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Indonesia, which has seen a flood of foreign investment this year, is edging closer to securing an investment-grade ratings status for the first time since the Asian financial crisis in 1997-1998.
Standard & Poor's on Friday revised its outlook on Indonesia's sovereign debt rating to positive from stable, citing expected improvements in the country's debt profile following economic reforms.
A fund manager at PIMCO said in a report that Indonesia could regain its high-grade status in 3-4 years as long as government policies focus on long-term growth.
An high-grade rating would mean increased investment by funds that, according to their mandate, can only buy high-grade rated debt.
For S&P and Fitch, the lowest investment-grade credit rating before junk is BBB-minus. For Moody's it is Baa3.
History of Indonesia's sovereign debt ratings…(see the source)
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S&P ups Indonesia rating outlook to positive – Alibaba News/Reuters
Pimco Says Indonesia May Win Investment Grade Rating - Bloomberg
Source (click to view full story): MoneyWeek
Just over a decade ago, Indonesia was considered "a basket-case", says The Economist. It faced economic collapse after the Asian crisis hammered companies overexposed to foreign-currency debt and caused the banking system to implode. Meanwhile, political chaos also appeared on the cards.
But now Indonesia has become a "stable, largely peaceful" democracy. It is also widely seen as an extra 'I' in the Bric (Brazil, Russia, India and China) group of fast-growing emerging markets. Along with rising global risk appetite, this helps explain why the Jakarta Composite index is Asia's best-performing market this year, up 123% in dollar terms.
Indonesia is helped by the fact that, unlike in most Asian countries, growth is propelled largely by domestic demand – exports comprise just 25% of GDP. This appears to be picking up again, with bank loans up 14.6% year-on-year in July. Sound management over the past few years has also put the economy on a more solid footing.
Keeping a tight lid on spending has helped lower debt quickly: public debt has fallen from 80% in 1999 to just over 30% by the end of last year. Companies have trimmed borrowings too: corporate debt is down from almost 50% of GDP to 15%. Lower debt has also reduced interest rates across the economy, cutting the cost of borrowing to invest.
That bodes well for the long term, and there are further reasons for optimism. Indonesia is resource-rich, with exports including palm oil, cocoa, coffee, coal and oil….
Source: (click to view full assessment): The Economist
Optimism abounded when Susilo Bambang Yudhoyono (pictured) was re-elected Indonesian president in July in a landslide. Analysts at home and abroad hoped he would use his strong mandate to appoint a more reform-minded cabinet for his second five-year term. No longer would the former general be beholden to venal political parties. Competent technocrats would take over to drive the nation on, lifting its annual growth rates from an average of 5-6% in his first term to his target of 7%. Boosting optimism, his Democratic Party had soared on his coat-tails to become the biggest party in parliament.
Mr Yudhoyono, however, has been reading a different script. Twenty out of the 37 cabinet-level appointments the president announced on October 21st are from parties that have promised support in parliament. Hardly any of these are seen as experienced managers, let alone competent ones. A conspicuous number have no background relevant to their portfolios.
As in his first five years, the president looks as if he will rely on sound, strong, technocrat-led monetary and fiscal policy and hope it will translate into higher rates of growth. But that did not really happen in the more benign global environment of his first term, so it is hard to see why it should now. Simply muddling along in areas such as infrastructure, education, health, agriculture and mines and energy might keep Indonesia’s economic growth at present, respectable levels. But it is unlikely to help South-East Asia’s largest economy catch up with faster-growing China and India. With luck, the legacy of the Yudhoyono decade may be a strengthened democracy; it seems unlikely to be a transformed economy…
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Source (click to view full report): PacNet #69 - CSIS Center for Strategic and International Studies
By Alphonse F. La Porta
Indonesian President Susilo Bambang Yudhoyono, familiarly known as SBY, will be inaugurated for a second term on Oct. 20, 2009. As the first democratically elected president and the first to be elected to a second term, SBY has opportunities that no other Indonesian leader has had. Yudhoyono can achieve greatness in domestic and international terms and lead his country into a new era of committed democracy.
