Change The World For A Fiver

Three years ago I bought a book called ‘Change The World For A Fiver’. I like the idea inside it. It's a must-have!

The book contains 50 small actions to change the world and 'make you feel good’, and is printed on ‘chlorine-free paper from trees grown in sustainable forests’. We Are What We Do is the Community Links project behind this straightforward but brilliant book (see website bellow).

The actions contained within it are diverse, ranging from Action 46 ‘Use both sides of every piece of paper’ to Action 19 ‘Learn one good joke’. Some of them would appeal to thrifty people, ‘Turn your thermostat down by 1º’ (Action 10), and some actions are very simple ‘Smile, and smile back’ (Action 5).

My favourite action is ‘Reverse Haggling’ (Action 27), where the book advises you to ‘confuse the wonderful people who work in charity shops – pay them more than they bargained for’.I did it several times in England and they thought I'm a stupid Asian.

I have tried and tested some of the ideas in this book, particularly declining plastic bags in shops, watching less TV, and turn off the tap water while brushing my teeth. It is simple but bring a great effect to our world, isn't it?

Hopefully this book will inspire more of us to ‘Give blood’ (Action 26) and to ‘Do something you think you can’t do’ (Action 32), even if being ‘the change you want to see in the world’ (Action 28, thanks to Gandhi) seems a bit daunting.

www.community-links.org

Honda launches new models to regain loss in market share

Saturday, August 25, 2007

The Jakarta Post, Jakarta

Motorcycle producer PT Astra Honda Motor (AHM) will launch three new models with more stylish and sporty features this year to regain its market leadership, which has dropped significantly since January amid growing competition from its main competitor, Yamaha.

AHM, which has been the motorcycle market leader in Indonesia for many years, launched one of the new models Friday, promising more affordability and reliability to Indonesian motorcycle fans.

The Honda Fit X bebek model, which has a 100cc four-stroke engine and a price tag of Rp 10.5 million (about US$1,129) off the road, is now available in Jakarta.

Dubbed "economical, reliable and functional", the Honda Fit X and two upcoming products -- a sporty motorcycle and an automatic scooter -- are expected to increase the company's sales by 20 percent this year, AHM marketing director Johannes Loman said at the launching ceremony.

He said the company hoped to sell between 2.2 million and 2.4 million motorcycles this year. "We are still looking to be number one in Indonesia," said Johannes.

With the expected increase in sales, AHM is currently increasing its production capacity so as to be able to produce about 200,000 motorcycles a month beginning September, he said.

AHM, which has led the country's motorcycle market for many years with a market share of about 55 percent, has seen its market share decline since January this year amid an aggressive marketing campaign by its main rival, Yamaha.

Honda's monthly market share fell to between 42 and 45 percent in the first semester of this year from an average of more than 53 percent last year.

By contrast, Yamaha's monthly sales continued to increase in the first six months of this year. In July, its sales amounted to 161,016 motorcycles, far higher than the 131,615 motorcycles it sold in the same month last year. Meanwhile, Honda's monthly sales fell to 143,223 in July from 186,047 in the same month last year.

In the first semester of this year, national motorcycle sales amounted to 2.11 million, with AHM controlling 43 percent of the market, Yamaha 41 percent and Suzuki and other producers the remaining 16 percent. Last year total motorcycle sales amounted to 4.42 million units.

Japanese motorcycles still dominate Indonesia's motorcycle market. Chinese-made motorcycles have tried to make inroads into the market over the last five years, but with little success.

However, the entry of TVS Motor, the leading two-wheel manufacturer in India, will make the competition even tighter,

The company's Indonesian unit TVS Motor Company Indonesia has recently launched its Neo and Apache motorcycle brands in the country.

TVS Motor chairman Venu Srinivasan said recently that he was upbeat the company's Indonesian unit would be able sell up to 100,000 units in its first year of operations, despite the strong competition from more established manufacturers in the country.

In order to meet this sales target, the company specially designed its two new small-engine capacity models to satisfy the unique characteristics of Indonesian buyers, he said.

