I N D O N E S I A N E W S L E T T E R

CONSULATE GENERAL OF THE REPUBLIC OF INDONESIA, MUMBAI, INDIA VOLUME 07/ JULY 2003 MONTHLY

1945 - 2003 17 August 2003In just over a month time, Indonesia will be celebrating its 58 th Anniversary of the Independence on August 17, 2003. A time for a reflection on the achievements of the past and setting the goals for the future. The day to remember the great heroes, both men and women who have sacrificed their lives as martyrs of the nation for the Independence.

FIATA WORLD CONGRESS 2003“Role of the forwarders in Logistics and Supply Chain”

29 September – 3 October 2003at Bali International Convention Centre, Nusa Dua – Bali, Indonesia

Host : INFA (Indonesian Forwarders Association)Organizer : PACTO CONVEX LTD

http://www.fiata2003.org/INVITATION Dear colleagues,Allow me as the President of INFA (Indonesian Forwarders Association) to remind you of the importance and attractiveness FIATA World Congress 2003 which will be held in Bali International Convention Centre, Nusa Dua, Bali, Indonesia on 29 September - 3 October 2003. On behalf of INFA I would like to cordially invite all of you to actively participate in this forthcoming event. The Organizing Committee has endeavored to put together an attractive program with well-known speakers so as to provide an opportunity for participants to be adequately informed and be able to exchange experience, knowledge and technology dealing with Role of the Forwarders in Logistics and Supply Chain. In addition, there will be an exhibition featuring the latest advance instruments and equipment of freight forwarders at the congress site.

There are 54 booths available at the Exhibition Hall of Bali International Convention Centre. So, as to combine business and pleasure, the Organizing Committee has framed a good social program and provided participants and also accompanying persons with the chance to get more acquainted with and enjoy the proverbial Balinese hospitality, the splendid scenery and magnificent Balinese art and culture. SELAMAT DATANG or Welcome to the FIATA World Congress 2003 in Bali!Chris KanterPresident (Indonesian Forwarders Association)

Host : Indonesian Forwarder Association, Perkantoran Yos Sudarso Megah Blok A/8, Jl. Yos Sudarso No. 1, Tanjung Priok, Jakarta 14320, Indonesia Tel : (62-21)43912283 Fax : (62-21)43912285 E-mail : infa@metro.net.id

GOLDEN JUBILEE YEAR OF INDONESIAN CONSULATE GENERAL 1951-2001Organizer : Pacto Convex Ltd, Lagoon Tower Level BI, Jakarta Hilton International, Jl. Jend. Gatot Subroto, Jakarta 10270, Indonesia Tel : (62-21)5705800 Fax : (62-21)5705798 E-mail : FWC2003@indosat.net.id

INDONESIAN PRESIDENT INAUGURATES NEW INDUSTRIAL ESTATES IN BATAM : Indonesian President Her Excellency Mrs. Megawati Soekarnoputri recently inaugurated six new industrial estates built at a total cost of US $210 million, and an expansion of an electronic plant worth Rp 10 billion (US $1.2 million), on Batam island. The estates Panbil Industrial Estate, Tunas Industrial Estate, Bintang Industrial Estate II, Citra Nusa Industiral Estate, Citra Buana Industrial Estate and Latrade are expected to attract more foreign investors and increase employment opportunities. Batam Industrial Development Authority (BIDA) chairman Ismeth Abdullah reiterated the importance of a law declaring Batam island, which is located 20 kilometers from Singapore, to be a free trade zone. The law will provide legal certainty for the investors in Batam and in return will attract more investors, meaning more employment. FTZ status for Batam would mean that exporters operating on the island would be allowed to import raw materials without paying customs duties and taxes, pending their eventual processing, transshipment or reexport. Batam was declared an industrial bonded zone in 1978 to lure investment and foster export competitiveness. Since then, the island has become the country’s main industrial center, where 70 percent of economic growth is contributed by the export-oriented manufacturing sector. The export value of the island’s output last year was over US $6.5 billion, or about 14 percent of the country’s total exports for that year. According to Ismeth, some 60 percent of the 611 foreign firms operating in Batam are involved in the electronics sector. So far, the total value of foreign investment on Batam amounts to US $9 billion.

