Indonesia Rise

SC O w VE or R ld IN f o DO lio N .co ES .
u IA k A
Our World
Thursday, April 12th, 2012
This supplement to USA TODAY was produced by United World Ltd.: Suite 179, 34 Buckingham Palace Road - London SW1W 0RH - Tel: 44 20 7409 3106 - ourworld@unitedworld-usa.com - www.unitedworld-usa.com
DI
Rise of the worlds fourth-largest nation

Partnerships, more so than military alliances, will be the defining feature of the international system in the 21st century... This is the time for new thinking.
SUSILO BAMBANG YUDHOYONO, President of the Republic of Indonesia
INDONESIA
A degree from an American university remains the goal of Indonesias brightest young people
Students still aim for the States
SUSILO BAMBANG YUDHOYONO, President of the Republic of Indonesia
ver the past 15 years, Indonesia has managed a spectacular turnaround. In terms of diplomacy, business and economics, this country of 240 million people the fourth most populous nation in the world has dramatically raised its international profile. A former home of President Obama, it shares similar multicultural traits as the U.S. across an archipelago of over 17,500 islands, more than 6,000 of which are inhabited and where no fewer than 300 local languages are spoken. Built on the principle of Unity in Diversity, it draws strength from its harmonious ethnic mix and has earned the respect of world leaders. Since recovering from the 1997-98 Asian financial crisis, it has achieved stable
GDP growth of 5-6% per year and this year it is expected to be the worlds fastest growing economy. Fitch Ratings returned the country to investment-grade status in December 2011 for the first time since 1997, and Moodys followed suit a month later, reflecting the increasing optimism for the countrys future. After successfully guiding the country through the 20082009 global financial crisis, President Susilo Bambang Yudhoyono (who is also known as SBY) won a second term in the July 2009 elections, with the next round scheduled for 2014. In May 2011, he officially launched his administrations ambitious Rp 4,000 ($437 billion) trillion national development roadmap covering 2011 to 2025. When discussing economic growth we must remember that it is directly
A UNITED WORLD SUPPLEMENT PRODUCED BY: Vincent Rifici, Charlotte Rose, Marc Joly, David Barbolla, Stuart West and Amanda Janoo For information about career opportunities with United World, please contact: recruitment@united-world.com
related to investment, says Kuntoro Mangkusubroto, Chairman of the Presidents Unit for Development Control and Monitoring (UKP4). We need $200 billion-worth of gross investment per year, coming from both foreign and domestic sources. This is a very high amount. Known as the Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI), the development initiative aims to attract greater foreign investment to boost economic growth nationwide and raise Indonesias gross domestic product (GDP) to around $4.5 trillion by 2025, which will place it among the worlds 10 largest economies. At the launch ceremony, Suryo Bambang Sulisto, Chairman of the Indonesian Chamber of Commerce and Industry (KADIN), said the business community had committed to provide $150 billion in new investment for the MP3EI programs, adding: This is the first time that the business community has been asked to be involved in the laying out of
the mid and long-term economic development sending a strong signal, especially for foreign investors, that the government is really serious and will go all out with this master plan. The MP3EI divides the country into six economic corridors, namely Java, Sumatra, Papua-Maluku, Kalimantan, Sulawesi, and Bali-Nusa Tenggara. The President said that projects falling under the new plan, some of which were already under way, include nationwide Internet broadband access, hydropower and solar power plants, a modern steel mill, a palm oil industry zone, access roads, toll roads, airports, dams, reservoirs, as well as nickel, cobalt and aluminum facilities. In March 2012, the government announced it would launch 84 infrastructure projects worth Rp 536.3 trillion this year as part of the MP3EI. The statement detailed that 15 projects valued at Rp 66.2 trillion would be financed by the government, with another 20 projects worth Rp 90.3 billion to be backed by state-owned companies, and 38 projects
totaling Rp 301.76 trillion to be funded by the private sector. Public-private partnerships (PPPs) are to develop the remaining 11 projects, worth Rp 78.2 trillion. Internationally, Indonesia is becoming more prominent as a member of the G20 and chaired ASEAN in 2011 with various accomplishments to its credit. Indonesias Ambassador to the U.S. Dr. Dino Patti Djalal says, We used to call ourselves a thirdworld country, but now due to our economic transformation, we consider ourselves an emerging economy. We are now the largest economy in Southeast Asia, with its largest middle class, and the third-highest growth in Asia. At a time when everybody has been downgraded, we have reached investment grade. We are very much in a good place now and Indonesia sees itself as a regional power with global interests. We hope that this will be the Asia-Pacific century, and Indonesia very much hopes to be part of the group of countries that moves, shakes, and shapes the Asia-Pacific region in the 21st century.
A longtime destination of choice for Indonesians seeking a degree abroad, the United States now has to compete with other countries to attract foreign students. But many bright young Indonesians still dream of gaining an American degree, and President Obama says he wants to double the number of Indonesians studying at U.S. colleges. Prominent among Indonesian educational institutions that are eager to send students to study Stateside is the Putera Sampoerna Foundation. An independent social business institution, its mission is to educate bright but under-privileged children and prepare them to become the leaders that Indonesia needs for its future. More than 75 American universities were represented at a higher education fair in Jakarta last year that was co-sponsored by the Foundation and the U.S. Commercial Service. We are pretty much at the forefront of the U.S. Governments attempts to attract students from Indonesia, says leading businessman Putera Sampoerna, who founded the institution in 2001. Providing students from emerging majority-Muslim nations with the opportunity to attain a quality tertiary education in the States so they can then return to work on the improvement of their home country is the best way to build upon and nurture sustainable relations that are mutually beneficial. In Indonesia, education is a luxury that many can not afford: around 1.5 million young people have to abandon their studies owing to financial difficulties every year, and only 18% of high school graduates can afford higher education. There is a lot of human potential we are missing out on, says Mr. Sampoerna, who received his own university education in the States, and now runs four senior high schools, named Sampoerna Academy, and two colleges. We take the smartest of the smartest and we mold them so that they have leadership qualities, and can be the country's future leaders, he says.
Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content
Asean chairmanship success

Indonesia's accomplishments as the 2011 ASEAN chair have further raised its position as a regional leader and responsible global citizen
INDONESIA
Distributed by USA TODAY
In recent years, Indonesia has become an increasingly active member of regional and global organizations such as the G-20, UN Security Council, and Association of Southeast Asian Nations (ASEAN). Politically and economically, the countrys heightened international profile has undoubtedly been helped by the nations stability, in addition to the popularity both at home and abroad of President Susilo Bambang Yudhoyono, who in 2009 became the first Indonesian president to be re-elected in democratic elections for a second term. In 2011, it was Indonesias second turn at the helm of ASEAN. Established in Bangkok on August 8, 1967, ASEAN was created to accelerate socioeconomic growth and cultural development among member states, as well as promote regional peace and stability. Indonesia was one of the original founding members of the ASEAN community, and its national motto of Unity in Diversity (Bhinneka Tunggall Ika) brought a harmonizing cultural message to the union last year that is echoed in the fundamental ethos of the group. Our founding fathers at the very beginning explained what our diversity should be, and that is what we are using as an instrument to maintain this diversity and to bring our nation forward, says Djoko Suyanto, Indonesias Coordinating Minister for Legal, Political and Security Affairs. The nation appears to demonstrate how multiculturalism can work. Indonesia is the largest Muslim-populated country in the world, and despite the stigma that Islam has of being radical, violent, intolerant and closed, we would like to say
DISCUSSIONS HAVE ALWAYS BEEN ABOUT THE ASEAN COMMUNITY UP UNTIL 2015. BUT AFTER THE BALI SUMMIT LAST YEAR, WE NOW HAVE A MUCH BETTER IDEA OF WHAT ASEAN SHOULD DO IN A GLOBAL CONTEXT
DR. DINO PATTI DJALAL, Indonesias Ambassador to the U.S.
that Islam in Indonesia is not like that, says Mr. Suyanto. Islam in Indonesia is more tolerant because it was developed through tradition, culture and personal relations and not through a dogmatic approach. Dr. Dino Patti Djalal, Indonesias Ambassador to the U.S., believes the Bali Concord III was Indonesias biggest achievement during its year as the ASEAN chair. The agreement was signed on November 17, 2011 by the leaders of ASEANs 10 member states. It outlines how member countries could increase cooperation in conflict resolution, tackle transnational crimes, fight
corruption and work toward nuclear disarmament. Social-cultural issues detailed include the relief and prevention of natural disasters, climate change, health, education and cultural issues. In line with ASEANs goal to become an integrated economic community by 2015, the declaration also calls for the adoption of regionwide production standards, a distribution system for commodities, greater transparency, technological progress and energy diversification. Discussions have always been about the ASEAN community up until 2015. But after the Bali summit last
year, we now have a much better idea of what ASEAN should do in a global context, says Dr. Djalal. The other achievement has been on the Declaration of Principles via members of the East Asia Summit (EAS). This is very important because this is a region with a lot of hope, but also still has some instability and clash points, for instance in the Korean Peninsula, the South China Sea, the Taiwan Strait, and so on. Having all of the member countries of the EAS sign up to a Declaration of Principles on how to manage regional affairs is quite a milestone for us. We hope that this is something that will be
morally binding to all countries that have signed on to it. Indonesias position as a regional leader and responsible global citizen was also demonstrated last year as it stepped in to diffuse rising tensions between Cambodia and Thailand. In July 2011, the International Court of Justice ordered both countries to withdraw military troops from a 1.78 square mile area on the border, which surrounds the disputed Preah Vihear tem-
ple, and appointed Indonesia as observer. You can see the [peacekeeping] role of Indonesia in terms of pushing Thailand and Cambodia to sit together, for example, and the conflict in the South China Sea, says Freddy Tulung, Director General of Information and Public Communication at the Ministry of Communication and Information Technology (Kominfo). It is playing quite a significant role. In terms of social issues and culture, we have the ASEAN Humanitarian Assistance Center and a peacekeeping force. Indonesia is also a vociferous proponent of the creation of an ASEAN single visa. We inherited the single visa idea from the EU, says Mr. Tulung. The project aims to establish ASEAN as a single destination and means that there will be no individual visas required for ASEAN m e m b e r countries, enabling foreign tourists to visit the region on a single tourist visa. After a successful year in charge, Indonesia handed the annually rotating ASEAN chair to Cambodia for 2012. It will then be passed on to Brunei in 2013, Myanmar in 2014, and Laos in 2015. As a former military-backed dictatorship that successfully transitioned to a democracy, Indonesia serves as a useful role model for Myanmar as it pushes ahead with its political and economic reform.
Record FDI and now easier to get started

The government has been working hard to improve the nations business and investment climate, and boost its appeal for foreign involvement in the countrys development
INDONESIA
QUOTED
THERE OUGHT TO BE MORE INDONESIAN STUDENTS STUDYING IN THE U.S. AND VICE VERSA. IT IS SOMETHING OBAMA RECENTLY FLAGGED UP
GITA WIRJAWAN, former Chairman of BKPM and recently-appointed Minister of Trade
Last year Indonesia received a national record amount of $20 billion in foreign direct investment (FDI). If we use data from the Jakarta Stock Exchange, in 2015 we will have around 3 million investors, up from 400,000 currently, says Zamzam Reza, President Director of AAA Investment. During an official visit to Beijing in March, President Susilo Bambang Yudhoyono announced that Chinese and Indonesian companies had signed partnership agreements on infrastructure, mining and steel projects in Indonesia worth more than $17 billion. The sectors in which cooperation has been established include seaports, roads, alternative energy, the motorcycle industry, mining, construction in strategic areas and the Sunda Strait, plantations, tourism, and the steel industry, he said. Also, in the two weeks alone prior to the Presidents visit, Japanese companies including Honda Motor Co., Nissan Motor Co. and Sharp Corp. announced massive expansion plans in Indonesia totaling more than $1 billion in investment. Our biggest challenge is infrastructure development. Without that, you cannot
WE ARE A HAVEN FOR INVESTMENT.

