime in-vestors for the region, including for Indonesia.

SECTORS FDI inflows to ASEAN is con-

centrated in the services and man-ufacturing sectors. The services sector accounted for about 50% of FDI inflows in 2008. The share of manufacturing was about 29%. It is not clear why the services sec-tor is more attractive for investors (see Figure 2).

It must be quite a disappoint-ment for countries like Indone-sia and Thailand with large nat-ural resources to see that so far FDI flows into the primary sector (agriculture, mining and quarry-ing) has been quite low. It shows that these important sectors are not attractive enough for foreign investors. There are still too many obstacles in these areas. Yet these sectors must be developed into en-gines of growth for countries with large natural resources, such as Indonesia, Thailand, Malaysia and the Philippines.

The ASEAN secretariat data suggest that Intra-ASEAN FDI flows are beginning to come up. So far the largest source countries are Singapore and Malaysia. Even Indonesia is being mentioned as a source (see Figure 3)

BOOSTING INVESTMENT An important goal of ASEAN is

to intensify the creation of an AEC (ASEAN Economic Community) by 2015. Under the AEC, ASEAN aims to transform the regional as-sociation (composed of 10 mem-ber countries) into a single market and production base, and to facil-itate the free flow of investment within the ASEAN region.

An integrated ASEAN support-ed with its relatively strong basic fundamentals would be able to bring a number of benefits to the region. ASEAN’s economic inte-gration is expected to bring quite a number of benefits to ASEAN. As the global investment environ-ment becomes more competitive, investors strongly prefer to see

ASEAN as a single regional mar-ket that has more drawing power than individual markets. This ar-gument also applies to the ques-tion of production base.

BIG CHALLENGE AHEADWith the possible growth of

South-South investment Indone-sia may face a different but more positive investment environment. Investors from the South are ea-ger to come to Indonesia, led by China, India and South Korea and other countries, including the Middle East and Latin America representing the South.

Indonesia has been facing the problem of Western investors “sit-ting continuously on the fence”. The rather new investors from

Asia and Latin America seem to be more prepared to enter into ar-eas not considered to be attrac-tive enough by investors from the North, such as resources develop-ment coupled with the establish-ment of value-added industries and food production in the east-ern part of Indonesia.

Certain potential areas of man-ufacturing development (for do-mestic consumption and exports) also require a high degree of new investment. In the area of ser-vice industries large investments are required. Investors from the South can be of great help for In-donesia which needs the massive flow of investment to accelerate economic development.

At the same time there is also the opportunity for Indonesia to develop Indonesia TNC’s (trans-national companies) to expand its business and investment activi-ties in other countries. This may give the country additional foreign exchange income.

This South-South Investment trend could open up a new chap-ter and a new niche in the global economy. This will be the big chal-lenge ahead for the developing countries. The East Asian coun-tries and ASEAN (including In-donesia) could increasingly play a leading role in that respect.

The writer is former Indonesian ambassador to the EU.

By Atmono Suryo tries following the examples of the TNC’s from Japan.

These trends show that in the area of FDI’s a highly impor-tant development is taking place, namely the increasing role of the developing countries not only as recepient countries but also as supplying countries of FDI’s. Their share in global outflows is still limited but the predictions are for a rapid increase of their share. These developments are transforming the economic land-scape of the developing countries, including ASEAN.

FDI INFLOWS INTO ASEANFor the international invest-

ment community ASEAN is looked upon as a potential desti-nation. The reason is that ASE-AN is increasingly known as a dynamic regional market. In addi-tion ASEAN is seen as having rel-atively open policies towards for-eign investors.

Foreign Direct Investments:

South-South Investment FlowsFigure 1. FDI INFLOWS INTO ASEAN

Source Countries

2006 2007 2008 2009

Value Share(%)

Value Share(%)

Value Share(%)

Value Share(%)(mil USD) (mil USD) (mil USD) (mil USD)

ASEAN 7,755.6 13.8 9,682.0 13.0 10,461.5 21.1 4,428.9 11.2

Australia 317.0 0.6 1,491.5 2.6 919.7 1.9 700.9 1.8

Canada 255.0 0.5 394.1 0.5 799.4 1.6 310.9 0.8

China 1,045.6 1.9 1,684.3 2.3 2,109.5 4.3 1,509.5 3.8

European Union 13,159.0 23.4 17,765.5 23.9 9,520.1 19.2 7,297.2 18.4

India -282.0 -0.5 1,466.2 2.0 698.6 1.4 983.6 2.5

Japan 10,439.7 18.5 8,828.7 11.9 4,657.8 9.4 5,308.4 13.4

Republic of Korea 1,246.3 2.2 2,715.5 3.7 1,583.5 3.2 1,421.8 3.6

New Zealand -209.0 -0.4 100.7 0.1 -165.1 -0.3 239.9 0.6

United States 3,018.3 5.4 8,067.6 10.8 5,132.6 10.4 3,357.7 8.5

Others 19,609.4 34.8 22,199.2 29.8 13,782.2 27.8 14,064.1 35.5

ASEAN Total 56,354.9 100.0 74,395.3 100.0 49,499.8 100.0 39,623.0 100.0

Source: ASEAN Secretariat FDI Database

Figure 3. INTRA-ASEAN FDI INFLOWS, 2009 (in mil. USD)

Host Country

SourceCountry B

rune

i D

arus

sala

m

Cam

bo

dia

Ind

one

sia

Lao

PD

R

Mal

aysi

a

Mya

nmar

Ph

ilip

pin

es

Sin

gap

ore

Thai

land

Vie

tnam

TOTA

L

BruneiDarussalam

0.00 0.00 0.00 0.00 9.88 0.00 0.05 -2.40 4.41 11.21 23.15

Cambodia 0.00 0.00 0.00 0.00 1.60 0.00 0.00 7.30 6.50 0.10 15.49

Indonesia 0.00 2.91 0.00 0.00 -29.38 7.30 0.00 937.00 -1.33 4.07 920.57

LAO PDR 0.00 0.00 0.00 0.00 0.10 0.00 0.00 0.00 0.54 0.00 0.63

Malaysia 0.01 55.56 312.9 0.45 0.00 0.00 2.22 872.60 9.79 66.15 1,319.47

Myanmar 0.00 0.00 0.00 0.00 0.00 0.00 0.00 65.90 0.32 0.00 66.22

Philippines 0.00 0.00 1.24 0.00 -5.53 0.00 0.00 82.70 16.33 1.72 96.47

Singapore 0.08 20.42 1,015.42 15.97 592.10 5.37 16.42 0.00 547.45 315.51 2,528.75

Thailand 0.00 23.87 50.72 17.20 -370.89 6.86 -0.01 15.50 0.00 29.96 -226.78

Vietnam 0.00 68.07 0.00 23.70 -467.60 0.00 0.00 59.00 1.76 0.00 -315.07

Total ASEAN 0.09 170.84 1,380.07 57.33 -269.73 19.53 18.68 2,037.60 585.77 428.72 4,428.91

Source: ASEAN Secretariat FDI Database

Figure 2. FDI INFLOWS TO ASEAN BY SECTORS, 2000-2009

Source: ASEAN Secretariat FDI Database

100%

75%

50%

25%

0%2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Primary & Others Manufacturing Services

35.8

39.9

24.2

56.8

40.1

3.2

38.7

46.6

14.7

44.2

28.3

27.5

49.2

40.8

10.0

44.7

38.4

16.9

63.4

24.4

12.2

55.4

28.0

16.6

62.1

26.4

11.5

67.9

21.5

10.6

An important goal of ASEAN is to intensify the creation of an AEC (ASEAN Economic Community) by 2015. Under the AEC, ASEAN aims to transform the regional association (composed of 10 member countries) into a single market and production base, and to facilitate the free flow of investment within the ASEAN region.

It should be noted that ASEAN has become the third largest source of FDI flows. This intra-ASEAN investment flows is a highly important trend in the development of the ASEAN economy.

Since 2002 FDI flows into ASE-AN rose significantly from $18 bil-lion in 2002 to $69.9 billion in 2007. This is an enormous in-crease. The main reason behind this rise was that ASEAN demon-strated that it was capable to cope with the Asian Financial Crisis of 1997/98. ASEAN took immediate measures to restore and improve the financial situation, and began with their economic reform pro-grams.

However, the FDI inflows de-clined in 2008 to $60 billion as a result of the global crisis followed by lower figures in 2009 estimat-ed to be as low as $39 billion. The prospect for 2010 and 2011, how-ever, looks more promising.

Looking specifically at the ASE-

AN 2009 figures one can see the following inflow from the main sources: 1) EU with $7,2 billion 2) Japan $5,3 billion 3) ASEAN $4,4 billion 4) United States $3,3 bil-

The EconomyThe President Post www.thepresidentpost.comJune 12, 2011A6

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The President PostT H E S P I R I T O F I N D O N E S I A

Imports Reach All-time High of $14 b in April

Indonesia`s imports reached an all-time high value of $14.89 billion in April, jumping 32.54% from the same month last year, the Central Statistics Agency (BPS) said.

April s imports represented a 2.8% increase compared to a month earlier, BPS Deputy Chief for Distribution and

Services Statistics Djamal said here last month.According to BPS data, oil/gas imports in April rose $1.01 billion or

35.28% from the previous month. However, non-oil/non-gas imports fell $0.61 billion or 5.25% from the month before.

“The oil/gas imports mostly consisted of crude oil and oil products,” he said.

Meanwhile, non-oil/non-gas imports were dominated by machinery and mechanical appliances valued at $1.93 billion, he said.

Cumulatively, the country`s imports in the January-April 2011 period reached $53.69 billion, up 30.32% from the same period last year, he said.

In the four months through April non-oil/non-gas imports increased 27.63% to $41.40 billion and oil/gas imports jumped 40.29% to $12.29 billion from the same period last year, he said.

He noted that China remained on top as the supplier of imported goods in the first four months of 2011 with $7.47 billion, or 18.03% of the overall imports and Japan came in second with $5.75 billion or 13.89%.

Overall, imports from other ASEAN member countries contributed 23.74% and European Union 8.82% to the overall imports.

RI’s 2012 Economic Growth Projected Highest in ASEAN

Indonesia`s economic growth in 2012 is predicted to be higher than those of other ASEAN countries, Finance Minister Agus Martowardojo said here last month.

“The government will prepare a ex-pansive fiscal policy in 2012 to support the economic growth,” Agus said when delivering the government`s response to the outlooks of House of Representatives factions in the House plenary meeting.

According to the finance minister, the government would make every effort to reach the economic growth of around 6.5% to 6.9% in 2012, although there would be a big enough challenge.

The finance minister said the rate of Indonesian economic growth would be higher than Malaysia’s 5.2%, Thailand 4.5%, the Philippines 5.0%, and Singapore 4.4%.

Public consumption and government consumption were also esti-mated to grow respectively by 4.8-5.2% and 6.0 -6.4%, while the invest-ment would grow by 10.0-10.4% and need the funds of about Rp2,800 trillion.

Agus said export and import were also predicted to increase respec-tively by 14.9-15.3% and 18.8-18.4%.

He added that budget allocation policy would be made to support quality economic growth, to expand the creation of job opportunity, and to reduce the number poor people.

“Policies will support the effort to expand employment, to increase people`s income, and to reduce the number of poor people,” the fi-nance minister said.

Maritime Ministry Allocates Rp 212 b for Fishermen

The Maritime Affairs and Fisheries has set aside Rp 212 billion to improve the welfare of fishermen through sev-eral empowerment programs, a minis-ter said.

“On national scale we have prepared a fund of Rp212 billion for fishermen welfare improvement programs,” Mari-time Affairs and Fisheries Minister Fadel Muhammad said here last month.

The minister said that the Rp 212 bil-lion funds accounted for 33% of the total budget for the maritime af-fairs and fisheries ministry.

He said that the improvement programs included housing for fisher-men, villagers fish pond empowerment, fishermen`s groups improve-ment and procurement of boats for fishermen through regional gov-ernments.

The ministry would propose a budget of Rp 1.2 trillion especially for improving the welfare of fishermen in 2012, he said.

The government is consider-ing to renegotiate investment con-tracts with foreign companies en-gaged in oil, gas and coal mining sectors, a minister said.

In principle, the government re-spected the contracts but deemed it necessary to review what it sees

as unfair contracts, Finance Min-ister Agus Martowardoyo said at the State Palace here last month.

“In 2011 there are many con-tracts of work that we need to re-view to see whether or not they represent a win-win solution and whether or not they are abnormal. That s what we want to review and study,” he said.

He stopped short of naming the foreign mining companies.

“All of them. We cannot men-tion them. But they are mostly en-

Govt to Renegotiate Foreign Mining Contracts

ECONOMIC UPDATES

Govt to Build Three LNG TerminalsThe government plans to build

three LNG (liquefied natural gas) storage terminals which are ex-pected to start operating in 2012, a senior energy official said.

The Energy and Mineral Re-sources Ministry`s director gen-eral of oil and gas, Evita Legowo, said here recently the three LNG terminals would be built at three locations, namely Jakarta, Bela-wan (North Sumatra) and Arun in Aceh.

“The operation of the terminals will reduce domestic gas supply problems,” she said.

She said the LNG terminal in

PT Nusantara Regas, which is a joint venture of PT Pertamina and state-owned gas company PT PGN respectively holding 60% and 40% shares.

The capacity of the floating ter-minal is planned at three million tons or 400 million cubic feet per day (MMSCFD) with an initial ca-pacity of 1.5 million tons.

The terminal will receive LNG from the refinery in Bontang, East Kalimantan, totaling 1.175 million tons a year based on a ten-year contract or totally reaching 11.75 million tons.

The gas will be used to meet the demands of Muara Karang and Tanjung Priok power plants in North Jakarta.

The Arun terminal meanwhile will be modification of its old func-tion as a supplying terminal into a storage terminal.

The Arun terminal built by Per-tamina wiil supply gas to fertilizer companies, power plants, paper and other industries.

Evita said the Belawan termi-nal which would be built by PGN has received supply up to 140 MMSCFD.

The gas from the terminal with

Agus Martowardojo

a capacity of 200 MMSCFD will be used by PLN (state power com-pany) totaling 140 MMSCFD and industries 60 MMSCFD.

The LNG to be supplied to Be-lawan terminal totaling 140 MMSCFD will come from the shifting of exports to Sempra in the United States.

Based on a contract, exports of LNG from Tangguh reach 3.6 mil-lion tons a year with the possibil-ity for 50% of them or 1.8 million tons a year to be shifted to other buyers with a compensation fee of around one US dollar per MMB-TU to Sempra.

Jakarta is expected to start oper-ating in the first quarter of 2012 while that in Belawan in the sec-ond quarter and that in Aceh in the third quarter of that year.

She said the government also plans to build another LNG ter-minal in Semarang, Central Java, which is expected to operate in 2013.

The groundbreaking of the LNG terminal project in Jakarta was carried out recently by the di-rector for general affairs of state-owned oil/gas company PT Per-tamina, Waluyo.

The project is carried out by

gaged in natural resources man-agement,” he said.

Basically, the government in-tended to increase state revenues, create more jobs and give added value to the country s natural re-sources so that it deemed it nec-essary to review the contracts, he said.

In addition, the government also did not consider such cru-cial issues as environment man-agement obligations when signing the contracts, he said.

Fadel Muhammad

The government respected the contracts but deemed it necessary to review what it sees as unfair contracts

The government raised Rp 5.45 trillion in funds from the auction of four series of state bonds.

During the auction the gov-ernment received total bids of Rp 14.7 trillion, Director Gen-eral of Debt Management at the Finance Ministry Rahmat Waluyanto said in a statement last month.

The bonds put to the auc-tion were series SPN20120504, FR0055, FR0053 and FR0057.

No bidder was declared a winner for the bonds series SPN20120504 which will ma-ture on May 4, 2012.

He said the Rp 5.45 trillion consisted of Rp 0.9 trillion from

bonds series FR0055, Rp 1.45 tril-lion from the bonds series FR0053 and Rp3.1 trillion from the bonds series FR0057.

The bonds series FR0055 due on September 15, 2016 car-ry a weighted average yield of 6.84906% and a coupon of 7.38%.

The bonds series FR0053 due on July 15, 2021 carry a weighted average yield of 7.499% and a cou-pon of 8.25%.

The bonds series FR0057 due on May 15, 2041 carry a weight-ed average yield of 9.2586% and a coupon of 9.5%.

The issuance of the bonds is de-signed to meet part of financing the target in the state budget.

Govt Raises Rp 5.45 t From Auction of State Bonds

The government has projected the domestic economy to expand by a range of 6.5-6.9 percent in 2012, or slightly higher than the economic growth forecast of 6.3 percent set under the 2011 state budget.

Strong domestic consumption, solid investment inflows and im-proving export performance are expected to remain the engine of economic growth next year.

The improving export perfor-mance will be inseparable from the good prospects of the world economy after it saw years of slowdown.

“In 2012, the government be-lieves that the global economy will be getting more prospective. For Indonesia, it will of course have a good impact on the national econ-omy. Therefore, we are optimis-tic that the economy will acceler-ate to a level of 6.5-6.9%,” Finance Minister Agus Martowardojo said when explaining the frame of macro economy and fiscal pol-icy of 2012 at a plenary meeting with the House of Representatives (DPR) here last month.

