KP3EI COMMITTEE FOR ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT

Accelerating Indonesias Economic Transformation Through MP3EI Synergy in Resources, Power and Infrastructure
By: Eddy Satriya Head of International Cooperation Division Secretariat of KPE3I

Presented in: Indonesia 2013 Investment Summit Conrad Hong Kong, October 21-23, 2013

KP3EI

OUTLINE:
1. MP3EI: The Way We Are 2. MP3EI Updates 3. Capitalizing on Mining Sector to Support Infrastructures Development 4. Debottlenecking Initiatives and Priority Projects Screening
Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

KP3EI

1.MP3EI: The Way We Are

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

Before, Now, and Then!!!

(China , America, and Indonesia) China constructs Bridges America exports Chopsticks

What can Indonesia do???

Rich Natural Resources

Natural Gas Thermal Coal
Geothermal

most of them are still intact to be processed into higher VA products

Palm Oil Cocoa Tin Nickel Bauxite Frequency Spectrum 700 MHz outside Java, Potential arrangeme nt for Java area 2300-2360 MHz urban nationwide

Key Metrics

About 165 TCF of reserves at production rate 3 TCF pa

World second largest exporter

Home of 40% of worlds resources (the largest in the world)

Worlds largest exporter; >19 mil tons per year

At 770 thou tons/year, worlds 2nd largest producer

At 65 thou tons/year, worlds 2nd largest producer

Own 12% of worlds reserves (4th largest)

Worlds 7th largest reserves; worlds 4th largest production

Abundant resources for gas-based energy and petrochemical industries Not including NonConventional Gases, from Coal Bed Methane and Coal Gassification

About 40% is assumed feasible. Up to now, 1.200 MW has been developed.

Will be at least partially processed domestically by 2013 (new mining law: 4/2009)

Indonesias Population is Growing and Becoming More Affluent

74 mill 141 mill

There is a valid concern that economic domination of Java and Sumatra need to reduced in the long run

All of Indonesias MAC Population is Growing,

Note: MAC (Middle-class and Affluent Consumer)

Increase economic precense at the regional economic centers is inevitable not only to maintain market penetration but more to foster enhanced economic competitiveness and resilience

Slide - 8

Political Stability: the worlds third largest democracy

% of appointed local government heads vs. directly elected 100% 80% 60% 40% 20% 0% 2002
Source: World Bank, 2009

Appointed

Directly elected 62%

Directly elected

Appointed 38%

2007

2009

(election year 2009)

In election year 2009, President wins more than 60% votes from 176 million registered voters

(New) Democracy YES!

Just Recently (20 Sept 2012) An humble Major from small city Solo in Central Java, JOKO WIDODO paired with AHOK from Belitung (Sumatera), unsurprisingly won the most prestigious position as DKI Jaya - Jakarta governors.

Courtesy of Antara

10

Indonesia is above world average

100 90 80 70

Indonesia >100
(above world mobile average)

Global ICT developments, 2001-2011*

Mobile-cellular telephone subscriptions Internet users Fixed telephone lines Active mobile-broadband subscriptions Fixed (wired)-broadband subscriptions

Per 100 inhabitants

60 50 40 30 20 10 0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011*

* Estimate. Source: ITU World Telecommunication /ICT Indicators database

1111

When Realizations meet Targets

2010 TARGET RPJM Economic Growth Inflation Unemployment Poverty 5,5- 5,6 4-6 7,6
REALIZATION

2011 TARGET RPJM 6,0 - 6,3 4,0 - 6,0 11,5 - 12,5 TARGET RPJM 7,0%-7,7% 3,5 5,5 5%-6% 7,3 - 7,4
REALIZATION

2012 TARGET RPJM 6,4 - 6,9 4,0 - 6,0 10,5 - 11,5 6,7 - 7,0
REALIZATION*)

6,2 7,1 7

6,5 3,8 12,49 TARGET RKP 6,8 7,2 5,0 6,0 4,5 + 1 6,6

6,23 6,14 (Agt) 4,30

12,0 - 13,5 TARGET RPJM

2013

13,33 TARGET APBN 2013 6,8 5,8 6,1 4,9

2014

11,66 (Sept) STATUS 2 1 1 2

12

Economic Growth Inflation Unemployment Poverty *) Tentaive figure

3,5 5,5 9,5 - 10,5 6,0 - 6,6

6,7 - 7,4

Source: Bappenas 2013

9,5 10,5

On Track/on Trend

8%-10%

8,0 10,0

=Need Efforts

Relatively robust, but still lower than pre-1997 crisis average rate
(% YoY)
10 5 0 1994 -5 -10 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Indonesias GDP Growth Rate 1994 - 2012

7,54

8,22

7,82

4,70 0,79

4,92

3,64

4,50

4,78

5,03

5,69

5,50

6,35

6,01

4,58

6,20

6,46

6,23

Impact of 2008s global financial crisis.

2006 2007 2008 2009 2010 2011 2012

~6.0
2013

Impact of 1997s Asian financial crisis.

1994 - 1997 : 7,1 %

-15
Source: Indonesia Statistic

-13,13

2001 - 2006: 5 %

2007 - 2012: 6 %

During pre-Asian crisis (1994-1997), the economy grew at an annual average rate of 7.1%, and was named an 'Asian Tiger' by the World Bank along with South Korea and Thailand. After Asian Crisis (2001-2006); Indonesias average annual GDP growth rate was 5%. From 2007-2012; Indonesias average annual GDP growth rate was 6 %. If this can be raised to 7% over the next 20 years, we believe Indonesia will be among the worlds 12 biggest economies by 2025, and the 6 biggest economies by 2050. Mc Kinsey Global Institute predicts Indonesia will be the 7th-largest economy in the world in 2030. Standard Chartered Global Research predicts Indonesia will be the worlds 10 largest economies in 2020, and the top six in 2030.