INDONESIA TO MEET 2003 NON-OIL EXPORT TARGET : Indonesian Minister of Industry and Trade, Rini MS Suwandi has expressed optimism that the country’s target to earn US $47 billion in non-oil/gas exports in the current year, 5 percent higher than last year’s would be achieved. The Minister added that non-oil/gas exports from January to May have reached US $19.14 billion, 8.18 percent higher compared to the figures in the corresponding period last year. The non-oil/gas exports grew by 3.12 percent from US $43.7 billion in 2001 to US $45.05 billion in 2002. Meanwhile the minister called on the Indonesian exporters to be more proactive in responding to developments by improving their business performance, broadening their outlook on non-oil/gas exports, getting more information and actively taking part in promotional activities on non-oil/gas products.

INDONESIA AIMS TO ESTABLISH FTAs WITH KEY TRADING PARTNERS : An senior official at the Ministry of Industry and Trade said that the Indonesian government will intensify talks with Japan, the United States, China, India and Australia this year in an attempt to seek the possibility of entering into free trade agreements with these countries. Tri Marjoko, Director for bilateral cooperation at the Ministry, said that such a move was also aimed at preventing buyers from these five countries from shifting their orders from Indonesia. Under the planned free trade mechanism, the country’s market would have to be fully opened up to products from the trading partner countries. Countries involved in FTAs must also slash import tariffs on their products, making their products cheaper. According to the World Trade Organization (WTO) secretariat, currently there are some 250 FTAs in existence worldwide. Indonesia so far has just entered into an FTA with members of the Association of South East Asian Nations (ASEAN) under its ASEAN Free Trade Area (AFTA) scheme. ASEAN groups Brunei, Cambodia, Indonesia, Loas, Malaysia, Myanmar, Singapore, Thailand, the Philippines and Vietnam. Tri further added that his office would conduct a number of meetings with the five countries this year.

INDONESIA NEWSLETTER(DECEMBER ISSUE) 2

** INDEX **Page 1.

58th Anniversary of Indonesian Independence

FIATA World Congress 2003

Page 2. Indonesian President

inaugurates new industrial estates in Batam

Indonesia to meet 2003 Non-oil export target

Indonesia aims to establish with key trading partners

Page 3. RI-Japan FTA to be

finalized in year 2004 RI Jan-Jun foreign

investment approvals jump BPPT to set up

business center World Bank approves

three projects worth US $460 million

World Bank to lend US $250M to RI

RI’s exports of veterinary drugs

IIRIF 2003 JIHF first three days

transactionsPage 4.

JICA continue funding Indonesian agricultural fishery development

RI’s car sales expected to reach 340,000 units a year

New sedans to the Indonesian market

Bajaj auto plans to set up mfg facility in Indonesia

Indonesian pulp exports

Page 5. Indonesian Cement

sales down in first five months S. Sulawesi exports

cacao to US & other three countries

Increase in crude palm oil output from North Sumatra

RI’s central sulawesi top US $25 mln in first quarter of 2003

RI establishes distribution center in S. Africa

RI & Bulgaria to develop SMEs

RI, Japan to develop coal-processing plant

Page 6. IFC lends US $26M to

local palm oil companies Bali investment board

issues 45 investment approvals

Belgian investor to build Animal feed plant

Malaysian state of sabah to invest in East Kalimantan province

Seven investors in

GOLDEN JUBILEE YEAR OF INDONESIAN CONSULATE GENERAL 1951-2001

RI-JAPAN FTA TO BE FINALISED IN YEAR 2004 : The Director of Bilateral Cooperation at the Indonesian Trade and Industry Ministry, Tri Mardjoko said that the establishment of an Indonesia-Japan free trade area (FTA) is expected to be finalized in year 2004 to enhance bilateral economic ties. Mardjoko said that the FTA is expected to be finalized next year after the delegation of each of these countries designs the rules of the game and commodities that would be subject to the FTA. In an attempt to accelerate the establishment of the FTA, a Japanese delegation will visit Indonesia to study details on the preparations of the area.

RI JAN-JUN FOREIGN INVESTMENT APPROVALS JUMP : Indonesia’s foreign direct investment approvals jumped in the first half of the year to US$ 4.37 billion from US $3.04 billion in the same period last year. Some of the key investments were in the transport, warehousing and communication sectors. Despite the increase in overall value, the number of total projects fell to 497 from 570 in the same period last year. According the government data, Mauritius was the largest country of origin for foreign investment approvals during the period with total investment value of US $1.75 billion.

BPPT TO SET UP BUSINESS CENTER : The agency for the Assessment and Application of Technology (BPPT) recently signed a memorandum of understanding with venture capitalist PT Bahana Artha Ventura and the Bandung Institute of Technology (ITB) to establish a business technology center. The center is aimed at a developing small-and medium-scale enterprises (SME) through the application of science and technology.

