Day: January 9, 2017

Mining Policy & Political Test for Jokowi

Jokowi-Kalla administration starts the new year of 2017 with a major political test. In less than 48 hours, they have to make decision on the crucial and politically sensitive issue. Under the existing laws and regulations, export of semi-processed minerals expires January 11. The government’s decision will not only affecting Freeport Indonesia and Amman Mineral Nusa Tenggara (new name of Newmont Nusa Tenggara). It may define the future of Jokowi’s administration.

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The Bakamla Corruption Case

The Corruption Eradication Commission (KPK) conducted a Sting Operation (OTT) on December 14, 2016. Four individuals were arrested and named as suspects the following day. The Deputy for Information, Law and Cooperation in the Maritime Security Agency (Bakamla) and an active Prosecutor Eko Susilo Hadi were the alleged bribe receiver. Three weeks later, the Military Police Center of the Indonesian National Army (Puspom TNI) named First Admiral Bambang Udoyo as the new suspect of the bribery case. To date, the KPK and Puspom TNI have examined dozens of witnesses.

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West Java’s 2018 Gubernatorial Election

West Java is another province that will take part in the 2018 simultaneous regional elections—which will be held in June 2018. The West Java 2018 gubernatorial election is worth monitoring because the province is the largest in the country in terms of size of population. The executive position in West Java has been occupied by PKS for almost ten years. PKS leader Ahmad Heryawan aka Aher has served as the Governor of West Java for two terms (2008-2018). And so like Governor Soekarwo in East Java, Aher will no longer be able to run in the 2018 gubernatorial election. PKS must therefore find another strong figure to nominate as their governor candidate.

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East Java’s 2018 Gubernatorial Election

Even though the 2018 simultaneous regional elections—which are scheduled to be held in June 2018—are still 17 months away, the stages leading to the elections, including the nomination of governor and vice governor candidates will begin this year. So, let’s look at the dynamics in East Java, one of the provinces that will participate in 2018 simultaneous regional elections.

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Infrastructure Journal No. 01/2017

Infrastructure development would remain Indonesia’s main story to tell for 2017. As some of major infrastructure projects entering final phase of construction, the chance is bigger to see investments start coming into the country. Improved quality of infrastructure is expected to reduce logistic costs. Tourism industry, which contributes 11% of Indonesian GDP, is also expected to grow faster.

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AKR Corporindo v. Kapuas Tunggal Persada

PT AKR Corporindo Tbk (AKRA), the largest distributor of fuel in the private sector, filed a bankruptcy lawsuit against its business partner PT Kapuas Tunggal Persada (KTP), the subsidiary of PT Mutiara Bara Energy. The lawsuit reportedly stemmed from a debt dispute worth Rp19.63 billion. This is the second bankruptcy lawsuit the Company filed against it’s business partners in the past year.

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Investment Update

The Investment Coordinating Board (BKPM) aims to book Rp678 trillion in investment this year, up 14% from last year’s target, along with the government’s effort to maintain positive economic fundamentals. Indonesia has the momentum to grow the economy amid tight competition against other countries to attract foreign investments.

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Market Snapshots & Corporate Actions

Trading in stocks would increase this week as investors are back from the long holiday (Christmas and New Year). Last week, trading was light, with value reaching Rp5 trillion per day at average. The stock market also lacked catalysts; its direction was mainly affected by regional and global market sentiments.

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Toll Road Projects: Harvesting Year

After two years of push and push, 2017 shall be harvesting year, not only for the developers but the country in general, including President Jokowi’s political profile. Progress of these projects could boost long-term prospect of the country amidst persistent weakness of commodities. A total of 392 KM of new toll roads will likely enter commercial operation in Java and Sumatra, which is expected to cut logistic costs for manufacturers and improve domestic tourism industry.

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