In addition, the government would also pay special atten-tion to the development of infra-

structure facilities both in urban and rural areas. Among the sec-tors that will be high on the list of the government s priorities next year will be energy and electricity, transportation, communication, health, and education.

Among the global challenges were unequal global economic re-covery, continuing crisis in Eu-rope, global currency war and po-tential hike in the world oil price that would affect inflation, he added.

Bank Indonesia Governor Darmin Nasution said early this year the prospect of the Indo-

Economy in 2012 toGrow by 6.5-6.9%

nesian economy would remain strong, with gross domestic prod-uct (GDP) expected to reach 6.3% in 2011 and 2012.

“The GDP in 2011 and 2012 is expected to grow at a brisk 6.3% each, particularly fueled by do-mestic demand and accelerated investment,” he said.

The Indonesian economy grew by 6.5% in the first quarter of 2011, particularly driven by strong consumption and exports.

Minister Agus said first-quarter economic growth was 55.7% con-tributed by public consumption.He said foreign investors confi-dence in the Indonesian econo-my remained high as reflected by strong foreign capital inflows. Positive sentiments in the global stock exchanges had caused the share composite index (IHGS) to strengthen and prompted the ru-piah to record the highest appre-ciation among the regional cur-rencies.

“In April alone, capital inflows in the state bond market reached Rp 9.85 trillion, the share market Rp 17.5 trillion and SBI (Bank In-donesia Certificates) Rp 9.71 tril-lion,” he said.

Darmin Nasution

Trade Minister Mari Elka Pangestu hoped Indonesia would continue improve its competitiveness until it reached a position over the 40th lev-el on the list of the World Eco-nomic Forum (WEF) s Global Competitiveness Index (GCI).

“We hope in the coming two or three years Indonesia s competitiveness rating would increase and be registered at over the 40th level,” the minis-ter said on the sidelines of the World Economic Forum - East Asia (WEF - EA) meeting here on Sunday.

“We will also do our best to overcome corruption and pub-lic health problems. For these, we will take short and long term steps,” she said.

The 2010-2011 WEF`s GCI report placed Indonesia s com-petitiveness rating on the 44th list of 239 developing coun-tries.

Indonesia s position was still over those of a number of de-veloping states such as Brazil, South Africa and India but it is under those of Singapore and Malaysia.

Several factors considered

to be contributing to Indonesia s competitiveness included fast eco-nomic growth, sound fiscal man-agement, and increasing basic ed-ucational access.

In the meantime, factors seen as having weakened the country s competitive edge consisted of in-sufficient infrastructures, toads, ports, railways and the lack of power and energy supplies.

In order to increase its compet-itiveness, Indonesia should also improve its health service, labor welfare, transparency and ac-countability of bureaucratic ser-vices.

Minister Mari Vows toRaise RI’s Competitiveness

Mari Elka Pangestu

The President Postwww.thepresidentpost.com June 12, 2011 A7

Around Jababeka

PT Jababeka Tbk last week held its annu-al general meeting of shareholders at the President Lounge Menara Batavia, Ja-

karta, and announced that its net profit in 2010 stood at Rp 62 bil-lion.

“We set aside Rp 50 billion as company reserves and the rest is recorded as retained earnings to strengthen the capital structure of the company,” said Budianto Liman, Vice President Director of Jababeka.

Last year, Jababeka sold 107.3 hectares of industrial space, a nearly 600 percent jump from only 15.3 hectares in 2009. Total sales stood at Rp 712.35 billion in 2010, a 305 percent rise from a year earlier.

The company was established in 1989 and is the first listed in-dustrial estate developer in Indo-nesia. It offers industrial, residen-tial and commercial buildings and land for sale, as well as provides infrastructure services, which in-clude water provision, waste wa-ter treatment, estate manage-ment. In addition, it develops and constructs power plants and sells electricity to state-owned power provider, PT Perusahaan Listrik Negara (PLN).

Located 35km from the Ja-karta Central Business District,

Jababeka’s 2010 Net Profit Hit New High at Rp 62 billion

bine generators (GTG) have been installed, tested and commis-sioned. Two chimneys for heat re-covery steam generators (HRSG) were installed, and a Steam Tur-bine Generator (STG) founda-tion has been completed while the

Global shipping companies are now able to enjoy the full benefits of the convenient process of im-port-export at Cikarang Dry Port (CDP).

In May 2011, two empty con-tainer depot operators, PT Multi-con Indrajaya Terminal (Multicon) and PT. Kharisma Astra Nusan-tara (KAN), began operations at CDP. Both companies provide empty container depot services in eastern Jakarta.

For Multicon, the opening of their new office at Cikarang com-plements the presence of shipping

Multicon and KANStart Operations at CDP

companies Maersk Line, MCC Transport and Safmarine at the CDP. Since its establishment in 1998, Multicon has become one of the largest empty container de-pot companies in Indonesia with a market share of nearly 20%.

The opening of KAN in Cikarang reflects the firm commitment to support the operations of ship-ping companies, namely APL and CMA-CGM, which will also open its services in the CDP.

The presence of empty contain-er depot operators will add more value to exporters, importers and users of other services. Various container depot facilities and ser-vices such as empty containers, the cleaning and repair of contain-ers are available at CDP to provide convenience to all parties.

Last year, Jababeka sold 107.3 hectares of industrial space, a nearly 600 percent jump from only 15.3 hectares in 2009. Total sales stood at Rp 712.35 billion in 2010, a 305 percent rise from a year earlier.

STG machine is still in the assem-bly stage. It is targeted to start op-erations by the end of 2011, selling electricity to PT PLN with a pos-sible buyback in line with tenant demands, Budianto said.

Another project is the Cikarang Dry Port, which is part of several programs by the Indonesian gov-ernment, namely Customs Ad-vance Trade System and Indone-sian Blue Print Logistics, and is intended to streamline and boost the country’s competitiveness in terms of supply chain and distri-bution of goods. The SAFE Frame-work of the World Customs Orga-nization and other international standard compliances shall be applied to enhance international trade and to bring value to sup-ply chain players both in Indone-sia and overseas.

Kawasan Industri Jababeka (KIJA), as the primary choice

destination for foreign direct investments,

revives the company’s sales boom to the pre-crisis levels of

1996-97.

55km from the Tanjung Priok sea-port and 65km from the Soeka-rno Hatta International Airport, Kota Jababeka-Cikarang is easi-ly accessible via toll roads. A su-per-efficient and comprehensive infrastructure supports various facilities within the estate. It con-sists of 1,570 ha of light-medium industries and 1,400 ha of resi-dential area.

Jababeka’s other site is locat-ed in Cilegon, 85 km of west Ja-karta and is connected via Jakar-ta-Merak toll road and railway. It covers 1,000 ha of medium & pet-rochemical industries.

Kawasan Industri Jababe-ka (KIJA), as the primary choice destination for foreign direct in-vestments, revives the company’s sales boom to the pre-crisis levels of 1996-97.

Approximately Rp 109 billion have been recorded as sales in 2010, and as such the remain-ing Rp 750 billion will be booked in 2011.

The demand of industry land is expected to increase due to the growth of economic activities, sol-id FDI inflows and the business sector’s expansion plans.

Jababeka develops beyond property projects to support sus-tainable growth with sound plans for the future. The Bekasi Power Plant as of May 2011 operates at the level of 88.5%. Two gas tur-

The presence of empty container depot operators will add more value to exporters, importers and users of other services.

Manufacturing Surabaya 2011 was held at the Grand City Convention and Exhibition Centre and proved to be a huge success in meeting the demand from the industry to keep themselves abreast of developments in new equipment.

A total of 281 companies from 25 countries participated in the exhibition, Singapore and Taiwan.

Jababeka, as one of the largest industrial estates in Indonesia, was also involved as an exhibitor in the Expo. As an industrial estate which houses more than 1,500 companies, both national and multi-national, and supported by the world-class facilities and infrastructure, Jababeka tried to offer superior products, including commercial office buildingx which are dedicated to the SME industry.

The exhibition was opened by Ir Budi Setiawan, Head of Department of Trade and Industry, Province of East Java, on behalf of the East Java Governor.

Ms Pauly Tan from the Singapore Manufacturers Association said that the event was very well organized and allowed people to gain many business opportunities.

Jababeka Industrial Estate in Manufacturing Surabaya 2011

For more information about Jababeka Eventsand our industrial estate, please call :

(021) 893 4350

Jababeka Event

In 2009, it commenced con-struction of a dry port on a 200-hectare area in Cikarang designed to handle up to 2 mil-lion twenty-foot equivalent unit (TEUs) containers until 2020.

The cost to build BP is $141 million while the dry port costs $200 million. Jababeka is still working on improving its ac-cessibility.

“BP’s revenue will be report-ed in 2012 and is estimated to reach $80 million per year, while revenue of the dry port is included in 2011 revenue but the amount is still small. We are still waiting the completion of the entrance highway to the Jababeka area by which time the dry port is projected to earn about Rp 87 billion,” ex-plained Budianto.

The President Post/Nandi Nanti

Jababeka Board of Directors. From left to right: Vice President Director Hadi Rahardja, Director Setiasa Kusuma, President Commissioner Bacelius Ruru, President Director Setyono Djuandi Darmono, Vice President Director Budianto Liman, Director Hyanto Wihadhi.

The President Postwww.thepresidentpost.com

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Displacement: V8 4,691 cc•Power: 323 kW (433hp) @ 7,000 rpm•Torque: 490 Nm ( 361 lb/ft) @ 4,750 rpm•Max engine speed: 7,200 rpm•

Quattroporte Sport GT S is equipped with an automatic six-speed transmission developed with sportiness of a new and specific gear-shifting strategy: the MC-Auto Shift mode, Manual Mode, and Manual Sport mode.

“MC AUTO SHIFT” mode: •In order to optimize standing starts, the automatic gearbox offers the MC Start Strategy, which functions with the MSP off. The driver should press and hold the brake pedal, then start pressing the accelerator and releases the brake pedal only when the optimum revs are reached (between 2300-2500 rpm). This fast start strategy, recommended only for use on the race track and in a situation of complete safety, reduces the 0 to 100 Km/h (0-62 mph) time from 5.3 seconds to 5.1 seconds.“MANUAL MODE”: •In manual mode the gear-shift is directly controlled by the driver, allowing the engine to reach its top speed.“MANUAL SPORT”/”AUTO SPORT” mode: •

When down-shifting, the throttle blip is matched with the SPORT-mode exhaust sound to facilitate maximum driving enjoyment.

ExteriorNew 20” Multi Trident Silver wheels are fitted as standard, together with red brake calipers and Dual Cast technology brakes. The exterior body color range includes all 19 colors available for the Quattroporte and the Quattroporte S.

InteriorThe sporty look of the interior features new M-design seats with perforated Alcantara® and leather upholstery.

The interior configuration range features 10 leather colors (Avorio, Sabbia, Cuoio, Marrone Corniola, Grigio Ghiaccio, Grigio Medio, Blu Navy, Rosso Corallo, Bordeaux, Nero)

Toyota Astra Financial to offer Rp 750 b bonds

PT Toyota Astra Financial Services is to offer fixed rate bonds worth Rp 750 billion to expand its automotive financing business.

The issuance of the bonds consists of three series with a maturity of one to three years and was part of strategies to diversify financing sources with attractive interest rate, Toyota Astra Financial Services President Director Buntoro Muljono said here recently.

The bonds series A due in 370 days are issued at a coupon of 7.5-8.25%, series B due in 24 months at a coupon of 8.25-9.25% and series C due in 36 months at a coupon of 9-9.75%.

Local rating agency PT Pemeringkat Efek Indonesia (Pefindo) has assigned an AA rating to the bonds.

Buntoro said proceeds from the issuance of the bonds would be used as working capital to expand automotive financing business. The financing sources would also come from external cash and banking loans.

The company has appointed PT Trimegah Sekuritas Tbk, PT HSBC Securities Indonesia, and PT Indopremier Securities as bond issue underwriters. The bonds will be offered to the public on June 27-July 1 and listed at the Indonesia Stock Exchange on July 8.

Toyota Astra Financial Services is a joint venture between Toyota Financial Services Corp., Japan and PT Astra International Tbk., which focus on automotive financing (Toyota) throughout Indonesia.

Bank Jatim posts Rp 347 b net profit

The East Java provincial government-owned Bank Pembangunan Daerah (Bank Jatim) booked a net profit of Rp 347 billion in the first four months of this year.

The net profit was inseparable from the bank`s good performance over the period, PT Bank Jatim President Director

Hadi Sukrianto said here last month.“We are optimistic that we can achieve the net profit target of Rp 1.2

trillion for 2011,” he said.

As per April 30, 2011, the bank`s assets totaled Rp 23.08 trillion. Meanwhile, the amount of credits channeled in the four months through April reached Rp 13.907 trillion and the amount of third party fund placement stood at Rp 19.2 trillion.

BUSINESS BRIEFS

PT Jaya Agra Wattie Tbk. (JAWA) officially listed its shares at the Indonesian Stock Exchange (BEI) here last month at an ini-tial offering price of Rp 500 per share.

JAWA released 1.132 billion shares or 30% of its issued capi-tal, fully paid in after initial pub-lic offering that raised Rp 566.202

billion.In the primary trading the price

of JAWA shares rose eight percent to Rp 540 from an initial price of Rp 500 per share.

“During offering we are over-subscribed 2.44 times of the number of shares released to the public. This is because the mar-ket has seen our business expe-

PT Jaya Agra Lists Shares at BEIPT. Jaya Agra released 1.132 billion shares or 30% of its issued capital, fully paid in after initial public offering that raised Rp 566.202 billion.

rience of 90 years in the planta-tion sector,” said JAWA president director Harijadi Soedarjo after the listing.

90% of the proceeds from the IPO would be used for planting and developing rubber and oil palm plantations to support the company s business. Apart from that, he said, he also planned to build rubber factories in West Java and East Java each with a capaci-ty of 150 kilograms per hour.

The remaining 10% of the pro-

ceeds would be used for new land acquisition, working capital and capital expenditures, he said.

“We would use 90% of the funds from the IPO for planting and de-veloping rubber and oil palm plantations in South Kalimantan, building crumb rubber factories in South Kalimantan, West and East Java and other corporate ac-tions,” he said.

After the IPO Utama Hadi Surya holds 19.99%, Dwijaya Hadi Surya 19.99%, PT Sinar Kasih Abadi 21%, PT Aji Lebur

Seketi 9.02%and the public 30%.Acting as underwriters for the

IPO were PT Mandiri Sekuritas and PT OSK Nusadana Securities Indonesia.

PT Jaya Agra Wattie is a rubber, oil palm, coffee and tea planta-tions company and has nine palm oil processing plants in Banten (West Java), East Java and South Kalimantan.

It is the eighth issuer record-ed at BEI this year to increase the number of listed companies to 426.

State telecommunication operator PT Telkom Tbk has decided to allocate 55% of its last year s net profit worth Rp 11.5 trillion as dividends.

Telkom would pay dividends worth Rp 6.34 trillion in total, Telkom President Director Rinaldi Firmansyah said following a general shareholders meeting here last month.

The dividends included interim dividends worth Rp 526.1 billion paid to shareholders on January 11, 2011, he said. The shareholders also agreed to buy back Telkom shares worth Rp5.1 trillion, he said.

“There has been an increase in the amount of funds to buy back shares to Rp 5 trillion from Rp 3 trillion previ-ously,” he said.

Telkom Finance Director Sudiro Asno said the buy-back program would be carried out in 18 months since the general shareholders meeting in May.

“The share buyback will be carried out through the purchase of shares at the Indonesia Stock Exchange and the New York Stock Exchange,” he said.

He said .37 billion of the 2010 net profit was allocated for partnership programs and Rp 115.37 billion for envi-ronmental conservation programs, or 1% of the net prof-it each.

The remaining net profit worth Rp 5.1 trillion would be used as retained earning to develop the company s Tele-communication, Information, Media and Edutaintment (TIME) business, he said.

Telkom to spend 55% of2010 profit on dividends

PIAGGIO INVESTMENT: PT Piaggio Indonesia plans to open over 35 outlets in Indonesia. Its warehouse at Cikarang supplies spare parts for the scooters it produces.The President Post/Nandi Nanti

BusinessThe President Post www.thepresidentpost.comJune 12, 2011B2

PT MNC Securities has issued bonds worth Rp 300 billion this year to strengthen its working capital, its president director said.

The bonds called MNC Securities II would be classified into se-ries A and series B with a maturity of three years and five years each, Wito Mailoa said in a public expose here last month.

The bonds series A worth Rp 150 billion would carry a fixed interest rate of 11.75-12.5% and the bonds series B worth Rp 150 billion would carry a fixed interest rate of 12.5-13.25%, he said.

Proceeds from the issuance of the bonds would be used as working capital to finance margin trading, increase portfolio in-vestment and develop branch offices and technology, he said.

“Nearly 95 percent of the proceeds from the issuance of bonds will be used to strengthen working capital and the rest to develop branch offices and technology,” he said.

Local rating agency PT Pemeringkat Efek Indonesia (Pefindo) has assigned a `BBB rating to the bonds. The rating outlook is stable.

MNC Securities has appointed Panin Securities Tbk as a bond issue underwriter. The bonds were offered on May 24-30 and listed at the Indonesia Stock Exchange (BEI) on June 20.

