Light participation

Fish traders at Kramat Jati market in East Jakarta kept their lights on during the Earth Hour campaign, on Saturday evening when people were supposed to turn off their lights, although many were unaware of this. Many night workers had to keep their lights on between 8:30 p.m. and 9:30 p.m.

Officials: Suicide bombs kill 35 on Moscow subway

Two female suicide bombers blew themselves up on Moscow's subway system as it was jam-packed with rush-hour passengers Monday, killing at least 35 people and wounding more than 30, the city's mayor and other officials said.

Emergency Ministry pokeswoman Svetlana Chumikova said 23 people were killed at the Lubyanka station in central Moscow. The station is underneath the building that houses the main offices of the Federal Security Service, or FSB, the KGB's main successor agency.

A second explosion hit the Park Kultury station about 45 minutes later. Chumikova said at least 12 were dead there.

Moscow Mayor Yuri Luzhkov said both explosions were believed to have been set off by female suicide bombers as the trains entered the stations. In the first case, officials said the explosion was on the train; there was no immediate information on the location of the second blast.

"The first data that the FSB has given us is that there were two female suicide bombers," Luzhkov told reporters at the Park Kultury site.

Russia's top investigative body also said terrorism was suspected.

The last confirmed terrorist attack in Moscow was in August 2004, when a suicide bomber blew herself up outside a city subway station, killing 10 people.

Responsibility for that blast was claimed by Chechen rebels and suspicion in Monday's explosions is likely to focus on them and other separatist groups in the restive North Caucasus region.

The Moscow subway system is one of the world's busiest, carrying around 7 million passengers on an average workday, and is a key element in running the sprawling and traffic-choked city.

The blasts practically paralyzed movement in the city center as emergency vehicles sped to the stations. Helicopters hovered over the Park Kultury station area, which is near the renowned Gorky Park.

Passengers, many of them in tears, streamed out of the station, one man exclaiming over and over "This is how we live!"

At least a dozen ambulances were on the scene.

KPK questions BI deputy governor Budi Mulya in Century case

The Corruption Eradication Commission [KPK] questioned deputy governor of Bank Indonesia Budi Mulya Monday about his possible involvement in the Bank Century bailout case.

“It’s a continuing investigation following a previous probe of [another] BI deputy governor Pak Budi Rochadi [some time ago],” KPK spokesman Johan Budi said as quoted by kompas.com.

Budi Mulya was being questioned in relation to BI's Rp 689 billion (US$75.1 million) liquidity assistance to the ailing Bank Century in 2008.

The antigraft body is focusing its investigations on graft that allegedly occurred in Bank Century's handling of the BI liquidity assistance and the Rp 6.76 trillion (US$716 million) bailout, and the subsequent channeling of funds.

Bakrieland to build Disneyland in Sukabumi

PT Bakrieland Development is planning to expand its entertainment and recreational properties by building a Disneyland park, following the development of its Jungle Water Park at the Lido tourism spot in Sukabumi, West Java.

The American-based Disneyland project plan is in line with Bakrie’s 54-kilometer toll road project that will connect Ciawi and Sukabumi, kompas.com reported Monday

Bakrieland president director Hiramsyah S. Thaib, however, declined to elaborate on the proposed Disneyland project.

Analysis: The ‘drivers’ that make drivers choose new cars in Indonesia

Like many cities around the world, traffic on the road is a nightmare in Jakarta except perhaps between 2 a.m. and 6 a.m. Other metros like Surabaya and Bandung aren’t far behind. Whether its good news or bad, the fact remains that only 3.5 percent of Indonesian households can afford to maintain the family car. Another 31 percent have opted for the family motorcycle. There are three million car drivers, not including taxi bus or truck drivers. In contrast, there are 45 million motorcycle riders. Many of them would like a car instead, which would strangulate the city and cause rigour-mortis to set in. Any hope of a real mass transit system seems remote, to be believed only when it is real. So Jakartans still have some room to crawl in, what little there is left.

In the meantime, the car industry is still crawling on the road to recovery. The elite group of car buyers were among the small fraction of Indonesian society affected or concerned by the global financial crisis. Demand is yet to go back to levels similar to the days leading up to the fuel price hikes. As at December 2009, there were 1.54 million people thinking of buying a car in the next four years. 1.29 million of them were considering a used vehicle, leaving only 298,000 in the market for a new car.

That’s cars for consumers, not including commercial, government, military or police fleet purchases.

In a world where the capacity to supply is far in excess of current demand, carmakers from around the world are flocking to Indonesia. From Ferrari and Porsche to Renault and Citroen, they are all now here for a piece of the action. The multi-billion rupiah question is whether they all know what the Indonesian aspiring to buy a new car really wants today. Roy Morgan Single Source has quite a few answers for anybody who is interested. Twenty seven percent of people thinking of a new car want a four-door station wagon, which definition in Indonesia of course includes the trusty Kijang. 25 percent want a five-door hatchback and 13 percent a three-door version.

But there’s a remarkable 12-percent who desire a coupe, sports or two-door convertible. That translates to roughly 36,000 units of big boys’ toys. Back to reality, another 9 percent are keen on a people mover or van. Almost 5 percent are thinking pick-up, just 4 percent the classic four-door sedan. The original SUV will be considered by only 1.4 percent of new car buyers. That just about wraps up who wants what. Except of course, the brands. Today, Honda leads with 26 percent share of the ‘future market’, closely followed by Toyota with 25. Way behind them is Mitsubishi with 7 percent.

