Indonesian Budget System

Indonesia strives to reduce chili prices to contain inflation

2011-01-10T22:13:00.000-08:00

The Indonesian government has called the public to grow chili at homes, following the skyrocketing prices of the commodity, as an effort to ease inflation pressure, media reported here Friday.

The commodity's prices have more than doubled recently, triggering concern among consumers.

Indonesian inflation accelerated to a 20-month high to 6.96 percent in December, higher than the central bank target of 4-6 percent, due to rising food prices, including those of chili and rice.

Indonesian Trade Minister Mari Elka Pangestu quoted by the Jakarta Post as saying that extreme weather and pest were blamed for poor supply of the commodity.

"There is not much we can do because this is a production problem caused by pests and the weather. The Trade Ministry can only focus on making sure there will be no distribution problems," Mari said on Thursday.

"People should be encouraged to plant chili shrubs in their yards. Just so you know, I've already planted chili shrubs at my house. I have 200 chili shrubs planted inside pots," she said.

Chili is one of the main ingredients badly needed by consumers in Indonesia.

Red chili price has climbed to more than 100,000 rupiah (some 11.17 U.S. dollar) per kilogram from the normal price of over 40, 000 rupiah (about 4.47 U.S. U.S. dollar).

Indonesia refrained from raising rate on Jan. 5 and kept it at a record low of 6.5 percent to prevent greater capital inflows which can raise currency volatility and financial instability.

On Dec. 29, the central bank tightened rules on banks' foreign- exchange holdings and overseas borrowing to ease inflation pressure and the impact of possible sudden reversal of capitals.

Copyright 2011 XINHUA NEWS AGENCY

Gold Invest

2010-11-01T18:41:00.000-07:00

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Economy of Indonesia

2010-10-24T17:36:00.000-07:00

Indonesia has a market-based economy in which the government plays a significant role. There are 139 state-owned enterprises, and the government administers prices on several basic goods, including fuel, rice, and electricity.

In the mid-1980s, the government began eliminating regulatory obstacles to economic activity. The steps were aimed primarily at the external and financial sectors and were designed to stimulate employment and growth in the non-oil export sector. Annual real gross domestic product (GDP) growth averaged nearly 7% from 1987-97 and most analysts recognized Indonesia as a newly industrializing economy and emerging major market. The Asian financial crisis of 1997 altered the region's economic landscape. With the depreciation of the Thai currency, the foreign investment community quickly reevaluated its investments in Asia. Foreign investors dumped assets and investments in Asia, leaving Indonesia the most affected in the region. In 1998, Indonesia experienced a negative GDP growth of 13.1% and unemployment rose to 15-20%. In the aftermath of the 1997-98 financial crisis, the government took custody of a significant portion of private sector assets via debt restructuring, but subsequently sold most of these assets, averaging a 29% return. Indonesia has since recovered, albeit slower than some of its neighbors, by recapitalizing its banking sector, improving oversight of capital markets, and taking steps to stimulate growth and investment, particularly in infrastructure. GDP growth has steadily risen this decade, achieving real growth of 6.3% in 2007 and 6.1% growth in 2008. While the government reduced its 2009 growth forecast to 4.2%-4.7% given reduced global demand, the consensus forecast was for growth of 3.5%.

In reaction to global financial turmoil and economic slowdown in late 2008, the government moved quickly to improve liquidity, secure alternative financing to fund an expansionary budget and secure passage of a fiscal stimulus program worth more than $6 billion. Key actions to stabilize financial markets included increasing the deposit insurance guarantee twentyfold, to IDR 2 billion (about U.S. $174,000); reducing bank reserve requirements; and introducing new foreign exchange regulations requiring documentation for foreign exchange purchases exceeding U.S. $100,000/month. As a G-20 member, Indonesia has taken an active role in the G-20 coordinated response to the global economic crisis.

Economic Policy: After he took office on October 20, 2004, President Yudhoyono moved quickly to implement a "pro-growth, pro-poor, pro-employment" economic program. He appointed a respected group of economic ministers who announced a "100-Day Agenda" of short-term policy actions designed to energize the bureaucracy. President Yudhoyono also announced an ambitious anti-corruption plan in December 2004. The State Ministry of National Development Planning (BAPPENAS) released in early 2005 a Medium Term Plan focusing on four broad objectives: creating a safe and peaceful Indonesia; creating a just and democratic Indonesia; creating a prosperous Indonesia; and establishing a stable macroeconomic framework for development. President Yudhoyono reshuffled his cabinet in December 2005, appointing former Finance Minister Boediono as Coordinating Minister for Economic Affairs and moving Sri Mulyani Indrawati from the National Development Planning Agency to the Finance Ministry. In May 2008, President Yudhoyono appointed Boediono as Governor of Bank Indonesia, the central bank. In June 2008, President Yudhoyono appointed Finance Minister Sri Mulyani Indrawati to also serve as Coordinating Minister for Economic Affairs. He re-appointed her as Finance Minister in his new cabinet in October 2009.

The Yudhoyono administration targeted average growth of 6.6% from 2004-2009 to reduce unemployment and poverty significantly. Indonesia's overall macroeconomic picture is stable. By 2004, real GDP per capita returned to pre-financial crisis levels. In 2008, domestic consumption continued to account for the largest portion of GDP, at 61%, followed by investment at 27.7%, government consumption at 8.4%, and net exports at 0.6%. By all measures, investment realization has climbed in each of the past several years.

Following a significant run-up in global energy prices in 2007/2008, the Indonesian Government raised fuel prices by an average of 29% on May 24, 2008 in an effort to reduce its fuel subsidy burden. Fuel subsidies had been projected to reach Rp 265 trillion ($29.4 billion) in 2008, or 5.9% of GDP. The fuel price hikes, along with rising food prices, led consumer price inflation to a peak of 12.1% in September 2008. To help its citizens cope with higher fuel and food prices, the Indonesian Government implemented a direct cash compensation package for low-income families through February 2009 and an extra range of benefits including an expanded subsidized rice program and additional subsidies aimed at increasing food production. Subsequent declines in oil and gas prices allowed the government to reduce the prices for subsidized diesel and gasoline. As of March 2009, gasoline was selling for market rates but was subject to a subsidized price cap in the event of an increase in prices.

Banking Sector: Indonesia currently has 124 commercial banks, of which 10 are majority foreign-owned and 28 are foreign joint venture banks. The top 15 banks control about 70% of assets in the sector. Four state-owned banks (Bank Mandiri, BNI, BRI, BTN) control about 37.4% of assets. The Indonesian central bank, Bank Indonesia (BI), announced plans in January 2005 to strengthen the banking sector by encouraging consolidation and improving prudential banking and supervision. BI hopes to encourage small banks with less than Rp 100 billion (about U.S. $11 million) in capital to either raise more capital or merge with healthier "anchor banks" before end-2010, announcing the criteria for anchor banks in July 2005. In October 2006, BI announced a single presence policy to further prompt consolidation. The policy stipulates that a single party can own a controlling interest in only one banking organization. Controlling interest is defined as 25% or more of total outstanding shares or having direct or indirect control of the institution. BI planned to adopt Basel II standards beginning in 2009 and to improve operations of its credit bureau to centralize data on borrowers. Another important banking sector reform was the decision to eliminate the blanket guarantee on bank third-party liabilities. BI and the Indonesian Government completed the process of replacing the blanket guarantee with a deposit insurance scheme run by the independent Indonesian Deposit Insurance Agency (also known by its Indonesian acronym, LPS) in March 2007. The removal of the blanket guarantee did not produce significant deposit outflows from or among Indonesian banks. Sharia banking has grown in Indonesia in recent years, but represents only 2.05% of the banking sector, about $4.1 billion in assets as of November 2008.

Exports and Trade: Indonesia's exports grew to a record $136.8 billion in 2008, an increase of 10% from 2007. The largest export commodities for 2007 were oil and gas (19.4%), minerals (18.8%), electrical appliances (13.27%), rubber products (6.8%), and textiles (3.6%). The top four destinations for exports for 2008 were Japan (12.8%), the U.S. (11.6%), Singapore (9.4%), and China (7.2%). Meanwhile, total imports rose to $128.8 billion in 2008. The U.S. trade deficit with Indonesia increased 1.9% in 2007 to $10.1 billion ($4.2 billion in exports versus $14.3 billion in imports).

Oil and Minerals Sector: Indonesia left the Organization of Petroleum Exporting Countries (OPEC) in 2008, as it had been a net petroleum importer since 2004. Crude and condensate output averaged 977,000 barrels per day (bpd) in 2008. In 2008, the oil and gas sector is estimated to have contributed $25.3 billion of government revenues, or 31.5% of the total. U.S. companies have invested heavily in the petroleum sector. Indonesia ranked eleventh in world gas production in 2007. In early 2007, Qatar passed Indonesia as the world's number one exporter of liquefied natural gas (LNG). Despite the declining trends, Indonesia's oil and gas trade balance remained positive at $2.3 billion for 2006 and $156 million in 2007, according to unofficial statistics.

Indonesia has a wide range of mineral deposits and production, including bauxite, silver, and tin, copper, nickel, gold, and coal. Although the coal sector was open to foreign investment in the 1990s, new investment was closed again after 2000. A new mining law, passed in December 2008, opened coal to foreign investment again. Total coal production reached 189.7 million metric tons in 2008, including exports of 140.3 million tons. Two U.S. firms operate two copper/gold mines in Indonesia, with a Canadian and a U.K. firm holding significant investments in nickel and gold, respectively. In 2007 Indonesia ranked fifth among the world's top gold concentrate producers. Since 1998, the number of new mines has declined compared with previous years. This decline does not reflect Indonesia's mineral prospects, which are high; rather, the decline reflects earlier uncertainty over mining laws and regulations, low competitiveness in the tax and royalty system, and investor concerns over divestment policies and the sanctity of contracts.

Investment: President Yudhoyono and his economic ministers have stated repeatedly their intention to improve the climate for private sector investment to raise the level of GDP growth and reduce unemployment. In addition to general corruption and legal uncertainty, businesses have cited a number of specific factors that have reduced the competitiveness of Indonesia's investment climate, including: corrupt and inefficient customs services; non-transparent and arbitrary tax administration; inflexible labor markets that have reduced Indonesia's advantage in labor-intensive manufacturing; increasing infrastructure bottlenecks; and uncompetitive investment laws and regulations. In each of the past three years, the Government of Indonesia has announced a series of economic policy packages aimed at stimulating investment and infrastructure improvements and implementing regulatory reform. A new investment law was enacted in 2007, which contains provisions to restrict the share of foreign ownership in a range of industries. The government is considering a review of Indonesia's negative list, but proposed revisions had not been enacted as of March 2009.

On September 2, 2008, the DPR passed long-awaited tax reform legislation. The legislation reduced corporate and personal income tax rates as of January 1, 2009. Corporate income tax rates fell from 30% to 28% in 2009 and will decline to 25% in 2010, with additional reductions for small and medium enterprises and publicly listed companies. The legislation raises the taxable income threshold for individuals, cuts the maximum personal income tax from 35% to 30%, and provides lower marginal personal income tax rates across four income categories. Taxes on dividends will also fall from a maximum of 20% to a maximum of 10%. Long-planned labor reforms have been delayed.

The passage of a new copyright law in July 2002 and accompanying optical disc regulations in 2004 greatly strengthened Indonesia's intellectual property rights (IPR) regime. Despite the government's significantly expanded efforts to improve enforcement, IPR piracy remains a major concern to U.S. intellectual property holders and foreign investors, particularly in the high-technology sector. In March 2006, President Yudhoyono issued a decree establishing a National Task Force for IPR Violation Prevention. The IPR Task Force was intended to formulate national policy to prevent IPR violations and determine additional resources needed for prevention, as well as to help educate the public through various activities and improve bilateral, regional, and multilateral cooperation to prevent IPR violations. It has yet to fully realize these aims. In 2007, Indonesia was removed from the U.S. Trade Representative's "Priority Watch" list and placed on the "Watch" list.

Environment: President Yudhoyono's administration has significantly increased Indonesia's global profile on environmental issues, and U.S.-Indonesia cooperation on the environment has grown substantially. Indonesia is particularly vulnerable to the effects of climate change, which include rising sea levels and erosion of coastal areas, increased frequency and intensity of extreme weather events, species extinction, and the spread of vector-borne diseases. At the same time, Indonesia faces challenges in addressing the causes of climate change. Indonesia has the world's second-largest tropical forest and the fastest deforestation rate, making it the third-largest contributor of greenhouse gas emissions, behind China and the U.S. In December 2007, Indonesia hosted the 13th Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC), and led efforts to highlight the importance of forests and deforestation in the climate debate.

In 2004, President Yudhoyono initiated a multi-agency drive against illegal logging that has significantly decreased illegal logging through stronger enforcement activities. The State Department and the U.S. Trade Representative negotiated with the Indonesian Ministries of Trade and Forestry the U.S. Government's first Memorandum of Understanding on Combating Illegal Logging and Associated Trade. Presidents George W. Bush and Yudhoyono announced the MOU during President Bush's November 2006 visit to Indonesia. Implementation of the MOU includes collaboration on sustainable forest management, improved law enforcement, and improved markets for legally harvested timber products. This effort will strengthen the enabling conditions for avoiding deforestation, specifically addressing the trade issues that are involved.

The U.S. Government contributed to the start of the Heart of Borneo conservation initiative to conserve a high-biodiversity, transboundary area that includes parts of Indonesia, Malaysia, and Brunei. The three countries launched the Heart of Borneo initiative in February 2007. In 2009, the Governments of Indonesia and the U.S. concluded a Tropical Forest Conservation Act (TFCA) agreement. The agreement reduces Indonesia's debt payments to the U.S. over the next 8 years; these funds will be redirected toward tropical forest conservation in Indonesia.

Indonesia is also home to the greatest marine biodiversity on the planet. President Yudhoyono called for a Coral Triangle Initiative (CTI) in August 2007. The Coral Triangle Initiative is a regional plan of action to enhance coral conservation, promote sustainable fisheries, and ensure food security in the face of climate change. In December 2007, the U.S. Government announced its support for the six CTI nations (Indonesia, Malaysia, Philippines, Timor-Leste, Papua New Guinea, and Solomon Islands). Since then, the United States has provided $8.4 million to this initiative. With projected funding of $32 million over five years, the U.S. is the largest bilateral donor to CTI, and President Bush endorsed the CTI proposal formally at the 2007 Asia-Pacific Economic Cooperation (APEC) Summit.

Indonesia hosted the first-ever World Oceans Conference in Manado, North Sulawesi, May 11-15, 2009. The World Oceans Conference was also the venue for the Coral Triangle Initiative Summit, at which leaders from the six CTI nations launched the CTI Regional Plan of Action. Top government officials and other leaders discussed the scientific interplay between ocean degradation, climate and weather patterns, and fishing stocks.

GDP (2007): $433 billion; (2008 est.): $511 billion.
Annual growth rate (2007): 6.3%; (2008): 6.1%; (2009 est.): 3.5%.
Inflation (2007): 6.6%; (2008): 11.1%; (2009 end-February): 8.6%.
Per capita income (2008 est., PPP): $3,900.
Natural resources (11.0% of GDP): Oil and gas, bauxite, silver, tin, copper, gold, coal.
Agriculture (14.4% of GDP): Products--timber, rubber, rice, palm oil, coffee. Land--17% cultivated.
Manufacturing (27.9% of GDP): Garments, footwear, electronic goods, furniture, paper products.
Trade: Exports (2008)--$136.8 billion including oil, natural gas, crude palm oil, coal, appliances, textiles, and rubber. Major export partners--Japan, U.S., Singapore, China, Malaysia, and Republic of Korea. Imports (2008)--$128.8 billion including oil and fuel, food, chemicals, capital goods, consumer goods, iron and steel. Major import partners--Singapore, China, Japan.

Source :www.traveldocs.com

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2010-06-09T17:35:00.000-07:00

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2010-06-07T19:14:00.000-07:00

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THE ECONOMIC CRISIS IN INDONESIA

2010-06-07T01:30:00.000-07:00

Until the onset of the 1997/98 economic and political crisis, the Indonesian economy has grown by an average of 7 percent per annum. The economy experienced a slowdown in the mid-1970s and again in the mid-1980s when the world economy was in a recession. Each time, however, the Indonesian economy was able to come out stronger, as the 'crises' forced the government to undertake the necessary reforms in order to sustain the country's economic growth.

Sustainable development as is understood in Indonesia is not only about economic growth. From the mid-1970s on it has been defined as involving three main elements, namely a sufficiently high economic growth, improved distribution of income and the fruits of development, and national (including economic) stability. This so-called 'trilogy of development' in essence proposes a kind of 'balanced development' in which growth will not be pursued at the cost of creating instabilities and a worsening in the distribution of income. Also, concern with distribution and equity issues should not lead to the adoption of policies that would result in economic stagnation. National stability is important but the pursuit of monetary stability, for instance, should not be at the expense of growth and welfare.

The strategy of development, nonetheless, is one that is growth oriented. It attempts to achieve growth with distribution and stability. Sound macroeconomic policies were adopted to achieve economic growth and stability. For many years, the government has strictly adhered to policy prescriptions that it has set for itself. These include the principle of a balanced budget, a current account deficit of no more than 2 percent of GDP, and a limit to external borrowing to maintain a debt-service ratio (DSR) of less than 20 percent. Distribution objectives were pursued through a policy of developing 'eight channels for more equal distribution' that is meant to improve access of the poor to basic health, education and training, job opportunity, credit, etc. A significant portion of the national development budget has been devoted to the agricultural sector, rural development and the provision of basic needs. It can be shown that progress has been made on many of these fronts. Most widely quoted has been the success in the reduction of the numbers of people living under the poverty line, from 70 percent in the late 1960s to 20 percent in the early 1990s. Gini-coefficients to denote relative income distribution have not seen a significant deterioration. Moreover, those indicators suggest that income distribution in Indonesia is better than in many other large developing countries.

The crisis of 1997/98, which is still ongoing in Indonesia, has led to a serious questioning of all these achievements. Were the achievements real? Why has it been that the crisis has hit Indonesia so hard? The Indonesian economy is expected to experience a contraction of 15 percent or more. Such severe contraction of the economy has not happened before. Inflation has reached 80 percent for the first eight months in 1998 and is expected to reach 100 percent for the whole year. Unemployment has increased to as high as 20 million, from about 6 million at the onset of the crisis. The number of people living under the poverty line is estimated to have risen to 80 million, or about 40 percent of the population. About half of them are faced with serious food security problems. Why have things gone so wrong? Is it because Indonesia has been pursuing a wrong development strategy?

Many have blamed the crisis on the premature opening up of the Indonesian economy, particularly of its financial sector. This strategy of opening up has not been adopted overnight, but began with a process of economic liberalisation since the late 1960s. Over the years, this process has been driven by various factors, both internal and external to the economy. This process has not been a smooth one, but whenever it achieved progress in terms of a further opening up of the economy it has been driven by the necessity to do so in order to sustain the country's economic growth and development. Indeed, as will be shown later, this process has not rested on some kind of a blueprint. The reforms have been based on pragmatism. It has been reinforced by regional and global commitments, such as through AFTA (ASEAN Free Trade Area), APEC (Asia Pacific Economic Co-operation), and the WTO (World Trade Organisation). The wave of competitive liberalisation that has emerged in East Asia has also been a positive factor in the adoption of open economic policies by countries in the region, including Indonesia. These developments have been widely praised, and countries in the region that have adopted this strategy are believed to being doing so largely in their own self interest. Yet, the question being raised today is whether this kind of strategy is sufficient in dealing with globalisation, particularly in regard to the huge and volatile flows of international capital.

A crisis, however, is pretty much in the eyes of the beholder. In April 1998 when the Indonesian students began to step up their demonstrations throughout the country, they demanded that President Soeharto make an end to corruption, collusion, and nepotism (CCN -- or KKN in the Indonesian vocabulary that has been adopted also by Malaysians), which in their view are the main source of the crisis. Demanding an end to CCN or KKN has become a shorthand for demanding 'good governance'. There is as yet no Indonesian word for governance, and until this crisis, the concept of governance has not been given sufficient attention to. Globalisation or governance has been often singled out as the main factor that has led to the East Asian crisis. There are some that have put the blame on either 'contagion' or 'conspiracy'. Yet, the crisis cannot be pinpointed to a single source.

