Local coffee exporters ask govt to impose quota scheme
Local coffee exporters ask govt to impose quota scheme
JAKARTA (JP): Local coffee exporters called on the government to introduce a quota scheme to limit the market share of foreign exporters operating in the country.
Chairman of the Association of Indonesian Coffee Exporters (AEKI) Hassan Widjaja said a quota for coffee exports was crucial to enable local exporters to compete with foreign coffee traders.
"We desperately need a quota system to protect local coffee exporters as about 70 percent of the country's current coffee exports are controlled by foreign traders," Hassan said in a hearing with House of Representatives Commission V for industry and trade affairs.
Hassan said that without a policy, local exporters would be sidelined and in the end the country's coffee exports would be fully controlled by foreigners.
However, he could not yet provide specific details, saying the association was still drafting the criteria and guidelines for the proposed scheme.
Hassan said that foreign coffee traders had strong capital and a network, but most had no interest in investing in the country to help create jobs.
Coffee exports from here stood at 310 million tons last year.
Hassan said the association had predicted the country's exports would fall short of the targeted 320,000 tons this year.
"Our exports will plunge by 30 percent to 240,000 tons this year, mainly due to a fall in the country's production," Hassan said.
He attributed the plunge in coffee output to the growers' lack of proper cultivation of trees following the continued pressure on coffee prices.
Many coffee growers have suffered losses due to low international prices for the commodity, which in turn has forced them not to cultivate their trees properly.
"They are no longer able to afford a higher cost of production," he said.
He said coffee prices were hovering at about Rp 2,000 (22 U.S. cents) to Rp 2,500 (27 U.S. cents) per kilogram, while the cost of production ranges between Rp 3,000 and Rp 3,500 per kilogram.
Coffee prices have been under protracted pressure amid an oversupply in the market following higher coffee supplies coming from the world's largest coffee-producing countries, Brazil and Vietnam.
2. Minyak (1x28) Legislators differ over fuel hike plan House members' opinions on fuel price increases vary
JAKARTA (JP): Several legislators of the three largest factions of the House of Representatives gave mixed reactions on Monday to the government's proposal to raise fuel prices by 30 percent next year.
Husni Thamrin of the second largest faction, Golkar, said the government should delay the plan given the hardships people suffer due to the prolonged economic crisis.
"I personally don't agree with the plan to hike fuel prices next year given the people's financial condition. It will add to the burdens of the poor," Husni told the Jakarta Post.
Another Golkar legislator, Paskah Suzetta, who is also deputy chief of House Commission IX, which will debate the government's draft budget, proposed fuel price increases be postponed until 2003 for the same reason.
President Megawati Soekarnoputri unveiled her 2002 state budget proposal -- her first budget proposal since she assumed power in July -- which includes a plan to raise fuel prices by 30 percent and electricity rates by between 3 percent and 4 percent every quarter.
Megawati said the government would reduce the fuel subsidy to Rp 32.29 trillion (US$3.5 billion) in 2002 from the Rp 53.77 trillion allocated for the current fiscal year to help plug the budget deficit.
Despite the fuel and electricity price increases, the 2002 budget proposed by the government will still have a deficit of Rp 45.3 trillion.
The 2002 budget also set the country's oil and gas revenue at Rp 66.1 trillion against the Rp 100.95 trillion target in the current budget, and the average oil price at $22 per barrel as against $24 under the current budget
The plan to raise fuel prices came at the request of the International Monetary Fund (IMF), which has argued that the fuel subsidy was mostly enjoyed by factories, the wealthy and smugglers, rather than the poor.
Zulfan Lindan of the Indonesian Democratic Party of Struggle (PDI Perjuangan) said the fuel price increase was understandable as the government had no choice in its attempt to plug the budget deficit.
"But since the House and the government have yet to debate the plan and the budget proposal, I can't for now say whether to endorse the plan or not," Zulfan said.
Syamsul Balda from the Reform faction, the third largest, also called on the government to delay increasing fuel prices, warning that the move could spark social unrest.