13

Key Economics Stabilization Achievement: Consistently Reduced Poverty and Unemployment Rate
unemployment rate
14,00 12,00 10,00 11.90 8,00 10.25 6,00 4,00 2,00 2004 2005 2006 2007 2008 2009 2010 2011 2012 unemployment (million people)
Source: Indonesia statistic

poverty rate
50 13 45 9,11 8,39 7,87 40 7,14 6,56 35 16,66 17,75 15,97 20,00 16,58 15,42 18,00 14,15 13,33 16,00 12,49 11,66 14,00 12,00 10,00 39,30 36,10 35,10 37,17 34,96 32,53 8,00 31,02 30,02 28,59 2012 6,00 4,00 2,00 0,00 2004 2005 2006 2007 2008 2009 2010 2011 poverty (million lives)
Source: Indonesia statistic

11,24 9,86

10,28

11 9

6,14 30 7 25 5 20 3 15 10 1 5 -1

10.93

10.01

9.39

8.96

8.32

7.70

unemployment rate (%)

7.24

poverty rate ( % of total population)

Indonesias robust average GDP growth of 6.2% over the past six years has reduced the unemployment rate to 6.15% of the total labour force in September 2012 from 11.2% in 2005. In September 2012 the poverty rate dropped significantly to 11.66% of the total population from 17.75% in 2006.
14

THE PROJECTED NATIONAL GDP STRUCTURE 2025 (BY ECONOMIC CORRIDOR)

NATIONAL GDP TARGET 2025 US$ 4.000 4.500 billions

FROM 23.8% 27 From US$ 217 b US$ 1114 b

FROM 2.1% 3.5% From US$ 19 b US$ 144 b

FROM 9.3% 11% From US$ 520 b US$ 2021 b

FROM 4.8% 6% From US$ 44 b US$ 248 b

FROM 9.3% 11% From US$ 85 b US$ 454 b

FROM 2.5% 3.5% From US$ 23 b US$ 144 b 15

Indonesia Economic Corridors:

Masterplan

Basically MP3EI is based on these strategic initiatives: 1. Encourage a large scale investment realization in 22 main economic activities 2. Synchronization of national action plan to revitalize the real sector performance 3. The development of center of excellence in 6 (six) economic corridors Main strategy of MP3EI: 1. Economic potential development through economic corridor 2. Strengthening the national connectivity 3. Strengthening national human resources capability and science and technology
16

With AEC and APEC integration around the corner, Readiness of Eastern Part of Indonesia is the Main Concern Indonesia

17

Strategic Focus Areas to Boost Reg. Development

18 18

MP3EI aims at accelerating Indonesias economic transformation through cross-entity synergy and collaboration
In creating economic transformation for Indonesia, MP3EI employs three pillars and revolves in the cross-entity efforts to ensure sound projects coordination, consisting of:
Coordinating Ministry of Economic Affairs, National Development and Planning Agency, Ministry of Finance, Ministry of Public Works, Ministry of Transportation, Ministry of Forestry, Ministry of Energy and Mineral Resources (other relevant Ministries), Governors, Chamber of Commerce leaders, experts, business players 9 Working Groups: 3 Cross-sector Working Groups (Regulation, Connectivity, HR & Tech) and 6 Working Groups of Economic Corridors)
Chairman : President Vice Chairman: Vice President

1 2 3

Developing economic potential through economic corridors Strengthening national connectivity Strengthening national human resources capability and science & technology

2025 2014 2010

GDP: US$ ~ 1,2 T

GDP: US$ 3,8 4,5T GDP/c: 13.000 16.100 US$ 12 high income country

DAILY IMPLEMENTATION TEAM Chairman: Coordinating Minister of Economic Affair Vice Chairman 1: Minister of National Dev Planning Agency Vice Chairman 2: Chairman of National Economic Committee
SECRETARIAT

GDP ~ US$ 700 B GDP/c: US$ ~ 4.800 GDP/c US$ 3,005 14 major 17th major nation economy

REGULATION Working Group

CONNECTIVITY Working Group

HR & TECH Working Group

Sumatr a EC* Team

Java EC Team

Kalimant an EC Team

Sulawe si EC Team

Bali-NT EC Team

PapuaKep.Maluku

EC Team

Note *EC 19 Economic Corridor

1 9

KP3EI

2. MP3EI Updates

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

MP3EI Updates:
The Importance of MP3EI

Increasing Indonesia's Investment Attractiveness & Regional Based National Economic Strategies

MP3EI

2 3 4

Triggered the urgency of Systematic Technocracy to accommodate the increasing in Value-Added Economic Activities Ability to accommodate a quite effective system for Synchronization and Coordination

Provided fresh spirit and sense of hope for the realization of the well-being and developed inclusive society
21

MP3EI Investment Updates

Per July 2013

Rp. 4,482 T
Rp. 2,304 T

Total Investment

Infrastructures Investment

Rp. 2,178 T

Economic Activities Investment

22

MP3EI Investment Updates (2)

Groundbreaked Projects

Groundbreaked Projects:
Investment updates as per July 2013

240

Trillion Rupiahs Investment

647

Trillion Rupiahs Infrastructures Projects

146 Projects

283

Trillion Rupiahs Real Sectors Projects

94 Projects
23

364

Infrastructure Investments
Main Infrastructures
INFRASTRUCTURES

Including KPI-Supporting Infrastructures (in Billion Rupiahs)

National Budget SOE Private Mixed National Budget

61,646 512,971 17,569 322,105 367,607 1,292,092 679,118 796,202

24

KPISupporting Infrastructures
per August 2013

SOE Private Mixed

Actual percentage of GB 2011 based on the value of the investment (not the number of projects)
Already Groundbreaked Not yet 3% Total Investment Rp Triliun

Actual Groundbreaking Value based on investment (in Trillion Rupiah) Total

SOE Private Government Mixed

Investment

Sumatera Jawa Kalimantan Sulawesi Bali - NT Papua - Maluku

18%

97% 98% 95%

90 171

80,24 159,78

5%

26 64

77,14 94,46 411,63 37 projects 42 projects 22 projects 10 projects 111 projects

100% 100% 100%

40 80

Sulawesi Economic Corridor has as many as 7 of the 11 GB projects, but the projects that have not been Groundbreaked worth quite large (in the mineral mining sector).

So far, 92% projects have been realized for the GB projects list in 2011. Only in Sulawesi, the realization of the total project remaining 63% %
25

Actual percentage of GB 2011 based on the value of the investment (not the number of projects)
Already Groundbreaked Total Not yet Investment Rp Triliun

Actual Groundbreaking Value based on investment (in Trillion Rupiah) Total

SOE Private Government Mixed Investments 41,65

Sumatera Jawa Kalimantan Sulawesi Bali - NT Papua - Maluku

17%

83% 100% 100% 100% 37% 63% 94%

37,8

92,6 99,3 10,4 4,4 35,5

100%

115,56

42,00 13,07 212,28 71 projects

6%

20 projects

28 projects

21 projects

4 projects

These indicates high value projects that have not been groundbreaked on Sumatera dn Papua-Kep.Maluku Economic Corridors (Sumatra: toll roads, state-owned investment on fertilizer; Papua: Freeport).