Suzuki, Mazda, Daihatsu and Nissan seem to have lost their shine, falling behind the more prestige names like Jaguar, Mercedes-Benz and BMW.

Then there’s the other set of multi-billion rupiah questions, why they want what what they want. While pleasure seekers have different wants from the needs of the family man, the opinions of all new car intenders in Indonesia produce an interesting diversity of expectations. Reputation still leads.

Eighty six percent “will only buy a car with a proven track record”. The same number “need lots of space and seating flexibility in a vehicle”. That’s followed by 82 percent with “ a long warranty is essential to me when buying my new car”. Not surprisingly, 82 percent believe “when I’m making a major purchase I tend to rely on facts and figures rather than gut feel”.

Many women are likely to smirk at this attempt at rationalizing bad choices based on looks alone. Marketers however must acknowledge that well-worn phrase, perception is reality. Fact or fiction, many buyers need the assurance of logic before they are willing to acknowledge falling prey to magic.

Cognitive dissonance or post-purchase rationalization aside, the fact remains that “after reliability, looks and style are most important to me” is a view shared by 73 percent of intenders.

“Safety is my number one concern” believes eight out of 10 buyers, with almost as many agreeing that “performance and road-holding are my number one concern”. Seventy eight percent “want a car that has all the extras as standard” while 74 percent “spend a lot of time researching my options before deciding what car to buy”. How many of these concerns are known and addressed by automakers operating in Indonesia, one wonders. There is little evidence or acknowledgement of these needs and wants in the advertising that we see.

These conclusions are based on Roy Morgan Single Source, a syndicated survey with over 25,000 Indonesians 14 years and older interviewed each year. The national database, comprising interviews conducted in the cities, towns and villages around the country is updated every quarter.

Gas shortage costs PLN up to Rp 2.4 trillion

State power firm PT PLN must carry operating costs which are Rp 2.4 trillion (US$263 million) higher than planned this year due to gas shortages affecting its Muara Tawar power plant at Bekasi, West Java.

PLN’s primary energy director Nur Pamudji said less gas supply means more oil fuel consumption.
“We must increase the power plant’s oil-based consumption by 618,000 kiloliters until the end of this year and this will cost us additional spending of Rp 2.4 trillion,” Nur Pamudji said.

PLN’s head of corporate finance division Yusuf Hamdani said the production cost of electricity generated from oil-based fuels was far higher than that generated from gas.

“In 2009, the average production cost for gas was Rp 318 per kWh [kilowatt hour], while the production cost for oil-based fuel was Rp 1,383 per kWh,”Yusuf said.

The combined cycle Muara Tawar power plant can use both diesel oil and gas. The plant receives gas from state gas distributor PT Perusahaan Gas Negara (PGN).

PGN and PLN have signed two gas sales and purchase contracts for the power plant. Under the first contract, PGN must supply as much as 200 billion British thermal units of gas per day (BBTUD) to PLN until 2012. As for the second contract, PGN has to supply 100 BBTUD to PLN for the same period. But the second contract is interruptible, meaning PGN will only supply PLN when additional gas is available.

Nur Pamudji said the gas supply had dropped to 100 BBTUD since early March, this year from an average of 250 BBTUD in 2009. “I thought the shortage was only temporary, but later on it became clear that the shortage could last until December,” Nur Pamudji said.

The Muara Tawar power plant comprises four operating units. “Currently, only one unit still receives gas,” Nur Pamudji said.

PGN’s gas supply to PLN and other industries fell this year due to a decline in the gas supply from ConocoPhillips’s South Sumatra field, PGN’s president director Hendi Prio Santoso said as quoted by Bloomberg last week.

Gas contributes 26 percent to PLN’s total energy consumption. Coal and oil-based fuels contribute 45 percent and 19 percent, respectively. The remaining 10 percent is from new and renewable energy sources such as hydro and geothermal.

PLN’s coal consumption has increased as some of the power plants planned and financed under the
first phase of the first 10,000 megawatt (MW) electricity crash program have started to come into operation.

All power plants under the first 10,000 MW project are coal-fired power plants. Nur Pamudji said PLN coal consumption reached 30 million tons this year, up from 22 million tons in 2009. However PLN coal consumption to feed an increased number of coal-fired power stations coming on stream is estimated to increase to 38 million tons in 2011.

RI, HK agree to eliminate double taxation, tax evasion

Indonesia and Hong Kong signed a bilateral agreement Tuesday on the avoidance of double taxation and the prevention of tax evasion in the hope of enhancing mutual business opportunities.

The agreement will eliminate double taxation issues encountered by Hong Kong and Indonesian businesses, and bring lower tax rates to cross-border economic activities.

It was signed by Hong Kong Financial Secretary John C. Tsang and Indonesian Finance Minister Sri
Mulyani Indrawati.

“This would help in doing business in Hong Kong and Indonesia. It provides certainty for businesses.

They will pay less tax than they are now. So we expect this would facilitate and enhance business opportunities,” Tsang said in an interview with The Jakarta Post.