MNC Securities issuesRp 300 b bonds

Instant noodle maker PT Indo-food Sukses Makmur Tbk (INDF) last year booked a net profit of Rp 2.95 trillion, a 42.2% increase compared with the year before, al-lowing it to allocate 40% of its last year s net profit as dividends.

“Shareholders agreed to dis-tribute dividends at the rate of Rp 133 per share. This is a form of our appreciation to shareholders support for the company so far. The dividend distribution is also a form of our optimism that we will be able to deal with challeng-es that may lie ahead,” INDF Pres-ident Director Anthoni Salim said following a general shareholders

Indofood Net Profit Up 42% to Rp 2.95 t

PT Freeport Indonesia has paid Rp 5.8 trillion in taxes and oth-er financial obligations in the first quarter of 2011 (January to March) to the Indonesian govern-ment, the company says in a state-ment received here last month.

The contributions include $346 million in corporate income tax, $165 million in employees income tax, regional tax and other kinds of tax as well $51 million in roy-alty and $117 million in dividends for government.

Total financial obligations that the company has paid from 1992 to Match 2011 to the government,

Freeport Pays Rp 5.6 t in Financial Obligations to GovtFreeport Indonesia s contribu-tion to the regional Gross Domes-tic Product (GDP) of Papua s Dis-trict of Mimika reaches 96% while for Papua province up to 68%. Meanwhile the company s contri-bution to Indonesia s GDP reach-es 1.59%.

Until 2010 total number of em-ployees of PT Freeport Indonesia is recorded at more than 22,000, 30% of them local Papuans and less than two percent are foreign-ers.

To increased the number of skilled workers especially from lo-cal Papuans in 2003 PT Freeport

Indonesia established the Mining Institute of Nemangkawi (IPN) as a training center for workers.

Until now it has produced more than 1,500 trainees to work for PT Freeport Indonesia and contrac-tor companies.

In 2010 PT Freeport Indonesia allocated more than $185.5 mil-lion in various sustainable devel-opment programs.

Of the total $72.9 million was for environmental management, $112.6 million for social develop-ment programs including $69.7 million through partnership funds for community develop-ment programs.

CONSTRUCTION EXPENDITURE

Workers doing construction work on a shopping center at Jalan Sudirman, Jakarta. Construction expenditure in 2011 is estimated to reach Rp 204 trillion.

The President Post/Nandi Nanti

State oil and gas company PT Pertamina said its $500 million bond issue was oversubscribed ten times, suggesting that inves-tors confidence in the company remained high.

“When the $1 billion bond issue was oversubscribed seven times, the $500 million bond issue was oversubscribed ten times,” Pertamina Finance Director Afdal Bahaudin said on the sidelines of a working meeting with the House of Representa-tives Commission VII here last month.

Yet the company still had no plan to issue another bonds de-spite the over-subscriptions, he said. He said shareholders had agreed on the value of bond issues to up to $1.5 billion.

Proceeds from the bond issues would be used to finance capital expenditures projected to reach Rp 37 trillion this year, he said. The other funding sources to finance the capital expendi-tures would come from loans and project financing, he said.

Both Afdal and Pertamina spokesman M Harun declined to comment on whether proceeds from the bond issues would be used to finance its oil blocks in Cepu, West Madura or Angola.

The $1 billion bonds will mature in 10 years and $500 million bonds in 30 years.

Pertamina $500 m Bonds Oversubscribed 10 Times

BULL to Offer 6.65 b Shares

Oil and gas shipping company PT Buana Listya Tama Tbk (BULL) will conduct an initial public offering of 6.65 billion shares to finance its business expansion.

The shares would be offered at Rp 155 each, PT Buana Listya Tama Tbk President Director Henrianto Kuswendi said last month.

Proceeds from the issuance of the shares would also be used to repay debts and strengthen capital, he said.

The plan to issue 6.65 billion shares had been adjusted to the company`s funding needs, he said, adding 38% of the shares would be offered to foreign investors and 62% to domestic in-vestors.

The company recently secured a number of new short-term contracts.

“We are optimistic that BULL will be able to improve its perfor-mance this year and upcoming years,” he said.

BULL currently leads the market for national energy logistic services, particularly oil and gas production services, he said.

“The government`s decision to raise the target of oil and gas production coupled with good prospects of the Indonesian econ-omy would make the market for national energy logistic services increasingly attractive,” he said.

BULL has appointed PT Danatama Makmur as a share issue underwriter with JP Morgan, BNP Paribas, and Standard Char-tered as sales agents.

Indofood net sales rose 2.7% to Rp 38.4 trillion last year compared to Rp 37.4 trillion a year earlier.

The government will again hold an Indonesian product promotion fair at Harrods Department Store, London, England, from July 31 to August 27, 2011.

The promotion s theme is “Indo-nesia Creative Escapes” and is a part of Indonesia s plan to have a much larger product sale during the Olympic Games in England in 2012, Hesti Indah Kresnarini, the trade ministry`s director gener-al for the national export develop-ment, said here last month.

“This year we don t have our products in a window display only like last year, but in fact we sell our products in a 360-m2 area on the third floor of Harrods,” Hesti said.

The products on sale are cul-

RI Products to be Promoted at Harrods

meeting here last month.The dividends would be dis-

tributed among shareholders on August 9, 2011, he said.

INDF Director Thomas Thjie said net sales rose 2.7% to Rp 38.4 trillion last year com-pared to Rp 37.4 trillion a year earlier. The general sharehold-ers meeting also decided to al-locate Rp 5 billion of last year s net profit as retained earnings. Thomas added Grup Indofood had decided to allocate Rp 5.2 trillion for capital expenditure this year. Of the total, Rp 2.2 trillion would be used for agri-business.

Meanwhile, the capital ex-penditure of PT Indofood CBP Sukses Makmur, a subsid-iary of INDF, would reach Rp 1.8 trillion. The fund would be used for the noodle division and food seasoning division as well as for construction of new dairy farm in East Java, he said. ture-based handicraft products

such as batik, woven clothes, ac-cessories, furniture and recycled goods.

Other products being offered are sports equipment, music in-struments, Spa products, coffee, tea, organic food, and spices.

“We also promote Indonesian culinary. Apart from the the dis-play, we also advertise the prod-ucts on the plasma television available at Harrods,” she said.

Earlier, Indonesia organized an integrated product promotion called “Remarkable Indonesia” at Harrods Department Store, Lon-don, from March 27 to May 1, 2010.

Anthoni Salim

Elnusa to Pay Rp 19 b in DividendsPT Elnusa Tbk, a subsidiary

of state oil and gas company Per-tamina, has decided to allocate Rp 19.17 billion of its last year s net profit as dividends.

“Shareholders have agreed to pay a dividend of Rp 266 per share on July 20, 2011,” PT El-nusa Tbk President Director Su-haryanto said following a gener-al shareholders meeting here on Thursday.

Elnusa posted a net profit of Rp

63.9 billion last year.He said 5% of the company s

2010 net profit will be allocated as general reserves and 65% as retained earnings.

“Given the decision reached at the general shareholders meeting today, the compa-ny will use the 2010 retained earnings to expand its busi-ness, especially integrated up-stream service as its core busi-ness,” he said.

After the promotion, Har-rods sent personnel to Indone-sia to survey potential products to be sold at the largest depart-ment store in England. They went to several shopping malls, as well as to handicraft, fashion, jewelry and food production centers.

The government hoped that the trade and tourism promotions at Harrods can create a better image of Indonesia and help smoothen the entry of Indonesian products to England in particular and Eu-rope in general.

Indonesia s exports to Eng-land include footwear, coal, fur-niture, motor spare-parts, textile and textile products, natural rub-ber and coffee.

based upon the working contract of 1991, reach $21.1 billion.

They consist of corporate tax income totaling $7.3 billion, the employees income tax, regional tax and other kinds of tax totaling $2.3 billion and dividends reach-ing $1.2 billion.

“Freeport Indonesia has in-vested about $7.2 billion in vari-ous social projects,” it says in the statement.

Based on a study by the Insti-tute of Social and Economic Re-search of the Faculty of Eco-nomics of state University of Indonesia (LPEM-UI) in 2010,

Freeport Indonesia`s contribution to the

regional Gross Domestic Product (GDP) of Papua`s

District of Mimika reaches 96% while for Papua province up to 68%. Meanwhile the

company`s contribution to Indonesia`s GDP

reaches 1.59%.

Giant Jababeka States its existency

To Be The Leading Retailer In Indonesia.

GIANT JABABEKANow open at Indonesia Movieland Kota Jababeka

vouchers worth of IDR 15 millions, 4

Honda Scoopy motorcycles, 4 Ipod

Touch, 40 Digital Pocket Camera and 40

Shopping Vouchers worth of IDR 400

thousands. To get the lucky draw

coupon, the customers only need to

shop with minimum purchase of IDR 50

thousands including one of the sponsor’s

products. By using Citibank Giant Credit

Card, the customer will also entitle to

double coupons allowing them to

increase the opportunities of winning the

prize. The promotion will be until 26th of

June and the coupon can be submitted

to the drop boxes at the deposit

counters by the latest of 30th June 2011.

The coupons will be gathered on the

16th July 2011 and the names of the

winners will be announced in the medias

and all over the store networks.

Giant cares for a greener greener envi-

ronment. Giant Jababeka has also

adopted the “Green Lighting Solution”

system using Philips Master LED Tube

that has been proven to be 50% more

efficient than the regular conventional

TL. It is eco-friendly as well as mercury-

free. Moreover, all the Giant stores,

including the Jababeka also uses ”bio-

degradable” plastic bags which are easy

to deteriorate and will be destroyed less

than 2 years, creating healtier soil and

environment.

Many achievements have been entitled

to Giant, such as several MURI records in

the social fields. Two of the most well-

appreciated programs are the donations

of 245 netbooks for 227 schools and the

”Giant Pulang Kampung”, an annual

Fried Chicken, Guardian, Pojok Busana,

Pata-Pata of the BATA Group, Ditami

Fried Chicken, Warung Bang Topan,

Sumobento Express, Mr. Baso, Ice Cream

Italiano, Crepes, Sweet Corn, Potato

Donut, Teh Poci, 11 Push Cart and many

more. Completed by free parking facili-

ties , Giant Jababeka is ready to serve its

customers.

To festive its launching of the superstore,

In line with its commitment to inces-

santly serve the Indonesian community,

Giant as one of the leading retailer

continue to expand throughout the

country’s most potential region such as

Jababeka, one of the promising indus-

trial districts in East of Jakarta.

Giant superstore Jababeka covers area

of 10.000 m2 where rests 5.190 m2

building, making this Giant Hypermarket

as the biggest and the most complete

shopping destination within the indus-

trial area of Jababeka. It sets-up in the

strategic location of Indonesia Movieland

Jababeka in order to make the custom-

ers easier to visit.

LIke the other Giants, Giant Jababeka

offers more added value for money

through variety of products, brands and

originalities. Everything of fresh foods;

households and kitchenwares; daily

apparels; to a wide array of living needs

including hobbies, careers and lifestyle

merchandises are available. It even

provides Korean products, knowing that

there is a community of Asian people

living nearby. Other facilities such as

Free play-land, Food court, ATM center,

and other tenants for instance; Giant

event to provide free transportation for

thousands of Giant’s customers to have

their ”mudik” ritual tradition on the

Ramadhan month. Last year, there were

7,000 customers for this program and

this year Giant aims to have 10,000

customers to participate (not only for

customers living in Jakarta, Bogor,

Depok and Bekasi area, but also in

Surabaya and nearby).

From year to year, Giant – known as the

biggest and most complete superstores

in Indonesia has constantly expanded its

networks. This shows in the first quarter

of this year, 38 Giant superstores and 76

Giant supermarkets have been operated

to serve Indonesian families. With almost

9 years of campaigning the low prices

every day, Giant Jababeka is ready to

contribute to the performance of Giant,

one of the leading retailers in the coun-

try. (end)

Giant has prepared variety of interesting

promotions such as crazy discounts

starting from 27th May to the upcoming

7th June. Besides the opening promo-

tion, the customers have a chance to

participate in the famous brand-lucky

draw program, known as the “MEREK

TERKENAL 2011” with the prizes to win 2

units of Nissan March cars , 4 travel

Fruits & Vegetables ATM Center

Daily Needs Dairy Frozen Bakery

Basic NeedsGiant Fried Chicken Houseware

Children Playground

Health & Beauty

Korean Products

InvestmentThe President Post www.thepresidentpost.comJune 12, 2011B4

Investment in Indonesia has in-creased 27 pct in the first quarter of 2011 compared to last year s.

“The increase was triggered by the big interest of local and for-eign investors in Indonesia,” head of the Capital Investment Coordi-nating Agency (BKPM) Gita Wir-jawan said herelast month

He said up to the first quar-ter this year French investment reached $5.2 billion.

In the meantime, he add-ed, South Korea s Po Hang Steel Company was ready to invest $6 billion in the mining sector and steel production.

On the form of business in the mining sector along with South Korean capital, he said they es-tablished cooperation with PT Krakatau Steel.

“The cooperation will increase production capacity by 6 million

tons in Krakatau Steel and a pro-duction of still 2.7 million tons, with the location of its operations in Cilegon,” he said.

Investment in Indonesia in 2010, he added, reached Rp 208.5 trillion, 20% in the mining sector.

“The remaining 80% is spread

in the sectors of manufactur-ing, agriculture, and services,” he said.

On the other hand, he added, investment in Indonesia in 2010 increased significantly by 54.2% compared to that in 2009.

He said investment outside Java in 2010 also increased sig-nificantly by 33% compared to that of the year before.

“The economic growth in 2011 is predicted to be able to reach seven percent a year. Therefore to attract investment opportunities must be created and existing po-tentials exploited,” he said.

He said Indonesia s potentials mainly come from natural re-sources, such as geothermal en-ergy source which comprise 40% of the world`s geothermal source and coal reserves which are huge.

RI Investment Up 27% in Q1 this YearIndonesia`s potentials mainly come from natural resources, such as geothermal energy source which comprise 40% of the world`s geothermal source and coal reserves which are huge.

European car maker Volkswa-gen will soon build a factory in In-donesia or at the end of 2011 at the latest, Industry Minister MS Hidayat said.

“I have had a talk with them (Volkswagen) about their plan. They already have a blueprint on the project,” said Hidayat after at-tending the ASEAN-UE business summit at the Jakarta Conven-tion Center (JCC) here recently.

Volkswagen had been explor-ing the possibility of setting up a production facility in Indonesia for the past three years and now it was hoping to realize it later this year, Hidayat said.

Volkswagen s intention to ex-pand its business in Indonesia was in line with the European country s plan to increase its in-vestment in Indonesia, especial-

ly in the automotive sector which had huge market potential. Hi-dayat, however, did not mention the amount Volkswagen would in-vest in Indonesia.

The minister said the German auto maker s plan to set up shop in Indonesia was in line with the exhaust emission standards cam-paign in 2012 towards Euro-3.

“This is good news for the do-mestic automotive industry be-cause the European automotive industry has no base yet in Indo-nesia where the market is so far dominated by Japanese and Ko-rean brands,” Hidayat said.

According to earlier reports, the investment value of the would be Volkswagen factory in Indonesia was about 35 million euro and it was expected to absorb 2,000 to 4,000 workers.

Volkswagen to Build Factory in RI An Indian investment com-pany has signed a cooperation agreement with the South Su-matra provincial administra-tion for building 270 kilome-ters of railroad tracks from Tanjung Enim to Lampung.

The track from the min-ing mouth in Tanjungenim to Lampung province is part of the efforts to increase coal pro-duction in the province, Gov-

ernor H. Alex Noerdin said in his written address read out by head of the South Sumatra Investment Coordinating Agency here on re-cently.

The governor mentioned the readiness of the Indian invest-ment company tp work with PT Abadi Global is an indication that the investment climate in the province has become increasing-ly conducive.

He said that in building the railroad the Indian investor would at least increase the coal produc-tion capacity by 10 million to 11 million tons per year to more than 35 million tons.

The Indian investor has already prepared at least Rp 16 trillion to Rp 17 trillion and absorb a work-force of thousands of people, he said.

Governor Noerdin has earli-

Indian Company to BuildRailroad Track in S. Sumatra

er said that South Sumatra is not only rich with coal depos-its reaching 22.24 billion tons or 48.45% of the total nation-al reserves, but also have other potential natural resources in the mining sector.

He said the natural resourc-es included 4.18 trillion stan-dard cubic feet of natural gas and 757.4 standard cubic feet of natural oil.

A Chinese company, PT Guandong Agribusiness, will invest in plantations in trans-migration areas in Indonesia to create jobs for up to 28,000 workers.

Indonesian manpower and transmigration minister Mu-haimin Iskandar witnessed the signing of a memoran-dum of understanding for it in Guangzhou, China last month, along with the Guandong gov-ernor representing the Chinese government.

“Workers to be involved in it could reach 28,300,” Mu-haimin said in a press state-ment received here.

The signing of the MOU was carried out by Lei Yong Juan from PT Guandong Agribusi-ness and Soedomo Margonoto from PT Pulau Sumbawa Agro as his Indonesian partner.