RAJA OKTOHARI, Chairman of the Indonesian Young Entrepreneurs Association (HIPMI)
expect that we will become an efficient and competitive economy, says Suyo Bambang Sulisto, Chairman of KADIN, the Indonesian Chamber of Commerce and Industry. Gita Wirjawan, Chairman of
the Indonesia Investment Coordinating Board (BKPM) and Minister of Trade, says: The new land acquisition law will provide certainty with respect to timing and pricing for anyone requiring land for infrastructure development whether it is roads, airports, power generation and more. We have not had this for a long time, over 30 years, so this will be a game changer. The BKPM has implemented a one-stop shop system to minimize bureaucracy and its National Single Window for Investment (NSWi) enables investors to apply for license and nonlicense services online. Indonesias Ambassador to the U.S. highlights ample
opportunity for greater American participation, saying: There is a lot of American investment in oil and mining, but there are many more promising sectors, such as the health sector, and I would like to see more American manufacturing in Indonesia. I definitely think the IT sector could benefit, as well as other sectors where there is a lot of innovation needed. In January, Indonesia received its second credit rating upgrade in as many months, as Moody's ratings agency restored its debt to investment grade, raising its rating to Ba1 from Baa3 with a stable outlook. The countrys rise above speculative grade for the first time since the 1997 Asian financial crisis is likely to encourage further foreign investment. In December, Fitch returned Indonesia to an investment grade rating, citing steady economic growth, declining debt and general macroeconomic stability. We are a haven for investment, says Raja Oktohari, Chairman of the Indonesian Young Entrepreneurs Association (HIPMI). We are one of the 10 biggest countries in the world for investment, with a substantial number of our economys sectors not being built up or touched by the investors. I think that with President Yudhoyonos MP3EI program we can, for the first time, communicate this huge potential effectively to the international community.
OUR ROLE IS TO WORK AS A PARTNER OF THE GOVERNMENT SO THEY CAN IMPROVE THE BUSINESS CLIMATE. WE UNDERSTAND HOW THE BUSINESS WORLD WORKS.
SURYO BAMBANG SULISTO, Chairman of KADIN, the Indonesian Chamber of Commerce & Industry
NOW IS THE RIGHT TIME TO ISSUE BONDS WITH LOWER YIELDS FOR INDONESIA. THE PERCENTAGE FROM THE LOAN PORTFOLIO IN FOREIGN CURRENCY IS ABOUT 16%..
ZAMZAM REZA, President Director of AAA Investment
Indonesia the best place to start a business, says BBC

Entrepreneurship is being increasingly encouraged as a key element within the national strategy for sustaining economic progress
A survey carried out for the BBCs Extreme World series last year found that Indonesia is the best place in the world to start a business, followed by the U.S., Canada and Australia. The conclusion was based on the results from polling more than 24,000 people across 24 countries. Interviewees were asked if creativity and innovation were highly valued in their country; whether it was difficult for budding entrepreneurs to get a new business off the ground; and if people who do take the initiative to go it alone were highly valued. Entrepreneurship, in all its forms, is a vital catalyst in kick starting and maintaining dynamism and diversity within fast-growing economies. Bambang Suryo Sulisto, the Chairman of the Indonesian Chamber of Commerce and Industry (KADIN), firmly believes in the importance of engendering an enterprising spirit: Creating entrepreneurs is necessary because entrepreneurs create jobs. They are vital for economic development, and that is why KADIN has made nurturing entrepreneurship a primary objective. Whether seen as a progressive addition to Indonesias favorable geopolitical position, or as a means to create a sustainable economic future for all of its citizens, and investors,
Entrepreneurship has become central to the thinking of the countrys present and future business leaders
entrepreneurship has become central to the thinking of the countrys present and future business leaders. Many business development experts share this view, and Giuseppe Nicolosi, Overseer of the Ernst & Young Entrepreneur of the Year award, is feeling optimistic: A developed economy requires
SHINTA WIDJAJA, of Sintesa Group and Global Entrepreneurship Program Indonesia (GEPI)
a minimum of 2% of the country to become entrepreneurs. In Indonesia the figure is currently at around 0.4% of the population. However, we have a large population so, in reality, that is a large number. The notion of entrepreneurship is not limited to soleoperating individuals, as Shinta Widjaja, of Sintesa
Group and GEPI (Global Entrepreneurship Program Indonesia) reveals: Someone in our Human Resources department does not have to just do HR work. If they hold a project, they are in charge of the whole thing ... this has really developed entrepreneurial skills; our employees can now work together with us and become an entrepreneur, or what we call an intrapreneur , within the organization. U.S. Secretary of State Hillary Clinton arrived in Bali last July to take part in a three-day ASEAN Regional Entrepreneurship Summit (RES) under the theme: Emerging Entrepreneurs: The Next Big Chapter. We are seeking to nurture the spirit of entrepreneurship within all the Indonesian people so that we can become just like Singapore or Japan. Whatever you want to do, if you have this mentality, it will make the process easier, says Raja Oktohari of the Indonesian Young Entrepreneurs Association (HIPMI). We are specializing in empowering females. This is because we believe in them and their unique strengths and drive. In some areas of Indonesian culture, the females are more active, especially in Bali and West Sumatra. About 30% of our members are women. Bayu Djokosoetono, Commissioner of Indonesias Blue Bird Group, adds: The government initially did not have
enough confidence that a woman could run a company in the taxi industry [in 1972]. My grandmother eventually convinced them she was capable of running a company and received a license for 25 taxis. This year, with over a 21,000-strong fleet nationwide, BB Group has established a position as the best and most reliable luxury taxi provider, expanding its business in not only the taxi industry, but also in property, manufacturing, services and more. This is a testimony to the entrepreneurial spirit driven through this family and developed further by the family members to take it to where it is today.
I WOULD SAY THE MOST IMPORTANT ASPECT IS TO WORK VERY CLOSELY WITH A REPUTABLE INDONESIAN PARTNER. THIS IS CRITICAL FOR SUCCESS.
GIUSEPPE NICOLOSI, CEO of Ernst & Young Indonesia
WE HAVE OVER 243 MILLION PEOPLE; 70% ARE UNDER 50, 38% OF THAT ARE 15-50 YEARS OLD. THIS IS AN INCREDIBLE PHENOMENON THAT WE SHOULD EXPLOIT.
RAJA SAPTA OKTOHARI, Chairman of the Indonesian Young Entrepreneurs Association (HIPMI)
Strong growth New era for opportunity in social security Indonesian banking system
The countrys banks have weathered the global financial storm with relative ease, and are well placed to provide extra support for the countrys economic development
INDONESIA
In its academies, colleges and beyond, the Putera Sampoerna Foundation is dedicated to providing the knowledgeable, entrepreneurial, and compassionate leaders the country needs
Nurturing the leaders of tomorrow

Competition for places at academies run by the Putera Sampoerna Foundation is fierce, and the selection process rigorous. To qualify, students have to be in the top 5% academically in junior high and show leadership potential. But those selected are on course for a bright future. I will personally guarantee that they will get a tertiary education once they are in our high schools, says Putera Sampoerna, who established the social enterprise institution that bears his name. Education is at the heart of Putera Sampoerna Foundations Pathway to Leadership strategy, which also encompasses entrepreneurship, womens empowerment, and compassionate relief programs. Its founder believes that if Indonesia is to thrive tomorrow, it must pay attention to nurturing its future leaders today. The Sampoerna Academy selects the brightest students from disadvantaged backgrounds and puts them through a secondary school curriculum of international standard to prepare them for a university education. In addition to their academic studies, the students take part in professional and other experience-based programs based on the Academys core values and learning expectations. We want all our students to be smart leaders and entrepreneurs, and they must have values, says Putera Sampoerna. Since it was established in 2001, the Putera Sampoerna Foundation has distributed more than 34,600 scholarships, provided training for more than 22,038 teachers and principals, and adopted 23 public schools and five Islamic schools. The first two boarding schools opened in Malang, East Java, and in Palembang, South Sumatra, in 2009. Last year saw the launch of two more, one in Bali and another in the city of Bogor, in Greater Jakarta. This year, 232 students will graduate from the academies, with 500 expected to graduate in 2013. All courses are delivered in English to enable students to qualify for any English-speaking university which implements 21st Century Learning, while the curricula meet both national and international requirements, leading to the International General Certificate for Secondary Education (IGCSE), accredited by University of Cambridge International Examinations
INDONESIA
Indonesians need better protection from accidents, ill health and old age, and the government says they will get it once social security has been reorganized. Jamsostek is one of the two non-profit agencies that will manage the new system
A couple of years ago, PricewaterhouseCoopers International predicted that by 2050, the size of the Indonesian banking sector could rival that of France or Italy, while returns could be considerably higher. Indonesias growing middle class, favorable interest rate environment, and the high profit margin for banks due to their concentration on consumer and retail banking certainly suggest a very bright future for the banking industry. In its most recent assessment, rating agency Moodys Investors Service said in December that the outlook for the sector remained stable in contrast to its neighbors. Beatrice Woo, a Moodys Vice-President, said: We expect the [Indonesian] banks positive credit attributes such as high loan growth, wide interest margins and low provisioning costs owing to good asset quality to continue in the next 12 to 18 months and sustain the systems resilience. Darmin Nasution, Governor of Bank Indonesia, attributes the relative ease with which the countrys financial system weathered recent global turbulences to action taken since the Asian financial crisis of 1997-98. This goes back to more than
a decade of repairs and improvement since the Asian crisis which has made our financial system, including the banking sector, more resilient and able to absorb instability risk. The stability of the banks today is indicated by a capital adequacy ratio securely above the minimum levelreaching 16% at the end of 2011and gross non-performing loans managed comfortably at 3%. Milan Zavadjil, the IMFs Senior Resident Representative in Indonesia, points out that while growth in the most advanced countries has been falling, Indonesia has been outpaced only by China and India. I think Indonesia is the only country that saw its public debt compared to GDP fall. In a world where debt is the problem, the Indonesian story really differentiates it from much of the rest of the world. Zulkifli Zaini, President Director of Bank Mandiri, Indonesias largest bank by assets, loans and deposits, says Indonesias prudent fiscal policy has given the banks a s t r o n g growth opportunity. Like other Indonesian
banks, state-owned Bank Mandiri has been expanding into a domestic market that still has plenty of potential for growth; about 40% of Indonesia's huge population of 240 million has yet to open a bank account. A decade ago the bank had virtually no presence in retail banking. Now it has more than 1,500 branches spread all over Indonesia, almost 9,000 ATMs and 100,000 EDCs (electronic data captures). We want to be dominant in credit cards, mortgages and business banking as well as micro financing, says Zulkifli Zaini. The bank is committed to expanding its loan portfolio, which grew by more than 25% last year. It appears high, compared to banks in other countries, but we believe we increased our loan book prudently. In 2012 the government is making a concerted effort to push infrastructure development, and we think it is possible for Bank Mandiri to take part in lending to finance infrastructure. In addition to supporting economic development at home, Bank Mandiri is expanding its business to allow it to compete in the regional market. It aims to become one of the top five regional banks by 2014.
THIS GOES BACK TO MORE THAN A DECADE OF REPAIRS AND IMPROVEMENT SINCE THE ASIAN CRISIS WHICH HAS MADE OUR FINANCIAL SYSTEM, INCLUDING THE BANKING SECTOR, MORE RESILIENT AND ABLE TO ABSORB INSTABILITY RISK.
ZULKIFLI ZAINI, President Director of Bank Mandiri
Indonesian workers have been calling for comprehensive social security for all for some time and the government recently responded by initiating a process to reform the system. Agung Laksono, Coordinating Minister for Peoples Welfare, acknowledges that the current social security system is not comprehensive enough. He says changes set in motion by the Social Security Providers (BPJS) bill, passed in November last year, will deliver improved social protection to Indonesians, pledging: The reform will revitalize social security in Indonesia. Under the changes, social security will be managed by two non-profit, public organizations: Jamsostek, responsible for workers benefits and services, and Askes, the new health agency. The government will allocate a total of 4 trillion rupiah ($447 million) from the state budget, with 2 trillion rupiah going to support each agency. Employers and employees will finance the system with their contributions, and the government will cover those who are unable to pay the insurance fee. At present, Jamsostek runs an employee provident fund, employee accident insurance, health benefits and death benefits. By 2015 it will have been divested of its responsibility for health protection, which will pass to Askes, but will take on responsibility for pensions. Hotbonar Sinaga, President Director of PT Jamsostek, says running the pension program will give the company the opportunity to grow faster and become a bigger organization in terms of the total funds it manages. We will be in a position to invest in long-term projects, including infrastructure and so on, he says. Of our total investment fund, 90% will be long-term oriented, such as provident funds and pensions. As a result we will have more flexibility to invest. Wholly state-owned Jamsostek manages an investment portfolio consisting of approximately 40% in the form of bonds, 30% in time deposits, 20% in equity or stocks, and 3% in mutual funds, with the remainder in
Putera Sampoerna (centre) says students at the Putera Sampoerna Foundations schools are guaranteed to go on to receive a tertiary education
THE REFORM WILL REVITALIZE SOCIAL SECURITY IN INDONESIA.

