Vol 3 No 47 - 13 December, 2012

The gamble: making cheap laborin Southeast Asia less cheap.Page 4

Don’t miss the GoodiesRestaurant Christmas Day buffet.Page 8

SPECIAL REPORT: China changingglobal commerce.

Page 12

In this issue:

A DEMAND slump and massivedownsizing efforts may have cast along shadow over the global econ-omy, but companies involved innatural gas services have reason toremain optimistic as the gas industryembarks on a rapid growth phase,most notably in Asia.

Meanwhile, world gas demand isprojected to increase rapidly from2011 to 2017, said InternationalEnergy Agency’s (IEA) Senior GasExpert Anne-Sophie Corbeau.Corbeau noted that global gasdemand will grow by 2.5% per

Asia’s thirst for naturalgas fuels opportunities

annum from 2011 to 2017, reaching576 billion cubic meters (Bcm) by2017.

The regions that will experience asurge in demand are Africa, theMiddle East, Latin America and Asia,Corbeau said. Each of these regionswill see annual growth rates rangingfrom 3 to 5%.

Corbeau pointed out that China willemerge as the leading importer ofnatural gas among the emergingeconomies, as the country’s demand

Continued on page 2

AN APPEARANCE by Santa Claus kicked off the holiday season atGoodies Restaurant as staff and employees of the Gorgonproject gathered for food and good company - and to try outGoodies’ new karaoke system. For more information aboutholding your holiday event at Goodies, please go to page 5.

Santaat

GoodiesSLOVAK FIRMS will invest aroundUS$1.4 billion over the next fewyears to develop infrastructure,particularly in the energy sector, andbuild a cement plant in Indonesia.One of the projects in the pipeline isthe construction of a coal powerplant with a capacity of 2x60 mega-watts in Batam.

Local media had earlier reported thatthe construction of the power plant,to be located on Batam’s KabilIndustrial Estate, would likely costaround $185 million and be con-ducted by Slovak’s engineering, pro-curement and construction firm, theIstroenergo Group, along with PTPembangunan Kota Batam.

“We expect the ground-breaking ofthe project to take place in Marchnext year,” Coordinating EconomicMinister Hatta Rajasa said, addingthat apart from that, Indonesia andSlovakia were also exploringpossibilities to distribute electricityor jointly build another power plantin Singapore.

The projects would be carried outthrough a public private partnershipscheme, as well as through pureprivate arrangements, Hatta said onMonday after attending the Indo-nesia-Slovakia Business Forum inJakarta.

In addition to investment in theenergy sector, a Slovak firm, whichHatta did not name, would also setup a cement plant in EastKalimantan in an unspecified timeframe. – The Jakarta Post

Slovak firmto build Batamcoal power plant

2

Continued from page 1

growth over the period 2011 to 2017will average 13% per annum.

“China is already the fourth-largestgas user, behind the United States,Russia and Iran. But the country issoon expected to become the thirdlargest gas user,” Corbeau said.

China’s natural gas demand growth,driven by unabated urban-ruralmigration, will focus on three areas;electricity generation, industrial andurban fuel gas and chemicalproduction, Jiang Xinmin, deputydirector at the China Center forEnergy Economics & DevelopmentStrategy (NDRC), said.

Douglas-Westwood Associate Direct-or Jason Waldie notes there is astrong correlation between grossdomestic product growth and energyconsumption, which implies thatChina and India will account for themammoth share of energy usageover the next decade.

Douglas-Westwood’s data revealed,for example, that China will be hometo approximately 120 million newcars by 2015. As a basis forcomparison, this figure surpasses thecombined passenger vehicle require-ment for UK, France and Germany.

Japan is meanwhile moving upquickly along the gas demand curveas the country shifts its focus ontoimporting more LNG for powergeneration in the wake of last year’sFukushima disaster.

Tokyo, in an apparent bow to publicpressure, announced in Septemberit will strive to cut its use of nuclearenergy to zero. Japan’s LNG importlandscape has since changeddramatically, after it became appar-ent that Tokyo will favor naturalgas-fired thermal power generationas an alternative to using nuclearpower. The Japanese governmenthas also set a mandate for Japanesepower plant operators to boost theirusage of renewables - energy thatcomes from natural sources - in thelonger term.

According to PFC Energy’s SeniorManager Jamie Webster, if Japanassumes a balanced approach –which incorporates coal, biomass, oiland renewables - in its powergeneration fuel mix, the country’sgas demand could reach 9.7 billioncubic feet (Bcf). However, if thecountry assumes a high gas relianceapproach – having a fuel mix skewed

heavily toward gas – the country’sgas demand could surge to 10.4 Bcfin 2030.

At present, there are 13 world-scaleLNG projects being built globally, ofwhich seven are sited in Australia.For the seven LNG projects inAustralia, Gorgon, Prelude, Wheat-stone and Ichthys in WesternAustralia, and Queensland Curtis LNG(QCLNG), Gladstone LNG (GLNG) andAustralia Pacific LNG (APLNG) inQueensland, the race is on to drillmore gas exploration wells.

