NEWS DAILY

MICRO ENTREPRENEUR

2006-12-07T22:39:00.000-08:00

Carrefour helps out micro entrepreneurs

JAKARTA: Carrefour International Foundation, a non-profit affiliate of hypermarket giant Carrefour, has granted 112,000 euros (Rp 1.3 billion) to a micro-finance provider, which will then lend it to some 1,000 micro entrepreneurs in Greater Jakarta and Surabaya.
The foundation donated the money Thursday to PT Bina Arta Swadaya, which operates under the auspices of non-governmental organization Bina Swadaya.
"With more than 10,000 employees, we are ready to help provide training for the micro entrepreneurs who receive loans," said Jean Noel Bironneau, president director of PT Carrefour Indonesia.
The French-based hypermarket, which has 28 outlets throughout the country, including 19 in Jakarta, will provide basic capacity-building training, such as training on product display, product hygiene, product packaging, and cash-flow management for the recipients. (JP/07)

BI RATE

2006-12-07T22:16:00.000-08:00

BI caps 2006 interest rate at 9.75 percent

Urip Hudiono, The Jakarta Post, Jakarta

Indonesia is likely to see higher growth next year on better macroeconomic indicators, with the central bank wrapping up 2006 with a final rate cut in line with the recent slowdown in inflation.
At its monthly policy meeting Tuesday, Bank Indonesia's Board of Governors trimmed its key interest rate by half a percentage point to 9.75 percent, the fifth cut of this size since August, following two quarter-point shaves in May and July.
This sees both inflation and interest rates back at single-digit levels, which is expected to help boost the country's US$266 billion economy on the back of higher consumer spending and investment ahead.
Inflation in the year to the end of November continued to slow to 5.27 percent, the Central Statistics Agency (BPS) recently reported, after soaring in the first months of the year following the fuel price hikes at the end of 2005.
In the wake of the hikes, the central bank had raised its benchmark BI rate -- which is used as a reference for bank lending rates and bill sales -- by December last year to 12.75 percent to help stave off inflation.
As a result of the twin evils of high inflation and interest rates, growth in the country's consumption-driven economy slumped to only 4.7 percent during 2006's first quarter, before rebounding to 5.08 percent and 5.52 percent in the second and third quarters, respectively.
While growth may miss its 5.8 percent target for this year, analysts say, ending up at around last year's level of 5.6 percent, the government expects it to accelerate to 6.3 percent in 2007.
The central bank hopes that Thursday's rate cut will spur more growth and help to improve the country's business climate while at the same time maintaining stability in the financial markets.
"BI's recent rate-cut policy has so far received a positive response from both the financial markets and the real sector," its Board of Governors said in a statement announcing the latest rate cut.
"Consumer confidence and optimism among producers is up, and is being translated into higher production and spending. Businesses will also be able to seek cheaper financing from outside the banking sector."
BI said that Indonesia's banking sector had expanded lending by Rp 66 trillion ($7.2 billion) by the end of October, or a 9 percent increase up to that date, although this was still short of the targeted 13-15 percent credit growth for this year.
The Jakarta Stock Exchange closed 0.13 percent down at 1,782.116 following the rate cut, while the rupiah closed 0.33 percent up at Rp 9,085 against the U.S. dollar.
Lower rates should help the prospects of publicly listed companies, but could also cut into the yields of rupiah-based assets, thereby affecting investor interest. Meanwhile, BI said it believed that the rupiah would average Rp 9,138 per dollar by the end of November.
For 2007, the central bank is maintaining its inflation forecast at 6 percent, plus or minus 1 percent, and the BI rate at 8.5 percent.
Inflation trend (%, yoy): BI rate trend (%):
January............17.03% Jan. 9......12.75% February...........17.92% Feb. 7......12.75% March..............15.74% March 7.....12.75% April..............15.40% April 5.....12.75% May................15.60% May 9.......12.50% June...............15.53% June 6......12.50% July...............15.15% July 6......12.25% August.............14.90% Aug. 8......11.75% September..........14.55% Sept. 5.....11.25% October.............6.29% Oct. 5......10.75% November............5.27% Nov. 7......10.25%
Dec. 7.......9.75%
Source: BPS Source: BI

