Ramadan has been a blessing of sorts for the economy. Moody's Investment Service upgraded Indonesia's sovereign debt ratings, the Asian Development Bank and the World Bank gave it a positive outlook, and, after a seven-year hunt, the National Police's counterterrorism unit, Detachment 88 killed its most wanted terrorist, Noordin M. Top.
Moody's upgrade: The global rating agency, Moody's Investor Service, upgraded Indonesia's foreign- and local- currency sovereign ratings from Ba3 to Ba2, with a stable forecast.
The upgrade comes hand-in-hand with international credit-rating agency, Fitch Ratings Ltd.'s BB, and Standard & Poor's BB-ratings.
This shows Indonesia's sovereign debt has lessened, but it is still two notches below the investment grade level, which the country achieved just before the 1997-98 Asian financial crisis.
Moody's cited the country's resilience to the current global recession and favorable medium-term growth prospects as reasons for its upgrade. Moody's expects growth to reach 5.5 percent in 2010.
Moody's vice president and sovereign analyst for Indonesia, Aninda Mitra, said the country needed to strengthen its foreign exchange reserves, develop its domestic capital markets and broaden its institutional investor base, to further improve Indonesia's sovereign ratings.
ADB ups growth estimates: This month, the Asian Development Bank and the World Bank raised Indonesia's 2009 economic growth estimate from the previous 3.6 percent estimate to 4.3.
In line with Moody's, their prediction for next year's economic growth is projected to reach approximately 5.4 to 5.5 percent, spurred by the predicted global economic recovery and world finanical markets' improvement.
Most-wanted terrorist shot dead: This time, the National Police was cautious to confirm shooting dead Indonesia's most sought-after terrorist, Noordin M. Top, who was shot in a raid outside of Surakarta, Central Java. It ensured the terrorist's fingerprints matched that of Noordin, before confirming his death. Three other terror suspects were killed in the police raid.
Sept. 2: Australia drags Garuda to court
The Australian Competition and Consumer Commission (ACCC) filed a lawsuit against international flag carrier, PT Garuda Indonesia Ltd, for allegedly fixing fuel and security surcharge prices with other international airlines. A hearing has been scheduled for Oct. 22 at the Federal Court of Australia in Sydney.
Garuda will be the 10th airline the consumer watchdog has taken to court. Last year, the court ordered Qantas Airways Limited and British Airways Plc to pay penalties of A$20 million and $5 million respectively, for price fixing.
Sept. 4: Indofood spins off noodle unit
The world's largest instant noodle producer, PT Indofood Sukses Makmur Terbuka, will divest its noodle and food seasoning divisions into a separate company, pending approval from authorities.
The new company will remain 100 percent owned by Indofood. This division is the most profitable, contributing 43 percent to the company's net sales of Rp 18.2 trillion (US$1.9 billion) in the first half of 2009.
Sept. 5: Fertilizer prices up
Due to the proposed lower subsidy allocation for fertilizers, the Office of the State Minister for State Enterprises expects the price of subsidized fertilizers to rise by up to 83 percent.
The Agriculture Ministry proposed the 2010 subsidy for fertilizers to shrink from Rp 17.5 trillion, allocated this year, to Rp 11.3 trillion. The 2010 state budget is yet to be endorsed and remains under discussion. This may negatively impact farmers.
Sept. 10: PLN ups rate 20%
With parliament rejecting PLN's proposed levels for margins and subsidies, the state electric utility plans to raise average electricity rate by 20 percent next year. The parliament's budget committee decided to revise the government's 2010 electricity subsidy from Rp 35.3 trillion to Rp 52.2 trillion.
PLN's proposal to raise government capital injection to 8 per-cent of production cost, up from 5 percent, was also rejected. A day earlier, parliament passed the new electricity bill into law, ending PLN's monopoly on electricity production and distribution, and allowing regional and local governments to participate with partners in the production and distribution of electricity, and to determine power rates.
Sept. 12: Govt proposes oil emergency fund for 2010 budget
The government contemplated adding Rp 5 trillion to the 2010 budget to cushion any rise of world oil prices. Senior officials are expecting world oil prices to increase as the world economy recovers. Oil futures in New York are now trading above $71 per barrel.
The extra amount will come from streamlining ministries and government agency budgets, officials have said.
Sept. 16: 3 firms to distribute subsidized fuel
PT Aneka Kimia Raya, PT Shell Indonesia and PT Petronas Niaga Indonesia may now distribute subsidized fuels starting next year. Currently, state oil company PT Pertamina has a monopoly.
Their appointment awaits parliamentary endorsement from the 2010 state budget, which will determine the subsidized fuel quota and margins for subsidized fuels.
Sept. 17/23/26: Bakrie Life gains parent support
Local insurance company, Bakrie Life, is under pressure from customers who were unable to cash in their investment funds issued by the company. Last year's stock market crash substantially reduced the funds' value, leading Bakrie Life customers to redeem their funds.
The Capital Markets Supervisory Agency (Bapepam) has given the company one month to settle. Subsequently, Bakrie Life's parent company, Bakrie and Brothers Group, has come to the rescue and will provide Rp 500 billion to help settle the dispute. Bakrie Life is trying to settle Rp 350 billion in liabilities owed to its 600 customers.
Sep. 19: Court favors Astro
The South Jakarta District Court rejected a $1.6 billion lawsuit filed by Lippo Group's cable operator, PT Ayunda Prima Mitra (APM), against Malaysia's largest cable television operator, Astro All Asia Networks Plc. The court noted that APM had insufficient legal grounds for its claim against Astro.
This ruling strengthened a Singapore International Arbitration Center decision to reject APM's appeal against Astro's effort to recover $260 million from APM. APM's parent company, PT First Media, is considering seeking an appeal.
The two joint-venture partners are disputing a $245 million compensation payment to their joint venture cable operator, Direct Vision. Astro claims APM did not sufficiently contribute to the venture.
Sept. 24: BUMI gets CIC financing
China Investment Corporation (CIC) has invested $1.9 billion into PT Bumi Resources (Bumi) to restructure its debt and fund its capital expenditure. The loan carries a 12 percent coupon rate and will be repaid in several tranches, between four and six years' time. Bumi is a part of the Bakrie Group, and is one of the world's largest exporters of thermal coal.
BUMI has a controlling stake in two key coal producers, Arutmin Indonesia and Kaltim Prima Coal, as well as oil contractor, Gallo Oil, and energy marketing firm, Enercorp Ltd. CIC has been securing investments in natural resource companies around the globe. The transaction's size has gained the Indonesia Stock Exchange's (IDX) interest, which is investigating whether it provided sufficient public disclosure on the transaction.
Sept. 26: Govt backs part of Garuda debt
Garuda's debt to Bank Mandiri, to be paid as mandatory convertible bonds, has been snagged, with Mandiri insisting that it receive an 18 percent return, promised by the previous government.
The Office of the State Minister for State Enterprises has assured that the government - the controlling shareholder of Garuda - will fulfill its obligation, but hasn't disclosed how this would be achieved.