WORLD BANK APPROVES THREE PROJECTS WORTH US $460 MILLION : The World Bank said that it had just approved three projects in Indonesia worth US $460 million to support poverty reduction in the country. The three projects are a sub-district community development project (KDP3), water resource and irrigation sector management program, and the Java-Bali power sector restructuring and strengthening project. The KDP3 project aims to reduce poverty and improve governance in rural areas by providing block grants to sub-districts to support cost-effective, community based investment plans. The water resources and irrigation sector management program seeks to support Indonesia’s program in water resources and irrigation. Meanwhile, the Java-Bali power sector restructuring and strengthening project aims at improving the performance of the power sector in the densely populate Java Bali region amid a looming power crisis.

WORLD BANK TO LEND US $250M TO RI : The World Bank recently said that they have

approved a US $250 million loan to Indonesia to fund health programs, alleviate poverty and build roads and other infrastructure projects. The Project director, Scott Guggenheim said that the aid will help to support an estimated 20,000 villagers stretching from Sumatra in the west to Papua in the east from 2003 until 2008. It is a part of the estimated US $850 million the bank agreed to lend Indonesia for the 10 year project that started in 1998.

INDONESIA EXPORTS OF VETERINARY DRUGS : Indonesia exported veterinary drugs with an estimated value of US $77.97 million in the first five months of 2003. The drugs included rabies vaccines.

INDONESIAN INTERNATIONAL REGIONAL INVESTMENT FORUM (IIRIF) 2003 : Indonesian Vice President, H.E. Mr. Hamzah Haz witnessed signing of an MOU between investors and various local governments (Pemda) of provinces, regencies, and municipalities. The MOU covered investments by 31 investors worth a total of Rp 3 trillion in 11 areas. One of the projects under the MOU is for gas and coal-fired power plants in West Sumatra. The MOU signing marked the closing of the Indonesian International Regional Investment Forum (IIRIF) 2003 held by the Assembly’s Faction of Local Representations (FUD), in collaboration with the Indonesian chamber of Commerce and Industry (KADIN) the Apeksi and the Apkasi from Jul 2-4, 2003 in Jakarta Convention Hall. Further it is reported that some of the 31 domestic and foreign investors would handle projects of combined-cycle power plants and coal-fired power plants. Chairman of the IIRIF 2003, Bamabang Soeroso said that all projects are located outside Java, infrastructure in Makassar, Tourism and Telecommunications in Tabanan regency, and a geothermal power plant in South Sumatra.

JIHF 2003 FIRST THREE DAYS TRANSACTIONS : Jakarta International Houseware Fair (JIHF) 2003 recorded a total transaction through its third day, with general houseware items being the most demanded commodity. The details of the fairs transaction volume are as follows : General houseware items US $ 415.180 (top 3 : hangers at US $124.00, ceramic craft at US $ 64.000 and footwear boxes US $54.000); Tableware US $97.880; Household textile US $69.460; Home decoration US $48.790; Gardening Accessories US $39.520; Artificial flowers US $12.200; Kitchenware US $11.770; Bathroom accessories US $3.710; Health and personal care items US $1.330; Cleaning equipment and supplies US $969; Lighting US $70. Through the third day of JIHF 2003, exhibitions have made transaction deals with the buyers from 27 countries. Most of the deals were with buyers from Germany at US $310.370, who were mostly interested in general houseware items (US $284.000), home

INDONESIA NEWSLETTER(DECEMBER ISSUE) 3

GOLDEN JUBILEE YEAR OF INDONESIAN CONSULATE GENERAL 1951-2001decoration (US $18. 130) and gardening accessories (US $7.910). Japanese and Indonesian agents were among the top 3 at US $110.510 and US $60.500 respectively. Notable trade deals were also signed with buyers from Malaysia (US $53.500), United States (US $24.640),Spain (US $22.580), China (US $21.800), United Arab Emirates (US $20.310), and India (US $12.000). JIHF 2003 was also visited by buyers from Lebanon, Sri Lanka, Australia, South Korea, Belgium, South Africa, Turkey, Saudi Arabia, Brunei Darussalam, Marco, Pakistan, Canada, Egypt, Italay, France, Peru, Panama and Bangladesh.

