[Marinir] Indonesia Digest: No.16.07 ; 08 - 06 - 2007

[Yap Hong Gie]

INDONESIA DIGEST
Indonesia's complex Issues in a Nutshell
By: Ms. Wuryastuti Sunario
Published by: TBSC-Strategic Communication
No.: 16.07 - Dated: 8 June 2007
In this issue:

MAIN FEATURE:

COMPARING THE ASEAN INTEGRATION PROCESS TO EU AND THE ASIA-PACIFIC

NEWS AND BACKGROUND:

1.      Tourism and Transportation:
Four months Tourist Arrivals up 12.78%
Tourism cares for the Environment: Lombok's Gili Air Hotel builds Mangrove 
Front;
Bali Hotels Reprimanded

2.      The Environment, Health and Culture:
Indonesia has already lost 24 Small Islands
National Holidays 2008

3.      The Economy, Trade and Industry:
Japan Repeats Nuclear Plant Offer
More Geothermal Plants Planned
Tax Incentives for New Refineries


MAIN FEATURE:
COMPARING THE ASEAN INTEGRATION PROCESS TO EU AND THE ASIA-PACIFIC

The Integration of ASEAN has proceeded much more smoothly compared to Europe 
in the forming of the European Union despite the fact that the integration 
of EU looks more promising today, says Dr. Kusnanto Anggoro of the Centre 
for Strategic and International Studies in a seminar in Jakarta entitled 
"Regional Integration Process of ASEAN and EU", as reported by Kompas daily.

In its long history, Europe's national borders have remained unchanged in 
the past 200 years, whilst, during the same centuries, in contrast, the 
ASEAN countries have suffered many territorial changes. Furthermore, after 
World War II, the United States has held power of hegemony over Europe and 
stabilized the Continent. On the other hand, South East Asian countries had 
to create their own regional stability through internal collective power.

Moreover, while the history of Europe has extended in long periods, the 
history of South East Asian nations is measured by short periods.

All the above factors, plus the fact that the ASEAN nations have had the 
common experience of, and common suffering through, foreign colonization, 
these all have resulted in that ASEAN  has become more inward looking and 
more likely to see common threats appearing from external factors outside 
this region. When we study treaties signed by the ASEAN countries, these 
confirm that ASEAN cooperation is mainly pushed by commonly conceived 
external threats.

This uniting force, continued Kusnanto has become the main impetus to the 
smoother integration of the South East Asian countries into ASEAN, when 
compared to Europe into the EU.

This process differs from Europe, where, through the Treaty of Rome and the 
Maastricht Treaty, European countries have focused on improving conditions 
internally. "Seen from this point of view, then indeed, the integration of 
the European Union seems more promising compared to the integration of 
 ASEAN" concludes Anggoro.

On the other hand, Rosa Maria Gili, delegation of the Europe Commission in 
Jakarta, explained that, different from ASEAN, Europe had chosen to 
establish and strengthen formal institutions first in efforts to unite 
countries in Europe. For this reason, EU had first built its legislation 
framework and formulated and established a clear formal system on which the 
integration of the European communities could be built.

"The integration of Europe is a gradual and a step by step process" said 
Gili. The inclusion of countries is still expanding, as is the integration 
of their communities into the European Union, explained Gili.

Further, Director General for ASEAN Cooperation of the Department of Foreign 
Affairs, Dian Triansyah Djani said that the two regional organizations that 
are considered most successful in the world, namely ASEAN and EU, differ in 
their experiences in respect of regional integration.
As both regions are today in the process of formulating their Regional 
Constitution, this is the right moment to learn from studying the 
differences in each other's process of integration.

On a parallel note, at a separate occasion, comparing ASEAN cooperation to 
that needed in the Asia-Pacific, Malaysian Prime Minister Abdullah Ahmad 
Badawi said that "relations among the ASEAN states have been peaceful 
because 40 years ago, we made the correct choice and took the right path" 
(which is the formation of ASEAN - ed), reports The Star/ANN from Kuala 
Lumpur.
"Although the ASEAN system of managing peace and security needed to be 
further developed, there was a similarity between ASEAN and the 
Asia-Pacific, Prime Minister Abdullah said in his keynote address at the 
Asia-Pacific Roundtable meeting in Kuala Lumpur.