Source (click to view full story): Xinhua News
Indonesian President Susilo Bambang Yudhoyono was sworn in for his second term of 2009-2014 in a respect inauguration ceremony attended by several friendly heads of states and foreign country special envoys.
Vice President Boediono was also sworn in the ceremony, which was chaired by the Upper House's chairman Taufik Kiemas and attended by 647 members of the institution.
Following the opening speech, an official from the General Elections Commission read the agency's ruling related to the result of the elections.
"We decided that the pair of Susilo Bambang Yudhoyono achieved 73,874,562 votes or 60.80 percent of total 121,504,581 votes," said the official.
As part of the inauguration ceremony, Yudhoyono and Boediono took oaths as president and vice president.
"For God's sake, I swear that I will do my jobs as best and fair as possible. I will strongly conduct mandate from the 1945 Constitution and other rules and I will be loyal to the nation and the country," said Yudhoyono.
The oath was followed by Vice President Boediono with the same sentences.
After signing the official report of the inauguration, Yudhoyono gave his speech as the president for his second term of 2009-2014…
Source (click to view): Xinhua News
Indonesian President Susilo Bambang Yudhoyono confirmed that his rival party in the presidential election, the Golkar Party, has joined coalition of political parties that support him in his second term ending in 2014, local media reported here Thursday.
Speaking in a press conference held in his private residence in Cikeas, West Java, on Wednesday night, the president said he has received the pledge of Golkar Party's newly-elected Chairman Aburizal Bakrie to stay in the cabinet and coalesce with Susilo's Democratic Party in the parliament.
"As of tonight our coalition has consisted of six parties," he was quoted by the Jakarta Post as saying.
The parties he mentioned include the Democratic Party, the Golkar Party, the National Mandate Party (PAN), the Prosperous Justice Party (PKS), the United Development Party (PPP) and the National Awakening Party (PKB).
The president said he was yet to receive coalition commitment from the other rivaling political parties in the July 8 presidential election.
"I respect the PDIP (Indonesia Democratic Party of Struggle), Gerindra (Great Indonesia Movement Party) and Hanura (People's Conscience Party), who have chosen not to coalesce with us, though I heard not all of them will become an opposition," he said.
With the support of six political parties, the president camp in the parliament would occupy 422 of the 560 seats in the parliament.
Susilo Bambang Yudhoyono is scheduled to be sworn in as Indonesia president for the period of 2009 - 2014 on Oct. 20. He will announce his cabinet members on Oct. 21.
SEE ALSO:
Indonesia's Democratic Party secures 3 chairmanships of 11 commissions in parliament – People’s Daily
Source (click to view): Xinhua News
Of 66 countries across the world, Indonesia's Information Technology (IT) competitiveness rating downed to 59 this year from 58 last year, according to the result of a survey released here on Wednesday (Oct 14).
The result of the survey, that was carried out by Economist Intelligent Unit (EIU) and Business Software Alliance (BSA), also disclosed that Indonesia only obtained an index score of 22.8 in the survey, made it ranked at number 15 in the Asia Pacific region.
"The index score of most Asia Pacific countries were apparently down if compared to the scores they obtained last year," Claro Parlede, BSA Software Policy Director for Asia Pacific region was quoted by the Detik.com as saying.
Australia, Singapore, Japan, Taiwan and South Korea were regarded the most IT competitive in the Asia Pacific region, the survey result said.
With index score of 68.7, the United States still tops the rank in the survey that has been conducted in the last three years.
Source: (click to view): eTravel Balckboard, and www.Wotif.com
Wotif Group, operator of leading online travel brands in the Asia Pacific region, last Friday (9 October 2009) held their inaugural Indonesia Hotel Awards in popular island destination, Bali.