There are many views and theories on the crisis in Indonesia as well as in the other East Asian countries. They can be clusters into three main themes. The first theme focuses on issues of financial fragility and the impact of volatile capital movements. Policy recommendations range from issues that are more or less of a technical nature, namely on how to strengthen prudential regulation and supervision of financial institutions, to those that involve complex policy choices regarding a country's capital regime, exchange regime and exchange rate system. The second theme stresses the importance of institutional development and institutional arrangements, either in the domestic context of enhancing governance practices and procedures or involving regional initiatives (regional surveillance mechanism) or multilateral, global co-operation (co-ordinated controls on short-term capital flows). The third theme addresses the issue of long-term growth strategy. As mentioned before, the prevailing development strategy based on international-oriented policies has been questioned. There is the view that incremental changes can be adequate, but others argue for the need for a totally new development paradigm.

In the case of Indonesia, the crisis has underlined the importance of governance and a strategy of development that can effectively respond to the challenges of globalisation. In policy terms, the challenge to Indonesia is how can it make a credible commitment to maintaining its open economic policies and to good governance. The next section reviews the process of economic liberalisation in Indonesia and efforts to make a credible commitment to open economic policies. This will be followed by a review of the governance structures, in terms of the broad institutional setting and policymaking processes in the economic field. The final section outlines the main issues that Indonesia has to address in responding to the challenges of globalisation.

From : Pacific.net

Indonesia`s economic growth to boost Spain`s investment

2010-05-23T21:14:00.000-07:00

Indonesian ambassador to Spain Adiyatwidi Adiwoso Asmady said the promising Indonesian economic growth is expected to boost Spain`s investment in Indonesia, which is still rare.

The Indonesian government believed the economy will grow by 6 to 6.2 percent this year and expected to reach 6.9 percent next year, he said at a function of promoting Indonesian culture and products at the Indonesian embassy along with PT Jarum Kudus and PT Garuda Indonesia at Hotel Art, Barcelona, Tuesday night.

He said despite the world crisis, Indonesia`s economy continued growing by 5.7 percent, which is expected to increase this year.

This is the right time for Spain to make an investment in Indonesia, because in the next five years the Indonesian government will focus on building infrastructure projects in the transportation sector, energy supply, mining and tourism.

Last year, Indonesia opened an Indonesian trade promotion center in Barcelona headed by Abu Umar in charge of technical matters of the Indonesian mission abroad providing services to facilitate business partners in boosting two-way trade.

The ambassador said further that the crisis which hit Greece, Portugal and also Spain prompted Indonesia to seek new breakthroughs especially in facing Spain which is having difficulties due to the crisis which hit several countries in Europe.

In the meantime, the promotion of Indonesian culture and products like clove flavored cigarettes of PT Jarum Kudus will be held in four cities in Spain, namely Barcelona, Seville, Vigo and Coruna, which in every invitation will have a lucky draw for an air ticket from Garuda which will open a flight route to Europe starting in June this year.

Each of the cities will have an opportunity in the lucky draw to come to the bazaar at the Indonesian embassy in Madrid on June 20 and of the four winners of the lucky draw, only one will be given a Garuda flight ticket for an Amsterdam-Indonesia return trip.

The cultural promotion with dances by Endang Kadek, a Balinese dancer living in Madrid, with her Panyembrama dance, welcome dance, and Cendrawasih dance from Bali, made a deep impression on the 100 guests.

Indonesian kretek cigarettes were also further introduced as a product of PT Jarum Kudus which had entered the market in Spain for quite a long time.

Taken from Antara

Cooperation Indonesia–Slovakia Economic and Business Cooperation

2010-05-23T21:07:00.000-07:00

Indonesia and Slovakia agreed to strengthen cooperation in trade, investment, and business as stated after an official visit of Slovakian Minister of Foreign Affairs, Miroslav Lajcak to Indonesia on 29-30 March 2010. Indonesian and Slovakian Ministers of Foreign Affairs open workshop on “The Role of the UN in Multidimensional Peacekeeping Operation and Post Conflict Peace Building: Towards an ASEAN Perspective” held by both countries in Aryaduta Hotel, Jakarta. Both Ministers also signed the Indonesian-Slovakian Visa Free Agreement for Diplomatic and Official Pasport Holders as well as Cooperation Agreement on science, education, culture, sport and youth.

Minister Lajcak had a bilateral meeting with Indonesian Minister of Foreign Affairs, Dr. R.M. Marty M. Natalegawa and courtesy calls to Indonesian Minister of Defense, Purnomo Yusgiantoro, and Coordinating Minister for Economics, Hatta Rajasa. Slovakia has stated its preparedness to supply primary defense weapon system for Indonesian National Army in the future. Slovakia has taken into account some steps to strengthen defense cooperation, for example through the exchange visits of defense officials of both countries. In order to give a sturdy foundation for the defense cooperation between the two countries, Slovakia has been ready to propose a draft of MoU concerning defense cooperation to Indonesia.

Both Ministers of Foreign Affairs agreed to strengthen the on going bilateral relation, particularly in economics. Slovakia considers economic relation with Indonesia as important, especialy to overcome the impacts of the global financial crisis which has caused its economic slow down of 4,7% and unemployment increase of 11% in 2009. According to the Indonesian Board of Statistic Centre, the volume of bilateral trade between Indonesia and Slovakia is not yet significant though it is continuously increasing since 2004. The trade volume reached USD 73,3 million or an increase of 16% in 2009.

In connection to this matter, Indonesia and Slovakia have commited to conduct the Indonesia and Slovakia 2nd Joint Commision Meeting in Bratislava, Slovakia on 29-30 April 2010. During the meeting, there will be a negotiation on the new Agreement on Protection and Improvement of Investment between Indonesia and Slovakia to replace the agreement of 1994 to facilitate investment cooperation.

Indonesian and Slovakian Ministers of Foreign Affairs also shared the views on some regional and global issues. Indonesian ministers explained the progress of the ASEAN integration and Indonesian position toward some global issues, such as conflict in Middle East, Afghanistan, as well as on UN reformation. Meanwhile, Slovakian Minister explained the development in European Union.

In investment, Slovakia is interested to invest in the development of hydro/thermal station and cement in Indonesia. Besides, Indonesia and Slovakia are now exploring the potential of cooperation on the marketing of Indonesian CPO in Slovakian and European market as well as tropical wheat in Indonesia.

Taken from Indonesia.go.id

Fixing Credit Is Easy

2010-02-22T18:17:00.000-08:00

One year ago, I had a financial complicated situation because the interest rate increased more than three percent. It was caused by global economic crisis. Many companies collapsed and bankrupted. Many people loss their job. Trading market was panic. It was very bad world economic condition.

The escalation of interest rate made me frustrated, because I had home and car loan. My salary was fixed, on the other hand I had to pay my installment higher than usual. I could not sleep for several days because of this condition. I needed a credit repair , but I did not know how to solve this situation. Fortunately, this situation was no longer. My best friend told me how to come out from this problem. He explained how to fix credit .

Now, I know that getting a credit repair service is very easy. By visiting RepairYourBadCredit.com, we will do a simple step to repair my credit. Don’t worry about your problem, they will help us seriously. I have proove their services, so I recommend you to try them. Remove your headache by joining RepairYourBadCredit.com now !

Indonesia pledges to `feed the world'

2010-02-01T18:12:00.000-08:00

Indonesia has reiterated its commitment to becoming a major global food producer by boosting the production of 15 key food commodities. Fransiscus Wilerang, head of the Permanent Committee for Food Resilience at the Indonesian Chamber of Commerce and Industry (Kadin), said Friday that the successful implementation of the program could contribute at least US$101.5 billion to the country's revenues for the 2010-2014 period.

The 15 food commodities, Fransiscus said, included four "strategic" ones - rice, corn, sugar and soybeans - and six "key" commodities, consisting of palm oil, tea, coffee, cocoa, tuna and shrimp.

Other categories are "nutritious" (beef and poultry), and "local popular" products (mangos, bananas and oranges). The 10 strategic and key commodities are part of the government's 2009-2014 road map for food development. The plan aims to, among others, allow domestic crude palm oil (CPO) producers to expand their plantations from the total 7.9 million hectares as of the end of 2009, to 9.7 million hectares by 2015.

The expansion is expected to help boost CPO production to 36.6 million tons.

Production of another key crop, coffee, is expected to reach 737,000 tons this year, or 142 percent more than domestic consumption.

Under the road map, the 433,000-ton surplus will be exported.

Coffee exports are expected to increase by 4.69 percent annually until 2020, when 636,000 tons of the total production of 973,000 tons is expected to be exported.

"Considering Indonesia's potential to achieve food self-sufficiency, we have to see the global food crisis as an opportunity and participate in efforts to supply food for the world," Fransiscus told hundreds of participants at the "Feed the World" seminar, organized by Kadin.

"We've agreed to develop the idea into a concept of food self-sufficiency and supply food for the world, or *Feed the World'."

At a press conference after the seminar, Kadin deputy chairman Franky Widjaja said the revenue from the 15 commodities could amount to $101.5 billion.

"If we manage to promote this at the downstream level in the next five years, this could more than just a dream," he said.

President Susilo Bambang Yudhoyono, who officiated the seminar and subsequent expo, said it was important for Indonesia to help address the world's food security issues, pointing out the consequences for not doing so could include the incitement of conflicts, as with water or energy issues.

He said to help achieve the "Feed the World" goal, the government would continue the first wave of its farming, plantation and fishery revitalization programs, lasting from 2004 to 2009, with the second phase set for the next five years.

Yudhoyono added that while Indonesia needed to maintain self-sufficiency in rice and corn production, it needed to achieve the same self-sufficiency in sugar production while reducing its dependence on imported soybeans.

He also reminded businesses not to neglect demand from the domestic market for the sake of more lucrative markets overseas.

"Why feed the world if we still have problems with food supplies and price instability at home," he said.

"The program **Feed the World'* should be understood as *Feed Indonesia, then feed the world'."

Investment Coordinating Board chairman Gita Wirjawan told The Jakarta Post on Thursday that the government would categorize main staple foods such as rice and corn among the types of commodities that foreign interests would be restricted from investing in.

"These commodities are key to our national security, so it is within our interests to protect them," he said.

Taken from Jakartapost

Get your tax rebate when you loose !

2009-12-15T18:16:00.000-08:00

Playing casino or other gambling is interesting. People can be rich or poor quickly. So if you like with this adventure, try to go to Las Vegas ! Las Vegas is a biggest gambling town on the world. You can spend your money on there as you like, gambling or casino is legal business on there. Remember forever that we can win or loose, so prepare yourself !

If we win when playing casino, usually we must pay gambling winnings tax to government. But in fact, we can not win forever, sometimes we will loose. There is an important thing, we are able to get a gambling tax refunds when we loose. It will reduce our cost. But how does we get casino tax refunds ? It is very simple, please follow a guidance from casino tax rebate . I recommend this site because I have proven it.

The process of casino tax refunds from casinotaxrebate is no long, If you do not have an Individual Taxpayer Identification Number it takes 12 to 18 weeks. If you already have a number it usually takes 8 weeks. They charge a flat fee based on the amount of time they estimate the service requires. If you have a large refund, competitors that charge a percentage of your refund can charge hundreds or even thousands of dollars more than they do. Other competitors charge a flat fee of $150.00 per winnings slip and do not give a discount for multiple slips within the same tax filing year. Casinotaxrebate also recover taxes from other gambling activities beside casinos.

Online Poker

2009-12-01T01:03:00.002-08:00

Do you like playing poker ? If you are an poker addict, now you can play it easily. There are many online poker site now, so you can play poker in front of your computer from your privat room. You don’t need to go to casino or gambling house. The definition of poker online wiki (taken from wikipedia) is he game of poker played over the internet. It has been partly responsible for a dramatic increase in the number of poker players worldwide. Traditional venues for playing poker, such as casinos and poker rooms, may be intimidating for novice players and are often located in geographically disparate locations. Also, brick and mortar casinos are reluctant to promote poker because it is difficult for them to profit from it. Though the rake, or time charge, of traditional casinos is often high, the opportunity costs of running a poker room are even higher. Brick and mortar casinos often make much more money by removing poker rooms and adding more slot machines. Online poker are cheaper because their overhead costs are smaller. Online poker may also be more vulnerable to certain types of fraud, especially collusion between players. However, they have collusion detection abilities that do not exist in brick and mortar casinos.

Free poker online was played as early as the late 1990s in the form of IRC Poker. Planet Poker was the first online cardroom to offer real money games. The first real money poker game was dealt on January 1, 1998. Author Mike Carlo became the "face" of Planet Poker in October 1999.

Before we decide to play gambling online and poker site , we need a guidance to choose the best online poker site. As a beginner, we prior need to learn it. I recommend one site that supply best information about poker online, pokergamblingindex. I have prooved their services, and I’m very satisfied. We don’t need to seek online tournament manually, because all important informations have been provided by pokergamblingindex.

Play poker online and win now by trying a titan poker! Titan Poker offers lots of promotions, satellites and freerolls. Titan Poker opened in July of 2004 and has been growing in strength ever since. Best of all, it can be used for both Mac and Windows users making it one of the few sites that can be enjoyed by all.

The low limit games are usually very loose with plenty of fish. Combine that with massive promotions, tons of freerolls and huge tournament events. Titan Poker is one of the most up and coming poker rooms in the world. And im sure it wont be long before its challenging Poker Stars for its crown. The site also sponsors the European Championship of Online Poker, which has a massive $2.5 million dollar prize pot. They also have over $16 million in Guaranteed tournament events. Wow, very interesting ! Try it now !

Let’s repair our credit now !

2009-11-24T18:35:00.000-08:00

I think everyone has known about bad credit. All people hate it because it can make an headache and they will avoid from bad credit if they can do it. On the other side, credit is very important for us. We can not have a home, car, and home equipment without loan or credit. But when it becomes a bad credit, it will be a big trouble. It can be caused by many elements like high interest rates, global economic condition, jobless, or bankruptcy. How does we overcome this situation ? We can improve credit by joining credit repair companies . So, don’t be panic !

Now, there are many companies that provide credit repair services . But I just recommend Repairyourbadcredit because I have proved it. I’m very satisfied with their services, very quick response and low cost. Their services include late payments, charge offs, foreclosures, judgements, repossesions, personal identification, closed accounts, bankruptcies, negative settlements, liens, and collections. They always update the status of their services every week. We can also contact them anytime when we need a help. We will get the specific results we are looking for, and the personal attention we need throughout their entire services.

Credit repair is something posible to do now. With Repairyourbadcredit, getting started of credit repair is very easy. We can order online through their secure server online, call them via toll free 1-866-382-3410 (24 hours a day, 7 days a week), or we can also mail or fax in our order as well. If we don’t have a credit card, we can still sign up for this service using a check via secure check online service.

Invest on Gold

2009-11-18T18:43:00.000-08:00

Gold is very famous all over the world, everyone knows about it. Most people know gold as jewelry. There are many definition of gold , but the general definition as we know is a precious yellow metallic element, highly malleable and ductile, and not subject to oxidation or corrosion or a monetary standard based on this metal or Symbol Au A soft, yellow, corrosion-resistant element, the most malleable and ductile metal, occurring in veins and alluvial deposits and recovered by mining or by panning or sluicing. A good thermal and electrical conductor, gold is generally alloyed to increase its strength, and it is used as an international monetary standard, in jewelry, for decoration, and as a plated coating on a wide variety of electrical and mechanical components.

Nowadays, gold is used as instrument of investment. Investment on gold is almost no risk, because gold-stock is very limited in the world, while gold demand increase from time to time. Gold will always be searched by people, so demand is bigger than supply. It will affect of gold price, and gold investor will get a big profit. We can compare with other investment instrument like future, share, obligation, foreign exchange or deposit on bank. It is full with risk if we are not carefull.

How can we get gold for investment ? I recommend one site that supply information about that, Goldcoinsgain. We can buy or sell gold on there. They provide all of their informative quarterly newsletters with news, information, and commentary about gold, as downloadable PDF. They also provide gold market analysts, economic conditions impacting the gold price, gold fundamentals, and economic events from the worlds top analysts. Get the the gold news update on there ! It is very helpful.

Ovationcredit

2009-11-17T18:00:00.000-08:00

Loan or credit is very helpful for our life, because we have no enough cash money to buy our necessaries like home, car, land, home renovation, cost of college, etc. By taking a credit, we can fulfill all of our utilities although we have no cash money. But, we have an obligation to pay installment every month for any period according to credit agreement between us and bank or other credit supplier. We will get a penalty if we violate credit agreement like late payment of installment or giving wrong information/fake guarantee.

As we know, economic condition always change. It also happens on our financial condition. Sometimes we have many utilities, or sometimes we can save our money more than usually. How do we encounter a bad financial situation like late payment ? It means that we have a bad credit . Don’t be panic ! Only one step that we can do. We must fix our credit so we can avoid from punishment. There are many website that will help us to fix credit but I just recommend one site, ovationcredit. I have prooved their services, very accurate and quick with low cost.

Credit repair by ovationcredit is very easy, simple and effective. Choosing ovationcredit needs ensures that we’ll receive affordable, premier credit report repair and customer service. They can help resolve questionable items on credit report including late payment, collections, charge-offs, bankruptcies, judgements, liens, inquiries, foreclosures, repossessions, identity theft, and incorrect personal info. How does we join ovation ? We just sign up for free and they will immediately get us into their system, assign us a case advisor and prepare our case for disputing. With jump start, clients don’t pay them when signing up. They never bill in advance for services. Ovation is commited to building long term relationships to provide you the most effective credit report repair posible. During any month, if they fail to provide the agreed upon services, they will refund our monthly fees for that month. It’s as simple as that !

Credit repair is our right, it is legal. The fair credit reporting act grants us the right to dispute qustionable items on our credit report and allows us to have assistance with the process. Becoming a client of ovation means we join forces in forging a greener planet and brighter tomorrow. They have undertaken proactive company policies to help reduce the carbon footprint of the work they do for us. Also, they donate a portion of their annual revenue to their 501(c) (3) charitable foundation. The foundation routinely contributes to numerous charitable organizations worldwide.

Repairmycreditnow

2009-08-04T19:29:00.000-07:00

Easy way to get student loan

2009-08-02T18:39:00.001-07:00

Everybody want to continue their studies on college, but sometimes they doubt because it needs high cost. So, just rich people can continue studying to university and it is very unfair because education is a future investment and everybody has the same right to get it. But we can do nothing with this condition. One solution is we must make a plann for getting college loans or look for scholarship. And now, geetting student loans is not difficult just by visiting and joining Nextstudent site. The NextStudent scholarship search engine is one of the largest scholarship databases out there today, and it’s packed with over 2.4 million scholarships worth over $3.4 billion. It’s updated daily, free of charge, advertisement-free and completely confidential.

With private student loans , we can cover up to 100% of our higher education expenses. We can get from $3,000 up to $45,000* a year to pay for those college and grad school expenses that our scholarships and federal financial aid didn’t cover. Very amazing !

Nextstudent has an online college degrees program that very helpful for us to finish our degrees, start new career, or increase our earning potential. With their eLearners interactive college search program, we can search thousands of online education possibilities by school, subject, or degree program. In just a few clicks, the NextStudent eLearners college search will find the online program that best meets our needs and will connect us with the nation’s top online universities, all absolutely free! With Nextstudent, we can get accredited online college degrees that has many plus poins like convenient, flexible, practical and readily available.

What are you waiting for ? Visit Nextstudent now and get many advantages from them.

Easy way to repair credit

2009-07-23T19:35:00.000-07:00

Do you ever feel desperate with your credit ? Yeah, I think everyone ever have a financial problem in their life. Bad credit have made everyone headache, they feel frustation because of this situation and do not know how to overcome it. The common question is : is it possible to fix credit and repair bad credit into positive credit ? I have same question with you, but after googling on internet I got a good news. I found many testimonials from people who have successed to repair credit and they are happy now. Just simple way by signing up on this website, repairyourbadcredit.com.

How does it work ? We must get a copy of three credit reports (FCRA, FACT, FDCPA). After we sent a copy of our credit reports to repairyourbadcredit.com, they'll go through the negative items and work to get as many of them legally removed as possible. Any information on our credit report that contains inaccurate and negative information is noted, and then it will be removed. Their teams are prepared to go directly through the credit reporting agencies to the credit institution who placed the negative item on our report if necessary to remove it. They demand written confirmation of the deletion and a copy is sent to us. Very simple !

It is not a big problem again to get credit repair like lower interest rates, a new home loan, or a nice car with simple way and cheap. Hurry to join through their website !

Fioricet

2009-07-23T00:44:00.000-07:00

Headache or migrain is a popular disease, I think everyone ever suffer from it. When someone get headaches, it is usually so bad even they don’t want to get out of bed. Although there are many drugs around us to treat it but headache come and come again. No drug that totally effective reduce headache. It will make us desperate. But after googling on internet, I found a good news, a drug to overcome headache efectively. The drug is called as Fioricet. Fioricet is a drug used for treatment of tension headaches and migraines but is as late as as after a in short time indicated for other types of pain such as shoulder and u. back pain.