The motorcycles will be sold at prices ranging from Rp 9 million to Rp 11.8 million, off the road (excluding tax). As an initial step, the motorcycles will be available in Jakarta and West Java. (02)

Industry minister backs Kadin's initiative in logging dispute

Saturday, August 25, 2007

The Jakarta Post, Jakarta

Industry Minister Fahmi Idris has lent his support to the initiative by the Indonesian Chamber of Commerce and Industry (Kadin) to ask President Susilo Bambang Yudhoyono to resolve an embarrassing dispute over logging between the National Police and the Forestry Ministry.

Speaking Thursday during a press conference at the Industry Ministry, Fahmi said that all of the stakeholders in the pulp and paper industry would meet soon to resolve the dispute in order to provide a healthy business climate for the industry without undermining the legal process.

"The government and Kadin share the same concern about the pulp and paper industry. Therefore, we will invite all stakeholders to look for a solution in the next few weeks," said Fahmi.

As part of the fight against illegal logging, the National Police have been conducting a series of operations, labeled overeager by the industry, that have resulted in the halting of the operations of many pulp and paper firms and their suppliers in Riau province. As a result, the country's two biggest pulp and paper companies, PT Indah Kiat Pulp & Paper and PT Riau Andalan Pulp & Paper, are faced with a serious shortage of raw materials.

Fahmi said that while the ministry supported the implementation of Presidential Decree No. 4/2005 on the eradication of illegal logging, he was concerned about the investment climate in the forestry industry, which is one of the five industries that contribute the most to the country's exports.

"The implementation of the decree has disrupted the pulp and paper industry, and has led to a decrease in production volume. Therefore, we are impartially trying to find a solution. While we support the war against illegal logging, we also need to protect industries that provide our exports," said Fahmi.

The value of pulp and paper exports in 2006 amounted to about US$3.5 billion out of $8 billion for the entire forestry sector.

The pulp and paper industry employs some 249,000 people in 14 pulp and paper factories in Riau, South Sulawesi, North Sumatra, Jambi, East Kalimantan and Aceh.

Kadin chairman MS Hidayat, who accompanied the minister at the conference, said that the dispute between the National Police and the Forestry Ministry, which has been going on for eight months, could cost the two companies as much as US$2 billion due to the decline in production.

He said that Kadin supported law enforcement, but also pointed to confusion between illegal logging and legal logging.

"Some companies that have legal permission from the state for logging have become the target of arbitrary police actions. Police cordon off their equipment, concessions and processing facilities without sufficient evidence," argued Hidayat.

He warned that if the dispute continued, the two companies would be out of raw materials by October, and might have to resort to massive layoffs.

He added that the dispute showed there was still no legal certainty in Indonesia -- something that had serious implications for the investment climate. (02)

Indosat boosts capital expenditure to $1.2b

Thursday, August 23, 2007

The Jakarta Post, Jakarta

PT Indosat, the country's second largest mobile phone operator, will increase its capital expenditure this year to US$1.2 billion from $1 billion as initially planned to further expand its networks and improve the quality of its services.

Indosat president director Johnny Swandi Sjam said Wednesday around 15 to 20 percent of the capital expenditure would be used to expand cellular networks, including the building of new base transceiver stations (BTS), while the remaining would be used to improve services.

As of June this year, the company had built 8,366 BTS, or a 33.9 percent increase from the 6,248 BTS in June last year.

Indosat finance director Wong Heang Tuck said about $300 million of the $1.2 billion capital expenditure would come from the company's own fund and the remaining $700 million from bank loans and the issuing of bonds.

"The company still needs around $200 to 300 million from other sources," Wong said.

Sjam said increasing capital expenditure for capacity expansion was needed because the number of Indosat's cellular subscribers had already increased by 44.3 percent to 20 million as of June from 13.9 million in the same month last year, while the number of its fixed wireless subscribers surged by 132.3 percent to 483,400 from 208,100.

He said the first semester showed a good record in consumer growth, so the company changed the new subscriber target number for this year to seven million from six million as initially planned.

The sharp increase in the number of subscribers resulted in a 33.3 percent increase in the company's total revenue to Rp 7.69 trillion (about US$826.8 million) in the first half of 2007 from Rp 5.76 trillion in the same period last year.

"Indosat's success in the first half of 2007 is attributed to the growing demand for cellular, fixed-voice and fixed-data services," Sjam said in a press briefing.