JICA CONTINUE FUNDING INDONESIAN AGRICULTURAL FISHERY DEVELOPMENT : Indonesian Agriculture Minister, Bungran Saragih said that the Japan International Cooperation Agency (JICA) will continue funding agricultural and fishery development projects in Indonesia for the period of 2003 to 2006. The programs consist of loans, grants and technical assistance. Saragih said that the assistance will be used to stabilize food supply; improve the people’s nutritional intake; enhance the welfare of farmers and fishermen; and empower the rural economy. JICA has been providing Indonesia assistance since the 1980s through an umbrella cooperation, which consists of the increasing rice production program in 1981-85, Promotion of Major Food Production Program in 1986-90, as well as the Integrated Agriculture and Rural Development Program in 1995-97. JICA has been financing seven projects since 1997, which include the production of high-quality potatoes and soybean seedlings, and a husbandry development program. Indonesia has teamed up with JICA since March to develop an agricultural development program in Afghanistan by providing experts and training for rural people in the country.

RI’S CAR SALES EXPECTED TO REACH 340,000 UNITS A YEAR : The Chief of the Indonesian Association of Automotive Industries (GAIKINDO) Bambang Trisulo recently said that Indonesian car sales are expected to reach 340,000 units annually in view of the improved macro economic indicators. During the January-May period, Indonesian car sales amounted to 30,000 units per month. If the target of 340,000 units could be reached, Indonesian car sales would be the third largest in ASEAN after Thailand and Malaysia. Thailand’s car sales reached 450,000 units annually and Malaysia 350,000 units annually.

NEW SEDANS TO THE INDONESIAN MARKET : Indonesia’s automotive market has a good start to the year with favorable sales so far. The first half of the year saw car manufacturers introducing new sedans to the market. Based on the data from the Indonesian Automotive Association (Gaikindo), over 140,000 cars were sold in the first five months of the year. The figure is 8 percent higher than that of sales

during the same period last year. Out of the total of 140,769 cars sold in January-May period, 13,000 cars were sedans. According to the data, the sedan’s share of the market has also plunged from 20.6 percent in 2000 to 17.6 percent in 2001 and to only 13.2 percent of the market in 2002. Despite these figures car manufacturers continue to launch new models of the sedan in Indonesia as they believe that Indonesian’s are still interested in driving sedans and market has a profitable future. Gaikindo has classified the sedans according to the capacity of its engine, It divides the sedan market into three segments: the lower segment 1,800ccc), the middle segment (1,800cc-3000cc), the upper segment (3,000cc). The lowest category of sedan usually equates to mini and small car types, the middle, includes low and high sedans and the luxury, premium sedans, are generally in the upper bracket. The sale of smaller sedans in Indonesia is monopolized by Toyota, Suzuki and Honda, who share about 75 percent of the market. Other manufacturers selling an increasing number of Sedans of this type include KIA and Hyundai.

BAJAJ AUTO PLANS TO SET UP MFG FACILITY IN INDONESIA : Bajaj Auto is planning to set up its first overseas two and three-wheeler manufacturing plant in Indonesia, as part of strategies to grow its global business. The Pune-based company is presently doing a feasibility study on the size and location of the plant in the Southeast Asian nation. Bajaj Auto plans to establish the plant to save on high imports duties in Indonesia and effectively take on competition from Japanese, Chinese and Taiwanese two-wheeler makers. Bajaj auto now exports its two and three-wheelers to Indonesia as completely-built-units.

INDONESIAN PULP EXPORTS : Based on the data presented by the Central Board of Statistics (BPS), Indonesia’s pulp export in year 2002 reached 2,245,180 tons worth US $706,929,000.

Indonesia’s Pulp Export1992-2002

Year Volume(Tons)

GrowthRate (%)

Value(US$000)

GrowthRate (%)

1996 1,127,390 - 431,612 -1997 1,186,033 5.2 489,342 13.31998 1,656,731 39.6 689,878 40.91999 1,592,480 -3.8 675,700 -2.02000 1,333,686 -16.2 710,573 5.12001 1,700,602 27.5 564,028 -20.62002 2,245,180 3.2 706,929 25.3

Indonesia has exported pulp to about 50 countries, with the main buyers consisting of China, South Korea, Italy, India, Taiwan, the Netherlands, Japan, the Philippines, Vietnam, France, the United States, Thailand, Malaysia, Spain, Turkey, Pakistan, Australia and Greece.

INDONESIA NEWSLETTER(DECEMBER ISSUE) 4

GOLDEN JUBILEE YEAR OF INDONESIAN CONSULATE GENERAL 1951-2001INDONESIAN CEMENT SALES DOWN IN FIRST FIVE MONTHS : Indonesia’s cement sales including exports totaled 13.41 million tons in the first five months of this year, down 4 per cent year-on-year. The Indonesian cement association said that consumption in the country declined slightly by 0.8 percent to 10.31 million tons compared with the same period last year. Exports in the first five months of this year shrank 25.2 per cent year on year to 1.41 million tons not including clinker exports which rose 0.4 per cent to 1.68 million tons.