So far 81% have been realized for the GB projects in 2012. Java and Sulawesi GB is 100%.
26

Total Projects Economic Corridors

Investment Value (Billion Rupiahs) Real Sectors 36.719,0 40.934,0 94.250,7 2.858,0 26.435,0 201.480,0 402.676,7 Projects 39 44 20 16 9 18 146

Total Investment Value (Billion Rp.) 62.533,9 115.774,0 108.878,7 10.738,0 43.273,0 204.565,0 545.762,6

Infrastructure Real Sectors Infrastructure Sumatera Jawa Kalimantan Sulawesi Bali-NT Papua-Kep.Maluku Total 32 13 9 9 5 14 82 7 31 11 7 4 4 64 25.814,9 74.840,0 14.628,0 7.880,0 16.838,0 3.085,0 143.085,9

The project plans value will be very high, compared to 2012s GB list, with investment value about twice from 2012.
* December 2012 27

Real Sectors Groundbreaking Matrix 2011 Juli 2013

Sumatra Jawa Kalimantan Sulawesi Bali - NT Papua - Kep Maluku Total Koridor
*TP= Total Projects

2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL

TP

6 2 1 9 6 0 0 6 4 6 1 11 1 1 0 2 0 0 0 1 0 1 18 9 2 29

SOE Investment

2.956,13 5.638,00 6.247,03 14.841 18.569,65 18.570 5.216,00 6.741,46 4.400,00 16.357 4.500,00 4.138,80 8.639 0 14.400,00 14.400 45.641,78 16.518,25 10.647,03

TP

7 6 0 13 14 8 0 22 6 7 1 14 4 0 4 4 1 0 5 3 0 0 3 38 22 1 61

Private Investment

9.532,99 506,54 10.040 19.040,61 9.953,00 28.994 4.038,95 84.290,00 1.200,00 89.529 6.692,00 6.692 32.252,00 1.500,00 33752 48.809,20 48.809 120.365,75 96.249,54 1.200,00

Government TP Investment
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0

TP

1 0 0 1 0 0 0 1 0 0 1 1 0 0 1 0 0 0 1 0 0 1 4 0 0 4

Mixed Investment

50.600,00 50.600 4.500,00 4.500 735,70 736 0 18.000,00 18.000 73.835,70 73835,7

TP

14 8 1 23 20 8 0 28 11 13 2 26 6 1 0 7 4 1 0 5 5 0 0 5 60 31 3 94

Total Investment

63.089,12 6.144,54 6.247,03 75.480,69 37.610,26 9.953,00 47.563,26 13.754,95 91.031,46 5.600,00 110.386,41 11.927,70 4.138,80 16.066,50 32.252,00 1.500,00 33.752,00 81.209,20 81.209,20 239.843,23 112.767,80 11.847,03 364.458,05 28

72807,063

217815,289

Infrastructures Groundbreaking Matrix 2011 Juli 2013

Sumatra Jawa Kalimantan Sulawesi Bali - NT Papua - Kep Maluku Total Koridor
*TP= Total Projects

2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL

TP

7 0 7 7 4

SOE Investment

8.983,40 -

TP

0 2 2 0 2 2 1 0 1 0 3 3 0 0 0 0 0 0 1 7 0 8

Private Investment

4.318,00 4318 6.687,00 6687 783,00 783 2.278,00 2278 0 -

Government TP Investment
2 7 9 7 4 11 8 10 1 19 9 3 12 10 1 11 15 2 17 51 27 1 79

3.834,00 3.993,10

TP

11 3 14 5 3 8 1 2 1 4 0 0 0 0 1 1 1 0 1 18 9 1 28

Mixed Investment

15.332,00 5.525,00 20857 12.882,00 10.185,00 23.067,00 1.200,00 1.557,00 22.000,00 24757 0 110,00 110 500,00 500 29.914,00 17.377,00 22000 69291

TP

8983,4 31.561,00 41.201,00 72762 3.297,00 350,00 1.200,00 4847 4.487,00 4487 3.382,00 3382 2.500,00 3.600,00 6100 49.723,40 49.638,00 1200 100561,4

7827,1 11.787,00 29.200,00 40987 21.339,00 4.791,00 363,28 26493,28 3.399,00 1.188,00 4587 6.163,00 110,00 6273 12.534,92 384,00 12918,92 59.056,92 39.666,10 363,28 99086,3

11 2 1 1 4 2 2 5 0 5 1 1 2 22 8 1 31

0 783,00 13.283,00 0 14066

20 12 0 32 19 13 0 32 12 13 3 28 9 8 0 17 15 2 0 17 17 3 0 20 92 51 3

Total Investment

28.149,40 13.836,10 41.985,50 56.230,00 87.273,00 143.503,00 26.619,00 6.698,00 23.563,28 56.880,28 3.399,00 7.953,00 11.352,00 9.545,00 220,00 9.765,00 15.534,92 3.984,00 19.518,92 139.477,32 119.964,10 23.563,28 283.004,70 29

146

TOTAL Groundbreaking Matrix 2011 Juli 2013

Sumatra
2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL 2011 2012 2013 TOTAL
*TP= Total Projects

TP

Jawa

Kalimantan

Sulawesi

Bali - NT Papua - Kep Maluku Total Koridor

13 2 1 16 13 4 0 17 6 7 2 15 1 3 0 4 5 0 0 5 2 1 0 3 40 17 3 60

SOE Investment

11.939,53 5.638,00 6247,026 23824,556 50.130,65 41.201,00 0 91331,65 8513 7091,457 5600 21204,457 4500 8625,8 0 13125,8 3382 0 0 3382 16900 3600 0 20500 95.365,18 66.156,25 11847,026

TP

7 8 0 15 14 10 0 24 7 7 1 15 4 3 0 7 4 1 0 5 3 0 0 3 39 29 1 69

Private Investment

9.532,99 4.824,54 0 14357,529 19.040,61 16.640,00 0 35680,61 4.821,95 84.290,00 1200 90311,95 6.692,00 2.278,00 0 8970 32.252,00 1.500,00 0 33752 48.809,20 0 48809,2 121.148,75 109.532,54 1200

Government TP Investment
2 7 0 9 7 4 0 11 8 10 1 19 9 3 0 12 10 1 0 11 15 2 0 17 51 27 1 79

3.834,00 3.993,10 0 7827,1 11.787,00 29.200,00 0 40987 21.339,00 4.791,00 363,28 26493,28 3.399,00 1.188,00 0 4587 6.163,00 110,00 0 6273 12.534,92 384,00 0 12918,92 59.056,92 39.666,10 363,28 99086,3