"The window of opportunity to make a similar choice is open to the countries 
in the Asia Pacific.
 The ASEAN experience could in fact serve us equally well in the wider 
Asia-Pacific region, although the situation in the wider Asia- Pacific, 
extending from India in the west to Australasia and Northern America in the 
east, may not be exactly similar to the dynamics and challenges that 
confront us in South-East Asia, said Abdullah Badawi, as reported by The 
Star.

(Sources: Kompas daily, The Star/ANN)             (Tuti Sunario)
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NEWS AND BACKGROUND:

1.                  Tourism and Transportation:

Four months Tourist Arrivals up 12.78%

During the first four months of 2007, from January through April, Indonesia 
received 1.37 million tourists through 15 gateways, or up a significant 
12.78% compared to the same period last year, said Rusman Heriawan, Head of 
the National Statistical Bureau, reported Bisnis Indonesia.

Best performance was made by Bali. The island received a total of 472,082 
visitors, up a hefty 38.38% when compared to the first four months last 
year, reported balidiscovery.com. In April, 131,034 tourists came through 
Bali, 98,101 through Jakarta, and 85,951 through Batam.

Although arrival figures are on the increase, averaging 300,000 visitors per 
month, this will make total arrivals this year to around 4.2 million only, 
which is still far below the national target of 6 million for 2007. To reach 
the expected target, Indonesia must receive an average 500,000 tourists per 
month, said Ben Sukma, Chairman of the Association of the Indonesia Tour and 
Travel Agencies, ASITA.

Despite the fact that arrivals from Japan, South Korea, Taiwan and China are 
recovering, yet, Indonesia's important markets of Europe and Australia are 
still lagging behind. The Europe market that used to make Indonesia one of 
its more popular holiday destinations, has dropped Indonesia because Garuda 
Indonesia has stopped flying to Europe.

The drop in the number of European tourists who used to stay in Indonesia 
for two months,  visiting many off-the-beaten track destinations, have 
caused tourism in many regions to suffer greatly during the past years. 
These resorts include the Toraja highlands of South Sulawesi, North Sumatra's 
Lake Toba region, Nias Island, Lombok and East Nusatenggara, the Moluccas 
and Papua.  While the trans-Java overland tour, once popular with European 
tourists, that used to visit Bandung, Wonosobo, Yogyakarta, Solo, Malang and 
on to Bali have also been dropped because of lack of participants.

Tourism cares for the Environment: Lombok's Gili Air Hotel builds Mangrove 
Front;
 Bali Hotels Reprimanded

Lea Crombie writing for Lomboktimes.com reports that Gili Air Hotel General 
Manager Bruno Milito has implemented a program to halt and even reverse the 
process of beach erosion at Lombok, West Nusatenggara.

The program, which Bruno has devised from studying natural deterrents to 
erosion, uses all natural materials and, even in its infancy, is yielding 
good results. Using readily available natural products - mangroves, 
jeranjang grass and the branches and leaves of the cemara tree which is 
plentiful on Gili Air, Bruno has planted a mix of 150 mangrove trees along 
100 metres of beachfront and around the inshore side of a nearby natural 
coral barrier.

He and five hotel staff did the plantings at low tide, during two 
consecutive nights in April.
Sixty of the mangrove trees, bought from a Lombok nursery, are the stylosa 
variety which grows in the marine reserve of Gili Sulat off Lombok's east 
coast and which is especially effective in resisting surf. The other 90 
mangroves are a mix of the mucronata, apiculata and bruguiera species. After 
growing down to strengthen their hold, the roots of mangroves spread out, to 
minimise erosion. The tree then grows upwards, creating a further barrier.