All of Australia’s LNG projects havea strong export focus, with severalof these projects having alreadyinked long-term LNG supply contractagreements with Japanese, SouthKorean and Chinese buyers.

In Malaysia, state-backed Petronasannounced that it has made twomajor gas discoveries offshoreSarawak, which combined couldcontain over 4 trillion cubic feet ofnatural gas, offshore Sarawak.

Meanwhile, Indonesia recently gavethe regulatory nod to BP for itsexpansion plans – worth $12.1 billion- for its Tangguh LNG project in thePapua Barat province in eastern

Indonesia. Both Malaysia andIndonesia also export LNG to Japanand South Korea.

These gas-centered projects couldmean large opportunities for thesubsea industry moving toward2012, through 2016. Waldie notedthat, globally, the number of subseawells drilled will rise from 904 in the2007/11 period to 1,484 in the2012/16 period.

In the Douglas-Westwood survey of30 exploration and productioncompanies, around $11.3 billion peryear will be spent on mid-sizedprojects in relatively shallow waters,with the Asian region accounting for43% of global offshore wells drilledover the next five years.

Waldie also said that Asia Pacific isexpected to dominate the FLNGmarket, with Australasia bagging alarge chunk of investment dollars.

Douglas-Westwood estimated thatthrough 2016, Australia is expectedto dominate the FLNG market with$5.3 billion in projects, followed byAfrica with $5.2 billion in projects andAsia with $4.7 billion in projects. -RigZone

3

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DESPITE HEFTY minimum wageincreases across the country nextyear, Indonesia remains anattractive destination for foreigncompanies due to the solid pace ofits economic growth, global banksUBS and Deutsche Bank say.

Economists at the banks said foreigndirect investment into Indonesiawould continue at a rapid clip, eventhough the wage increases, led byJakarta’s 44% rise may dampensentiment slightly.

“We expect Indonesia to remainpopular as an investment destin-ation despite less friendly industrialpolicies being debated and intro-duced ahead of the 2014 election,”Edward Teather, an economist withUBS, said

Teather said that relative to Europe,which is grappling with a debt crisis,and the U.S., which is headingtoward a “fiscal cliff,” Indonesia andits solid economic growth wereattractive to investors.

Indonesia’s economy, whichexpanded by 6.2% in the thirdquarter this year from a year earlier,is forecast by the government toexpand by 6.5% across the whole of2012, a similar pace to last year.

“Six percent real GDP growth ...estimated by UBS for Indonesia thisyear will look attractive to firmslooking to sell into Indonesia’sdomestic market,” Teather added.

He said consumption in Indonesia ofgoods and services, in particularcars, motorcycles and otherconsumer products, was relativelylow, creating an opportunity forforeign investors.

Heriyanto Irawan, an executive atDeutsche Bank, said he believed theminimum wage rises across thecountry may actually stimulateinvestment because higher wageslead to more consumption. He saidthat on average an increase of 5% ofsales turnover at a company shouldbe enough to absorb the increase inlabor costs. – The Jakarta Globe

Minimum wagerises won’t hurtinvestment

Economists:

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AFTER YEARS of profiting fromcheap labor, Southeast Asian busi-nesses paying wages low enough toundercut China are being forced toaccept it is time they paid people abit more.

In Thailand, minimum wages willjump by 35% in some regions fromJanuary, on top of a nationwideincrease of 40% last April. Bigpercentages that add up to just afew dollars more in pay packets eachmonth.

The country’s finance minister saysit will be good for workers andindustry.

“People getting higher wages will notwant to lose their jobs andemployers will not want to increasewages for nothing. They will have to

The gamble: making cheap labor less cheapwork together to boost efficiencyand productivity,” Kittirat Na Ranongsaid.

Economists also point out that if youpay people more they’ll buy more.But the nagging worry is thateveryone could eventually lose out ifwages rise too fast, resulting inhigher inflation and job losses asfirms lose competitive edge.

While the political benefits are easyto see in a region where a vastmajority of people are clamoring fora better life, the economiccalculation is a harder sell to abusiness community whose marginsdepend on cheap labor.

The chairman of the Federation ofThai Industries was ousted lastmonth for failing to lobby hard

enough to convince the governmentto go back on a promise to voters,and the surrender to higher wagesleft the federation riven with factions.

Similar social and economic tensionsare evident elsewhere in SoutheastAsia, a region that has otherwisecome through the global slowdownbetter than most. The emergingmarket boom that characterized thefirst decade of the millennium sawgrowth rates surge and profitsmultiply, but now countries such asThailand, Indonesia and Malaysiaface pressure from workers for abigger share of the wealth.

The World Bank designated Thailandan upper-middle-income country in2011 after national income percapita almost doubled in a decadebut it has fretted about wealthinequality.