“Initially sisal plantations will be developed in a 4,050 hectare area in Sumbawa along with a processing in-

a Chinese state-owned company established since 1951 and owns rubber, sugarcane, sisal and fruit plantations, plantatiions prod-ucts and fisheries with a turnover at around 15 billion yuan or Rp 21 trillion a year.

PT Sumbawa Agro meanwhile is the subsidiary of Kapal Api Group that will prepare the man-agement and domestic market.

Chinese investors interested in infrastructure projects

Chinese investors are keen on building a number of infra-strucure projects including bridg-es, toll roads, rainroad trains,

Chinese Company to Invest in Plantationsdustry that will produce carpets, medical materials and others,” Muhaimin said.

The initial investment is expect-ed to absorb around 3,300 work-ers from transmigrants and local villagers living around the Ton-go transmigration area in West Sumbawa.

For the oil palm plantation de-velopment project in North Malu-ku the district government has al-located a total of 21,500 hectares of land.

Based on it the investment would reach around Rp 200 bil-lion ($22,727) and could absorb around 15,000 workers.

For the sugar cane plantation project and its processing indus-try in Bener Meriah the district administration has permitted 37,000 hectares of land.

The 22,000 hectare sugar cane plantation development and its processing industry will absorb an investment of around $136.362 and 10,000 workers.

PT Guandong Agribusiness is

Investors Eyeing Bio-Ethanol Potentials in C. Kalimantan

Investors have begun to eye the cassava potentials of Pulang Pisau district of Central Kaliman-tan province, which could be pro-cessed into bio-ethanol energy, a regional official said.

Acting Head of the local Agri-culture and Animal Husbandry Service Muhajirin said here last month that Pulang Pisau had

abundant cassava production which could be processed and produce 750,000 liters of bio-eth-anol per day.

He said that the cassava-based bio-ethanol could be used as al-ternative energy, especially to meet the need of household fuel energy consumption.

Muhajirin said that the district

was able to produce over 18,000 tons of cassava which so far was only used as a food stuff and as raw material for producing glue.

The ethanol output which could reach 750 thousand liters per day could be supply to all districts to meet the need for energy of house-holds in Central Kalimantan, he said.

Gita Wirjawan

ports and airports, and environ-mentally friendly energy pojects in Indonesia, Indonesian ambas-sador to China Imron Cotan said.

“Chinese investors are also in-terested to realize various devel-opment cooperation projects in those sectors under the Public-Private Partnership scheme,” the ambassador said in a press re-lease here on last month.

This was mentioned in the RI-China investment forum in Bei-jing on May 25, 2011.

The forum was part of the Trade, Tourism and Investment (TTI) promotion program of the Indonesian embassy in Beijing in various cities in China to increase the flow of Chinese investments and tourism to Indonesia and ex-pansion of market access for Indo-nesian products in China.

Some 300 Chinese leading businesses like Sinohydro, Chi-na Road and Bridge Corporation (CRBC), Gezhouba,CITIC, Chi-na National Offshore Oil Compa-ny (CNOOC) and Indonesian busi-nessmen attended the forum.

Muhaimin Iskandar

According to earlier reports, the investment value of the would be Volkswagen factory in Indonesia was about 35 million euro and it was expected to absorb 2,000 to 4,000 workers.

MS Hidayat

Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11

18000

16000

14000

12000

10000

8000

6000

4000

4000

3000

2000

1000

-1000

Exports

Imports Trade balance (RHS)

US$mn

0

US$mn

The President Postwww.thepresidentpost.com June 12, 2011 B5

Economic Highlights

2008 2009 2010 2011E* 2012E*

National Accounts

Real GDP (% y-o-y) 6.0 4.6 6.1 6.4 6.7

Domestic demand ex. inventory (% y-o-y) 7.5 5.4 5.2 7.6 8.6

Real Consumption: Private (% y-o-y) 5.3 4.9 4.6 5.4 5.4

Real Gross Fixed Capital Formation (% y-o-y) 11.7 3.3 8.5 11.7 13.1

GDP (US$bn) — nominal 508 542 707 809 933

GDP per capita (US$) — nominal 2,221 2,343 2,976 3,818 4,662

Open Unemployment Rate (%) 8.6 7.9 7.1 6.9 6.6

External Sector

Exports, fob (% y-o-y, US$ bn) 18.3 -14.3 32.2 13.0 17.3

Imports, fob (% y-o-y, US$ bn) 36.9 -23.3 42.0 15.8 22.1

Trade balance (US$ bn) 22.9 30.1 31.1 31.6 29.9

Current account (% of GDP) 0.0 1.9 0.9 0.2 -0.2

Central government debt (% of GDP) 33 28 26 24 22

International Reserves –IRFCL (US$ bn) 51.6 66.1 96.2 116.1 127.0

Merchandise import cover (months) 4.0 6.5 7.1 7.2 7.0

Currency/US$ (Year-end) 10,950 9,403 8,991 8,700 8,950

Currency/US$ (Average) 9,767 10,356 9,074 8,786 8,825

Other

BI policy rate (% year end) 9.25 6.50 6.50 7.00 7.00

Consumer prices (% year end) 11.06 2.78 6.96 5.90 6.70

Fiscal balance (% of GDP; FY) -1.0 -1.6 -0.6 -1.2 -1.0

S&P's Rating -FCY BB- BB- BB BB+ BBB-

No deflation, but no worries eitherBy Helmi Arman and Anton Gunawan

The consumer price index rose 0.12% m-o-m in May, which brought the year on year headline down to 5.98% (from previ-

ously 6.16%). This is higher than our forecast and consensus. Gen-erally, though, the numbers con-firm our projection of no deflation, but with the year on year headline still dropping below 6%.

Rice prices have begun to creep up but spices are still lower month on month following ample supply. As the planting season comes, food prices may see a broader-based rise going forward. But the year on year headline numbers may still decline; food production is expected to improve compared to a year ago as weather patterns return to normalcy.

For example, estimates from the national weather agency (BMKG) shows rainfall in June this year falling close to normal levels throughout most of the country. This stands in contrast to a year ago, when many regions experi-enced above normal rainfall.

Meanwhile, core inflation decel-

erated in May, partly due to a high base effect (higher gold price infla-tion last year). However, the prices of some manufactured items e.g. toiletries are still adjusting to the surge in raw commodity prices that happened late last year/early 2011. We expect continued pass-through for such items in the months ahead until core inflation reaches the 5–5.5% range.

Separately, the BPS last month

Indonesia: Selected Economic Indicators

Source: CEIC, *Danamon Estimates

Chart 1. Indonesia CPI Inflation

Source: Bank Indonesia, CEIC

Chart 2. Indonesia Foreign Trade

Source: Bank Indonesia, CEIC

also released foreign trade data for May, which showed the trade sur-plus narrowing slightly to $1.63bn (from previously $1.88bn).

Imports of vehicles and parts (from Japan and probably Thai-land) dropped following the Fu-kushima disaster. However, this was offset by surging imports of oil, both crude and refined, in the midst increased domestic ‘con-sumption’. The gap between sub-sidized and non-subsidized fuel prices was nearly 75% in April, providing strong incentive for ille-gal arbitraging activities.

Policy Implications

The data is consistent with our expectation that BI will hold its policy rate at 6.75% this month. We expect the year on year fig-ure to decline further in coming months, well into BI’s 2011fore-cast range of 4%–6%; this may stave-off concerns that BI has been “behind the curve”.

Towards the end of the year, however, we are still expecting one more 25bps rate hike in Dec-10, given the expected rise in core in-flation and prospects of fuel sub-sidy adjustments in early 2012.

With regard to the IDR, we

think BI will be measured in al-lowing for further currency ap-preciation (as they have been over the past month). However, the em-phasis will be more towards the trade-weighted exchange rate as opposed to just the IDR/USD. Globally, we may continue to see risk-on/risk-off episodes amid continued uncertainty in Greece. However, with the Yuan strength-ening momentum continuing, we do not rule out the IDR dip-

ping below 8,500/US$ in the near term, although our year-end fore-cast remains at a more conserva-tive level of 8,700/US$.

May-11 (Actual)

May-11 (Fcast)*

May-11 (Cons.) Apr-11 Mar-11

Headline CPI (% chg y-o-y) 5.98 5.88 6.40 6.16 6.65

Headline CPI (% chg m-o-m) 0.12 0.03 0.06 -0.31 -0.32

Headline CPI (% chg y-t-d) 0.51 0.42 0.45 0.39 0.70

Core CPI (% chg y-o-y) 4.64 4.62 4.70 4.62 4.45

Source: Bloomberg, CEIC, *Danamon estimates

Helmi Arman is Economist at Treasury & Capital Markets, PT Bank Danamon Indonesia, Tbkhelmi.arman@danamon.co.id

May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11

14

12

10

8

6

4

2

BI rate

Headline inflation

% y-o-y, p.a.

Core inflation

PropertyThe President Post www.thepresidentpost.comJune 12, 2011B6

Asia Pacific Property Investment Report 2011

Sales Momentum Expected to Accelerate

The investment activi-ty in 1Q 2011 across Asia Pacific was somewhat moderat-ed following major investment improve-

ment in 2010.The year ended with a signif-

icant 29% y-o-y increase and a 26% q-o-q increase. This surge in the last quarter of 2010 was due to low lending rates and evidence of sustained prime office rental re-covery across the region.

In 1Q 2011, investment sales were a total of $107.5 billion and though it marked a robust y-o-y growth of 14%, it was a decrease of 9% q-o-q. In comparison, the US’s investment sales contracted by 44% over the same period. This moderation can be attributed to a seasonal slowdown and investors reworking their strategies in light of the strong run up in capital values in some markets. On the whole, investors were largely opti-mistic in 1Q 2011 as Asia Pacific markets continue to be poised for a sustainable economic growth.

China, supported by continued high economic growth in 1Q 2011, accounted for the bulk of known property investment volumes in the region. Commercial proper-ty sales in 1Q 2011 were a total of $0.93 billion and accounted for a mere 1.2% of the overall invest-ment sales in China – indicative of a broad based investor interest in different property types as the overall property market in Chi-na showed significant strength. Property cooling measures in Chi-na implemented through capital controls and taxation measures have moderated overall property sentiment and sales in 1Q 2011.

Investor interest for core/ core plus commercial properties was significant in Japan, Singapore and Hong Kong. Core markets such as Tokyo, Hong Kong and Singapore are still top picks for commercial property investors. Japan accounted for 20%, while Hong Kong and Singapore each accounted for 10% of total invest-ment sales in Asia Pacific.

Investor interest for commer-cial properties in these gateway markets has surged due to rent-al growth now strongly evidenced. Economic fundamentals continue to strengthen as occupier demand soars. These cities continue to at-tract the majority of international firms seeking to grow or establish

er, we think such investment hold-back is temporary as there is both presence of foreign capital and continued positive investor senti-ment throughout Australia. This positive outlook is underpinned by stable economic growth and in-creasing portfolio level opportuni-ties with expectations of recover-ing rentals in the medium-term.

ChinaDue to the government’s in-

creasingly hawkish policy mea-sures in residential real estate the investment capital has realigned its focus to the commercial real estate sector, especially in tier 1 and select tier 2 cities. With po-tentially more restrictive policy measures in store for the residen-tial sector, more domestic and for-eign investors are expected to fo-cus on commercial real estate, a trend that was well demonstrated in SOHO’s recent purchase of five of commercial projects in Shang-hai. The demand for commercial

property is likely to surge as the economic momentum continues.

We expect investment volumes in China’s commercial real estate markets to remain strong for the rest of the year. China remains one of the top three destinations earmarked for foreign institution-al investors. In Shanghai, exclud-ing land transactions, there were seven transactions in Q1, total-ing RMB 4.6 billion. Domestic in-vestors accounted for 50.4% of the market share, including those from Taiwan and Hong Kong, while foreign investors accounted for 49.6%. By property type, office accounted for 44.5%, followed by mixed use 22%, retail 12.5% and hotel 21%.

Hong KongThe Hong Kong office invest-

ment market remains positive with the total number of sales transactions up to 1,036, mark-ing a 6.5% q-o-q increase; and the total value of transactions was

HK$11 billion, a 6.3% increase. The current sentiment shows more positive appetite for com-mercial real estate assets relative to residential developments as re-strictive policy measures continue to dampen growth prospects for residential prices. Rents of Grade A office properties in Greater Cen-tral increased by 6.8% q-o-q in 1 Q 2011, while prices rose by 7% q-o-q in 1Q 2011.

Investment sales activity is ex-pected to increase in 2011, with office and retail performing par-ticularly well. The strong demand for office space attributed to cor-porate expansions and economic growth is encouraging landlords to raise rentals aggressively. Rent-als and prices for commercial as-sets are expected to increase in 2011 amid continued low interest rate environment, limited supply and strong demand in all sectors. Office rentals are expected to rise by 20-25% and capital values by 15-20% during 2011.

IndiaThe real estate market in India

showed signs of recovery in 1Q 2011, evident from the increasing occupier demand especially in cit-ies favoured by software and high tech industries such as Banga-lore. The investment market con-tinues to be dominated by owner occupiers and private investors. Transactions in the commercial space have gained momentum across the country. Some mar-kets continue to see excess sub-urban supply thus presenting potentially lucrative buy oppor-tunities. Improved market condi-tions from early 2010 have helped developers in improving their cash flows through leasing of commer-cial space and sale of residen-tial units. The prospects for office properties in Bangalore are posi-tive and rents are expected to re-cover on the back of persistent de-mand coupled with moderate new supply, while rents of office prop-erties in Mumbai are expected to be stable in spite of substantial new supply.

JapanTokyo’s investment sentiment

was largely stable in 1Q 2011. Be-fore the earthquake on March 11, sentiment was unmistakably positive with investors showing strong demand for all investment targets, especially residential de-spite the overall supply being lim-ited. Investor interest in office and retail properties was encouraging as well. Tokyo’s investment mar-ket has stayed cautious instead of pessimistic. While foreign in-vestors are adopting a wait-and-watch approach, Japanese insti-tutions are continuing to invest across all property types.

South KoreaThe investment market in 1Q

2011 was primarily dominat-ed by domestic investors. To-tal transaction volume for office buildings for this period was ap-proximately $965.5 million. The quarter also witnessed the sale of

For the remaining three quarters of 2011, investment sales momentum is expected to gradually accelerate, as investor sentiment continues to be buoyant supported by strong economic growth.

About Cushman & Wakefield

Cushman & Wakefield is the world’s largest privately-held commercial real es-tate services firm. Founded in 1917, it has 230 offices in 60 countries and more than 13,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction Services, including tenant and landlord representation in office, residential, industrial and retail real estate; Capital Markets, including property sales, investment management, investment banking, debt and equity financing; Client Solutions, including integrated real es-tate strategies for large corporations and property owners, Consulting Services, including business and real estate consulting; and Valuation & Advisory, including appraisals, highest and best use analysis, dispute resolution and litigation support, along with specialized expertise in various industry sectors. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Centre at www.cushmanwakefield.com.

MAJOR PROPERTY INVESTMENT DEALS IN 1Q 2011

Country City Building Buyer Type Property Price

Purchase(USD Million)

Japan Tokyo Otemachi PAL Building Mitsui Fudosan Office 877

Singapore Singapore Capital Square Alpha Investment Partners & NTUC Income

Office 705

Singapore Singapore 16 Collyer Quay NTUC Income Office 524

Australia Sydney 310-322 Pitt Street Commonwealth REIT/MacarthurCook Property Investment

Office 207

Australia Sydney 55 Clarence Street Eureka Funds Management/ARIA Office 86

Australia Sydney 14 Martin Place Abacus Property Group/Kirish Office 98

Australia Sydney 15 Bourke Road Capital Corporation Office 30

China Shanghai International Capital Plaza CSI Propeties Limited Office 174

China Shanghai Haichi Treasury Holdings Office 87

China Beijing The Fifth Square China Minmetals Corporation Office 684

South Korea Seoul Twin Trees Hanii Engineering & Construction Co. Ltd.

Office 258

South Korea Seoul SK Building SK Corporation JV SKEnergy Co. Ltd. JV National Pension Service (NPS)

Office 505

India Mumbai Citibank Citibank Office 222

Source: Cushman & Wakefield Research

the SK building, POSCO ICT (for-mer. POS DATA) building, Twin Trees (former Hankook Ilbo Hq), Dankook building and Daeheung building.

In the near term, due to limit-ed availability of prime buildings and abundant liquidity in the market, investors will most like-ly face an increasingly competitive bidding environment. The govern-ment will set up a debt clearer to buy non-performing loans and to contain systemic risks posed by the slumping property market. The proposed “the bad bank” will be operational by June, and will acquire KRW 1 trillion worth of non-performing loans at a 50 per-cent discount. This will put the promising projects back on track and weed out the less competitive projects, thereby significantly re-ducing the uncertainties posed by such loans.

SingaporeSingapore’s investment sales

marginally declined 41% q-o-q in 1Q 2011, largely due to fewer land sales awarded by the govern-ment and limited REIT acquisi-tions during the quarter. This de-cline also reflects the tight supply of buildings available for sale as office rentals are poised for a sus-tained recovery and owners are holding out of stronger positive rent reversions. Rents of Grade A offices in Raffles Place showed a q-o-q increase of 6.0% in 1Q 2011, while prices increased by 6.8% q-o-q in 1Q 2011.