TP

12 3 0 15 5 3 0 8 2 2 1 5 1 0 0 1 0 1 0 1 2 0 0 2 22 9 1 32

Mixed Investment

65.932,00 5.525,00 0 71457 12.882,00 10.185,00 0 23067 5.700,00 1.557,00 22000 29257 735,70 0 735,7 110,00 0 110 18.500,00 0 18.500,00 103.749,70 17.377,00 22000 143126,7

34 20 1 55 39 21 0 60 23 26 5 54 15 9 0 24 19 3 0 22 22 3 0 25 152 82 6 240

JP

Total Investasi

91.238,52 19.980,64 6.247,03 117.466,19 93.840,26 97.226,00 191.066,26 40.373,95 97.729,46 29.163,28 167.266,69 15.326,70 12.091,80 27.418,50 41.797,00 1.720,00 43.517,00 96.744,12 3.984,00 100.728,12 379.320,55 232.731,90 35.410,31 647.462,75 30

173368,463

231881,289

25 HIGH PRIORITY PROJECTS WILL BE READY FOR GROUNDBREAKING BETWEEN 2015 AND 2017. 16 PROJECTS OF THESE PROJECTS HAVE POTENTIAL TO BE FUNDED THROUGH A PPP SCHEME.
Sumatra
Toll Roads MedanBinjai (15.8 km) PalembangIndralaya (22 km) PekanbaruKandisDumai (135 km) BakauheniTerbanggi Besar (150 km) Tebing TinggiKisaranRantau Prapat (178 km) PanimbangSerang (83 km)** Lubuk PakamTebing Tinggi (43.5 km)* Seaports Hub Kuala Tanjung Tanjung Sauh at Batam
Investment Value (US$ Mill)

Kalimantan
Toll Road Balikpapan-Samarinda (99.02 km) PurukcahuBangkuang Mangkatip Railway (290 km) Coal-Fired Power Plant Asamasam 5-6 (2x100 MW)*

Investment Value (US$ Mill)

Sulawesi
Road PaluParigi (37.4 km) Toll Road ManadoBitung (46 km) International Hub Bitung Railway MakassarPare-Pare (136.3 km)* Hydro Electric Power Plant Karama (4x112.5 MW)*

Investment Value (US$ Mill)

210.4 179.6 1,529.9 2,372.4 1,396.2 1,191.0 707.8 2,794.5

1,260.5 2,277.0 331.2

103.5 353.1 3,208.4 621.0 1,375.5

Not yet available

Kalimantan Sulawesi Sumatra Papua-Maluku

Java
Access Road to Purwakarta Industrial Area (7.8km)* Umbulan Water Supply* Cilamaya Port and Access Road (30km) Karawang Airport & Access Road Railway MadiunSurabaya (165 km Double Track) Coal-Fired Power Plant Indramayu 4 (1 x 1000 MW)*

Investment Value (US$ Mill)

Java Bali Nusa Tenggara

71.2 211.3 4,175.6 3,746.5 429.5 2,116.0

Bali-NT
Water Supply South Bali**

Investment Value (US$ Mill)

Papua-Maluku
Road EnarotaliTiom (240 km)**

Investment Value (US$ Mill)

282.2

173.9

Notes: Blue-marked projects are potential PPP-projects. All projects are expected to groundbreak (GB) in 2017, except: *) GB in 2015 and **) GB in 2016

31

MP3EI Enhancements
Maritimization
Strengthening the management of marine resources, strengthening connectivity, and strengthening of the National Logistics System Optimization of potential of natural resources to support the realization of ecological sustainability

Natural-Resource Balance Sheet

Strengthening of Economic Society

Where the economic dimension will became cornerstone in the empirical process of acceleration and expansion of economic corridor development

Enhanced MP3EI

Enhanced Version of MP3EI are planned to be released on APEC Summit 2013

32

Incorporating Sustainable Development Issues Into MP3EI

Indonesia's participation in the World Summit on Sustainable Development (WSSD) has demonstrated a commitment to achieve sustainable economic development. In practice, the WSSD has provided a WEHAB framework that consists of five inherent aspect of human life

Water (air) Energy (energi) Health (kesehatan) Agriculture (pertanian) Biodervisity (biodiversitas)
33

KP3EI

3. Capitalizing on Mining Sector to Support Infrastructures Development

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

Mining Sectors on MP3EI

Included on 22 Main Economic Activities
MP3EI sets a number of major programs and the main economic activities focused of development strategies and policies. This priority is a result of a number of agreements that are built together with all stakeholders in the discussion and dialogue series that are interactive and participatory. Mining Sectors such as Steel, Coal, Nickel, Copper, Bauxite are included on MP3EIs 22 Main Economic Activities.
Sunda Strait Metropo Area litan Jakarta Area

ICT

Oil& Ship Gas ping

Textil es

Food Beverag e

Food Crops

Steel

Touri sm
Fisher ies

22 Main Economic Activities

Animal Husba ndry

Defense Equipm.

Palm Oil Rubb er

Cocoa

Baux ite Copp er

Nickel

Coal Tran Tim sport ber

35

MP3EI Impact on Infrastructure And Mining Sectors

*)Regulation such as Law No.4 year 2009, Government Regulation No. 27 year 2012, Government Regulation No. 23 year 2010, and Minister of Energy and Mineral Resources Decree No. 7 year 2012

36

Role of Mining Sectors in MP3EI

Mining Activities Infrastructures Electricity Other Industry
Exploration and Exploitation Mining Facilities Smelter Coal Processing Facilities (Gasification and Upgrading, etc.) Road Railway Port Coal Based Power Plant Mine Mouth Coal Based Power Plant Renewable Energy Power Plant Steel Industry Cement Industry Pulp & Paper
37

Source: Ministry of Energy and Mineral Resources, Republic of Indonesia

MP3EI infrastructure projects offer potential opportunities of ~USD 64 billion for private sector participation
MP3EI Infastructure Project Funding Sources* MP3EI Infrastructure Project Funding Gap per Infrastructure Sector

152 Funding Gap: ~ USD 400 64 Billion Private Funds (7%) APBN 24% (19%) 27% PPP 599 41% (28%) 536 Funding 41% Gap (25%) Road & SOE Bridges, 11,0% 24% 8% State-Owned
Mixed Funds

Railway, 22,5%

Seaport, 21,5%

Water (logistics), 0,2% Airport, 10,6%

Energy, 34,3%

1%
State Budget (APBN)

Enterprise Funds

Funding gap calculation based on: MP3EI Database per 31 August 2012 (477 Projects) Funding gap formula: Investment value (allocated State Budget + SOE). Private sector funded projects are assumed 100% fully covered. ICT sector is not included in the calculation as the projects list still under progress of validation Energy funding gap requires further validation with PLN