HOTBONAR SINAGA, President Director of PT Jamsostek
direct investment. We utilize all these investment vehicles to enable the banks to give loans, to get the real sector moving, so that public-listed companies can expand their business, says Hotbonar Sinaga. The company is raising the level of its investment. In 2011, it invested a total of 111.87 trillion rupiah, compared to 98.98 trillion rupiah in 2010. This produced an investment gain of 11.87 trillion rupiah, compared to 11.06 trillion, an increase of 8.8%. In 2012, there are plans to increase the size of the portfolio by 12% to 125.7 trillion rupiah. Two years ago Jamsostek set up a subsidiary called Jamsostek Investment Company (JIC) to handle its direct investments. The insurer is substantially increasing its investment in real estate and direct placement. Later this year it will launch a new subsidiary, the Indonesia Investment Company (IIC), a business venture with the Islamic Corporation for the Devel-
opment of the Private Sector (IDC), a subsidiary of the Islamic Development Bank (IDB). Since becoming President Director in 2007, Hotbonar Sinaga has taken a proactive approach, improving benefits for members by raising service quality. Members enjoy additional benefits, such as cheap apartments built close to industrial complexes. This year, Jamsostek has plans to cooperate with 20 banks to disburse a 220 billion rupiah fund for a housing deposit program for workers. We hope that through our investments jobs will be created and that our total number of members will also increase, he says. That is our role in relation with the government to create jobs, help the poor, create economic growth and protect the environment. Not only do the government and employers trust us, but also the general public as a whole, and being a trusted company is very important for us.
(CIE) and Cambridge International A / AS level, and the National Examination (Ujian Nasional), accredited by the National Education Department of Indonesia. First steps towards establishing a world-class university have been taken by establishing two colleges: Sampoerna School of Education (SSE), and the Sampoerna School of Business (SSB). There are collaborative programs with Cornell and MIT, and the Foundation is seeking partnerships with other universities overseas.
The Foundations Access Education Beyond program is an international higher education exchange initiative enabling Indonesian students to enroll at universities overseas and vice versa. It also fosters university-to-university partnerships between nations. In broader terms, Putera Sampoerna sees the Foundation as a catalyst for change, and its educational and leadership-building activities extend beyond the classrooms of its academies. The Foundation acts as a provider of Corporate Social
WE WANT ALL OUR STUDENTS TO BE SMART LEADERS AND ENTREPRENEURS, AND THEY MUST HAVE VALUES. WE PROVIDE AN EDUCATION ECOSYSTEM SERVICING SO MANY THINGS THAT WORK TOWARDS CREATING FUTURE LEADERS.
PUTERA SAMPOERNA, founder of the Putera Sampoerna Foundation
All courses are delivered in English to enable students to qualify for any Englishspeaking university
Responsibility (CSR) programs for corporations, organizations and associations, and its MEKAR Entrepreneur Network aims to strengthen the Indonesian entrepreneurial community by fostering relationships among entrepreneurs and investors. Sahabat Wanita, or Friends of Women, has been launched to promote the empowerment of women and gender equality, while Bait AlKamil is a humanitarian institute that aims to improve the welfare of fellow citizens and provide relief to underprivileged families in communities afflicted by natural disasters. We provide an education ecosystem servicing so many things that work towards creating future
leaders, says Nenny Soemawinata, the Foundations managing director. She stresses that the Foundation is actively seeking sponsors, patrons and partners to help it in its work. Whatever we do, we always have to think about the sustainability of the program. We need help in any shape or form, whether a partnership or student assistance. The more assistance, the more people we can help in Indonesia.
For further information, or if you wish to contribute to the Putera Sampoerna Foundation programs for the betterment of Indonesia, please visit: www.sampoernafoundation.org
Students emerge from the Putera Sampoerna Foundations academies equipped with knowledge, leadership skills, and an understanding of their social responsibilities
Education is an investment, not a gift.

mission to nurture leadership. The ethos of the Foundations Pathways to Leadership strategy extends beyond developing academic potential to instilling core values, such as moral integrity and a strong commitment to social justice. When we select kids, not only are they academically smart, but we look for leadership potential as well, says Putera Sampoerna. If we did not provide boarding facilities, we could double the number of students. But for me, having the students for three years at boarding school is important. From day one, they are told that their education is not a free gift. It is an investment in them so that they can invest back. The Foundation provides various types of financial assistance to students. Scholarships were offered in the past but the Foundation realized that this was not a sustainable model to improve the quality of education in creating future leaders. "If you give scholarships, the kids think that they are entitled to it because they are smart". This is not the reasoning that will produce future leaders and sustain the program. A better
For the students enrolled at its academies, the Putera Sampoerna Foundation is their ticket to a first class education. Many of them will seek to complete their education in the United States and other countries. They will be equipped with the academic qualifications, confidence, and entrepreneurial spirit needed to launch successful careers. And, if the Foundation achieves its goal, they will also emerge from its academies with a socially committed mindset, understanding that they are expected to make a contribution to society and help shape Indonesias future. For the Foundation, the donors, and partners who provide support, and for the students themselves, their education represents an investment. The students agree to contribute and fund the next generation through Siswa Bangsa Cooperatives once they graduate and start their career, but their commitment is much more than merely financial. Other than in military academies, boarding school education is unusual in Indonesia, but Putera Sampoerna sees it as essential to the Foundations
From day one, they are told that this is not a gift just because they are smart. It is an investment in them so that they can invest back. Putera Sampoerna, founder of the Putera Sampoerna Foundation
way is "to find patrons, like Exxon and the large companies, to basically adopt the kids... they are supporting what I call the assistance portion." Putera Sampoerna emphasizes the concept of Gotong Royong which means giving back so that the existing generation of students will eventually fund the next generation. "Once they enter tertiary education, I expect that assistance portion to keep going". This giving back asks students during their profitable working life to contribute 20% of their income to continue supporting the program. At first, this may sound a lit-
tle rough... There is risk involved. If you put it in terms of an investment (in Indonesia's future), then everything changes. In addition to a full school day, the students are involved in extra-curricular activity, including community service. We have programs which we call Learn to Live , about how to live with the community around you, says Nenny Soemawinata, the Foundations Managing Director. Students leave the academies knowing that a lot is expected of them. They are instilled with a clear understanding that they are expected
to contribute to the development of the country and their communities. Ms. Soemawinata says: Our goal is to create leaders in different fields. We want to make sure that while we have these students we inculcate our values, rights and rituals into them so they can come home and contribute to the country. People say it is a big wish-list, but all of us are very committed and we are working hard to get there. The values of the Foundation are clearly reflected in how the children see their future. Typically, they aspire to be doctors, teachers, lecturers,
scientists, and the business leaders of tomorrow. Student Muhammad Nur Siddia Aceh wants to become a doctor. The school provides everything I need to achieve my dream. I would like to continue my education abroad, and become a nerve specialist. Dwiki Febri Ristanto shares the same ambition. I want to be a doctor because many Indonesian people do not get good medical services, he says. Another student, Siti Arsyah Rosyada Ocha , sums up the academies ethos in a single sentence: You have to give something back to the community in everything you do.
Infrastructural investment vital to master plans success

Private initiatives and partnerships with the government are being sought to connect Indonesias islands to each other, and to the world of global enterprise
INDONESIA
Sky-high prices for new airports

Soekarno-Hatta International, which serves Jakarta, is the worlds twelfth busiest airport. Designed in the early 1980s to handle 22 million passengers annually, last year it accommodated more than 51 million people. And the number is expected to continue rising rapidly. A major and expensive upgrade and expansion of the domestic and international terminals is getting underway this year, aimed at increasing the airports passenger handling capacity to 62 million. However, even that is unlikely to be enough to cater to the numbers of people wishing to fly into and out of the nations political and economic hub in the foreseeable future. By 2025 it is estimated passenger numbers could reach 90 million a year. There is talk of a fourth terminal and a third runway, and the government is considering building an additional, completely new airport in the Greater Jakarta area in partnership with the Japanese government. Expansion of SoekarnoHatta International is one of four major transport infrastructure projects being expedited this year as part of the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3E1). Tri Sunoko, President Director of state-owned airports operator PT Angkasa Pura II, says the 11.7 trillion rupiah ($1.3 billion) overhaul will turn Soekarno-Hatta International into a worldclass facility by 2015. More than 8.2 trillion rupiah of the cost will be sourced from external funds. Our goal is to create a truly world-class airport in order to be able to compete with the likes of Singapore and other regional airports such as Bangkok Suvarnabhumi airport and Kuala Lumpur, says Tri Sunoko. The airport will have an impressive, environmentally friendly design. It will be
INDONESIA
Billions of dollars need to be spent to give Southeast Asias biggest economy the top-flight airports it needs, and partnership projects with the private sector could provide the funds
The Indonesian archipelago comprises more than 17,500 islands and its total area of 735,358 square miles makes it the 15th largest country in the world. Its population of over 248 million people is unevenly spread. For example, the islands of Java and Sumatra hold 136 million and 50 million people respectively, whereas Bali and Nusa Tenggara are home to only 13 million combined. Infrastructure development is fundamentally the greatest
area of concern if the nations economy is to continue moving forward. That is where our role as the Ministry of Transportation comes in, to be a leader in implanting inter-island and international connectivity, says Dr. Bambang Susantono, Vice Minister of Transportation. We have to build many airports, as well as ports for the shipping industry, to support our economic growth. That is the micro-situation that we are facing right now.
According to Prof. Armida Salsiah Alisjahbana, State Minister for National Development Planning and the head of the National Development Planning Agency (Bappenas), Indonesias economy will grow by up to 7% in the next few years if investment in infrastructure development is increased. Currently, infrastructure investment accounts for 4% of GDP, lower than the ideal minimum of 5%. In a written statement she issued last
November, the Minister said that sustainable infrastructure investment was needed to boost national competitiveness and she encouraged both state and private efforts to realize the Master Plan for Acceleration and Expansion of Indonesian Economic Development (MP3EI). We definitely think the master plan has set out a vision to transform Indonesias economy into one of the top 10 by 2025, says Stefan Koeberle, the World Banks
Country Director for Indonesia. There have been groundbreaking structural changes taking place, setting the pace for growth. However, there are challenges; Indonesia can reach a much higher level of growth if it addresses some of these fundamental challenges and most importantly provide a platform for infrastructure development. He believes the MP3EI lays out a very strong role not only for state-owned enterprises but also the private sector,
and that a focus on public-private partnerships (PPPs) is definitely something that needs addressing. According to Yasti Soepredjo Mokoagow, Chairman of the House of Representatives Commission V, the potential for private initiatives is across the board. We do not think there is any particular sector that has the leading role. We are hoping there will be a lot of investors, investing equally, without single major players, she says.
TRI SUNOKO, President Director of PT Angkasa Pura II
The number of people passing through Indonesias airports has been rising twice as fast as the global average, and with implementation of a regional open skies policy on the horizon the race is on to expand airline fleets and airports
Major challenge of soaring passenger numbers
a modern airport, but will maintain a traditional Indonesian flavor. The bill for developing Indonesias airport infrastructure will be huge, and the government has been looking at involving the private sector through publicprivate partnerships (PPPs). In the next 10 to 15 years, we need to spend 32 trillion [$3.6 billion] on building new airports, says Deputy Transportation Minister Bambang Susantono. Indonesias Bank Mandiri has pledged funding of R5 trillion towards expanding
and upgrading airports run by Indonesias other state-owned airports operator, PT Angkasa Pura I. Passenger capacity at Ngurah Rai, Indonesias thirdbusiest international airport, which serves the holiday island of Bali, is being more than doubled, from the 12 million passengers a year it was designed to accommodate to 25 million passengers. The four-phase project will cost an estimated 2 trillion rupiah and include a new international terminal, and is due to be completed in time for the APEC summit in Bali in 2013. Also scheduled for completion in 2013 is the expansion of Sepinggan airport in Balikpapan, Borneo, where 1.6 trillion rupiah will be spent on raising passenger capacity to 10 mil-
lion passengers. Construction of a new passenger terminal at Syamsuddin Noor airport, in South Kalimantan, will cost approximately 500 billion rupiah and is scheduled for completion in 2015. PT Angkasa Pura I is also planning a new airport at Yogyakarta, in Central Java. A joint project with the GVK Group of India, it will cost an estimated 1.2 trillion rupiah, and is expected to open in 2013. PT Angkasa Pura I also has a cooperation agreement with South Koreas Incheon International Airport Corporation (IIAC) to develop commercial facilities and improve customer service at Indonesias second-largest and secondbusiest airport, Juanda International, in East Java.
The new terminal at the International Airport of Semarang Central Java, to be completed in 2013
A few weeks ago Indonesias budget airline Lion Air startled the aviation industry by finalizing a $22.4 billion deal with Boeing for 230 new 737s the biggest-ever commercial order the U.S. plane-maker has ever taken. Almost simultaneously, Garuda Indonesia, Lion Airs closest rival, announced that it is to acquire up to 18 Bom-
bardier CRJ1000 NextGen aircraft and plans to increase the size of its fleet from 89 to 154 aircraft by 2015. Last year, Kuala Lumpurbased AirAsia placed an order for 300 Airbus A320neos and announced plans to make Jakarta its regional headquarters. Meanwhile, Indonesias overcrowded airports are being turned into construction sites
and plans have been drawn up for new ones, as they struggle to cope with an unprecedented increase in passenger numbers. Expansion of airline fleets and airport capacity are not just a response to the increase demand for air travel witnessed so far. On the horizon is ASEAN Open Sky, the liberalization of aviation by the member countries of the Association of Southeast Asian
Nations. Due to be implemented in 2015, this is expected to lead to another big surge in international traffic. For the airlines, ASEAN Open Sky will open up new opportunities in the regional aviation market hence the orders for additional aircraft. For the five international airports that will be affected in Indonesia Soekarno-Hatta (Jakarta), Ngurah Rai (Bali), Polonia/Kuala Namu (Medan), Sultan Hasanudin (Makassar), and Juanda (Surabaya) the lifting of regional flying restrictions makes improvements in capacity and quality essential. Of course we are very pleased, but the challenge is to balance our capacity with the increased flow of air traffic and passengers, says Tommy Soetomo, President Director of state airport management company Angkasa Pura I, which operates 13 airports in eastern Indonesia. Almost all our airports have insufficient capacity, so we are having to do a lot of building. He says the airports managed by PT Angkasa Pura I served 56 million passengers last year a rise of almost 14%. And its the same story at the 12 airports in western Indonesia run by the other state airport management company, PT Angkasa Pura II. More than 62 million people passed through facilities designed to accommodate 30 million people. Busiest of all was Jakartas Soekarno-Hatta airport, now the twelfth biggest airport in the world, where passenger numbers soared from 12 million in 2001 to nearly 50 million in 2011 the fastest growth recorded in any ASEAN airport. With the economy expanding, the increase in air travel is being fuelled by Indonesias burgeoning middle class. And the signs are that demand will continue to rise with incomes. At the same time, Indonesia is
busy marketing itself as an international tourist destination. This year it is aiming to attract a record 8 million foreign visitors. Indonesia has a population of 240 million and in 2010 only 10 million people traveled because each of these people can be reckoned to have flown five times, says Tengku Burhanuddin, Secretary General of the Indonesia National Air Carriers Association (Inaca). Soon we are going to have an open sky policy, and then the international traffic will grow. Asia is the fastest growing region in the world. Indonesias economy, in particular, is really improving, and peoples income is increasing. The main problem we have is the airport infrastructure. We have to
THE CHALLENGE IS TO BALANCE OUR CAPACITY WITH THE INCREASED FLOW OF AIR TRAFFIC AND PASSENGERS. ALMOST ALL OUR AIRPORTS HAVE INSUFFICIENT CAPACITY, SO WE ARE HAVING TO DO A LOT OF BUILDING.
TOMMY SOETOMO, President Director of Angkasa Pura I
raise the capacity, and we also need more pilots. Growth in passenger numbers, which amounted to double the global average last year, has sent the revenues of the airlines skywards. These are good times for the airport operators too. PT Angkasa Pura I saw its income take off to around 3 trillion rupiah ($331 million) last year, a 23.3% rise, while its profit rose to 655 billion rupiah, up more than 17% year-on-year. PT Angkasa Pura II saw a 12.25% rise in revenues to 3.48 trillion, with profits expected to exceed $1 trillion rupiah. Last year, PT Angkasa Pura I signed a memorandum of cooperation with IT solutions company SITA to install the latest Intelligent Airport technology at all its airports. Using real-time information, the technology will provide passengers with improved flight information displays and better check-in and baggage reconciliation facilities. The whole reason behind the memorandum of cooperation with Angkasa Pura I was to work with the airport authorities to bring the infrastructure in their 13 airports up to world class standards, says Damian Hickey, SITAs regional Vice President. We have vast experience in what is considered industrywide best practice, and they were very keen to work with us and bring some of those worldwide best practices to Indonesia, to bring some of these airports up to Skytrax 5-star standards.
State-owned railway company PT KAI is working hard to meet Indonesias growing demand for passenger and freight transportation
Upgrades needed to get railways back on track

