The failure to attract enough investors for new oil and gas blocks offered in 2009 will cost the government a Rp 60 trillion (US$6.36 billion) drop in state revenue this year, the energy and mineral resources ministry said. The ministry estimated the revenue from the sector would drop to Rp 175.48 trillion in 2010 or down by about 25 percent from Rp 235.31 trillion in 2009, as a direct result of a new regulation on cost recovery.

Plantation sector investment is forecast to grow by 11 percent per year over the next five years while the amount of land used for palm oil plantations will jump by almost 20 percent, according to an Agriculture Ministry forecast released last week. In 2010, total plantation investment, including palm oil, rubber, cocoa, coffee and sugar cane plantations, is expected to be Rp 45.18 trillion ($4.79 billion), up 4.3 percent on 2009.

Despite the turbulence in financial markets decimating global commerce and nearly toppling trade-driven economies in February, the Bank Indonesia governor at the time, Boediono, said the nation had “a blessing in disguise.” He was referring to the economy not being advanced enough to become reliant on international trade. As a result, the collapse in global demand would not seriously dent growth, he forecast.

Bangkok. A free-trade agreement between China and Southeast Asia came into force on Friday, consolidating a sixfold surge in economic activity over the past decade between countries representing a quarter of the world’s population. The agreement expands a limited 2005 trade area between China and the 10-member Association of Southeast Asian Nations, scrapping tariffs on about 90 percent of goods.

Indonesia fell woefully short of its biofuels target in 2009 as producers halted operations because of the surging price of crude palm oil, the main raw material. Total biofuel production was just 104,100 kiloliters in 2009, a 96 percent fall from the 2.56 million kiloliters produced in the previous year, the Energy Ministry said.