Potential PPP opportunities are largest in the energy, railway and seaport sector. There are also opportunities in the road, airport and water sector.
38

The government will lead the infrastructure development by funding 15 projects that will ground break in 2014
The 15 Infrastructure projects to be funded by the Government have a total investment value of US$ ~ 3.72 Billion 2014: 2017: 25 Infrastructure Projects (62%)
Infrastructure Projects (38%)
Sumatra: 3 Projects US$ 1.13 Billion

MP3EI High Priority Projects in 2014 Bridge Water Sanitation Energy ICT Railway Airport Seaport 1 Project 2 Projects 1 Project 2 Projects 1 Project 2 Projects 1 Project 5 Projects

2014

15

Kalimantan 2 Projects US$ 988.8 Million

Sulawesi 2 Projects US$ 659.2 Million

Papua-Maluku 1 Project US$ 164.8 Million

Java: 4 Projects US$ 350.2 Million

Bali-Nusa Tenggara 2 Projects US$ 144.2 Million

National ICT Project (Palapa Ring): US$ 288.4 Million

The 15 infrastructure projects funded by the Government will be the kickoff for infrastructure development in Indonesia and improve Indonesias competitiveness through a significant reduction of logistical costs

39

25 Priority Projects that are planned for groundbreaking before 2017 have large potential to be funded through PPP schemes
Those 25 projects, which will be groundbreaking before 2017, have a total investment value of US$ ~32 Billion
2014: 15 Infrastructure Projects (38%) 2017: 25 Infrastructure Projects (62%)

2017

MP3EI High Priority Projects in 2017 Road 12 Projects Water Supply 2 Projects Railway 3 Projects Airport 1 Projects Energy 3 Projects Seaport 4 Projects

Funding sources for infrastructure projects planned for groundbreaking in 2017:

5 projects directly funded through State Budget (20%)

Kalimantan 3 Projects US$ 3.9 Billion

Sulawesi 5 Projects US$ 5.6 Billion

Papua-Maluku 1 Project US$ 175.1 Million

16 Potential PPP Projects (20%)

3 projects indirectly funded through State Budget (Loans) (12%) 1 project funded by StateOwned Enterprise (4%)

Sumatra: 9 Projects US$ 10.3 Billion Java: 6 Projects US$ 10.7 Billion Bali-Nusa Tenggara 1 Project US$ 278.1 Million

16 High Priority Projects with groundbreaking before 2017 will be offered to the private sector through PrivatePublic Partnership (PPP) schemes.

40

Indonesia offers huge investment opportunity palm oil industry as an example (1/5)
The current CPO national productivity in Indonesia is only 2,98 ton/ha while the producivity potential in Indonesia is 7 ton/ha. Opportunity in Upstream Palm Oil Industry Ton CPO/ha
Current Productivity Productivity Potential
Sei Mangkei (Medan, North Sumatera)

The existing palm oil industry is concentrated in Sumatera, within following KPIs*

Investment in infrastructure is required to support the palm oil industry investment opportunity:

Kuala Tanjung port - available for investment Dumai port expansion - govt funded Port Belawan port expansion - govt funded

7 2,98
Current Productivity

GAP = 4,02 ton/ha

Dumai (Riau island) Kampar (Riau island) Rokan Hulu-Hilir Siak (Riau island)

Pekanbaru Kandis Dumai toll road available for investment Road Medan Binjai toll road - available for investment Trans Sumatera - available for investment PLTU Banjarsari 2 x 100 MW PLTU Mulut Tambang 4x150 MW

Productivity Potential

Source: Kementerian Pertanian RI, Pusat Data InfoSAWIT, 2010

Pasaman Barat (West Sumatera) Solok Selatan (West Sumatera)

Singingi (Riau island) Lingga (Riau island) Bangka Barat (Bangka Belitung ild)

The current global demand for biodiesel is 92 mn tonnes, while total supply is only 33 mn tonnes- untapped opportunity. Opportunity in Downstream Palm Oil Industry In percentage (%)

Muara Enim (South Sumatera) Empat Lawang (South Sumatera)

Tanjung Api-Api (South Sumatera) Ogan-Komeling Ilir (South Sumatera)

3
Indonesia Others Others Untapped

30 60

South Sumatera 9 Mine Mouth Coal Energy* Fired Steam Power Plant (2 x 600 * MW) South Sumatera 10 Mine Mouth Coal Fired Steam Power Plant (1 x 600 MW)
**Available for investment

Lampung Timur

Sumber: ISAAA 2011

*Palm oil plantations are also available in Aceh, Bengkulu and Jambi provinces

41

Huge potential of Palm Oil Industry

Palm Oil Demand from Main Importer Countries is Continue to Rise
In million ton

20 EU25 Cina India

4,5 5,2 2,8 4,5 5,4 3,7 4,8 5,6 4,8 5,5 5,8 6,1 5,7 6 6,4 5,9 6,2 6,6

0 2006
Sumber: Oil World, Reuters, 2010

Palm Oil Outlook Positive Worldwide: China, EU and India respectively are the main consumers of palm oil accountable for 80% of worlds demand. Rising population and increasing income, world experiences an increase in demand for. palm oil & its derivats

2007

2008

2009

2010E

2011E

Consumption Growth > 7% CAGR: Consumption growth of palm oil worldwide for the last 7 years have been increased and is expected to rise as the price of oil continues to increase. Such growth is also on account of a growing population as well as the rising demand for alternative energy sources biodiesel.

in %

Consumption Growth of Palm Oil, 2005-2009 CAGR 20

19 10

% CAGR
9 7

0 India
Sumber: Oil World, Reuters, 2010

Cina

Indonesia

Eropa

The demand for palm oil will likely remain strong and research and development work is being done in Indonesia.The availability of land in Indonesia, coupled with recent years of high seed sales, record energy prices, and high vegetable oil prices are factors that will result in Indonesia continuing to lead the world in palm oil production for years to come.