Passenger trains in Indonesia are often overcrowded and its common to see people clinging to the sides and even traveling on top of carriages. Undoubtedly some of these unconventional passengers are freeloaders, but the shortage of trains and the level of overcrowding are also to blame. In addition to passengers, the railway system carries cargo bulk commodities such as petroleum fuel, fertilizer and cement, as well as containers. However, in freight transportation also the trains are straining to meet demand as the economy expands. Indonesias railway system currently comprises four unconnected railway networks, the main one in Java and three others in Sumatra. The average age of the locomotives is 30 years, and lack of maintenance and spare parts affects their reliability. Overall, a major expansion of the railways is required to reduce pressure on the roads, and to support economic growth and job creation. Economic growth may downshift in the near future if we do not improve the system, says Ignasius Jonan, President Director of PT KAI, the stateowned railway company. Logistics costs need to be reduced one way or another. Last year, some 21 million tons of goods were transported on the railways. By 2014, this needs to be raised to 35 million tons, rising to 70 million tons by 2018. Capacity for passenger
IGNASIUS JONAN, President Director of PT KAI (left), with SUSILO BAMBANG YUDHOYONO, President of Indonesia (right)
traffic needs to increase from the 200 million passengers who currently travel on the long-distance and commuter lines to 600 million passengers per year by the end of 2018. There are plans for a $250 million railway link between Jakarta city center and Soekarno-Hatta International Airport, Indonesias biggest airport, that there are hopes of completing as early as 2013. A 33-kilometer express line between Manggarai and the airport via Angke in West Jakarta and Pluit in North Jakarta is also planned. We are trying to triple the capacity of passengers in the next seven years, we want to make
freight grow more than threefold, says Ignasius Jonan. The railways chief acknowledges that the challenge will be enormous. However, help is being provided by the United States. In February, a deal to upgrade and maintain the system was signed in Washington by PT KIA and GE Transportation, the leading maker of rail and transportation products. The focus will be on improving Indonesian railway locomotives over the next 40 years, developing the transportation infrastructure, and providing maintenance and technology transfers. Benyamin Carnadi, the Charg dAffaires of the In-
donesian Embassy in Washington, hailed the deal as a new landmark in Indonesia-U.S. cooperation in the infrastructure and transportation sectors. U.S. officials said it would provide long-term mutual benefit for both countries and act as a cat-
alyst for increased cooperation between Indonesian and U.S. private sectors. Last September, the United States Government agreed to a $600,000 grant to support PT KAIs expansion plan and ensure the safety of the rail net-
work as part of the U.S.-Indonesia Comprehensive Partnership. The grant will provide technical assistance and training of PT KAI staff, and will support the upgrading of the rail signaling and telecommunications systems.
Ports investment boosts capacity and efficiency

The operator of Indonesias biggest port has changed its name and adopted the motto Energizing Trade, Energizing Indonesia. The Independent Port Corporation (IPC) is spending huge sums to make Indonesia a regional hub for seaborne trade
INDONESIA
Blue Bird spreads its wings

Among the most common sights on the crowded streets of Jakarta are the distinctive sky-blue vehicles of the Blue Bird taxi company. The largest and most instantly recognizable taxi firm in the country, Blue Bird has an excellent reputation among both Indonesians and foreign visitors, and a plethora of awards for the quality of the service it provides. Its uniformed taxi drivers are seen as trustworthy and well trained, and they always operate with a meter to guarantee the fares charged are fair. Indeed, such is Blue Birds good name and reliability that fraudsters pretend to be Blue Bird drivers, picking up passengers in blue vehicles very similar to the firms taxis. Bayu Djokosoetono, Blue Birds Commissioner, says it has been a problem. He recommends visitors book a cab through their hotel or online, use the firms credit voucher scheme, or, if flagging a taxi down in the street, check it has a Blue Bird sunscreen before getting in. Recently, customers have also been able to make a reservation on their smart phones. The high standards and reliability Blue Bird expects from its drivers comes from its origins as a family firm. From what was initially a small car rental firm, the taxi business was started by Bayu Djokosoetonos grandmother, Mutiara, in 1992. In those less enlightened times, she had to persuade the authorities that a woman was capable of running such a business. In the early days, when there were just 25 cabs, the drivers would take meals with the family. Today, in the firms 40th anniversary year, the now diversified, and still expanding, Blue Bird Group has retained the same values it started with. We try to create a sense of belonging amongst the employees and the drivers, says Bayu Djokosoetono. An honest culture within the company itself means that all of the company stakeholders try to maintain these values in their own lives, and use this to better serve our customers. Blue Bird now has a fleet of more than 21,000 taxis and serves approximately 8.5 million passengers per month all over Indonesia. Its 24-hour call center receives up to 24,000 calls a day. Mr. Djokosoetono says that for the regular taxi service, the potential in Indonesia is still high. In addition to Jakarta, Blue Bird taxis ply their trade in Bali, Bandung, Banten, Manado, Medan, Lombok, Semarang, Surabaya, and Yogyakarta. The service is being extended to other parts of Indonesia as their local economies improve. Once the economy reaches a certain level in a city, we enter the market there. There are many cities in Indonesia which are growing well economically, but they are not supported by a good transportation service. Last year Blue Bird opened
INDONESIA
Just as New York has its yellow cabs so Jakarta and other Indonesian cities have their blue taxis. Indonesias best-known cab firm is part of a group with diversified interests
a branch in Palembang to support the Southeast Asian Games. Further branches are opening in Bandung and Sumatra. Blue Bird also runs a luxury Silver Bird sedan service for the well-heeled customer. We are not the only taxi service here in Indonesia offering a
On February 4, the Diadema, a giant container vessel laden with cargo, docked in Indonesias busiest harbor in North Jakarta. The arrival of the Maersk Line mega-ship, carrying more than 4,500 standard-size containers, marked a new stage of development for Tanjung Priok port, Indonesias biggest seaport. It was the first time that the port, which handles 75% of the nations total container traffic, was able to accommodate a ship of such a size. Previously, only vessels of up to 3,000 twentyfoot equivalent unit containers (TEUs) could dock there. Tanjung Priok port is a bustling center for West Java exports and transshipments with other islands in Southeast Asia and the South Pacific. Ex-
port and import activity has surged, container traffic has been growing at an average annual rate of 26%, and last year exceeded the ports capacity of 5 million TEUs. February was also the month that state-owned Pelindo II, the operator of Tanjung Priok port and 11 other harbors, relaunched itself as IPC Indonesian Port Corporation, adopting the motto Energizing Trade, Energizing Indonesia. IPCs President Director Richard Joost Lino says the arrival of the Diadema now making a regular weekly call demonstrates to the big international shipping lines the confidence they can now have in Indonesias principal port. He wants Tanjung Priok to become a regional hub in the next three
Since 2008, IPCs profits have increased almost four-fold
years, and be internationally recognized for its efficiency. We want to be a world-class port operator, he says. In the near future, we expect to have an average increase of at least one million TEUs of containers per year so by the end of this year, hopefully, we will reach 6 million TEU containers, he says. Making this possible will continue to require, considerable cost and effort. In recent years, IPC has invested nearly $250 million in upgrading Tanjung Priok port, which now operates 24-hours a day. New container loading cranes have been installed, an 1,000square meter plot of land in Terminal 3 has been converted into an international container terminal, and a new $11.55 million information technology system is to be installed to ease congestion by monitoring vessel traffic online. The system will also be installed at Palembang, Pontianak, and Jambi ports in 2013. Mr. Lino says, The system enables ship operators to know exactly when and in which terminal their ships will dock. They can plan their shipping properly to maximize their resources, and logistics costs will be dramatically reduced. Indonesias logistics costs are among the highest in any Southeast Asian country. As a state-owned enterprise, IPC must help this country to reduce logistics costs to make the economy grow faster, says Mr. Lino. He argues that if the ports
WE NEED TO HAVE VERY EFFICIENT AND PRODUCTIVE PORTS... THE PORTS ARE THE GATES TO INDONESIA FOR THE WORLD, AND VICE VERSA.
RICHARD JOOST LINO, President Director of the Indonesia Port Corporation
can be made cheaper and more efficient transportation of goods can be shifted from Indonesias congested roads to sea transportation. We need to have very efficient and productive ports. If your port is efficient, you will increase your ship capacity. The ports are the gates to Indonesia for the world, and vice versa. Based in Jakarta-based stateowned IPC runs 11 other Indonesian ports in addition to Tanjung Priok. Since it began its revitalization drive in 2008 under Mr. Linos leadership, revenue has doubled and profits increased almost four-fold. In 2011, the increase in car-
go traffic took the port operators total revenues to 5.14 trillion rupiah ($570 million), an increase of 41.46%, compared to 2010. Net profit increased by 33% in the same period, reaching 1.63 trillion rupiah. This year, the company is targeting earnings of up to 6 trillion rupiah, and net profit of 1.7 trillion rupiah. Six subsidiary companies are being established to further improve efficiency at the ports and accelerate infrastructure development. IPC increased its investment in port facilities by 36% to 1.5 trillion rupiah in 2011. This year it expects invest 4.5 trillion rupiah. A substantial amount of that
will go towards construction of North Jakartas New Priok Container Terminal, needed to relieve the mounting pressure on Tanjung Priok port. Phase I will be completed by the end of the first quarter of 2014, and the rest of the project in 2017 at a cost of approximately $2 billion. Work will also start this year on the development of Sorong Container Port in West Papua. The port should become operational by 2014. Significant investment is also being made in staff training. We have invested $50 million to prepare our best people to be world-class managers, says Mr. Lino.
premium or luxury service, but we have established our position as the best and most reliable luxury taxi provider through a partnership with Mercedes Benz. Golden Bird provides limousine and car rental, and Big Bird chartered buses.
More than 40,000 people work in the Blue Bird Group, whose business interests range from transportation and logistics, to property, manufacturing and services. Our ability to manage that huge number of people is a testament to our professionalism, says Bayu Djokosoetono. He says the logistics business is one the group is particularly focused on expanding. The potential for the logistics service is also limitless because it is a growing business. Indonesia is a resource-based nation and we need to move our goods all around the world. This takes good logistics infrastructure. Blue Bird already operates Iron Bird Trucking and Iron Bird Transport, the official agent for Japans Sumitomo Warehouse company; OceanAir, a supply chain management service; and Ritra Konnas, a warehouse and container depot. The group sees opportunities for foreign partnerships, and serving as the Indonesian agent for multi-national logistics companies. Looking ahead, Mr. Djokosoetono says one of the ways to secure the companys future is by an initial public offering (IPO). As the third generation, we have to prove that we are capable of running the family business, not because we are the owners, but because we are professionals in our own right, he says.
WE TRY TO CREATE A SENSE OF BELONGING AMONGST THE EMPLOYEES AND THE DRIVERS. AN HONEST CULTURE WITHIN THE COMPANY ITSELF MEANS THAT ALL OF THE COMPANY STAKEHOLDERS TRY TO MAINTAIN THESE VALUES IN THEIR OWN LIVES, AND USE THIS TO BETTER SERVE OUR CUSTOMERS.
BAYU DJOKOSOETONO, Commissioner of Blue Bird Group
Palapa Ring to transform ICT