He said Hong Kong and Indonesia should foster closer business cooperation after the recent global financial crisis. He said trade in Asia should be expanded to compensate for the decline in exports to the US and EU countries.

“We can do more things together, particularly as our traditional markets — the US and EU countries — are importing less. So I think we need to expand our own regional market to compensate for exports we have lost in traditional markets,” he said.

Under the agreement, he said, Hong Kong and Indonesian businesses will have their taxes more than halved.

Tax income on dividends which now stand at 20 percent, will be cut to 10 percent; and for a shareholder owning at least a 25 percent share in a company, tax will be further reduced to 5 percent.

Tax on royalties, which now stand at 20 percent, will be capped at 5 percent.

The Indonesian directorate general of taxation said it would pursue similar tax agreements with other countries to pursue tax evaders.

“We’re negotiating with Serbia and Oman. We’re renegotiating with Malaysia and some European countries. What’s important is information exchange. We can ask information now,” said Syarifuddin Alsah, director of tax regulations.

On Tuesday, Tsang also met the central bank to discuss cross-border banking supervision and
development of Islamic finance, which he said was an “ethical investment tool”.

“We see a lot of potential for Islamic finance as an alternative investment. Not only for Muslims, but for everyone,” he said.

Tsang said on Wednesday he would meet the Coordinating Economic Minister Hatta Rajasa, Trade Minister Mari Elka Pangestu and Fuad Rahmany, head of the Capital Market and Financial Institutions Supervisory Agency, to discuss various issues.

He also explained that Hong Kong would become a platform for the internationalization of the Chinese currency the renminbi to become one of the world’s convertible currencies, which would change the dynamics of the world currency system.

“Now the US dollar is the main reserve currency, the main currency for business in the world for
most transactions. But as the economy of China grows, as the business involving Chinese entities grows in the future, then the renminbi will become a more important currency,” he said.

“When it becomes a convertible currency, a significant and international currency, certainly the dynamic of it, and also of the US dollar, and the euro, will surely change. But we have to look at the geopolitics at that time. So we can see how things will change,” he added.

Few firms join industry revitalization program

The Industry Ministry has reduced the amount budgeted to its machinery revitalization program in the textile, footwear and leather industries, as well as sugar mills, due to the lack of response from eligible firms.

This year, the government is allocating a total of Rp 202.74 billion (US$22.3 million) for industrial revitalization, including Rp 144.35 billion for textile firms, Rp 34.25 billion for footwear and leather companies and Rp 24.14 billion for sugar mills, the ministry announced Tuesday.

Last year, the government allocated Rp 342.5 billion to the same sectors under the same program, providing manufacturers with access to incentives to help them replace old machines with new ones to help improve industrial competitiveness.

“In absolute size, the total budget has been cut from Rp 342.5 billion last year to Rp 202.74 billion this year,” the ministry’s director general for metal, machinery, textile and miscellaneous industries Ansari Bukhari said during the launch of this year’s program at his office.

“We have learned our lessons that the utilization of the budget would only amount on average to between 63 and 64 percent of the total.”

He said he expected budget spending would be more efficient and effective with the cuts.
Likewise, the ministry’s inspector general Sakri Widianto said, “It’s not about the size of the budget is, but how much it’s spent.”

Unlike in the textile industry, fewer participants were interested in the proposed program for the footwear and leather industries and sugar mills, Ansari said.

He elaborated that these companies had been reluctant to join last year’s program due to market uncertainties caused by the continuing negative impacts of the global financial crisis.

He also said the ministry had to remove the Scheme Two component of the program due to the lack of response from producers despite the fact that the program had been implemented three years running.

There are two schemes in the textile machinery revitalizing program. Under Scheme One, the government provides 10 percent discounts for manufacturers who want to purchase new machines, while Scheme Two is aimed at small and medium enterprises and provides soft loans.

“Apparently, the number of applicants under Scheme Two was very low, while on the manpower side it took a lot of work to do the administration,” said Ansari.

Secretary of directorate general for small and medium industries Andang Fatati Nadya said her office had begun this year to include the textile, footwear and leather industries in its discount program.

“We will give 25 percent discount for every machine purchased overseas and 30 percent discount for every machine purchased locally,” she said. The machines should be worth between Rp 40 million and Rp 2 billion each, she said.

In addition, the director for the textile industry Arryanto Sagala said there were reportedly four participants under Scheme Two in 2007 and two in 2008 who could not pay their debts on their soft loans. This may have discouraged borrowers.

Landslide kills three in Sumatra

Three people were killed and eight others injured after a landslide hit Saok Laweh, Solok regency, West Sumatra on Wednesday.

West Sumatra disaster management coordinator Ade Edward said the landslide occurred at 6:30 a.m., destroying three homes and an auto repair shop near Jl. Solok, just four kilometers from Muara Kalaban, Sawahlunto.

“This disaster is related to the behavior of the local people, who build homes near the ravine," he said

Lightning kills four, injures three in South Sulawesi

Lightning has killed four people and severely injured three others in Lakeppang, Bone, South Sulawesi.

Darwis, a local leader said the victims, all farmers, were taking a lunch break in a small hut located in a rice field amid heavy rain when lightning struck the hut Tuesday evening, Antara state news agency reported.

Four farmers died instantly and while the other three suffered severe burns.