Set to be held annually, the Wotif Group Indonesia Hotel Awards aim to recognise top hotel partners who have attracted the most travellers through the Group's accommodation sites - Wotif.com, AsiaWebDirect.com and LateStays.com - in the past twelve months. The Awards ceremony was a resounding success, with over 60 hoteliers and hotel executives gathered at a champagne breakfast event at the Oceans 27 boutique lounge on Kuta's beachfront to celebrate the successes of their peers.
Sii Eawsakul, Wotif Group's Executive General Manager for Asia, said, "Despite turbulent events in recent months, Indonesia, with Bali in particular, is a highly resilient market with great growth potential. We are thrilled at this opportunity to demonstrate our confidence in the country's travel industry, and our appreciation for our hotel partners."
"Indonesia remains a key growth market for Wotif Group, and we are set to ramp up our presence in the country with the opening of a new office in Bali very soon. We continue to support our hoteliers' marketing efforts by promoting Indonesia as a tourism and travel destination, and by working closely with them to offer ever more attractive deals to the more than 7.5 million consumers who visit our sites every month," she added.
Award categories included Top Achievers - hotels who produced the most room nights for the three Wotif Group brands - and Top Producers - hotels who generated the most revenue from the Wotif Group brands*. The winners were:
Top Achievers FY 08/09 (room nights)
1. The Bali Dream Villa
2. Aston Bali Resort & Spa
3. Febri's Hotel & Spa
Top Producers FY 08/09 (revenue)
1. The Bali Dream Villa
2. Aston Bali Resort & Spa
3. The Sanyas Suite
Awards were also presented to Best Newcomers for each brand - signifying hotels that had signed up on a Wotif Group brand during the year and generated the most room night sales per month since listing. Indonesia's Best Newcomers were:
Wotif.com Best Newcomer FY 08/09
Padma Resort Bali at Legian
LateStays.com Best Newcomer FY 08/09
The Bali Dream Suite Villa
Asia Web Direct Best Newcomer FY 08/09
Melia Benoa
Compiled from various sources (click to view): Japan Today, and Times Online. Photo: detik.com
A Japanese porn star has canceled a trip to predominantly Muslim Indonesia to act in a no-nudity comedy after sparking outrage from religious groups, producers said Wednesday.
Maxima Pictures pulled plans to film “Kidnapping Miyabi” in Indonesia and is scouting for an alternative location, said executive producer Yoen K.
Maria Ozawa, popularly known as Miyabi, was scheduled to arrive Wednesday (Oct 14) to begin production. The 23-year-old was “sad and disappointed to hear so many people opposed her visit,” he said.
Over the years various foreigners have been banned from entering Indonesia, but Maria Ozawa does not look like an obvious candidate for the blacklist.
A shapely 23-year old of mixed Japanese and Canadian parentage, she is not a terrorist, journalist, or a convicted criminal. But Ozawa has been forced to cancel her arrival in Jakarta today in a row that has drawn in Islamic fundamentalists, feminists and plenty of people in between.
Better known by her acting name Miyabi, Ozawa is one of Asia’s most successful pornographic film actresses. Although little known in the West, she has surpassed even acting legends such as Pamela Anderson as the most searched for celebrity on Indonesia’s internet version of Google. But news of her plans to work in Indonesia have stirred up angry protests from conservative Islamic organisations in the latest round in an ongoing debate about sexual morality.
Ironically the film project which was to have brought Ozawa to Indonesia was one that required her to keep on all her clothes. She had been invited by the producers of Kidnapping Miyabi, a comedy about a group of teenagers obsessed with Ozawa’s work who “accidentally kidnap” her as she is attempting to escape from a mob of fans. The screenplay ends happily with the adult star settling down in Jakarta, where she opens a lingerie shop.
Yoen said discussions were ongoing with religious organizations, but added it was wrong to prevent someone from acting in film, rather than judging the final product.
One of the most vocal opponents has been the influential Indonesian Ullema Council, a board of Muslim clerics, which has consistently opposed Ozawa’s visit over fears it will damage the country’s image.
