High-profile cases: Corruption and Papua
• With the arrest of graft fugitive Nunun Nurbaeti, the bribery case related to the election of Miranda Goeltom as Bank Indonesia senior deputy governor in 2004 may lead to the prosecution of more politicians.
• The House of Representatives has extended the mandate of the monitoring team of the Bank Century bailout to December 2012, which could be used as a pretext to impeach President Susilo Bambang Yudhoyono and Vice President Boediono.
• Having been named a suspect, National Mandate Party (PAN) lawmaker Wa Ode Nurhayati could lead the Corruption Eradication Commission (KPK) to politicians involved in mafia practices in the House’s budgetary committee.
• The graft trial of former Democratic Party treasurer Muhammad Nazaruddin may implicate other big names in politics and show how state budget is misused or swindled.
• Investigations into corporations for alleged tax evasion look to gain momentum as the KPK found tax evasion had caused Rp 70 trillion (US$7.84 billion) in state losses in 2011 alone.
• Indonesia is under international scrutiny as violence escalates in Papua.The government has established a special unit to accelerate development in Papua and West Papua, and increased budget allocations for the two provinces by 23 percent.
Land disputes: More people to lose their rights?
• The newly-passed Law on Land Acquisition is expected to support development of basic infrastructure within the next five years. The law also mandates a fair process of land acquisition by providing a 60-day public consultation period.
• The Agrarian Reform Consortium (KPA) has warned the law will accommodate the interests of the government and business players at the expense of the people.
• Land disputes have often pitted security troops against local people, as indicated by the latest incidents in Mesuji regency on the border between Lampung and South Sumatra.
• The government will allocate Rp 3.85 trillion (US$425 million) from the state budget to help finance land acquisition next year in a bid to accelerate construction of 18 toll roads in Java and Greater Jakarta.
Elections bill: Where are the minorities?
• The House of Representatives’ special committee deliberating the general elections bill has pledged to pass the draft law in March 2012.
• The House is split between closed and open proportional electoral systems.
• Parliamentary threshold has divided the ruling coalition. Small parties, including four coalition partners, fight for 3 percent of threshold. The Golkar Party and Indonesian Democratic Party of Struggle (PDI-P) want the threshold to be set at 5 percent, while the Democratic Party supports the government’s proposal of 4 percent.
• The coalition will agree on maintaining the old allocation of parliamentary seats at 3-10 seats per electoral district.
• All parties agree that the formula to convert votes won into legislative seats must keep the principle of people’s representation intact.
Foreign Policy: Playing the middle power role
• Indonesia should play the role of a middle power in East Asia, by benefiting from the shift of world power from the West to East Asia.
• Historically, Indonesia has never allowed itself to be co-opted by a single major power. The latest shift in the world’s balance of power, however, could plunge Indonesia into a conflict of interests between the US and China. The US plan to deploy 2,500 marines to Darwin in Australia is seen as a countermeasure to China’s growing power in Asia Pacific region.
• While Indonesia has been quite productive in defining its boundaries, various segments are left to settle. As per December 2011, Indonesia has yet to settle more than 20 maritime boundary segments in around 15 locations.
• Fishing incidents highlight the apparent on-going maritime boundary disputes between Indonesia and China. While Indonesia has been consistent in its refusal to acknowledge China as one of its maritime neighbors, it seems China has a different view.
Macroeconomics: Optimistic but cautious
• The central bank cut its estimate of Indonesia’s gross domestic product (GDP) growth for 2012 to 6.3 percent, down from 6.5 percent.
• Domestic consumption growth is expected to remain steady between 4.6 to 5.1 percent next year, while investment growth would accelerate to between 10.2 and 10.6 percent, up from 7.7 percent.
• Export growth might level off at between 12.8 and 13.3 percent, down from an initial estimate of 16.4 percent for 2011.
• The government aims to reduce poverty to at least 7.5 percent in 2015, less than four years from now, as part of its efforts to fulfill the Millennium Development Goals (MDGs).
• As many as 15 oil and gas projects will begin production in 2012 with a total output of 1.15 million standard cubic feet per day of gas and 32,200 barrels of oil per day.
• BI starts its campaign to push down lending rates, which is important for real sector.
• Barriers to investment in Indonesia include Law No. 13/2003 on Manpower
Microeconomics: Always upbeat
• Publicly listed engineering and construction company PT Adhi Karya has set a target of Rp 9.4 trillion (US$1 billion) in total revenue and Rp 204.65 billion in net profits by the end of 2012.
• The automotive industry is expected to achieve growth of more than 6 percent despite the global economic slowdown.
• The country’s industrial sector is expected to grow between 6 percent and 7.1 percent
• Indonesia’s Islamic banking institutions held more than $11 billion in assets as of the end of 2010, a steep increase from $7.7 billion in the previous year. the government plans to raise the amount of KUR micro-credit loans from Rp 20 trillion (US$2.36 billion) per year to Rp 25 trillion next year.
• Suburban areas have attracted 31.75 percent, or 95,250 of a total of 300,000 visitors looking to purchase property in the near future.
• The government expects batik industry to become a driver of the micro economy by 2025, as 99.39 percent of all 55,912 batik producers last year were micro- and small-sized enterprises.
• Competing data services have been hampered by high operational costs and local taxes, particularly in the construction of the tower Transciever Base Station (BTS).