"I agree with the government's plan to cut the fuel subsidy, but it should wait for the right the time to do so," Syamsul told the Post, adding it was only his personal view.
He charged that about 70 percent of the fuel subsidy had been so far enjoyed by the business sector, with only 10 percent going to the poor.
3. Intel (2x16) Taiwan's VIA files suit against Intel Taiwan's VIA files suit against Intel
TAIPEI (Reuters): Taiwan microchip designer VIA Technologies filed a lawsuit against Intel Corp on Monday, after the U.S. semiconductor giant charged VIA with patent infringement last week.
Analysts say the countersuit, the latest salvo in a legal battle between the two companies that dates back years, may trigger additional legal action from Intel, the world's largest semiconductor firm, while legal problems would hurt VIA's ability to attract customers.
"I think the lawsuit will last for a long time and will have a negative impact on VIA's business development," said John Leong, a semiconductor analyst at Deutsche Bank based in Taipei.
The litigation knocked the Taiwan firm's shares down the seven percent daily trading limit to T$101 on Monday, far underperforming a 0.3 percent drop in the benchmark TAIEX index.
VIA said Intel's top-of-the-line Pentium 4 processor, and the 845 chipset that supports it, infringe on company patents.
"Not only Intel has chipset and CPU (central processing unit) patents. We have a lot of patents also," VIA Vice President Ted Lee told a news conference.
VIA also accused Intel of anti-competitive behavior, related to allegations that the U.S. firm has threatened Taiwan's motherboard makers with legal action if they use VIA's products.
VIA's riposte comes after Intel filed a complaint in Delaware on Friday accusing VIA, the world's second-largest chipset company behind Intel, of violating five Intel patents with its P4X266 chipset.
Chipsets link the microprocessor -- the primary computing engine of a personal computer -- with other semiconductors to communicate with the rest of the PC. Makers of motherboards, which function as the chassis of any computer system, incorporate chipsets into their designs.
Taiwan firms make over 60 percent of the world's motherboards.
"From what we understand, tier one (motherboard makers) are predominately driven by Intel. It is a slow market, and when you have uncertainty, the last thing you need is a lawsuit to interrupt production," said Leong.
Intel's Asia-Pacific spokeswoman Josie Taylor said the company could not comment on VIA's lawsuit as it has not been served with any documents.
4. Tour (2x12) EATOF vows to boost tourism
YOGYAKARTA (JP): Eight provinces out of nine East Asia Inter- Regional Tourism Forum (EATOF) founding members issued a joint declaration here on Monday stating their intention to empower East Asian tourism by strengthening multilateral relations among EATOF members.
In their joint declaration, the provinces of Gangwon (Korea), Cebu (Philippines), Tuv Aimag (Mongolia), Chiang Mai (Thailand), Tottori Prefecture (Japan), Jilin (China), Yogyakarta (Indonesia) and Sarawak (Malaysia) agreed to hold a regular annual meeting to deepen relations among them.
Another founding province, Primorsky (Russia), could not send its delegation due to internal matters.
"We encourage those member provinces that were unable to participate in this year's EATOF General Assembly to make every effort to attend future General Assemblies," the statement said.
The statement, which was read out by Yogyakarta governor Sultan Hamengkubuwono X, mentioned that EATOF's member provinces would work together throughout the year to encourage trade, tourism and investment among the group.
"In addition, local authorities shall seek ways to support and promote exchange programs among universities or private tourism sectors," the sultan said.
He said the first stage of the project could be implemented by establishing bilateral relationships among institutions.
"It can be developed in the form of organizing a consortium among universities or private tourism sectors," he added.
The participants also agreed to establish an EATOF promotion booth that will be operate at international travel marts wherever possible to promote joint marketing of the province members.
The conference was attended by some 60 participants and 200 other tourism stakeholders. Around 70 institutions, including government offices and tourism stakeholders, participated in the EATOF travel mart held at the Hyatt Regency Yogyakarta.
