Govt to reduce need for foreign loans: Vice Minister

Indonesia will reduce its need for foreign loans by preferring to meet its financing requirements by the issuance of state debentures, National Dvelopment Planning Vice Minister Lukita Dinarsyah Tuwo said.

Although there were indications Indonesia`s foreign debts would still increase because of a budget deficit, the government had n committed to lessen its need for foreign loans and encourage domestic financing through state debentures (SUN), Lukita said here Friday.

"Due to the state budget deficit foreign debts are expected to rise but in terms of ratio it will drop. In terms of foreign debt we are committed to reducing our foreign debt stock. We will proritize debts from state debentures issued at home or abroad although the majority will certainly be issued at home in the form of state debentures and shariah bonds," he said.

He said by reducing foreign debts in the budget financing the ratio of debts to gross domestic product was expected to drop quicker.

"In terms of ratio the foreign debts will drop faster as we have been committed to limit the debts," he said.

He said with the deficit to drop from 1.6 percent to 1.2 percent in 2014 it was expected the country`s debt ratio to the gross domestic product would drop drom around 30 percent in 2009 to 24 percent in 2014.

"So, every year it drops by one percent," he said.

He said the government expected a 5.5 percent growth in 2010 and up to seven percent in 2012 and "in 2014 the growth is expected to reach above seven percent."

He said the government would strive to return the source of growth to processing industries and agriculture which are expected to contribute an average 3.6 to 3.7 percent to growth.

With regard to inflation he said it was expected to reach around 5.o to 6.0 percent while the rate of poverty to drop to 8.0 to 10 percent and unemployment 5.0 to 6.0 percent in 2014, he said. (*)

Sources :

http://www.antara.co.id/en/news/1264205120/govt-to-reduce-need-for-foreign-loans-vice-minister

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President asks govt agencies to implement budgets promptly

President Susilo Bambang Yudhoyono has reminded all administrative authorities to implement their work programs in 2010 and not to postpone implementation of their budgets.

President Susilo Bambang Yudhoyono made the statement here on Tuesday when handing over a List of Approved Projects (DIPA) 2010 to ministries and departments as well as regional administrations.

All regulations on budget disbursement and policies on goods and services procurement were available, the head of state said.

Therefore, there was no excuse for postponing the implementation of budgets, he said.

The head of state presented the DIPAs from the 2010 State Budget at the State Palace at a ceremony attended by Vice President Boediono, all cabinet ministers and 33 provincial governors from across the country.

The government is expected to allocate funds from the 2010 State Budget amounting to Rp1,047.7 trillion or 15.5 percent of the Gross Domestic Product.

The allocation of state budget funds for the central government is estimated at Rp725.2 trillion or 12.1 percent from the state budget, or up Rp79.8 trillion or 12.4 percent from Rp645.4 trillion in the 2009 state budget.

"The larger state budget should be spent as best as possible for the improvement of the people`s welfare," the president said.

Among government institutions and ministries receiving the largest amounts of DIPA funds totaling Rp340.1 trillion were the defense ministry (Rp42.3 trillion), the national education ministry (Rp55.2 trillion), the public works ministry (Rp34.8 trillion) , the religious affairs ministry (Rp27.2 trillion), the national police (Rp27.2 trillion) and the health ministry (Rp21.4 trillion). The transportation ministry (Rp15.8 trillion).

The president on the occasion presented DIPA funds to National Education Minister M Nuh for the 2010 budget for national education, and to Defense Minister Purnomo Yusgiantoro and Finance Minister Sri Mulyani Indrawati as the state`s general treasurer.

The 33 governors would also receive DIPA funds from President Yudhoyono for their 2010 regional budgets.(*)


Source :
http://www.antara.co.id/en/news/1262733478/president-asks-govt-agencies-to-implement-budgets-promptly
http://danisugiri.files.wordpress.com/2009/04/budget_1918.jpg