To get fioricet is easy, we can buy online fioricet just in front of our computer and by clicking mouse. We don’t need to go to drugstore or pharmacies because it will loss our time. So, we will get big advantage if we buy online fioricet – save time and money . Sometimes we will get a great prices, low and stable prices, discounts and bonuses, the quality of medicines and services. Very amazing ! We can also get fioricet no prescription , and it make me convenience. We don’t need to go to doctor practise or hospital.

Now, headache and migrain is not big problem anymore, fioricet will always help us everytime.

Home Alarm

2009-07-17T06:22:00.000-07:00

Everyday we often watch criminal actions on TV. We must be carefull when walking alone on the street, even when we stay in the house. Thief or robber threaten us. We need tools to protect our family from crime. But, must we give a gun for our wife or kids? Absolutely no if we install wireless home alarm on our home. As we know, Installing a home security system may bring down the cost of our homeowner's insurance. Because home alarms protect our belongings and prevent losses, this makes our home less of an insurance risk. Many security systems will qualify, but specifically those that contact fire, police, and medic in the event fo an emergency.

One kind of home alarm product is ADT home security. They have the best in home security technology and service. From their website I know that ADT provides continuous security monitoring from four interconnected command centers that are strategically located throughout the United States. Each command center is backed by powerful equipment and trained professionals, so if one center loses connection, another center picks up your home monitoring. This means ADT is prepared to handle everything from severe weather events to computer crashes without losing contact with your home. A company with only one monitoring center can't protect our home and family if its one center suffers an outage.

I’m very safe after installing ADT home security. It is very simple and they offer lower price. Very interesting ! And if you are now living in Kansas, it is a great news for you ! ADT Security Deals Now Available in Kansas. ADT Kansas provides reliable around-the-clock monitoring for families in Kansas. ADT professionals monitor your alarm 365 days a year, and respond rapidly in the event of an emergency. At about a dollar a day, ADT monitoring is affordable for your family.

Hurry, follow me using ADT security system in our home !

Direct TV Service

2009-07-17T05:43:00.000-07:00

One kind of sport that I like is NFL. I always see NFL game on TV although I must leave my work. But three weeks ago I had a problem with my TV channel, There were many nodes on my TV screen. I thought my TV was broken, but when I asked to my neighbour, they had same problem. Oh my God ! I thought it could destruct me to follow 2009 NFL Sunday ticket schedule . Fortunately my office friend told me to use directstarv, and after that the problem has been rosolved.

I’m very satisfied when seeing game NFL on Direct TV . The screen TV is very clear, no annoyance. Now I can enjoy to watch NFL. I have selected a best choice of directv, because Direct Star TV is the largest DIRECTV dealer in the nation. It Founded in 2003 with a commitment to providing a superior customer experience, they continue to grow rapidly and add satisfied new satellite TV subscribers every day. Now, DIRECTV is the national leader in sports and HD programming, and Direct Star TV is its leading dealer. They offer the best satellite TV packages, deals and offers available anywhere.

As NFL addict, Direct Star TV is best choice. The NFL Sunday Ticket is exclusive to Directv subscribers and features : Get up to 200 NFL games,The NFL Network-24/7 original news and football information shows, player tracker where we can select our favorite players to get live stat updates, enhanced games - player and team stats, real time scores, and live updates, NFL sunday snap - sunday show with real-time stats and scores pregame Coaches' Shows - view the pregames shows with coaches from your favorite teams.

Now Direct start TV has special offer, hurry get Directv deals with lowest price ! We can choose premier package, plus HD DVR package, plus DVR package, choicextra package, choice package or family package. It depend on our budget and our requirement !

Payday cash advance loan

2009-07-10T00:20:00.000-07:00

Sometimes we meet a condition that we have no enough cash money, while we must pay several emergency needs like credit card bill, hospital fee, school fee, home installment, and many other. How will we solve this problem ? Selling our property such as car, TV, computer, or furniture is not a good choice because they are not liquid assets. Looking for a loan is good solution, but usually it needs a guarantee and several times to process. After googling on internet, I found a good site about personal loan on www.paydaycashadvanceloans.biz.

PaydayCashAdvanceLoans.biz is the leading online payday loan source. They provide info about quick online loans, cash advances, bad credit personal loans and no fax payday loans. Their goal is to place payday loan lenders with borrowers with appropriate lenders in order to meet their cash advance or emergency loan needs. From their website, we can get payday advance loans details, a current quick loan APR calculator, current news and updates, and expert advice. It is very helpful for us to take financial decisions.

We can complete our cash advance loan application in minutes and one of their lending partners will contact us directly to finalize our loan. Very simple ! PaydayCashAdvanceLoans.biz can handle all our payday loan needs! Their innovative application form allows borrowers to access fast cash with an instant online payday advance loans . They help borrowers to connect with lenders throughout the nation to find a variety of fast cash loans online including check cash advance loans, no fax payday loans, bad credit personal loans, and no faxing teletrack loans. PaydayCashAdvanceLoans.biz is not a lender but a marketing service provided on behalf of payday loan lenders and cash advance companies.

Payday advance loans are a short-term personal loan that provides coverage for your expenses until your next paycheck. Generally, cash advance loans are between $100 and $500 for a two-week term with an average interest rate of about 15 percent per loan period. Unsecured personal loans may also come with attendant fees and penalties for untimely loan repayment.

Back to Basics: The Best Response by Banks to The Crisis

2009-06-29T19:25:00.000-07:00

Amidst the ongoing global financial crisis, the annual bankers’ speech delivered by the Governor of Bank Indonesia at the end of January emphasized the importance of national banks going "back to basics". The request was directed to all financial institutions, especially banks. This announcement by the Governor was based on the reality that the current crisis faced can be seen as a consequence of financial sector development that is detached from its root, namely the real sector.

The appeal for banks to go back to basics is not merely limited to banks in Indonesia, but also in America, where the current economic turmoil began. Frederick Holmes, a Professor Emeritus of medicine from the University of Kansas wrote an open letter in The Economist, edition 14 on 20th February 2009. In the letter he expressed satisfaction at being a customer of a local bank in Kansas City for 40 years, which operates conservatively. He wrote, "Despite the death knell sounded throughout the media, most people and most banks did not encumber themselves with mountains of unsecured debt. In the conservative heartland of America we have avoided the razzle-dazzle of "sophistication" and “computer-modeling" when managing our finance." Meanwhile, on the other hand the CEO of the bank endeavored to reassure worried customers during these troubling times by declaring: "when the siren song of the subprime-mortgage market came along, we took the long view and turned a deaf ear." This announcement was possible because the bank in question did not engage in subprime lending, which would have endangered the condition of the bank. It is therefore proven that the conservative actions of the bank safeguarded it from the impacts of the financial crisis.

Oil drifts below $69 as traders eye US economy

2009-06-29T19:15:00.001-07:00

Oil prices drifted below $69 a barrel Monday in Asia as traders look to macroeconomic indicators this week for signs of improvement in the U.S. economy.Benchmark crude for August delivery slipped 40 cents to $68.76 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it fell $1.07 to settle at $69.16.Oil prices yo-yoed near $70 a barrel last week as investors mulled mixed signals on whether the U.S. economy, the world's largest, is poised to climb out of its worst recession in decades.

Investors will be eyeing economic data this week, including the Labor Department's June unemployment report. The jobless rate hit a 25-year high of 9.4 percent in May, jumping from 8.9 percent the previous month.The latest indicators of consumer confidence and manufacturing will also be released. Crude has doubled since March, leading some analysts to predict oil will pullback until definitive signs of economic growth emerge.

"There's concern about sluggish oil demand," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "Unless we see data that shows a clear economic recovery, prices may have peaked in the short-term.

"The oil price rally is running out of steam."

In other Nymex trading, gasoline for July delivery fell 0.66 cent to $1.87 a gallon and heating oil was steady at $1.73. Natural gas for July delivery plunged 6.8 cents to $4.04 per 1,000 cubic feet. In London, Brent prices fell 42 cents to $68.50 a barrel on the ICE Futures exchange.

Taken from Jakartapost

Goverment needs to better manage foreign debt: analyst

2009-06-29T18:47:00.000-07:00

Despite the fact that incumbent President Susilo Bambang Yudhoyono (SBY) has managed to improve the country’s foreign debt to Gross Domestic Products (GDP) ratio, his debt management policy needs to be improved, an economist says.
“The amount of foreign debt is definitely increasing, but that is not necessarily a bad thing. As we can see, the ratio of foreign debt to the GDP has been decreasing,” Sri Adiningsih, from Yogyakarta’s Gadjah Mada University, told The Jakarta Post in Jakarta on Sunday.
“A decreasing ratio between foreign debt and GDP shows that the country’s capability to pay the debt has been gradually increasing,” she added. Public debt has reportedly increased by an average of Rp 80 trillion (US$8 billion) per year during SBY's presidency. As of January 2009, it stood at Rp 1,667 trillion. Around Rp 747 trillion of that debt was in foreign loans and around Rp 920 trillion is from bonds.
Data from the Finance Ministry shows GDP growth has risen faster than foreign debt levels during SBY’s presidency. The ratio of foreign debt to GDP declined to 32 percent during SBY’s presidency, down from 54 percent during the presidency of Megawati Sukarnoputri, who is again running in the July 8 election.

“However, the government also mismanaged the debt allocation in certain policies. For example, the direct cash subsidy (BLT) is also funded by foreign debt,” she said.
“That is the wrong practice of foreign debt allocation. Consumption subsidies must be funded by a predetermined state budget, not by using foreign loans,” she added.
Head of the Anti Debt Coalition (KAU), Dani Setyawan, said that SBY’s presidency showed nothing but a severe mismanagement of foreign debt.
“During SBY’s presidency, the debt was paid using another loan from abroad. The country is pretty much trapped in a circle of unresolved and accumulated foreign debt,” he said. A report provided by the KAU show the country had received around Rp 48 trillion in foreign loans during 2008, but paid around Rp 90 trillion of foreign debt in the same period.
“This condition shows that Indonesia is severely trapped in a vicious debt cycle. The statistics also portray a grim fact that Indonesia is still exploited by the rich countries,” Dani said

Taken from : Jakartapost.com

Sakuralive

2009-06-29T18:41:00.000-07:00

I have met many girls from all over of the world, american girls, asian girls, african girls, and russian girls. Each girls from different continent have a specific type, but they all are sexy. I love them all. You don’t need to visit every country to meet with them, One that you must do is visiting a famous travel destination in the world, so people from any different country will come to there for travelling.

Japanese girls is very famous in the world, they are beautiful, sexy and smart. How can we meet or see them ? Now we are able to use internet to do that, I recommend one site, www.sakuralive.com. Sakuralive.com is the place to be when we want to check out the finest girls that we can find from Japan. Once we enter the site and view the amount of sexy Japanese girls, we will see why this site is ranked #1 in live asian cam sex. We don't have to worry about any restrictions, except that we must be at least 18 to enter this site. It’s very easy !

We can do a direct communication with them via webcam. We can have total control over our cam girl. You can control all of the movements of her privat body, and show her where to put it. You can easily turn on your own webcam and show her how she is getting you off. The choice is yours. There are many different hot and innocent looking Asians to checkout on the site. It is easy to see which ones are available for some 1 on 1 chats, a Live Show, and who is waiting for you to view her asian cams. We just cannot pass up an opportunity like this where you can actually control her movements and actions on webcam.

Let’s be happy to meet Japanase girl now !

Qwest Service

2009-06-29T02:35:00.000-07:00

The communication across country on very long distance is usual in this milenium era. Everybody can connect each other eventhough they live in different continent. The technology growth is very amazing and quick. All make our lives very comfortable. We don’t need to send post-mail again for our families who lives in other island. By telephone, we can talk to other people eventhough they stay in other country. All make our lifes easier. One of the company related with it is Qwest .
I recommend Qwest because Qwest phone service makes me satisfied. With Qwest Choice® Home and Qwest Choice? Home Plus it's easy to customize a phone service plan to meet our unique needs, with the freedom to change our plan as those needs change. We will get unlimited local calls, no contracts, and streamlined billing. All delivered with the Qwest Spirit of Service.We also get to create the exact plan we need by choosing from Qwest's extensive list of calling features, including Caller ID, Call Waiting, Voice Mail, Three-Way Calling, and many more.

With Qwest Unlimited Long-Distance Plan, we can call anywhere in the United States, Canada, and Puerto Rico for one low monthly fee. And there are no calling-time restrictions, so we can call any time of the day, any day of the week. With the Qwest Unlimited Long-Distance Plan, we'll have the freedom to talk as long as we want, whenever we want, without having to worry about your long-distance bill!

Qwest also provide internet service. With Qwest high speed internet we get quality, Internet with speeds that blow dial-up out of the water, all for one low monthly price. Qwest high speed internet allows us to download videos, music, images, and other large files at lightening-fast speeds. No extra phone line is necessary, and DSL doesn't tie up our existing line, so we can talk on the phone and surf the web at the same time. And because Qwest High-Speed Internet is always connected, we won't waste time worrying about busy signals and waiting for our modem to connect.

Try qwest now and get many advantage from them !

Kehidupan Ekonomi Keluarga

2009-06-24T18:22:00.000-07:00

Salah satu tujuan dalam hidup setiap orang adalah membina hubungan rumah tangga dengan pasangan yang dicintainya melalui perkawinan. Setiap orang yang telah mencapai usia dewasa di atas dua puluh tahun biasanya sudah mempersiapkan akan hal-hal tersebut. Tetapi perlu diperhatikan bahwa persiapan pranikah memegang peranan penting dalam kelangsungan kehidupan rumah tangga. Masing-masing harus sudah mengenal pasangannya dengan baik, kekurangan dan kelebihannya, dan characternya. Menerima apa adanya kekurangan yang dimiliki pasangan adalah hal yang sangat penting.

Setelah membina bahtera rumah tangga, aktifitas hubungan intim merupakan faktor yang sangat vital dan tidak boleh dianggap sepele apabila ada hal-hal yang mengganjal. Misalnya seorang suami merasa tidak percaya diri karena alat vitalnya, sekarang telah ada solusi melalui penis enlarger . Informasi mengenai hal tersebut bisa diperolah di www.x4extender.net.

Dalam situs tersebut dijelaskan proses penis extender tidak berbahaya karena tidak menggunakan obat-obat seperti lazimnya, tetapi melalui proses alamiah berupa penis stretcher . Alat yang dipakai adalah alat mekanik berupa exclusive Comfort Strap technology dan silicone tubing. Alat ini telah diuji dilaboratorium oleh teknisi-teknisi handal, sehingga dijamin dapat bekerja maksimal.

Online Trading

2009-06-22T02:10:00.000-07:00

In the past, people depended on trading broker company to manage their funds on capital market like stock trading , foreign exchange trading, etc. Only rich people could trade on capital market, because they have much money. They were not free to make decisions, broker also had a right to controll trading transactions. But when clients have lost their trading, broker was not responsible. It was a weaknes of old system.

Now, trading is very easy for everyone even for beginner. People with less money can join on capital market. The information technology growth have also influenced capital market world. Manual broker is not too important now, because people can do trading via online broker . There are many online broker now and we can find them on internet easily. But I recommend one best service, www.firstrade.com.

Firstrade is a leading discount online brokerage serving investors for over 23 years. Many reasons why I choose them, like they provide account protection up to $150 million dollars. No minimum deposit for anyone wanting to invest. They offer 10,000 types of mutual funds. No hidden fees, low margin rates, no fee IRAs, free devident reinvestment, no inactivity or account maintenance fees, and many others. I think Firstrade is best choice for online trading now. Firstrade's commitment as an online discount broker to offer the most for the least struck a chord with investors. Firstrade grew rapidly, providing self-directed investors with fast order execution, excellent customer service, and exceptional site performance. Major industry publications including Barron's, Forbes, and Smart Money have all rated Firstrade as one of the best online brokers for consecutive years.

Advantage Tax Help

2009-06-18T22:58:00.000-07:00

Paying tax is an obligation for every citizen. Tax is main element of country’s revenue. Government needs large revenue to develop and build our state. Our taxes are very useful to help poor people, build many public facilities, preserve global environment, forest and animal, develop educational system, etc. Don’t ever to avoid tax obligation, because it is criminal action and we will be a prisoner.

Sometimes we have financial problem. It will influence our tax obligation. On the other hand, many citizens don’t understand about tax rule. They don’t know what they must do to get free from tax debt when they have financial problem. When we were undergoing serious tax problems such as a tax lien, a salary garnishment or have received an audit notice, things can get extremely complicated. If we don't know intricate tax laws, we could end up paying more than you really owe. So, how do we get back taxes when we have financial problem ? We can get the answer of it from www.advantagetaxhelp.com.

Advantage Tax Help takes pride in offering their clients a wide variety of tax related products and services. They are a team of highly qualified tax attorneys, tax negotiators, Certified Public Accountants and associates who are dedicated to helping taxpayers find the best solution available in order to help us resolve our tax problems quickly. They recognize this is a difficult time for us and we are looking for quality tax help. The tax professionals team from www.advantagetaxhelp.com have years of experience successfully negotiating thousands of cases with the IRS and the State. The team of tax relief expert advisors are highly trained in customer service and will be able to assist us in determining the best course of action to resolve our tax issues.
So, don’t worry about tax again because we can get advantage tax help anytime !

Tax Refunds of Casino

2009-06-18T18:28:00.000-07:00

USA especially Las Vegas is the dream place for every casino player. This place is well known all over the world as gambling town. I have a dream to come to there and try to play casino. Maybe you are, too. But are we ready to lose when playing casino ? Playing casino is full with challenges, we can win or loss quickly. Many factors influence it. Every gambler must understand about it. Sometimes they just think about winnings and not ready for losses.
As we know, US tax rule requires that casinos and other gambling establishments withhold 30% of the gambling winnings of international visitors (internal revenues service/IRS). I think 30% is very large gambling winnings tax , especially for international visitor like me. For canadian players, they can offset gambling losses against the gmabling winnings reported on form 1042-S and get some or all of the gambling tax back. Non US citizens from several countries also qualify for casino tax refunds of the 30% withholding on their casino winnings. We can see these list of eligible countries on www.casinotaxrebate.com.

How can we get the casino tax rebate ? Please visit www.casinotaxrebate.com and you will get much information about it. They have established a reputation as best US tax recovery service in Canada. Now we can enjoy playing casino although we loss.

Direct TV

2009-06-16T18:47:00.001-07:00

I was a loyal customer of tv cable because I got a satisfied service and many good television channel. When my wife told me about Direct TV , I ignored it because I have enjoyed with tv cable services. Then my wife gave me an url address about direct tv on www.directsattv.com. I tried to open and browse on it, there was a tool to compare between cable and direct TV. Wow, it was amazing ! I became understand about Direct TV. Direct TV service is better than usual cable tv, it has over 130 channel including cable and dish network, it offers an incredible value with a lower price per channel than cable, it features crystal clear HD channels with Dolby digital 5.1. sorround sound and 100% digital quality for every channel, it features best sport like NFL Sunday ticket, NASCAR hotpass and NCAA @ Mega March Madness.
According to American Customer Satisfaction Index, for the eight year in a row Directv scored higher in customer satisfaction than cable companies measured in. It means that Directv service is the best at the moment. They give many special offers and packages, like premier, plus HD DVR, plus DVR, choicextra, choice, and family. On Premier package, we can get over 250 channels including premium movie channels and sports networks and free DVR or HD receiver after instant rebate. On Plus HD DVR package, we can get Over 195 channels including 68 XM Satellite Radio channels, plus DVR and HD service and Free DVR or HD receiver after instant rebate. On Plus DVR package, we can get Over 185 channels including 68 XM Satellite Radio channels and DVR service and free DVR or HD receiver after instant rebate. On Choice xtra package, we can get Over 185 channels including 68 XM Satellite Radio channels and Free DVR or HD receiver after instant rebate. On Choice package, we can get Over 140 channels including 50 XM Satellite Radio channels. On family package, we can get over 40 channels suitable for all ages and offering parental controls.
Now, I decide to order directv now and leave cable tv, because I’m interesting with Directv system .

Business sentiment is still improving

2009-05-28T00:49:00.000-07:00

Thanks to the country's large domestic economy and limited reliance on exports, Indonesia has been spared the worst of the global economic crisis.