S. SULAWESI EXPORTS CACAO TO U.S., & OTHER THREE COUNTRIES : South Sulawesi exported 29,250 tons of cacao to the United States, Brazil, Malaysia and Singapore in January to June 2003. The United States accounted for 18,000 tons followed by Brazil with 8,000 tons, Malaysia 2,300 tons and Singapore 950 tons. Cacao is the province’s main export commodity. About 70 per cent of the country’s cacao products are directly exported to foreign markets. The government’s direct export system had encouraged local farmers and exporters to improve the quality of their products, enable them to compete in the world market.

INCREASE IN CRUDE PALM OIL OUTPUT FROM NORTH SUMATRA : Crude Palm oil (CPO) from North Sumatera, the country’s largest producer of palm oil, rose 46.23 per cent year-on-year to US $172.03 million in the first half of this year. The Head of the provincial office of the trade and Industry office in Medan, T. Azwar Aziz said that CPO exports contributed considerably to North Sumatra’s earning from the exports of non-oil commodities. The region’s exports of commodities other than oil and gas were valued at US $744.65 million in the first five months of this year, up from US $589.43 million in the same period last year.

INDONESIA’S CENTRAL SULAWESI TOP US $25 MLN IN FIRST QUARTER OF 2003 : Indonesia’s Central Sulawesi province exported 25,393 tons of non-oil/gas commodities valued at US $25.73 million in the first quarter of 2003. Economic and financial data from the Bank of Indonesia’s palu office shows the province’s export commodities included oil and fat, frozen shrimp, lobster, plywood, household utensils and cacao. According to the data, cacao was the biggest export for the province, with a volume of 10,760 tons worth US $19.8 million, followed by oil and fat (11,437 tons, US $2.9 million), plywood (2,981 tons, US $1.7 million), and shrimp and lobster (139 tons, US $1.128 million). The value of the province’s non-oil/gas exports increased by 100 per cent compared to the corresponding period in the previous year, with a volume of 13,000 tons valued at US $25 million. The data showed the value of Central Sulawesi’s non-oil/gas exports to the United States in the first quarter was US $1.4 million, a significant drop from the

previous year’s figure of US $6.8 million. Meanwhile the province’s exports to Malaysia were up to US $18.7 million in the first quarter, a significant increase from last year’s figure of US $3.5 million. Further the exports of marine products ad household utensils to Japan and Taiwan were considered relatively stable from month to month. The province’s non-oil/gas exports to Europe, especially to France, Germany and the Netherlands significantly increased.

RI ESTABLISHES DISTRIBUTION CENTER IN S. AFRICA : Indonesia has established a distribution center at Durban Port, South Africa as a gateway for the country’s exports to southern, eastern and central Africa. The Head of the Indonesian Chamber of Commerce and Industry (Kadin) for Southern African countries, Haryono Eddyarto said that market potentials in Africa, especially in south, east and central Africa are very good, and the distribution center would not only enhance trade but also cooperation in investment and tourism. Haryono Eddyarto further added that market potentials in southern Africa alone could reach US $200 million, while east and central African countries would add the total market potential to US $500 million. The distribution center, called the House of Indonesia-Africa Ltd, is located in the port’s bonded zone to facilitate trade transactions. For African importers, the establishment of the House of Indonesia will enable them to buy Indonesian products at competitive prices without going to the country. Haryono further added that the distribution center in South Africa could increase bilateral trade, especially for SME’s products, and enhance other economic cooperation. Data from the Indonesian Central Bureau of Statistics (BPS) showed that Indonesia’s exports to African countries have increased from US $1.1 billion in 2000 to US $1.235 billion in 2002.

RI & BULGARIA TO DEVELOP SMEs : Indonesia and Bulgaria have agreed to cooperate in developing the two countries small and medium enterprises. Indonesia’s State Minister for Cooperatives and Small Business, Ali Marwan Hanana on his arrival from a tour of several eastern European countries said that a memorandum of understanding was signed by officials of the two countries recently. Under the MoU, the two countries would exchange regulations on the developments of small enterprises. While in Bulgaria, the Indonesian minister also explored the possibility of inviting third parties to get involved in the project.