He explained that cellular operating revenues grew by 37.4 percent to Rp 5.89 trillion in the first half of 2007 from Rp 4.30 trillion in the same period last year.

Meanwhile, fixed-data service revenues grew by 9.9 percent to Rp 1.01 trillion in the first half of 2007 from Rp 927.3 billion due to increasing demand of wholesale and corporate consumers to rented internet circuit, internet protocol virtual private network (IPVPN) and internet services.

Fixed-voice service revenue grew by 41.1 percent to Rp 774.4 billion from Rp 548.9 billion in the same period last year and was driven by an increased demand for international calling and fixed wireless services.

The cellular business contributes 77 percent to the company's total revenue, while its fixed-voice and data services contribute around 10 and 13 percent respectively.

Sjam said the company's operational spending increased by 34.8 percent to Rp 5.66 trillion in the first half from Rp 4.19 trillion in the same period in 2006. Therefore, its operational profit increased by 29.4 percent to Rp 2.03 trillion from Rp 1.56 trillion, while its net profit soared by 54 percent to Rp 845.1 billion from Rp 548.8 billion. (02)

Bank Niaga signs mortgage agreement

Tuesday, August 21, 2007

The Jakarta Post, Jakarta

PT Bank Niaga signed a memorandum of understanding on apartment mortgages Friday with property developer PT Asiana Lintas Ciptakemang, which is currently building apartments in Kemang, South Jakarta.

Under the agreement, buyers of PT Asiana's apartments will be able to get loans from the bank with an interest rate of 9.9 percent a year.

Bank Niaga's head of mortgage banking Laksmi Mustikaningrat said that with the agreement, the apartment buyers would be able to process their loans much faster than under the normal procedure.(02)

Doulton resumes expansion project

Monday, August 20, 2007
The Jakarta Post, Jakarta

British-based ceramic tile manufacturer PT Doulton Indonesia will go ahead with its US$30 million investment at its ceramic tile factory in Tangerang, Banten, after the government confirmed the project would get a gas supply.

"Thanks to Industry Minister Fahmi Idris for his support in allowing us to resolve the gas supply problem for our factory. We are very happy with the situation and will continue to invest in Indonesia," Narinder Arora, the president director of PT Doulton Indonesia told The Jakarta Post on Thursday.

The Royal Doulton Company through PT Doulton Indonesia, which has so far invested US$75 million in its Indonesian ceramic venture, had planned to increase its investment by US$30 million this year, but the plan was delayed due to a lack of gas.

Beny Wahjudi, the director general of agro-chemistry industries at the Industry Ministry, said that the shortage of gas to the ceramic industry had persisted since last year due to the delay in the building of a gas pipeline from Pagar Dewa in South Sumatra and Grissik in Jambi to Tangerang and Bekasi, both in West Java.

With the increase in the gas supply, PT Doulton Indonesia will be able to double its production capacity from the existing eight million ceramic tiles a year to 16 million.

To feed this capacity, the company will need an additional 85,000 cubic meter of gas per month. To date, the company has needed 630,000 cubic meter of gas per month.

PT Doulton Indonesia has operated its plant in Balaraja, Tangerang, since 1996. About 98 percent of the company's products are exported. In 2006, exports totaled $20.1 million, a slight rise from the $17.7 million recorded the previous year.

In December 2006, the company finished the first stage of its expansion by raising production from 5 million tiles to eight million, at a total investment of $2 million.

The company now plans to increase the number of its workers from 1,350 at present to about 2,000.

Earlier in the day, Narinder accompanied by Achmad Widjaya, chairman of the Indonesian Ceramic Industries Association (Asaki), met Industry Minister Fahmi Idris to thank the minister for his help in overcoming the gas supply shortage that has been badly affecting the industry over the past several months.

Achmad said Asaki members appreciated the efforts made by the minister to increase the gas supply so that some 20 ceramic tile manufacturers in Tangerang and Serang could resume production.

However, he also asked the government to pay special attention to the problem of gas transmission quality. "We are not talking about the supply only, but we are also talking about the pressure of the gas supply," he told the Post.

He said that the gas pressure needed by the ceramic industry was two bar at the minimum. However, since the end of 2005, many ceramic producers in West Java had been receiving a pressure of only gas one bar. The gas supply was also unreliable, he said.