In the months ahead, there will be positive momentum in the of-fice market supported by rent-al growth. Singapore is one of the most favored markets in the re-gion for cross border regional and global capital and we anticipate continuing interest until the year end. Investor interest is seen spill-ing over to secondary commercial buildings, including lower grade older suburban buildings which offer value add or redevelopment opportunities.

new headquarters in the region.

OutlookFor the remaining three quar-

ters of 2011, investment sales mo-mentum is expected to gradually accelerate, as investor sentiment continues to be buoyant support-ed by strong economic growth.

The resilience of the region, un-derpinned by easy liquidity, in-creased trade volumes and low unemployment rates, highlights the strength of Asia’s property market and its strong rebound from the global financial crisis.

Investment sales recovery in 2H 2011 will continue as major Asia Pacific economies continue to out-perform the rest of the world by a huge margin.

Against this backdrop, the re-gion’s prime commercial proper-ties will continue to be favoured by investors due to the strong leasing demand from occupier ex-pansion. The continued rental re-covery in most markets will sup-port underwriting by investors, including cross border regional or global investors who are keen in acquiring buildings in gateway cities like Singapore, Hong Kong and Shanghai.

Retail and hospitality assets are expected to receive increased investor interest in response to rising consumerism and tour-ism in Asian cities. Rising afflu-ence is contributing to stronger inter-Asian tourism, consump-tion and higher retail sales. Asian cities continue to attract increas-ing number of international tour-ists and business travel is ex-pected to rise in key Asian cities. As companies report continued healthy profits, this will encour-age allocation of more travel bud-gets for senior executives traveling in Asia, leading to more business-es for hotels in the four and five star categories and opportunities for growth as overall hotel revenue increase.

Investment Trends in Major Asian Countries

AustraliaProperty investment transac-

tions in Australia reflected 72% q-o-q decrease in 1Q 2011. This is in part a knee-jerk reaction to the strong Australian dollar which has increased the cost of financ-ing; and natural disasters such as the floods in Queensland. Howev-

MAJOR PROPERTY INVESTMENT DEALS IN 1Q 2011

Source: Real Capital Analytics, Cushman & Wakefield Research

China71.9%

Japan3.6%

Thailand1.1%

Taiwan1.3% Malaysia

0.4%

India0.8%

South Korea0.7%

Australia2.8%

Singapore3.5%

Hongkong1.8%

Others12.10%

The President Postwww.thepresidentpost.com June 12, 2011 B7

Jakarta, 29 April 2011. Global thought leaders and international ex-perts on strategy exe-cution will converge at the Palladium Strategy

Execution Forum 2011 in Jakarta on June 14thst at the Ritz Carlton Hotel Mega Kuningan, to discuss and share world best practices on strategy execution. They will highlight leadership capabilities required to mobilize organisations for change and the processes that assist leaders in the formulation, communication and motivation of strategy execution. They will delve into how value creation can be achieved through organisation-al alignment and discuss sever-al emerging approaches to break down cross functional silos with-in organisation.

Leading the line up of global management thought leaders is Dr David Norton, founder and di-rector of the Palladium Group and co-creator with Dr Robert Kaplan of the Balanced Scorecard and Matthew Tice, Managing Director, Palladium Asia Pacific. Address-ing strategy execution issues for local companies will be Kresna CEO, Michael Stevens and Garu-da Food CEO, Sudhamek AWS.

The Palladium Strategy Execu-tion Forum 2011 is entitled “Mas-tering the Strategy Management

in the 1990s, provided a means to these intangible assets. Research now shows that organizations that use the Balanced Scorecard as a foundation for their strategy management system have a 70% chance of outperforming their peer groups. More impressively, successful strategy execution has been shown to create increases in shareholder value of 50% to 150% over a three year period.

The Palladium Group is the home of the Balanced Scorecard Hall of Fame for Executing Strate-gy, a globally esteemed award rec-ognizing public, private and gov-ernment organisations that have excelled at implementing the Ka-plan and Norton strategy exe-cution management system and through it increased their value.

In the Asia Pacific region, Ko-rea, India and the Philippines ex-cel at generating Hall of Fame winners. During the past two years, the Philippines cities of Iloi-lo and San Fernando have won this illustrious award and have consequently are increasingly be-coming coveted destinations for local and foreign investment. They managed to increase the per cap-ita income whilst decreasing cor-ruption. The implementation of the Balanced Scorecard by the cities has created a transparent and common platform for busi-

nesses, citizens and government agencies to strive towards com-mon goals and outcomes in mu-tual support.

Korea leads the region in terms of number of winners, via a mix of government agencies and public company winners – Korean Tele-com, Busan Metropolitan City, Health Insurance Review & As-sessment Services (HIRA), Kore-an Customs Service, Korean East West Power, KOTRA and the Min-istry of Home Organisations, LG-Philips LCD Korea and E-Land, Korea’s leading fashion group. All have in common improved over-all performance, increased work-force effectiveness and increased efficiency in executing strategy.

India runs second with illustri-ous past winners such as Hindu-stan Petroleum Corporation, In-fosys Technologies, Tata Motors, North Delhi Power, Lakshmi Ma-chine Works and Trent – all well known, successful organisations.

Indonesia has so far only pro-duced one Hall of Fame winner – the SOHO group.

Palladium Balanced Score-card Hall of Fame for Executing Strategy award submissions are currently open and applications are available from The Palladi-um Group web site. http://www.thepalladiumgroup.com

About the Palladium GroupThe Palladium Group, founded

by leading management thinkers Dr. Robert Kaplan and David Nor-ton, is the global leader in helping clients address their most chal-lenging and pressing Strategy Ex-ecution issues by providing an in-tegrated set of services designed to deliver tangible results and leave lasting capabilities – the Ex-ecution Premium. Palladium has offices throughout North Ameri-ca, Europe, the Middle East, and Asia-Pacific. With a successful track record of over 700 clients, the Palladium Group is dedicat-ed to understanding and address-ing the strategic issues unique to the Asia-Pacific region. The Pal-ladium Group’s work with the re-gion’s most influential organisa-tions means Palladium Group is uniquely positioned to guide cli-ents in each of the Group’s six fo-cus areas, namely Strategy De-sign, Strategy Management, Innovation, Leadership for Exe-cution, Operational Performance, and Risk & Governance.

Palladium StrategyExecution Forum 2011to be held in Jakarta

The Palladium Strategy Execution Forum 2011 is entitled “Mastering the Strategy Management

System”.

The Palladium Group is the home of the Balanced Scorecard Hall

of Fame for Executing Strategy, a globally esteemed award recognizing

public, private and government organisations that have excelled

at implementing the Kaplan and Norton strategy execution

management system and through it increased their value.

System”. As we witness the cur-rent changes in the world econ-omy we realize that there are corresponding implications for or-ganisation in navigating growth and change through new strate-gies and of course, consequently, having the internal skills to effec-tively align the whole of the organ-isation to the new directions.

“Executives in all types of or-ganisations, be it public, private or government, realize that having a robust strategy management sys-tem, such as the Kaplan and Nor-ton system, gives them a solid and effective framework through which to manage and implement strategy change, in way that con-sistently engages the whole of or-ganisation”, says Matthew Tice, Managing Director, Palladi-um Asia Pacific. Such a power-ful strategy execution tool in the hands of skilled executives has proven to reap high rewards for organisations all over the world.

For example, global research shows that a staggering 80% to 90% of organisations are un-able to execute the strategies they agree they should implement. Much of this problem stems from the emergence of a new econo-my, where intangible assets re-placed the role of tangible assets as a source of value. The Bal-anced Scorecard, developed by Robert Kaplan and David Norton

For further information, please contact:Ms. Magdalena Toth Palladium Group APAC Phone: +61 2 8259 1000 mtoth@thepalladiumgroup.comwww.thepalladiumgroup.com

Management

Crude Oil-LHS

Palm Oil-RHS

COMMODITY PRICES Mal$ permetric ton

Sumatran LightUS$/barrel

4,000

88

83

78

73

68

3,750

3,500

3,250

3,000

2,750

2,500

2,250

M$ 3,475

M$ 2,499

$74.50

NJ S O F Mar MM10

2010

AugJun D Jan11

93

4,250

98$ 102.13

103

108

113

Apr

2011

EXPORT AND IMPORTS(US$ Million)

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0NJ S O Jan

11F AprApr

10M

2010

AugJun

*Q4 2000=100

Exports

Imports

Dec

2011

Mar

INFLATION 66 CITIES109

General

Food

WPI

Index

106

103

100

97NovJ S O F Mar AprM

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106.0

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105.4

107.4

2011

M

GDP GROWTH (%)By QuarterYear on Year

% Index*2000=100

165

95

105

115

125

135

145

155

8

0

1

2

3

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5

6

7

06

07 09

08

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20102009200820072006

10 Q4

175

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Executive HighlightsThe President Post www.thepresidentpost.comJune 12, 2011B8

Bank Indonesia kept its benchmark rate unchanged at 6.75% for a fourth straight month in June amid easing inflation.

In its policy statement, the cen-tral bank governors highlighted “decelerating” price pressures as a result of lower food prices. Un-derscoring the bank’s moderat-ing inflation outlook, the bank’s governors omitted commentary made in previous sessions as-serting they were prepared to raise rates in response to a ris-ing inflation threat, although they also said they would re-main vigilant monitoring accel-erating price pressures. Head-line inflation has moderated this year to 6% y-o-y in May from 7% y-o-y in January. Core inflation, however, has risen to 4.6% y-o-y from 4.2% y-o-y for the same pe-riod. Because of this, some an-alysts think Bank Indonesia is still behind the curve and needs to raise rates now as have oth-er emerging markets like Brazil and India, rather than wait un-til price pressures pick up again. Although technically outside its mandate, BI is also sensitive to the effect of an interest rate hike on the Rupiah which has appre-ciated more than most region-al currencies already, putting pressure exports from Indone-sia’s generally weak manufac-turing sector. (See “Rupiah” be-low)

Bank Indonesia said Q2 GDP growth would likely be higher than initially forecaston the back of stronger exports and accelerating investment growth. The bank is projecting full year 2011 growth at the up-per end of its 6-6.5% forecast.

The rupiah is currently trading at a seven-year high of Rp8,500-8,550 to the dollar.

Analysts expect the currency to continue strengthening over the short and medium-run, with moderating inflation pressures and Bank Indonesia’s continued support for the rupiah’s gradual appreciation “in line with trends of regional currencies” sup-porting this outlook. Contin-ued global demand for Indone-sia’s high-yielding capital assets amid a low interest rate environ-ment in industrialized nations will also likely support the rupi-ah’s appreciation over the medi-um-term.

A consortium led by Japan’s electric power development co. Has been awarded a US$3.2 billion contract by state power utility PLN to develop a 2,000 MW coal-fired power plant in Central Java.

Other members of the consor-tium were Japan’s Itochu Corp and local coal miner Adaro En-ergy. PLN president director Dahlan Iskan said the deal was a milestone because it was the first public-private partnership project that has been auctioned successfully. The project will be insured for a variety of risks in-cluding land clearance, licens-ing, construction and other op-erational and political issues by the Indonesian government’s in-frastructure guarantee fund. Dahlan said that the project was crucial given that it would be the largest power plant in the coun-

try to date and would be using the latest technology to improve ef-ficiency and limit carbon emis-sions. The consortium will oper-ate with a 25-year power purchase agreement under a build, operate and transfer (BOT) scheme. The power facility is scheduled to start operations in 2017. Other proj-ects in the pipeline this year that could potentially receive risk cov-erage from the Indonesian govern-ment include the US$750 million Manggarai-Soekarno Hatta inter-national airport railway line and the US$200 million Umbulan wa-ter treatment facility in Pasuruan, East Java.

U.S. telecom giant AT&T has received a multimedia services operator (MSO) license, the first foreign telecoms operator to receive this license in Indonesia.

The sector was opened to foreign investment through a revision in the government’s negative list (DNI) issued last year allowing 95% foreign ownership of communica-tions services. AT&T owns 95% of its local subsidiary. Choo Hock Lye, general manager of AT&T’s southeast Asia operations, said the MSO would enable the firm to offer a wider range of services and make it easier for the company to do business with multinational customers. AT&T already offers VPN and data services like Ether-net to multinationals through lo-cal service providers, but the new license will now allow the firm to provide these services directly to corporate clients. Among the new services AT&T will be able to offer with the new license include man-aged LAN, managed IP and man-aged application services. AT%T will also be able to provide globally managed network services direct-ly, along with simpler contracting and billing arrangements. An-alysts estimate the Indonesian market for corporate multimedia and telecom services at around US$10 billion per year.

Pertamina raised a total US$1.5 billion from its maiden international bond issue.A US$1 billion, 10-year issue re-ceived US$7 billion in orders and was ultimately priced at a yield of 5.5%, the tight end of initial guid-ance, highlighting strong demand from global investors. U.S. inves-tors bought 42% of the 10-year debt, Asian buyers 36% and Eu-ropean investors 22%. A US$500 million, 30-year issue, meanwhile, received US$5 billion in bids and was priced at 6.625%, also at the tight end of initial guidance.. Dis-tribution of the 30-year bond was Asian investors 40%, U.S. buy-ers 37% and European investors 23%. The bonds were rated Ba1 by Moody’s and BB+ by S&P and Fitch international ratings agen-cies, equivalent to Indonesia’s sov-ereign rating. Citi, Credit Suisse, HSBC and local firms Danareksa Sekuritas and Mandiri Sekuritas managed the deal. Proceeds from the deal will be used to develop the Cepu block in East Java, the West Madura offshore block as well as to finance acquisitions includ-ing the purchase of an oil and gas block in Angola. Pertamina has an ambitious target of producing one million barrels of oil equiva-lent per day (boepd) by 2015 ver-sus 470,000 boepd currently. The company reported extremely modest net profits of US$1.8 bil-lion on revenues of US$48.7 bil-lion in 2010.

Telecom operator Axis has secured Islamic financing deals worth US$1.2 billion to finance its business expansion.

The deals comprised a US$450 million commercial facility from Deutsche Bank and HSBC; a US$400 million facility from the China Development Bank to fund equipment purchases from Chi-nese manufacturer Huawei; and a US$350 million facility from HSBC and Swedish export cred-it agency EKN to fund equip-ment purchases from Ericsson. The loans all carry a tenor of 7.5 years. Gassan Hasbani, chief ex-ecutive officer of Axis’ parent firm Saudi Telecom Co., said the loans were one of the largest Islamic fi-nancing deals in Asia and would help fund the firm’s five-year plan to increase user penetration and modernize its operations. He as-serted that Indonesia had great potential for growth in the telecom sector given its increasingly afflu-ent, young and tech-savvy popu-lation. Axis currently has a 4% market share of Indonesia’s mo-bile telephone market and is look-ing to raise this to 10% over the next five years. The firm is also planning to increase the number of telecom towers it operates to 15,000 units over the next three years from 4,000 units currently. Saudi Telecom currently has an 80.1% stake in Axis.

BP has said it plans to invest US$10 billion in Indonesia over the next 10 years.

While visiting Jakarta, Chief exec-utive officer Bob Dudley said the global energy giant plans to build a third and possibly fourth pro-duction line at its LNG facility in Tangguh, Papua. The US$5 bil-lion Tangguh plant currently has two production lines with a com-bined production capacity of 7.6 million tons of LNG per year. It is supported by gas fields with nat-ural gas reserves totaling 28 tril-lion cubic feet. The facility start-ed commercial LNG shipments in 2009 with multi-year contracts to supply 2.6 million tons per year to China, 1.2 million tons to South Korea and up to 3.7 million tons to Sempra Energy in the U.S. The firm is also looking to develop coal-bed methane (CBM) blocks after signing four coal-bed meth-ane production sharing contracts in the Barito basin in South Kali-mantan earlier this year. William Lin, BP’s president of Asia Pacif-ic exploration & production, has stated that the deals would help create a material CBM position for

the firm in a highly prospective basin. BP is also currently devel-oping a CBM block in East Kali-mantan.

The World Bank has approved loans totaling US$890 million to help finance crucial power and roadway projects in Indonesia.

A US$640 million loan will be provided to state power utility PLN to help fund the 1,000-MW upper Cisokan storage power fa-cility near Bandung, West Java. The facility generates energy by transferring water from reservoirs built at different heights to drive turbines, and then subsequently pumping water back to the high-er reservoir at off-peak times. The Cisokan project will make In-donesia one of very few develop-ing countries to have this kind of power plant. The facility is sched-uled to be completed by 2016. An-other US$250 million loan will be provided to the public works min-istry to support its western Indo-nesia national roads improvement project. The project aims to up-grade 716 km of existing road-ways in western Sumatra by ex-panding the roads, laying new asphalt, improving drainage and replacing bridges.

Local food and beverages producer Garudafood is finalizing a deal to divest a minority stake.

GarudaFood owners the Tudung Group has shortlisted several in-vestors to purchase a 30% stake in the company, worth an esti-mated US$200 million. The local business group is reportedly look-ing to complete the sale before the end of June. Global private equi-ty firm Carlyle Group is the front-runner to purchase the stake, with Japanese beverage producer Suntory and international invest-ment firms 3i Group and TPG also reportedly submitting bids. Gar-udaFood produces a wide range of popular products, from pea-nuts, biscuits to energy drinks. In addition to the domestic mar-ket, the firm exports its goods to more than 25 countries. Sud-hamek Sunjoto, president direc-tor of GarudaFood, said the firm was aiming to boost sales to Rp20 trillion by 2015. He asserted that the firm was planning significant investments in the palm oil sector to better integrate its supply chain

and production process. The company is also looking to make a strong push to expand exports to China and India.

