The Netherlands Sends Largest Ever Trade Mission to Indonesia

This week, a group of Dutch politicians and businessmen, led by prime minister Mark Rutte, will pay a four day visit to Indonesia.

The aim of the visit is to smoothen bilateral relations and search for business opportunities between both countries.

This Dutch group, which includes more than one hundred Dutch company delegates, forms the largest Dutch trade delegation that has visited Southeast Asia’s biggest economy in the modern history.

However, relations between the Netherlands and Indonesia are still complex today.

Obviously, the complexity of relations between both countries traces back to the colonial period, which brings along more emotions, in particular on the part of Indonesia.

Last year, commotion emerged after the Dutch parliament refused to sell army tanks to Indonesia because the Indonesian government might use these against its own people. This then became a laughing stock for Indonesians who pointed to the colonial past.

Moreover, in 2010, Indonesian President Susilo Bambang Yudhoyono cancelled a trip to the Netherlands at the last minute because the Dutch government could not guarantee Yudhoyono’s inviolability regarding a lawsuit filed by the government-in-exile of the Republic of South Maluku (RMS). The RMS issued legal proceedings to have Yudhoyono arrested upon entering the Netherlands.

Indonesia is a highly promising market. The country contains a large population (over 240 million people) with a rapidly expanding middle class.

Per capita GDP has been increasing strongly in recent years, implying that the expanding middle class segment has more and more money to spend.

Regarding commodities, Southeast Asia’s largest economy contains an abundance and variety, including palm oil, coal, nickel, rubber, and cocoa.

Despite the political sensitivities, trade relations between both countries have been growing robustly.

In the last three years, bilateral trade rose 25 percent to approximately €3.5 billion in 2012. As such, Indonesia is the fastest growing export market for the Netherlands in Asia.

However, there is still ample room for further growth and that is why the Dutch trade delegation, which includes Shell, Unilever, Philips and ING, is heading for Indonesia this week.

Source: indonesia-investments

Breakthrough imminent in Indonesia: O’Neill’s plan to defuse standoff over West Papua

By Rowan Callick === A breakthrough may be on the way for one of the most intractable conflicts in the Asia-Pacific region. Relations between Indonesia and the Melanesian nations, led by Papua New Guinea, have remained awkward ever since the Dutch withdrew from “Netherlands New Guinea,” and the Pacific islands became independent states.

The plight of “West Papua” as it is often called, has prevented Indonesia, the biggest and closest country in South-East Asia, from building the links that might otherwise have been expected, with the island countries to its east—even since it became a liberal democracy 15 years ago.

But, the PNG government, led by Prime Minister Peter O’Neill, has recently launched an initiative aimed at defusing the stand-off over West Papua, building the economy of the centre of New Guinea island, and gaining diplomatic spin-offs.

The western half of New Guinea island comprises two Indonesian provinces: Papua, whose capital is Jayapura, and West Papua, whose capital is Manokwari. It has a 750-km mostly mountainous and often in the past fraught and dangerous border with PNG.

In 2001, the area now covered by the two provinces was declared autonomous with 80 percent of its tax receipts to be retained for local use. But this process has remained only partially complete compared with the more successful governance situation in Aceh, at the other end of the Indonesian archipelago.

O’Neill, who led a delegation to Jakarta for talks with President Susilo Bambang Yudhoyono, said: “West Papua has been a sticky issue for PNG and the western Pacific for quite some time. Our role is to open up discussions.

Genuine desire
“We feel the government of Indonesia has a genuine desire to ensure issues relating to West Papua are managed in a mutually beneficial manner. For the first time in our bilateral discussions, we were able to discuss this openly with the Indonesian government,” said PM O’Neill.

He said he is convinced that Yudhoyono now wishes to withdraw military presence from West Papua, and allow for more autonomy through economic empowerment of the people.

“We feel this is a good opening for us to engage with the Indonesian government so we can participate in the improvement of the lives of Melanesian people there and of our own people along the border. Our officials are now engaged meaningfully in establishing the cooperation we agreed,” he said.

PNG’s Foreign Minister Rimbink Pato elaborated on the deal that was informally struck: “The Indonesian president will adopt a softer approach to West Papuan issues, allowing them greater autonomy.”

