Rupiah falls, market waits for policies to take effect

Aditya SuharmokoThe Jakarta Post ,  Jakarta   |  Thu, 10/30/2008 7:21 AM  |  Headlines

The rupiah continued its slide Wednesday against the U.S. dollar, with the market unresponsive to the government’s newly launched set of fiscal policies, waiting for them to take effect.

The rupiah fell to Rp 11,025 per dollar at 5:15 p.m. in Jakarta, from Rp 10,900 at 4:19 p.m. on Tuesday, Bloomberg reported.

“The policies will take time (to turn market sentiment around), but they did spark positive sentiment early on,” said Purbaya Yudhi Sadewa, Danareksa Research Institute head of research.

“I think the (government’s) moves are good; we’ll just wait for the implementation.”

During morning trading, the rupiah climbed to Rp 10,400 per dollar, but lost steam later on.
“The rupiah can’t rebound in a day. There’s no one-day cure for (market) sentiment,” Purbaya said.

He added the government should implement its policies, including buying back government bonds and ordering state-run companies to place their foreign reserves — including export proceeds — in local banks, to help boost the rupiah.

“If the implementation works, the sentiment will change,” he said, calling the 10 policies “far more realistic” than the 10 unveiled by President Susilo Bambang Yudhoyono on Oct. 6.

The earlier policies included maintaining economic growth at above 6 percent and doing business as usual, which economists deemed unrealistic and unapplicable.

The new policies were announced Tuesday by the government, in a bid to bolster foreign reserves and prop up the rupiah.

They include the exercising of currency swap agreements with the central banks of China, South Korea and Japan, if needed.

Purbaya said if the government and the central bank started to buy back government bonds, market sentiment would rise.

Currency analyst Farial Anwar, however, said the policies were good but did not address the main problems.

“There are two problems: Free capital flow and free currency traders,” he said. “The government is supposed to limit the flow of hot money entering the country and the sales of dollars.”

By adopting a capital control, Farial went on, the government could manage the flow of investment-oriented money, or hot money, into and out of Indonesia.

Source : www.thejakartapost.com

Corruption, Lawlessness Fuel Epidemic of Illegal Logging in Indonesia


WASHINGTON, DC and JAKARTA, Indonesia, Feb. 20, 2002 – Corruption and lawlessness are fuelling an epidemic of illegal logging in Indonesia, resulting in a doubling of the country’s deforestation rates in the late 1990s, according to a report released today.

Indonesia today is losing nearly 2 million hectares of forest every year, up from 1 million hectares annually in the 1980s. Forest cover fell from 162 million hectares in 1950 to only 98 million hectares in 2000. The country’s richest forests, the lowland forests, are almost entirely gone in the island of Sulawesi and will disappear in 2005 from Sumatra and in 2010 in Kalimantan.

“Deforestation on this scale, at this speed, is unprecedented,” said Emily Matthews, co-author of the report, The State of the Forest: Indonesia. “Indonesia is rapidly transitioning from a forest-rich to a forest-poor country.”

The report, published by the World Resources Institute (WRI), Global Forest Watch (GFW), and Forest Watch Indonesia (FWI), is the first comprehensive map-based assessment of the forests of Indonesia. It provides a detailed analysis of the scale and pace of change affecting Indonesia’s forests.

The report concludes that the doubling of deforestation rates in Indonesia is largely the result of a corrupt political and economic system that regards natural resources as a source of revenue to be exploited for political ends and personal gain. The political instability that followed the economic crises of 1997 and the eventual ouster of former President Suharto in 1998 further increased deforestation to its current level.

“Indonesia’s economic miracle of the 1980s and the 1990s was based on ecological devastation and abuse of local people’s rights and customs,” said Togu Manurung, director of Forest Watch Indonesia. “Our findings do not provide grounds for much optimism, despite clear signs of change in Indonesia.”

Driving the rapid deforestation of Asia’s largest – and the world’s third largest — contiguous areas of tropical forests are corruption, lawlessness, illegal logging, political instability, and over-expansion of forest industries.