Bruno, who has protected the mangroves with bamboo stakes, expects that if 
the trees survive the next six months, they will last for ever. About a year 
ago, he attempted a similar project with a different species of mangrove 
tree. About 85 percent of that planting was destroyed by strong currents and 
winds.
On the beachfront near Gili Air Hotel, Bruno has planted jeranjang grass, 
which is a tall, natural-looking, fast-growing grass native to Lombok in 
which sand deposits get trapped and begin to build up the previously eroded 
beach. Having tried this within the hotel grounds, Bruno has seen 40cm 
height of sand collect in one year.
Also on the beach, Bruno has used the cemara tree to build a fence which he 
has backed with branches and leaves of the tree, to form a filter through 
which sand sifts and deposits. After one year, sand behind the fence is 60cm 
higher than in front.
Bruno, who does not agree with using cement or even expensive stone to 
combat beach erosion, explained his "experiment" recently to the Head of the 
three Western Gilis, the Village Head of Gili Air, and Gilis' tourism 
operators.
The issue which has brought these people together is continual erosion of 
the beach, which has brought the shoreline well inland from where it was 
when most of the hotels were built.
The solution is not to move the hotels back further from the beach but to 
build up the beach so it withstands wave erosion. They believe that 
prevention must be a matter for local government - including funding - as 
well as the hotels themselves.


Bali's Sanur Beach Hotels Reprimanded

In neighbouring Bali, tourism development is also taking environmental 
issues to heart. Balidiscovery.com informs that a task force comprising  the 
Coordinating Team for the Control of Pollution (TKP2LH), members of the 
Foundation for Sanur Development (YPS-Yayasan Pembangunan Sanur) the Working 
Secretariat for the Rescue and Safeguarding of the Environment (SKPPLH)and 
members of the Sanur village community have issued a two-month deadline to 
three leading hotels in Sanur to get their environmental record-keeping in 
order and correct deficiencies in their waste management systems and 
procedures, the Indonesian-language Denpost reported.

Cited for urgent correction at a joint meeting held in Sanur on Thursday, 
May 31, 2007 were three hotels along Sanur beach. These are the Hotel Inna 
Grand Bali Beach, Bali Hyatt and the Hotel Sanur Beach.

The task force's meeting was chaired by Ir. Yeni Trihandani, accompanied by 
Ir. Ketut Suandi of the local Environmental Service. Also in attendance were 
the Chairman of the YPS IB Gede Sidharta Putra, the Chairman of the SKPPLH 
Made Mangku, members of the TKP2LH task force, representatives of the local 
Board of Health, and community leaders from Sanur.

Hotel Sanur Beach

According to the Denpost, Hotel Sanur Beach received the most numerous 
negative citations from the task force and was ordered to urgently compile 
and present an environmental management and monitoring plan (UKL/UPL) and to 
also renew their now-expired Work Place Permit (SITU) and No Disturbance 
Permit (HO).

The Sanur Beach Hotel was also ordered to close a bypass pipe draining into 
a local estuary and to re-divert and recycle rain water now being fed into 
the hotels Waste Management System (IPAL).

The hotel was also reminded that the IPAL must be in continuous operation 
with results of water samples formally reported to the Government once every 
six months.

Following the report of the task force, an urgent water quality report is 
due within 2 months of the latest findings which revealed pollutants present 
in the Hotel's system in excess of the maximum limits set by a decree from 
the Governor of Bali.

Bali Hyatt Hotel

The Bali Hyatt was also given two months by the task force to make current 
its UKL/UPL and SITU/HO documentation and bring the operating parameters of 
its Waster Management System (IPAL) into line with strict limits set by the 
Governor.

Inna Grand Bali Beach

While all pollution and environmental documentation were found to be in 
order at Bali's oldest international hotel, the task force determined that 
the effluent from the IPAL was outside established limits, with Management 
given two months to correct the problem.

The hotel's operators were also ordered to re-divert overflow from the 
swimming pool, now flowing into the ocean, to the IPAL for water treatment.

