Category: Economy

Indonesian military TNI to welcome two Sukhoi Su-35 fighter jets this year

The Indonesian military is expected to welcome two Sukhoi Su-35 “Flanker-E” to its combat aircraft fleet in October, after signing a contract to buy the fighter jets from Russia.

A spokesman for the Defense Ministry, Brig. Gen. Totok Sugiharto confirmed that the contract for 11 multirole combat aircrafts was signed in Jakarta on Feb. 14.

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Sukhoi Su-35. Photo:

Rear Adm. Agus Setiadji, head of defense facilities agency at the ministry, signed on behalf of the Indonesian government with a representative from Russia’s state-owned defense product broker, Rosoboronexport.

The first two fighter jets are expected to arrive in early October, said Totok, in time to take part in the TNI parade to celebrate armed forces day on Oct. 5. TNI is the Indonesian acronym for the Indonesian Armed Forces.

“The Sukhoi jets would replace the existing F5-E Tiger jet fighters fleet,” he added.

The contract, worth $1.140 billion, was finalized following negotiations that started in 2017. It includes the signing of a bilateral deal in Moscow in August to barter coffee, tea, palm oil, cacao, spices and the commodities’ derivatives, processed fish and textiles as well as Indonesia’s defense products with the Sukhoi fleet. Indonesian state trading company PT Perusahaan Perdagangan Indonesia and Russian state conglomerate Rostec will be the agencies implementing the barter trade.

The part-barter deal will allow Indonesia to pay 50 percent of the Sukhoi jet fighter contract by exporting its commodities valued at $570 million, Trade Minister Enggartiasto Lukita said in August at a joint press conference with Defense Minister Ryamizard Ryacudu.

“With this barter deal, Indonesia can export more commodities that we have exported before, as well as the ones that we didn’t get to export previously,” Enggartiasto said.

Under Indonesia’s defense industry law, the procurement contract for defense equipment from foreign producer is subject to at least 35 percent offset requirements. Russia has said that it will provide 35 percent offset from the contract value by providing a training for maintenance and repair of the Sukhoi fleet.

In October, then-military chief Gen. Gatot Nurmantyo said in accordance to request from the air force, that the Sukhoi jets will be equipped with air-to-air missile, air-to-ground missile, bombs, ground support equipment, simulator, spare parts and spare engines.

The Indonesian Air Force already has a full squadron of Sukhoi Su-27 SKM and Su-30 Mk2 jets.

Since the administration of President Susilo Bambang Yudhoyono, who is President Joko Widodo’s predecessor, Indonesia has been significantly increasing its defense budget to modernize its aging Armed Forces fleet and equipment and rejuvenate its defense industry.

Its spending on military equipment aims to meet the minimum essential force target by 2024 or the bare minimum of primary defense equipment to safeguard the country’s vast archipelago.

This article first appeared in Arab News

It’s connectivity that matters: Indonesians use smartphones and internet for staying in touch

If there’s one thing that Indonesians can agree on when asked what smartphones and the internet are most useful for, it would be to access social media and messaging applications.

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A survey conducted by the Indonesian Internet Service Providers Association (APJII) and the Indonesian Telecommunications Society (Mastel) showed that 95.1 percent of respondents use smartphones to access social media applications, while 73.7 percent said they use it to access messaging applications.

The survey was conducted across the country from October to November involving 1,020 respondents, more than half of them are high school and university students, followed by professionals and entrepreneurs.

The most popular social media applications among the respondents are Instagram with 82.6 percent, while 66.5 percent named Facebook and 49.6 percent said they liked Pinterest.

The top chat application is Line with 90.5 percent respondents, followed by WhatsApp and Blackberry Messenger with 79.3 percent and 33.10 percent  respectively.

Typical of these users is 19-year-old waitress Andini Sugeha, who says she uses Facebook most of the time but the features she most uses are messaging services.

Uploading photos and chatting with friends are what draws user to these applications the most.

“I use Facebook to upload photos while I also do that on Instagram, and I use WhatsApp as well to chat,” Andini said.