The countrys flagship Nusantara Super Highway Project, known as Palapa Ring, is forming a nationwide fiber-optic network that will be the backbone of Indonesias information and communication technology (ICT) system. The project is expected to significantly lower the costs of telecoms and Internet access, as well as boost broadband speeds, by creating seven interconnected rings or main island groups namely the Sumatra, Java, Kalimantan, Sulawesi, Maluku, Nusa Tenggara and Papua rings that will strengthen inter-island and international connectivity. Covering 33 provinces and 460 districts, in total the Palapa Ring comprises 21,921 miles of undersea optical fiber and 13,489 miles of underground fiber optics. The brainchild of the Ministry of Communication and Information Technology (MCIT), the Palapa Ring is on track to be fully connected by 2014 and was initially funded by telecom operators, led by Telekomunikasi Indonesia (Telkom). Over time, the operators gradually pulled out of the project. Only one is left, says Freddy Tulung, Director General of Information and Public Communication at MCIT. The consortium was meant to take care of the financing. Unfortunately, they have pulled out. Now, the government is set to finance both the ICT fund and the Palapa project. Other ICT initiatives from the government include the Desa Berdering Program, which is establishing basic telephony services, including voice and SMS, in each of the countrys 72,000 villages. Also, the Pusat Informasi Masyarakat (PIM), or the Community Access Point (CAP), scheme aims to extend the reach of ICT within the country and involves setting up Internet community centers by 2014.
Advancing Indonesias telecoms is central to the success of the governments push to develop soft infrastructure under its MP3EI master plan for economic development
We are now moving towards the digital era. That is why we are also preparing for the convergence of the triple Cs: communications, computers, and content. This also includes the convergence in ICT infrastructure, which covers telecommunication, Internet, and broadcasting (where we have educational entertainment), says Mr. Tulung. Technology infrastructure means nothing without the knowledge of the software being developed, and the impact of the regulations that are being effected. The Palapa Ring demonstrates how Indonesia is making huge strides towards strengthening its ICT infrastructure and improving the existing telecommunication systems. Combined with our highly IT-oriented youthful workforce and large market base, there are just so many opportunities for foreign investors to explore.
Connectivity: IP Backbone Development 2011-2015 NUSANTARA SUPER HIGHWAY
10
Geothermal energy can reduce emissions and power economy

Generated and stored in the earth, geothermal energy is cheap, reliable, sustainable, environmentally friendly and renewable and Indonesia has more of it than any other country. Now steps are being taken to make use of it
INDONESIA
Mining sector aims to increase profits and share the benefits

Indonesia sits on a wealth of buried treasure a wide range of mineral and energy resources that the world needs and activity is gaining pace as the mining sector strives to meet demand at home and abroad
INDONESIA
11
Located on the Pacific Ring of Fire, Indonesia has more active volcanoes than any other country. They are most visible sign that the country has the worlds largest geothermal reserves enough heat generated and stored in the earth to produce 29,000 megawatts of electricity To put that in proportion, 29,000MW is the equivalent of 12 billion barrels of oil. Existing global geothermal power generating capacity amounts to approximately 11,000 MW. Currently, only a tiny fraction less than 5% of this cost effective, reliable, sustainable, environmentally friendly and renewable source of energy is being exploited. However, thats changing fast. A pledge by President Susilo Bambang Yudhoyono last year that he would increase subsidies for clean energy has prompted what has been described as biggest geothermal spending spree in Asia and the largest outside of the United States. Analysts say the investment boom could reach $30 billion. Former U.S. Vice-President Al Gore has called Indonesia
the first potential geothermal superpower. World-class companies such as U.S. oil major Chevron, Indias Tata Group and Sumitomo of Japan are already involved. The national energy companies are stepping up their geothermal activities too. State power firm PLN says it wants to boost its use of geothermal energy sources to 7%, and is launching three new geothermal power plants this year. Pertamina Geothermal Energy (PGE), a subsidiary of the national oil and gas company, has been spending millions of dollars developing geothermal power plants in West Java, Sumatra and Sulawesi, and also expects to bring three more plants online this year. Pertamina also has a joint operation contract with Bali Energy, which is set to generate geothermal energy on the holiday resort island. Recently State-Owned Enterprises Minister Dahlan Iskan announced that PGE is to become a joint subsidiary of Pertamina and PLN, the state electricity company to facilitate government plans
to build 44 new geothermal plants to more than triple capacity to 4,000 MW by 2014. Discussions are, however, still at an early stage. Geothermal energy is nonexportable, but as an alternative to fossil fuels it could reduce the amount Indonesia spends on importing energy and make a significant contribution to President Susilo Bambang Yudhoyonos pledge to cut carbon emissions by 26% by 2020, while also contributing to boosting Indonesias electrification rate above 80% by 2014. At present, Indonesias geothermal power plants have the capacity to generate just 1,341MW only 4.6% of the total potential. The government aims to increase geothermal capacity to 4,000MW by 2014-15 and to 9,500MW by 2025, when it would account for approximately 33% of Indonesias electricity demand. One of the problems that has held back development up to now has been that many geothermal reserves are located in protected forests though this now appears to have been overcome. A memorandum of understanding
IF THE PRICE IS RIGHT AND THE FORESTRY ISSUES CAN BE RESOLVED, GEOTHERMAL WILL BE HUGELY BENEFICIAL.
WIDJAJONO PARTOWIDAGDO, Vice-Minister of Energy and Mineral Resources
WE HAVE GEOTHERMAL RESOURCES IN ABUNDANCE. IT IS IMPORTANT THAT WE AS A NATION TAP INTO THIS.
POERNOMO ABADI, Chairman of Indonesia Geothermal Association
WE STILL HAVE DEFORESTATION PROBLEMS AND ILLEGAL LOGGING, AND THAT IS SOMETHING THAT WE NEED TO FIX FIRST.
SATYA YUDHA, Spokesperson for Commission VII
(MOU) recently signed by the Ministry of Energy and Mineral Resources and the Ministry of Forestry removes licensing problems for the exploration of geothermal en-
Indonesias geothermal potential includes the ability to produce 29,000 megawatts of electricity
ergy in 28 locations in forest conservation areas, and is likely to become a guideline for future geothermal projects. Investment will also be encouraged now that the government has agreed to provide expanded guarantees to geothermal developers, covering risks during the exploration and construction phases. The financial, regulatory and technical challenges will be addressed at the World Geothermal Energy Summit 2012, which is to be held in Jakarta in July. Widjajono Partowidagdo, Vice-Minister of Energy and Mineral Resources, says geothermal energy could offer big advantages to Indonesia. If the price is right and the forestry issues can be resolved, geothermal will be hugely beneficial. He hopes the MOU will speed things up. If the ministries work together, everything can be sorted out. It depends on our will and if we want to improve or not. The potential is there, but we need to move in the right direction. The contractors do not need the money but they need a guarantee from the government that they are going to make a profit. Poernomo Abadi, chairman of Indonesia Geothermal As-
sociation, says 25% of Indonesias energy could come from renewable energy sources including solar and wind, as well as coal bed methane and biofuels. We have geothermal resources in abundance, spread throughout the country. It is important that we as a nation tap into this. He says the IGA is working with the government to remove the barriers that inhibit investors coming to Indonesia in order to develop geothermal activities. All technology and knowledge from the U.S. and other countries is welcome in Indonesia, he adds. Satya Yudha, a member of the House of Representatives Commission VII on energy, mining, technology and the environment, says achieving the 26% carbon emissions reduction will be quite a big job, but using renewable resources will help. If you look at the forestry sector, we still have deforestation problems and illegal logging, and that is something that we need to fix first. If we can fulfill our energy needs with renewable energy, and optimize clean-burning fuel like gas, this complies with the countrys ambition to achieve a 26% cut.
Indonesia has some of the richest deposits of coal, gold and copper in the world. High in the mountains of Papua province, in the eastern part of the country, is the worlds largest gold mine and secondlargest copper mine, but in Sumatra, in the south, there is a resource of greater economic value coal. Mining accounts for more than 10% of Indonesias GDP, and the sector is growing fast. In its 2012 first quarter report on the industry, British Monitor International (BMI) says it expects the industrys value to reach $147 billion in real terms by 2015 almost double that of 2010. Coal mining is fuelling this rapid pace of growth. BMI forecasts coal production will reach 816 million tons by 2015, an annual average growth of 17.8% from 2010 levels. Indonesia is already the worlds leading exporter of coal for power stations, with much of what it produces going to feed the voracious demand for energy in the rapidly expanding economies of China and India. Last year, India overtook Japan as Indonesias biggest customer for coal, and demand from China is expected to double over the next five years. Other countries seeking to source their coal from Indonesia include Kenya, Bangladesh and Pakistan. As production is ramped up and new mines are opened in response to accelerating demand, there is a need for greater investment to sustain the sectors expansion. The government expects mining investment to reach $6 billion this year, and has brought in new mining regulations to improve certainty for investors.
In January, President Susilo Bambang Yudhoyono ordered a review of all mining permits issued by local governments in a bid to enhance transparency and accountability in the sector. Satya Yudha, a member of Commission VII, which oversees energy and mines at Indonesias House of Representatives, says many permits have been issued more than once by the different heads of regions, especially after new governors have been elected. There is a lot of flexibility by the local governments, and this makes the mining sector a bit messy compared to oil and gas. But if we have common goals between local and central governments and a good integration among the ministries we will have a positive outcome, he says. Last month, the government gave a clear indication that Indonesia intends to retain more of the profits from mining by rebalancing investment in the sector more towards domestic investors. A surprise change in the rules, announced in March, will limit foreign ownership of mines to just 49%. The Energy Ministry has also demanded a 4% increase in the amount of coal supplied for domestic consumption to 82 million tons. Indonesia exports most of its natural gas, and so needs coal to drive its own power stations. And in a further move to boost revenue from mining, the government wants to see coal and minerals processed into added-value products before export, and plans to ban shipments of raw coal material by 2014. Bob Kamandanu, Chairman of the Indonesian Coal Min-
Bob Kamandanu (right), Chairman of the Indonesian Coal Mining Association
ing Association, says: We have been exploiting oil, gas, and coal and minerals such as nickel, iron ore, copper and gold. We cannot continue this way for too long, because Indonesia has to transform itself into a human capital economy. I am not proud of Indonesia being the number one coal exporter, he adds. We would like to see Indonesia using its own coal. Indonesia needs energy, fuel and strength to take off, and mining is part of the backbone of Indonesia right now. He says more exploration is needed and greater use of technology. Indonesia has one of the largest reserves of coal bed methane in the world a potential 453 trillion cubic feet, which is more than double the countrys natural gas reserves. We have mostly low rank coal. We have to employ coal
WE HAVE BEEN EXPLOITING OIL, GAS, AND COAL AND MINERALS SUCH AS NICKEL, IRON ORE, COPPER AND GOLD. WE CANNOT CONTINUE THIS WAY FOR TOO LONG, BECAUSE INDONESIA HAS TO TRANSFORM ITSELF INTO A HUMAN CAPITAL ECONOMY.
BOB KAMANDANU, Chairman of the Indonesian Coal Mining Association
conversion technology in which this coal becomes methanol, a cleaner fuel. Everybody has been talking about this technology but nothing has been done yet. This will ensure the energy efficiency of Indonesia. Syahrir AB, Executive Director of the Indonesian Mining Association, says greater investment is needed in exploration so the countrys mineral wealth can be more fully exploited. I have already asked the central government why we dont explore our potential in gold, bauxite and copper. If there is no exploration, there is no exploitation. Mr. Kamandanu also has strong views on mining standards and CSR initiatives, which he believes are best led by the largest mining companies, which control 80% of the industry.
The small operators do not design mining well... They see black coal and they rush and dig, the walls collapse and then they leave. For CSR to be truly effective, co-ordination is needed. There are about 200 or 300 companies at the moment and each company has CSR money. If we put them altogether, that is billions of dollars. We need a nationwide program. For example, in Kalimantan, the number of people who are graduating from elementary school is two million, and by enforcing the CSR, they can go to high school and then go to university. We need these programs nationwide. We could have a mining fund to transform Indonesias human resources. We do not mind being charged more if it is going to transform things.
Energy from your own backyard