Coal miner Bayan Resources has secured a US$185 million loan from Standard Chartered and ANZ to fund the acquisition of nine mining concessions in East Kalimantan.

Company president director Chin Wai Fong said the new conces-sions would help the miner boost its coal production to around 25 million tons by 2013 from a pro-jected 15 million tons this year. He said the new output would help it meet growing global demand for coal, particularly from India which currently accounts for 30% of Bayan’s exports and is the firm’s main international buyer. India is projected to see a surge in coal de-mand as new power plants there come on stream over the next several years. Bayan Resources is 20% owned by Korea Electric Power Corp. The miner has coal resources totaling more than four billion tons from its mining con-cessions across Kalimantan.

Shareholders of local Islamic lender Bank Muamalat are moving forward with efforts to divest a majority stake.

Potential buyers reportedly on the shortlist include Bank Permata, the Qatar Islamic Bank and Sin-gapore’s Overseas-Chinese Bank-ing Corp (OCBC). Bank Mua-malat, Indonesia’s oldest Islamic bank, has nearly 400 branches across the archipelago plus an of-fice in Malaysia. According to its chief financial officer Hendiar-to, Muamalat had around Rp20.4 trillion in assets as of end-2010, with asset growth projected to reach 50% this year. The exec-utive added that the lender also planned to quadruple its holdings of syaria-compliant debt this year. Bank Muamalat’s shareholders include the Islamic Development Bank at 32.8%, Boubyan Bank Kuwait at 24.9% and Atwil Hold-ings Ltd at 18%. Analysts say in-vestor interest in Bank Muamalat reflects the high growth potential of Islamic banking in Indonesia. According to Bank Indonesia, Is-

Selected Instant Indicators

Business Highlights are contributed to The President Post by CASTLEASIA/PT Jasa Cita from information supplied to members of their CEO Forum, the Indonesia Country Program. They are reprinted here with permission. For more information about CASTLEASIA programs, please contact Juliette or Wijayanti at 62 21 572 7321 or email castle@castleasia.com subject CEO Forum

lamic bank assets totaled Rp100 trillion as of end-2010, up from Rp67 trillion a year earlier on rising demand for Islamic bank-ing services.

Korea aerospace industries has reached an agreement to sell 16 t-50 supersonic trainer jets to the Indonesian Air Force in a US$400 million deal.

The South Korean manufac-turer beat out Russia’s Yakov-lev Yak-130, the Czech Repub-lic’s Aero Vodochody L-159 and Italy’s M-346 for the contract. Lockheed Martin Corp. will pro-vide the avionics systems, flight control systems and wings for the T-50, while the engines will be supplied by General Electric Co. Delivery of the trainer jets is scheduled for 2013, and will replace 38 aging BAE Systems Hawk 53 trainer jets currently in use. The latest deal reflects a broader effort by the Indone-sian air force to upgrade its as-sets. In November last year the air force purchased eight Em-braer EMB-314 Super Tucano light attack aircraft to replace its 1970s-era Rockwell OV-10 Broncos. In January earlier this year it awarded Arinc Engineer-ing Services a US$67 million contract to modernize five of its Lockheed Martin C-130B trans-ports. The Indonesian air force is also reportedly looking to up-grade its 10 Lockheed Martin F-16A/B fighters, and possibly purchasing another 24 ex-U.S. Air Force F-16s.

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Given that people seem to spend more and more of their time peering at glowing electronic screens, this was probably

bound to happen. Still, the swiftness of this sea

change – three-and-a-half years after the Kindle hit the market – appeared to catch even Amazon by surprise.

“Customers are now choos-ing Kindle books more often than print books. We had high hopes that this would happen eventual-ly, but we never imagined it would happen this quickly – we’ve been selling print books for 15 years and Kindle books for less than

four years,” said Jeff Bezos, Ama-zon’s CEO, in a statement.

Amazon introduced the Kindle e-reader in November 2007. By July 2010, Kindle book sales had surpassed hardcover book sales, and six months later, Kindle books overtook paperback books to become the most popular for-mat on Amazon.com, the online retailer said.

Of course, these stats only rep-resent sales of books on Amazon.com, the only place consumers can buy e-books for the Kindle. When sales of books from other websites and brick-and-mortar stores are factored in, e-books still represent a small minority of all titles purchased, although some

Amazon E-booksNow OutsellingPrint Books(CNN) – As further proof of how digital media dominate today’s entertainment, Amazon announced last week that its customers now buy more e-books for its Kindle device than all print books -- hardcover and paperback – combined.

analysts predict they could reach 20% within a year or two.

The growth of electronic books has been a bright spot in an oth-erwise struggling publishing in-dustry. Sales revenue from e-books were up 145.7% in March of this year compared with March 2010, according to the Association of American Publishers. At the same time, adult hardcover sales increased 6%, while mass mar-ket books – less-expensive paper-backs – grew by 1.2%.

Consumers wanting to read books electronically can now choose from many competing de-vices, including Sony’s Reader, Barnes & Noble’s Nook, and a va-riety of touchscreen tablets, in-

cluding Apple’s iPad.Amazon has repeatedly slashed

the price of its Kindle e-reader, which now costs $139 (or $114 for a model loaded with on-screen ads.) The Web retailer said it has sold more than three times as many Kindle books so far in 2011 as it did during the same period in 2010.

Peek into any executive confer-ence room in America, and you’re bound to see one – or a dozen – of these anachronistic smart-phones: BlackBerrys, their keys clicking like rain on a tin roof. Those red lights flashing, train-ing their owners to pick them up on a second’s notice: An e-mail! A BBM! Answer me!

To owners of Android-based phones and the iPhone, partic-ularly in the U.S., the BlackBer-ry is starting to look more than a little too old-school. These phones don’t really run apps. They don’t store much music. Their screens, in general, are much smaller than those of smartphone competitors, meaning it’s difficult or impossi-ble to browse the Web comfortably or watch online video.

A new BlackBerry phone – the Torch – was unveiled last week by maker Research In Motion. Even hard-core BlackBerry users don’t seem that enthralled by it. Mean-while, a survey released by the Nielsen Co. last week found the majority of U.S. BlackBerry own-ers – 58 percent – want to buy an-other kind of phone, usually an Android or iPhone, when they up-grade.

But here’s the kicker: Despite the fact that the BlackBerry isn’t hip, high-tech or cheaper than its main competitors, the phones are still the most popular (or at least the most common) in the U.S. market, and they’re growing in-ternationally.

It turns out, according to a handful of interviews with Black-Berry users, there are three ba-sic reasons: People are addicted to the click-clacking keyboard; they love the blinking red light on the top, which alerts users to new messages; and many just happen to have the phone because it’s re-quired for work.

Ask a BlackBerry user what they like about their phone, and they’re bound to mention the key-board. Ask them why that key-board is so great, and they’ll go into sensual detail about the click of the keys, how the buttons are raised just so and how the “shift” key – oh, the shift key! – is just as easy to use as those on a full-size computer keyboard.

“The keyboard is definitely a hook for RIM, and it’s interesting to see that the marketplace, in general, has conceded it to RIM,” said Kevin Michaluk, found-

er of the BlackBerry fan website Crackberry.com. “Everyone sees the iPhone, and they think apps. And I think everyone sees a phone with a keyboard, and they think BlackBerry, whether it is or isn’t.”

This comes at a time when most smartphones – including the iP-hone – are moving toward touch-screen-only interfaces, where us-ers tap on glass to type instead of pecking away at tactile keys.

The details of how the Black-Berry keyboard feels are what make it addictive, said Nan Palm-ero, a writer for another fan site, BlackBerryCool.com.

“They really go to great lengths to raise plastic in certain ways on the keys,” he said of the tac-tile keyboard’s design. “They kind of describe it as guitar frets: Your hand naturally knows where to go and where to be.”

Palmero said he can type up to 40 words per minute on his phone. Michaluk said he can hit 65. Neither has to look at the key-board.

Kevin Kovanich, a 23-year-old BlackBerry user in Chicago, Il-linois, who responded to a CNN Tech question about the phones on Twitter, said he loves that he

can still “rock the keyboard” even though his thumbs are “larger than average.”

“It is really nice how far the but-tons stick up -- and you can really feel that click,” he said. “It doesn’t feel like you’re making any mis-takes ... no matter how big your fingers are.”

On top of every BlackBerry, there’s a little sliver of a red light, and it blinks at you when a new message or call comes in.

People get seriously addicted to that light, Michaluk said.

“You put a blinking red light on a device, and when that light blinks, you jump,” he said. “It’s Pavlovian training, right? For me, really, it’s my connection to my people. And second, it’s my con-nection to the world in terms of news and everything.”

He added: “It’s one of those things that always calls you back to your BlackBerry.”

Of course, other phones have ways of alerting people to new messages, too, but none has the same feel as that BlackBerry light, users said.

It’s not designed to run flashy applications, for playing games

or for uploading pictures to Fa-cebook and Twitter. It started out a business-minded device, and RIM has continued to market it as a business-friendly device, al-though recent ads have pitched it as a leisure phone for young mul-titaskers as well.

Part of the allure is that the BlackBerry is known for being se-cure. It encrypts messages, which makes business owners more comfortable giving the phones to their employees, who may share sensitive documents and e-mails over the phones.

This issue came into focus this week as the United Arab Emir-ates and Saudi Arabia threatened to stop BlackBerry service for this very reason: because they wanted to get inside private messages on the phones and couldn’t.

“See someone typing away fu-riously on a Blackberry? They’re probably sending a top-secret e-mail,” she writes. “See someone intently focused on an iPhone? They’re probably playing with the Bubblewrap or Lightsaber Un-leashed apps. Regardless of what a Blackberry user is really do-ing, the phone itself just seems so much more straight-laced and se-rious than the iPhone.”

Why People Still Use BlackBerrys (CNN) -- It’s the smartphone everyone owns -- and no one seems to like.

People are addicted to the click-clacking keyboard; they love the

blinking red light on the top, which alerts users to new messages; and

many just happen to have the phone because it’s required for work.

Amazon introduced the Kindle e-reader in November 2007. By July 2010, Kindle book sales had surpassed hardcover book sales, and six months later, Kindle books overtook paperback books to become the most popular format on Amazon.com.

TechnologyThe President Post www.thepresidentpost.comJune 12, 2011C2

Governments nowa-days are challenged to ensure the com-petitiveness of their countries and to show solid econom-

ic performance. A country’s com-petitiveness provides a foundation that enables its human and natu-ral resources to attract global at-tention – either as a trade partner or as a prime location for foreign direct investment.

In terms of national competi-tiveness, Indonesia is ranked 44th out of 139 countries in the World Economic Forum (WEF) Global Competitiveness report for 2010-2011, an impressive gain mainly driven by a healthier macroeco-nomic environment and improved education indicators. However, there are still room for improve-ment in several areas, especial-ly infrastructure, health situation and technology readiness.

The ICT industry’s role as an important enabler of growth and competitiveness will open up enor-mous opportunities for advances and help Indonesia transform it-self into a knowledge-based soci-ety moving forward with a strong innovation-driven economy.

Microsoft, Modernisator and

the Investment Coordinating Board (BKPM) presented a forum on promoting Indonesia’s nation-al competitiveness in an effort to reach Indonesia’s Vision 2025.

“As one of the emerging markets in Asia Pacific, Indonesia is well placed to boost national compet-itiveness. To increase competitive-ness and productivity, Indonesia must have a strong fundamen-tal focus on education and capac-ity for innovation, where the role of technology is essential to drive national competitiveness in mov-ing towards an innovation-driven economy,” said Orlando Ayala, Mi-crosoft Corporation’s Chairman of Emerging Markets and Chief Ad-visor to the Chief Operating Offi-cer.

Ayala suggested that if Indo-nesia wishes to boost its ICT de-velopment, its human resources should be restyled.

Indonesia plans to reach its 2025 vision with four Mid-term Development Plans (RPJMs). Cur-rently it is in the second stage, which is to realign plurality, im-prove the quality of human re-sources, building capacity and technology, and strengthen the competitiveness of the economy. Once the microeconomic envi-

Driving Indonesia’s Competitiveness through Technology

Microsoft, Modernisator and the Investment Coordinating Board (BKPM) presented a forum on promoting Indonesia’s national competitiveness in an effort to reach Indonesia’s Vision 2025.

ronment is set up as a solid foun-dation for a growth economy, the benefits of technology to small and medium businesses as well as enterprises will become in-creasingly clear.

BKPM chief Gita Wirjawan said that Indonesia’s competitiveness in the World Economic Forum (WEF) will improve this year.

“Indonesia is committed to cre-ating favorable conditions for both domestic and international inves-tors,” he said.

Indonesia boasts many advan-tages in attracting foreign invest-ment, including abundant nat-ural resources, a large number of consumers, fiscal and mone-tary stability and sound econom-ic fundamentals. Gita is optimis-tic that Indonesia will succeed like India and China in improving the ICT industry. This means govern-ment investment on ICT should increase by at least 10% of total GDP, unlike the current rate of only 0.07%.

Sandiaga Uno, a young Indo-nesian businessman, hopes in the next five years the ICT indus-try in Indonesia will be advanced, meaning the government should budget $52 trillion for investment, of which $12 trillion is for infra-

structure development, to bolster Indonesia’s competitiveness.

Innovation is key; capacity for innovation in Asia Pacific has grown tremendously thanks to huge spending on R&D and the availability of scientific and engi-neering talent. Thus, as an engine of economic growth in the region, it is crucial for Indonesia to have a clear agenda for economic de-velopment which underscores the importance governments place on ICT as an economic driver and a building block for national com-petitiveness.

Ayala added, “Microsoft has the global experience to partner with the government to advance na-tional priorities. To transform the country into a knowledge-based society with a strong innovation driven economy, Indonesia will need to look at accompanying is-sues and have solid pillars to start laying the foundation for the fu-ture of the country. Microsoft In-donesia has its pillars aligned with the Indonesian national agenda, which are fostering local innovation and content creation, creating jobs and workforce devel-opment, transforming education and promoting transparency and good governance.”

The ICT industry’s role as an important enabler of growth and competitiveness will open up enormous opportunities for advances and help Indonesia transform itself into a knowledge-based society

moving forward with a strong innovation-driven economy.

From left to right: Sandiaga Uno, Chairman of Saratoga Capital and Co-founder of Modernisator; Orlando Ayala, Microsoft Corporation’s Chairman of Emerging Markets and Chief Advisor to the Chief Operating Officer; Gita Wirjawan, BKPM chief.

Indonesia International Communication Expo & Con-ference (ICC) 2011 was suc-cessfully held on June 8-12 2011 at The Jakarta Conven-tion Center (JCC).

The expo, themed “The Bor-derless World of Communica-tion”, integrates B2C & B2B exhibitions focusing on Cellu-lar Operator infrastructures business, along with the de-velopment of the ICT industry itself. The expo is intended to bridge cellular operators and infrastructure vendors.

The exhibition is connected to the Indonesian Computer Festival 2011, which was held on the same date and at the same site. This collaboration is intended to accommodate peo-ple’s need on ICT products. Ac-cording to Bambang Setiawan, general manager of IT Division Dyandra Promosindo, the rap-id growth of ICT industry (In-formation Communication Technology) in Indonesia was the reason to implement this exhibition.

Citing an example, Bambang said that the number of cellular phone subscribers, as of Decem-ber 31, 2010, stand at 240 million. In addition, the number of Inter-net users is expected to reach 45 million people, representing 20 percent of Indonesia s total pop-ulation. Social media network-ing also increased dramatically, allowing people to connect for 24 hours.

ICC 2011 is a comprehensive coverage of the telecommunica-tion industry, combining the trade

Indonesia International Communication Expo and Conference 2011a Successful Event

show with entertainment and educational features, cover-ing a gross exhibit area of over 12,000 sqm.

The five-day exhibition is an expansion of the previous well-known exhibition called “Indo-nesia Cellular Show (ICS)”. ICS – it is held annually since 2004 – has been acknowledged as Indonesia’s prime ‘Business to Consumer’ (B2C) telecom-munication expo. ICS attract-ed more than 196,000 visitors last year.

ICC 2011 is a comprehensive coverage of the telecommunication industry, combining the trade show with entertainment and educational features, covering a gross exhibit area of over 12,000 sqm.

The President Postwww.thepresidentpost.com June 12, 2011 C3

Education

ferior to that of the two countries. Besides, by giving more opportu-nities to foreign students to study in Indonesia, Indonesian students can benefit by way of cultural ex-changes, networks and connec-tions. Moreover, Indonesia can improve its image as a condu-cive and safe study destination in Southeast Asia.