The precipitous drop in the value of the rupiah to the Rp12,000 per US dollar level did invoke fears of another currency meltdown and subsequent economic turmoil, but since May the rupiah has performed remarkably well and recovered strongly.

Another sign that the Indonesian economy is headed in the right direction comes from the stupendous performance of the country's stock exchange: the Jakarta Composite Index (JCI) has already risen about 40 percent so far this year.

But despite these encouraging developments, it is unwise to rely on them to gauge the strength of the economy and its future prospects. After all, the positive trends shown by these indicators can be ephemeral and quickly reversed.

A look at any chart depicting the performance of Indonesian stocks or the domestic currency unit will tell you that.

So what is a better way to gauge the strength of the economy? Well, one way is to simply ask the people who run the country's largest companies what they think.

Because if they don't know, then who does?

By aggregating the views of more than 700 chief executives and directors from the nation's leading companies, Danareksa Research Institute (DRI) is able to gain a valuable insight into the views of CEOs on a range of important economic and business issues - for both the present time as well as the future.

In its latest survey covering the two months of February and March, the main index formulated from this survey - called the Business Sentiment Index (BSI) - climbed 3.5 percent to 117.4.

More impressively still, this gain came after a huge 15.7 percent increase in the index in the previous survey.

In regard to the current conditions, however, the CEOs said that their companies were booking lower sales and lower profits (the respective indices fell 22.9 percent and 19.2 percent respectively).

However, this does not appear to constitute a lasting slowdown in economic activity as CEOs are much more upbeat looking forward.

Indeed, some 55.0 percent of the CEOs surveyed expect business conditions to be "good" over the next six months while 32.6 percent of them believe that business conditions will be "normal".

Only a small 11.2 percent of CEOs expect business conditions to be "bad".

And as for the economic outlook, CEOs now see light at the end of the tunnel after a worrying period marked by the turbulence in the world's leading economies.

Quite simply, the CEOs surveyed believe that the economy will quickly reverse its direction (i.e. the economic recovery will be V shaped rather than U shaped).

Against this backdrop, CEOs expect their companies to show much stronger performance going forward.

Most notably, both sales growth and profits growth are expected to increase.

One area where CEOs are less sanguine, however, is inflation.

This particular index showed a surprising 30.1 percent increase to 134.1 and suggests some pressures on prices - most likely arising from a pick-up in commodity prices in addition to the pass through effects of rupiah depreciation.

However, this does not herald a new period of rising inflationary pressures as inflation is generally subdued and the longer-term inflationary trend is clearly downward.

Despite the rising inflationary expectations, CEOs remain confident that the central bank will cut interest rates in the months ahead (this index declined a further 2.6 percent after a massive 36.9 percent drop in the previous survey).

Currently, the central bank's benchmark interest rate stands at 7.25 percent after six straight rate cuts from a peak of 9.5 percent in November 2008, while bank lending rates are starting to ease, although they remain fairly sticky.

Lower lending rates will help to move key areas of the economy - such as property for example - where banks are already starting to entice prospective property buyers with attractive lending rates.

Interestingly, confidence in the government ebbed slightly in the latest Danareksa survey (the business confidence in the government index or BCGI slipped 1.3 percent).

Nonetheless, it still remained at a high enough level to suggest that CEOs are largely satisfied with the way in which the government is carrying out its duties.

Moreover, the component of the BCGI measuring sentiment toward the government's ability to provide public utilities rose again. It added another 14.6 percent to 130.8 and has climbed rapidly from its low of just 76.40 in May 2008.

This bullishness suggests that the government is at last delivering on some of its pledges to get much-needed infrastructure projects such as toll roads underway.

In conclusion, it can be seen that the CEO survey has been a useful tool to gauge the state of the economy and the direction it is taking.

Even when many people were citing their concerns that the Indonesian economy would be badly affected by the global economic recession - late last year - CEOs remained upbeat. In fact, they have become increasingly upbeat.

Yes, better times do lie ahead. But I didn't tell you that - the nation's CEOs did.

The writer is an analyst at Danareksa Research Institute (DRI)

Next Student

2009-04-29T20:41:00.000-07:00

Some people can continue their study on college without inhibition, because they have much money. But majority of them have a difficulty to continue studying because it needs high cost where as they have a financial problem. Most of senior high school graduate prefer to seek a job. In the future, it will be a big problem because they have no enough skill and too many competitor.

If you have a financial difficulty about studying in college, I recommend to visit nextstudent.com, a website that support informations and aids about student loans . Because getting an education is the best investment people can make, Nextstudent was dedicated to helping poeple pursue their education dreams by making college funding as easy as possible. Nextstudent also provide largest scholarship databases out there today, and it’s packed with over 2.4 million scholarships worth over $3.4 billion. It’s updated daily, free of charge, advertisement-free and completely confidential. Extracted from over a decade of experience, the NextStudent Financial Aid Advisor gives us the essential information we need in an easy-to-read online tutorial. Each section is designed for quick reference, or can be viewed in sequence for a view of the financial aid process from beginning to end.

When our scholarships, grants, and federal student loans don’t cover the total cost of our education, we can still get the money we need for school. Private student loans are available to undergrads and graduate students for tuition and fees, room and board, and your other education-related expenses: books, supplies, your trips home, even a laptop. Private student loans have no application deadlines or fees. Apply for NextStudent Private Loan any time, at the beginning of the school year, mid-semester, or right before finals ! If we apply now, we could have a preliminary approval today! Hurry !

NextStudent gives us as many funding options as possible with low-cost federal and private loans such as undergraduate and graduate student loans, parent loans, private (K-12) loans, federal and NextStudent Custom Consolidation Loan programs and college savings plans. Also Nextstudent provide tools and resources, including online calculators, loan comparisons, a financial aid glossary, and an extensive list of answers to frequently asked questions. So, we can estimate college costs and compare loan rates.

Gold Coin

2009-04-22T20:57:00.000-07:00

There are many options to invest now, for example : buy a stock/share, foreign exchange/forex, obligation, future, index, property or deposit on bank. Investing on capital market and money market are the fast way to make a high benefit, but they also have high risk. Even we can lost all of our money. These business need a special knowledge and ability, proper strategy and very influenced by global economic condition. Saving money on bank is more safe but return on investment is too small. How about investing on property ? It’s good but need a big money, and we must be carefull because there are many problem about the land ownership.

So, what is the best and safe investment instrument ? I recommend to buy gold coins or gold bullion. Gold is very liquid, trusted by investor and finance college. Do you ever hear scarcity theory ? the amount of gold is very limited, many gold miner company stopped their operation because they did’nt find new source of gold in the earth. The gold supply will decrease step by step but the demand is always going up. And the effect, gold price will more and more expensive.

Now, you want to buy gold bullion ? Please visit goldcoinsgain to get clomplete information. They are Aurum Advisors most comprehensive resource for gold coins and gold bullion acquisition. No where else will we find such easily accessible information on just about every physical gold topic under the sun. Their services are from buying gold coins to gold bullion, to gold liquidation, spot price of gold, grading of gold, gold’s history, gold coin performance.

Investors are placing physical gold in IRA. With the global economic environment growing more and more uncertain, gold has become the first alternative for IRA, 401k, 403b, and Pension Plans. Investors that want to take advantage of a gold IRA use an already designated specialized precious metals depository for the storage of gold. The depository offers a secure safekeeping service and provides easy access for the physical delivery of your gold. So, what are you waiting for ? Gold is the best investment instrument, hurry visit www.goldcoinsgain.com.

BetterTrades

2009-04-20T21:37:00.000-07:00

I have a rich neighbour. He has a luxury home an car. At the beginning I did’nt know his job, because he seldom went out from his home. But finally I knew that he was a stock trader, and he worked from home. Great job, How does it work ? Getting a lot of money by working from home ? I have worked for fifteen years, everyday from morning to night, but I have nothing now, just a simple home and old motorbike. Maybe I must be a trader to have a financial freedom like my neighbour. I have had a basic knowledge about stock trading, but I must learn more to increase my ability for doing Better Trades .

I tried to seek information about trading course on internet. There were many sites provide it, but I found one that informative, simple, accurate, and educative site. It was www.bettertrades.tv. BetterTrades is a stock market education organization that teaches people how to profit by trading. BetterTrades provide the best stock market education and coaches in the world. Their material will always be up to date and timely, with the focus on enabling us to be profitable in the stock market. They provide an unmatched level of service. It’s all part of the BetterTrades pledge to be the premier stock market information company in the country.

I’m very happy because after joining BetterTrades, a talented team will help us by our side. BetterTrades Coaches will continue to make up the top financial faculty in their field. They promise to deliver the methods and strategies that will enable us to be successful. Wonderful ! They have many experience and best coaches, one of them is Freddie Rick . The strategies created by Freddie Rick worked for anyone who applied them correctly. Because he could share what he now knew with others in his same position, Freddie Rick founded BetterTrades.

If you are interesting in trading and want to increase your knowledge, hurry visit about BetterTrades now ! Get many advantages from them and be a professional trader !

Repair Credit

2009-04-20T02:04:00.000-07:00

My best friend have resigned from his company since three month ago, because he had an internal conflict with his leader. On the other side, he had a home and car loan. It was a difficult thing and would be a big problem. Fortunately, a month later he got a new job although his salary was lower than before. Untill now, he still stay on there. But I think his cashflow is still on trouble. With a lower salary, he will be difficult to manage his cashflow. He need a credit repair. I want to help him but I can do nothing.

One week ago, my head office told me a way to repair credit . It was a simple way by following the instruction from this website, www.repairyourbadcredit.com. I checked it soon. Wonderful, really simple ! With a little cost, everyone can repair credit quickly. I think their service is the best. Getting started is easy :with several steps : after we fill out the quick order form we will receive a welcome letter and e-receipt sent to our email address. Then representatives of www.repairyourbadcredit.com will contact us within the next 48 hours. They'll congratulate us on our smart decision to get our credit repaired and answer any other questions we may have. They'll be in contact with each other every step of the way, in fact, after we sign up we'll be brought to their customer support center which is in place to support us through every step of the the process. They always keep us updated and informed, plus we can even call or email them anytime throughout our entire 6 month service! Very amazing !

After knowing it, I plan to tell my best friend to fix credit by joining www.repairyourbadcredit.com. It will save his time, money, and a lot of frustration. If you have some case with my friend, try it now ! How does they fix credit ? Find the answer on their website.

Creditcardsclub

2009-04-12T22:24:00.000-07:00

How will we get the best Credit card for our life with maximum benefit and low cost ? Because all of credit cards issuers do an aggressive offering to look for many customers. Actually, we can search information from internet. Many website on internet provide a guidance to choose Credit card . One of them is creditcardsclub.com. This site supplies accurate and trusted informations about credit cards. I have prooved it, because I have several card and now I can optimize all of my card after reading tips from creditcardsclub .

The amount of annual fee is one of many consideration to choose credit card. Many credit card issuers don’t charge annual fee or minimum annual fee. It is very interesting, you can get a list of them on here . Leave a credit card with huge amount of annual fee, becauuse you can get free.

We all know that the interest of credit card is higher that usual loan. It is one bad side of credit card. If we are not carefull, it will be a big problem and disturb our cashflow. Now, you can get credit card with very low interest rate . It will make us comfortable to shop using credit card.

Applying for Instant Approval Credit Card is highly benefited for your financial needs. We don’t waste our time by waiting for credit card approval. However, instant approval credit cards usually offer the higher interest rate than any other traditional credit cards. If you need a credit line for yourself at any time, the appropriate thing for your need is instant approval credit card which would be easily carried at the time of any business deal or sudden outcome of any necessity regarding extra money you need during your vacations, applying for this instant credit card is an approved way for every body to meet your credit needs.

It is a time for us to get many advantage from credit card. Get your reward card, for example : financial reward, airline reward, hotel reward, travel reward, discount item, etc. One that I like is cash back reward . Cash Back Credit Cards are useful in attaining cash back facilities from the creditors. Very interesting, try to visit creditcardsclub !

Comparecards.com

2009-04-12T18:01:00.000-07:00

Many bank or other financial company offer Credit cards now. They try to seek customer as much as possible. More customers mean more profits for them. The growt of Credit card market is very fast, credit card will be used as major instrument for transaction to replace manual transaction. There are many many advantages using Credit cards : more safe because we don’t need to bring so much money to shop, getting a chance to win prizes or a discount price, cash back or other rewards. Applying for credit card is easy now. We don’t need to visit the credit card issuers, but they will look for us. Very amazing !

There are many kinds and types of credit card. It is good for cunsumer because we have many choice. We must consider many essential factors for choosing credit card, like : track record of issuer, instant approval, annual fee, interest rate, protection, credit quality, etc. Here is a best way to determine the best card for us : compare credit cards side by side. I prefer visit www.comparecards.com to compare credit cards , because guidances and informations provided by this site are very useful, complete, and accurate.
One consideration to select credit card is an interest rate. With comparecard.com, comparison shopping for a low interest rate credit card is quicker and easier with their online card comparison tools. After comparing, we can apply for a credit card using a secure online application.
Are you paying high interest rates on credit card balances each month? Transferring all or even part of your high interest credit card balances to a 0% interest balance transfer card can save you hundreds of dollars a year. Credit card balance transfer , when used appropriately, can significantly reduce the pressure of high interest rates. The trick to this is to transfer all of your balance from your highest interest card first. Transfer as much as you are allowed and then get aggressive when paying off the remaining high-interest balances. Its a solid plan toward reducing debt. Find complete info about it on comparecards now !

Firstrade

2009-03-19T18:17:00.000-07:00

Sometimes we are confuse to choose between Investment or saving when we have more money. If you want to feel safe, you can deposit your money on the bank. But if you want your money grow up quickly, place your money on one of many investment instrument like stocks trading, options trading, forex trading, futures, mutual funds, exchange trade funds, etc. But remember that this choice is very risky, your money may grow up quickly or loose quickly, too. So, we must prepare ourselves with worst chance. If you love challenge, investing your money is good choice.

If you are a beginner about instrument of investment, you can search on internet or buy a guide book on bookstore. At least, we must have a little knowledge about it so we will act carefully. It is simple to start by choosing a good broker to manage our invest. But now we can do it ourselves because we can use online broker . There are many online broker on internet, one of them is Firstrade.com. In my opinion this company is very trusty, because Firstrade provides one of the best account protection available in the discount stock brokerage industry. Your account is protected up to $150 million dollars. The other reasons to choose firsttrade are no minimum deposit, no hidden fees, no inactivity or account maintenance fees, free S&P reports and 5 star recommendations, real-time portfolio tracker, exceptional customer service, free devident reinvestment, no fee IRAs, low margin rates, low commissions, etc. There are several types of online trading on firsttrade : stock, options, mutuaf funds, exchange traded funds, fixed income, etc. online trading is the best choice for you who have more money but have no spare time to manage it.

Stock trading on firstrade listed on the NYSE and AMEX, Nasdaq stock market, or the over –the counter (OTC) market such as the OTC Bulletin Board or Pink Sheets. It is very complete. Hurry ! Join firstrade to begin invest and start getting many advantages !

Casino Tax Rebate

2009-02-20T01:47:00.000-08:00

Do you like playing gambling ? It is interesting because you have a chance to win huge of money. But you must be careful too because you may loose your money. Yes, it a game and you can win or loose. If you are familiar with gambling, I’m sure that you have known about Las Vegas Town. Las Vegas is the paradise for gambler. Many people from all over of the world come to there to play gambling.

As we know, we must pay a tax of casino winnings , it is usually called as gambling tax. How if you loose ? Can we refund gambling winning tax if we loose ? If you are a gambler addict, please visit here to get an important information about casino tax rebate ! Many Informations from this site can help us to reduce the lost, because we can ask for casino tax refund.

The casinotaxrebate recoup the US 30% withholding tax on gambling winnings of Canadian and International visitors to the USA. Could be finance or gambling or travel to Las Vegas themed. However, due to the U.S. Canada Tax Treaty, Canadians can offset gambling losses against the gambling winnings reported on form 1042-S. and get some or all of the gambling tax back! Non U.S. citizens that are residents of certain several countries may also qualify for a refund of the 30% withholding on their casino winnings. The list of countries are Austria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russian Federation, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom. These listed countries do not have to establish gambling losses in order to claim a full refund.

Hurry, visit here to get more information about casino tax refunds !

Achieve Card

2009-01-27T18:35:00.000-08:00

Nowadays, everybody don’t need to use a cash money to buy anything. Now, people just use a chip card to shop anywhere or pay bills. It is safer and easier, because it is too dangerous to bring a big cash money in your pocket. You can lose it if you aren’t careful.

There are two types of card, credit card and debit card. With prepaid credit card, you don’t need a prior deposit to shop. Actually, it is a debt. You must pay it later. So, You must be able to control yourself when using this card. You need a prior deposit to use a debit card. It is like ATM card, a card for withdrawing from your bank account. a prepaid debit card won’t let you spend more money than you have. For many of people it can be an invaluable budgeting tool and help them get control of their finances.

Achievecard is one type of prepaid debit card. This card is very recommended. The Achievecard is a reloadable, prepaid debit card that can be used at any location that accepts MasterCard. As prepaid mastercard, the AchieveCard is safer and easier to carry than cash, you are not responsible for charges to your card if it is lost or stolen. It can be a great complement to a checking account or can replace a checking account by directly depositing your paycheck onto your Achievecard. It truly is the flexible and secure way to store your money.
You can get this card by completing the convenient online application and your achieveCard should arrive by mail within 7-10 business days. There is a one-time $29.95 application/fulfillment fee which can be paid during the application process or when you receive your AchieveCard. This fee includes a month of unlimited PIN and signature transactions at no additional cost. During your second month, and every month thereafter a fee of $7.95 will be charged. This will include unlimited PIN and Signature transaction and customer care.
Before using your AchieveCard Prepaid MasterCard, you need to add money to your card account. To add cash to your AchieveCard account simply click here.
Hury and get your Achievecard now !

Student Loan

2009-01-14T21:35:00.000-08:00

Do you or your child have a plan to continue studying on higher level ? Yes, education is important for us. We will not get a vacancy if we have no skill and enough formal education. We don’t understand with newest information, and we feel that we live inj the jungle. So, make education as your main goal !

Education need a fee. Maybe you can continue studying free of charge, but every people will not get a chance like that. If you want to get higher level of education but have no money, you can look for a loan. Loan for student is defferent with usual loan. Visit this site and get many informations about student loan !

On this site, you can get information about privat student loan. With a NextStudent Private Loan, you can cover up to 100% of your higher education expenses. Get from $3,000 up to $45,000* a year to pay for those college and grad school expenses that your scholarships and federal financial aid didn’t cover. your scholarships, grants, and federal student loans don’t cover the total cost of your education, you can still get the money you need for school. The private student loans are available to undergrads and graduate students for tuition and fees, room and board, and your other education-related expenses: books, supplies, your trips home, even a laptop.
The process of finding money for college may seem like a daunting task with a never-ending pile of paperwork. But it doesn't have to be that way. At NextStudent, we believe that getting an education is the best investment you can make, and we’re dedicated to helping you pursue your education dreams by making college funding as easy as possible. Get the informations about college loans on this site !

Repair bad credit

2009-01-13T17:48:00.000-08:00

Most of people have a credit loan. This instrument is very helpful to fulfil their needs, because people usually have no enough cash money. As the consequency, we must pay an installment plus interest every month. The amount of installment must be smaller than our salaries, so It will not influence our casflow. The bank or other finance institution is very selective to give credit.

The main problem of loan is how much the interest rate ? Choose fixed rate or floating rate ? How to get loan approval if our credit was fixed ? Many people have frustated with bad credit. They turned down for credit again and again. Now, if you have problem about it, this is a way for you to repair credit . Visit here to get credit repair information . Don’t give up with your credit ! Hurry visit with www.repairyourbadcredit.com ! their experienced team and proven process has helped thousands of people about many problem : late payments, charge offs, foreclosures, judgements, repossessions, personal identification, closed accounts, bankruptcies, negative settlements, liens, collections, etc. They have handled everything you can imagine, and when they remove a negative item from your credit report it does not come back. They take care of everything. Once you sign up, simply relax and they'll take care of the rest.
Now, credit repair is not a difficult thing. Getting started is simple, and your credit starts getting better. They will help you to fix credit , and let you take care of the rest.

About insurance

2008-12-02T16:55:00.000-08:00

I think now everyone is familiar with insurance, it has become a primary need. None can predict what will happen in the future, so they need to protect their assets and lifes. Insurance system is created to cover the loss from unpredictable condition. So, we can life peaceful.

