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.