CBM coal bed methane is a highly promising new frontier in natural gas development. The entry of multi-national oil companies looks set to boost its economic prospects further and visionary Indonesian outfit Ephindo is also keen to play its part
Switching to a cleaner power source

Private companies big and small are turning Indonesias potential for geothermal energy into a reality
Indias leading private sector power producer, Tata Power, is investing $125 million in a 240MW geothermal project in northern Sumatra. OTP Geothermal Power, a joint venture between Tata Power and Australias Origin Energy is developing the concession for the project at Sorik Marapi. Indonesias Supraco has a minor holding in the consortium, which has been carrying out a detailed exploration program since last year. Construction is due to begin later this year and the first unit is expected to come into operation towards the end of 2015. Two more units will follow early in 2016. Mumbai-based Tata Power aims to achieve at least 25% of its generation portfolio through renewable sources of energy by 2017. People really need to understand geothermal and the huge benefits it has for Indonesia, says John Wheble, OTP Geothermal Powers former President Director. It is not influenced by international oil, gas or coal prices, and has both economic and environmental advantages. It is better for the country to use geothermal energy, which cannot be exported, rather than other fuel sources
that will bring export earnings. He says that up until now there has simply not been the reward and recognition for those interested in taking the geothermal exploration and exploitation development risks. In the past, there have not been enough government incentives and regulatory support for the private sector to feel comfortable spending millions of dollars on the exploration and development. According to Mr. Wheble, Tata Power and Origin have the combined strength to become a world leader in geothermal energy. And they have not entered the Indonesian market for a single project. Its an enormous cost to support a team in Indonesia for just one project, he says. The returns these days arent great compared to the sheer risk involved with geothermal exploration, and so you need more projects. The consortium will identify 1,000MW and try to secure the projects it believes to be beneficial to Indonesia and to shareholders, he adds. Bret Mattes, President Director of Tata Indonesia, says the recently established Alliance of Low Carbon Businesses in Indonesia (Albi) wants to see legislation to force the energy sector alone to reduce carbon emissions by about 300 million tons. Imagine if all that coal was being sold outside the country, rather than being consumed locally
THE TIDE IS FINALLY CHANGING AND PEOPLE ARE TAKING THE PROJECT SERIOUSLY. WE CAN MOVE AT A MOMENTS NOTICE.
IRA FRANCIS HATTA, President Director of Bali Energy
IT IS BETTER FOR THE COUNTRY TO USE GEOTHERMAL ENERGY, WHICH CANNOT BE EXPORTED, RATHER THAN OTHER FUEL SOURCES THAT WILL BRING EXPORT EARNINGS.
JOHN WHEBLE, former President Director of OTP Geothermal Power
where it is subsidized and taxpayers are paying for it, he says. According to Albi, we could deliver about 170 million tons of carbon emission reductions without any additional costs, just by allowing geothermal and hydroelectric to compete with coal on an even playing field. Almost half of Indonesias geothermal potential is located where the demand for energy is at its greatest, on Java and Bali, Indonesias most populous islands. Balis only geothermal pow-
er plant project is managed by Bali Energy, which first became involved in trying to generate geothermal energy on the holiday resort island as far back as 1994. The project, which has confirmed reserves in excess of 175MW, was re-launched in 2004 after being suspended in 1997 by the government during the regional financial crisis, but is still waiting to go into commercial operation. Bali Energy has three production size test wells, a joint operation contract with In-
donesias national oil company, Pertamina, an energy sales contract with PLN, a government guarantee letter from the Ministry of Finance and an environmental and social impact study signed by theGovernor of Bali. Ira Francis Hatta, the companys President Director, says: Bali has always had a shortage of energy mainly because of its dependency on tourism related businesses. It was a no-brainer for Pertamina and PLN to recognize the need for indigenous power. Last year PLN subsidized energy to the island of
Bali in excess of $130 million! He also says Bali Energy has first-class partners and has been having discussions with two equipment suppliers, Toshiba and General Electric (GE). Using GE binary technology could enable Bali Energy to produce 10MW from its current wells. It will have a tremendous impact, says Mr. Hatta. I think it will probably be their first binary system implementation outside of Italy. We are small and committed, and GE is big and committed. The key word is committed.
Indonesia is the worlds second largest exporter of coal and LNG and has the worlds largest geothermal resources, as well as an estimated 453 trillion cubic feet of coal bed methane (CBM) which has a lower exploration risk and significantly lower per well activity than oil or gas. Energy experts predict that CBM has the potential to create a new, global energy frontier, especially following recent trends in the five coal-mining states of the northeast United States by ExxonMobil,BP and Total, trends which look set to propel CBM exploration into the limelight. Veteran gas consultant Richard Fuller, who has worked in Indonesia for 30 years, says: CBM has the potential to give Indonesia the opportunity of becoming the region's lowest energy-cost economy.(Straits Times, Indonesia). CBM development differs substantially from that of conventional gas, often requiring thousands of shallow wells and a major de-watering process. But these same characteristics dictate high employment and the strong economic growth: the Marcellus Basin development is now creating 15,000 jobs a year. Studies have shown that there is as much as 5.1 trillion cubic meters of CBM in two large basins in East and South Kalimantan areas where Ephindo are already massively invested. Despite the fact that only 10 to 15% is thought recoverable, this amounts to 566 billion cubic meters in conventional reserves, and makes the overall gas resource about the same size as the Marcellus Basin, a trillion-dollar shale
to be a major player in the CBM industry in Indonesia. Gas is the future of the counIT IS SIMPLY A MATTER try. People worry about doOF FINDING THE GAS mestic market obligations THEN MAKING IT FLOW. and pricing, but if you look at THE MARKET AND gas sales deals in the last 12 INFRASTRUCTURE ARE months, you are looking at THERE. an average of between $6 and $7. Now PLN is talking about MR. SAMMY HAMZAH, President Director buying gas at $9 plus. If you of Ephindo Energy compare it to the U.S., you could not even sell it for $3. It is a very good market. His confidence is based on gas deposit hailed as one of well thought-out strategy: America's richest energy The basins we have chosen finds. With another 7.1 trillion represent almost 70% of the cubic meters of CBM poten- Indonesian CBM resources. tial in southern Sumatra, East Kalimantan and South where pipelines already sup- Sumatra have very good gas ply conventional gas to Sin- infrastructure because congapore and Jakarta, Indonesia ventional gas has been proboasts more than 12.8 trillion duced there for over 40 years. cubic meters of CBM the It is simply a matter of findequivalent of over 80 billion ing the gas then making it flow. The market and infrabarrels of oil. The figures are impressive. structure are there. Five of But we still have to prove that our six blocks are very close CBM is commercial and raise to the second biggest LNG awareness of the fact that plant in the world. It has eight CBM is completely different trains and three of them are to conventional gas. The mar- idle at the moment, waiting ket needs to adjust...you are for gas to come in. You are talking about 10 to 20 times looking at an idle LNG plant more of a footprint than con- in your backyard! What more ventional gas players. But could you want? He continues: Indonesia there is no doubt that there is huge potential, explains Sam- is a very attractive place to my Hamzah, President Di- be, especially in the current global economic situation. rector, Ephindo Energy. A pilot to power model in Our investors are my top priSangatta, has helped Ephindo ority. If we are able to estabcommercialize some reserves. lish a substantial enough Sangatta is currently short portfolio that will allow us to of 6 to 7 MW. They are burn- produce 50 to 100 million cuing diesel to produce elec- bic feet in five years, that tricity. We are helping the would be good. But the most community to get electricity important thing for me is reand are helping ourselves by turns for my shareholders. He believes the future of showing the world the pothe region is bright: I am a tential of CBM. He is bullish about Ephin- firm believer in enterprise. dos prospects: You are look- Times are changing and we ing at a company that is going are excited about it.
Indonesia boasts more than 12.8 trillion cubic meters of CBM - the equivalent of over 80 billion barrels of oil
12
Coal still has a viable future

Adaro Energy is tipped to be one of the worlds top three thermal coal exporters by 2015, while its principal backer the impressively resourced Saratoga Capital is assisting the move towards gas, hydro and other energies
INDONESIA
Adaro Energy is Indonesia's second largest thermal coal producer, the biggest domestic supplier, and, arguably, the regions most fully integrated coal mining company. It operates the largest single coal mine in Indonesia, is a significant supplier to the global seaborne thermal coal market, and is the only Indonesian coal company exporting coal on a regular basis to the U.S. Established in 2004 as a limited liability company under the name PT Padang Karunia, it changed its name to PT Adaro Energy Tbk in 2008 in preparation for becoming a public company. Adaro and its subsidiaries currently deal in coal mining and trade, coal infrastructure and logistics, and mining contractor services. In addition to impressive coal reserves and a unique, environmentally friendly product, Adaro boasts numerous high quality assets which underpin its operations for instance, the 46-mile haul road connecting the mine to the crushing facility in Kelanis, and the terminal in Pulau Laut. As its President Director Boy Thohir explains: We are not just involved in coal mining, we fastidiously look after our supply chain. If you compare Adaro to other mining companies in Indonesia youll see that our business model is unique. This is what will enable us to be a reliable energy supplier domestically and globally. But we do not just want to produce the coal and export it. We want to contribute more. He elaborates: Adaro is now building a power plant for our own use and for our people and we recently won a tender to build the biggest power plant in Southeast Asia (2 x 1,000MW in central Java). There will be a lot of demand for electricity, and with Adaro getting involved in power, and Saratoga behind us, we can contribute more to the
AS THE NEED FOR ELECTRICITY INCREASES, DEMAND FOR COAL WILL ALSO INCREASE. THE AVAILABILITY OF COAL IS LIMITED THEREFORE THE PRICE WILL REMAIN HIGH.
EDWIN SOERYADJAYA, President Commissioner of Saratoga Capital
WE DO NOT JUST WANT TO PRODUCE THE COAL AND EXPORT IT. WE WANT TO CONTRIBUTE MORE
BOY THOHIR, President Director of PT Adaro Energy Tbk
Mr. Edwin Soeryadjaya, President Commissioner of Saratoga Capital concurs. Voted Ernst & Young Entrepreneur of the Year in 2010, he says, We try to do a lot of value added work for the benefit of the country. His business ethos inherited from his father, one of Indonesias most respected business leaders, is to give back continuously. Saratogas investments range from telecommunications (the World Bank sanctioned Aria West Project, a $1 billion joint venture with AT&T) broadband provision, Alaskan fish processing, and more. Mr. Soeryadjaya too is confident about the long-term future of the Adaro-Saratoga fusion: One of the reasons that demand for our coal has increased is due to the Great East Japan earthquake and the subsequent tsunami. However, in the foreseeable future, as the need for electricity increases, demand for coal will also increase. The availability of coal is limited therefore the price will remain high. Adaro will be looking to increase its reserves and Saratoga will help them explore alternative sources. So together we will continue to thrive, as will the communities we are involved with.
A fruitful investment
Apple Coal, a wholly owned subsidiary of Apple Commodities Ltd., Hong Kong, has interests in coal mining, coal mine development, and coal trading, in the Indonesian provinces of Southeast Sumatra and East Kalimantan. Its focus and strength lies, primarily, in the growing Asian energy markets. Through a combination of its asset strength and its close bonds made through strategic and mutually beneficial local partnerships it has experienced steady growth since its establishment in 2009. Nischal Jain, President Commissioner of Apple Coal, has been pleasantly surprised by the short-term gains made by the company in addition to what he sees as its long-term potential: Apple Commodities (Hong Kong) is also involved in agricultural products and textiles, as well as focusing on natural resources such as coal. We plan to expand our portfolio here in Indonesia, too. We are already looking into bauxite and manganese markets in the coming years. But right now it is just iron ore and coal for us. However, he is keen to stress that mining will not be the primary focus, ongoing: PT Apple Coal is a subsidiary of Apple Commodities Ltd., which owns concessions all over Indonesia. Apple Coal is a trading company; we have been trading a lot of coal over the past three years and we will continue to do so, but as I have stated, Apple Coal is not just a mining company, nor are we thinking about staying as just a mining company. Over the next four years the company's aim is to become a 10 million metric ton per annum (mtpa) operation. In possession of several mines throughout Indonesia with an area totaling over 58,000 hectares, Mr. Jain is cautiously optimistic that they will become a publicly traded company, sooner rather than later. And that bright future looks quite attainable judging by the current growth rate. Apple is also looking at investing over $350 million in the mining and infra-
INDONESIA
13
The new and rapidly developing Apple Coal company (Indonesia) has proven to be a robust presence in the region, distinguished by its unfaltering commitment to the support and development of the domestic economy and being a much welcomed boon to the prosperity of the native Indonesian workforce
country. The power sector has a multiplier effect on industry, education, everything in fact. Adaro leads the way in CSR programs: We cannot increase our production if we cannot manage our surroundings. That is why I spend most of my time dealing with CSR and the development of the local area. If we can better develop surrounding communities, then those communities will protect Adaro because they will feel that Adaro belongs to them.
The company is also internationally recognized as an environmentally-friendly coal mining extractor; its Envirocoal is considered as one of the lowest sulfur content coals available. One of our consumers is China Light Power (CLP) in Hong Kong where the strictest of emissions standards apply. Adaro showed them the benefits of using Envirocoal and now supply over 50% of CLPs coal requirements, revealed the company boss, continuing, Back in 1992, everyone was
thinking about the heat value of coal. The power utilities were not concerned about the environment. Our team was visionary in introducing Envirocoal back then. Obviously, if you compare coal to other energies like gas or geothermal, coal is not as good. However, if you compare our product to other coal specifications, youll see how we can contribute a little to the world by reducing or replacing not so clean coal products. Mr. Thohir is confident
about Adaros ability to attract overseas investment too, Our track record speaks for itself. BHP Billiton one of the biggest mining companies in the world recently chose Adaro as their partner in Indonesia. One of the key success factors for investors is to find reputable local partners, and, in that context, we have done our homework. We know Indonesia better than anyone else, and one of our strengths is our ability to communicate and manage local issues.
Indonesias coal production will reach 380 million tons in 2012, most of it destined for export; about 80 million tons are used domestically
structure sector in over the next three to five years. Mr. Jain continues: On the human resources side, we employ over 100 people in Indonesia, we have only nine ex-pats. Manpower is available in Indonesia and the expertise is here. We know how the system works here... we plan to employ close to 350 people in the medium term. Long-term plans include giving the land back to society through public parks and hospitals and schools for the local villages where we will be mining. We plan to replant the forests as well and go even beyond what the regulations stipulate. We are an environmentally responsible company. There are villages surrounding many of the sites in Indonesia and as they are located in remote areas, they aren't quite fecund in social resources. Mr. Jain explains Apple's position regarding this situation: We plan to do whatever we can for those communities. Even now, Apple Coal supports many children and elderly people's initiatives in East Kalimantan. We provide for their education, their medicines, clean sanitation, and clothing. And on a happier note, We also try to get involved in celebrating traditional festivals with these isolated people. At present, Indonesia gets most of its investment in the mining sector, however it needs more investment in energy and
LONG-TERM PLANS INCLUDE GIVING THE LAND BACK TO SOCIETY THROUGH PUBLIC PARKS AND HOSPITALS AND SCHOOLS FOR THE LOCAL VILLAGES WHERE WE WILL BE MINING. WE PLAN TO REPLANT THE FORESTS AS WELL AND GO EVEN BEYOND WHAT THE REGULATIONS STIPULATE. WE ARE AN ENVIRONMENTALLY RESPONSIBLE COMPANY.
NISCHAL JAIN, President Commissioner of Apple Coal
mine mouth power plants. Despite the fact that Indonesia has so many resources, particularly gas, oil and coal, there are still critical electricity issues. There is not enough power. As Mr. Jain explains, Jakarta is completely different to other areas of Indonesia. Sometimes even the
major airports in Indonesia experience blackouts. That is why we need investment in the energy sector. Over the latter part of the last decade business laws have changed, or been reformed, in Indonesia. These revisions have made it more straightforward for foreign
companies to come and invest in the burgeoning economy. It may take time and effort for the energy deficit to be tackled in Indonesia, but in the meantime there is much opportunity for foreign investors as this country's growth prospects continue to improve.
14
MP3EI: A coherent plan for well-distributed growth