42

Indonesia offers huge investment opportunity coal industry as an example (2/5)

With coal production of approximately 300 million tons/ year, Indonesia has coal reserves for the long term:
Coal profile in Indonesia, 2010 (Mn Tons)

The existing coal industry is concentrated in following KPI* (select sample):

Investment in infrastructure is required to support the coal industry investment opportunity:

KPI Kotabaru Location: South Kalimantan

104,800

Port

Maloy port, East Kalimantan (IDR 4.8 trillion) available for investment Coal Railway South Sumatera Lampung (IDR 802 billion) available for investment

KPI Kutai Timur Location: East Kalimantan

21,000

325 Production

265 Export

KPI Tanah Laut Location: South Kalimantan KPI Tanah Bumbu Location: South Kalimantan KPI Muara Enim Location: Pendopo, South Sumatera

Coal Railway Puruk Cahu Bangkuang, Central Kalimantan (IDR 15 trillion) Railway available for investment Coal Railway Puruk Cahu Tanjung Isuy, Central Kalimantan (IDR 20.3 trillion) available for investment PLTU Mulut Tambang (4x150MW) (IDR 7.5 trillion)

Resources

Reserves

Coal resources in Indonesia, 2009 (in Bn Tons)

0.5 51.9 104.8 52.4

KPI Tanjung Api-Api, Tanjung Carat Location: South Sumatera KPI Palembang Location: South Sumatera

Energy PLTU Banjarsari (2x100MW) (IDR 2.8

trillion) East Kalimantan Coal Fired Steam Power Plant (2x100MW)

Sumatera Kalimantan Others

Total

From 1996 to 2010, Indonesias coal production grew by an average of 14.8% per year with an average growth of coal exports at 15.1% per year. The level of domestic coal consumption experienced an average growth of 13.8% per year within the period of 1996 -2010.
*Source: Indonesia Coal Mining Association (2010), Directorate General Mineral (Ministry of Energy and Mineral Resources)

43

Indonesia offers huge investment opportunityAluminium Smelter as an example (3/5)

The current production capacity for bauxite processing is only ~2% of total bauxite potential in Indonesia:
Indonesia Bauxite Profile, 2010 (tons)*

The existing bauxite extraction is concentrated in following KPI* (select sample):

Investment in infrastructure is required to support Alluminum Smelter investment opportunity:

National Bauxite Production, 15.490.357 , National 2% Bauxite Reserves, 179.503.546 , 24%

National Bauxite Resources, 551.961.397 , 74%

KPI Ketapang Location: West Kalimantan KPI Kabupaten Sanggau Location: West Kalimantan KPI Mempawah Location: West Kalimantan

Port

Teluk Melano port, West Kalimantan - govt funded Pontianak port improvement - govt funded New port development in Pontianak available for investment New road development in KPI Ketapang govt funded Tayan bridge development - govt funded PLTU Parit Baru (2x50 MW) West Kalimantan available for investment East Kalimantan Coal Fired Steam Power Plant (2x100MW available for investment Pontianak Water Supply govt funded

Road

Energy

207,932

Other

Private sector investment opportunities in bauxite industry are massive for example processing bauxite into alumina and aluminum. In addition, there are also major investment opportunities for infrastructure provision for these mines such as private rail or private ports.
*Source: Ministry of Energy and Mineral Resources

44

Indonesia offers huge investment opportunity nickel industry as an example (4/5)

The current production capacity for Nickel processing is 462,000 tons from 3,900,000 tons of total Nickel potential in Indonesia
National Nickel Reserves Recent National Nickel Production

The existing Nickel industry is concentrated in following KPI:

Investment in infrastructure is required to support the nickel industry investment opportunity:

KPI Palopo Location: Luwu Timur, South Sulawesi Main Economic Activity in KPI: Nickel mining and processing KPI Kolaka Location: Kolaka, South East Sulawesi Main Economic Activity in KPI: Nickel Mining KPI Konawe Utara Location: Mandiodo, South East Sulawesi Main Economic Activitty in KPI: Nickel Smeltering Pig Iron

Seaport

Bitung Port Expansion (IDR 414 Billion) Makassar Port Expansion (IDR 2.2 Trillion) Manado Minut Bitung toll road Access Road to support Nickel Industry from North Kolaka to Pomala Port IDR 79.4 billion Access Road to support Nickel Industry from North Kolaka to Lasususa Port

11%

Road

89%
Source: United States Geological Survey

KPI Morowali Location: Bahodopi, Central Sulawesi Main Economic Activity in KPI: Nickel Mining, Preparation and Smeltering (Pig Iron)

Energy

North Sulawesi Coal Fired Steam Power Plant (2x55 MW)

45

Indonesia offers huge investment opportunity steel industry as an example (5/5)

With the govt target to reach the steel consumption of 100kg/capita/year by 2025, the govt commits to boost the downstream steel industry: Steel consumption, 2008 The existing steel industry is concentrated in following KPI: Investment in infrastructure is required to support the steel industry investment opportunity:

KPI Kotabaru Location: Kotabaru, South Kalimantan KPI Kotawaringin Barat Location: Central Kalimantan KPI Tanah Laut Location: Tanah Laut, South Kalimantan KPI Tanah Bumbu Location: Tanah Bumbu, South Kalimantan KPI Cilegon Location: Banten
4 0
Others

Port

Development of Tanah Grogot port (IDR 163 billion) govt funded Expansion of Batulicin port (IDR 10 trillion) govt funded Lingkar Selatan Cilegon road (IDR 300 billion) govt funded

Kg/capita/year

Road

90 80 70 60 50 40 30 20 10 0

84

Iron deposit in Indonesia (%)

Primary iron deposit Laterite iron deposit

Road development in Tanah Bumbu area private sector funded PLTA Kusan 67 MW (IDR 860 billion) available for investment

Energy

29

32 21 5 8 0 0
Papua

17 0
Maluku

Water Supply

Batu Licin Water Supply (IDR 200 billion) available for investment 46

Kalimantan Sulawesi Sumatera

Source: Min of Industry, 2007; Indonesian Commercial Newsletter Vol 57, June 2008

KP3EI

4. Debottlenecking Initiatives and Priority Projects Screening

Committee for Acceleration and Expansion of Indonesia Economic Development 2011-2025

The prioritization process follows a three-step methodology based on international best practice and involves stakeholders throughout the process
Selecting infrastructure projects with estimated strategic contribution for acceleration and expansion of economic growth Project Identification: Early identification of projects based on several criteria: construction has not started yet, no maintenance/reparation project or goods procurement, investment value > US$ 50 Million. Recommendation from Line Ministries: data collection and initial discussions on projects with KP3EI Secretariat, Bappenas, MoF, BPN and related Line Ministries based on the agreed criteria.* Technical Committee Discussion: Indepth discussion on strategic value of selected projects using helicopter view perspective.**

Phase 1
Top 200 Infra Projects

Prioritization Criteria

Scoring System

Score Justificatio n

Phase 2
78 Selected Projects

Phase 3
56 Priority Projects

Weighting Criteria

Summary of Outcome Priorities

Final Result
48

* Urgency of the project, Readiness Level, Socio-economic Effects, Environmental Effects **considering diversification of corridor and sector, synergy with principles and targets MP3EI, as well as cost-benefit analysis of project delay.