POVERTY IN INDONESIA

2006-12-07T20:02:00.000-08:00

Report raises hackles over sensitive rice imports issue

The World Bank's latest report on poverty in Indonesia addresses the politically-sensitive and controversial issue of rice imports, arguing as it does that the recent rise in the country's poverty levels is largely due to the recent steep increase in the price of rice.
With rice prices still going up, and the government's unconditional cash-payment welfare program for the poor coming to an end, there is a distinct possibility that poverty levels could rise again next year, unless economic growth increases significantly.
The report, therefore, suggests the lifting of the ban on rice imports so as to lower prices for the sake of the poor.
The report estimates that the 33 percent increase in rice prices that took place between February 2005 and March 2006 cast an additional 3.1 million people into poverty, as rice accounts for 21.4 percent of poor people's expenditure.
"The price increase was well beyond the food inflation rate, showing that it was not primarily caused by the rise in fuel prices," the report said.
The Central Statistics Agency (BPS) announced in September that the poverty rate in Indonesia had increased during the period from February 2005 to March 2006 from 16 percent to 17.75 percent.
This period came hard on the heels of the fuel price hikes in March and October 2005, which pushed inflation up to 17 percent at one point and forced the central bank to raise its key rate to 12.75 percent in order to contain inflation. While achieving this objective, the rate rises also resulted in a slowdown in economic growth.
Coordinating Minister for People's Welfare Aburizal Bakrie said the government would prioritize increased rice production and the revitalizing of the country's agricultural sector. If domestic supplies still proved insufficient, then importing rice to make up the shortfall would remain an option.
Rice imports are a highly sensitive issue, with critics arguing that allowing imported rice onto the domestic market would badly affect local farmers' incomes. (JP/Urip Hudiono ).

MIZONE CASE

2006-12-07T19:53:00.000-08:00

Mizone pulls product with incomplete label

The Jakarta Post, Jakarta

The producer of isotonic beverage Mizone is pulling the product from stores around the country because it has not included complete information about preservatives on bottle labels.
"We will withdraw our products from the market and replace the labels with complete information about preservative content," PT Tirta Investama marketing director Didi Nugrahadi said.
"An internal investigation is in progress on why we only printed one instead of two preservatives on our bottle labels. We truly regret the incident," Didi said Wednesday.
The Food and Drug Monitoring Agency (BPOM), which ordered a recall of the product, is allowing Mizone to take longer to relabel the bottles than its original Dec. 12 deadline, Didi said.
Tirta Investama, the holding company of mineral water company Aqua Group, has 30 depots, 50 distributors and more than 1 million outlets across Indonesia, he said.
The blue-label "Mizone Active Hydration" has been widely available on the local market for about a year in its "Passion Fruit" and "Orange Lime" versions.
While the preservative calium sorbat, which curbs the growth of fungus, is listed on the label, the company neglected to add natrium benzoat, a preservative commonly used in edible products.
"Even without the complete information, the preservatives are considered safe. The perception that consuming both preservatives causes lupus, an autoimmune disease, is also false," he said.
The maximum allowable amount of natrium benzoat in drinks here is 600 milligrams a liter, and 1,000 mg a liter for calium sorbat.
Mizone drinks have 100 mg a liter of natrium benzoat and 100 mg of calium sorbat, he said.
The makers of four other beverages -- Zestea, Jungle Juice, Zporto and Mogu-Mogu -- also failed to list complete preservative information on their products and would have to temporarily recall their products, BPOM said.
Indonesian Consumers Foundation head Husna Zahir said the recall of Mizone was not a matter of safety.
"Why was a permit (for the beverage) issued before?" The procedures for approving the drink were questionable, she said.
Either BPOM had failed to study the product properly or Tirta Investama had added the preservative without the government's consent, she said.
"Moreover, what type of compensation should the Mizone producer give to retailers all over the country? They the ones losing out because of this incident," Husna said.
The 1999 Consumer Protection Law rules that producers and distributors of products that fail to list complete content information on packaging can face a maximum of five years' jail and fines of up to Rp 2 billion (US$219,000). (03)