A Strong Message to Other Hotels

The Denpost quoted the Head of the Local Environmental Agency, Suandi, who 
said he hoped the work of the task force would serve as a warning to all in 
Sanur to better manage waste and pollution. Reflecting a widespread feeling 
among the people working and living in Sanur to get on top of the pollution 
problem, the Director of Engineering for the Bali Hyatt, I Made Sumantara, 
told the press, "we are committed to create a cleaner environment for 
Sanur."


2.                  The Environment, Health and Culture:

Indonesia has already lost 24 Small Islands

In a survey of Indonesian small islands made during the past two years, the 
Department of Seas and Fisheries have found that 24 small islands in 
Indonesia's 7 provinces have disappeared , flooded over by sea water. The 
cause for their disappearance varies from tsunami to sand quarrying to 
abrasion, said Director for Small Islands Development, Alex S.W. Retraubun, 
as reported by Bisnis Indonesia.

Three islands in the province of Aceh Nangroe Darussalam have disappeared 
after the devastating tsunami, these are the islands of Sanjai, Karang Linon 
Besar and Karang Linon Kecil.

In the province of the Riau Archipelago, five islands have disappeared below 
sea level caused by sand quarrying and abrasion. These are the islets of 
Terumbu Daun, Lereh, Tikus, Inggit and Begonjai. Jakarta has lost three 
islands to quarrying for the construction of the airport, these are Ubi 
Besar, Ubi Kecil and Nirwana, while four others have disappeared through 
abrasion, which are Dapur, Payung Kecil, Air Kecil and Nyamuk Kecil.

North Sumatra has lost four islands, West Sumatra, two, South Sulawesi, one 
and Papua, three islands, all through abrasion.

The disappearance of these islands through ecological neglect is most 
disconcerting, Alex said, as these islands have physically disappeared below 
sea-level. More of Indonesian islands are threatened to follow the same 
fate, taking into consideration experts' predictions that Climate Change and 
Global Warming will raise sea levels up another one meter before the end of 
the century.

2008 National Holidays announced
Media Indonesia on Line reports that the government has announced official 
national holidays and joint public holidays for 2008, totaling 23 days in 
all, as decided in a Joint Ministerial Decision signed by the Minister for 
State Apparatus, Taufik Effendi, Minister for Religious Affairs, Maftuh 
Basyumi, and Labour and Transmigration Minister.

The National Holidays and Joint public holidays are as follows:
·         1 January 2008 , Tuesday : New Year's Day;
·         10 January , Thursday: Muslim New Year 1429 Hijriah, - followed by
·          11 January, Friday, public joint public holiday;
·           7 February - Thursday : Chinese New Year 2559, -  followed by
·          8 February , Friday, public holiday;
·          7 March, Friday: Hindu Nyepi Day 1930;
·         20 March, Thursday, Maulid of the Prophet Muhammad
·         21 March,  Good Friday;
·         1 May, Thursday, Ascension Day of Jesus Christ, - followed by
·          2 May, Friday, public holiday
·          20 May , Tuesday Buddhist Vesak Day 2552,  - and
·          19 May, Monday, one day prior to Vesak day, public holiday;
·          30 July, Wednesday: Isra' Mi'raj, the Ascension of the Prophet 
Muhammad;
·         17 August, Sunday, Indonesia's Independence Day, with
·          18 August, Monday national holiday;
·         1 - 2 October, Wednesday, Thursday  Eid'l Fitri 1 Syawal 1429 H, 
and
·          29 -30 September, Monday, Tuesday and 3 October, Friday, joint 
public holidays;
·          8 December, Monday:  Eid'l Adha, 1429 H;
·         25-26 December, Thursday:  Christmas Day, Thursday, and public 
holiday on Friday;
·         29 December, Monday:  Muslim New Year 1430 H.

2008 has 4 more public holidays compared to 2007, which has 13 national days 
and 6 extra public holidays, making a total of 19 public holidays 
altogether.
Indonesia has 5 working days in the week, with Saturday and Sunday being 
non-working days.