RI, JAPAN TO DEVELOP COAL-PROCESSING PLANT : The Indonesian government with Japan will develop a coal processing plant in Palimanan in Cirebon, West Java. Japan has committed to funding the project. The Director of the research and development center of coal and mineral technology a the ministry of energy and mineral resources, said that the project would require a minimal investment of US $100 million, or about Rp900

INDONESIA NEWSLETTER(DECEMBER ISSUE) 5

GOLDEN JUBILEE YEAR OF INDONESIAN CONSULATE GENERAL 1951-2001billion. Japan Coal Energy Center (JCOAL) will collaborate with Indonesian companies like PT Arutmin, PT Batubara Bukit Asam, PT Berau Coal Mining, and PT Kideco Jaya Agung in the project. The processing facility of upgraded brown coal (UBC) in Palimanan is intended to improve Indonesia’s coal quality for export.

IFC LENDS US $26M TO LOCAL PALM OIL COMPANIES : The International Finance Corporation (IFC), the investment arm of the World Bank, has agreed to provide US $26 million in loans to two Indonesian palm oil plantation companies. The IFC, in a statement released recently said that US $14 million would be lent to Verdaine Investment Limited and US $12 million to PT Sahabat Mewah Makmur, a 1,2000 hectare oil palm plantation acquired by Verdaine in February 2003. Verdaine was created in June 2000 with US $100 million in committed equity from Austindo Nusantara Jaya, Olympus Capital Holdings Asia and JP Morgan Partners Asia. Verdaine aims to acquire, rehabilitate and manage 40,000 to 50,000 hectares of palm oil plantations. Verdaine director Kelly Knight said that IFC was the right partner for Verdaine because they both were committed to good corporate governance, sustainable development and the creation of employment. Kelly Knight further added that palm oil business is one of Indonesia’s most important generators of employment and dollar export earnings. Indonesia exported US $1.97 billion worth of palm oil and kernels last year, the country’s second largest export commodity after exports of pulp and paper, according to the government statistics. Indonesian Palm Oil Producers Association, Indonesia’s production of crude palm oil may increase 6.5 percent to 9.6 million tons this year, compared with 9 million tons the year before.

BALI INVESTMENT BOARD ISSUES 45 INVESTMENT APPROVALS : The Bali Provincial Investment Coordinating Board (BKPM) in 2003 to May licenced 45 investment projects with a total investment of Rp651.597 billion (US $79.7 million). Most of the investment went to transportation, tourism, trade, cooperative, service, industrial, and agricultural sectors. The projects were located in Badung, Buleleng, Gianyar, Karangasem and Jembrana Districts and Denpasar Municipality.

BELGIAN INVESTOR TO BUILD ANIMAL FEED PLANT : A Belgian investor is planning to build a Rp 10 billion (US $1.2 million) animal feed manufacturing plant in Barru and Enrekang districts in the Indonesia province of South Sulawesi. The Deputy Chairman of the Parepare integrated economic zone, HM Yunus Mana said that the plan to invest in the business undertaking came after the Belgian company invested in corn plantations in the same districts last year. HM Yunus further added that the Belgian investor has secured a permit-in-principle from the provincial government.

MALAYSIAN STATE OF SABAH TO INVEST IN EAST KALIMANTAN PROVINCE : Up to 125 investors from the Malaysian state of Sabah have expressed interest in investing in Indonesia’s East Kalimantan province. The Chief of of the Sabah delegation, Encik Samsu Bahar Haji Abd Rahman disclosed during a meeting with the provincial administration and local businessmen. The Malaysian delegates consisted of representatives from the Bumiputera Sabah Commerce Council, the Malaysian Business and Commerce Council, the Kandazandsum Chamber of Commerce and Industry, the Sabah United Chinese Chamber of Commerce and the Penampang Chinese Chamber of Commerce. Meanwhile, East Kalimantan was represented by some businessmen from the local Chamber of Commerce and Industry and business associations. Abd Rahman said that Malaysian businessmen were interested in investing in various sectors in the province, including oil palm plantation and agricultural sectors.

SEVEN INVESTORS IN BATAM PLTG TENDER : PT PLN plans to develop a gas-fired power plant (PLTG) at Galang in Batam and has received tender bids from seven foreign-capital investors (PMA) though the winner has yet to be announced. Bambang Purwadi of PT PLN’s Batam PR division said that seven bidders from China and Japan had taken part in the tender. The development of the PLTG in Batam is one of several alternatives to replace the existing diesel power plant in an effort to cut down production costs due to the high price of oil fuel. Besides the PLTG, PLN in Batam also intends to develop a coal-fired power plant (PLTU) in Batam. PLN owned 33 power plants with an installed capacity of 173 MW but most of these plants are old and the total capacity has decreased to 140 MW a peak load of only 110 MW.