As an indicator of this, official representatives will participate in the Melanesian Festival of Arts and Culture to be hosted by PNG next year.

He said Indonesia would allow Papua New Guinea communities near the border to draw on its excess hydro power capacity with state-owned enterprise PNG Power buying electricity for its grid from Indonesia, and that the two countries would jointly explore for oil and gas in highly prospective targets that straddle the border.

Indonesia, Pato said, would fund an ambitious paved highway from Merauke on its side of the border in the south, to PNG’s Wewak on the northern coast.

The countries’ leaders signed a total of 11 MOUs during O’Neill’s visit, after which Pato and his Indonesian counterpart Marty Natalegawa began to chart an implementation course.

Extradition treaty
They agreed on an extradition treaty—which may ensure that Indonesian businessman fugitive Joko Chandra—wanted for corruption and who obtained PNG citizenship under a process that is being challenged legally—returns to face charges.

Another agreement under final negotiation, will permit planes to fly from Nadi, Fiji, through Honiara in Solomon Islands, then Port Moresby, and on to Bali.

One goal of the warming of relations, Pato said, was to prevent any resurgence of asylum-seekers from the Indonesian side of the border. About 8,000 refugees remain in PNG, living in camps in Western province run by the UN High Commissioner for Refugees following earlier conflicts, many of them seeking refuge more than 25 years ago.

The discussions between PNG and Indonesia have led to the latter inviting the foreign ministers of the four Melanesian states — Solomon Islands, Vanuatu and Fiji, as well as PNG, who form the “Melanesian Spearhead Group” (MSG) — to visit its Papua and West Papua provinces.

O’Neill flew for talks with Yudhoyono instead of attending an MSG leaders’ meeting held at the same time in New Caledonia.

While PNG is helping to usher its fellow Melanesians in towards better relations with Indonesia, Indonesia in return is backing Port Moresby’s membership of the Association of South East Asian Nations (ASEAN).

ASEAN has 10 members at present — and PNG feels it is entitled to join it because it has such a long land border with the group’s largest state.

Indonesia is also backing PNG’s bid to host the 2018 summit of the APEC forum — which would bring the American and Russian presidents, among other leaders, to Port Moresby — which will be decided at the next summit in Bali in October.

“It’s important for us to have such a relationship with Indonesia,” said Pato — who points out that in previous years, tensions not only unresolved but not even fully discussed about West Papua had prevented the full development of positive, mutually beneficial arrangements between the countries.

Now a joint committee of ministers from the countries has been formed to tackle the details and ensure the MOUs are implemented, he said — starting with the joint economic projects.

Source: Islands Business

Indonesia’s President welcomed by British queen

Quen Elizabeth II: “I am confident that if we work together on our shared aspiration to build a prosperous world based on fundamental freedoms, the partnership between the United Kingdom and Indonesia will continue to flourish.”

Britain’s Queen Elizabeth II welcomed Indonesia’s President Susilo Bambang Yudhoyono on Wednesday for a state visit aimed at boosting ties with the emerging Asian power, with the help of some traditional pomp and pageantry.

The queen hosted a lavish banquet at Buckingham Palace in honour of Yudhoyono and his wife Ani, after formally welcoming them for the three-day visit with a guard of honour and a ride in her ceremonial carriage.

In a speech to the 177 dinner guests in the palace ballroom, the 86-year-old British monarch praised the strong relationship between the two countries and spoke of their “common values”.

“I am confident that if we work together on our shared aspiration to build a prosperous world based on fundamental freedoms, the partnership between the United Kingdom and Indonesia will continue to flourish,” she said.

She described Indonesia as having undergone a “remarkable transformation” since Yudhoyono came to power in 2004.

“It is now a thriving democracy and one of the world’s fastest growing economies,” said the queen, who visited Indonesia in 1974 with her husband Prince Philip.

“Your visit marks a further step in strengthening our relationship.”In his own speech, delivered in Indonesian, Yudhoyono said the two countries “have many things in common, including in efforts to strengthen democracy”.

“I wish to reaffirm my country’s readiness to establish close cooperation with the United Kingdom,” he told the assembled guests, who included British Prime Minister David Cameron, other ministers and members of the royal family.