President University is one of few top universities in Indonesia that actively attracts foreign students to study in Indonesia. The Univer-sity, founded by Prof. Dr. Juwono Sudarsono, S.D. Darmono and Susilo Bambang Yudhoyono as honorary advisor, provides a cul-tural exchange program that re-cently attracted American college students from Iowa State Univer-sity to stay and learn the cultures and heritages of Indonesia. As one of few international standard uni-versities with the largest number of foreign students, President Uni-versity also actively promotes it-self abroad to attract students from China, Vietnam, South Ko-rea, the Philippines, Singapore, Malaysia and many others to study in Indonesia. The manage-ment of the University guaran-tees that the quality of education in the University is not inferior to the educational quality in neigh-boring countries.

President University is among eight universities in Indonesia list-ed in Nuffic NESO (Netherlands Education Support Office) as a

university with international standard of higher education in Indonesia. The University is prominent in local and in-ternational societies for being able to align theory and prac-tical learning effectively. No wonder the University’s gradu-ates are highly sought after by many national and multina-tional companies in Indonesia and abroad.

Attracting foreign students is not easy as this must be supported by the efforts and commitments from the Indo-nesian government and em-bassies abroad to promote some of the best universities in Indonesia, particularly the universities with international standard of higher education which use English as their pri-mary language of instruction. The government should also be able to simplify the process for obtaining visas and limit-ed stay permit cards as this is one of Malaysia’s keys of suc-cess in recruiting foreign stu-dents. Meanwhile, universities in Indonesia can help by offer-ing and promoting academic and non-academic uniqueness in order to attract foreign stu-dents to study in Indonesia.

Jhanghiz Syahrivar is an Education Observer and Asst. to Lecturer of Faculty of Economics, President University.

Foreign Interest to Studyin Indonesia Rises butConstrained by Visa ProceduresThe government should be able to simplify the process for obtaining visas and limited stay permit cards as this is one of Malaysia’s keys of success in recruiting foreign students.

Indonesia IS the 18th richest country in the world based on the data from the Inter-national Monetary Fund (IMF) data in 2010, and the country is a member of the

G-20, a group of 19 countries with the world’s major economies plus the European Union (EU). More-over, according to the World Trade Organization (WTO) in 2010, In-donesia is also the 27th largest ex-porting country in the world. With a population of 240 million people (the 4th most populous country in the world) combined with mas-sive land and sea area of 5 million km2 (the 15th largest country in the world), Indonesia is expected to become the 8th richest country in the next 20 years.

To increase foreign reserves ev-ery year, Indonesia is not only boosting its exports but also en-hancing the role of its tourism sector in attracting foreign tour-ists. This became evident when the government initiated the change of Indonesia’s last year tourism slogan “Visit Indonesia”, which many considered “less sell-ing” by many, to “Wonderful Indo-

nesia” this year. No less than Rp 60 billion was spent by the Cul-ture and Tourism Ministry to build 567 new rural tourism fa-cilities. Despite the relentless ef-forts and huge funds to increase foreign reserves and improve In-donesia’s image internationally, there are still other potential sec-tors that could be cultivated to bring in foreign reserves, such as the education sector.

Have a look at Malaysia, which successfully earns foreign re-serves from their education sec-tor. Recent reports say the num-ber of foreign students who study in the country has increased ex-ponentially from 54,474 foreign students in 2009 to 75,819 foreign students in 2011. According to the Indonesian Embassy in Kua-la Lumpur, the number of Indo-nesian students currently study-ing in Malaysia stands at 14,000. One can imagine millions of Ring-git profits earned by the Malay-sian government each year from the education sector alone.

Indonesia could also bring in foreign reserves like neighboring countries Malaysia and Singapore have, given the fact that quality of education, particularly tertiary education, in Indonesia is not in-

By Jhanghiz Syahrivar

As its 2011’s major milestone in bolstering the development of entrepreneurship in Indonesia, Global Entrepreneurship Pro-gram Indonesia [GEPI], in col-laboration with Global Entrepre-neur Program of the US State Department, is organizing two key international events in July: GEP Entrepreneurship Delega-tion [EDEL] and Regional En-trepreneurship Summit [RES]. Hosted by Minister of Trade Dr Mari Pangestu, the Regional En-trepreneurship Summit [RES] is scheduled to have US Secretary of State Hillary Rodham Clinton as the keynote speaker.

These events come at a time of renewed global interest in In-donesia’s investment prospects and its commitment to set en-trepreneurship as a central pil-lar of development. Both two key events aim to catalyze the entre-preneurship agenda in Indone-sia and connect Indonesia’s rap-idly growing startup community with major investors and entre-preneurship networks in the US and Asia.

The first event GEP Entre-preneurship Delegation [EDEL], is scheduled on 19 – 21 July in Jakarta and will enable inves-tors and mentors from Indone-sia and the US to see and study the business plans of aspiring Indonesian entrepreneurs. GEP EDEL will also work as platform of introduction of promising In-donesian start-up companies to the Delegation for further invest-ment.

During EDEL, 32 startups from Tech and Non-Tech Sec-tors - under the category of Ear-

ly Stage and Growth Stage - will pitch to the Delegation. The Del-egation consists of prominent US investors and academics that vol-untarily make time commitment to be involved in this program and voluntarily bear the cost of travel. Organized by GEP in the US State Department, the Delegation will nominate 8 finalists to attend the second event: Regional Entrepre-neurship Summit [RES].

“EDEL will be a significant op-portunity for tech and non-tech sector startups, to challenge and win opportunities to global net-work for their business. We are in-viting Indonesian startups to reg-ister by 19 June as the cut-off date and explore this global opportuni-ty,” Giuseppe Nicolosi, Vice Chair – GEPI, said.

“The Tech and Non-Tech Start-up entries will be categorized under Early Stage and Growth Stage, with Early Stage is one that already has a product or service being developed, a committed en-trepreneur, but maybe no custom-ers or revenue. The later, Growth Stage, is one that already has a product or service, customers and revenue, but maybe not yet prof-itable,” Shinta Widjaja Kamdani, Vice Chair – GEPI explained.

Presenting the theme “Emerg-ing Entrepreneurs – The Next Big Chapter”, the second event, Re-gional Entrepreneurship Summit [RES], is scheduled on 22–24 July 2011 in Bali. This will be hosted by the Minister of Trade Dr Mari Pangestu, whom has slotted the event into the ASEAN calendar as one of the key ASEAN activities hosted by Indonesia in 2011. The Regional Entrepreneur Summit will present prominent local and

international speakers to Bali and high level participants from US, ASEAN countries along with In-dia and China.

About Global Entrepreneurship Program Indonesia [GEPI]

GEPI is part of a wider global initiative, Global Entrepreneur-ship Program, which grew from an initiative of President Barack Obama and it is now a core pro-gram at the US State Department guided by Secretary of State Hil-lary Rodham Clinton. Founded by 13 Indonesia prominent business leaders, GEPI aims to to promote entrepreneurship as a key pillar of economic development among developing countries and catal-yse Indonesia’s entrepreneurship strategies.

GEPI is an umbrella organiza-tion that aims to work in partner-ship with the many organizations and companies focused on devel-oping entrepreneurship in Indo-nesia to do a number of things in-cluding:

Raising the awareness of entre-•preneurship and innovation in IndonesiaWorking together to provide •what we might call the right ecosystem for emerging entre-preneursWorking together with entre-•preneurship groups and the Government of Indonesia to im-prove the enabling environment for entrepreneurshipWorking together to ensure that •emerging entrepreneurs can have access to finance and do-mestic and international angel investors Helping to facilitate entrepre-•neurs and innovators to go re-gional and global

GEPI: Bolstering the Development of Entrepreneurship in Indonesia

Culture-TourismThe President Post www.thepresidentpost.comJune 12, 2011C4

For Gere, a Buddhist, the visit was not just an ordi-nary trip but more a spir-itual journey. His inter-

est in Buddhism began when he traveled to Nepal in 1978 with the Brazilian painter, Sylvia Martins.

He is a practicing Buddhist and an active supporter of the Dalai Lama as well as a strong advo-cate of human rights in Tibet. He is a co-founder of the Tibet House, creator of The Gere Foundation and chairman of the board of di-rectors of the International Cam-paign for Tibet.

Gere puts a high premium on the sincerity and practices of Bud-dhism, and meditates daily. As he sees it, meditation helps him set his motivation for the day.

Says Gere: “Meditation may be the path to overcoming narcis-sism. That is why Buddhism has become the opiate of choice for me.”

“The journey to Borobudur is important as it connects me with my teacher, Dalai Lama, and for my own study,” he said as he ar-rived at the Borobudur Temple, Magelang, Central Java.

He did the ritual ceremony on Borobudur Monday at 4.30am. The ritual was conducted by Ma-haguru Badhra Ruci from Thai-land. It started with the Pradak-sina by encircling the main

structure of the Borobudur three times and holding a prayer.

Later, Gere read Parita in the company of seven monks. Many visitors took part in the ritual, which was followed by meditation for 25-30 minutes in a very calm and quiet ambience. He ended the ritual by lying on the ground for a few seconds with the monks and did a Peace Walk from the 9th floor of the temple to the yard.

Gere, who recently turned 61, also watched the colossal dance performance of Mahakarya Borobudur at the Aksobya open stage on Sunday evening. The Ma-hakarya Borobudur performance recounts the history of the con-struction of the Borobudur Tem-ple by King Smaratungga.

Julia Roberts, his partner in “Pretty Woman”, was in Bali two years ago to make “Eat, Pray, and Love”. Remarked Gere: “I will not make a movie that Julia Roberts made in Bali. I’ll make a movie about the history of the discovery of this temple. I am very eager to make this film.”

The historic temple was dis-covered by the British Governor-General Sir Thomas Stamford Raffles in 1814.

Richard Gere Makes Spiritual Journey to Borobudur

The Culture and Tourism Ministry has set itself the target of 7.7 million foreign tourist arrivals this year, a tourism official said.

“We are optimistic that the target will be achieved,” Rita Sofia, promotion section chief of the Marketing Directorate for Java of the Tourism Ministry, said here last month.

Speaking on the occasion of the opening of an exhibition on Central Java tourism , Rita said that the target this year was higher than that of last year, which was only seven million.

She said that the number of domestic tourists this year was also expected to increase to 237 million from 234 million in 2010.

Hollywood actor Richard Gere was last week in Indonesia to visit the Borobudur Temple, a cultural symbol of the greatness of Indonesian ancestors as epitomized by Kamadatu, Rupadhatu, and Arupadhatu.

Ministry Targets 7.7 mForeign Tourists in 2011

The Trade Ministry has designated Batam city in Riau Islands province as an ASEAN Batik Trade Center, a local trade official said.

“The Trade Ministry approved the designation of Batam city as an ASEAN Batik Trade Center yesterday,” spokesperson of Batam`s Indonesian Chamber of Commerce and Industry (Kadin), Nada Faza Soraya, said here last month.

She said the selection of Batam as an Asean Batik Trade Center was agreed on during an ASEAN summit in Jakarta early this month.

According to her, it was the Kadin Indonesia Foundation and Indonesian Batik Foundation that had asked the Trade Ministry to name Batam as a batik trade center in the ASEAN region.

Nada said due to its strategic location and sea border with several Asean countries, the city was designated as the Asean batik trade center.

In late 2009, the UN Educational, Scientific and Cultural Organization (UNESCO) officially recognized batik as an Indonesian cultural heritage. Batik was considered not only as part of Indonesian cultural heritage but also recognized as a representation of humanity`s culture for its rich value and cultural inheritance.

“The Indonesian community need to know various kinds batik motif after it has been internationally recognized,” Nada said, adding that every detail of batik had the value of a decent life that has to be maintained.

According to her the color and motif of batik also reflects the regions in Indonesia because every region has its own typical motif.

Batam Designated as ASEANBatik Trade Center

President OpensBali Arts Festival

Gere’s visit is at the invitation of Jero Wacik, Minister of Cul-ture and Tourism. Jero said that the invitation was initiated when he visited Borobudur after the Mt. Merapi eruption.

“I came with UNESCO officials and we decided to find a figure to raise the profile of the Borobudur after it had closed off due to the ash from the eruption. The figure should have close relations with the Borobudur, and that person is Richard Gere,” said Jero.

Director of PT Taman Wisata Candi Borobudur, Prambanan and Ratu Boko, Purnomo Siswo-prasetjo, stated that Gere’s visit is expected to boost tourism in the area, home to several other Bud-dhist and Hindu temples and the ancestral seat of Javanese cul-ture.

Before flying to Yogyakarta with his wife, Carey Lowell, and son, Homer James Jigme, Gere was in Jakarta to meet with Pres-ident Susilo Bambang Yudhoyono and Jero. In the meeting they dis-cussed humanitarian activities.

“Gere said he would like to be involved in major humanitarian events here,” Jero said.

In late 2009, the UN Educational, Scientific and Cultural Organization (UNESCO) officially recognized batik as an Indonesian cultural heritage. Batik was considered not only as part of Indonesian cultural heritage but also recognized as a representation of humanity`s culture for its rich value and cultural inheritance.

Central Java Governor Bibit Waluyo has mobilized tens of soldiers to help accelerate the renovation of Lawang Sewu, a famous landmark in Semarang.

The soldiers helped rearrange the environment around Lawang Sewu, the governor said when inspecting the renovation work at Lawang Sewu, here last week.

The renovated Lawang Sewu is expected to be officially inaugurated by First Lady Ani Yudhoyono on July 5.

Lawang Sewu (which means “Thousand Doors” and was built during the Dutch colonial era) will become a main tourist attraction for the Central Java Visit Year 2013.

Semarang’s Tourism IconSoon Ready for Visitors

The value of Bali s painting exports increased 36.55% from $46,667 in March 2011 to $63,997 in April 2011, a regional government spokesman said.

“But in terms of volumes the painting exports declined 22,21% form 3,296 to 2,564 pieces,” Bali Regional Government Spokesman I Ketut Teneng said here last month.

He said that the painting exports were based on data in Bali trade and industry office only.

Many of Balinese artists canvas products are purchased directly by foreign tourists who came to Bali for holidays, he said.

“They came to Bali for holidays and purchased paintings and arts collections directly and as such are not recorded officially,” he said.

A total of 2.57 million foreign tourists visited Bali in 2010.

Ketut also said that besides paintings, Bali also recorded in an increase in its ceramics exports. The value of Bali s ceramic exports in the first quarter of 2011 was recorded at $909,732 or an increase by 129.27% with that in the corresponding period a year earlier, which was $396,799.

“But in terms of volumes Bali s ceramic exports dropped 21,22% from 248,391 pieces to 196,691 pieces,” I Ketut Teneng said.

He said that Bali s ceramics products with different designs and ornaments had enough competitive edge and were preferred by consumers in international markets.

The Bali ceramics export items vary, including unique household ahd furniture ornaments.

He said that Bali s exports of plaited handicraft products increased by 120.92% to $875,979 in the January-April 2011 period and increased by 120.92% compared to last year`s only $395,517 in the same period.

“The foreign exchange revenue was for the shipment of 645,892 pieces of handicraft articles in those four months, up by 59.94% compared to the only 403,823 pieces in last year`s same period,” I Ketut Teneng said.

Exports of Bali`s Paintingsup 36.55%

Bibit Waluyo

President Susilo Bambang Yudhoyono has opened the 33rd Bali Arts Festival last week.

The Bali Art Festival, involv-ing both local and internation-al artists, is a regular annu-al event organized by the Bali provincial administration.

President Yudhoyono open the art festival on Friday eve-ning at the open theater of Denpasar Cultural Park.

Themed “Desa Kala Patra: Self Adaptation into Multicul-tural Concepts,” the festival is a grand art festivity this year

for a month-long performance of dances, music, poetry, and hand-icraft exhibition.

Held from June 11 to July 9, 2011, the Festival started with a traditional opening parade led by Bali Governor Made Mangku Pas-tika.

The festival is conducted in con-junction with the Bali World Cul-tural Forum and the National Utsawa Dharma Gita 2011 as a starting point to create global cul-ture with local wisdom.

The main agenda of the Bali Arts Festival are stage perfor-mances, competitions, meetings

and seminars, and handicraft ex-hibition of small industry.

Each year the Bali Arts Festi-val introduces the fed classical dances of the island such as the legong, gambuh, kecak, barong, baris, mask dances and the like.

It is based on the theme around which new “dance choreography” is produced and old village danc-es and activities revived.

Over the years, the whole range of classical Balinese stories - Ra-mayana, Mahabharata, Sutaso-ma, Panji - have been turned into “colossal” Sendratari Ballets.

President Susilo Bambang Yudhoyono (second right) walks with Culture and Tourism Minister Jero Wacik and Bali Governor Made Mangku Pastika to open the XXXIII Bali Arts Festival.

www.thejakartapost.com

*20June-16July 2011

*

The festival is conducted in conjunction with the Bali World Cultural Forum and the National Utsawa Dharma Gita 2011 as a starting point to create global culture with local wisdom.

www.usatoday.com/Slamet Riyadi, AP

The President Postwww.thepresidentpost.com June 12, 2011 C5

Travel

Tanjung Lesung in Banten is one of the most potential areas in Indonesia that can be turned into a new favorite international

tourism destination. Sitting on a 1,500-hectare pen-

insula, the area offers extensive ocean frontage and beautiful san-dy beaches. This popular destina-tion is 170 km and three hours’ drive away from Jakarta and ap-proximately 120kms from Soeka-rno Hatta International Airport.