The Master Plan for Acceleration and Expansion on Indonesias Economic Development (MP3EI) has been created to enable the country to
Center for production and processing of national agriculture, plantations, fisheries, oil & gas, and mining
Lying directly in the center of Indonesia, the Sulawesi Economic Corridor is poised to be the center for production and processing of national agriculture, plantation, fisheries, oil & gas, and mining. While agriculture (rice, corn, cocoa, soybean and cassava) is the largest contributor to the regions Gross Regional Domestic Product (GRDP) and absorbs about half the total workforce, the sector is hindered by a lack of adequate economic and social infrastructure, such as roads, electricity, water and healthcare. On a national scale, Sulawesi is the third largest food producer in Indonesia; nevertheless, productivity is lower compared to other regions owing to low fertilizer use, a limited access to modern agricultural equipment, and an inadequate irrigation network. The MP3EI for Sulawesi targets the optimization of land use, the creation of new rice paddy fields, and the rehabilitation and conservation of agricultural land. The plan also addresses financing for farmers, the creation of quality storage to reduce potential loss of quantity and value of post-harvest products, and improving access roads and irrigation facilities. In addition, a downstream sector will be developed to add value to Sulawesis commodities. As Dr. Syahrul Yasin Limpo, Governor of South Sulawesi, says, We expect that our agriculture sector can become more agro-industry in the future. Within Southeast Asia, Indonesia is the largest producer of fishery products, and Sulawesi is the biggest producer nationally. The industry is a powerful contributor to the corridors economic growth yet certain challenges, namely overfishing, have raised red flags in its continued expansion. The Master Plan aims to develop aquaculture as well as increase added-value products and activities for seaweed processing. Another one of Sulawesis strengths lies in nickel: it boasts the most advanced nickel production in a country that ranks fourth among global nickel producers. Where the national government would like to see more growth, however, is in the downstream industry, especially nickel product refining. The last economic anchor of the MP3EI for Sulawesi is oil and gas. Although reserves of these fossil fuels are considered to be low, they have not been properly identified and explored. Moreover, as Indonesias overall oil reserves continue to decline, Sulawesi could help prolong their lifeline.
INDONESIA
INDONESIA
15
become one of the 10 major world economies by the year 2025. Six growth centers and eight primary focus programs have been identified
SULAWESI
Driver for national industry and services provision

Home to the nations capital and 135 million people, Java has better economic and social conditions in comparison with the other corridors. Under the theme driver for national industry and services provision, Javas potential to progress in its value chain from manufacturing-based economy to a service-based one will be developed, while paying special attention to water and environmental conservation. The main economic activities to be promoted under the MP3EI are food & beverage, textile, transportation equipment, shipping, ICT and defense equipment. Among the manufacturing industries, food & beverage employs the highest number of people, and production accounts for more than 22% of total manufacturing production in the corridor. The sector overall will receive an added boost once import duties on raw materials are reduced, tariffs on end-products raised, and the cost of packaging materials lowered. Another big employer and source of foreign exchange, the textile industry is the only non-oil manufacturing export industry with a positive net export. However, as Indonesia imports 90% of raw cotton materials, a domestic cotton growing industry could integrate the upstream sector with an emerging garment design industry in Jakarta. Java is a big industrial player, contributing 80% to Indonesias equipment and machinery sector. Of this, the transportation equipment segment is the largest contributor. While the MP3EI envisions a rise in both domestic car sales and exports of vehicles, it sets strategies for developing new and existing seaport car terminals, raising the level of human resources to attract more original equipment manufacturers (OEMs), and participating in the global arena with harmonization of automotive industry standards, among others. As an enormous archipelago nation with extensive territorial waters, Indonesia requires a strong shipping industry for both transport and defense. Nevertheless, the country ranks 18th globally as a ship builder. In terms of general defense, Java is mandated to further develop the defense equipment industries to reduce dependence on imports and raise the local content, all while encouraging further economic activity. Finally, ICT development has been highlighted as a vehicle to improve Indonesias competitiveness and create a knowledge-based economy. By 2015, Indonesia is set to have a National Broadband Network (NBN), based on the Telkom Super Highway network and the other network operators that currently exist. Specific targets for 2014 are reaching a broadband connection of 8% of households and 30% of population. For the ICT sector to truly develop, the MP3EI stresses the importance of harmonizing policies and government programs to create a conducive atmosphere, expanding the use of ICT applications in various major economic activities, and building domestic applications and digital content industries, among others.
JAVA
Center for Development of Food, Fisheries, Energy, and National Mining

The development theme for the Papua-Kepulauan Maluku (PKM) Economic Corridor, Center for Development of Food, Fisheries, Energy, and National Mining, will focus on five economic activities: food agriculture, copper, nickel, oil & gas, and fisheries. With the lowest population density of all six corridors and a flat and fertile terrain, PKM is an ideal center for food and energy reserves. Here, a unique development program, dubbed Merauke Integrated Food and Energy Estate (MIFEE), is underway on a 1.2 million hectare area. MIFEE consists of large-scale cultivation of crops by adopting the concept of agriculture as an industrial system based on science and technology, capital, and modern organization and management. Ten clusters of Agricultural Production Centers (called KSPPs) will focus on different activities ranging from food crops, horticulture, animal husbandry, plantation, and aquaculture. The priority activities in MIFEE are sugar and sugar cane production and palm oil. Indonesias Master Plan outlines regulations and policies intended to gradually develop food estate land, educate the local community on the implementation and benefits of the MIFEE program, develop the necessary physical infrastructure to further MIFEEs success, and to establish R&D for agricultural technology. Another of PKMs strengths can be found in copper and nickel. Papua alone is home to 45% of national copper reserves, while nickel is mainly found in Maluku. In 2014, Timika (Papua) is to become the site of Indonesias third copper smelter, which should send production into surplus, thus creating sufficient copper to meet domestic demands and for export. Thanks to the MP3EIs strategy to simplify rules and regulations, the PKM corridor will not only focus on higher added value activities for nickel, it will also attract more investments in nickel mining and exploration. As for hydrocarbons, PKM boasts large reserves of oil and gas. The Master Plan aims to optimize production by balancing the capacity of exports and imports, providing a healthy investment climate, fine-tune legislation and licensing, and encouraging the achievement of oil lifting. The MP3EI also dictates the establishment of an Oil Information Center and an Oil and Gas R&D Center at Sorong, West Papua. The last of the economic activities, fisheries, holds interesting potential, especially in the Maluku Islands, where aquaculture offers tremendous development opportunities as the resources are not yet optimally exploited. Further infrastructure, namely in terms of fishing ports, marketing and power generation, envisioned by the Master Plan should help boost the industry.
PAPUA
Center for production and processing of natural resources and the nations energy reserves
The Sumatra Economic Corridor is being heralded by the Master Plan as Indonesias center for production and processing of natural resources and the nations energy reserves . Its strategic location can also potentially propel it to become the front line of the national economy into the European, African, South Asian, East Asian and Australian markets . However, in order to realize the MP3EIs targets, Sumatra must address various issues namely in terms of infrastructure, finance and human resource development in order to boost its core strengths of palm oil, rubber, coal, steel and shipping. Alex Noerdin, Governor of South Sumatra, sums this up when describing his regions dilemma: Our province is one of the richest in Indonesia, but only in terms of potential. Sumatra is home to some 70% of Indonesias oil palm plantation area and 65% of natural rubber production, yet productivity here and nationwide in general is far below the productivity of its neighbors and competitors. This has been blamed on low seed quality, non-optimal land utilization, and inadequate use of fertilizers (two problems linked with small holders and their limited budgets) as well as long transport times. With approximately 42% of oil palm land and 80% of rubber tree plantations in the hands of small holders, it is clear that these hurdles must be addressed if Sumatra is to boost its production. The MP3EI envisions increasing research to produce superior quality seedlings, the establishment of research centers, and the provision of financial assistance, training and education for small holders, in addition to improving regulations and incentives for the development of downstream industries. The Plan also tackles infrastructure challenges, such as developing port and power capacities, onshore logistics networks and access to ports. Sumatras coal industry will also benefit from updated and expanded infrastructure. Half of Indonesias exports of steam coal come from Sumatra, yet production remains low as most coal reserves are found in the middle of the island, far from seaports and railways. In line with the regions infrastructure program is the MP3EIs strategy to grow the shipbuilding industry and construct the Sunde Straits Bridge to connect Sumatra with Java. And in line with these objectives lies the plan to develop Sumatras steel industry, thanks to its possession of 8% of the countrys laterite iron ore reserves.
SUMATRA
Gateway for tourism industry and national food support