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2008-10-22T20:30:00.000-07:00

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The 10th Anniversary of the Asian Financial Crisis: Lessons Learned, Critical Assessments, and Charting the Path Forward

2008-10-08T21:02:00.000-07:00

This year marks ten years since the onset of the Asian financial and economic crisis, a critical event in contemporary economic history that had a profound impact on the people, the economies, and the stability of the Asian region. On May 16, the Asia Program, in co-sponsorship with the Science, Technology, America and the Global Economy Program of the Wilson Center, the Sasakawa Peace Foundation, and the Center for Economic and Policy Research, held an event to re-evaluate the Asian financial crisis of 1997-98. The Asian financial crisis was not only a financial crisis, but also a human crisis and a crisis of globalization. Decades of economic progress in East and Southeast Asia were jeopardized, as daunting levels of poverty, unemployment, and social inequality beset the most affected countries -- Indonesia, Thailand, Korea, the Philippines, and Malaysia. Ten years onwards, it is imperative to re-examine the debates on free capital mobility in developing countries, the role of international financial institutions, the structural flaws in domestic banking and financial sectors, and the macroeconomic policy framework that was used to respond to the Asian financial crisis. This conference sought to expand these debates in light of the significant global changes and developments that have occurred as a result of economic and financial globalization over the last decade.

Jomo Kwame Sundaram, a development economist and expert on Malaysia at the United Nations, led off the first panel by arguing that the lessons of the Asian financial crisis have yet to be incorporated by most of the affected Asian countries, in particular the recognition that financial globalization fundamentally increases vulnerability to financial crises. He emphasized several key areas that deserve more attention from the Asian region and from international institutions, including the need for counter-cyclical macroeconomic policies to reduce financial volatility, the importance of expansionary macroeconomic policy to strengthen human development, and the challenge of creating an inclusive international financial system where all levels of society can access credit. Soedradjad Djiwandono, former governor of Bank Indonesia during the Asian crisis, drew from his extensive experience in Indonesia to explain how Indonesia did not just become the epicenter of the financial crisis, but rather, experienced a different type of contagion as the financial crisis developed into a socio-political crisis. Indonesia was the most severely affected of all Asian countries, as its growth rate plunged to -15 percent and its currency depreciated by 80 percent. However, Djiwandono optimistically stated that the recovery and reform process for Indonesia has been steady over the last ten years, and that this has been achieved with a functioning democracy. Meredith Woo, a Korea expert and professor at the University of Michigan, stated that the passing of ten years is a “historical marker for an epoch that went up in flames,” as she drew a parallel between the financial crisis and the natural crisis of droughts and forest fires that struck East and Southeast Asia at the same time. The financial crisis, she asserted, brought an end to the “manufacturing miracle” of Asian countries and to the “subsidy-era.” For Indonesia and Malaysia, the Asian crisis led to the downfall of the authoritarian regimes of Soeharto and Mahathir, respectively.

David Burton, Asia and Pacific director at the International Monetary Fund (IMF), stated that the Asian region has reduced its vulnerabilities to financial shocks through several domestic reforms, such as building vast foreign exchange reserves and implementing greater transparency and reforms in the financial and corporate sectors. Burton declared that the IMF’s goal now is to help ensure regional financial stability through strengthened financial sector surveillance and close dialogue with Asian leaders, while recognizing the importance of country ownership. Robert Wade, a professor of political economy at the London School of Economics, argued that the Asian financial crisis provided a strong impetus to the creation of a “standards-surveillance-compliance (SSC) system,” where international financial norms and standards are enforced through peer pressure and market reactions. Wade asserted that the SSC system constitutes a significant change, as it enhances the “insertion of supranational authority into international financial markets,” leading to structural disadvantages and institutional constraints in developing Asian countries. Co-director of the Center for Economic and Policy Research Mark Weisbrot highlighted the key role that the Asian Monetary Fund, proposed by Japanese authorities at the height of the Asian financial crisis in the fall of 1997 and subsequently rejected by U.S. authorities, could have played in Asian financial stability. He argued that the macroeconomic policy reforms imposed by the IMF exacerbated the financial crisis in Indonesia, where the IMF called for the closing of 16 banks and instituted 140 policy conditions in its Letter of Intent with Indonesia.

Worapot Manupipatpong, the principal economist at the Association of Southeast Asian Nations (ASEAN), outlined the economic initiatives that ASEAN has developed in the last ten years, beginning with the Chiang Mai Initiative (CMI) in 2000. The CMI is a short-term financing facility of “bilateral swaps” that provides institutional support against financial crises. ASEAN strives to engage the private sector, as well as create a “conducive environment” where the region can progress. Ilene Grabel, professor of global finance at the University of Denver, called for “trip wires and speed bumps,” or early warning models, that could potentially bring financial crises to a halt before investor panic sets in and an economic recession takes place. She argued that in order to prevent future crises, national economic and financial policymakers need to consider financial and economic policies that follow national development needs. Nelson Barbosa Filho, secretary of economic monitoring in the Brazilian Ministry of Finance, examined the effects of the Asian financial crisis on Brazil and Argentina in subsequent years. In the wake of the Asian crisis, Brazil experienced speculative capital flows, increases in interest rates and public debt, and growth deceleration. In 2001, Argentina experienced fiscal and monetary contraction as banks collapsed and social and political crises took place. As the two economies have recovered, new challenges today include assessing the trade-offs between inflation targeting and growth acceleration, Sino-centric globalization, and global coordination on capital controls policy.

Drafted by Bhumika Muchhala, Asia Program Associate
Robert M. Hathaway, Director, Asia Program

President Susilo: Indonesia can overcome financial crisis

2008-10-08T20:59:00.000-07:00

Indonesian President Susilo Bambang Yudohono said Indonesia can overcome the global market crisis which affected the country as the country has strong economic foundations, state spokesman Andi Mallarangeng said here Wednesday.

President said that all the elements in the country had been hand in hand in addressing the crisis.

"In the current situation, all elements including businessmen, financial and monetary organizations, have been united, so we are optimistic," the sposkesman quoted President Susilo as saying.

ILO: Indonesia`s 2008 economy shows sound improvement

2008-09-01T22:29:00.001-07:00

Jakarta, (ANTARA News) - Indonesia`s economy has been growing positively but the labour market has not yet developed significantly, according to a report of the International Labour Organization (ILO) on Labour and Social Trends in Indonesia 2008, Wednesday.

While the unemployment rate has fallen to 9.1 percent followed by a rise in involuntary underemployment, such as that the share of those "fully employed" is actually bellow the level in 2002, the report said adding that looking ahead, it forecast unemployment to fall to 7.0 per cent by 2009.

"The report presents socio-economic and labour market trends in Indonesia aimed at drawing attention to key policy challenges and informing the development of Indonesia`s next Medium Term Development Plan (2010-2014), said Alan Bourton, ILO Director for Indonesia.

The report notes that poverty remains largely a problem of the unemployed as it is estimated that about one in two employed persons are poor at the US$2 a day poverty line.

These working poor do not suffer from the lack of economic activity but rather the unproductive nature of such activities, it said. As such, boosting labour productivity is critical for poverty reduction.

Indonesia`s labour productivity has grown at a healthy annual average of 4.3 per cent in 2000-2007, but the report cautions that the gains from productivity growth need to accrue to firm for both added investment and innovation but also to workers in the form of higher real wages, improved working conditions and countinous on-the-job learning to ensure sustainability.

The report suggested that real wages of workers have stagnated in recent years despite the increasing efficiency of their labour.

The report cautions that while unemployment is an informative indicator, it does not provide an adequate measure of labour market performance.

"It is critical to assess other indicators, including those used to measure progress on the new Millennium Development Goal (MDG) target of full and productive employment and decent work for all" said the ILO Economist Kee Beom Kim.

The new target for MDG is to reduce poverty and its indicators including the employment-to-population ratio, vulnerable employment, and the share of the working poor.

It is also essential to look at the age and gender aspects of labour market indicators. Young women and men in Indonesia represent only 21 per cent of Indonesia`s labour force and 57 per cent are jobless.

While women are likely to be employed in recent years, characterized by decent work deficits in terms of low quality, unproductive and poorly renumerated jobs, not to mention the absence of rights at work and representation.(*)

VP to drop 2002 cheap LNG deal with China

2008-08-25T02:52:00.000-07:00

Vice President Jusuf Kalla's weekend trip to Beijing has led to promises to renegotiate a controversial 2002 deal to export LNG to China at a price far below market value.

After a Sunday meeting with Chinese Vice President Xi Jinping, Kalla said the two had agreed to renegotiate a 2002 contract to supply liquefied natural gas (LNG) from Indonesia's Tangguh field in Papua to Fujian province.

"In principle they have understood and received (our proposal for renegotiation) well. The two countries will set up a team to further discuss the issue," said Kalla after meeting Xi as reported by Antara.

"If we compare the LNG Tangguh contract signed in 2002 with today's (prices), the (contract) price is far lower. That's why we want to talk about the contract again," he said.

Kalla believed the 25-year contract for LNG export to China, made during the administration of president Megawati Soekarnoputri, would lead Indonesia to high losses once the export begins next year.

Under the contract, according to Kalla, the price of LNG had been pegged at US$2.40 per million British thermal units (mmbtu) regardless of any increase in crude oil prices.

At present the international LNG price is around $20 per mmbtu.

The LNG price at the time of the contract's signing was based on a crude oil price of $20 per barrel.

The Chinese government had earlier agreed to raise the price to $3.80 per mmbtu but the Indonesian government refused the offer, saying it was still too low.

Analysts have repeatedly criticized the contract, calling it foolhardy to assume the world oil price would remain at 2002 levels.

Kalla had demanded the House of Representatives investigate the inking of the contract for irregularities, calling it the country's most bungled LNG contract ever.

"The House must investigate this (through the ongoing inquiry session). This is the most devastating contract ever made, and it is the worst," said Kalla, who is also chairman of the Golkar Party, which has the majority of seats in the House.

Energy and Mineral Resources Minister Purnomo Yusgiantoro, who held the same post during the Megawati administration, played a key role in the 2002 negotiation with the Chinese government.

President Susilo Bambang Yudhoyono, who was the Energy and Mineral Resources Minister during then president Abdurrahman Wahid's administration in 2000, was also actively involved in trying to sell the gas to China.

The operation of the Tangguh LNG plant is led by BP Plc, Europe's largest oil and gas company, and will start supplying 2.6 million tons of LNG annually to China's Fujian province.

Located in the Berau-Bintuni region, the Tangguh plant is expected to produce 7 million tons per annum in the first phase of production scheduled in 2009. Gas fields, which will feed the plant, have proven reserves of 14.4 trillion cubic feet.

Korea Gas Corp has recently agreed to buy Tangguh LNG at the record price of $20 per mmbtu.

Buyers of the LNG also include the United States company Sempra Energy LNG Corp, South Korea's steelmaker POSCO and power firm K. Power.

From : The Jakarta Post

Goverment may set oil price at $130 in 2009 state budget

2008-08-13T02:04:00.000-07:00

The government may assume an oil price of US$130 for the 2009 state budget, to be delivered before the House of Representatives by President Susilo Bambang Yudhoyono on Aug. 16.

"We realize that oil prices are hard to predict, so we consider it (oil price of $130 per barrel) a valid estimate," director general of budgetary affairs at the Finance Ministry, Anny Ratnawati, said Friday.

The price of crude oil dropped on Friday to $117.70 per barrel at the New York Mercantile Exchange, after reaching a record high of $147.27 on July 11, Bloomberg reported. The price of oil has fallen 5.6 percent this week.

Analysts have said the price of crude oil may fall again next week because of slower demand.

The assumption in the budget is lower than that announced on July 22 when the government said the Indonesia Crude Price -- the country's benchmark oil price -- would be set at $140 per barrel.

As in previous years, the President will deliver the state address and the government's statements on the 2009 state budget bill on Aug. 16, the day before Independence Day.

The government was forced to revise the state budget early this year as soaring oil prices stretched the budget. It then raised subsidized fuel prices on May 24 by an average 28.7 percent to save the budget.

The fuel price increases pushed year-on-year inflation up to 11.03 percent in June and 11.7 percent in July. In May, year-on-year inflation stood at 10.38 percent.

Yet the economy still managed to grow in the first semester by about 6.3 percent thanks to robust consumption and investment, according to government estimates.

Official figures on the first semester economic growth will be released by the Central Statistics Agency (BPS) on Aug. 15.

Because of high inflation, the central bank has raised its benchmark interest rate four times since May by a total of 25 basis points, bringing it to 9 percent in August.

Analysts have said the central bank is likely to raise the rate to 9.5 percent by the end of 2008.

Boediono, the central bank governor, said Friday that inflation, triggered by the fuel price increases, had peaked in July.

"We expect to bring inflation down to between 6.5 percent and 7.5 percent in 2009," Boediono said.

Boediono also said the central bank would maintain the value of the rupiah against the dollar at an acceptable level and absorb excess liquidity to curb inflation.

The rupiah weakened 0.8 percent to 9,170 per dollar, Bloomberg reported. The currency declined 0.8 percent against the dollar this week.

High interest rates could dampen demand for bank lending and slow down economic activity.

Source : The Jakarta Post, Sat, 08/09/2008

Regional Development

2007-07-10T20:44:00.000-07:00

LAW No. 22 of 1999 on Regional Administration was sanctioned in the sequel of the Peoples Consultative Assembly Decree No. XV/MPR/1998. It enables extensive, concrete, and responsible implementation of regional autonomy, based on the principles of democracy, peoples participation, equality and justice, as well as the potentials and plurality in the provinces of the Unitary State of Indonesia Law No. 25 of 1999 on Financial sharing between the Provincial and Central Government was promulgated to guide the regional governments in performing their task.

Regional Development Budget

Regional development has a budget allocation of Rp 3,362.4 billion that will be directed to development activities in support of regional capacity improvement, regional development, and urban and rural settlement development. It is also for activities on community empowerment in effort of poverty alleviation and local economic development. The budget is allocated to prepare resettlement of refugees and the local population who have given up their land for refugees, economic, social and culture empowerment for transmigrants and refugees, as well as to cope with regional problems and development acceleration to the regions in eastern Indonesia

Balance Fund

Since 2001, with the initiation of regional autonomy and fiscal decentralization, the transfer of funds from the State budget to the regions are allocated in the form of balance fund. This is to ascertain the source of funding for the Regional Budget, and to reduce the difference of interregional fiscal capacity.

In fiscal year 2002, the Government made improvements in the legal regulation concerning balance fund formulation. With the increase of domestic revenue, in the year 2002, the allocation of balance fund to the regions will be Rp. 90.3 trillion.

In the previous year of 2001, the allocation of balance fund was Rp. 81.5 trillion or 5.6% to the Gross Domestic Product (GDP), consisting of Profit Sharing Fund 1.4% to GDP, Public Allocation Fund 4.1% to the GDP and Special Allocation Fund 0.05% to GDP.

The share of state revenue for regional administrations through the State Budget of the fiscal year 1999/2000 and 2000 were only revenues derived from the taxes sector namely Tax on Land and Building (PBB), and Tax on Land and Building Rights (BPHTB). Revenues from non-oil and non-gas natural resources, especially forestry and general mining have actually already been shared with the regional administrations and technical ministers through the mechanism of direct remuneration by entrepreneurs of concerned sectors.

Profit Sharing Fund

From the entire allocation of balance fund, the transfer of profit sharing fund in fiscal year 2002 was targeted at Rp. 23.2 trillion, which increased by 14.3% from the 2001 profit sharing fund. The ratio against GDP was 1.4%. Its increase resulted from taxes, an increase in taxes for about 39.5%, and profit sharing fund from natural gas and general mining natural resources about 18.4% and 19.7% respectively. On the contrary, the allocation for the non-tax profit sharing fund originating from oil and forestry natural resources decreased by 16.9% and 20.0% respectively from the 2001 allocation.

According to Law No. 25 of 1999 and Government Regulation No. 104 of 2000, the allocation from profit sharing fund of oil and gas for the regional administration was decided at 15% and 30% respectively from the revenue after taxes. In line with the promulgation of Law on Nanggroe Aceh Darussalam (NAD), the allocation of profit sharing fund from oil and gas for NAD will be added by 55% and 40% respectively, so that each allocation will reach 70% after taxes. The ratio of the profit sharing funds will be effective eight years starting from 2002. On the ninth year the ratio will change to 50% each from the revenues, after taxes.

Public Allocation Fund

According to Chapter 7 of Law No. 25 of 1999 on the Ratio of Budget between the National and Provincial Governments, the Public Allocation Fund is decided at minimally 25% from net domestic revenue, which is domestic revenue minus profit sharing fund and Special Allocation Fund, derived from reforestation funds.

The public allocation fund is made available in effort to create equal balance in the regions, with consideration that the regional governments have different revenue capacities and potential. In other words, the public allocation fund has the task to cope with the interregional horizontal balance. For better result of the efforts to create equal balance, in fiscal year 2002, the Government is evaluating the 2001 formulation of the public allocation fund. Improvement is made in the variables of fiscal needs and fiscal capacity. Regional fiscal needs include population, extent of area, population density, building material price index and poverty gap. The variable of regional fiscal potential include Gross Domestic Regional Product (PDRB) of industry and services as well as natural resources profit sharing fund, PBB, BPHTB and Personal Income Tax (PPh).

For fiscal year 2002 transferring to the public allocation fund for the regional government was projected at Rp66.3 trillion or 73.4% from total balance fund. Provincial governments will receive 10% of the amount which is Rp6.6 billion, approximately 0.4% to the GDP, while the Regency/City government will receive all of the 90% which is Rp.59.7 trillion, or 3.5% to the GDP.

(Source: Indonesia 2002, An Official Handbook, NationalInformation Agency of theRepublic of Indonesia)

ADB Boosting Indonesia's Local Government Planning and Budgeting for Poverty Reduction

2007-07-10T19:30:00.000-07:00

ADB will help improve the decentralized planning and budgeting process of Indonesia's local governments to reduce poverty, through a US$2.1 million technical assistance grant.

The TA, cofinanced by the United Kingdom, will help local governments develop local poverty reduction strategies that are linked to the budget process. The TA will design a capacity development program to assist at least 12 district governments in two provinces to produce local strategies that address resource planning and allocation for poverty reduction and achievement of the Millennium Development Goals.

"Local budgets are the fundamental tool for planning and managing resources in Indonesia's decentralized context," says Karin Schelzig Bloom, an ADB Poverty Reduction Specialist (Social Development). "Ensuring that budget processes are pro-poor and participatory will help boost service delivery and accelerate poverty reduction."

While local planning and pro-poor budgeting are key steps in the fight against poverty, national-level support is also required. The TA will also contribute to institutional development for poverty reduction at the central level, and will support ongoing development of a nationwide conditional cash transfer (CCT) program that will provide income support to the poor while building human capital.

CCT programs, which have been proven effective in Latin America, involve providing money to poor families contingent upon certain behavior, usually investments in human capital such as regularly sending children to school or making periodic visits to health centers. The income support provides immediate relief, while human capital investments reduce the risk of future poverty.

"This component will support the Government's efforts to cushion the impact on the poorest of the October 2005 removal of fuel subsidies and subsequent price increases," explains Ms. Schelzig Bloom.

The total cost of the TA is estimated at $2.625 million, of which the Government of the United Kingdom will provide $300,000 in cofinancing. The Government will shoulder the balance of $525,000 equivalent.

Indonesia's National Development Planning Agency (BAPPENAS) is the executing agency for the TA, which will be carried out over about 18 months beginning May 2006 under the Deputy Minister for Poverty Reduction, Labor, and SMEs (from ADB)

Debt Swap in Brief

2007-07-09T19:24:00.000-07:00

Debt crises of the 80s forced creditor and debtor countries to look for mechanism that can ease the burden of debtor countries. In 1985, Chile became the first country to introduce debt-equity program, i.e. mechanism to swap debt of developing countries that could not pay their foreign debts. In this program, sovereign debtor’s commercial debt from private creditor is bought by investor in secondary debt market and then converted into share investment in debtor country. Debt-equity swap has contributed to reduction of debt and increase of investment in developing countries.

Debt-swap mechanism was also applied in nonprofit sector in the form of debt-for-nature swap in Bolivia in 1987. This was followed by debt-for-developmentswap in other sectors such as child development, education, and health. Although debt-for-development and debt-for-nature swap is being replaced by debt-equity swap as the main means of debt reduction in developing countries, the nominal of their transactions remains significant in financing development.

Since it is considered as a new and innovative product, debt swap has become a standard for debt manager in developing countries for the past 20 years. More or less 50 countries has been implementing debt swap since 1985. In the first decade since its introduction, three-party debt-swap that involved conversion from commercial debt and export credit took the main stage. However, since the addition of debt swap clausal in Paris Club in 1990 bilateral debt has also become eligible for swap.