48

The selection of priority projects is based on the immediate needs of economic development centers and investment-readiness of downstream industries
Production centers which have the potential and the high level of investment-readiness require government commitment in the provision of infrastructure to reduce logistics cost and accelerate economic growth...
1. Development of downstream palm oil industry in SEZ* Sei Mangkei PT Unilever Indonesia and PT Ferrostaal are investing US$1 billion. 2. Downstream palm oil industry in East Kalimantan Currently there are 200 companies and 42 oil palm plantations in East Kalimantan CPO industry. 4. Bitung and Palu Investment-Focused Areas Potentially attract investment of US$ 170 Million (Palu) and US$ 174 Million (Bitung) in chocolate, rattan, sea grass, coconut, fishery and manufacturing industries.
Production Center

1 2
5. Coal industry in South Sumatera 39% of national coal reserves is located in the southern part of Sumatera, with an estimated amount of 18.13 billion tons.

SLOC & ALKI Strategic Sea Lines

3 5 6
3. Coal Industry in Central Kalimantan Potentially produce USD 4.5 billion/year worth of coal, current production is around USD 750 million

7.
6. Karawang Industrial Area There are more than 7 industrial areas exporting more than 65% of Indonesias total export. LOreal has invested USD 1 billion, automotive companies are building plants with US$1.5 Billion investment value.
* Special Economic Zone

7. Tourism industry in Bali and Lombok Number of tourists who visited Lombok rose 35% per year from 2010 to 2012. Mandalika has potential to attract US$ 300 Million investment and Senggigi is already attracting foreign hospitality companies.

8. Sorong as the gateway for Papua Sorong, which is located in the northern part of Papua, becomes the center of activity and gateway of Papua.

49

49

The Government will fund 24 of the most urgently needed priority infrastructure projects to ensure accelerated delivery (as early as 2014)
Medan Kualanamu Double Track Railway (US$ 78.8M) Kuala Tanjung Port* (US$ 600M) Balang Island Bridge (S157.2M) Palu Parigi Rass (US$ 100M)

Coal-Fired Power Plant Pangkalan Susu 2 x 200 MW (US$ 417.2M)

Sorong Port (US$ 160.9M) Enarotali Tiom Road (US$ 168M)

Trans Sumatera High Grade Highway (US$ 6180.1M)

Coal-Fired Power Plant Indramayu 2 x 1000 MW (US$ 2044.5M) Coal-Fired Power Plant Asamasam 2 x 100 MW (US$ 320M) Makassar ParePare Railway (US$ 600M)

Access Road to Purwakarta Industrial Area (US$ 68.8M) Solo Madiun (US$ 223.7 M) Madiun Surabaya (US$415 M) Double Track Railway

Water Supply Jatiluhur (US$ 189M)

Lembar Bay Port (US$ 39M)

Dam Kolhua & Dam Raknamo (US$ 100M)

Coal-Fired Power Plant Takalar 2 x 100 MW (US$ 280M)

Notes: Exchange rate IDR/US$= 10.000; Palapa Ring (US$ 280M) is a priority project but not displayed (multi-corridor scale project) *) development of existing port

Following the 3 pillars of MP3EI, the entire process of selecting priority infrastructure projects is based on: Urgency of the project; ease of implementation (readiness level); social, economic, and environmental effects; Supporting Production Centers or Investment-Focused Areas with strategic value, coupled with a high level of investment readiness, for example: Sei Mangkei, Maloy, Bitung, Karawang. Project's contribution to strengthening National Connectivity 50 50

Another 32 projects (US$29 Billion in total) located in the main economic growth centers are selected as priority projects to be offered under PPP-scheme (2017)
International Hub Kuala Tanjung (US$ 2700M) Consolidated Urban Development in Banda Aceh (US$ 21M) East Agam & Bukittinggi Water Supply (US$ 17M) Padang Water Supply* (US$ 28M) Karya Jaya Integrated Terminal Palembang (US$ 75M) Monorail South Sumatera (US$ 515.5M) Muara Enim-Pulau Baai Railway (US$ 3000M) Jakarta Wastewater Disposal System (US$ 431.9M) Pondok Gede Water Supply (US$ 20M) Tanjung Priok Access Road (US$ 612.5) Panimbang-Serang Toll Road (US$ 1150.7) Pasir Koja-Soreang Toll Road (US$ 210M) Cisumdawu Toll Road (US$ 1015.8M) Integrated Railway Terminal Gedebage (US$ 133M) Kertajati Airport (US$ 112.5M) Cilamaya Port & Access Road (US$ 4034.5M) Batam Municipal Solid Waste Disposal (US$ 100M) Tanjung Sauh Port in Batam (US$ 756M, Phase I) Puruk Cahu Bangkuang Railway (US$2200M) Balikpapan Samarinda Toll Road (US$1217.9M) Maloy CPO Port (US$178M) Coal-Fired Power Plant Karama 4 x 112.5 MW (US$ 1329M) Manado Bitung Tollroad (US$ 341.2M)

International Hub Bitung Port (US$ 3100M)

Solid Waste Disposal & Treatment Surakarta ((US$ 30M)

Makassar New Port (US$ 360M)

Water Supply South Bali (US$ 272.7M) Revitalization of Rail Station & Pedestrianization Malioboro (US$ 870M) Pandaan-Malang Toll Road (US$ 420M)

Umbulan Water Supply (US$ 204.2M) Lamongan Regency Water Supply (US$ 16.7M)

Note: Exchange rate IDR/US$= 10.000 *) expansion of current Padang Water Supply facilities

Karawang Airport (US$ 3619.9M)

Following the 3 pillars of MP3EI, the entire process of selecting priority infrastructure projects is based on: Urgency of the project; ease of implementation (readiness level); social, economic, and environmental effects; Supporting Production Centers or Investment-Focused Areas with strategic value, coupled with a high level of investment readiness, for example: Sei Mangkei, Maloy, Bitung, Karawang. Project's contribution to strengthening National Connectivity 51 51

Samples of top down initiatives to debottleneck MP3EI Economic Sectors Development facilitated by KP3EI (1)
Project/ Investor Bottleneck issues Debottlenecking effort and result

Sei Mangkei

Delay in land acquisition

process due to delay in the

Enhance coordination between line

ministries/agencies, other government entities and stakeholders, which resulted in acceleration of RTRW finalization KP3EI ensures additional budget is provided and allocated to support infrastructure projects implementation in timely manner

Industrial Estate

PTPN III

issuance of Provincial Spatial Planning State Law (Perda RTRWP) Infrastructure availability in time of the investment (Kuala Tanjung seaport expansion, road, railway and Kuala Namu airport)