The injured were immediately rushed to Watampone Regional General Hospital, while the deceased victims were sent to their respective homes.

Those killed were identified as M Ali (55), Alimuddin (37), Sumiati (35) and Ayis Sautra (3), while those injured were Akmal (18), Sanating (50) and Agus (24).

Last month, lightning killed five people and seriously injured another as it struck a hut near a rice field in Kampuang Caniago village in the West Sumatra regency of Agam.

Oil and gas producers need 3 years for adjustment

Oil and gas industry will need up to three years to adjust to the new environmental law, upstream regulator BPMigas said.

The 2009 Environmental Law stipulates strict environmental standards which include several requirements such as the maximum temperature and degree of impurities in liquid waste.

“We need to find new equipment and technology to adjust to these environmental standards. This will require between two to three years,” BPMigas chairman R. Priyono said over the weekend.

The environmental law took effect since October last year. The implementing regulations giving details on the environmental standards will reportedly be issued by April this year.

Priyono said the law would also impact upon major oil and gas projects in Indonesia. He cited the example of the regulation requiring companies to lower the temperature of liquid waste from 45 degrees Celcius to 40 degrees Celcius, which will have a major impact on the operations of PT Chevron Pacific Indonesia (CPI) in Duri, Sumatra.

“CPI uses massive steam flood. It needs to boil water to produce the steam. If the waste water temperature is too restrictive, then the steam cannot [easily] be produced and used,” he said.

Another example is the Conoco Phillips operation in Belanak field, Natuna. Priyono said the field’s crude contains a high degree of mercury and limiting the average mercury concentration at 40 parts per million (ppm), as required by the law, will require the company to redesign its facility.

“The crude refinery is not available in Indonesia. It’s available among other options in Thailand. If the standards are implemented, the field’s production will decrease by between 28,000 to 40,000 barrels oil per day [bopd],” Priyono said.

Decreasing production due to the new law has been signaled by several other oil and gas contractors earlier. CPI said its production might drop by 248,000 bopd.

PT Pertamina EP, a subsidiary of state oil and gas company PT Pertamina, said its production might drop by 61,000 bopd.

Priyono said the national production would decrease by about 50 percent of total production. The state budget set national oil production at 965,000 barrels per day (bpd). But as of March this year, total oil production had only reached 954,000 bpd.

Govt promises to solve supply shortage

Minister of State Enterprises Mustafa Abubakar has promised to help solve the acute gas supply shortage being suffered by state gas distributor PT Perusahaan Gas Negara (PGN).

“We will meet with PGN’s president director on Wednesday or Thursday to find the best solution in dealing with the gas supply shortage,” Mustafa said at his office on Friday in response to PGN’s plan to reduce its gas supply to ceramic producers by 20 percent.

Mustafa said that the government should be able to provide a solution to ensure the state gas distributor would be able to meet the gas needs of its customers especially labor intensive manufacturing industries.

“The cut in the supply to industries should be avoided in order to prevent layoffs,” he said.

PGN’s president director Hendi Prio Santoso said last week that the gas shortage was mainly because a big portion of existing domestic gas supply had been diverted to local power plants, but this also reflected wider problems with LNG exports.

He estimated the gas shortage had reached about 297 million standard cubic feet per day (MMSCFD).
Hendi said that PGN planned to import liquefied natural gas (LNG) from Qatar to cope with the supply shortage problem. But the import plan would not be able to immediately solve the problem because it would take years to implement it.

PGN with its partners plan to build two floating LNG terminals off Banten, West Java and off North Sumatra to store part of the LNG to be imported from Qatar.

The construction of the terminal facilities will take at least two years.

Mustafa said it would not be a problem if PGN decided to import gas to solve the supply problem.
“There is no problem with the import option,” the minister said.

Industry Minister M.S. Hidayat also said last week he hoped PGN would not cut the gas supply because the government had promised to divert the larger part of the gas supply from Chevron to PGN for manufacturing industry.

According to the Indonesian Ceramics Industry Association (Asaki), its members are only able to get between 20 and 40 percent of their total demand for gas supply which is up to about 1.88 billion standard cubic feet per day.

Ceramics is among the manufacturing industries that have been hard hit by the acute shortage of natural gas.

Gas is largely used by manufacturers of ceramics, float glass, textiles and chemical products such as rubber gloves as well as by manufacturers of steel-based products, base metal and cement.

Asaki and others have reported that one manufacturer after another has been forced to shut down because of gas shortages.

Indonesia’s gas consumption surged 11.5 percent in 2008, outstripping the rate of growth of gas production, which only reached only 2.7 percent.

Besides the manufacturing sector, gas shortages also hurt the power sector. State power firm PT PLN’s primary energy director Nur Pamudji previously said PLN was short of gas, up to as much as 235 million British thermal units per day (BTUD) in Jakarta, 150 million BTUD in Central Java, and 90 million BTUD in East Java.

Outside Java, the big shortage is in North Sumatra, where PLN needs another 150 million BTUD of gas.
PLN is working to convert its fuel-fired power plants to gas-fired power plants in a bid to cut the cost of the government fuel subsidy.

SBY asked to find names for BI chief

The government should name candidates to fill the vacant post of Bank Indonesia’s governor as well as those nominated to replace deputy governor Siti Ch. Fadjrijah, banking analysts have said.

