Indonesia to unveil third batch of economic stimulus steps next week: cabinet secretary

The six newly appointed ministers of Indonesian President Joko Widodo pose for photographs after the swearing in ceremony at the presidential palace in Jakarta on August 12, 2015. 

PHOTO: AFP

OCT 1, 20156:06 PM

[JAKARTA] Indonesia will announce a third batch of stimulus measures next week as it continues efforts to attract investors and revive economic growth, the cabinet secretary said on Thursday.

The announcement will include more measures to shorten the time investors need to obtain permits, Pramono Anung said in a statement on the website of the cabinet secretary's office.

In the second batch of measures announced on Tuesday, the government promised to act on applications for investment permits in industrial zones in no more than three hours.

Pramono said the third batch will put some regulations of regional governments in sync with national ones. Indonesia's government "decentralization" policies to give more power to provinces and local governments has often created a bureaucratic nightmare for investors.

REUTERS

    
 

Indonesia defends rail project after Japan angered

OCT 2, 201512:01 AM

[JAKARTA] Indonesia defended Thursday the chaotic bidding process for its first high-speed railway after months of mixed messages ended with China being chosen over a furious Japan for the US$5 billion project.

Beijing and Tokyo had long been vying to build the line linking the capital Jakarta with the mountain-fringed city of Bandung, some 160 kilometres away.

The contest was one front on Asia's two biggest economies escalating battle for influence across the region.

The winner was expected to be unveiled early last month, only for authorities to turn around at the last minute and announce they were opting for a cheaper, medium-speed train and reopening the bid process.

But on Tuesday, Japan's chief government spokesman said that an Indonesian envoy had been sent to Tokyo to tell him Jakarta had changed its mind again - and China's original bid for a high-speed train had been accepted.

The spokesman, Yoshihide Suga, called the news "extremely regrettable".

On Thursday Indonesia's State-Owned Enterprises Minister Rini Soemarno, who had championed the Chinese plan, came out to defend the bid process.

"It's very transparent, in my opinion," she told reporters in Jakarta, when asked about the mixed messages from the government.

"I don't know why it should upset foreign investors," she added.

She said the Chinese bid was picked due to its "financial structure" - because the Chinese had not required any Indonesian government financing or a government guarantee, unlike the Japanese plan.

An Indonesian and Chinese consortium are now negotiating over the terms of the contract, but there are no other bidders left in the process.

The rail project is a key part of President Joko Widodo's drive to build more infrastructure and overhaul Indonesia's ageing roads, railways and ports.

AFP

    
 

PM Lee stresses urgency of leadership renewal

By

Melissa Tanmelissat@sph.com.sg@MelissaTanBT  

PM Lee Hsien Loong (front row, third from left) and the Cabinet at the Istana, Oct 1, 2015. 

ST PHOTO: DESMOND FOO

OCT 1, 20158:58 PM

The clock is ticking when it comes to Singapore's leadership renewal and his overriding goal will be to have a new team ready to take over soon after the next elections, Prime Minister Lee Hsien Loong said on Thursday at the new Cabinet's swearing-in ceremony.

Stressing the urgency of the matter, he said he has "entrusted major responsibilities to younger ministers", while the older ministers will "provide my team with depth and breadth to think more deeply about issues and to plan more systematically for the future".

He also highlighted the importance of "review" for the economy, saying Singapore must create opportunities even as global growth flags and speed up its move towards higher skills, innovation and productivity. "These are urgent tasks, because both global economic conditions and domestic demographic trends will pose us severe challenges."

Saying that Singapore was "entering a new phase of nationhood" and now faces more complex challenges and new issues that cut across multiple domains, PM Lee identified three major areas Singapore must tackle and explained why he had appointed Coordinating Ministers for all three. These areas are national security, economic and social policies and infrastructure.

National security remains a "vital precondition" of the country's success, he said, cautioning that the Islamic State (ISIS) and jihadi terrorists posed a serious problem for South-east Asia and Singapore.

"Political problems or racial tensions in neighbouring countries can complicate bilateral relations, or spill over to affect our own society," he added.

PM Lee also said economic growth would be "harder to come by" as the population ages and the global environment remains uncertain. "Yet our economy must grow to create opportunities for Singaporeans and improve our lives ... Every citizen should benefit from Singapore's success, and those needing an extra helping hand should be looked after."

As for infrastructure, he said Singapore has done well compared with most other countries but the government knows where it needs to do more work to "improve standards and remedy shortcomings".

He added that the outcome of the recent general elections were a win for all Singaporeans and boosted investor confidence.