The guests were served Scottish halibut followed by a main course of chicken with baby artichokes and fondant potatoes, and a desert of iced green apple with a mulberry parfait made with fruit from the palace garden.

The queen wore a gold dress with a diamond necklace passed down to her from Queen Victoria, her great-great-grandmother.

She had earlier welcomed the Yudhoyonos with a military ceremony on Horse Guards Parade, the large parade ground in central London, where the visiting leader inspected the troops in their scarlet uniforms and bearskin hats.

The queen and Prince Philip then accompanied them in a horsedrawn state carriage procession along the Mall to Buckingham Palace, where the visiting couple are staying during their trip.

Yudhoyono will hold talks with Cameron on Thursday and attend a meeting of the high-level United Nations panel that is drawing up a strategy on how to build on the Millennium Development Goals.

Yudhoyono, who is the world’s only head of state to have served as a UN peacekeeper, will also give a speech at the Royal College of Defence Studies.
The 15th-century Guildhall, in London’s financial district, will host a second banquet on Thursday night.

Several trade announcements are expected during the three-day trip, with Britain keen to gain access to Indonesia’s fast-growing economy and 240 million consumers.

The state visit is part of Britain’s drive to boost its diplomatic presence in Southeast Asia, with Indonesia regarded by British officials as the most influential player in the region.

As the world’s largest Muslim-majority country, it is also seen as a strategic ally in the Islamic world.

Britain usually hosts two state visits each year, but Yudhoyono is the only foreign head of state to receive the formal hospitality in 2012 following months of diamond jubilee celebrations marking the queen’s 60th year on the throne.

The last state visit was by Turkish President Abdullah Gul in November last year.

Source: AFP

Indonesian president in Britain for state visit

Indonesia’s President Susilo Bambang Yudhoyono begins a three-day state visit to Britain on Wednesday, with officials keen to impress the emerging Asian power with a display of pomp and pageantry.

Queen Elizabeth II is scheduled to formally welcome Yudhoyono and his wife Ani on Wednesday afternoon with a guard of honour on Horse Guards Parade, before accompanying them to Buckingham Palace in a horse-drawn carriage.

The Indonesian leader and his wife will stay at the palace, where the 86-year-old monarch is hosting a lavish state banquet in their honour on Wednesday evening.

“As well having one of the world’s most thriving economies, Indonesia is in the vanguard of the political change shaping Asia,” Foreign Secretary William Hague told parliament on Tuesday.

“This visit will be an opportunity for us to build on the strong partnership established over the last decade.”

The president will hold talks with Prime Minister David Cameron on Thursday and attend a meeting of the high-level United Nations panel that is drawing up a strategy on how to build on the Millennium Development Goals (MDGs).

Yudhoyono, who is the world’s only head of state to have served as a UN peacekeeper, will also give a speech at the Royal College of Defence Studies.

The 15th-century Guildhall, in London’s financial district, will host a second banquet on Thursday night.

Several trade announcements are expected during the three-day trip, with Britain keen to gain access to Indonesia’s fast-growing economy and 240 million consumers.

The state visit is part of Britain’s drive to boost its diplomatic presence in Southeast Asia, with Indonesia regarded by officials as the most influential player in the region.

As the world’s largest Muslim-majority country, it is also seen as a strategic ally in the Islamic world.

“Indonesia is far and away the most important country in ASEAN,” said a Foreign Office source.

Officials also see Indonesia as a potential future host for foreign campuses of its universities, similar to Malaysia where several British universities including Nottingham, Southampton and Newcastle have outposts.

Britain usually hosts two state visits each year, but Yudhoyono is the only foreign head of state to receive the formal hospitality in 2012 following months of diamond jubilee celebrations marking the queen’s 60th year on the throne.

The last state visit was by Turkish President Abdullah Gul in November last year.

Source: MSN News

UK’s trade delegation visits RI

A delegation comprising UK companies visit Indonesia this week to explore business opportunities, particularly in developing partnerships with state firms and private companies in the country’s power and energy sector.

The delegation, led by Ali Sherwani, business development head at UK Export Finance, the UK government’s export credit agency, will stay in Indonesia from Tuesday to Friday in a bid to strengthen the bilateral trade and investment relations between the two countries.

“UK companies recognize the size and strength of the Indonesian economy and are very keen to develop long-term, productive and collaborative partnerships with their Indonesian counterparts,” Ali said in a statement made available to The Jakarta Post.