“Come or not, we continue to reject her,” said Ma’ruf Amin, a prominent member of the council, known by its Indonesian acronym MUI. “We will continue to reject her even if she will not be nude.”
The cancellation comes weeks after Indonesia’s parliament passed a law ordering filmmakers to uphold “religious, ethical, moral, and national cultural values.” Movie makers are concerned a new censorship body outlined in the law will bring back the days of extreme censorship under the Suharto dictatorship, which was toppled more than a decade ago.
Indonesia’s population of 235 million is largely socially conservative, but not everyone agreed with the clerics that keeping out porn stars is a good thing.
Around a dozen Muslim students staged a rally in the capital of South Sulawesi, Makassar, on Wednesday, saying Ozawa’s human rights were being violated.
“As long as she will not appear in any porn action, there is no reason to ban her visit to Indonesia,” said Ubaidi, a protester at the Indonesian Muslim University campus.
“Everyone has the right to come and earn a living in Indonesia,” he said. “Just take care of your own morals, don’t intervene in Miyabi’s business.”
The resulting brouhaha may have the opposite effect to that intended, however. According to the Japanese Kyodo news agency, sales of pirated Miyabi DVDs have surged in Jakarta’s Glodok market .
Source (click to view): CNN Business Blogs/ Pauline Chiou
Five years ago, Garuda Indonesia was an airline that seemed to be on a path of constant turbulence. It was losing money year after year, battling allegations of corruption within the state-owned enterprise and stained with a questionable safety record. Today, Garuda is a symbol of what’s possible in the difficult airline industry. You need a leader with focus.
Emirsyah Satar, 50, is the CEO of Garuda. Now in his fifth year as the head of the national airline, he has turned Garuda from problematic to profitable through staged planning. “In the first two years, just surviving was good enough. And then the next two years was the turnaround stage,” he said. Now the airline is embarking on the growth stage.
The son of an Indonesian diplomat who grew up in Mexico City and Prague, Satar went on to become a banker and then the CEO of Bank Danamon, Indonesia’s fifth largest bank. In 2005, he was brought to Garuda as President and CEO and he made drastic changes from the start.
“What happened in 2005, the business model was just not working,” Satar said. It increased accountability at all levels in the organization. And in the short term, Satar decided less was more: “We got out of routes where we were losing money … it was ok if we reduced our market so we could become profitable again.”
He positioned Garuda as a “premium airline” and told his staff not to worry about local competition. With a domestic population of 240 million people, he bet focus on the cream of the crop would keep Garuda afloat while it restructured. His bet paid off, in part because Indonesia sidestepped the brunt of the global downturn thanks to the strength of its domestic market: Indonesia’s economy is still growing at around 4 percent.
While Garuda is still juggling $700 million in debt, the state-owned enterprise has been able to turn a profit the past two years. Satar has plans to make what he calls a “quantum leap.” By 2014, he wants to bring the fleet from the current 66 to 116 aircraft.
The big challenge now is getting a stalled IPO back on track. Satar had wanted to bring Garuda public this year, but the global downturn put a halt to that. Now he’s shooting for an IPO for June 2010. The airline is also in the process of restructuring its debt, which Satar hopes to have completed by the end of this month.
Then there was the issue of safety. In the past decade, a string of crashes involving various Indonesian airlines eroded the public trust in Indonesian air safety. In March 2007, a Garuda plane overshot a runway in Yogyakarta and crashed, killing 21 people. In June 2007, the European Union banned all Indonesian airlines in European airspace. Satar hired an American consultant and and cracked down on safety issues. In July of this year, the EU lifted the ban on certain airlines included Garuda.
The airline now plans to get into the long-haul market, starting with an Indonesia-Amsterdam route by June 2010. That will be followed by routes to Frankfurt, London, Paris, Rome and eventually in 2012, Los Angeles.
“We (Garuda) travel to Australia, Japan, Korea, China and these people still travel. And Bali is still a good attraction,” Satar said.