Indonesia is now the world's fifth-biggest ceramic tile producer.(02)

Air cargo industry faces problems

Saturday, August 18, 2007
The Jakarta Post, Jakarta

A lack of regulations and airport facilities has made Indonesia's air cargo industry virtually stagnant during the past several years, as investors are reluctant to enter the business, says an executive.

Chris Kanter, spokesman for the Indonesian Chamber of Commerce and Industry (Kadin), said Wednesday legal uncertainty and poor airport facilities had contributed to slow growth in the industry.

Speaking at a seminar on the modernization of Indonesia's air cargo services, Kanter said it would be difficult under current conditions for local air cargo companies to expand their business, especially to untapped markets in eastern Indonesia.

"Until now, limited regulations have been imposed on air and sea cargo services. We need to formulate a law on cargo service in order to control service standards and quality," Kanter said.

He also said facilities and financial support from the government, as well as the use of the latest technology, were also important for growth in the air cargo industry.

Indonesia's air cargo services are still dominated by foreign express companies such as Fedex and Polar Air Cargo and foreign airlines such as China Airlines, Eva Air, Korean Airlines, Malaysian Airlines, Singapore Airlines and Qatar Airways.

Local air cargo service providers such as PT Republic Express, PT Cardig Air and PT Tri MG face difficulties in expanding their business due to legal issues and the poor conditions found at airport terminals.

Hemi Pamuraharjo, deputy director for domestic flight services at the Ministry of Transportation, acknowledged there were no specific regulations for cargo services in Indonesia.

Hemi said the only regulation the country has is a colonial Dutch regulation, Staatblad 139, which only outlines the responsibilities of cargo flight carriers but mentions nothing about the system of cargo transportation.

President director of RPX Airlines Iwan Tirtawidjaja said within the last decade air cargo volume had steadily decreased, especially at airports in the eastern part of the country.

According to data from the Ministry of Transportation, a slight increase occurred only in the country's main airports; Soekarno-Hatta in Jakarta, Juanda in Surabaya and Hasanuddin in Makassar.

Data from state-owned airport operator PT Angkasa Pura II indicates cargo volume in Soekarno-Hatta Airport reached more than 370,000 tons in 2006, with an average annual growth of 5 percent since 2000. (02)

The BIG MAN who started from small things

Everyone should be able to do business: Nobel Prize winner

Nobel Peace Prize winner and founder of the Grameen Bank in Bangladesh Muhammad Yunus was recently invited to visit Indonesia by President Susilo Bambang Yudhoyono. The Jakarta Post's Abdul Khalik, Veeramalla Anjaiah and Matheos Messakh caught up with Yunus before his departure Sunday. Below are excerpts from their discussion:

Question: Your profile is very unique, changing your career path from being a professor to a banker. What inspired this change?

Answer: The reason was we were experiencing famine in Bangladesh ... when I was teaching at one of the universities. So I saw how useless the theories that I taught were. I taught economic theories while people were dying.

So I went to the villages to see if I could be useful to anybody there. Then I tried to give loans to people who borrowed from money lenders based on trust. Nobody (else) would give money like that. So, I wanted to arrange a system with the banks. But after months of roaming around the banks, they couldn't open the door. So I offered myself as a guarantor. I said "I will sign your papers, your rules are protected and I will get the money". That finally worked. So I signed all the papers, took the money and gave it to the people.

And I took the responsibility of collecting it and taking it back to the bank. It worked. So that was the beginning of the whole thing.

What was the purpose of your visit to Indonesia? What is your opinion about micro-credit and micro-finance in Indonesia?

Well, I was invited by the President to give a presidential lecture. That was the main reason, and since I was coming (anyway), the Bank of Indonesia also invited me to give a presentation to bankers.

I came here (for the first time) some 12 years back. This is my fourth visit. I can see a lot of changes. Banks here have been doing micro-finance for a long time. They are doing well and there are lots of organizations, but still each one of them is small and sticking ... to government formalities. They (haven't) opened up in a big way. There are still lots of people in Indonesia who should be reached with financial services.

Do you think the kind of system you used in Bangladesh would work in a country like Indonesia?

