Media Monitoring

Private and Bulog to fight over rice

Thursday, 29 Nov 2018
Private and Bulog to fight over rice
Workers unload rice from a truck at Cipinang Market in East Jakarta. (The Jakarta Post/Ben Latuihamallo)

GENERAL NEWS AND HEADLINES

 
Lion Air JT610 unfit to fly: KNKT
The Jakarta Post, Headline

The National Transportation Safety Committee’s (KNKT) report has revealed that the aircraft used for Lion Air flight JT610, which crashed into the Java Sea on Oct. 29, was unairworthy. The report includes the aircraft’s latest maintenance record, a detailed communication record between cockpit crew members and air traffic control as well as data downloaded from the flight data recorder (FDR). While presenting the report, KNKT investigator Nurcahyo Utomo said the aircraft had malfunctioned during a flight from Denpasar, Bali, to Jakarta the night before the incident.
 
According to the FDR, the plane’s stick shaker, a device which warns the pilot of an imminent stall, was active prior to and during the flight from Denpasar. The same problem remained until the crash. Other warning signs on the flight display, including ones concerning a difference in airspeed and the airplane’s automatic trim system, also occurred during the flight from Denpasar. After landing, the pilots who flew the airplane from Denpasar to Jakarta reported malfunction to engineers, who did maintenance checks on the aircraft before it was used for the JT610 flight.
 

South Jakarta judges bribed over civil case
Koran Tempo, p.5

Corruption Eradication Commission (KPK) has apprehended two judges from South Jakarta District Court, Iswahyu Widodo and Irwan, for alleged bribery. They allegedly received a bribe from advocate Arif Fitrawan relating to an ongoing civil case. The KPK has also named East Jakarta District Court’s substitute clerk, Muhammad Ramadhan, and the civil case’s plaintiff, Martin P. Silitonga, as suspects. The arrest of the judges occurred on Tuesday night, Nov. 27, when the KPK conducted red-handed operations in a number of areas in South Jakarta. Six people, including the suspects, were taken to KPK’s headquarter after the anti-graft body seized money amounting to S$47,000 (Rp 500 million) during the operation. According to KPK commissioner Alexander Marwata, the money was used to bribe the judges relating to the civil case of PT Asia Pacific Mining Resources’ acquisition of PT Citra Lampia Mandiri. The plaintiff, Martin P. Silitonga and Isrulah Achmad, requested the judges to revoke the acquisition agreement.
 

House troubled to accommodate KPK’s request
Kompas, p. 4

The Corruption Eradication Commission’s (KPK) requested the House of Representatives (DPR) to implement the recommendations of the United Nations Convention Against Corruption (UNCAC) into the country’s regulation. Regardless, the House finds the request difficult to grant in the current period, claiming that their legislative workload is packed to capacity. According to Arsul Sani from the House Commission III, which is responsible for overseeing legal affairs, it might be possible for UNCAC recommendations to be implemented into regulation through the revised draft for the Indonesian Criminal Code (RKUHP), which is being deliberated by the House. Arsul admitted that it would be difficult to find other means in implementing the UNCAC recommendations as House members devoted most of their times to work on RKUHP since they targeted to finalize the draft before the end of their term in September, 2019. Arsul stated that UNCAC recommendations which were being considered to be incorporated to RKUHP were those pertaining to corruptions in private sector, illicit enrichment and influence peddling.
 

Muhammadiyah youth declined Prabowo’s visit
Media Indonesia, p. 2

Presidential candidate Prabowo Subianto had to cancel his plan of visiting Muhammadiyah youth wing’s muktamar (national congress) in Muhammadiyah University, Yogyakarta. Prabowo then visited Muhammadiyah members in Sleman instead, during which he claimed that his initial plan had been dropped due to technical problems. In addressing this, Amien Rais, a well-known Muhammadiyah figure and also Prabowo’s supporter, explained that the cancellation was due to a number of reasons, one of which was Muhammadiyah’s decision not to bring political campaigns in university area. Meanwhile, candidate for Muhammadiyah youth wing’s central executive board chairman Sunanto said that he did not want Muhammadiyah to be entrapped in political intrigues ahead of the 2019 general elections. It is reported that the majority of Muhammadiyah youth wants the organization to remain neutral and unaffiliated with any political parties.
 

Govt. struggles to fill public service jobs
The Jakarta Post, p. 4

The National Civil Service Agency (BKN) has revealed a low pass rate among civil servant applicants in the recent basic skills test (SKD), which is part of a series of ongoing assessments for civil service jobs. The test results reveal that of around 80 percent of all participants of the test, the national pass rate is below 3 percent. Following this, concern over whether the government would be able to fill more than 200,000 vacant public service jobs arises.
 
In addressing the low pass rate, Administrative and Bureaucratic Reform Minister Syafruddin issues a new regulation allowing recruiting institutions to select participants based on their ranking in the SKD in an attempt to recruit more civil servants. The regulation will allow recruiting institutions to declare eligible three times as many participants as the number of vacancies in each institution. These participants will sit for the next phase of the civil servant selection process, namely the competency assessment test (SKB).
 