“It should be the main priority to immediately name the central bank’s new governor,”

BNI Chief Economist A. Tony Prasetiantono said Sunday. “I think it’s better to have a governor and not to have a senior deputy governor, instead of having a senior deputy governor but not having a governor.”

Presidential spokesman Julian Aldrin Pasha said earlier this month Yudhoyono was selecting the names of BI governor candidates. But he refused to mention names.

There has been speculation that BI Senior Deputy Governor Darmin Nasution may be named as a candidate for BI governor. But this will leave a vacant post for senior deputy governor position due to the law. If the President names Darmin as candidate for BI governor, his position could not be filled immediately. Article 41 in the 2004 law on BI stipulates that the replacement of members of the BI board of governors is limited to a maximum of two positions annually.

Former BI governor Boediono left his position in May 2009 to run as the Vice President.

President Susilo Bambang Yudhoyono recently submitted three names as possible replacements for BI Deputy Governor Siti Ch. Fadjrijah, to be chosen by the House of Representatives in early April.

The three names are Halim Alamsyah, director of banking research and regulation at BI; Perry Warjiyo, director of monetary policy research at BI; and Krisna Wijaya, a commissioner at Bank Danamon, who is the only non-BI candidate.

Halim or Krisna seem to be the stronger ones to replace Fadjrijah, who was in charge of banking supervision before she fell ill in the midst of the Bank Century collapse.

BI’s banking supervision has been widely criticized following the Century collapse in November 2008, which cost the Deposit Insurance Corporation Rp 6.76 trillion (US$716 million), to finance the government-approved bailout.

“The empty post is [banking] supervision and BI just had the Century ‘storm’, so in my opinion the post is more suitably given to a commercial banker who could more rapidly detect misappropriation in a commercial bank,” Tony said.

“So Krisna is more suitable. Perry and Halim I suspect will fill the next expired positions in the board of governors,” he said.

BI spokesman Dify Johansyah said in 2012 BI Deputy Governor Muliaman D. Hadad and BI Deputy Governor Budi Mulya would end their terms.

But Dify dismissed speculation that Krisna or Halim would be the strongest candidates. “The appointed candidate isn’t automatically in charge of banking supervision. It can be rotated based on the workload of the board of governors,” he said, adding that BI Deputy Governor Budi Rochadi has taken over banking supervision prior to Fadjrijah’s illness.

Perry himself said he would review regulatory compliance at BI, which he said could be strengthened. “[There needs to be] improvement, structure and efficiency [of regulatory compliance],” he said.

More challenges will be faced by the appointed candidate, said Tony, particularly after the establishment of the Financial Services Authority (OJK) at the latest by the end of this year, as stated by the law on BI. The OJK will supervise the whole financial sector.

Lawmaker Akhsanul Qosasih, vice chairman of the House’s commission XI which oversees financial affairs and which will test the BI deputy governor candidates, said the assessment of Halim would be troubled by the Century case.

Krisna in 2005 was also nominated as BI deputy governor candidate, but the House chose Fadjrijah
over him.

Obama's Asia trip more about influence than policy

President Barack Obama's second trip to Asia since taking office is unlikely to result in tangible accomplishments, but the two-country sojourn could be an important step in restoring U.S. influence in the region.

The economy, terrorism and climate change all figure to play prominently in Obama's stops in Indonesia, the world's most populous Muslim nation, and Australia, a key U.S. ally and supporter of American military efforts in Afghanistan.

Obama is the first U.S. president in at least a decade to travel to Southeast Asia for anything other than a regional summit, a move administration officials say reflects his efforts to strengthen relationships with smaller, emerging nations.

"There are a number of important middle powers, countries like Australia and Indonesia who are significant players," said Jeff Bader, the president's senior adviser for Asia.

As the president prepares to undertake his first international trip of the year, scheduled for Sunday, domestic politics have threatened to overshadow his foreign policy goals.

The ongoing debate on health care reform forced Obama to push back his original Thursday departure by three days so he could stay in Washington and help Democrats in Congress rally last-minute votes for his overhaul plan.

The change in itinerary also meant first lady Michelle Obama and daughters Malia and Sasha would no longer accompany the president abroad, despite the fact that the trip had been scheduled to coincide with the girls' spring break from school.

Obama had hoped to show his family his boyhood haunts in Indonesia, where he spent four years after his mother married an Indonesian man. A bronze statue of a 10-year-old Obama was recently erected at the elementary school he attended.

During his two-day stop in Jakarta, Obama will meet with Indonesian President Susilo Bambang Yudhoyono. In a separate appearance, he'll deliver his first address to the Muslim world since his historic speech in Cairo last year.

Obama will also spend a day in Bali, a well-known tourist destination that has been struck by deadly terrorist attacks. There he will meet with civil society leaders and hold an event promoting the role civil society has played in Indonesia's emerging democracy.

The president's itinerary in Australia has been scaled back due to the delay in his departure. He'll no longer visit Sydney, where his family was expected to do some sightseeing, and instead stop only in Australia's capital, Canberra.

He will meet with Prim Minister Kevin Rudd, with whom he shares a close relationship on the issues of climate change and the war in Afghanistan.