UK is currently one of the leading investors in Indonesia. A number of UK-based world-class companies have been investing their money in the Southeast Asia’s largest economy.

One of the companies is the oil and gas giant firm BP. Plc., who owns a a massive gas project located in the Bintuni Bay area in Papua, where total proven gas reserves amount to some 14.4 trillion cubic feet.

Source: The Jakarta Post

US and Indonesian navy warships conduct joint exercise

The US navy warship USS Benfold conducted an exercise with two Indonesian navy warships in Bali waters.

The exercise covered tactical manoeuvers, communication, and other safety procedures.

The two Indonesian navy warships that involved in the exercise were KRI Hasan Basri and KRI Uling.

The Indonesian navy hopes that the exercise would improve the capabilities of the Indonesian Navy personnel.

Meanwhile, USS Benfold commander Adrian Jansen said his ship`s presence in the region was part of his tour of Southeast Asia.

After that, Jansen said, he would return to the US to conduct other operations.

The 54-metre-long USS Benfold weighs around 8,900 tonnes and can carry 280 navy personnel.

Source: ANTARA News

Pupuk Indonesia plans $5.2 bln petrochem complex in Papua

Indonesian fertilizer firm PT Pupuk Indonesia plans to build a petrochemical complex worth $5.2 billion in the country’s Papua region, an official said on Wednesday (19/04).

Investors from Japan, South Korea and Germany have expressed interest to take part in a plant that will have annual capacity of 2 million tonnes a year, said the firm’s CEO Arifin Tasrif.

“We want to be the majority (owner) in a joint venture company,” Tasrif said, without giving details on the timeframe for the plant.

Indonesia, Southeast Asia’s largest economy, is seeing strong economic growth of over six percent and the government is keen for investors to expand the petrochemical industry to make higher value products from the country’s oil and gas output.

Papua, a remote and mountainous region in eastern Indonesia home to BP’s ‘s Tangguh liquefied natural gas plant, sees high costs for construction and businesses because of the expense in transporting materials from the country’s main industrial centres on Java island.

Pupuk Indonesia, a holding firm of four state-controlled fertilizer firms, already has plants in west and east Java, in Kalimantan on Borneo island and Aceh in Sumatra island, with a total capacity of 12 million tonnes.

The firm expects sales in 2012 to reach 45 trillion rupiah ($4.90 billion), up from last year’s 40 trillion rupiah.

*($1 = 9,180 rupiah)

Source: Reuters

Russia offers to RI to build satellite launching base in Papua

Russia has again urged the Indonesian government to conclude a much-delayed agreement on a milestone satellite station project, offering the idea of Indonesia becoming a “prestigious space nation”.

Russian Ambassador Alexander A. Ivanov

Russian Ambassador to Indonesia Alexander A. Ivanov reiterated on Tuesday (14/02) his country’s keen interest in the project to develop a satellite launch station on the Indonesian island of Biak, which is situated off the northern coast of Papua and 3,200 kilometers northeast of Jakarta.

The plan was first made public in 2006, but no agreement has so far been concluded to pave the way for its implementation.

“To tell you frankly, the draft agreement is almost ready with the exception of one article. It is on missile technology immunity,” Ivanov told a media briefing in Jakarta, adding that the Biak project would utilize technology possessed only by Russia that had not been used anywhere else in the world.

He said Indonesia was still troubled by the article, but Russia kept pushing for it given that Indonesia was not a member of the Missile Technology Control Regime; an informal and voluntary partnership between 34 countries to prevent the proliferation of missile and unmanned aerial vehicle technology capable of carrying a 500-kg payload at least 300 km.

Ivanov said Russia, as a member of the regime, had “international obligations” on the safeguards.

Contacted separately, Indonesian Foreign Ministry spokesman Michael Tene refused to discuss why the Indonesian government still objected to the contentious clause, citing only “technical issues” behind the prolonged negotiations over the Biak project.

“As the negotiations are still ongoing, I cannot add anything more,” Michael told The Jakarta Post.

Ivanov explained that the Biak station would be an air-launch station, meaning satellites would be launched from a “mothership” aircraft instead of from the ground.