SBY eyes 6.6% average annual growth rate

Indonesia’s economy may grow by an average annual rate of 6.6 percent over the next five years and reach 7 percent by the end of 2014, President Susilo Bambang Yudhoyono said at the opening of the first trading day in 2010 of the Indonesia Stock Exchange.
In his second five-year term Yudhoyono plans by 2014 to have the unemployment rate fall to between 5 and 6 percent from 8 percent currently, and to reduce the poverty rate to between 8 and 10 percent from 14.2 percent.
Yudhoyono said the Indonesian economy showed all the favorable conditions required to attain 7 percent growth by 2014 as long as there was economic and political stability.
A key contributing factor to  economic stability, he said, was to have strong foreign currency reserves.
“We now have only US$65 billion [in foreign currency reserves]. This must be increased in line with our volume of trading,” Yudhoyono said, announcing a target of US$100 billion for currency reserves by 2014.
Yudhoyono also lauded the performance of the IDX in 2009, which had emerged as the second best performer in Asia with a growth of 86.98 percent.
“I really thank and appreciate all the parties who have been working hard last year,” Yudhoyono said, following  which he pressed the button to start this year’s  trading.
The IDX is expected to be among the markets that will remain bullish this year due to the country’s strong economic fundamentals at a time when many economies are still suffering from recession.
The IDX closed the day with a rise of 41.06 points or 1.6 percent to stand at 2,575.41, the steepest increase since Nov.16, Bloomberg reported.
Finance Minister Sri Mulyani Indrawati said that stock market positive performance was achieved due to the government’s responsive actions to cushion the impacts of the global economic downturn.
Mulyani said the government’s measures in handling the crisis last year had succeeded in maintaining market confidence.
“As a result, we experienced a stable economy in 2009 which placed Indonesia as one of the very few countries in the world which were able to post positive growth despite the [global] crisis,” she said.
Indonesian economic conditions are stabilizing after the market collapse and turbulence as a result of the global financial crisis, which reached its peak by the end of 2008. The inflation rate in 2009 reached 2.78 percent year-on-year in December, the lowest inflation rate in a decade, while the rupiah remained stable at between Rp 9,400 and Rp 9,600 to the US dollar.
Low inflation may give the BI room to keep its benchmark interest rate at a record-low 6.5 percent when policy makers meet on Wednesday.
Chatib Basri, an adviser to the finance minister said the inflation rate was likely to reach 6 to 7 percent in 2010 assuming the rupiah remained stable at 9,800 to the dollar.
The economy would receive a boost from the expected rebound in exports which were expected to recover from a 15 percent fall in 2009 by the middle of the year, he said.
“Exports have begun to recover but still at a slow pace. The global economic crisis has eased but it will take time to impact on investment and export rates,” Chatib said.
Unlike exports, the investment rate has already regained ground and demonstrated positive growth.
“Investment is already going up, albeit slowly,” he said.

Source : 
http://www.thejakartapost.com/news/2010/01/05/sby-eyes-66-average-annual-growth-rate.html

Whole bailout process was ‘illegal,’ says audit agency

The investigators into the Bank Century’s bailout may be hitting a wider target as the Supreme Audit Agency (BPK), whose recent report is the basis for the probe, underlined Monday the bailout process might not have a legal basis.

On Monday, the BPK hosted a meeting with representatives from three law enforcement institutions, the Corruption Eradication Commission (KPK), the National Police, and the Attorney General’s Office, as well as the Financial Transaction Report and Analysis Center (PPATK), to discuss its findings that might lead to criminal charges arising from the case.

A member of the BPK who was also the head of the BPK’s investigation team on the Bank Century case, Hasan Bisri, reiterated the agency’s findings, as stated in the audit report, that the whole bailout process resulting in Century being handed over to the Deposit Insurance Corporation (LPS) might be illegal due to the absence of a clear legal basis.

A body called the Coordination Committee (KK) officially handed over the Bank Century to the LPS, but the BPK audit said the KK had never been legally formed.

According to Article 21 of the 2004 Law on LPS, a troubled bank considered to constitute a systemic threat to the banking system should be handed over by the KK to the LPS. However, the detail of the law said that the KK could only be established after the enactment of the proposed law on the financial sector safety net, which has never been established and endorsed.

“In this case, we found that the KK’s legal basis was absent and therefore the LPS management of Bank Century has not been legally covered,” Hasan said.

The KK was crucial because the bailout disbursement could not be done if the committee did not hand over the bank to the LPS.

When asked whether the absence of a legal basis for the KK would mean the whole Rp 6.76 trillion (US$710 million) of bailout was illegal, Hasan said, “I think so.”