Media professional Ami Afriatni said she has been on Facebook for a decade and still uses it mainly to stay in touch with friends and families living in faraway places, while for her works she finds Twitter is most useful.

“It is helpful to get news updates, personal insights public figures might offer or official statements of some credible organizations. People also often take to Twitter to respond to recent issues and to express their stance,” Ami said.

As a budding photographer, she uses Instagram to sharpen her photographic skills, adding that the entertainment aspect of the photo sharing platform is the main draw for her.

In a reflection to the APJII and Mastel survery, Ami said social media and messaging applications are equally important but agreed that social media platforms have reached maturity while messaging applications are more important.

“I think there are rooms for improvement for this, let’s say creating a messaging applications that are more friendly to elders or communities who are less exposed to technology,” she added.

But the proliferation of hate speech, hoax and fake news on Facebook, especially as they relate to political preference, has made the world’s largest social networking platform no longer as enjoyable as it used to be, she said.


Internet stakeholders in Indonesia are well aware of the problems and in anticipation of regional elections this year, the Ministry of Communications and Information Technology, APJII and Elections Supervisory Body have launched a campaign against online hoaxes.

The three agencies, along with local representatives of internet giants including Google, Facebook, Telegram, Twitter, Line, MeTube, Bigo Live and Live Me signed on Feb 7 a memorandum of understanding to curb the spread of hate speech and fake news related to the elections.

ICT Minister Rudiantara said the drive to issue such declaration started in 2016 and every party involved in the online ‘ecosystem’ had an obligation to be part of it.

“So, there is no reason for service provider not to takedown [negative content] when the General Elections Committee and Elections Supervisory Body request for it because they are the independent bodies that organise the elections and are well aware of election rules and regulations,” Rudiantara said.

APJII chairman Jamalul Izza, said application providers and related parties agreed it was time for joint effort to curb negative content, as previous experience during the divisive presidential election in 2014 and Jakarta gubernatorial election last year showed how content that incited hate and misinformation directed at some candidates can flourish and go viral.

“Therefore, as the internet ecosystem in the country we agreed to safeguard the 2018 regional elections to make them free from negative contents and hate speech,” Jamalul said.

An APJII survey released in November showed that there were 132.7 million internet users in Indonesia, out of its 256 million population.

The ICT Ministry has been stepping up its efforts to ensure that the material available online does not breach local standards for behavior and morality. That includes material related to homosexual activity. In January, it asked Google to suspend applications related to LGBT activities from its Google Play Store so that they are no longer accessible in Indonesia.

It also said it has handled 72,407 complaints regarding pornographic content on the internet in January. Earlier in the month, the ministry has begun to operate an artificial intelligence-based censorship system to using keywords to detect and crawl pornographic content online.

The US$14-million dollar machine was installed following years of manual monitoring that failed to curb the flood of illicit contents on the internet, especially pornographic material. A ministry team will evaluate and verify the data crawled and take the necessary measures such as blocking the sites if they are validated to have inappropriate content.

“Global and national internet providers are urged to be active in ensuring the availability of positive contents and suppress negative material from spreading,” ministry spokesman Noor Iza said.

The story first appeared in Bangkok Post



Indonesia aims to emulate Norway in managing its mineral wealth

After three years leading Indonesia’s largest state-owned bank by assets, former Bank Mandiri chief executive officer Budi Gunadi Sadikin has a new role as special staff to Rini Soewandi, the Minister of State-Owned Enterprises (SOE).

In this role, which he started in late June 2016, Budi is charged with establishing a holding company made out of state-owned mining enterprises to re-do the way the government handles its future stakes in the industry.

Continue reading “Indonesia aims to emulate Norway in managing its mineral wealth”

Fighting foreign poachers

It was no April Fool’s Day joke when on April 1 Indonesia’s Ministry of Maritime Affairs and Fisheries sent in whole and in pieces 81 illegal fishing boats to the bottom of the sea simultaneously at 12 locations across the country.

The Maritime Affairs and Fisheries Minister, Susi Pudjiastuti, in another show of force to reassert her ministry’s tough stance to combat illegal fishing, led the sinking and blowing up of the vessels, 75 of which were foreign, from Ambon province which is close to the Arafura Sea on the eastern part of the country.