Debt belonging to multilateral institution is not included in debt swap operation because of the creditor’s status as multilateral institution. In addition, the initiative of Heavily Indebted Poor Country (HIPC) involves multilateral debt conversion de fact because debtor countries have to have a commitment to implement poverty reduction program as a prerquisite for HIPC debt relief.

Bilateral debt conversion may be applied in poor countries as long as it is related to debt conversion program. Paris Club debt swap clausal for debt rescheduling in 1990s regulates the framework of debt conversion bilaterally. The clausul regulates:

-debt reduction program for converting Official Development Assistance (ODA) to become fund for development and environmental projects. Several bilateral aid agencies have bought debt from export credit agent and commercial creditor.

-debt selling programs for converting non-concessional export credit—which is mostly debt-equity swap. In this program, the agent of creditor country—mostly export credit agency/ECA or Ministry of Finance—sells debt to potential investors for debt conversion transaction.

Non-Paris Club bilateral creditor have also sold debts for debt swap transaction, generally through ad-hoc transaction negotiated with investors or through bilateral agreement negotiated directly with the government of debtor country.

From the perspective of debtor countries, the advantages of debt swap program are:

§ Debt reduction. In general, debt conversion can be recognized from the reduction of the number of debt through discount from lower face value or redemption price.

§ Positive impact on payment balance. The positive impact of debt swap on payment balance is the decreasing amount of debt service payment in foreign currency. The implementation of debt-for-export swap can also increase export value and trade balance.

§ Investment encouragement. Debt swap can be formulated to increase investments on prioritized sectors. Debt-equity-swap is an incentive to encourage privatization or facilitate the return of capital that has been moved by its citizen to other countries.

§ Increase of fund for development programs. Mexico and Madagascar have applied debt-for-development and debt-for-nature swap by offering interesting redemption level for non-profit investors.

However, still from the point of view of debtor countries, the disadvantages are:

§ Fiscal cost of debt prepayment. If debt swap requires that payment should be made in local currency, it will take a considerable amount of fund from the budget to finance the prepayment, thus adding extra burden to the budget.

§ Inflation risk. The negative impact of debt swap is large intake of fund in local currency that can increase the level of inflation. To reduce such undesirable impact, the government can stipulate the ceiling of total fund intake in local currency.

§ Transaction cost. Debt swap transaction is complicated and requires a considerable length of time, thus necessitates some resources for negotiating, documenting, and monitoring the entire length of transaction. On certain cases, Governments may need to hire consultants to assist them throughout the process.

§ Investor corruption risk. Debtor countries should instigate close supervision to prevent ‘roundtripping’, i.e. investor transfers local currency obtained from debt conversion to other countries to get illegal profit.

§ Policy conditionality. Debt swap that takes the form of acquisition of local assets by foreign owner may result in resistance from local community due to their sense nationalism since undoubtedly the foreign owner will take full control of the said assets.

§ Investment subsidy. Debtor countries may give investment subsidy because in debt-equity swap, usually the government gives incentive to foreign investor in order to implement privatization.

The forms of debt swap, debts eligible for debt swap and the form of debt conversion are as follows:
Indonesia has also been involved in debt swap. Until recently Indonesia has received offer of debt swap from four creditor countries; Germany, Great Britain, France and Italy. The debt swap schemes offered by the four countries vary. Germany and Italy offer largely similar scheme, i.e. debt repayment through the implementation of agreed development projects. Germany has agreed upon two projects regarding elementary education quality enhancement and is considering another related to environment. Meanwhile, Italy offers development
project especially in the area hit by Tsunami like Aceh and North Sumatera. Great Britain and France offer debt swap that involves third party as investor. Debts offered to be written off are non-ODA debts that are almost similar in nature to commercial debts. The theme offered by the British is employment provision and environment conservation, while the French focuses on increasing foreign investment in Indonesia.

Oil Subsidy Compensation Program FY 2005

2007-07-09T02:18:00.000-07:00

Preface

In order to reduce the state budget deficit, government launched a spectacular breakthrough. President Susilo Bambang Yudhoyono through President Regulation No. 25 Year 2005, decided to raise up the domestic oil price since March 1, 2005. This policy is applied by government to reduce the oil subsidy in line with the international oil price grows up continuously.

The other reasons are : a) subsidized oil price doesn’t go to poor communities; b) the subsidy doesn’t show the scarcity of resources; c) the poor communities do aware how to fulfill their basic needs; d) to change the subsidized price into programs which helped poor communities is more rational and accepted as well.

Government do realize that this policy has a big impact such as price increasing is done. Therefore government tries to design a policy which can solve the problems overcome. The policy called Oil Subsidy Compensation Program (OSCP).

Basically, this Compensation Program is not a new policy introduced by government. This program has been applied by the previous government. However, today’s program is full of improvement based on the evaluation result in which the program will be financed by switching of the oil subsidy fund allocated before. Hopefully, this program will be enjoyed by poor societies. To realize the wish, the Compensation Program is imposed to reduce poverty through fulfilling all their basic needs in line with the National Strategy for Poverty Relief.

Policy Direction

How the compensation program can work as one of the effort to reduce poverty, a study has been designed to cover what the poor communities wish to alleviate poverty. The results are : 1) economic access : capital,job, resources; 2) education : education cost and quality; 3) infrastructure : electricity, communication, roads, water, sanitation, and irrigation; 4) rule of law : safety and low enforcement; 5) health services and disaster relief. Referring to the study result, the Compensation Program should be implemented by suitable criteria as well. The criteria’s such as : 1) feed availability; 2) access and quality of health services; 3) access and quality of education services; 4) job opportunity and business especially in micro business; 5) water and environment; 6) participation and safety; and 7) housing and sanitation.

Furthermore, how to make the compensation policy to be succeeded, it needs a qualified data and targets. Based on Bappenas’ data, Indonesian people are 17.072.346 in which about 36.146.700 or 16,65% are poor people (Susenas, BPS 2004). Based on BKKBN’s 2003 data, Poor households are about 15,92 million in which 8,38 million are pre-welfare groups and 7,54 million are welfare I group families. Data for education, the total poor students based on education level consist of : 1) elementary and middle level about 8,45 million; 2) dropout students about 2,27 million; 3)discontinued students and never schooled about 3,16 million. Meanwhile, the poor villages are about 26.737 even based on Ministry of Home Affair the amount is 40-50 thousand villages.

How the programs and criteria’s are designed excellently, if they are not supported by other factors, the goals of the programs should be hardly to achieve. The programs have to plan well, socialize informatively, implemented accurately, and supervise tightly. Thus, it needs transparence, participation, and accountability from all stakeholders. Succeeding of the programs depend on the synergism of all factors indeed.

The Compensation Program is directed to switch the price subsidy into development program that useful for poor community. Besides, the programs aim to reduce their burden’s and to give them opportunity to operate some business especially micro business.

The Compensation Programs

In 2005, the Compensation Programs decided by government consist of four divisions : education, health, cheap rice, and sub-urban infrastructure. Total fund allocated to financed this program is about IDR 16.056,4 billion. In which through State Budget FY 2005 has been allocated about IDR 7.140,3 billion and the balance about IDR 9.4180 billion is provided by State Budget Supplementary FY 2005.

Education

Education is one of important things to upgrade the human values. To fulfill the basic need of education is based on state constitution that should be adopted by government in implementing development programs. The main objective of this program is to cover all children in school aging can study well without economic problem, to provide more chance for students to continue their school until next level, to join-in children who never or not yet schooled in the elementary level, to bring in back to school children dropped-out, and to facilitate student graduated from elementary to junior high school and from junior high school to senior high
school level.

In 2005, Education Programs planned to scholars about 9.690.489 poor students, so they can study well,students dropped-out may be back to school and may continue until senior high school. The scholarship covers both direct and indirect cost, such as : fees, books, stationary, costumes, and transportation. Direct cost such as fees is transferred to school directly, so students will be free of charge. While indirect cost such as costumes, books, and transportation is paid to students. Government allocated about IDR 5.601,5 billion for this program. The Ministry of National Education and the Ministry of Religion Affair are responsible for this
program.

Health

According to community’s health in bad conditions, the main purpose of this program is providing health insurance for poor community. So they can be free-in-charge during medication. Through Poor Community Health Insurance (PCHI), Government targeted about 36,1 million people in poor community will afford this program. The fund allocated for this program about Rp2.176,7 billion. This program is managed and
responsible by the Ministry of Health.

The services offered in health program are treatment in health center, advanced treatment in health center, treatment in hospital, and advanced treatment in hospital third class.

The mechanism for this program as follow : data of poor people are collected from villages in coordination with nurses, family planning officers, and community leaders, finally they approved by the Major. For poor people who recorded as member in the insurance list when they ill and need treatment, so they are free of charge and guaranteed by PT Askes as a unit pointed by Ministry of Health to manage the insurance.

How to control the implementation of the insurance work is done by Health Office monthly. Recording and reporting are made by hospital that give services, and PT Askes sends report to Ministry of Health monthly.

Cheap Rice

Feed availability is basic need for poor communities. While the rice price is still high, so the Cheap rice program is designed to slice-up the poor to fulfill their feed sustainability. This program is applied by government as a commitment in accordance with the law.

Government will supply cheap rice in this program which can be afforded by 8.600.000 poor families group. In 2005, the budget allocated to this program is about IDR 5.438,5 billion. How to decide the poor families group is done by bottom-up process with refers to criteria and guidance of poor families. The recording starts from
villages and district, finally decided by the Major. When poor families in a village are more than the limit, so the poorest of the poor is applied. The poor families group are recorded in list will accept poor card. Through the card, they can buy the rice only IDR 1.000/kg for about 20 kg monthly.

Government pointed Perum Bulog (government enterprise) to manage and implement this program in which during the implementation Bulog collaborates with other units both in center level and local/regional level. In order to guard the distribution process, monitoring and evaluation are done tightly. Community Complaint Unit is developed in each municipal and regency to follow up every complaint about the process. Besides,
government also develop evaluation team both in center and local level to improve the mechanism process for next years.

Sub-urban Infrastructures

The main goals of Sub-urban Infrastructures Development Program are isolated poor villages which lack of infrastructures and scarce of water resources. Hopefully, this development program will provide accessibility, reduce communities spending, increase communities contribution, and grow their income through involving in any activities and job opportunities.

To guarantee that infrastructures development program is useful, so it needs to define criteria as follows :
1) to fulfill emergency infrastructure which proposed by poor society; 2) to provide services for communities especially poor groups; 3) to develop village area oriented; 4) infrastructure area is provided by society; 5) to open job opportunity to local people and to use local material; 6) to use simple or suitable technology that
can be done by it’s society; 7) the infrastructure can be managed by society; 8) to guarantee the infrastructure built functional continually; 9) not to raise negative impact to environment, social, and tradition.

Infrastructures built on this program are infrastructures that support accessibility and open isolation such as : village roads and bridges, canoes deck, and so on. The other infrastructures are small dam, land water, and irrigation built to increase feed production. The last is infrastructure for water supply.

Besides physical development, government also provides supporting activities such as : to empower communities in maintaining infrastructures, to socialize the programs, to accompany and facilitate communities during planning, implementing, and management process, to develop organization in managing problems dealing with their infrastructures.

To convince that the implementation is running well, supervising is done both internally and externally. Internal supervising is conducted by government institution (BPKP), while external supervising is conducted by NGO’s and mass media and pointed universities. Besides, monitoring team from all levels may cross-check
information in accordance with the implementation.

Total villages will be covered in this program are more than 12.000 and the cost index is about IDR 250,- million per village. Government allocated budget about IDR 3.342,1 billion and Ministry of Public Work is responsible for this program.

Direct Grant for Society

Besides four divisions compensation program above, government also allocated budget about IDR 1.182 billion for direct grant for society in which its distribution scheme is similar to Oil Compensation Program. The grant is designed to subsidize the development of simple housing, social services, revolving fund for micro business, and contraception services for family planning.

Housing

Housing is one of society basic needs that becomes problem for urban and sub-urban society. On one hand, for urban poor societies live in uncomfortable places such as : river edge and junk yard away from healthy house. On the other hand, in sub-urban it needs to provide housing that cheap and healthy. Government allocated budget for this program about IDR 400,-billion.

Housing program will build 33 rental twin blocks for 3.168 family groups. The program will take place in 16 major cities with approximate cost about IDR 196,-billion. The twin blocks will be completed by social facility, economic facility, and public facility.

Besides twin blocks, government also facilitates to provide settlement infrastructure which based on society empowerment. The activities consist of transferring revolving fund in kind of loan for material component to build or renovate house. The loan is managed by Community Empowerment Board (BKM) which can be paid off up to 3 years. Society may borrow up to 3 times after paying the loan off.

Infrastructures for housing environment such as roads, drainage, sanitation, and water supply are developed through empower local people. Revolving loan for materials is allocated about IDR 2,4 million/house, for environment about IDR 2,4 illion/house, and community companion about IDR 0,6 million/house, so total loan is about IDR 5,4 million/house.

Government pointed the Ministry of Settlement to manage this program. During implementation, the Ministry collaborates with other units both local and center level.

Social Services

Social problems are hard to solve. However, effort to alleviate social problems have to do continuously. Government allocated about IDR 250,-billion to social disabilities. The activities consist of improving social mess infrastructures, developing business group, and empowering poor and isolated communities.

Improving mess infrastructures consist of activities such as food assistant for 14.250 tenants who live in but serve under minimum standard food index IDR 10.000/person. This program will assist about IDR 4.900/person/day. For social mess ex the Ministry of Social Affair about 110 units that can’t be used comfortably will
be granted up to IDR 400 million each in 28 provinces. Grant for 2.800 units productive Business Economic improvement will be granted up to IDR 25 million in 31 provinces. While business groups for poor family will be provided to 9.000 groups. Grant for improving poor family welfare will be distributed to 16.000 families.
Finally, Isolated Community will be granted up to IDR 450 million in 12 provinces.

During implementation, social program will be handled by the Ministry of Social Affair in associate with Social Institution and other related units. Monitoring and evaluation are conducted in every 2 to 4 month to know if the social services fund transferred accurately.

Micro Business Revolving Fund

The program for Micro Business Revolving Fund is directed to improve poor groups income who involve in productive economic activities in informal sector and micro business scale.

The recipients targeted to receive this program are about 98.000 micro businessmen who came from poor family but have productive economic activities in many sectors. Cooperation runs credit activities and roles as intermediation for about 1.960 units are targeted as well. This program is located separately in 440 municipals and regents especially disadvantage areas.

Government allocates about IDR 200 million and wishes all micro businessmen get enough result. The budget will be managed by the Ministry of Cooperation and Micro Small Business in collaboration with other related institutions both center and local level.

Contraseption Services

In order to improve the Poor’s welfare, it needs to participate in family planning program. Through contraception service program, the access to family planning service including contraception medicine and tools becomes easier. Total targets for this program are to provide contraception tools about 11,8 million for fertile couples.

Providing tools and contraception medicine activities consist of : a) 13,4 million of pills (for 1 million family planning participants); b) 3,4 million injection vials (for 855,6 thousand participants); c) 99,9 thousand implant sets (for 166 thousand participant); d) 387,5 thousand IUD sets (for 387,5 thousand participants); e) 124,5
thousand gross condoms (for 20,4 thousand participants). For fertile couples who don’t want to add kids anymore, they get permanent contraception service through medical surgery. Besides, the services can be afforded such as : pills, injection, IUD, implant, and condoms available at clinics, health center, village polyclinics, nurses, and field officers.

Government allocated about IDR 100 billion to support this contraception program in 2005. National Family Planning Board is pointed to manage and apply the program in collaboration with other institutions both local and center level.

Safeguarding

How to conduct the whole programs to be succeeded, it needs quick response from all units. Through qualified safeguarding, the compensation program is hopefully running fast, smooth, transparent, and accountable.

Safeguarding activities consist of : planning coordination, socialization, monitoring and evaluation, community complaint service unit, financial audit and performance, design study, data processing, and safety.

The budget allocated to safeguarding is about IDR 132,0 billion which be managed by several institutions such as : the Coordinator Ministry of Economy, the Coordinator Ministry of People Welfare, Bappenas, BPKP, Police, Intelligence Bureau, Statistic Bureau, and others.

The Development of Indonesia’s State Budget

2007-07-09T01:55:00.000-07:00

As globalization render countries nearly borderless, the flow of people, investment and information freely moves from one country to another. That is also why the economic condition of a certain country is inevitably influenced by world economy, both directly and directly.

In the era of borderless world, new developments on state finance management is easily accessible over the internet and mass media. Therefore, best practices from developed countries can be studied, evaluated and applied by the developing countries, if such practices are considered beneficial.

As a result of Indonesia’s open economic system, the effort to amass budget revenue is influenced by both domestic and foreign economic condition. As the world economy was improving in the beginning of the implementation of the first long term developmnet, so was Indonesia’s ability to generate fund. In early 80’s, world economy started to show signs of the declining of primary comodity price, investment to developing countries, economic growth of several developed countries, and the free-fall of crude oil price. Domestic influence includes the economic crises, development of private sector, and the spirit of decentralization, regional autonomy, and the urgency to create clean government and good governance. Meanwhile, other
foreign influence includes the adjustments made to state budget format to comply with GFS and internationally approved practises.

This chapter will discuss the development of state budget from 1969/70 to 2005 which is grouped into changes in state budget format, composition, structure, and other policy changes. The change of format will cover the transformation from T-account to I-account. Composition change will discuss the significant role of tax revenue, and government bond (SUN) as an alternative source of revenue. Structural change will cover issues related to addition of budget share, change in balance fund, and expenditure reclassification by function.

CHANGES IN STATE BUDGET FORMAT

The fundamental changes in state budget include change in format, from T-account to I-account, the purpose of which is to increase transparency, efficiency, and effectiveness, especially in the area of budget deficit control. Fiscal Year (FY) 2005 saw further improvement in state expenditure to accomodate the transformation
from dual budget to unified budget.

The Change from T-account to I-account

State budget adopted T-account from FY 1969/1970 to FY 1999/2000. The shortcoming of this format, some may consider, is that the format does not provide clear information on deficit control and lacks transparency.

Hence the need for improvement.

Starting from FY 2000, state budget format is changed into I-account, in compliance with Government Finance Statistic . The change is meant to:

a. increase transparency in budget formulation
b. facilitate easier analysis, monitoring, and control in budget implementation and management
c. facilitate cross-country comparative analysis
d.facilitate a more transparent calculation of balance fund to be distributed by central government to local government as warranted by Law 25/1999 on Central and Local Fiscal Balance

The differences between the two formats are:

a. In T-acount the revenue and expenditure sides are separated in different column, meanwhile in I-account they are not, instead, both are put in the same column.
b. T-account reflects a balanced and dynamic budget, while I-account applies deficit/surplus budget. In T-account balanced means that both revenue and expenditure side should have the same total amount. If the expenditure is larger, the deficit is covered by financing from domestci and/or foreign sources. I-account applies deficit/surplus budget, i.e. the gap between combined amount of revenue and grants and that of expenditure. Negative gap or deficit occurs when total expenditure is larger than total revenue and grants. Positive gap or surplus is when the amount of revenues and grants exceed that of expenditure. Financing sources used to cover deficit may come from both domestic or foreign.
c. Budget expenditure is divided into that of central and local government. T-account does not show clear distinction between the composition of budget managed by central government and local government, as a result from centralized budget. On the contrary, I-account clearly shows the composition of the amount of budget managed by local governments.

The detailed transformation from T-account to I-account is as follows :

a. Reclassification of state revenue items, that includes:
i. Tax component in oil and gas revenue is reclassified into income tax revenue from oil and gas sector in domestic revenue.
ii. Other components of oil and gas revenue are reclassified into non-tax revenue item..
iii. Non-tax revenue is divided into:
• Natural resources, including; oil, natural gas, general mining, forestry and fishery.
• Revenue from governmnet’s share of State-Owned Enterprise (SOE) proceed.
• Other non-tax revenues.
b. Reclassification of expenditure items, including several transfer payments in recurrent expenditure that are prone to confusion, such as:
i. subsidy for interest on credit program
ii. interests of the bonds for national bank restructuring program
c. Separation of budget financing components that are previously included in revenue and expenditure side
i. Revenue
-Revenues from SOE provatization
-Selling of assets under national bank restructuring program
-Selling of governmnet bonds in domestic market

According to GFS, revenues from thses proceeds should be put in financing account in state budget and not be traeted as revenue

ii. Expenditure
Repayment of foreign loan principals are moved to budget financing and thus reducing revenue from new forign loans

In T-account forign loans are considered to be development revenues. Similarly, repayments of their principal are regarded as recurrent expenditure. Meanwhile, in I-account foreign loans and their repayment is considered as budget financing. This differing concepts consequently causes a change in the way foreign loans are handled. The new format considered foreigd loans as debts, thus their amount should be as small as possible since the repayment of these loans’ principal and interest will undoubtedly burden the state budget in the future.