The Bali-Nusa Tenggara Economic Corridor is home to Indonesias most famous and popular province. It is only logical then that the regions theme is the Gateway for tourism industry and national food support. Tourism is the obvious strength, yet agriculture is closely linked in the corridors strategy to maintain a green, all-organic economy. Combined, Bali and Nusa Tenggara have 15% of national hotel capacity and account for 21% of national hotel income. Bali alone received nearly 40% of foreign tourist visits in 2010. The Master Plan highlights that there is still much unrealized tourism potential, especially in terms of average tourist spending per day and average length of stays, which are both low in comparison with Thailand and the Maldives. To turn these trends around, the government will improve security, refine its marketing tactics, promote the development of tourist destinations beyond Bali with a focus on services and facilities, and improve human resources development. In addition, the two provinces can be marketed as a major tourist destination for MICE (meetings, incentives, conventions and exhibitions), cruises and yachts. We have to improve the quality of the tourism industry, explains Made Pastika, Governor of Bali. We do not want to increase the quantity of tourists, but rather the quality. The MP3EI points out the need to increase capacity and services at airports, develop road and rail infrastructure, raise harbors and marinas to international standards, and move towards more renewable energies and cleaner fuels. In the area of food support, Bali-Nusa Tenggara will focus on fisheries and animal husbandry, two of its present strengths. Currently, fisheries contribute 13.2% to the food agricultural sector, yet they are not operating at full potential. The MP3EI aims to boost the production of fishery products and raise the production of high value-added processed products, while also improving infrastructure and building water treatment plants to support aquaculture and marine product processing. In the area of animal husbandry, beef cattle afford the most potential for development in the region, while staying within the green concept envisioned. Beyond meat, leather and milk, for example, cow urine can be used as organic fertilizer and cow faeces, as natural manure and for biogas energy.
BALI
Center for Production and Processing of National Mining and Energy Reserves
Thanks to Kalimantans abundant resources and unique geographic features, the MP3EI has designated this economic corridor as a Center for Production and Processing of National Mining and Energy Reserves. Already, oil & gas and mining contribute around half of the total GRDP; nevertheless, a decline in annual total production of the oil & gas sector means there is increasing pressure on other sectors to continue driving economic development. These other sectors include coal, palm oil, steel, bauxite and timber. With its ever-growing demand for oil, Indonesia has grown increasingly dependent on imports. The Master Plan proposes to counter this trend by promoting exploration of new oil and gas fields, especially in the Kalimantan Economic Corridor, an area known to have large reserves. The region is, however, an important producer of liquefied natural gas (LNG), contributing 37% to Indonesias overall production. Greater investment is required for exploring further hydrocarbon fields as they pose more difficult conditions (ie deep sea exploration). The MP3EI addresses simplifying regulations; designing more production sharing contracts to make investing in Kalimantans oil and gas industry more attractive; accelerating the use of Enhanced Oil Recovery technology; and providing technical support to reduce exploration costs. Another source of energy, coal is a powerful economic driver for the region, with some of the largest deposits of this rock located in Kalimantan. Infrastructure improvements outlined in the Master Plan are expected to raise coal production more than sixfold, and plans for coal conversion activities such as coal gasification and liquefied coal production should create more jobs, increase revenues and reduce imports. Palm oil is another powerful generator of revenues for the region, with oil palm plantations occupying 53% of the total plantation area in Kalimantan. Due to environmental consideration, further expansion is limited. Consequently, the regions growers must increase production yields of existing plantations, a task they will be aided in with government policies outlined in the MP3EI. With 84% of Indonesias primary iron ore reserves and important reserves of bauxite, Kalimantans mining sector also plays a strategic role in the regions economic development. For the next few years, investment will focus on developing processing industries so as to create on one hand, a self-sufficient steel industry capable of meeting domestic needs and, on the other, an added value chain of bauxite-alumina-aluminum downstream production. Lastly, timber offers huge potential for Kalimantan as it is home to vast forested areas. Nevertheless, the forestry sector also contains non-timber potential such as fruits, rattan, bamboo, silk and agar.
KALIMANTAN
Finding unity in diversity

With more than 17,000 islands, 580 different languages and dialects, and some 26 religions, Indonesia has held itself together phenomenally well since its independence from the Netherlands in 1949. And, in light of the uprisings in the Muslim world last year, Indonesia can be considered a role model for the peaceful co-existence of Islam with other religions
One of the biggest democratic countries on earth, Indonesia ranks as the largest predominantly Muslim nation in the world. Its sheer size dictates that diversity rules not only in terms of geography but also in culture and thanks to its foundations of tolerance and peace, Indonesia embraces the pluralism and actually uses it to create and strengthen a sense of unity throughout its 17,500 islands. Indonesia is noteworthy for its tolerant brand of Islam, as
Minister Of Home Affairs Dr. Gamawan Fauzi, explains: There may be other interpretations of Islam in other countries, however I was taught by my parents when I was a child that Islam is a religion which is very friendly and peaceful. Indeed, Dr. Fauzi sees no conflict between his religious views and professional practice as a democratic politician. I seek advice from prominent religious leaders as to how I should react as a Muslim and
also as a minister. The principles of Islam support democratic views. Officially, the government recognizes six religions (Islam, Protestantism, Roman Catholicism, Hinduism, Buddhism and Confucianism) and there are 20 more local religions, although more than 85% of Indonesians are Muslim. What many people do not know, however, is that Indonesias line of Islam differs from that of many other Muslim countries.
The Islam in Indonesia is more tolerant because it was developed through tradition, culture, and personal relations and not through a dogmatic approach, explains Djoko Suyanto, Coordinating Minister for Political, Legal and Security Affairs. The schools of thought in Indonesia have always been tolerant. The arrival of more intolerant, violent and radical schools of thought has only been over the past 20 years.
These schools have started to take advantage of the environment of openness and freedom in Indonesia. The mainstream Muslims here, however, at the grassroots level, the intellectual level and at the leader level are very moderate, and there has been a reaction against this radical and intolerant so-called Islam. Indonesia has been a case study in how democracy and Islam can prove compatible, and to a certain extent this can
be attributed to Muhammadiyah, an Islamic organization founded 100 years ago by KH Ahmad Dahlan. Muhammadiyah, which means followers of Muhammad, was a revolutionary movement in Dutch-controlled Indonesia as it adopted contemporary Western educational methods and combined them with Islamic teachings for the organizations schools. It also employed modern management styles and fo-
cused on social development projects such as building hospitals, orphanages and other institutions for the needy. It was back in the first quarter of the 20th century that Dahlan first introduced the concept of democracy and even created an election system for Muhammadiyah leadership. Today, Muhammadiyah is the second largest Islamic organization and while it is solely dedicated to social and educational activities in In-
donesia, such is its fairness and openness that it has facilitated national discourse by permitting its members to join different political parties. Fourteen years after the establishment of Muhammadiyah, the Nahdlatul Ulama (NU) was created as a traditionalist Sunni Islam group. NU also holds tolerance as a main tenet for its members and for Indonesia. NU has declared since 1936, nine years before our declara-
tion of independence, that Indonesia is not a Muslim state but a salam (peace) state, says Dr. Sajid Akil Seraj, NU Chairman. Our philosophy in NU is to teach Islam in a moderate and tolerant way. NU, much like Muhammadiyah, has contributed to Indonesias role as a peaceful and freedom-loving country, as well as acting as a charitable body, helping to fund schools and hospitals, and combating poverty.
16
SEA Games showcase South Sumatras investment potential

When it was decided to hold the 2011 biannual Southeast Asian Games, the second largest global multi-sports event after the Olympics, in Indonesia, the obvious choice for the host city would have been the national capital, Jakarta. In fact, however, for 12 days in November the eyes of millions were on Palembang, the capital of South Sumatra, which staged both the spectacular opening and closing ceremonies complete with fireworks, hi-tech special effects, and thousands of dancers and singers in its Gelora Bumi Sriwijaya Stadium, and also provided venues for 296 of the 562 events. Dubbed the biggest SEA Games ever, the event involved 5,000 athletes and sports coaches from 11 countries competing in 42 sports. The worldwide attention focused on Palembang as the main host city was a personal triumph for Alex Noerdin, Governor of South Sumatra. Only two cities other than national capitals have ever hosted the Games before. We fought to get the SEA Games, says the Governor. We competed with Jakarta, West Java and Central Java. We created the Sports City in just 10 months from a swampy area comprising 320 hectares, without asking for money from the central government. We obtained funding from the private sector. We convinced Jakarta that we could host this international event on behalf of the Republic of Indonesia. Now the world can see that we have the spirit and powerful motivation to be number one in Indonesia. the province of South Sumatra and to invest in productive sectors here, which will create more jobs. South Sumatra has a lot going for it. The province has abundant natural resources. Its agriculture-based economy has played a key role in Indonesia becoming the worlds main palm oil producer, and it is the second largest producer of raw rubber. Almost 50% of Indonesias coal resources are to be found there. Our province is one of the richest in Indonesia, but only in terms of potential, the Governor says. We need investment from outside. He aims to attract investments in the minerals/ore processing industry, agrobusinesses, biotechnology industries, and oil and gas refineries. We have a lot of coal and gas. We also have oil, coal bed methane, and 28% of the worlds potential in geothermal. There is a special economic zone where we do coal gasification. We make tires in a factory and we export them to China. We are developing the downstream crude palm oil (CPO) industry. We can create jobs for our people with these industries. He emphasizes the provinces strategic location. We are only 400 kilometers from Singapore, the gateway to Asia. In three or four years time we will create almost 300,000 jobs for our people. I am very sure that we will be leading in every sector. There are plans to make Tanjung Api-Api, about 80 kilometers north of Palembang, a special economic
INDONESIA
The province of South Sumatra is rich in natural resources but it needs investors to help it make use of them to create jobs and increase the prosperity of the people
OUR PROVINCE IS ONE OF THE RICHEST IN INDONESIA, BUT ONLY IN TERMS OF POTENTIAL. WE NEED INVESTMENT FROM OUTSIDE.
ALEX NOERDIN, Governor of South Sumatra
5,000 athletes and sports coaches from 11 countries competed in the biggest ever SEA Games, held in South Sumatra last year
Alex Noerdin has been Governor of the province since 2008. We have done a lot in just four years, he says. We provide free education from elementary level and we also provide free medical care. We have three priorities: education, health, and job creation for everyone. But to achieve our goals we have to make the world believe in
zone housing several industries and a seaport. The Governor is particularly keen to get U.S. investors to invest in infrastructure. I am inviting investors to come to South Sumatra to develop a double track railway and transport for coal. We have worked with American companies for years, he says. Now we are inviting more to come over to South Sumatra. They can also contribute in the education and health sectors. When Scot Marciel, the U.S. ambassador, visited South Sumatra in February he declared himself very im-
pressed by the economic growth and investment potential in the province. The purpose of the visit was to promote cooperation and exchange initiatives in education and learn about investment opportunities for U.S. companies. There is already significant presence by U.S. companies in South Sumatra, most notably ConocoPhillips, which operates a block of six oil fields and six natural gas fields, and Cargill, which has more than 36,000 hectares of sustainable oil palm plantation in the province. Hosting international and
national events is proving an effective way to put South Sumatra on the investment map. Investment in the province last year reached Rp11.5 trillion ($1.29 billion) from the original target of Rp9 trillion. According to a spokesman for the South Sumatra Regional Investment Permit and Promotion Body, the target for this year is Rp13.5 trillion in investment. Meanwhile, Governor Alex Noerdin is looking further ahead. He wants the central government to back his drive for Palembang to host the 2019 Asian Games.

Indonesia Rise

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Indonesia Rise

Transféré par

Droits d'auteur :

Formats disponibles

SC O w VE or R ld IN f o DO lio N .co ES .

Rise of the worlds fourth-largest nation

Students still aim for the States

SUSILO BAMBANG YUDHOYONO, President of the Republic of Indonesia

Thursday, April 12th, 2012

Asean chairmanship success

Distributed by USA TODAY

Distributed by USA TODAY

Record FDI and now easier to get started

Thursday, April 12th, 2012

WE ARE A HAVEN FOR INVESTMENT.

Indonesia the best place to start a business, says BBC

Thursday, April 12th, 2012

Distributed by USA TODAY

Distributed by USA TODAY

Nurturing the leaders of tomorrow

Thursday, April 12th, 2012

THE REFORM WILL REVITALIZE SOCIAL SECURITY IN INDONESIA.

Education is an investment, not a gift.

Thursday, April 12th, 2012

Infrastructural investment vital to master plans success

Distributed by USA TODAY

Distributed by USA TODAY

Sky-high prices for new airports

Thursday, April 12th, 2012

TRI SUNOKO, President Director of PT Angkasa Pura II

Major challenge of soaring passenger numbers

Upgrades needed to get railways back on track

Thursday, April 12th, 2012

Ports investment boosts capacity and efficiency

Distributed by USA TODAY

Distributed by USA TODAY

Blue Bird spreads its wings

Thursday, April 12th, 2012

Since 2008, IPCs profits have increased almost four-fold

Palapa Ring to transform ICT

Connectivity: IP Backbone Development 2011-2015 NUSANTARA SUPER HIGHWAY

Thursday, April 12th, 2012

Geothermal energy can reduce emissions and power economy

Distributed by USA TODAY

Distributed by USA TODAY

Mining sector aims to increase profits and share the benefits

Thursday, April 12th, 2012

Bob Kamandanu (right), Chairman of the Indonesian Coal Mining Association

Energy from your own backyard

Switching to a cleaner power source

Thursday, April 12th, 2012

Coal still has a viable future

Distributed by USA TODAY

Distributed by USA TODAY

Thursday, April 12th, 2012

Thursday, April 12th, 2012

MP3EI: A coherent plan for well-distributed growth

Distributed by USA TODAY

Distributed by USA TODAY

Thursday, April 12th, 2012

Driver for national industry and services provision

Center for Development of Food, Fisheries, Energy, and National Mining

Gateway for tourism industry and national food support

Finding unity in diversity

Thursday, April 12th, 2012

SEA Games showcase South Sumatras investment potential

Distributed by USA TODAY