The basic issue is that everybody should have the right to (access) financial services. Nobody should be denied on the (basis) that they are too poor to do business. The second issue is that you have money lenders in the country. I'm sure that there are money lenders in Indonesia.

I met with 27 groups who are doing micro-credit in Indonesia. Some are lending money to five thousand borrowers, some are (lending to) 10 thousand borrowers and some are (lending to) 70 thousand borrowers.

These are all NGOs. The common question I asked was, "what is holding you back? Why have you stuck with that number?" They said "we have no money". It is because the law here doesn't allow NGOs to take deposits. Why can't we either organize a common fund or a wholesale fund, where any NGO can borrow money and lend it?

We have done it in Bangladesh. That's why micro-credit could spread. The next solution is to enable those NGOs to take deposits. Just create a law and call them micro-credit banks. Then create an independent regulatory body. When dealing with money, particularly public deposits, you need an independent regulatory body to avoid misuse.

BRI (Bank Rakyat Indonesia) has been offering credits to small-scale enterprises in Indonesia. How can they make a bigger impact on society?

In general, governments and micro-credit have bad chemistry. Because after all, the government is a political entity, and (it) is supposed to deal with poor people. But politics becomes (more) important than other aspects, including the economic side. And when people don't pay back (money), politicians don't push them too hard. After all, they are poor people.

An organization which works (at a) distance from the government can work much better than an organization close to the government. BRI, being a government organization, (has) this problem, not that they are bad people or inefficient people. Simply this closeness creates problems. And also, the government has to go through certain bureaucratic procedures which may not be appropriate for credit expansion to poor people.

Why do you believe so much in the poor?

The basic idea is that I believe that all human beings are born with unlimited potential, whether a child is born on the street or born in a palace. Poverty doesn't come with a person. It is created by the system that we created. So why don't we go back to the system to fix it up? Then nobody will be poor. That's my point.

We give opportunities to beggars and lend them money. We tell them that if they go from house to house, can they carry something to sell, some candies, some sweets, some toys, whatever they can sell. And (they) give people the option of whether they want to give (them) rice or they want to buy something.

We give them the money to expand (their business). The typical size of such a loan is about $12. With $12 she or he becomes a salesperson. Many of them are now quitting ... begging and have become sales people because everybody supported them.

During your visit did you explore opportunities for cooperation with Indonesian banks or institutions?

Not in a specific (sense) but definitely I'm sure this will bring us closer. The government themselves are pretty much interested. We discussed a lot about what steps need to be taken. This should not be stopped here. And the role of the media is to make sure this will not stop here.

The advantage of micro-credit is that it doesn't need the government all the time. It is civil society which needs to get it done. The government has to perform the role of creating an enabling environment. The law has to be fixed. Instead of pushing the government to do everything, we can just ask them to create an enabling environment and (then) leave it to the people.

Then, the provincial government can pick it up, the district government can pick it up, because you can make it as small as you want.

LG launches new, cheap, 3G handset

The Jakarta Post, Jakarta

South Korea-based mobile phone manufacturer LG Mobile Communications Indonesia (LGMCI) launched Tuesday a new 3G mobile phone in Indonesia, which it says is the cheapest mobile phone in its class.

Vice president of LG Electronics Bo Hoo Choi said Tuesday that with its more affordable price, the new LG KU250 handset was expected to narrow the gap between 2G and 3G handsets.

"We are aiming at first-time buyers of 3G handsets. We want to expand the market by bringing the entry level down so that people can start using 3G phones right away. We help them move from 2G to 3G technology," Bo told The Jakarta Post.

"When we use a 3G phone, there are two kind of benefits. One is video transmission and the other one is data transmission. That is why we developed this model targeting the younger generation and business people," he added.

The LG KU250 handset is the winner of a tender called "3G for All" held by GSM Associations in Barcelona in February to provide a good quality 3G mobile phone at affordable price.

Among 19 models proposed by eight vendors for the tender, LG KU250 was chosen as the winner by a jury of 12 GSM operators. The eight criteria for selection were functionality, usability, logistics, market acceptance, price, service and support, strategic commitment and form.