Account Format Change in Expenditure

Starting from FY 2005, the I-account format underwent several adjustments in the expenditure side as warranted by Law 17/2003 regarding State Finance. The adjustments were made to facilitate the application of unified budget system, i.e. integrating the previously separated reccurrent expenditure and development expenditure.

One purpose of the adjustments is to increase state expenditurte management transparency and accountability through reducing duplication of strategic plan and budgeting in state expenditure and to create linkage between output and outcome to be achieved by organization budgeting. Other purpose includes complying with internationally approved classification system. See Chart II-2 for details.

The new format still separate central government expenditure from local governmnet expenditure. However, as a result of state budget format adjustment, several changes have been made in central governmnet expenditure. They are:

-with the application of unified budget, the classification of expenditure according to type no longer separate reccurrent expenditure from development expenditure.
-Classification of expenditure by organization will be done in accordance to the existing organization and will be included in Budget Law. In the previous format, classification according to organization exist only in Satuan 3 book.
-Classification of recurrent expenditure by type consists of personnel, material, interest payment, subsidy and other recurrent expenditure. The new format adds capital, grant and social aid expenditure.
-In the new format, the old development expenditure is converted and distributed into personnel, material, capital, social aid, and other expenditure.

CHANGE IN BUDGET COMPOSITION

The changes in budget composition, among others, are the increasing role of tax revenue in supporting the budget and the inclusion of government bonds (Surat Utang Negara, SUN) as one of the budget’s financing sources. From FY 1969/1970 to 1985/1986, the dominant source of budget revenue is oil and natural gas, however since FY 1985/1986 their contribution have been declining and relaced by tax revenue. During and after economic crises, governmnet debt, especially domestic debt in the form of governmnet bond that was used to finance bank restructuring program, skyrocketed. Since 2002, SUN has become an important instrument in covering budget deficit. The proportion of domestic debt used to finance loan interest and principal repayment is also increases compared to the period prior to the crisis.

The Increasing Role of Tax Revenue

From FY 1969/70 up to 1985/86 oil and natural gas revenue gave large contribution to the budget. IN FY, Indonesia reaped major profit from oli price-hike. In April 1973 Indonesian Crude Oil Price (ICP) was US$ 3.73 per barrel (see Graph II-2) and increased rapidly to US$ 11.7 per barrel by April 1974. The event is known as Indonesia’s ‘oil boom’. On the contrary, the period was dubbed ‘oil crises’ by oil-importing countries. In FY 1969/70, the beginning of Pelita I (Five Year Development I), oil and natural gas revenue amounted to IDR 65.8 billion (27% of total domestic revenue – see Graph II.2), meanwhile in FY 1974/75 the number rose to
IDR 957.2 billion (54.6% of domestic revenue). In the Pelita III (FY 1979/80 – 1983/84) oil price kept on rising and reached its peak in January 1981, which was around US$ 35.0 per barrel, so that in FY 1981/82 the share of oil and gas revenue in domestic revenue amounted to 70.6%. In Pelita IV (FY 1984/85 – 1988/1989) oil price dropped significantly due to world economic crisis and excessive supply of oil and gas in international market. Oil price nosedived from US$ 35.0 per barrel in January 1981 to US$ 10.0 per barrel in August 1986. Its impact on the budget was the rapid declining of oil and natural gas revenue. While oil and gas revenue in FY 1985/86 reached IDR 11,144.4 billion or 57.9% of total domestic revenue, in the following fiscal year the number dropped to IDR 6,337.6 billion or 39.3% of total domestic
revenue.

The positive impact of the enactment of these laws are the sharp increase of tax revenues. Tax revenue that was only IDR 4,788.3 billion or 30.1% from total domestic revenue rose to IDR 11,687.9 billion or 53.6% of total domestic revenue in FY 1988/89. Since then, tax have made larger ontribution to state budget compared
to oil and gas revenue.

In 1994, the government perfected the prevailing tax laws to increase the ignificance of tax revenue and thus strengthen Indonesia’s economy in the eve of globalization. The new laws are:

a. Law 10/1994 on Income Tax (PPh)
b. Law 11/1994 on Value Added Tax (PPN) and Luxury Good Retailing Tax (PPn-BM)
c. Law 12/1994 on Land and Building Tax (PBB)
The new tax laws did enhance tax revenue significantly. In FY 1997/98 tax revenue amounted to IDR 70,934.2 billion, a steep 59.6% increase from total tax revenue in FY 1994/95, which was IDR 44,442.1 billion.

In order to trim down deficit, the government continued to increase tax revenue. The increase is considered feasible because Indonesia still have low tax ratio. Therefore, in the year 2000, the government refined the existing tax laws into:

a. Law 17/2000 on Income Tax (PPh)
b. Law 18/2000 on Value Added Tax (PPN) and Luxury Good Retailing Tax (PPn-BM)
c. Law 19/2000 on Duties on Land and Building Transfer (BPHTB)
The Increasing Domestic Debt

During the period of FY 1969/70 to FY 1997/98, the amount of domestic debt was much smaller compared to foreign debt. Domestic debt was usually in the form of unpaid electricity, gas, water,and telephone bills of government offices from the previous year and other third party bills. Compared to repayment of foreign loans, the amount of these debts was really unsignificant.

However, since the economic crises, Indonesia’s domestic debt has grown significantly. In order to carry out restructuring programs for banks that were nearly collapsed the government implements recapitalizing and financial guarantee programs. To finance the financial guarantee program, government issued Government
Bond (Surat Utang Pemerintah, SUP) worth IDR 218,315.6 billion. Another IDR 432,075.9 billion worth of bond was also issued to finance recapitalizing program.

In 2002, the government and the Parliament enacted Law 24/2004 on Governmnet Bond to regulate the issuing of government bond be it in the form of State Treasury Bond or bonds. The purpose of government bonds is to finance budget deficit, covering short term cash shortage as a result of mismatch between revenue and expenditure cash flow in state account within one fiscal year, and to manage state debt portfolio. IN FY 2005, the government plans to issue IDR 43.0 trillion worth of Government Bonds. Meanwhile the total amount of domestic debt as if June 30th, 2005 is IDR 625.4 trillion.

So that at present the government has alternative financing to cover budget deficit from domestic sources as well as foreign.

The Increasing Amount of Repayments of Domestic Loan Interest and Principal

Prior to the economic crises Indonesia’s repayment of domestic loan interest was considerably low. However, since the issuing of Government Bond and bonds to finance bank recapitalizing and financial guarantee program, the number have been rising steeply.

The most direct impact of government bonds is the increase the load that the budget have to carry, i.e. repayment of domesctic loan interest and principal. In FY 1997/98, before the crises, domestic debt repayment was IDR 1,639.7 billion, while in FY 2001 domestic debt repayments was a stunning IDR 61,174.3 billion,

which was even larger than foreign loan repayments totaling IDR 28,395.4 billion in the same year.

In addition to reduce the burden of government bond payments that were due in 2004 to 2009, the government has conducted reprofiling to bonds owned by four SOE banks, namely Bank Mandiri, BNI (National Bank of Indonesia), BRI (People’s Bank of Indonesia), and BTN (State Saving Bank). The reprofiling is done by shifting
the fixed rate bonds’ due date from 2004-2009 to 2010-2013, and shifting variable rate bond from 2004-2009
to 2014 to 2020.

In 2002, the government and the Parliament enacted Law 24/2004 on Government Bonds that will make the role of domestic debt interest and principal repayment more significant in the future, especially if the bond issued by the government is larger than those whose date is due.

In FY 2005 total repayments of domestic debt reaches IDR 58.8 trillion which consists of IDR 39.0 trillion of interest repayment and IDR 19.8 trillion of principal repayment. Meanwhile, total foreign debt repayment is IDR 72.0 trillion which consists of IDR 25 trillion of interest repayment and IDR 47 trillion.

Debt Reschedulling and Suspension in order to Decrease Budget Load

The sharp increase in foreign loan interest and principal forces the government to seek ways to lighten the budget load by suspending or rescheduling the loan through Paris Club.

Loan suspension priority is given to projects with low-intake capability and those yet to be implemented. As an example, the goverment has cancelled several projects which were funded by IBRD and ADB loan. In 1998 and 1999, 66 IBRD funded projects was suspended, the total value of which were US$ 1,030.1 million in 1998 and US$ 556.48 million in 1999. The number of suspended projects from ADB loan was 59, the total value of which were US$ 923.29 million in 1998 and US$ 317.9 million in 1999.

In order to reschedule foreign debts, the government organizes Paris Club forum. The forum has convened three times since its establishment:

1. Paris Club I, which was held in September 1998 and attended by 16 member countries, 6 non member countries, and 9 commercial banks. The meeting resulted in the signing of US$ 4.2 billion worth of debt rescheduling agreement.
2. Paris Club II, which was held in April 2000 and attended by 17 member countries, 3 non member countries, and 3 commercial banks. The meeting resulted in the signing of US$ 5.8 billion worth of debt rescheduling agreement.
3. Paris Club I, which was held in April 2002 and resulted in the signing of US$ 5.4 billion worth of debt rescheduling agreement.

The reschedulling lessens the burden of state budget not only in the on-going fiscal year but also for the future fiscal years.

In addition, Paris Club II and Paris Club III agreements signify that the creditors are giving Indonesia the chance to decrease its foreign debt stock through debt swap program that contains elements of debt relief. Up to this moment Indonesia has received offers of debt swap programs from four creditor countries; Germany,
England, France and Italy.

In the end of 2003, the Indonesian Government decided not to extend IMF program in the form of Extended Fund Facility and chose Post Program Monitoring in its stead. The impact of the decision was the absence of Paris Club meeting to reschedule repayment of debt interest and principal to creditor countries. However,
in the aftermath of Tsunami that hit Aceh and other Asian countries, Paris Club issued policy to grant debt suspension to to countries hit by the catastrophy. The amount of suspension offered by Paris Club to the Indonesian Government is US$ 2.6 billion or IDR 24.31 trillion for one year foriagn debt repayment. The
suspension decreases Indonesian budget deficit by 0.9% from GDP. In addition, several member of Paris Club also apply 0% interest for debts included in the suspension program.

CHANGE IN STRUCTURE

Structural changes in state budget includes the transformation of Regional Development and Recurrent Fund into Balance Fund, the addition of Indonesian Bank Capital Addition, addition of Public Service Obligation (PSO) as part of subsidy, and government capital. Other change comprises expenditure reclassification by
functions.

Transformation From Regional Development Fund (DPD)
and Regional Recurrent Fund (DRD) Into Balance Fund and
Sepecial Autonomy and Equalization Fund

As reform movement swept through all area in Indonesia, changes in policies on authority delegation from central to regional government have been made. The change is instituted in Decree of People’s Consultative Assembly No. XV/1998 regarding Regional Autonomy that regulates sharing and usage of national resources
and fiscal balance between central and local government. The decree is followed by the enactment of Law No. 22/1999 on Regional Government and Law No. 25/1999 on Fiscal Balance between Central and Local
Government.

Law No. 22/1999 regulated region establishment, authority distribution, personnel and regional financial sources. Further exposition on distribution of regional financial sources was regulated in Law No. 25/1999.

Law No. 25/1999 stipulated the formula for calculating the amount of fund allocation and other regulations related to regional financial sources. The allocation for the regions was definite so that estimation of the amount of fund allocation could be calculated anually.

In 2004, both laws were considered no longer appropriate so Law No. 22/1999 was ammended by Law No. 32/2004, as so did Law No. 25/1999 by Law No. 33/2004.

The enactment of those laws changed the budget format as Autonomous Region Subsidy/Regional Recurrent Fund and Presidential Instruction Project (proyek inpres)/Regional Development Fund of the old format were transformed into Balance Fund and Special Autonomy and Adjustement Fund.

Autonomous Region Subsidy or, some might say, regional recurrent fund was used to finance the region’s recurrent expenditure, be it personnel or non-personnel. Non-personnel expenditure included operational expenditures of sub-district (kecamatan) and village (desa). Meanwhile, Proyek Inpres, which was later on
refferred as regional development fund, was intended to accelerate the achievement of evenly spread people’s wealth, thus it included aid for village development, second-tier region (district) development, first-tier region (province) development, elementary schools, health, marketplace improvement, tree-planting, and road/
bridges maintenance/building. Later on the scope of regional development fund only involved village, district/municipality, province, and Social Safety Net-Poverty Control (JPS-PK).

Balance Fund is central government fund transfer to the regions to support the implementation of their tasks.
Balance Fund consists of revenue sharing (DBH), General Allocation Fund (DAU), and Specific Allocation Fund (DAK). DBH is the region’s share of tax revenue and revenue from certain natural resources. The distribution of DBH to the ragions is based on producing region principle, i.e. part of the revenue is trasferred back to the
producing region. DBH is divided into tax and natural resources revenue sharing. Furthermore, tax revenue sharing includes income tax, land and building tax, and duties of land and building transfer while natural resources revenue sharing comprises petroleum, natural gas, general mining, forestry and fishery. DBH is
intended to reduce vertical imbalance, i.e. fiscal gap between central and regional government.

DAU is a block grant, by which it means that regional government has considerable flexibility in spending it according to the needs and aspiration of each region. Although the regions has full discretionary expenditure over DAU, DBH and regional original revenue (PAD), there are matters that non-discretionary and thus should
be prioritized, such as personnel expenditure, including central personnels that have been transferred to the regions, and other recurrent expenditure that are considered as budget priority. DAU is meant to correct horizontal imbalance, due to the fact that the regions’ ability to generate revenue varies largely. According to Law No. 33/2004 at least a quarter of domestic net income is allocated for DAU. Net income is domestic income after revenue sharing deduction. DAU allocated to every distric/municipality and province is based on a certain formula so that the DAU received is relevant to their fiscal gap condition.

The provision of DAU is intended to direct the implementation of regional authority so as to fulfill special needs that are considered as national priorities. In the beginning DAU originated from 40% of reforestation fund. Starting from 2003, aside from financing reforestation in producing regions, DAK was also given in
the form non-reforestation DAK to finance activities in the area of education, health, infrastructure, and expanded regions’ infrastructure. Since 2004 marine and fishery have been added to the areas financed by non reforestation DAK.

In 2005, regional expenditure reaches IDR 130.6 trillion that consists of IDR 31.2 of DBH, IDR 88.1 of DAU, IDR 4.1 of DAK and IDR 7.2 of special autonomy and equalization fund.

The government has also been allocating special autonomy and equalization fund since 2002. Special autonomy fund, which amounts to 2% of DAU, is allocated only for Papua as manifestation of Law No.21/2001. For FY 2005 Papua receives IDR 1.777 trillion in the form of this fund.

However, in 2004 balancing fund was replaced by equalization fund, which consists of pure and ad-hoc equalization fund. Pure equalization fund is given to the region so that the amount of DAU and pure equalization fund received by the regions will never be smaller than the previous year’s. Ad-hoc equalization is given if there are government policies that may influence certain budget item in regional expenditure, for example, the policy of awarding bonus of one-month salary to all civil servants including those in the regions.
The equalization fund is considered as aid and in FY 2005 its amount is IDR 4.7 trillion.

Subsidy

Bearing in mind the fluctuative nature of economy, government’s involvement is sometimes needed to ensure economic stability, especially the stability of basic good prices so that they are affordable by domestic market.
One way of doing so is by giving subsidy for the price of particular items that are important for people’s well being. However, the subsidy should be given within close consideration to the state’s financial capacity because subsidy is nothing more than reduction of fund reserved for development.

Initially, subsidy was only given for staple food, i.e. rice subsidy and wheat flour subsidy. The subsidy was used to fill the gap between the price of imported rice and the price set in domestic market. The purpose of this subsidy is to ensure adequate supply of rice, and that its price is affordable. Rice subsidy program was
started in FY 1973/74 and terminated in 1982/83 because since then Indonesian rice production have been able to supply its domestic need.

Meanwhile, to encourage consumption diversity so that people would not be dependent solely on rice, the government launched wheatflour import subsidy program to ensure that the flour was affordable. The program started in FY 1973/74 and was terminated in FY 1982/83 due to the increase of people’s purchasing capacity.

Petroleum fuel subsidy program was started in FY 1977/78 because as a source of energy petroleum fuel plays a significant role in supporting national economic activity and maintaining economic stability. The amount of petroleum fuel subsidy is dependent on the net amount of fuel sold in domestic market and the cost of fuel
provision which includes osts of crude oil purchasing, refining, and national distribution.

The scope of subsidy is getting larger. This is evident because in FY 2005 subsidy can be cathegorized into petroleum fuel, non-petroleum fuel and Public Service Operation (PSO). Of the three, petroleum fuel is the most costly. The expenditure for petroleum fuel subsidy is generally affected by international crude oil price,
the exchange rate of IDR to US$, domestic petroleum fuel consumption, and the policy of domestic price equalization that have been implemented gradually since 2001. Non-petroleum fuel subsidy take the form of food, electricity, program credit interest, fertilizer, seed, vehicle, and tax subsidy. FY 2004 saw the addition
of subsidy for SOE in implementing public service obligation into the budget. Prior to FY 2004, PSO aid was included in other recurrent expenditure in the budget. SOEs receiving PSO aid are PT Kereta Api Indonesia (Indonesian Railway Service), PT Pos Indonesia (Indonesian Postal Service), PT TVRI (Television of Republic of Indonesia) and Perum Bulog (Logistic Affairs Agency). The total amount of distributed subsidy for FY 2004 is IDR 26.3 trillion which consisted of IDR 14.5 trillion of petroleum fuel subsidy, IDR 11.0 of non-petroleum fuel subsidy, and IDR 0.8 of PSO aid. See Table II-6 for details.

Bank Of Indonesia Capital Addition

Starting from FY 2005, Bank of Indonesia Capital Addition is inluded as a new item under Government Bond in domestic financing. The new item is intended to contain the settlement of Liquidity Aid of Bank of Indonesia (BLBI). The settlement of BLBI is carefully engaged with close consideration to short term and long term budget
capacity and long term fiscal sustainability of Bank of Indonesia. Furthermore, repayment of government bond for BLBI settlement refers to the ratio of the capital of Bank of Indonesia to monetary obligation which is 310%. In the event that the ratio is less than 3%, the government will supply the required fund the get the ratio
back to 3%.

In Budget Draft 2005, the planned addition of the capital of Bank of Indonesia is IDR 8.7 trillion, however after the deliberation with the Parliament and Bank of Indonesia, the number is decreased to zero.

Government Capital Participation for Second Mortgage Facility (SMF)

In FY 2005 the government is planning to operate long term financing system for housing (second mortgage facility, SMF). The SMF program is intended to support government’s effort to build 225.000 plain and sanitary houses for low income communities. Initial capital for SMF is IDR 2.5 trillion, IDR 1 trillion of which comes from state budget and the rest is from a SOE, PT Jamsostek.

Within the state budget government’s capital contribution for SMF is included under domestic non-bank financing. Initially, SMF was not included in the budget proposal for FY 2005, however government’s capital participation of IDR 1 trillion was agreed upon in the deliberation with the Parliament.

Expenditure Reclassification by Organization, Function and Type, Where Formerly by Sector and Type The breaking down of expenditure by function is a reclassification of programs formerly included in the old format as sectors/subsectors. However, programs in both new and old format is incomparable due to the fact that they are different in nature.

Function/subfunction is not the basis for budget allocation as in the new format state budget allocation is based on programs proposed by ministries/agencies. Then the programs are grouped according to their function/subfunction Expenditure classification by function is merely an analysis tool used to identify functions that have been, is being and will be implemented by government in compliance to best international practises, which is Classification of the Functions of Government (COFOG). COFOG is formulated by UNDP and was adopted by GFS Manual 2001-IMF. Indonesian government, however, made an adjustment by separating religious function
from recreation, culture, and religious functions so that in state budget the classification encompasses 11 functions namely: (1) general public services, (2) defense, (3) public order and safety, (4) economic affairs, (5) environmental protection, (6) housing and community amenities, (7) health, (8) recreation and culture, (9) religion, (10) education, (11) social protection.