EATOF was established in a meeting hosted by Korea's Gangwon province in September 2000. The nine participating provinces were recognized as EATOF founders. (23)`
5. Rice (2x18) India's rice support not to impact exports
NEW DELHI (Reuters): A decision by India to raise the support price for rice paddy will only add to bulging foodgrain stocks and not help exports, analysts and traders said on Monday.
They said the move announced last week will firm up domestic prices.
"There would be hardly any impact as the export prices are currently fixed by the government and not determined by the market forces," said a Hyderabad-based grains trader.
India has a stockpile of around 20 million tons of rice.
Its rice exports are likely to be around one million tons in the year to March 2002 but well below the government's target of three million tons mainly because of higher domestic prices and lower demand from importing countries.
The government on Friday raised the minimum support prices (MSP) for rice paddy and oilseeds for the winter harvest crop.
Agriculture Minister Ajit Singh told reporters the MSP, the price at which the government procures the grains from farmers, for rice paddy of common variety had been raised to 530 rupees per quintal (100 kg) from 510 rupees set in the previous season.
The crops are sown around June and harvested from October.
Analysts said the government had raised the procurement price to please farmers and with an eye on coming elections in the rice-growing states of Uttar Pradesh and Punjab.
"The government has increased the MSP for political reasons," said a Bombay-based commodity analyst. "A higher MSP will lead to higher open market prices and more procurement adding to the subsidy burden."
He said this would mean that rice stocks will bulge to 30 million tons at the end of the calendar year.
Indian rice exports, which remained dull until the government set a lower export price in May, consist mostly of five percent sortex parboiled variety and little raw rice, traders said.
The state-run Food Corporation of India (FCI) is offering parboiled rice to exporters at 6,000 rupees per ton ex-granary and raw rice at 5,650 rupees a ton.
A Bombay-based grains trader said there would be no immediate impact of the MSP on exports but it would firm up the domestic rice prices.
"Higher domestic prices may put pressure on the government to raise the export prices also," he said.
6. IBRA (3x10) Govt urged to provide legal basis for IBRA Government urged to provide legal foundation for IBRA
JAKARTA (JP): President Megawati Soekarnoputri needs to immediately sign a new decree to provide a legal foundation for the Indonesian Bank Restructuring Agency (IBRA) to work "properly" from, a senior legislator said on Monday.
Faisal Baasir of the House of Representatives Commission IX for financial and development planning affairs said that the new decree was needed following Megawati's decision to transfer the agency from under the supervision of the Ministry of Finance to the State Ministry of State Enterprises.
"What's most important for the House is that everybody carries out their jobs properly without having to worry about legalities," he told the Jakarta Post.
IBRA was previously under the supervision of the Ministry of Finance as stipulated by government regulation No. 17/1998.
Megawati decided to transfer IBRA to the State Ministry for State Enterprises to allow the Ministry of Finance to focus on its efforts to achieve state budget sustainability.
IBRA controls various banking assets worth Rp 600 trillion (US$68.72 billion) transferred from closed banks, ailing banks and former bank owners, making the agency vulnerable to intervention from politicians and influential businessmen.
The agency is mandated to restructure the assets and sell them to raise cash to help finance the state budget deficit.
But IBRA often has to face severe political obstacles, including from Commission IX legislators, in implementing its program.
This year, the agency was targeted to raise about Rp 27 trillion in cash, and so far it has raised Rp 14 trillion.
For the 2002 state budget, the government has targeted to raise Rp 35.3 trillion in cash, of which Rp 21.5 trillion is to help finance the projected budget deficit of 2.5 percent of the gross domestic product, and the remaining Rp 13.8 trillion is to repurchase government bank recapitalization bonds to help ease the burden of the state budget.
The agency is also mandated to restructure some Rp 7.5 trillion of non-performing bank loans under its management, which will be swapped with bank recapitalization bonds.
Late last week, IBRA chairman I Putu Ary Suta said the new target was difficult to achieve given the deteriorating value of IBRA's assets.