The 12 GSM operators that selected the winning handset, were Cingular Wireless, Globe Telecom, Hutchison 3G, KTF, MTN, Orange, Smart, Telecom Italia, Telefonica, Telenor, T-Mobile and Vodafone. These operators are now introducing this model in their respective networks.

Bo was optimistic that LG would be able to sell 10 million new handsets worldwide a year, but he was reluctant to predict Indonesian sales.

The phone is equipped with GPRS facilities, 10MB shared memory and external micro SD card slot, bluetooth and USB as well as a 1.3MP camera and a VGA camera for video calling.

He claimed that the handset, which is now available at Rp 1.4 million (about US$160), is the cheapest in its class.

"The prices of most of 3G phones in the country are above Rp 2 million. Only some old products are bellow that level. So in terms of price and value, I don't think there is any competitor for us," said Andre Tanudjaja, sales and marketing general manager of LG Electronics Indonesia.

Andre said that by June the average demand for 3G handsets in the country had reached 13 percent of the total demand for mobile phones, far higher than 6 percent last year.

Indonesia's annual total mobile phone sales reaches around 15 million.

He said that the average was likely to increase to 15 to 17 percent by the end of the year and that LGMCI was aiming to secure a share of 10 to 15 percent of the 3G market in the country. (02)

RI needs microcredit regulator

Friday, August 10, 2007
The Jakarta Post, Jakarta

Indonesia needs to establish an independent regulatory body to govern and supervise its microcredit sector if it is to grow in line with its potential, Nobel laureate and microcredit pioneer Muhammad Yunus said Thursday.

Speaking before members of the Indonesian Chamber of Commerce and Industry (Kadin), Yunus said an independent body for the microcredit sector was very important due to the specific and unique nature of the business.

"Rather than leave it to the central bank, it should instead be done by an independent regulatory body created for microcredit. It can't be just pushed into one of the corners of the central bank," said Yunus.

He said he had always promoted the idea of an independent regulatory authority, but it took decades for the Bangladeshi government to eventually agree to the establishment of such a body.

"As a bank, the Grameen Bank was regulated by the central bank, but it was not a very happy experience because we (central bank and microcredit providers) speak different languages," said Yunus who founded the Grameen Bank in 1983.

He said the ultimate solution for the microcredit sector was legal reform that would allow any financial-sector organization to become a microcredit provider.

When asked why Indonesia's microcredit experience had not been so successful, Yunus said the microcredit sector in any country should keep itself as far away as possible from the government.

He said that preventing the government from getting involved in the microcredit banking sector had been a continuous struggle for him since he first became involved in microcredit in 1976, especially in the 1990s when the microcredit concept in Bangladesh became very popular.

"The more the government is involved, the messier the business. We always make it very clear to the government that microcredit and the government is bad chemistry."

"We always told them to stay away from it, help us in the policy-making field, don't give us money directly," he said, adding that what the government could do was provide a revolving fund to provide start-up capital that would later be managed and used by the sector.

Also, he said, in order to secure more money for microcredit, all financial institutions should be allowed to create deposits for extending loans to the poor.

Grameen Bank had arranged a core deposit derived in part from the World Bank and the Bangladeshi government.

"The government's money has been paid back, the World Bank's money is about to be paid back. But the bank still has a lot of money on its own. So now, they lend the money out and recycle the money themselves," Yunus told the meeting. (02)

Pusri plans to build fertilizer plant in Mideast or N. Africa

Thursday, August 09, 2007
The Jakarta Post, Jakarta

PT Pupuk Sriwadjaya (Pusri), a holding company of state-owned fertilizer manufacturers, plans to build a plant in the Middle East or in North Africa to cope with Indonesia's increasing demand for non-urea fertilizers.

Pusri president director Dadang Heru Kodri said here Tuesday that Pusri was exploring the possibility of constructing a factory in Iran, Jordan, Morocco or Egypt.

PT Petrokimia Gresik, a Pusri subsidiary that produces non-urea fertilizers, had sent representatives to those countries to explore the possibilities, said Dadang.

He said the plan to build a factory in the Middle East or North Africa was the result of difficulties in procuring raw materials for the production of SP 36 fertilizers (super phosphate with 36 percent phosphorous pentoxide).

SP 36 fertilizer is made from three main raw materials -- phosphate, gas and potassium -- with the first of these being in short supply in Indonesia, said Dadang.