“This is to tell the people, that there was a time when thousands of foreign vessels came to steal our fish and now they know that Indonesia can actually combat such a crime,” she said in a statement after leading the operation that stretched to the Natuna Islands on Indonesia’s northernmost maritime frontier and borders the South China Sea, where most of the ships – 29 – were destroyed.

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Photo: Maritime Affairs and Fisheries Ministry/Didik Heriyanto

The Natuna Sea and the Arafura Sea are both fertile fishing grounds and often infested with illegal fishing boats.

Yunus Husein, the deputy head of Task Force 115, which was set up to combat illegal fishing, said the eastern waters of Indonesia is still prone to risks of illegal fishing and by choosing to lead the operation from Ambon, the ministry wanted to reaffirm that illegal fishing should no longer happen in the Arafura Sea. It also aimed to show support to the Indonesian Navy’s Eastern Fleet and other law enforcement agencies in the eastern region to take firm measures in deterring poachers.

“We hope Sino serves as a symbol of our victory against fish plunderer, after years of defeat, especially in eastern Indonesia,” Susi said, referring to the name of the two ships, Sino 26 and Sino 35 that were sunk in Tihlepuai waters off Morella village in Ambon.

The ships’ names indicated a relation to China, and Yunus said the Indonesian-flagged ships were owned by an Indonesian company with a Chinese investor.

To date, Indonesia has sunk 317 illegal fishing vessels since October 2014 and most of them were from neighboring Southeast Asian countries.

Since January to March 21, the ministry’s patrol boats have apprehended 40 illegal fishing boats, which included 36 boats from Vietnam while the rest were from The Philippines, Malaysia and Indonesia.

Poaching fish in Indonesia’s waters is a crime punishable by maximum six years in prison and a maximum fine of 20 billion rupiah.

“Illegal fishing is rampant in Indonesian waters because we have not been able to tap this potential resource,” said Akhmad Solihin, a lecturer at Bogor Agricultural University’s School of Fisheries and Maritime Sciences.

While he agrees that blowing up illegal boats could create a deterrent effect to poachers, he urged the government to improve the investigation procedures for foreign boats to ensure that the legal process is conducted fairly and especially to provide proper translators for foreign seamen.

“I think the best solution to combat illegal fishing is by forging bilateral relations with fishing poachers’ countries of origin, to form agreement that those countries’ government could prosecute the fishing companies or fishing boats’ owners to pay compensation to Indonesia for poaching in our waters,” Akhmad said.

Meanwhile, Abdul Halim, the director for Jakarta-based advocacy group Maritime Studies Center for Humanity, said that while Susi seemed to be gaining grounds in combatting foreign poachers, local fishermen were not able to yield much from the abundant fishing resources.

This is due to due to a ministerial regulation that prohibits the use of trawling nets and dragnet fishing and bombs that damage coral reefs within Indonesian waters.

“There is no solution on what the fishermen can use to catch fish in place of the prohibited nets,” Abdul said.

Viva Yoga Mauladi, a lawmaker from a House of Representatives’ commission that oversees maritime affairs called on the government to review the regulation due to widespread refusal from various fishing community. In place of the prohibited nets, the regulation stipulates that fishermen can only use the ecosystem-friendly gill net.

After visiting a coastal community in Lamongan, East Java on March 31, he said that fishermen in Lamongan refused to use the recommended gill net.

“They have been using trawling nets and dragnet fish for a long time and they don’t want to use the gill net as it only incurs losses for them,” Viva said.


New Pertamina chief faces one-price fuel policy challenge in a vast archipelago

The newly appointed president director of state-owned energy firm Pertamina, Elia Massa Manik, has a huge task ahead to carry out President Joko Widodo’s one-price fuel policy, in the face of inadequate infrastructure to distribute fuel to the country’s remote areas and far-flung islands in the Indonesian archipelago.

Maryati Abdullah, the national coordinator for PWYP Indonesia, a civil society coalition for energy and extractive industry governance reform, considers the policy is viable if Pertamina could import crude oil at a much more affordable price and refine it in its own refineries.