He said this was more “ecologically friendly”, adding that ground-based launches usually caused pollution on the ground and in the air.

“If this project is implemented, Indonesia will become a space nation. Indonesia will have the opportunity to launch commercial satellites from all over the world, especially countries situated in the Asia-Pacific region.”

Ivanov refused to share what was in the project for Russia, but added that it would be very “beneficial” and “prestigious” to Indonesia.

He added Biak was chosen due to its proximity to the equator, reducing the cost of satellite launches.

“The cost of launching is eight times cheaper in comparison to launching satellites, for example, from territories in Kazakhstan or Russia.”

Ivanov also reiterated on Tuesday Russia’s interest in boosting its trade and investment partnerships with Indonesia.

He said a delegation of about 40 representatives from major Russian private companies would visit Indonesia at the end of the month to seek business opportunities in Southeast Asia’s largest economy.

They include representatives from the space technology, oil and gas, railway and agriculture sectors, Ivanov said.

Source: the Jakarta Post

Labor dispute at Freeport may end soon

The government says that a compromise has nearly been reached between a striking workers union and the management of a local unit of US gold and copper mining giant Freeport McMoran.

Newly appointed Energy and Mineral Resources Minister Jero Wacik said on Wednesday (16/11) that the union’s salary demand had come down to US$4 per hour from the initial demand of $35 per hour.

Meanwhile, Freeport Indonesia’s management had agreed to a 28 percent salary increase to $3.09 per hour, according to Jero Wacik.

“It has come so close [to a compromise]. If reached, Freeport could operate again. Otherwise, all parties will suffer losses — the state from taxation losses, the people from income losses and the company from output,” Jero told a press briefing on the sidelines of the ASEAN Summit.

However, the workers union refuted Jero’s claims, saying nothing had been finalized and that negotiations to demand a higher salary than the current $2.4 per hour were still “ongoing”, according to the union’s official Virgo Solossa.

The union has been on strike for more than three months, possibly the longest stoppage in the country’s mining history, which holds the world’s largest single reserves of copper and gold.

The increasing chaos followed repeated calls from politicians and officials for the government to renegotiate its contract with Freeport. The government said the contract, renewed in 1991 and due to expire in 2021, had positioned Indonesia on the losing side.

The labor strike and the violence have prompted Freeport to declare force majeure in its Papua operation.

The company’s current production is 5 percent of its normal output. Under normal conditions, Freeport recorded $8 million in revenue per day.

The executive vice president and chief administrative officer of Freeport Indonesia, Sinta Sirait, said the company was offering a net monthly salary of between Rp 12.7 million ($1,400) and Rp 17 million, excluding incentives and bonuses.

“We, on the management side, really want the negotiation process to proceed despite other efforts. We want to reach a compromise. The process has been long, but we believe that the government’s mediation would help both parties to accelerate the process,” she said.

Freeport Indonesia currently employs 8,467 people and almost 40 percent of them, or more than 3,200 workers, are Papuans.

Manpower and Transmigration Minister Muhaimin Iskandar dismissed concerns that the continuous strikes, including in other mining companies, were a trend that could hinder business expansion in Southeast Asia’s largest economy.

“The trend [of strikes] is not increasing. It’s a common phenomenon, especially approaching the season of joint contract agreement [renewal],” he said.

Source: The Jakarta Post

Greenpeace Unveils Solar-Wind Hybrid Power System in West Papua, Indonesia

Greenpeace, a non-governmental environmental organization, has unveiled a solar-wind hybrid power system in West Papua, Indonesia. The organization requested the Indonesian government to utilize its abundant source of renewable energy.

The solar-wind hybrid power system has a capacity of one MW and it consists of solar panels producing 800 W of energy and a wind turbine generating 200 W of energy. The power system was constructed on Mansiman Island in Manokwari district.

A climate and energy campaigner of Greenpeace Southeast Asia, Arif Fiyanto stated that the reason to select the island to house the project was, as only 32% of its population has access to electric power. Greenpeace would educate the inhabitants about the management and maintenance of the new power systems prior to presenting them to a broader area, he added.

Arif further said that Indonesia has a geothermal power potential of 28 GW whereas only 3% of that was explored by the nation. The government is required to be more involved for the development renewable energy in the region, he added.

Source: cleantech