"Indonesia usually imports phosphate from China but recently China seems reluctant to export phosphate to Indonesia, while the price on the international market is getting higher," said Dadang.

Besides China, Indonesia also relies on countries in the Middle East for the raw materials for SP 36 fertilizer.

Pusri said that the total cost of the construction of the plant could reach Rp 2 trillion (about US$219.7 million). As the holding company of the state-owned fertilizer producers, it has submitted proposals for the financing of the construction of the plant to the Ministry for State-owned Enterprises.

Currently, PT Petrokimia Gresik is the only state enterprise that produces SP-36 fertilizer, and has a capacity of 800,000 tons per year, far below the domestic demand of 2.4 million tons per year.

Chairman of the Farmers' and Fishermen's Contact Group, Winarno Tohir, said the plan to build the fertilizer plant would solve the problem caused by the lack of SP 36 fertilizer.

At present, many farmers use other fertilizers, such as NPK (Nitrogen, Phosphorous and Potassium), and organic fertilizers, due to the lack of SP 36 fertilizer.(02)

Government and microcredit is a bad chemistry:Muhammad Yunus

Matheos Viktor Messakh/Jakarta

Nobel laureate and microcredit pioneer Muhammad Yunus said Friday that governments should stay away from directly lending microcredits to the poor and better provide good environment for microfinance banking through legal reform.

Speaking at a public discussion at the Ministry of Agriculture, Yunus said that it was a bad idea for governments to get directly involved in lending microcredits to the people.

"The position I again and again promote is that government and microfinance don't work well. It is a bad chemistry. A government basically is a political entity and political entities should not be trusted with the task of lending, particularly lending to the poor," said Yunus who was applauded by the audience.

"The moment the government starts lending to the poor, the political reaction begins: why are you charging interest to the poor people, you can't charge people. After all, you are government," he added.

He said that two conditions were absolutely needed for the development of microfinance in Indonesia. First is funding arrangement, either by allowing microfinance banks and NGOs to take deposits or by creating a wholesale fund.

"This is a fund where a government puts money and that has independent management. So that this fund can lend money to NGOs or microfinance institutions that in turn lend money to the poor. That's much safer, rather than the government running a
microfinance program by itself. Whenever the government tries to do that, it becomes a total mess," said Yunus.

The second condition, said Yunus, was that the government conducted a legal reform to allows the creation of microcredit banks.

"With this law people can specialize in microfinance banking, lending money to the poor without collateral, without guarantee, without any legal instrument, so that people can do things on their own to move up, making income better, as quickly as possible," he said.

Yunus said that several attempts on microfinance had been made in Indonesia for several years but were stuck due lack of fund from the government.

"They got stuck because financing is not available to them. A very simple solution is to create wholesale fund to lend money to microfinance organizations to lend money to the poor. It can be resolved. In Bangladesh we have done it. As a result,
microfinance flourished all over the country. That one step would help a lot," said Yunus.

"People have proved that it can be done, and it is done it very well. Anyone can go and just visit them and find out. So is not a question of whether it can't be done or it can be done. It can be done, it has been demonstrated," he added.

Yunus said that one of the key success of the Grameen Bank was institutional design.

"The institutional design should be right. If we design it right, it works. We make it very independent, we could defy everybody and carry on," said Yunus.

Focusing on the poor and women was also very important to keep the business in its track, said Yunus.

"Go to the poor as far as possible. If you mix up the poor and non-poor, soon you will see that you are not doing microfinance that you are supposed to do. You get into another kind of thing. Focusing on women is also very important. It is so much worth for their families." said Yunus.

Taking savings from the borrowers would create financial strength for the microcredit lenders, said Yunus adding that today 56 percent of deposits of Grameen Bank came from the borrowers themselves.

"They are not only borrowers, but they also save in the bank. That's become important to the bank. This provides a financial strength, and it has to be sustainable. Never shifted from the focus, in order to be sustainable and profit making. We make profit and the profit goes back to the borrowers, because they
own the bank," he said.(02)

Darma Henwa expects to raise $200 million from share offering

Friday, August 03, 2007
The Jakarta Post, Jakarta

Coal mining contractor PT Darma Henwa plans to sell 3.15 billion new shares during the company's initial public offering (IPO) in early September, a senior company executive says.