Budget Section Addition For Financing and New Ministry/Agency Item

The dynamics of economy, demands for good government and increasing number of ministries/agencies are the reason underlying the adjustment of the number of budget section. Recently the code number of budget section (Bagian Anggaran, BA) has reached 99, among the new additions are Foreign Loan Principal Repayment, Domestic Loan Principal Repayment, On-lending, and State Capital Participation. New budget
section codes for newly established ministries/agencies have also been added, i.e. for Nanggroe Aceh Darussalam Reconstruction and Rehabilitation (BRR-NAD) and Board of Regional Representatives (DPD).
Budget section codes are enacted to ensure a more organized, transparent, and accountable state budget.
Additionally, having their own budget section code means that ministry/agency has full authority over state financial management. See Table II-7 for new additions of budget section codes.

Currently not all of 99 budget section codes are used. Some, like for instance code number 14, 16, 17, 21, 28, 30, 31, 37, 38, 39, 45, 46, 49, 53, dan 58 are codes for ministries that no longet exist, e.g. Ministry of Information, Ministry of Industry. These codes are not written off for hystorical reasons.

OTHER CHANGES

Other changes in state budget, both in preparation and policy, are the inclusion of grants in budget document, project readiness criteria, and international obligation criteria.

Inclusion of Grants in Budget Document

Prior to 2001, forign grant management encounterd various contrains that were caused by:
-the absence of fixed mechanism and administration procedures of foreign grants;
-the fact that foreign granst were conducted through various institution, for instance National Development

Planning Agency, Ministry of External Affairs, State Secretariate, and Ministry of Finance. Some grants were even transferred directly to their beneficiaries

-the various form of grants, e.g. cash, material. services, consultation services, training, and project
preparation;

- the absence of fixed grant reporting system;

-the fact that most grants went unreported and unrecorded through budget mechanism, thus a major
accountabilty problem.

In order to control these problems Directorate General of Budget issued Circullar Letter No. SE-54/A/2001 dated April 21st, 2001 which stated that grant executive agencies/beneficiaries must report the grants they received to Ministry of Finance. The reporting would ensure more organized, transparent, and accountable foreign grant administration so that the realisation of foreign grant could be compared and held accountable to Parleament and public in general.

In the case of grants from Government of Japan (GOJ) for rehabilitation and reconstruction of Nias and Aceh, GOJ even insisted that the grants must be put into budget document. In its tender implementation, GOJ appointed Japan International Cooperation System (JICS) as procurement agent. The grant itself amounted
to US$ 139.40 million or the equivalent of IDR 1,240.66 billion. This case is indeed a sign of improvement in foreign grant administration as warranted by Circullar Letter No. SE-54/A/2001

Project Readiness Criteria

The implementation of projects funded by foreign loan usually encounters problem such as incomprehensive project preparation that includes aspects like land acquisition, project staffs appointment, evaluation and supervision system preparation, lack of coordination with related institutions, and many others. These problems causes project stagnancy even when the loan agreement has been signed and the fund disbursed.
The obvious consequence of such incidence is the inefficiency of commitment fee paid by the government.

To prevent such inefficiency, the government has enacted ‘Project Readiness Criteria’ to ensure that the project is in a state of ready for implementation before loan agreement is signed so that once the loan is effective, the project may be commenced immediately.

As an example, readiness criteria filter for Neighborhood Upgrading and Shelter Secter Project includes:

a. the availability of performance indicator for monitoring and evaluation, including baseline data.
b. the availability of commitment from regional government to participate and provide the obligatory financing and contiguous fund
c. contiguous fund of both central and regional government for the firts year has been allocated in the fiscal year in which the project supposed to commence
d. draft of Grant Agreement has been approved by central and regional government
e. the availability of land acquisition and resettlement plan.
f. the appointment of Project Management Unit and Project Implementing Unit, including the staffs.
g. the availability of the final draft of project management/manual administration (including organizational
scope and Term of Reference), procurement, financing, reporting, and audit mechanism
h. the availability of procurement proposal and request for proposal
i. financing plan has been deliberated and approved by Bappenas and Ministry of Finance
j. Fund Absorbtion plan
k. budget agreement document for loan and contiguous fund proposal for the first year has been issued
l. recommendation concerning the winner of project tender for main consultant of the first year.

Issue International Bond

In order to cover budget deficit and increase devisa reserve, the government also issues international bonds.
Until recently, the government has issued international bonds three times which were in 1996, 2004, and 2005. The value of international bonds issued in 1996 was US$ 400 million. Whereas in 2004 and 2005 the value was US$ 1 billion in each year.

The high level of interest shown by investors to Indonesian bonds issued in 2004 and 2005 indicates the increasing level of trust of the investors to Indonesian economic recovery.

The issue also implies the variety of current alternative budget financing, aside from domestic Government
Bonds and foreign loan.

Indonesian budget process and system

2007-07-06T01:12:00.000-07:00

The year 2005 is the first year of budget reform implementation as warranted by Law No. 17/2003 on Public Finance and Law No. 1/2004 on State Treasury. The reform includes the implementation of Unified Budget, Medium Term Expenditure Framework and Performance Budget as well the implementation of functional classification based on Government Financial Statistic (GFS).

In addition, the government needs an independent auditor to supervise the implementation of Public Finance. On the basis of that goal, Law No. 15/2004 regarding Audit of the Public Finance Management and Responsibilties has been issued.

As the reform commences, adjustments need to be made in state budget, such as the concepts and terms, the budget cycle, planning and implementation. In order to have better understanding, this chapter will discuss the budget coverage, the budget composition and classifications, the budget formulation process, implementation, and its accountability.

I. Basic Conceptions
State budget has the following functions:

• Authorization
State budget is the basis for revenue generation and expenditure implementation in one fiscal year
• Planning
State budget is the guideline for management to plan activities in one fiscal year
• Supervision
State budget is the guideline for assessing whether the governance has been implemented properly.
• Allocation
State budget should be directed to reduce the rate of unemployment and resource inefficiency, and increase economic efficiency and effectiveness.

• Distribution
State budget policies should always put justice and fairness into consideration.
• Stabilization
State budget is an instrument to maintain and endeavor the balance of economic fundamentals.

II. Laws and Regulations
The laws and regulation underlying state budget formulation are

a. Constitution of Republic of Indonesia 1945 and its Amendments;
b. Law No.17/2003 on Public Finance;
c. Law No. 1/2004 on State Treasury;
d. Law No.15/2004 on Audit of the Public Finance Management and Responsibilties;
e. Law No. 32/2004 on Regional Government;
f. Law No. 33/2004 on Fiscal Balance between Central Government and Regional Government;
g. Government Decree No. 20/2004 on Government Strategic Plan;
h. Government Decree No. 21/2004 on Formulation Work Plan and Budgetting of Line Ministry/Agency.

III. Fiscal Year (FY)
Fiscal year is the period of 12 months during which the budget is implemented. Indonesian fiscal year commences on January 1st, and ends on December 31st.

IV. Scope of State Budget
The scope of state budget is:

1. Line ministry/agency budget
a. Line Ministry Fund
The fund originates from state budget and is managed by line ministries in accordance to their main task and functions

b. Deconcentration Fund
Deconcentration fund is line ministry’s fund originating from state budget that is transferred to governor in his capacity as representative of central government. It includes all revenue generation and expenditure of line ministry in the region in order to implement deconcentration principles but exclusive of fund allocated for the expenditure of line ministry’s vertical unit in the region.

c. Assisted Task Fund
Assisted Task Fund is line ministry’s fund from state budget that is transferred to regional governments to finance the ministry’s revenue generation and expenditure in the region in order to implement assisted task principle.

2. Other than Line Ministries Budget
Other than the above, some part of state budget are allocated to: directorate general of budget

-Loan interest repayment (Budget Section 61)
-Subsidy and Transfer (Budget Section 62)
-Other Expenditure (Budget Section 69)
-Balance Fund (Budget Section 70)
-Special Autonomy Balancing Fund (Budget Section 71)
-Foreign Amortization (Budget Section 96)
-Domestic Amortization (budget Section 97)
-On-lending (Budget Section 98)
-State Capital Investment (Budget Section 99)

3. Balance Fund
Balance fund originates from state budget and is transferred to the regions to finance the regions’ needs in the implementation of decentralization. Balance fund consists of:

- Revenue sharing, i.e. transferred fund originating from tax and natural resources

-General Allocation Fund (DAU), i.e. fund from state budget, the purpose of which is to correct horizontal imbalance and to finance regional expenditures in the implementation of decentralization.

-Specific Allocation Fund (DAK) i.e. fund from state budget that is transferred to the regions to aid the financing of special activities which are the region’s responsibility and relevant to national priority.

V. Budget Classification and Composition
Budget composition for fiscal year 2005 is still based on I-account, with several adjustments both format-wise and structure-wise. They are:

-Separation between central government expenditure and regional expenditure.
-State expenditure that is subsidy or aid in nature is classified as subsidy
-Expenditure containing the term ‘other’ is classified as other expenditure.

Budget classification consist of:

1. Classification by Organization, i.e. classification according to state ministries and agencies that are established to carry out specific tasks and functions based on Constitution 1945 and the prevailing laws and regulation. Each ministry/agency is further divided into organizational units and work units (satuan kerja/satker). For fiscal year 2005, work units are grouped into:
a. Central Work Unit, i.e. work unit whose authority and responsibility lie in central office of its ministry/ agency, regardless of its location that can be both in the capital or the regions.
b. Technical Implementer Work Unit of Ministry/Agency, i.e. work unit whose authority comes from central office but the day-to-day management is done by central office’s vertical unit in the regions.
c. Special Work Unit, i.e. work unit that is established to conduct budget management activities of activities/ programs financed by budget other than the ministry/agency budget.
d. Regional Apparatus Work Unit, i.e. work unit whose authority and responsibility are transferred from ministry/agency to governor for the implementation of deconcentration tasks and to governor/head of district/major of predesignated province/district/municipality for assisted tasks.
e. Specified Non Vertical Work Unit, i.e. work unit that is not a vertical unit eventhough its authority and responsibility come from central office. This work unit is established because the aforementioned authority and responsibility cannot be delegated directly to Regional Apparatus Work Unit.
f. Temporary Work Unit, i.e. work unit that is established for only one year because the authority and responsibility of financial management cannot be delegated to work units described from point b to e.

2. Classification by Function is classification based on service functions conducted by government to public, both individually and collectively, to redistribute income and increase public wealth. This classification is enacted in 2005 to replace classification by sector.

The reasons underlying the implementation of classification by function are:

a. This type of classification facilitate stakeholder in assessing the level of success of budget implementation and the performance of a certain function.
b. Classification by function refers to Government Financial Statistic, therefore conducting cross country analysis will be easier since the practice is internationally approved.
c. Financial report that refers to GFS will satisfy policy and fiscal condition analysis needs.

Law Number 17/2003 stipulates the following functions:

a. General Public Services
General Service function includes Legislative and Executive Institutions, Financial and Fiscal affairs, Foreign Affair, Foreign Aid, Public Service, Science and Technology Research and Development, Government Loan, Regional Development. Governmnet Public Service Research and Development, and other general services.

b. Defense
Defense function includes National Defense, Defense Support, Foreign Military Aid, Defense Research and Development, and other defense-related activities.

c. Public Order and Safety
Security and order function includes Police, Disaster Control, Law Development, Trial, State Penitentiary, Public Order Research and Development, Security and Law, and other Public Order, Security and Law functions.

d. Economic Affairs
Economic function includes Commerce, Business Development, Cooperation and Small to Medium Scale Industry, Employment, Agriculture, Forestry, Fishery and Marine, Irrigation, Fuel and Energy, Mining, Industry and Construction; Transportation, Telecommunication and Information Technology, Economic Research and Development, and other economic functions.

e. Environmental Protection
Environment function includes Waste Management, Liquid Waste Management, Pollution Control, Natural Resource Conservation, Landscape Planning and Land Affairs, Environment Protection Research and Development, and other environment protection functions.

f. Housing and Community Amenities
Housing and community amenities function includes Housing Development, Settlement Community Development, Water Service Provision, Street Lighting, Housing and Settlement Research and Development, and other housing and settlement functions.

g. Health
Health function includes Medicine and Medical Supply, Individual Health Service, Public Health Service, Family Planning, Health Research and Development, and other health functions.

h. Tourism and Culture
Tourism and culture function includes Tourism and Culture Development, Youth and Sport Development, Publishing and Broadcasting Development, Culture, Youth, and Tourism Research and Development and other tourism and culture functions.

i. Religion
Religion function includes Religious Life Enhancement, Religious Harmony, Religious Research and Development and other religious services.

j. Education
Education function includes Early Education, Elementary Education, Intermediate Education, Non Formal and Informal Education, Government Official Education, Higher Education, Educational Aid Services, Religious Education, Education Research and Development, and other education functions.

k. Social Security
Social security function includes Security and Services for the Disabled and Ailed, Security and Services for Elderly Citizens, Security and Services for families of War Survivors, Social Security and Services for Children and Families, Women Empowerment, Social Information and Mentoring, Housing Aid, Social Aid and Safety, Social Security Research and Development, and other social security functions.

3. Economic Classification, i.e. classification that cathegorizes budget into 8 types of expenditures:
a. Personnel Expenditure, i.e. an amount of cash and/or goods given to civil servants as compensation for their services.
b. Material Expenditure, i.e. disposable goods and services expenditure needed to produce marketed or unmarketed goods and services.
c. Capital expenditure, i.e. expenditures aimed at establishing capital that adds to ministry/agency’s asset and inventory.
d. Interest, i.e. payment for usage of loan principle, both foreign and domestic
e. Subsidy, i.e. budget allocation given to institution/enterprise that produces, sells, exports or imports good and services that is crucial to public in order to make the price affordable.

f. Social Aid, i.e. transfer of cash or goods to public to protect them from social risks. The aid can be given directly to the citizens and/or public institution, including aid for non-gevernment organization in the area of education and religion.
g. Grant, i.e. transfer of cash and capital to foreign government or international organization.
h. Other expenditures, i.e. central government expenditures that cannot be classified into types of expenditure from poin a to g.

VI. Budgetting Approach
a. Integrated Budgetting
By integrating recurrent and development expenditures budgeting process will be more transparent, and in addition, it will make budget formulation and implementation more performance-oriented. This is necessary to ensure that recurrent investment and operational cost be considered simultaneously.

b. Budgetting in Medium Term Perspective
This approach provides comprehensive framework, affirms the linkage between planning and budgeting process, develops fiscal discipline, and strengthens public’s trust in the government by providing more efficient and optimum services. Medium term projection minimizes the uncertainty of future fund availability for financing on-going and new policies by taking into account the implications of the new policy to fiscal sustainability.

c. Performance-based Budgetting
This approach emphasizes that strategic plan and budget proposal should be based on achievement and the aim to which ministry/agency’s programs and activities should be directed in order to achieved the standardized result and output of Government Strategic Plan. In order to be efficient, budget formulation is based on unit cost per output and activity.

VI. State Budget Preparation
State budget formulation as depicted on chart 1 is as follows:

The Minister of Planning and Minister of Finance enact indicative ceiling, that is a rough estimate of ministry/ agency’s budget ceiling for every program, as a reference for strategic planning formulation.

Based on development priority and indicative ceiling line ministries formulate their strategic plan for the following fiscal year.

Meanwhile, on the second week of May, at the latest, the government submits Governmnet Strategic Plan (RKP), which is detailed manifestation of National Medium Term Strategic Plan (RPJM), along with the fundamentals of fiscal policies and macroeconomic framework for the following fiscal year to the Parliament.

-The fundamentals of fiscal policy includes principles underlying fiscal policy, fiscal policy on state revenue and grant, fiscal policy on expenditure, and fiscal policy on budget financing.

-Macroeconomic framework includes prospect of world economy, macoroeconomic policy, and state budget indicator assumptions
Afterwards, the government and the Parliament will discuss macroeconomic framework and the fundamentals of fiscal policy in budget proposal preliminary hearing, the relust of which will become reference for ministries and agencies in formulating their budget proposal.

Having received Circular Letter of Miniter of Finance regarding temporary ceiling on mid June, ministries and agencies formulate their strategic plan and budget proposal (RKA-KL), using RKP as guidelines and employing the following approaches: (a) Medium Term Ezpenditure Framework, (b) Integrated Budgetting, and

(c) Performance-based budgeting.
RKA-KL also classifies expenditures according to organization, function, program, activity and type.

The ministries and agencies goes into deliberation with related committees in the Parliament to discuss RKA-KL in Juli at the latest. The deliberated RKA-KL will be submitted to and scrutinized by the Ministry of Planning and the Ministry of Finance to analyse its accordance to RKP, Circular Letter of Ministry of Finance on Temporary Ceiling, forward estimate that was approved the previous year, and the approved unit cost standard.

Ministry of Finance will compile all the analysed RKAKL to be included in the deliberation with the Cabinet along with Financial Notes and Budget Proposal. This phase should be completed by August at the latest and State Budget Law should be enacted by the end of October.

The RKA-KL that is approved by the Parliament will be enacted as Presidential Decree on Detailed State Budget by the end of November which will subsequently used as the basis for formulating budget implementation document (DIPA) concept.

The DIPA is submitted to the Minister of Finance (c.q. Directorate General of Treasury) in its capacity as State Treasurer by the second week of December at the latest so that it can be authorized by the Minister of Finance by December 31st.

VII. Budget Implementation
Law 17/2004 has made it particularly clear that the Ministier of Finace has the authoriety and responsibility of a Chief Financial Officer in managing the state’s assets and obligations, meanwhile line Ministers and Head of Agencies are Chief Operational Officers who have the authority and are responsible over governance administration. In other words, a distinction has been made between which unit has administrative authority and which treasury authority.

Adminitrative authority includes entering into binding commitment and other measures that result in state revenue and expenditure, conducting analysis and forwarding bills to ministries/agencies in relation to the commitment realization, and issuing payment order or claim revenue as a result of budget implementation.

Minister of Finance as State General Treasurer and other officials as Acting State General Treasurer has the authority of not only state revenue and expenditure, but also to monitor them.

In the implementation of state budget, Minister/Head of Agency :

• formulates budget implementation documents;
• appoints officials:
-as Acting Budget/Goods User;
-in charge of collecting state revenue;
-to perform actions resulting in state expenditure;
-in charge of assessment and payment order;
-that will be the treasurer in issuing and receiving goods.
• issues payment order (SPM);
• has the authority to:
-assess the validity of material evidence of the claimant’s right ;
-analyse the output of prerequisite documents in goods/service provision commitment/agreement;
-conduct budget availability check;
-post expenditure;
-issue order payment based according to state budget
In his capacity as State General Treasurer, Ministry of Finance is obliged to:

• check the comprehensiveness of payment order issued by the Budget User/Acting Budget User;
• check the bill calculation as stated in payment order
• check the availability of the fund in question
• order fund disbursement as basis of state expenditure
• disallow fund disbursement issued by Budget User/Acting Budget User should it fail the predesignated requirements

IX. State Finance Accountability
Law 17?2003 states that budget implementation accountability report is submitted in the form of finance report that consists of budget realization report, balance, cash flow report, and notes on financial report that is in accordance to government accounting standard. Governmentfinancial report should be submitted on time and is consistent with government accounting standard.

The report will be audited by State Auditor Agency (BPK) and submitted to the Parliament within six months, at the latest, after the fiscal year in question ends.

Furthermore, Law 15/2004 states that in order to accomplish state finance management as warranted by Law 17/2003 and Law 1/2004, an audit conducted by the independent and autonomous State Auditor Agency as has been stipulated by article 23(e) of the 1945 Constitution is deemed necessary. In these laws, BPK has the independence and autonomy in 3 stages of auditing:

a. independence in planning stage, i.e. free to determine object to be subjected for auditing, except for matters regulated by law or special request by representative agency;

b. independence in the administering of auditing activities, i.e. free to determine the timeframe and method of auditing, including investigative methods.

c. Independence in reporting the audit result

In relation to state finance management and accountability, the auditing involves:

a. Financial audit, i.e. audit over central and local government financial report.
b. Performance audit, i.e. audit over economy, efficiency, and effectiveness aspects which is generally performed by government internal auditing apparatus for the benefit of the management;
c. Audit for special purposes, i.e. auditing conducted for special purposes, aside from financial and performance audit. This type of audit includes audit over matters related to finance and investigation. Audit report will be submitted to the Parliament and government. The report will be used by the government to make the necessary correction and adjustments. The Governmnet is given the chance to forward their response to the findings and conclusion of the report. Upon discovering criminal evidence, BPK must report it to the authority, as has been stipulated in Law 15/2004. In the effort to improve transparence and increase public participation, the Law stipulated that every audit report that has been submitted to the Parliament is declared open for public.