 
 

BUSINESS AND ECONOMIC NEWS AND HEADLINES

SMEs restricted for foreigners
Bisnis Indonesia, Headline

President Joko Widodo finally decided to remove micro, small and medium enterprises (SMEs) from negative investment list (DNI) relaxation policy. This decision is recognized as a form of government’s support to national business growth. On the closing of the 2018 Indonesian Chamber of Commerce and Industry (Kadin) national leadership meeting (Rapimnas) on Wednesday, Nov.28 in Solo, the President affirms that the government commits to SMEs growth because this sector has contributed significantly to the economic growth. Currently, there are approximately 62 million units of SMEs with 116 million labor employments and 60 percent contribution to the gross domestic product (GDP). “DNI remains an issue, Kadin and Hipmi (the Association of Young Indonesian Businessmen) complained. I have not signed the presidential regulation, no worries, I ensure you that I will remove SMEs from DNI relaxation. I decided,” stated Jokowi in front of the businessmen. This decision was well-received by Kadin members. Kadin chairman Rosan P. Roeslani appreciates the President’s response to businessmen’s advice.
 

Next year, bank margin will be trimmed
Kontan, Headine

The trend to increase reference interest rate has a direct impact on banking business. Although banks can increase credit interest rate, a number of bankers confirm that the net interest margin (NIM) will shrink. The shrinking NIM occurs due to banks being worried about increasing credit interest rate too much. They fear that if the credit interest is too high, credit issue would decrease and non-performing loan (NPL) increases. Maybank Indonesia President Director Taswin Zakaria sees that, industrially speaking, NIM will shrink next year. “However, it depends on the banks. Right now banks are still slow to increase the credit interest rate. If there is adjustment next year, then margin will erode,” he said on Tuesday, Nov. 27. Maybank is also trying to maintain their cost of fund (COF) stable. That is why Maybank Indonesia has not aggressively pushed up their credit interest. OCBC ISP President Director Parwati Surjaudaja explained that increasing the credit interest rate cannot be as quick as the fund interest rate. OCBC NISP is trying to at least keep their NIM at 4 percent in 2019. “NIM keeps on falling, we are projecting at 4 percent. Not so much different from now,” she added.
 

DIVA will digitalize SMEs
Investor Daily, p. 1

PT Distribusi Voucher Nusantara Tbk (DIVA) plans to modernize micro, small, and medium enterprises (SMEs) through digitalization. This company aspires to accomplish Digital Energy of Asia in 2020 as what the government aims. DIVA President Director Raymond Loho stated that in order to make the mission a reality, one of the steps the company has to take is to be registered in the Indonesian Stock Exchange (BEI). Distribusi Voucher Nusantara is the fifty-fourth issuer that floors on the BEI this year. This company set the initial stock price Rp2,950 and released 400 million stocks. The company made Rp632 million from their initial public offering (IPO).
 

Lippo Karawaci Divested Rp6 trillion worth of asset
Investor Daily, p. 1

PT Lippo Karawaci Tbk (LPKR) has successfully divested their asset by finalizing the sales of their First Real Estate Investment Trust (REIT) Manager and some of the First REIT units, gaining Rp2.2 trillion. This company will also divest their asset furthermore, making them earn more than Rp6 trillion in cash. PT Lippo Karawaci Head of Corporate Communications Danang Kemayan Jati stated that the divestment strengthens LPKR liquidity position to fulfill all obligation in payments of debts. That includes US$75 million-worth of obligation that is due in June 2020. “The next LPKR obligation will be due in 2022,” he added during a press conference on Wednesday, Nov.28 in Jakarta. He also mentioned that the company will consider sever options to increase LPKR equity in the future. Other than strength in liquidity and balance, LPKR will remain as one of the most dynamic and advanced property developers in Indonesia. LPKR has developed big companies with most market share in a number of sectors. First, hospital or health service through PT Siloam International with 51 percent of the stocks owned by LPKR. Second, lifestyle malls where LPKR both directly and indirectly owns or manages the biggest retail and lifestyle malls in Indonesia. Third, independent city developments, where they claim to be the developer with the best landbank in the country. Fourth, hotel through the Hotel Aryaduta network, one of the most prominent local brands. Fifth, asset management or REIT. LPKR is the REIT pioneer in Indonesia.
 

Private and Bulog to fight over rice
Kontan, p.1

The government is on its way to changing the scheme for rice procurement. To increase government rice stock, starting from 2019, the state-owned logistics company (Bulog) can buy rice at market price. This step allows Bulog to buy rice with flexible price, just like the private. The government no longer limits the price for buying rice fixed at government’s buying price (HPP). However, as a consequence, the competition between the private and Bulog will be tougher. This condition will exacerbate even further if rice stock decreases. The Cipinang Rice Central Market (PIBC) chairman Zulkifly Rasyid stated that other than the fierce competition with the private sector, the new scheme will make the farmers push up the price for grains and rice. “As a result, the price for rice in the market will be higher,” he said on Wednesday, Nov. 28.