Logging concessions covering more than half the country’s total forest area were awarded by former President Suharto, many of them to his relatives and political allies. Today, ten companies control 45 percent of the total logging concessions in the country.

“Cronyism in the forestry sector left timber companies free to operate with little regard for long-term sustainability,” said Matthews. According to the Ministry of Forestry, legal timber supplies from natural forests declined from 17 million cubic meters in 1995 to less than 8 million cubic meters in 2000.

Massive expansion in the plywood, pulp and paper industries over the last 20 years means that demand for wood fiber now exceeds legal supplies by as much as 40 million cubic meters annually. Many industry leaders have acknowledged their dependence on illegally cut wood, which accounted for as much as 65 percent of the supply in 2000.

The government’s industrial timber plantation program and the system of converting forests into plantations further drive deforestation. Nearly 9 million hectares of land, much of it natural forest, has been allocated for industrial timber plantations by 1997. While most of it is cleared now, only 2 million of it has been re-planted. In addition, nearly 7 million hectares of forest had been approved for conversion into palm oil or rubber plantations, but only about 4 million has actually been planted.

The report warns that Indonesia’s rapid move to a new system of regional autonomy could result in further deforestation since provincial and district governments do not have the funds or the capacity to govern effectively. Raising short-term revenue will be a top priority and as a result, intensified exploitation of forest resources is already occurring in many regions.

“Growing lawlessness has been a major factor in increased logging and forest clearing,” said Manurung, a co-author of the report. Since 1998, the incidence of illegal logging and farming in national parks have increased, such as in Central Sulawesi’s Lore Lindu National Park and in Aceh’s Leuser National Park and in Central Kalimantan’s Tanjung Puting National Park.

Indonesia’s forests are considered to be among the most diverse and biologically rich in the world. Although the country comprises only 1.3 percent of the earth’s land surface, it holds a disproportionately high share of its biodiversity, including 11 percent of the world’s plant species, 10 percent of its mammal species, and 16 percent of its bird species.

While the report says that much of Indonesia’s natural resource base has been destroyed and degraded, much of it still remains. The harder, but more sustainable route will be to reclaim the land that currently lies idle and conserve the primary forest that remains.

Pressure is being applied by international aid donors led by the World Bank to reform the country’s forestry policy, but these efforts have met with limited success. Local Indonesian environmental organizations such as the Indonesian Forum for the Environment (WALHI) are also putting forward a reform agenda, but to date the government has paid serious attention only to aid donors.

“Sixty four million hectares of Indonesian forest have been cut down over the past 50 years,” said Dirk Bryant, director of Global Forest Watch. “There is no economic or ethical justification for another 64 million hectares to be lost over the next 50 years.”

Source : www.globalforestwatch.org

Indonesia is significant for Japan

Padang, W Sumatra, (ANTARA News) – Japanese ambassador to Indonesia Shiojiri Kojiro said that Indonesia is an important country to Japan because both nations have similarity to prioritize children`s education.

The Japanese envoy made the remarks when presenting his government citation to Bung Hatta university (UBH) in Padang, capital of West Sumatra province on Wednesday.

UBH received the citation based on the Japanese consideration over the university`s great contribution in enhancing the two countries` relations particularly in the fields of education, letters and culture.

In addition, the two countries have never caused other nations cornered.

With such similarities, Kojiro said he felt happy to become Japanese envoy to Indonesia and not to mention that Indonesia is important to Japan due to its substantial deposite of mineral and human resources.

Despite its much import of energy currently, Japan believes that Indonesia as a democratic country still has sufficient deposit of energy.

This university used the name of Bung Hatta, Indonesia`s first vice president. (*)

COPYRIGHT © 2008

Source : www.antara.co.id

A Rp 20 Billion Education Project is Scrapped

TEMPO Interactive, Surabaya:A number of education projects worth Rp 20 billion which had been allocated in Surabaya’s Regional Budget failed to be realized this year.