      

Hackers step up attacks in Southeast Asia amid tensions: FireEye

A man types on a laptop computer in an arranged photograph on Thursday, Jan. 8, 2015. 

PHOTO: BLOOMBERG

OCT 1, 20152:56 PM

[TAIPEI] Hackers have stepped up their attacks on government organizations and companies in Southeast Asia and made the region one of the most targeted in the world amid heightened regional tensions, according to security provider FireEye.

Disputes over territorial waters and ongoing trade talks mean that organizations in the region were 45 per cent more likely to be targeted than the average for rest of the world, FireEye wrote in a report released today. The security firm looked specifically at sophisticated cyber attacks, those typically used by governments or professional criminal organizations, rather than amateur efforts.

"A lot of it is intelligence gathering surrounding border disputes and trade negotiations," Bryce Boland, chief technology officer for Asia-Pacific at FireEye, said by phone today.

Companies and governments in Southeast Asia bear some responsibility themselves, Boland said. The threat is more intense because victims aren't required to report or share details of attacks, so there is typically no coordinated effort to develop best practices and mount defenses.

"When a company gets targeted, other companies generally will not find out about it, because there's no disclosure and therefore other companies will remain vulnerable," Boland said in a separate interview on Bloomberg television today.  Thailand, where political tensions have risen, was twice as likely as the global average to see attacks in the first half of this year, according to the report. The report comes after the US and China, which have traded accusations about intelligence-gathering efforts online, agreed last month to curb commercial hacking.

Security breaches cost the global economy more than US$400 billion annually, the Center for Strategic and International Studies estimates, with Asian countries among the most hurt as a percentage of their respective gross domestic products.

Outside of Southeast Asia, Hong Kong and Taiwan were the most at risk during the period, with around half of organizations exposed to attacks, FireEye said without identifying victims or perpetrators. Telecommunications, technology and financial services companies and government organizations were the most targeted in the Asian region, it said. BLOOMBERG

    
 

Najib signals delay in balancing budget in address to investors

Malaysia may miss a goal to balance its budget by 2020 as a plunge in commodity prices forces the government to cut its projections, according to Prime Minister Najib Razak. 

PHOTO: REUTERS

OCT 1, 20152:06 PM

[KUALA LUMPUR] Malaysia may miss a goal to balance its budget by 2020 as a plunge in commodity prices forces the government to cut its projections, according to Prime Minister Najib Razak.

The budget shortfall may be "in the region" of 1 per cent of gross domestic product at the end of the decade compared with a current deficit of 3.2 per cent, the New Straits Times reported, citing Mr Najib's comments to fund managers and investors in New York. Malaysia remains committed to achieving a balanced budget by 2020, he was quoted as saying.  Policy makers have been struggling to boost confidence in the economy and government finances since oil prices started slumping late last year. The ringgit has dropped more than 20 percent versus the dollar this year, battered by a political scandal, the decline in crude prices and the prospect of higher US interest rates that threaten growth.

The premier reiterated Malaysia won't impose capital controls or peg the ringgit even as the currency depreciates to a 17-year low. It's the worst performer against the greenback this year among major Asia Pacific currencies tracked by Bloomberg.

While Southeast Asia's third-largest economy has run a fiscal deficit since 1998, the gap as a percent of GDP has been narrowing. To boost state coffers, Mr Najib scrapped a decades-old fuel subsidy policy in December and started a 6 per cent goods and services tax in April. Still, Mr Najib in January revised the deficit target for 2015 to 3.2 per cent from 3 per cent as his administration forecast less oil-related revenue.

The government raised pump prices in October, with analysts from Nomura Holdings Inc calling it "somewhat of a surprise to us, but is nonetheless consistent with crude oil price movements over the past month." "This continues to show the government is sticking to its fiscal reforms, despite the political pressure, as well as the unpopularity of both the goods and services tax and the removal of fuel subsidies," Singapore-based analysts Euben Paracuelles and Brian Tan wrote in a note Thursday.

Foreign funds have dumped more than US$3 billion of the nation's shares this year as Mr Najib grapples with allegations of financial irregularities at a state investment company, whose advisory board he chairs. He is also facing accusations of impropriety after it was disclosed that political donations ended up in his private accounts in 2013. The accounts have since been closed.

Investors in the US shouldn't be concerned with the political situation in Malaysia as there is "stability," Mr Najib was cited by the New Straits Times as saying. 1Malaysia Development Bhd will sort out its financial issues before year- end and is expected to further reduce its debt by 16 billion ringgit very soon, Mr Najib said, without elaborating.

BLOOMBERG