Obama will address Australia's parliament and mark the 70th anniversary of relations between the U.S. and Australia.

In some parts of Asia, the most carefully watched stop of Obamas trip will be the first, and the shortest - a speech he'll make to U.S. service members stationed in Guam while his plane refuels before heading to Indonesia.

The tiny U.S. Pacific territory is at the center of a growing rift between Washington and Japan. Under a post-World War II pact, the U.S. has about 50,000 troops in Japan, most of whom are on the island of Okinawa. Both countries had agreed to close the sprawling Marine Corps Air Station Futenma and relocate 8,000 Marines to Guam.

While Tokyo's previous administration agreed to build a replacement for Futenma farther north on a less-populated part of kinawa, Japan's new coalition government is divided over whether a base should remain in Japan at all. The U.S. says the transfer of Marines to Guam cannot move forward until the new site on Okinawa is finalized.

Some Toyota drivers suing in US for a full refund

A group of Toyota owners sued the Japanese automaker Monday, demanding a full refund for their recalled cars and seeking a payout that could exceed several billion dollars.

Dozens of Toyota owners in Arizona and Washington claim the vehicles recalled over incidents of sudden acceleration are so unsafe they should be able to return them immediately. Attorney Steve Berman said many of the owners no longer trust their vehicles.

"When we talked with Toyota owners, they all voiced the same desire - to drive the car back to the lot, hand them the keys and pick up a check," said Berman, who is based in Seattle. "Fortunately, we think the law allows for exactly that solution, and we are asking the courts to make it happen."

The new lawsuits seek class-action status, which if expanded nationwide, could mean a settlement covering about 6 million recalled Toyotas in the U.S.

Dozens of other potential class-action lawsuits have also been filed against Toyota since it began recalling millions of vehicles to fix floor mats the company says can snag on the accelerator in some models and gas pedals that can get stuck in others. Critics and lawsuits contend the real problem is Toyota's electronic throttle control, which the company has denied.

Most of the lawsuits contend the recalls have triggered a significant drop in the value of Toyotas - between 6 percent and 15 percent, according to the Kelley Blue Book used-car manual - and are seeking a cash payment for owners to compensate for that loss. Lawyers involved in those cases have estimated Toyota could have to cough up more than $3 billion, assuming a conservative $500-per-owner payment.

The full refund cases take it a step further.

"I don't know of any parent who would be willing to put their kids in a potentially unsafe car in exchange for a few hundred bucks," Berman said.

A Toyota spokesman did not immediately return a telephone call seeking comment. Generally, the company has refused to comment on the lawsuits.

Matt Cairns, a private attorney and member a group of lawyers that represents corporations and individuals, said he didn't think the Toyota owners should be entitled to full refunds.

"If they prevail, such plainiffs will effectively have received free transportation for the period of their ownership of a car that met their every need, something all of us would appreciate when we decide we want a new ride," said Cairns, who is the president-elect of The Voice of the Defense Bar.

Cairns said Toyota owners who selltheir cars may be able to get compensation for a loss in the vehicle's value following the recall.

The full refund lawsuits come a week before a panel of federal judges will hold a hearing in San Diego on whether to consolidate more than 110 potential Toyota class-action cases before a single judge. The juge would decide whether the cases can be combined into a single "class" of affected Toyota owners and whether the case should proceed to trial.

A group of attorneys filing Toyota cases nationwide - known as the Attorneys Toyota Action Consortium, or ATAC - announced Monday they are adding racketeering clims to many of their lawsuits. The attorney coordinating the effort, Northeastern University law professor Tim Howard, said Toyota has known of accelerator problems since at least 2000 and engaged in a "conspiracy to hide the truth" from consumers.

"It's become increasingly apparent that Toyota profitsere not built on quality products, but on a willful pattern of deception, fraud and racketeering," Howard said.

If fraud claims are successful under the federal Racketeering Influenced and Corrupt Organizations or RICO law, Howard said, it could push total Toyota class-action damages above $10 billion.

Claims of fraud and deception have been made against Toyota in previous lawsuits, including one filed in California in July 2009 by a former Toyota employee. The newer lawsuits are based in part on documents obtained by investigative reporters and congressional committees looking into the company's recalls.

Some Toyota drivers suing in US for a full refund

A group of Toyota owners sued the Japanese automaker Monday, demanding a full refund for their recalled cars and seeking a payout that could exceed several billion dollars.

Dozens of Toyota owners in Arizona and Washington claim the vehicles recalled over incidents of sudden acceleration are so unsafe they should be able to return them immediately. Attorney Steve Berman said many of the owners no longer trust their vehicles.

"When we talked with Toyota owners, they all voiced the same desire - to drive the car back to the lot, hand them the keys and pick up a check," said Berman, who is based in Seattle. "Fortunately, we think the law allows for exactly that solution, and we are asking the courts to make it happen."

The new lawsuits seek class-action status, which if expanded nationwide, could mean a settlement covering about 6 million recalled Toyotas in the U.S.

Dozens of other potential class-action lawsuits have also been filed against Toyota since it began recalling millions of vehicles to fix floor mats the company says can snag on the accelerator in some models and gas pedals that can get stuck in others. Critics and lawsuits contend the real problem is Toyota's electronic throttle control, which the company has denied.