“They could start by revitalizing its existing, old refineries so they could increase its production output, while also remain committed to developing new ones,” she said.

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Pertamina refinery in Cilacap, Central Java. Photo:

Widodo announced the policy in October 2016 during a visit to Yahukimo, a district near the Indonesia-Papua New Guinea border in the easternmost province of Papua. Due to the location and lack of infrastructure in Papua and the eastern part of Indonesian archipelago, fuel prices can cost up to a dozen time more from the normal price of 6,450 rupiah per liter for petrol and 5,150 rupiah per liter for solar. The policy is expected to cost Pertamina about 800 billion rupiah annually.

Fahmy Radhi, an economic energy analyst from Universitas Gadjah Mada in Yogyakarta agrees that having its own production infrastructure could give Pertamina wider fuel distribution coverage.

“If it has its own refineries, Pertamina won’t have to import up to 650,000 barrel per day. This is a huge amount that the oil and gas rent seekers have been cavorting around,” Fahmy said.

Kurtubi, a lawmaker from the House of Representatives Commission VII which oversees energy and mineral resources said as a company drawn to constitutional obligation about exploitation of the country’s natural resources should benefit the people, there is more that Pertamina has to consider in its operation than merely making a profit.

Article 33 in Indonesia’s 1945 Constitution states that “sectors of production which are important for the country and affect the life of the people shall be controlled by the state and the land, the waters and the natural riches contained therein shall be controlled by the State and exploited to the greatest prosperity of the people.”

“One-price fuel policy is a constitutional mandate. Pertamina could do it as long as the cost is efficient,” Kurtubi, who goes by one name, said.

“The new president director has to be able to operate the company without contradicting the constitution,” he added.

Kurtubi also said that cutting fuel import should be high in Pertamina’s agenda under Manik’s leadership.

“It should develop its own refineries so that Pertamina could produce its own fuel to meet the domestic demands,” Kurtubi said, adding that the existence of a refinery in a certain area could also create multiplier effects that would boost the local economy and open new jobs.

Manik was appointed to head the company during Pertamina’s general shareholders meeting at the State-Owned Enterprises Ministry in Jakarta on March 16, more than a month after then-chief executive Dwi Soetjipto and deputy director Ahmad Bambang were ousted on Feb 3 because of what the government – its majority shareholder – was a leadership problem and a lack of teamwork.

Manik, who was the president director of PT Perkebunan Nusantara (PTPN) III, the holding company of 14 state plantations firms since April 2016, is an alumnus of Bandung Institute of Technology and Asean Institute Of Management.

In his first address to Pertamina’s employees, Manik said he would focus on strengthening the company’s human resources and maintaining Pertamina’s improved performance for the past years.

Sudirman Said, the then-energy and mineral resources minister, said in 2015 that Pertamina was able to save 250 billion rupiah per day after ousted CEO Dwi in 2015 disbanded Pertamina Energy Trading Limited (Petral), a Singapore-based Pertamina subsidiary handled crude and fuel oil imports for the state energy company and was notorious for being the oil and gas rent seekers’ den.

“There are many important projects we need to execute to achieve the national energy security goal, therefore it is important to gain trust so that we can adeptly carry out the projects,” Manik said.

PWYP Indonesia had urged the government to select the new president director in a transparent, credible and independent manner, following the Feb 3 ouster of Dwi.

Maryati said the government didn’t say much about the reason they appointed Manik, but given his public track record on improving corporate efficiency, she holds a favorable view that Manik would be efficient in his human resources planning and be able to restructure various executive positions to a more effective appointments.

“We also hope he would not be swayed by certain political interests,” Maryati said.


Indonesia upbeat on prospect of Trump’s presidency

Deputy House Speaker Fadli Zon gave his insights during a TV interview on Trump presidency. Photo: Twitter @fadlizon

Donald Trump’s triumph in the US presidential election is expected to have both positive and negative impacts on Asia, and Indonesia in particular  Continue reading “Indonesia upbeat on prospect of Trump’s presidency”