ABOUT POLIGAMY

2006-12-07T19:25:00.000-08:00

Polygamy ban gets a mixed response

Hera Diani, The Jakarta Post, Jakarta

The government's plan to extend the ban on polygamy for civil servants to cover all state officials could end up helping in the fight against corruption, a prominent Islamic scholar says.
Azyumardi Azra said widening the ban on polygamy, which is stipulated in the 1974 Marriage Law, would mean less male officials stole money from the state to keep their wives happy.
"(The ban) would be very good for the welfare of women and children because they would ending up being protected more justly, and it would also be a good way to improve the image of the Indonesian Muslim community," he said.
Azyumardi's view was one of many often unusual responses to the idea from Muslim leaders, scholars, lawmakers and women's activists.
Kamala Chandrakirana, the chairwoman of the National Commission on Violence Against Women, thought it would be better to properly enforce the marriage law, which requires men intending to marry again to receive permission from their first wives before doing so.
"This gives an assurance (to people) that the first wife does give permission for her husband to take another wife," she said.
Other proponents said widening the ban would improve women's positions in society.
Currently, men are only legally allowed to take a second wife if their first wives are an invalids, terminally ill or infertile. The letter of the law, however, is rarely enforced and the practice is becoming more common among Muslims.
State Minister for Woman's Empowerment Meutia Farida Hatta Swasono said Tuesday the 1983 law prohibiting civil servants from practicing polygamy -- passed reportedly under pressure from the wife of ex-dictator Soeharto -- could be expanded to cover ministers, lawmakers and governors, regents and other officials.
The minister announced the plan after meeting with President Susilo Bambang Yudhoyono. The move comes after charismatic Muslim preacher Abdullah "Aa Gym" Gymnastiar publicly admitted to taking a second wife.
Aa Gym, who had a strong female following and often preached about family harmony and values, has had to weather a storm of criticism since his admission.
Despite support for the idea from many Muslim figures, the polygamy ban drew opposition from others.
Masdar Farid Mas'udi, a leader in the country's largest Muslim organization Nahdhatul Ulema, said that every man was polygamous by nature.
"Islam only gives a standard of fairness, but it never prohibits it (polygamy). The perception that polygamy only benefits men is not right. Polygamous institutions actually fulfill women's desires and reproductive rights," he told The Jakarta Post.
"Not every man is up to being a husband, unlike women (who make good wives). Therefore, polygamy is nature's way of balancing the supply of women wanting to be wives, with the demand of men who are up to being good husbands."
Legislator Misbach Hidayat said the government had no right to regulate what was clearly allowed by Islam.
"The government should focus on real issues, like corruption cases," he told the detikcom news portal.
The ban if implemented, he argued, would make infidelity more widespread and in turn increase prostitution.
Legislator Yoyoh Yusroh from the Prosperous Justice Party said as a woman, she believed polygamy was allowed by Islam to overcome social problems.
"Polygamy is better than infidelity. Think of a 25-year-old widow -- she will need a husband to finance her children. If polygamy is banned, things would only get worse for her," she told detikcom.
Meanwhile, Din Syamsuddin, who chairs the country's second-largest organization Muhammadiyah, thought it would be better not to talk about the subject at all.
"There are many more important problems faced by this nation. Polygamy is a matter of religious interpretation. The government should not develop this into a political issue and religious figures should not give responses (to the idea)," he told the Post.
Meanwhile, women's activist Lies Marcoes Natsir told Metro TV said rather than banning polygamy, it was more important to increase education campaigns about the bad effects of polygamy on women and children.