Ary Suta confirmed on Monday that the government had yet to issue the new decree governing IBRA's new status.
"No, not yet. I haven't received any information about that yet," he said on Monday.
He refused to elaborate further on the subject saying he was not in a position to comment on that particular matter.(10)
8. SPORE (2x10)
S'pore offers training to RI
SINGAPORE (AP): Hundreds of officials from cities and provinces in Indonesia will come to Singapore to hone their administrative skills now that they've been granted more autonomy, a business school said Monday.
Thirty provincial governors and about 500 mayors and other local Indonesian officials will take part in the program run by the Singapore Institute of Commerce, or SIC, school directors said on Monday.
A new autonomy law that took effect this year gives Indonesia's regional governments more control over local affairs. The move is aimed at cooling separatist movements in parts of the sprawling archipelago.
However, implementing the new law has proven difficult as many inexperienced and under-trained professionals take on new duties. In some parts of the country this has led to temporary breakdowns in public services such as water supply, road maintenance and education.
"Everybody always wants the power, but then they turn around and say, 'Oops, we've also got the responsibility,"' said SIC executive director Michael Cope.
Though Indonesia is a vast nation of more than 200 million people on thousands of islands, Singapore - a tiny city-state with 4 million people - can show the trainees examples of administrative efficiency, Cope said.
The courses, expected to begin in the next few months, will likely cost more than 500,000 Singapore dollars (US$285,000) and will be paid for by the Association of Provincial Governors of Indonesia.
8. KL (2x12) Cheap imports feared after pact
KUALA LUMPUR (Reuters): A planned trade pact within southeast Asia risks unleashing a flood of cheap imports from elsewhere due to some members striking bilateral accords with other states, a Malaysian Chinese business group said on Monday.
A survey by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), quoted by the official Bernama news agency, said members were worried about the effects of such pacts on the Association of South East Asian Nations free trade zone.
Trade liberalizations and globalization more generally would see ASEAN markets being flooded by cheap imported consumer goods such as shoes and clothing, the report said.
Bernama did not identify any country as a source of goods.
More than half of ACCCIM's 252 survey respondents, mainly from manufacturing, wholesale, retail and construction sectors, also highlighted immediate concerns about lower foreign and domestic demand and increased local competition.
"(A) majority of the Chinese business community is pessimistic in relation to the economic outlook for the second half of 2001," the report said.
ASEAN countries' stalled recovery from the region's financial crisis of 1997-1998 has revived discussion of a trade liberalization plan which will see bigger states open their doors to fellow members' goods from 2003.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
9. LNG (2x12) Korea to get LNG from Arun Korea to get 56,000 ton LNG from Arun
SEOUL (Dow Jones): One liquefied natural gas cargo will arrive in South Korea Tuesday from Indonesia's Arun gas field, the Ministry of commerce, Industry and Energy, or Mocie, said Monday.
The 56,000-metric-ton cargo is the first volume from Arun since production was halted in March, Mocie said in a statement.
ExxonMobil Indonesia Inc., a unit of Exxon Mobil Corp., resumed some of its natural gas operations in mid-July after a four-month shutdown due to security concerns in Aceh province. ExxonMobil Indonesia is the sole natural gas operator at Arun.
Mocie said this is the restart of normal LNG imports from Arun, securing stable LNG supply to South Korea during the coming high demand season.
Indonesia's state-run Pertamina asked South Korea to take two cargoes in August and four cargoes in September, but South Korea refused because it had made alternative LNG purchase arrangements until September, Mocie said.
South Korea plans to receive two cargoes in September and four or five cargoes in October, Mocie said.
Indonesia exports LNG from the Arun gas field to South Korea and Japan.
Indonesia is South Korea's largest LNG supplier. South Korea has a long-term contract with Indonesia to import 3 million tons of LNG from Arun and 2.3 million tons from Bontang in 2001.
This year, South Korea also plans to receives 11.02 million tons of LNG from its other contract suppliers - Malaysia, Qatar, Oman and Brunei.