Speaking during a public briefing Thursday, Darma Henwa's president director Hamdan Handoko said that the shares, accounting for about 30 percent of its enlarged stock, would be offered to the public from Aug. 28 through 30 at a price range of between Rp 290 and Rp 375 per share

"We expect to raise about US$200 million from the public offering," he said, adding that the shares would be listed on the Jakarta Stock Exchange (JSX) on Sept. 6.

PT Danatama Makmur Investment Bank has been chosen as the lead underwriter.

Hamdan said that the company would use 60 percent of the IPO proceeds to finance the capital expenditure on the development of its Bengalon's project, 50 percent to finance its capital expenditure on the Asam Asam project and the remainder to strengthen its working capital.

Chief commissioner Rini M. Soemarmo said the company had recently signed contracts worth $4.75 billion with PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia for mining work in Bengalon, East Kalimantan, and Asam Asam in South Kalimantan, respectively.

PT Darma Henwa was established in 1991 and marked its debut with a $100 million contract with BHP Minerals for a project in Petangis, South Kalimantan. The company is 85 percent owned by Zurich Assets International Ltd. and 5 percent by PT Indotambang Perkasa.

With its established track record of working with some of the largest mining firms in the world, such as BHP Billiton, INCO, Rio Tinto, Newmont and Freeport, and its participation in the government's "10,000 Megawatts" project, as well as current high coal prices, Steffen Fang, the vice president of Danatama Makmur said he believed that Darma Henwa's IPO would be attractive to both local and foreign investors.

In the first semester of this year, the company's revenues and net income reached $109 million and $2.5 million, respectively. The company expects to book total revenue of $252 million this year, with net profit amounting to $8.5 million.

Hamdan said that revenue was projected to increase to $317 million in 2008 and $335 million in 2009, while net profit was expected to reach $24 million next year and $44 million in 2009. (02)

India and Indonesia promote SME links

Thursday, August 02, 2007
The Jakarta Post, Jakarta

To boost bilateral trade between Indonesia and India, the World Trade Center (WTC) Jakarta is holding an exhibition displaying export-quality products from Indonesia's small and medium enterprises (SME), with the focus being on the Indian market.

The three-day exhibition, titled Indian-Indonesian Trade Fiesta 2007, gathers together exporters, traders and businesspeople from both countries with a view to seeking opportunities for cooperation.

Indian Ambassador to Indonesia Navrekha Sharma said that the event would provide a great boost to the two countries' goal of achieving bilateral trade worth US$10 billion by 2010. This goal was agreed on by President Susilo Bambang Yudhoyono and Indian Prime Minister Manmohan Singh during the former's visit to India in 2005.

"There has been impressive growth in bilateral trade. The total trade between India and Indonesia in 2004 was $3.2 billion, and it rose to $4.798 billion in 2006, which was a jump of 22 percent over the previous year," Sharma said during the opening ceremony for the exhibition Wednesday.

She said that in 2006, India's exports to Indonesia reached $1.4 billion, and Indonesia's exports to India $3.39 billion, with the balance of trade being in favor of Indonesia.

The ambassador said he saw great potential for an SME partnership between India and Indonesia as people to people contacts were increasing and there were major potentials in the fields of tourism, handicrafts, gems and jewelry, furniture, leather goods, cosmetics and textiles.

"With a middle class of more than 300 million, India is a market waiting to be tapped by Indonesian entrepreneurs, who should be eager to sell many value-added products to Indian consumers," said Sharma.

However, she said that there needed to be an appreciable shift in the trade pattern, which remained heavily reliant on raw and unprocessed materials from Indonesia, if the two countries wanted to put their trade on a sustainable path in the long term.

"Garuda Airlines should be more aggressive about exploiting the growing Indian tourist market, which sends millions of tourists to Southeast Asia every year. We send about 400,000 tourists to Malaysia each year, why not to Indonesia, a much bigger country?" asked Sharma.

Besides displaying products such as garments, fashion, leather goods, herbal products, handicrafts and furniture, the event, which is sponsored by global freight forwarder Damco, will also feature seminars on trade and tourism issues, and a short course on how to become an exporter.(02)