3.     The Economy, Trade and Industry:
Japan Repeats Nuclear Plant Offer
Indonesia's Trade and Investment News issued by the Coordinating Ministry 
for the Economy reports that Japan has repeated its offer to build 
Indonesia's first nuclear power plant in compensation for continued supply 
of liquefied natural gas (LNG), Antara reported on Monday (28/5/07).
Trade Minister Mari Pangestu, on a visit to Japan, said the nuclear power 
plant will guarantee domestic energy requirement, and Japan claims to have 
the best nuclear technology in the world.
Indonesia has said it will reduce supply of LNG to Japan to meet its growing 
domestic requirement. Vice President Jusuf Kalla has told Japan to increase 
its investment in the oil and gas sector if it wants major LNG supplies from 
Indonesia.


Earlier, investors from Japan, France and South Korea offered to finance and 
build the nuclear power plant estimated to cost $6 billion.


The government hopes to open tenders next year for the construction of a 
nuclear power plant with a capacity of 4x1,000 MW to be built in the Muria 
peninsula of Central Java. Construction is expected to start in 2010 and be 
completed in 2025.

More Geothermal Plants Planned
Further, Indonesia's Trade and Investment News reports that in order to help 
ease the threats of power shortages in remote areas, state electricity firm 
PT PLN plans to build 30 power plants which will be powered by coal or 
geothermal. The plants are planned for outside Java with an estimated total 
capacity to reach 1,852 MW by 2010.


PLN power generation director Ali Herman Ibrahim told The Jakarta Post 
Monday (28/5/07) that the geothermal power plants would be built at Ulubelu 
in Lampung, Ulumbu in Flores, East Nusa Tenggara, Lumutbalai in South 
Sumatra and Lahendong in North Sulawesi.

State-owned oil and gas company Pertamina has set aside a budget of $24 
million to develop geothermal plants in Lahendong, Ulubelu and Lumutbalai 
and PT Medco Energi Internasional recently announced a plan to build a 
geothermal plant in North Sumatra.

Herman said the capacity of each plant would range between 20 MW to 110 MW, 
with an estimated total capacity of around 1,000 MW.

Indonesia is believed to have nearly one-third of the world's geothermal 
resources so the government is stepping up efforts to develop its estimated 
27,000 MW of potential geothermal power capacity. These efforts are expected 
to help reduce the country's dependence on oil and gas.

Investors however are hard to come by -- and their issues with the projects 
include a lack of necessary regulations or incentives. Pertamina and Chevron 
both have geothermal operations in Indonesia.
The archipelago has a total installed capacity of 807 MW of 
geothermal-created energy, which is around 3% of its potential.
The government expects to complete a new regulation on tender procedures and 
licenses to explore and develop geothermal plants by the end of this year, 
said Energy and Mineral Resources Minister Purnomo Yusgiantoro, Herman said 
PLN also plans to build coal-fired plants outside Java and Bali.

These projects are not part of the 10,000 MW program initiated by the 
government to deliver an additional power supply of 10,000 MW by 2009.


Tax Incentives for New Refineries
In another report, Indonesia's Trade and Investment News  said that the 
government will provide tax incentives for new oil refinery projects in an 
effort to boost the country's oil product output, the head of the Investment 
Coordination Board had told reporters on Wednesday (30/5/07).

Indonesian state oil and gas company PT Pertamina has nine refineries 
scattered around the archipelago with a combined capacity of around 1 
million barrels per day (bpd). But it only supplies 70% of domestic oil 
product consumption and 30% comes from imports.

Muhammad Lutfi told reporters the country needs around $4 billion worth of 
investment to develop 300,000 bpd of processing capacity. His remarks came 
after the plan to develop a number of refineries in the country was stalled 
as construction costs doubled.


"Refinery projects are a capital-intensive investment. To make it 
economical, we have to provide tax incentives or tax breaks," Reuters quoted 
Lutfi as saying.
"Currently, we are in talks with a Kuwaiti investor to develop a refinery in 
Selayar island."
Lutfi had said the government has been trying to develop a 
220,000-barrels-per day refinery on Selayar island, South Sulawesi.


For your comments or inquiries please e-mail to: tbsc-strategy at indo.net.id