Bangko Tengah
Railway for coal transportation

Railway area overlaps with

Coordination is conducted up to

forest area Ministrial level, resulted in clearance of Delay in issuance of IPPKH dispute settlement (Forest land area use permit) KP3EI facilitated the provision of ~9.881 ha forest area to be used by PT Bukit Asam
52

Samples of top down initiatives to debottleneck MP3EI Economic Sectors Development facilitated by KP3EI (2)
Project/ Investor Bottleneck issues Debottlenecking effort and result

ANTAM

Mining Permit (Ijin Usaha

Konawe Mining Permit overlapped with PT Duta Perkasa Inti Minerals

KP3EI facilitated a meeting with Bupati

of North Konawe for accelerated mining permit issuance The result is still awaiting the reissuance of PT Antams Mining Permit from Bupati of North Konawe

Pertambangan) unilaterally Investment Focused Area of North Konawe repealed by Bupati of North

PT Vale Indonesia

Delays in the issuance of

IPPKH by the Ministry of Forestry, because the recommendation letter from Bupati of Luwu and from Governor of Center Sulawesi is not yet being sent to Ministry of Forest

Investment Focused Area of Morowali and Palopo

KP3EI facilitated the meeting with PT

SCM and PT Vale regarding the Mining Permit issues The resul was the publication of IPPKH from Ministry of Forestry to PT Vale Indonesia. Yet, on the website of Ministry of Forestry, the IPPKH are still on process.
53

Samples of top down initiatives to debottleneck MP3EI Economic Sectors Development facilitated by KP3EI (3)
Project/ Investor Jakarta MRT Bottleneck issues Jakarta MRT project has been discussed for ~20 years with no significant progress, while financial loss due to traffic has reached IDR 12.8 T in 2012 Debottlenecking effort and result

GOI encouraged Local Government to

proceed with the plan as per initial timeline The recent development is that Central Government accelerating their support and plans to increase Central Government funding portion from the current 42% to >48% for MRT project

Central Java IPP

Location permit has not

been issued by local government due to different interpretations of the power plant Requires acceleration for land acquisition and certification

The location permit that was stuck for 20

months was unlocked in 3 months following KP3EI involvement KP3EI continues support of debottlenecking for land acquisition process to reach financial close by Oct 2013
54

Improving Investment Climate

44 regulations have been completed, 16 regulations are being revised, 28 regulations to be revised.
Revisions, corrections, and improvement made on the regulation comprise of : Law (UU); Government Regulation; Presidential Decree; Draft of Law, Draft of Government Regulation; and Ministerial Decree. Some are sectors , others are crosssectoral or regional basis.
As of April 2013
55

(Stabilization Policy and Economic Growth Package)

No. (Policy Substance)
(Reducing oil and gas import increasing biodiesel portion in diesel fuel by 10% as mandatory requirement) (Increasing export by relaxing the mineral export procedure) (Tight Fiscal Policy by applying additional VAT on Luxury Goods for CBU car and branded products)

Instrument
(Min of Energy and Mineral Resources Decree) (Min of Energy and Mineral Resources DecreeCircular Notes) (Goverment regulation)

A. (Fixing current balance account and maintaining exchange rate)

1 2 3

B. (Maintain Economic Growth and Purchasing Power)

1 2 3 (Guidence on the Minimum Wage Policy) (Classification of labor intensive and medium industries) (Reducing the income tax rate of article 25 and postpoing the payment of income tax of article 29 for selected industrial tax payer) (Presidential Instruction) (Min of Industry Decree) (Min of Finance Decree)

(Relaxing regulation for Bonded Zone) a. (Up to 50% of Domestic Sales) b. (Above 50% of Domestic Sales can be provided by DG Custom on behalf of (Min of Finance Decree) MOF and based on the recommendation from related ministries)
56

56

(Stabilization Policy and Economic Growth Package)

NO.
5

(Policy Substance)
(Waiver facility on VAT for imported books) (Fiscal Relaxation Reducing and/or Waiver on VAT for Luxury Goods which are no longer considered as luxuries good e.g. Electronics (Television, Refrigerator, Air Conditioner, Water Heater, Camera and Sanitary Equipment)

(Instrument)
(Gov Reg and MoF Reg)

B. (Maintain Economic Growth and Purchasing Power)

(Gov Reg and MoF Reg)

C. (Maintaining inflation rate)

1 Deregulate trading rules for meat and horticultural products from using quantity based to references price mechanism (Min of Trade and Min of Agriculture Reg)

D. (Accelerating Investment)
1 Reduction of Negative Investment List DNI (License simplification) 1. (Reducing number and type of license) 2. (Grouping similar license) 3. (For the 1st stage, it will be applied in mainstream sector of mineral and gas by reducing 69 license to 8 (similar group) license) (Presidential Decree)

(SLA for implementation of license simplification)

57

57

(Stabilization Policy and Economic Growth Package)

No.
3

(Policy Substance)
(Debottleneck obstacles in strategic investment projects) a. (Finalize renegosiation for Contract of Works - Kontrak Karya and PKP2B) b. (Finalize financial closing of PLTU Batang 2x1000 MW)

(Instrument)
(Revision of Gov Reg no 24/2012 on Divestation, Mainstreaming on Mineral Sector) and Gov Reg no 9/2012 on Royalty (Pres Reg)

D. (Accelerating Investment)

58

58

REPUBLIC Of INDONESIA COORDINATING MINISTRY FOR ECONOMIC AFFAIRS

Head of International Cooperation Division, Secretariat of KP3EI Deputy Assistant for ICT and Utility Jalan Medan Merdeka Barat No. 7, Jakarta Pusat - Indonesia Phone: +62 21 34832611; Fax: +62 21 34832609 email: satriyaeddy@gmail.com @EddySatriya

Eddy Satriya

Eddy Satriya
1989 :Graduated from Bandung Institute of Technology (Telecommunication Engineering) 1997 :Graduated from University of Connecticut (MA in Economics) 1989-90: Program Management Consultancy (PMC-IV) for Telecommunication Development 1990-2005: Working in Bappenas (The National Development Planning Agency). 1995 : Secretary to Board of Commissioners of PT.Telkomsel 1997- present: Visiting Lecturer in University of Indonesia, University of Pelita Harapan, and ITB
Contact: satriyaeddy@gmail.com 62.21.3511466 t

2002-present : Actively writes various article and column in national papers and magazines. 2005 (Dec)-present: Working in Coordinating Ministry for Economics Affairs 2011 - Present: Head of International Cooperation Division, Secretariat of KP3EI

62.21.3511464 f

Recent publications are available on:

eddysatriya.wordpress.com kolom.pacific.net.id