China to offer $4 billion for Indonesian infrastructure

China to invest up to $200 million to build a cement factory on Indonesia’s Papua island and may invest in power plants there.

China Investment Corp plans to offer $4 billion of loans for Indonesian infrastructure, part of a package of deals Indonesia is hoping for during a visit this week by Chinese Premier Wen Jiabao, Indonesian officials said on Thursday.

The plans by the $300 billion wealth fund are likely to be announced during a two-day visit to Indonesia by Wen, due to arrive in Jakarta later on Thursday in an effort to boost bilateral trade and gain access to the archipelago’s resources.

“CIC plans to provide about $4 billion in the form of loans to Indonesia’s infrastructure projects…and the loans are supposed to be for Indonesian firms,” Gita Wirjawan, Indonesia’s investment chief, told Reuters.

In addition, Bank of China and and Industrial and Commercial Bank of China plan to lend several billion dollars to Chinese firms for investing in Indonesian industry, Agus Tjahajana of the industry ministry, told Reuters.

Indonesia is trying to attract over $100 billion from investors to overhaul poor infrastructure among its 17,000 islands, while China is on a global hunt to secure long-term resource supplies to fuel its fast-growing economy.

So far Chinese infrastructure investment in Indonesia has lagged that from other Asian countries such as Japan, South Korea and India, though China is the largest trading partner for Indonesia, the world’s top exporter of coal for power plants.

Wirjawan said China’s State Development and Investment Corp, a state-owned investment holding firm, also plans to invest up to $200 million to build a cement factory on Indonesia’s Papua island and may invest in power plants there.

This would be the first cement factory on Papua, cutting construction costs in a province lacking infrastructure but home to the world’s largest gold mine, huge natural gas deposits and forests that the government wants to turn into food plantations.

Source: Reuters

Govt committed to keeping Papua`s forest regions intact

“They can`t use the thickly forested areas, they instead can use the logged over areas but then they chose to withdraw”

Forestry Minister Zulkifli Hasan said his ministry remains committed to keeping Papua`s primary forest regions intact and not letting them be exploited by forest concession holders.

The minister made the statement in a media dialogue on forestry policies held by ANTARA News Agency on Tuesday.

He said there had been requests for opening the forest regions in Papua for non-forestry activities but the government was resolved to keep intact the 7.3 million hectares of primary forests in the province.

Some 26 million hectares of forest areas in the country are already controlled by forest concession holders. We intend to keep this as it is, “there will be no expansion of the forest concession area. Should there be parties intending to sue (the government for not issuing new permits), they are free to do so,” Minister Hasan said, adding the non-expansion policy was being implemented nationwide including in Papua.

Hasan said there has also been a proposal for the appropriation of 1.3 million hectare of forest area for the development of the Merauke Integrated Food and Energy Estate (MIFEE) in Papua but the government has approved for only 600,000 hectares.

On the approval given to the MIFEE project or industrial forest estates, Minister Hasan said priority is given to such projects because the government focuses on enhancing food resilience in accordance with the economic development corridor as directed by President Susilo Bambang Yudhoyono.

In addition to MIFEE, he said, there are 19 other proposals in Papua on the exploitation of industrial forest and forest areas for non-forestry activities. However, many have withdrawn their proposals after having been given explanation that such activities could not be carried out in primary forest areas.

“They can`t use the thickly forested areas, they instead can use the logged over areas but then they chose to withdraw,” said Minister Hasan.

The government, he added, hopes that the remaining proposals would not be withdrawn because there are at least 40,000 hectares (logged over areas) can be utilized for supporting the sugar self-sufficiency program.

For industrial estate forest, Hasan said the treatment is the same for proposal on oil palm plantation and other non-forestry needs. For such purposes, the activities can take areas outside primary forest or peat land areas.

At least Indonesia has 12 million hectares of deserted forest or logged over forest areas, the minister disclosed.

Source: ANTARA News

Fiji uses Melanesian Spearhead Group and approaches Indonesia to end pariah status

Co-operation among Pacific islands will be tested by Frank Bainimarama’s leadership of the group

There aren’t many international summits where the leaders sit down to a round of sedatives before settling into formal talks. But getting together around the kava bowl in laid-back Pacific style is their way of reaching consensus.

So it was at the 18th Melanesian Spearhead Group (MSG) summit in Fiji, the beginning of a new era for the sub-regional grouping under the direction of a regime branded the pariah of the Pacific.

The summit in Suva was a show of strength for the host, Fiji’s military ruler, Commodore Frank Bainimarama. Bainimarama has been waging with Australia and New Zealand since the 2006 coup in which he seized power.

Australia, New Zealand, the US and the EU continue to enforce sanctions against Fiji, which is also suspended from the Commonwealth and the Pacific Islands Forum over the regime’s failure to meet a deadline for democratic elections. But Bainimarama shows no signs of loosening his grip on Fiji and is portraying the MSG, with him at its helm, as the new leadership of the Pacific islands region.

It also means looking for new friends to help shore up Fiji’s tottering economy and Bainimarama has been busy strengthening ties with Asian powers. Fiji’s need has driven the move in the MSG to grant Indonesia observer status, a decision that strikes at the heart of the Melanesian people of Indonesia’s Papua region.

It’s been described as a major test of the sub-regional grouping’s credibility due to the sensitive issue of West Papuan. Despite years of lobbying for MSG observer status by West Papuan leadership groups, they have not yet been granted a seat at the table even though New Caledonia’s Melanesian Kanaks are already accepted as full members and not the government of France.

Papua New Guinea’s foreign minister, Don Polye, suggested at the Suva meeting that “Indonesia is willing to speak with members of the MSG in close proximity on that issue”.

Could the new approach be a positive step? The co-ordinator of the Papua Peace Network, Pastor Neles Tebay, told Radio New Zealand International that the move was acceptable if it helped to encourage Indonesia to seek a peaceful solution to the conflict.

It has already proven the key issue behind the toppling of Sato Kilman’s government in Vanuatu, where the MSG approval of Indonesia has proven deeply unpopular.

Bainimarama describes greater Melanesian regional co-operation as imperative for achieving his vision of a prosperous Pacific. It involves an expansion of the MSG trade agreement and a labour mobility scheme to take advantage of the thousands of jobs on offer in Papua New Guinea’s massive ExxonMobil-led liquified natural gas project.

And in a sign that the Pacific Forum’s suspension of Fiji is losing ground, MSG leaders are demanding Fiji’s re-inclusion in key regional economic and trade discussions. This includes trade talks with the EU as part of the African, Caribbean and Pacific (ACP) group of countries.

The MSG is also planning far greater co-operation in security matters. A proposed Humanitarian and Emergency Response Force will be trained to respond to threats to regional and international borders, and to tackle natural disasters and internal conflicts within Melanesian countries.

“We don’t want to be caught unaware in a crisis situation,” says Polye. “It’s wise to have a proactive force ready to address security concerns rather than a laid-up approach when a crisis strikes. It’s not a new concept – previously we’ve had the police and military force in Bougainville and recently with the Regional Assistance Mission in the Solomon Islands.”

However, in those cases the security forces were almost totally drawn from Australia and New Zealand. The new regional security force will be all Melanesian.

Bainimarama’s recent trip to Indonesia may have provided a clue. As well as Indonesia’s president, he met with the chief of the National Armed Forces (TNI), Admiral Agus Suhartono, and has invited the TNI to use Fiji’s jungles for military training. He says the TNI has a lot to offer the Fiji army in terms of training and has increased the number of officers sent to Indonesia for training.

Source: Guardian