LPS executive director Firdaus Djaelani recently said the debate over the KK’s legal basis was due to differences in legal interpretation.

“In my opinion, the KK was legal. It was not a real institution, though. It was like a group of officials.”
KPK acting chairman, Tumpak Hatorangan Panggabean, said the antigraft body would only investigate violations committed by authorities and leading to state losses.

“If you ask whether the KPK has found graft indications? I answer, yes. We have kicked off preliminary investigations but have yet to be able to publicize the case.

“We will soon summon witnesses, search offices, seize evidence, in order to find facts before we can name any suspect,” Tumpak said.

National Police Chief Detective Comr. Gen. Ito Sumardi, meanwhile, said that detectives would soon question Ito’s predecessor Comr. Gen. Susno Duadji over the Century scandal.

Susno previously said that he had information about the recipients of the bailout funds.

Another BPK member, Taufiequrahman Ruki, said the investigative audit of the bailout had found nine violations that could potentially be categorized as crimes.

“The possible crimes don’t only include corruption, but also banking crimes and money laundering, as well as general crimes,” Ruki, a former KPK chief, said.

Information on the nine findings will be distributed to three law enforcement institutions. The violations were allegedly committed by officials from Bank Indonesia, the Financial System Stability Committee (KSSK), the LPS and Bank Century itself.

http://www.thejakartapost.com/news/2009/12/15/whole-bailout-process-was-%E2%80%98illegal%E2%80%99-says-audit-agency.html

Century team to summon Boediono and Sri Mulyani

The Bank Century inquiry committee is questioning Vice President Boediono and Finance Minister Sri Mulyani on their decision to issue Rp 6.76 trillion (US$716 million) in bailouts.

The decision to summon Mulyani and Boediono was made during the first plenary meeting of the House of Representatives committee in Jakarta on Monday.

Mulyani and Boediono decided to salvage the bank during a meeting in November last year. During that time, Boediono was the Bank Indonesia governor.

Mulyani and Boediono said their motives were nothing more than to save the nation by preventing a possible systemic collapse of the country’s banking system by saving Bank Century during the global
financial crisis.

Economists and legislators at the House’s finance commission, however, have doubted their reasoning, citing that Bank Century was a small and insignificant bank. Legislators also questioned the bailout, because its amount was much higher than the amount agreed by the House, which ranged between Rp 600 billion and Rp 1 trillion.

An audit report from the Supreme Audit Agency (BPK), recently submitted to the House, also said there might have been a number of procedural violations conducted during the bailout process.

Along with Mulyani and Boediono, the 30-member inquiry committee will also summon a number of people deemed to know more information about the bailout.

One of the committee deputy chairmen, the Indonesian Democratic Party of Struggle’s (PDI-P) Gayus Lumbuun, said former National Police detective chief Comr. Gen. Susno Duadji, would also be summoned. Susno was heard in a wiretapped conversation by the Corruption Eradication Commission (KPK) to have allegedly asked for a Rp 10 billion bribe during the debacle.

Gayus also said that former vice president Jusuf Kalla would be summoned, because he was the acting president when the bailout was issued. During that time President Susilo Bambang Yudhoyono was abroad.

Despite determining the people and institutions that needed summoning, the committee has yet to determine the fixed schedule of the summoning.

“Our summons will be directed by the development of the investigation,” committee chairman Idrus Marham from the Golkar Party said.

The committee has currently only established a fixed meeting schedule with the BPK and the Financial Transaction Report and Analysis Center (PPATK).

“We are going to meet with the BPK on Wednesday, and PPATK on Thursday,” Idrus said.

The committee plans to discuss the people that need summoning and budgeting Tuesday.

During the hearing, there was also a debate on whether the committee’s future hearings should be made open to the public.

Yudhoyono’s Democratic Party, which has the most members in the committee, insisted that the meeting should be closed door.

However, other parties insisted the meetings be open to the public and the media. The committee agreed that all hearings and inquiries be made open, unless there were requests from certain witnesses. “But the final say will be made by committee members,” committee deputy chairman, Mahfudz Siddiq from the Prosperous Justice Party (PKS), said.

http://www.thejakartapost.com/news/2009/12/15/century-team-summon-boediono-and-sri-mulyani.html