FOREIGN AIRLINES FLY TO BALI : An Indonesian official said that at least 16 foreign airlines are now flying to Denpasar, capital of Indonesia’s island resort of Bali., The Head of the Bali Office of the Indonesian Airport Management, I Gusti Made Dhordy said that during the past few months, the 16 airlines have been bringing in 3,000 to 3,500 passengers daily to the Ngurah Rai International Airport. Australian Air is the latest foreign airline to service Bali. About 120 airplanes land at the Ngurah Rai airport every day. Meanwhile, promotions chief of the provincial tourism office, Nyoman Suamba said that for the period of January-May 2003 302,152 foreign tourist visited Bali compared to 521,091 in the same period last year. Despite the decrease in the number of foreign tourists coming to Bali, Japanese travelers have outnumbered Australian travelers in the island. Some 50,773 Japanese tourists visited Bali from January to April this year, followed by 28,312 Australian tourists.

INDONESIA NEWSLETTER(DECEMBER ISSUE) 6

GOLDEN JUBILEE YEAR OF INDONESIAN CONSULATE GENERAL 1951-2001

THE OVERVIEW OF INDONESIAN EXPORTS & IMPORTS IN MAY 2003

E X P O R T S The value of Indonesia exports in May 2003 experienced a slight decline over the last month figure,

from US $5.00 billion to US $4.92 billion. However, in cumulative January-May 2003 period still experienced an increase of 11.66 per cent, over the same period in last year.

The non-oil and gas exports value in May 2003 reached to US $3.92 billion or rose by 1.03 per cent over the previous month figure, and in cumulative January-May 2003 period experienced an increase of 8.18 per cent over the same period in last year.

The highest increase of non-oil and gas exports in May 2003 was particularly on Machinery and Electrical Equipments as high as US $92.4 million, whilst the biggest decrease was on Woods and processed woods as much as US $80.1 million.

In May 2003, the value of non-oil and gas exports to U.S.A. was amounting the highest figure, at US $611.3 million, followed by those to Japan (US $565.7 million), then those to Singapore (US $382.9 million). The contribution of these three countries was amounting to 39.79 per cent of the overall non-oil and gas exports.

The performance of exports by sectors reveals that, the exports of agriculture, manufacturing, and mining products and others in January-May 2003 experienced an increase of 0.17 per cent, 7.34 per cent and 2484 per cent respectively, over the same period in 2002.

I M P O R T S The value of Indonesian imports in May 2003 reached to US $2.87 billion, or dropped by 6.43 per

cent compared to the figure in April 2003 as high as US $2.69billion. The cumulative (January-May 2003) imports figure experienced an increase of 21.01 per cent over the same period in year 2002, to US $11.51 billion.

The value of non-oil and gas imports in May 2003 was amounting at US $2.20 billion or slightly increased by 0.23 per cent over the previous month. In cumulative January-May 2003 period however, it reached to US $10.83 billion, showing a significant increase of 19.35 percent over the same period in last year.

During January-May 2003, the highest value of non-oil and gas imports was marked on machinery and mechanical appliances (US $1.79 billion or 16.53 per cent of the total non-oil and gas imports). According to the country of origin, these imports were mostly originated from Japan, with the value of US $2.00 billion, which composed 18.50 percent to total non-oil and gas imports.

In addition, imports value of consumption goods and raw material/auxiliary goods during January – May 2003 reached to US $1.25 billion and US $11.25 or increased by 31.60 per cent and 25.97 per cent respectively, compared to the same period in year 2002. Meanwhile, the imports value of capital goods dropped by 12.28 per cent, to US $1.43 billion.

THE OVERVIEW OF INDONESIAN TOURISM IN MAY 2003 The number of foreign tourists visiting Indonesia through 13 points of entry in May 2003 increased

again to 222.5 thousand people or rose by 8.76 per cent over the April 2003 figure as high as 204.6 thousand people.

However, number of foreign tourists visiting Bali in May 2003 experienced a decline of 12.31 percent, that was from 59.0 thousand people in April 2003 to 51.7 thousand people in May 2003

In cumulative January-May 2003 period, number of foreign tourists visiting Indonesia through 13 points of entry was recorded at 1.28 million people, which indicated a decline of 23.64 per cent over the same period in 2002, as high as 1.68 million people.

The room occupancy rate of the classified hotels in 10 tourist destination areas in April 2003 was amounting to 38.02 percent, increased by 1.75 points compared to that in March 2003 as high as 37.52 per cent. In Bali, the occupancy rate still experienced a decline, from 31.12 percent to 30.95 per cent.