“Some of the projects were dropped or scrapped from the previous plans,” said Ahmad Jabir, a member of Surabaya’s Legislative Council from the Welfare Commission yesterday.

According to Jabir, among the projects were the construction of a language laboratory valued at Rp 900 million, land for state-owned Kali Kedinding Elementary School at Rp 391 million and a subsidy for overseas internship programs for students of vocational schools, in the amount of Rp 117 million.

The non-realization of these projects is due to lack of planning by Surabaya’s Office of Educational Services. “They had insisted on the projects being included in the budget, but in reality some of them had to be dropped at the end of the budget year,” Jabir explained.

Saudi, Surabaya’s Office of Educational Services chief, said the budget allocation had to be dropped because there was not enough time to disburse the budget. “The language lab construction cannot be tendered until now, yet we only have two months left. That is why we are dropping the project,” he said.

So far, Saudi said, they have disbursed Rp 71 billion from the total budget of Rp 165,709 billion education.

Meanwhile the Education Services has proposed an additional Rp 66 billion in the budget, which will be used to finance the operations of state-owned schools, starting from elementary schools to high schools, among some of the projects. “So that students will not be charged school fees,” he said.

DINI MAWUNTYAS

`Extinct` cockatoo rediscovered in Indonesia: researchers

Jakarta (ANTARA News) – A species of cockatoo feared to have become extinct has been “rediscovered” with the sighting of a handful of breeding pairs on a remote Indonesian island, researchers said Thursday.

Ten Yellow-crested Abbott’s cockatoos were found on the Masalembu archipelago off Java island, the Indonesian Cockatoo Conservation group told AFP.

“We were excited when we found them in residential areas on Masakambing island,” researcher Dudi Nandika said.

The group included four breeding pairs and two juveniles.

Despite the discovery the Yellow-crested Abbott’s cockatoo (Cacatua sulphurea abbotti) remains the rarest species of the bird on earth, he said.

It hasn’t been seen since scientists observed a group of five in 1999,
researcher Dwi Agustina said.

It was assumed that number was too low for the cockatoos to reproduce and the species had died out, Agustina said.

The local population of the cockatoo has been threatened by hunting and capture for the pet trade. (*)

COPYRIGHT © 2008

Source : www.antara.co.id

Goverment announces steps to overcome financial crisis

Jakarta, (ANTARA News) – The government will buy back state debentures (SUN) and cut down crude palm oil (CPO) export tax to zero percent in an effort to face financial crisis, Finance Minister Sri Mulyani said Tuesday night.

The minister said the decision to buy back the SUN and cut the export tax of CPO were among the ten point-policy taken by the government in the face of the present economic condition.

The ten-point decision was decided in a limited cabinet meeting at the Presidential office Tuesday night, which was chaired by President Susilo Bambang Yudhoyono.

The meeting was also attended by Vice President Yusuf Kalla, cabinet ministers and Bank Indonesia (BI) Governor Boediono.

Finance Minister Sri Mulyani told the press that the SUN buy-back would be carried out in an effort to stabilize market conditions and to maintain market players` confidence.

“The buy-back of the SUN will be carried out in stages,” the minister said. The government also is taking a step to maintain the continuation of the balance of payment and the availability of foreign exchange reserves.

She said the government will accelerate infrastructure development, provide an export rediscount facility and secure market for Indonesia`s crude palm oil (CPO) exports. Beginning November 1, 2008, the government cut its CPO export tax from 2.5 percent to zero percent.

In an effort to prevent the entry into Indonesia of illegal imports, the government will issue a regulation which will limit the import of certain goods which will also be enforced beginning November 1, 2008.

The government will also issue a home affairs minister`s regulation on the establishment of an integrated task force to charged with the task of supervising goods in circulation.

All policies taken by the government are intended to cope with market turbulence and to protect three pillars that the government has to safeguard, namely the balance of payment, BI credibility and the credibility of the state budget.(*)

Source : http://www.antara.co.id