Most of the lawsuits contend the recalls have triggered a significant drop in the value of Toyotas - between 6 percent and 15 percent, according to the Kelley Blue Book used-car manual - and are seeking a cash payment for owners to compensate for that loss. Lawyers involved in those cases have estimated Toyota could have to cough up more than $3 billion, assuming a conservative $500-per-owner payment.

The full refund cases take it a step further.

"I don't know of any parent who would be willing to put their kids in a potentially unsafe car in exchange for a few hundred bucks," Berman said.

A Toyota spokesman did not immediately return a telephone call seeking comment. Generally, the company has refused to comment on the lawsuits.

Matt Cairns, a private attorney and member a group of lawyers that represents corporations and individuals, said he didn't think the Toyota owners should be entitled to full refunds.

"If they prevail, such plainiffs will effectively have received free transportation for the period of their ownership of a car that met their every need, something all of us would appreciate when we decide we want a new ride," said Cairns, who is the president-elect of The Voice of the Defense Bar.

Cairns said Toyota owners who selltheir cars may be able to get compensation for a loss in the vehicle's value following the recall.

The full refund lawsuits come a week before a panel of federal judges will hold a hearing in San Diego on whether to consolidate more than 110 potential Toyota class-action cases before a single judge. The juge would decide whether the cases can be combined into a single "class" of affected Toyota owners and whether the case should proceed to trial.

A group of attorneys filing Toyota cases nationwide - known as the Attorneys Toyota Action Consortium, or ATAC - announced Monday they are adding racketeering clims to many of their lawsuits. The attorney coordinating the effort, Northeastern University law professor Tim Howard, said Toyota has known of accelerator problems since at least 2000 and engaged in a "conspiracy to hide the truth" from consumers.

"It's become increasingly apparent that Toyota profitsere not built on quality products, but on a willful pattern of deception, fraud and racketeering," Howard said.

If fraud claims are successful under the federal Racketeering Influenced and Corrupt Organizations or RICO law, Howard said, it could push total Toyota class-action damages above $10 billion.

Claims of fraud and deception have been made against Toyota in previous lawsuits, including one filed in California in July 2009 by a former Toyota employee. The newer lawsuits are based in part on documents obtained by investigative reporters and congressional committees looking into the company's recalls.

BankPermata issues Rp 700 billion notes

AKARTA: PT Bank Permata Tbk (Bank Permata) has issued a 10-year unsecured subordinated Medium Term Note (MTN) worth Rp 700 billion (US$76.3 million) to fund future business expansion, the bank announced Wednesday.

With a coupon at 275 basis points over the 3-month Indonesian SBI, the issuance is priced at par. All notes were purchased by strategic shareholder Standard Chartered Bank.

“This issuance further strengthens BankPermata's balance sheet and gives us even greater flexibility to take advantage of growth opportunities in the Indonesian banking market as they emerge,” BankPermata president director David Fletcher said.

With the issuance of the notes, the bank can maintain an even higher level of capital relative to risk weighted assets, he said. — JP

BI said to delay single presence rule

The central bank has agreed to postpone the implementation of the single presence policy for two years and may consider exempting state banks indefinitely, the government said.

State-Owned Enterprises Mi-nister Mustafa Abubakar told The Jakarta Post in an interview earlier this week that Bank Indonesia (BI) acting governor Darmin Nasution had given his approval for the postponement of the policy in a meeting that was also attended by Industry Minister Mohamad Suleman Hidayat and two BI directors.

“For the two years postponement, they have agreed. I haven’t received the letter yet, but it has been decided in the meeting,” Mustafa said.

Darmin was not available for comment, but BI spokesperson Difi Johansyah said the central bank had not made a final decision on the matter.

“The decision has to be made in the Board of Governors meeting,” Difi said.

The single presence policy, first introduced in 2006, requires majority shareholders in more than one bank to merge or divest their ownership, or create a holding company, no later than by the end of this year.

The policy resulted in Malaysia’s CIMB Group merging Bank Lippo and Bank Niaga in 2008 to form CIMB Niaga. Singapore’s Temasek Holdings, which currently owns 76 percent of Bank Danamon, also sold a majority stake in BII to comply with the policy.

Mustafa argued that private banks were different in nature and mission in comparison to state banks as the latter were governed by a set of legal provisions uniquely applied to state assets.

“State banks uphold the objectives of the state. They are bound by the Constitution, Article 33 [on national wealth], the 2003 State Enterprise Law and the Corporation Law. With a combination like this, it is legally difficult to give the same treatment to state banks [as for private ones],” he said.

The implementation of the policy on state banks not only implies serious legal complexities, but also a mammoth undertaking in merging state banks with assets among the 10 biggest in the market and thousands of workers, Mustafa said.

The government has a 76 percent share in Bank BNI, 73 percent in BTN, 66 percent in Mandiri and 56 percent in BRI. Based on December 2009 figures, the merger of the four banks would create an entity that would control 39 percent of total assets of commercial banks.

“There will be too much energy wasted at a time when we must go forward and take advantage of the positive momentum in the economy. We cannot go forward fast enough if we have to go through such a massive internal homework,” Mustafa said.

Being granted a postponement was not enough for the government, he said, thus it was proposing for BI to completely exempt state banks from the policy.