The average foreign and domestic guest length of stay in Indonesia at the classifieds hotels in April 2003 was 20.6 days, which decreased by 0.04 points compared to the figure in March 2003.

INDONESIA NEWSLETTER(DECEMBER ISSUE) 7

GOLDEN JUBILEE YEAR OF INDONESIAN CONSULATE GENERAL 1951-2001

I N D O N E S I A N E W S L E T T E R

SHOPPING IN BALITRADITIONAL MARKETS

Bali is known as a treasure house of interesting goods to buy. Products of various kinds from traditional antiques to the latest quality fashions in extraordinary displays await the shoppers. It is quite common to bargain in markets, shops and art shops for buyers, so having a good price is partly dependent upon one's smartness in bargaining. Splendid local hand woven materials, silver and gold works, woodcarvings, garments and many other interesting things can be found at any market or art market. You will find that

shops selling similar items are generally grouped together. This makes comparing prices easy as you just have to go next shop to find the same things. Remember to bring your cash, as not all places accept credit cards.  Denpasar : The Kumbasari Market near the river gives an interesting overview of an Indonesia market with household wares and clothing on the third level, spices and dried goods on the second level and traditional market in the basement.It can be a bit dark in the basement. Nearby is Jalan Hasanuddin, a whole street of gold shops, selling 18-22 carat gold jewelry. Not far away from jalan Hasanuddin is jalan Sulawesi where all manner of fabrics are available. The whole street consists of fabric stores on both sides with a few household ware stores in between.

Kuta : Kuta Art Market has a multitude of shops selling a wide variety of goods including, sarongs, handicrafts, jewelry, clothing, furniture and leather goods. You can find some good pieces if you look carefully and smart bargain.

Sanur : Sanur's main shopping street is Jalan Danau Tamblingan and it is more peaceful then shopping in Kuta. Sanur has an interesting variety of shops with lots of nice restaurants.There are still a few hawkers but they are not as aggressive, except at the beach market. You can find woodcarvings, sarongs and other handicrafts in Sanur Art Market.

Sukawati : Sukawati has a new art market and a traditional market on the main road and side streets. Set in a two-floor building, the market sells everything from statues to dance costumes, all at reasonable prices. A large assortment of woven baskets can be found here along with Balinese ceremonial items made from colorful "Prada" - gold painted cloth. These include dance costumes, fans, umbrellas and clothes worn at tooth filings and weddings. Bargaining is a must.

Ubud : The area of Ubud often regarded as the cultural center of Bali. It is where the image of Bali as a land of artists was created. Ubud gives you the opportunity to see the real Bali. The Ubud Market has kept much of its traditional charm, with squatting Balinese sellers haggling loudly among spices and vegetables. The market also sells handicrafts, many made in the neighboring villages of Mas, Tegalalang, and more.

GALLERIESBali is known as a treasure-house of interesting goods, splendid local hand woven materials, silver and gold works, wood carvings and many other handicrafts in attractive displays.

Agung Rai Gallery Jl. Raya Peliatan,Ubud, Gianyar,,Ubud Phone: 975449 : Representing a community of artists, this gallery offers paintings of some of Indonesia's best young artists.

Andy's Gallery Jl. Raya Br. Taman Kerobokan No. 15Kuta : Offers an eclectic mix of furniture and carvings nicely displayed on two levels. Includes both antique and reproduction furniture. Has an attractive wedding chest.

Galeri Keris, Galleria Nusa Dua Phone: 771303 : Open daily 9am - 10pm. If you're looking for a one-stop shop for all your arts and crafts needs, this is the place to visit. Also known as the Indonesian Handicraft Centre and Department Store, Galeri Keris has a wide selection of arts, crafts, and clothes that make inexpensive and fun gifts. A good place to kill a half hour checking out prices and choices.

Asmat Kamoro, Jl. Patih Jelantik 175, Kuta Phone: 755-625 : Located on the corner near Jl. Majapahit, you can't miss this shop; it has a character of its own. This very crowded and cramped shop specializes in tribal artifacts from Irian Jaya. While you can find lots of junk here, if you dig enough, you may find an occasional treasure. Look for long carved Asmat poles, shields, drums, penis sheaths, axes, and bows and arrows.

Bamboo Gallery, Main Road Ubud, Phone: 975037 : Representing many of Bali's most promising young artists, this gallery is less traditional and more innovative than most other galleries in Bali.

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