With full commitment to devel-op Tanjung Lesung as an interna-tional tourism destination, the lo-cal administration aims to build an airport in Panimbang, about 10 minutes away from Tanjung Lesung. The local administration is optimistic it can realize the plan to build the airport. It will there-fore allocate budget of more than Rp 600 million for feasibility study and for the master plan.

The airport also proposed to fa-cilitate transportation access to South Banten and is expected to bring in investors to invest in the mining sector in the southern part of the region such as Cibali-

ung and Bayah.However, the airport will only be

big enough to accommodate small aircraft with seat capacity of less than 20 persons. According to the plan, the airport will only serve certain routes such as Jakarta, several cities in Java, and parts of Sumatra.

A plan to build a 84-km Se-rang-Panimbang highway has also been laid out. The project will connect Tanjung Lesung and Jakarta – Merak highway that will shorten traveling time from Soekarno Hatta International Air-port to the area to only 1 hour and 15 minutes.

Tanjung Lesung is a great desti-nation with a wide range of invest-ment opportunities. Its developer, PT. Banten West Java Tourism Development Corporation (BWJ), is inviting prospective land buy-ers and developers to collaborate and to submit their bids.

Tanjung Lesung sits on a penin-sula on the western coast of Ban-ten, bordering the Sunda Strait. The land area is rich in natural beauty and attractions while the sea is home to vibrant and thriv-

Tanjung Lesung

ing marine ecology.It has a launch point to one

of the best national parks in In-donesia, Tanjung Ujung Kulon, which is a UNESCO World Heri-tage property and has the back-drop on one of the world’s most fa-mous landmarks, Anak Krakatau Volcano.

This area will truly become a world class sailing, yachting and cruising destination. It has a semi sheltered waters that will bring the best conditions for any kinds of water sports as well as Ari-el sports like gliding, hot air bal-looning, parasailing and seaplane scenic flights over the famous Anak Krakatau Volcano and oth-er islands.

The nature of the low lying land form will allow for the develop-ment of one of the biggest water-front canal estates in the entire region, with approximately 1,000 allotments. The land form will also allow for the development of a Venetian styled city center.

Modern infrastructures such as electricity, telephone, mobile phone network, satellite TV, high speed internet access, water treat-ment plant, waste water treat-

With full commitment to develop Tanjung

Lesung as an international tourism destination, the local administration aims to build an airport in

Panimbang, about 10 minutes away from

Tanjung Lesung.

ment plant, security service, good road infrastructure and beautiful scenery will add to the attraction.

PT Banten West Java is an ex-pert in resort planning and devel-opment and has been widely rec-ognized as a special consultant in the development of the area.

BWJ shareholders are respect-ed local businessmen with rich experience in such business-es as property, textile and gar-ment, chemicals and various oth-er manufactured goods.

A Wonderful Spot for Development Opportunities

Tanjung Lesung sits on a peninsula on the western coast of Banten, bordering the Sunda Strait. The land area is rich in natural beauty and attractions while the sea is home to vibrant and thriving marine ecology.

TANJUNG LESUNG

Bogor

Pandeglang

TangerangJakarta

Soekarno-HattaInternational Airport

Labuan

Serang

Cilegon

Merak

FutureToll Road

Ujung Kulon

JAVA ISLAND

Pictorial EventsThe President Post www.thepresidentpost.comJune 12, 2011C6

BreakfastDialogueBreakfast Dialogue at The Financial club Jakarta, themed “The 2014 Elections and What They Mean” with James Van Zorge, Principal and Founder Van Zorge, Heffernan and Associates. The event was attended by professionals, namely Tanri Abeng and other businessmen.

The Palladium GroupStrategy Execution Forum 2011The Palladium Group Strategy Execution Forum 2011, themed “Mastering the Strategy Management”, was held at Ritz Carlton Mega Kuningan, Jakarta. The Founder of Palladium Group, Dr. David P. Norton, and CEO of Garuda Food Sudhamek were the speakers at the forum.

Taxt & Photos by Nandi Nanti

IABC (Indonesia Australia Business Council) held a gala dinner at Mandarin Hotel, Jakarta. It was attended by professionals and delegations from both countries, namely Noke Kiroyan, Micky Hehuwat, Yedi Sondy, HS Dillon and Marzuki Darusman.

IABC (Indonesia Australia Business Council) Gala Dinner

South Korea–Indonesia ICTTraining Center Inauguration The ICT Center at Jababeka Cikarang was inaugurated by Minister of Communications and Information Tifatul Sembiring. It was built thanks to donations from the South Korean government amounting to of $ 8,900,000.

“Accelerating Economic Development: To Boost Investment”The speakers at the forum were Gita Wirjawan, Chairman of Investment Coordinating Board of the Republic of Indonesia, and Stefan G Koeberle, Country Director of the Word Bank. The event was held at The Financial Club Jakarta and attended by businessmen and professionals.

Celebrating the 484thAnniversary of JakartaCelebrating the 484th Anniversary of Jakarta, Arlinda Frota presents a porcelain painting exhibition themed “Impressions of Jakarta” at Alun-Alun Indonesia, Jakarta. Arlinda started to paint porcelains by using batik motifs.

The President Postwww.thepresidentpost.com June 12, 2011 C7

Living

By William J. Bennett

I want to offer a graduat-ing class four pieces of advice, general but per-sonal advice to each one of you about the parts of the real world to which you are being trans-ferred. I don’t wish to

speak of life in the government or of public policy or some burning public issue of the day, but rath-er of some steady and enduring issues of every day. Of the partic-ular blessing of civilization and lit-erature and history and philoso-phy that has advised us about these things.

My first piece of advice, my lon-gest one: Try to like life. Be good-humored about your mortality. I

don’t mean that you should like all parts of your life, or all parts of the world, or that you should be hap-py with everything that occurs in your life – you certainly won’t be. My advice is that your attitude be one of optimism, engagement and interest, and that’s largely under your control.

Writing about disappointment, the great novelist George Eliot once wrote, “Everything depends not on the mere fact of disappoint-ment, but on the nature affect-ed and the force that stirs it.” Let disappointment, when it comes, and it will come, stir you, stir your force. So that is practical opti-mism that I recommend to you.

If you think about it, living with interests and engagement is an attitude to which there is simply no reasonable alternative. Beware the cynics; beware the damp-ers. Cynicism, gripping a state of chronic disappointment and com-plaining about the world, is no way to have life work for you or to live it. And those who start out feign-ing cynicism soon become cynics for real. Cynicism corrodes. It cor-rodes passion. It corrodes com-mitment. So take into your en-

terprises what the writer E.M. Forster calls “pluckiness.” Pluck-iness of spirit. Take good will and take a good sense of humor.

My second piece of advice is a corollary of the first. Look forward to work, don’t dread it. Look for-ward to it and approach your work with passion and engagement. Listening to my contemporaries, I can tell you that I have found over and over again that those men and women who like what they do from day to day are happier than those who do not like what they do, even if the latter make twice or three times or five times as much money as the former.

Think of your work in terms of what you know and what you love. Try to expand the number of things that you know and love. There are blessings, ladies and gentlemen, blessings to be won in this way, blessings to be won from work that cannot be won from idleness or leisure. The human-ities have long taught that work killed fewer hearts than boredom or idleness do. Modern medical science bears this out.

Perhaps for some of you, your

first job may not be the one you really want. It certainly wasn’t for me. That’s not unusual. The idea that every person should be able to choose the job he or she wants is in fact, as history goes, a very new idea, still a relatively rare re-ality. So if that’s your situation, the only reasonable thing to do is to make the best of it. But, while making the best of it, don’t let your passions dry. Don’t lose the passion to do what you know and what you love. We are at our best when we do that which we know and which we love.

In the movie “Chariots of Fire,” the great English runner Eric Lid-dell told us he loved to run.

“When I run,” he said, “I feel God’s pleasure.”

I think all of us have the op-portunity to feel God’s pleasure through us, but only if we’re will-ing to stay at it. To be at one with one’s work, whether it is dentist-ry or running or sales or teaching or farming or even government, is worth a very great deal.

My third piece of advice has to do with an old issue and a con-temporary occupation. You see

it all the time on television, and they talk about it in the movies, and no doubt the subject is still a late-night dormitory conversation. That subject is called happiness.

My advice to you, strange as it may sound, is not to seek happi-ness. There are all sorts of peo-ple who think that happiness is a condition that can be sought, then caught and then maintained indefinitely, kept in a jar or in a cage.

Some also believe that the qual-ity of a life is determined by the number of hours of happiness you can chalk up. That’s not true. The thing is, the irony is, that you will have a much better chance of finding happiness if you don’t bother your head about it, if you worry about other things.

No doubt, some of you have al-ready discovered that happiness is not the same as pleasure. Plea-sure comes and pleasure goes, but happiness is a different thing. The point is, as Robertson Davies has written, “The nature of hap-piness is such that happiness re-treats the more intensely you pur-sue it.”

Happiness is like a cat. If you coax it or call it, it will avoid you; it won’t come. But if you pay no attention to it and go about your business, you will find it rubbing against your legs and jumping into your lap. So forget pursuing hap-piness. Instead, pursue learning, pursue work, pursue honor, pur-sue your commitments and keep them, pursue the truth, pursue decency, look honestly for God. Be faithful to your spouse, to your children, to your friends, to your country. Forget pursuing hap-piness; pursue other things and with luck happiness will come to you.

Finally, the fourth and last piece of advice, is about your mind. A very smart man, a phi-losopher, once said, “The sole pur-pose of education is to be able to detect when a man is talking rot.” I hope you know it when you hear or read it. I hope you haven’t read it today. For this advice, this very brief last piece of advice, is about your mind. Here I offer this say-ing: “Keep an open mind. An open mind is a very good thing. But don’t keep your mind so open that your brains fall out.”

In-flight Wish List: How would you makeair travel fun?

The man spoke the truth. Lock-ing yourself into a metal tube with two hundred strangers for several hours is hardly one of life’s most pleasurable pursuits.

Surely it doesn’t have to be that way?

Etihad has the right idea. The UAE airline recently announced it would be employing chefs to tai-lor-make meals for passengers in its Diamond First class cabins, of-fering “a five-star restaurant style of service in the sky.”

That inspired us to come up with 10 more things that could turn air travel from a chore into a delight. Some are a little fantas-tical, we admit, others more do-able.

After gleaning inspiration from our list, what suggestions would you make to ensure your flight is less boredom and terror, more bliss and tranquility?

CNNGo’s in-flight wish list:

1. Massage/manicure/pedi-cure/spa services. After that tan-trum at check in because your bag was 0.3 kilos overweight and therefore $100 more expensive, you need to be kneaded. A little room with soft lighting, incense, whale music and pretty peo-ple in white coats whispering, “Is the pressure ok?” will do just the trick, thanks.

Children’s cabin. We heard the movie “Snakes on a Plane” was originally going to be “Kids on a Plane” but that was deemed too terrifying. Stick the little ones in a sound-proof room with plas-tic balls, slides and perhaps even a few seats they can kick in the back. Problem solved.

2. Boot the beverage cart. As if the threat of deep-vein thrombo-sis wasn’t enough, airlines also

insist on knee-capping us twice a flight with the drinks trolley and forcing those trying to get to the toilet to detour up into First Class and down the other side. Get rid. If people want a drink they’ll ask for it.

3. Singles’ seats. Every sin-gleton flying hopes against hope they’ll be sat next to their dream date who’ll be hoping the same thing. Give those an option for a ‘singles seat,’ located next to other ‘singles seats’ for a chance of love in the air.

4. Free Wi-Fi. If Singapore Air-lines can introduce in-flight Inter-net, why can’t everyone?

5. Allow movies to finish. Any-one who started “The Sixth Sense” within an hour of landing just thinks it’s a slightly stupid mov-ie about a kid who sees ghosts. If there are 30 minutes to landing and another 15 minutes of taxi-ing, then there’s time for the mov-ie to end.

6. Wet room. Bath tubs, showers, Jacuzzis … nothing passes time better than a bit of a splash around.

7. Proper child facilities. Decent diaper-changing op-tions, proper kiddie cots and baby minders in the cabin crew might help stop all the screaming and crying. And that’s just the parents.

8. Decline the recline. As if being stuck in the middle seat on a 12-hour flight be-tween two fleshy strangers wasn’t bad enough, the guy in front then decides to put his head in your lap. One or two inches is plenty enough pushback.

9. Viewing section. Air travel provides some of the most amazing views of the earth we’ll ever see. Why not make an entire section of the plane transparent to make the most of the opportunity?

Happiness is like a cat. If you coax it or call it, it will avoid you; it won’t come. But if you pay no attention to it and go about your business,

you will find it rubbing against your legs and jumping into your lap.

Keep an open mind. An open mind is a very good thing. But don’t keep your mind so open that your brains fall out.”

LOVELIFE& WORK

If you could wish for anything on a flight, what would it be? Emirates’ suites are pretty cool. But we can do better. “There are only two emotions in a plane: boredom and terror,” Orson Welles once said.

www. cathaypacific.com

HealthThe President Post www.thepresidentpost.comJune 12, 2011C8

Can diabetes be a (possible) cause of fa-tigue, leg and lower back aches?

The answer is that diabetes itself prob-

ably is not the cause of your fa-tigue, lower back and leg aches. The things that cause type 2 di-abetes (also called adult onset di-abetes), such as a weight problem and lack of exercise, are common-ly the cause these symptoms.

Fatigue incorporates three components: 1. The inability to initiate activity. 2. Reduced ability to maintain activity. 3. Difficulty with concentration and memory.

Fatigue should be distin-guished from sleepiness, short-ness of breath on exertion and muscle weakness, although these can also be associated with fa-tigue. Fatigue lasting six months or more is referred to as chron-ic fatigue. Chronic fatigue is not necessarily the entity known as chronic fatigue syndrome, which is a diagnosis after exclusion of all other causes.

Fatigue in anyone should be evaluated by a health care provid-er to exclude all possible causes and to get counseling on how to treat it. Other medical causes of fatigue are the side effect of drugs, thyroid dysfunction, high calci-

um levels, rheumatologic illness-es, adrenal, kidney or liver prob-lems.

Some infections such as tuber-culosis or hepatitis can cause fa-tigue, and indeed, fatigue can be their only symptom. Depression is also a major cause of fatigue.

diabetes can cause fatigue by causing anemia or a metabol-ic change known as lactic ac-idosis. These are unusual side effects.

Many patients use the word fatigue to complain of sleepi-ness. A significant proportion of adults and especially a sig-nificant proportion of those who who are obese have ob-structive sleep apnea. This is a condition in which the sleeping person literally stops breathing for a few seconds, several times a night. Each time, they wake up to start breathing again.

People with obstructive sleep apnea usually do not re-alize that they disrupted their sleep several times during the night. This leads to sleepiness throughout the day because the person literally did not get a good night’s sleep. Sleep ap-nea is commonly treated with a continuous positive airway pressure machine, common-ly known as CPAP, which in-creases the pressure of air breathed in during the night.

If a root cause of the fatigue cannot be found, it can often be treated with cognitive be-havioral therapy or graded ex-ercise therapy. A regimen of ac-tivity and exercise is frequently successful.

Can diabetes causefatigue, body ache?Fatigue in anyone should be evaluated by a health care provider to exclude all possible causes and to get counseling on how to treat it.

If a root cause of the fatigue cannot be found, it can often be treated with cognitive behavioral therapy or graded exercise therapy. A regimen of activity and exercise is frequently successful.

www.thestrokefoundation.com

While unusual, uncontrolled diabetes can be the cause of fa-tigue. These patients generally also have other symptoms of di-abetes such as excess thirst, fre-quent urination and blurred vi-sion. Some drugs used to treat

Eggs-actly How ManyEggs Are Too Many?

One ordinary egg doesn’t contain too much cholesterol, if you believe the hype coming from egg producers and their aggressive advertising campaigns. But a recent article in the Canadian Journal of Cardiology reminds people that just one egg yolk can exceed the recommended daily limit of 200 milligrams (mg) of cholesterol for people at risk of cardiovascular disease.

One large egg can have up to 275 mg of cholesterol. When compared to fast foods like the much-maligned Double Down meal from KFC (150 mg of cholesterol), one egg yolk is higher in cholesterol. Even Hardee’s Monster Thickburger®—with two-thirds of a pound of beef, three cheese slices and four bacon strips—has slightly less cholesterol (210 mg). That doesn’t mean that burgers and fried chicken are better choices. The saturated and trans fats in foods matter too—but don’t forget about dietary cholesterol.

“At a time when inactivity, obesity and diabetes are increasing internationally...it seems very unwise to reverse the longstanding recommendations on limiting cholesterol consumption,” the authors wrote. “In our opinion, stopping egg consumption after a myocardial infarction [heart attack] or stroke would be like quitting smoking after lung cancer is diagnosed: a necessary act, but late.”

High levels of cholesterol have been linked to heart attack, stroke, circulation problems and other conditions, including death. The American Heart Association (AHA) recommends that healthy people consume no more than 300 mg of cholesterol per day; for those with high LDL (“bad”) cholesterol or for people taking a blood-cholesterol lowering medication such as a statin, the daily limit is 200 mg.

People who enjoy eggs and want to continue eating them (including as an ingredient in meals and desserts) should find other ways to lower their cholesterol intake, for example, by using only egg whites or limiting consumption of other foods that are high in cholesterol.

www.wallcoo.net