“We have sent a formal letter proposing BI to review the policy. The two-year period will allow BI to do that. What we want is full exemption,” Mustafa said, while adding that he was optimistic BI would agree to the request.

Govt to raise subsidies by 23% to Rp 199.34 trillion

Total subsidies will be raised by 26.3 percent to Rp 199.34 trillion (US$21.73 billion) in the revised 2010 state budget to protect households, the main driver of Indonesia’s economy, the Finance Ministry said.

In the 2010 budget it is estimated total subsidies will reach Rp 157.82 trillion. But they need to be revised in line with a predicted surge in global oil prices, bringing the Indonesia Crude Price (ICP) to $77 per barrel in the revised 2010 budget up from $65 earlier, the ministry said.

Last year total subsidies were set at Rp 157.73 trillion, based on an ICP of $61 per barrel.
Finance Minister Sri Mulyani Indrawati told the foreign media Tuesday night the government would maintain the purchasing power of households to achieve the targeted 5.5 percent economic growth.

“The economy is sustained by household consumption and investment recovery,” she said. Last year the economy grew by 4.5 percent, mainly driven by household consumption, the Central Statistics Agency (BPS) said.

In the revised 2010 budget, the fuel subsidy is to soar by 30 percent to Rp 89.29 trillion, almost double the fuel subsidy of Rp 45.04 trillion in 2009, the Finance Ministry said.

This year’s inflation is estimated to reach 5.7 percent, according to the revised 2010 budget. Inflation may increase in the second half of this year after the government raises the electricity tariff, analysts predict.

Mulyani said the government would raise the electricity tariff in the second half of the year, instead of in January as planned.

The electricity subsidy in the revised 2010 budget rises 44.2 percent to Rp 54.5 trillion because of the crude oil price increase and delayed electricity tariff increase, as well as a carryover of Rp 4 trillion from a delayed 2009 electricity subsidy payment and the increased margin allowed to state power utility PLN up from 5 to 8 percent.

The tariff increase will apply to households and businesses with capacity of above 6,600 VA who use electricity at a rate of more than 50 percent of last year’s average consumption for their category. The fertilizer subsidy is also raised by 30 percent to Rp 19.18 trillion. The plan to raise fertilizer prices has been delayed until April from January.

Asian stocks lower amid spike in China inflation

Asian stock markets were mostly lower Thursday as China's burst of inflation and Japan's weaker growth tempered confidence in the regional economic rebound.

Most markets were modestly higher in the first two hours of trading but reversed course as the latest figures raised doubts about the outlook for major economies.

Oil prices fell below $82 a barrel amid signs of tepid U.S. crude demand and the dollar lost ground against the ye while rising slightly versus the euro.

China's inflation rate jumped to 2.7 percent in February over a year earlier from 1.5 percent in January, adding to pressure on Beijing to prevent overheating without derailing recovery.

Japan, meanwhile, cut its reading of fourth quarter growth to an annualized3.8 percent from the initial estimate of 4.6 percent. That underscored the patchy recovery in the world's No. 2 economy.

In Australia too, there was a break in the recent slew of positive economic news. The jobless rate edged up slightly to 5.3 percent in February, the first rise since peaking at 5.8 percent last October.

Japan's Nikkei 225 stock average was up 88.91 points, or 0.9 percent, to 10,653.70 while Hong Kong's Hang Seng lost 74.07, or 0.4 percent, to 21,134.22.

South Korea's Kospi was off 0.2 percent at 1,659.35 and China's Shanghai benchmark slipped 0.1 percent to 3,047.92.

Elsewhere, Autralia's index fell 0.1 percent and Singapore's market also shed 0.1 percent. India's Sensex added 0.1 percent.

Oil prices were lower in Asia. Benchmark crude for April delivery was down 51 cents to $81.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 60 cents to sette at $82.09 on Wednesday.

In currencies, the dollar fell to 90.37 yen from 90.49 yen. The euro fell to $1.3646 from $1.3654.

Seven Indonesian billionaires listed in Forbes

Seven Indonesians joined the 2010 list of the world's billionaires issued by Forbes magazine, with businessman Michael and Budi Hartono sharing the top position in 258th place.

The pair’s wealth stood at US$3.5 billion each, followed by Martua Sitorus in 316th place with a total wealth of $3.0 billion.

Peter Sondakh, with his $2.2 billion, was ranked 437th, while Sukanto Tanoto was in 536th place with a net worth of $1.9 billion.

The last two Indonesian billionaires were Low Tuck Kwong, ranked 828th, and Chairul Tanjung, ranked 937th. Low and Chairul had a fortune of $1.2 billion and $1 billion respectively.

The richest man in the world is Mexican telecom titan Carlos Slim Helu.

Subsidized fuel price likely to increase

The government may raise the price of subsidized fuels if the benchmark Indonesian Crude Price (ICP) soars above US$84.7 per barrel this year, according to the proposed revised 2010 state budget.

"Under an estimate, if the average Indonesian Crude Price in one year has an increase of more than 10 percent than the assumed price in the revised 2010 state budget, the government is authorized to adjust the price of subsidized fuels," Article 7 in the proposed 2010 budget said.

In the proposed budget, the ICP has been raised to $77 per barrel from $65 stated in the initial 2010 budget.

The government has yet to make a comment on this issue.