As a former stock exchangepresident, the Thai finance ministerseems an unlikely class warrior. Butthat is how he sounds.

“We have a duty to improve thedistribution of wealth,” said Kittirat.“For over 30 years that economicrecords have been kept, it seemsincome distribution has notimproved. The proportion of low-income earners is still the same.”

After years of political turmoil,broadly pitting the lower classesagainst Bangkok’s middle class and“old money” elite, Prime MinisterYingluck Shinawatra’s governmentwas elected in July 2011 with apromise to bring in a nationwideminimum wage of 300 baht a day. At$9.80, it is hardly a princely sum,but it equates to an increase of up to90%, in two stages, by January forworkers in the poorer provinces.

Similar trends are evident elsewherein Southeast Asia. In Indonesia,trade unions have rallied in severalcities in recent weeks to protest atemployers using contract labor tocircumvent employment regulations.In the capital of Jakarta, GovernorJoko Widodo has announced a 44%increase in the monthly minimumwage to Rp 2.2 million ($228).

Apindo, the employers’ association,has warned it will cause “waves oflayoffs.”

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Malaysia plans to bring in aminimum wage in January of up to$300 a month, which will give some3 million workers an increaseaveraging 5%. The change comes inthe run-up to an election that shouldbe held in the first half of next year.

Singapore, wealthier, tightly control-led and more capitalist-orientedthan most of the region’s states,doesn’t have a minimum wage andhas no plans to introduce one. Butpay strains are showing there, too.

Bus drivers from China went onstrike last month over pay andworking conditions, complainingthey were less well paid than driversfrom Singapore and Malaysia.

Singaporeans, in turn, have com-plained about the competition forjobs and the government has madeit harder for low-skilled foreigners toget jobs, which could exert upwardpressure on wages.

In Vietnam, the prime ministersigned a decree on Dec. 4 raising theminimum wage for laborers by 16%to 18%, lifting laborers’ wages toanywhere between 1.65 million to2.35 million dong ($79-$113) per

month. That was a compromisefigure after business associationskicked back against plans for a 20%to 35% rise.

Cao Sy Kiem, head of the VietnamAssociation of Small and MediumEnterprises, acknowledged workerswere struggling to make ends meetbut said companies, too, would havestruggled with the original proposalafter rises in operating expenses.

Vietnam’s annual inflation was stillrunning over 7% in November,having been reduced from doubledigits in 2011.

Inflation elsewhere in ASEAN, the10-member Association of South-east Asian Nations, has been fairlywell contained, allowing centralbanks to loosen monetary policy tosupport their economies as globalweakness hit export markets.

Any general increase in wages couldcomplicate coming policy decisions.Credit Suisse forecast this week thatwages in Thailand would rise 10% in2013 after 12% this year, pushingaverage inflation up to 3.7% nextyear from 3.0%.

In Indonesia, it forecast wageswould rise 10% next year after 6%

this year. Credit Suisse saw inflationaveraging 5.7% in 2013 after 4.3%in 2012.

It noted that many districts inIndonesia were being granted bigrises in minimum pay for next year.“With the minimum wage alreadyroughly two-thirds of the nationalaverage wage, we see a goodchance that upcoming increases willimpact wages higher up thespectrum, as well.”

“Foreign direct investment is drawnto Indonesia for reasons beyondcheap labor,” said HSBC economistSu Sian Lim. “Its population of 240million represents not just aresource but also a significantmarket. Rising incomes - helpedalong by minimum wage hikes - onlyraise its allure.”

The other big worry is that a rise inwages could hurt ASEAN’s exports,especially in markets where itcompetes with China. But China’swages are higher, and rising. Anddemographics work in ASEAN’sfavor, with China’s working-agepopulation likely to decline as aproportion of the overall populationfrom 2015. - Reuters

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AFTER WEEKS of review, Indo-nesia's Education Ministry hassuccumbed to pressure that Englishlessons be retained in elementaryschools. This about-face should begood news for parents. But it is notunexpected given the national swingtoward English as an importantforeign language in recent years.

Deputy Education Minister MusliarKasim announced in late Septemberthat English would be scrapped forlower elementary pupils in the nextschool year beginning July as part ofa curriculum revamp. It was part ofefforts by the ministry to ease theworkload of pupils by reducing thenumber of subjects from 10 to six. Itwould involve the scrapping ofEnglish, science and social studies in

favor of religion, nationalism,Bahasa Indonesia, mathematics, artand sports.

The decision to leave out Englishwas unpopular from the start, notonly among parents and languageteachers but also several educationdepartments in the regions. Parentswanted their children to have a headstart in the language, seen as havinghigher economic value than Dutch,the language of their colonialmasters. They feared their children'sEnglish lessons would be disruptedby the new curriculum.

"The scrapping of English is aretrogressive step," the head ofWest Kalimantan's provincialgovernment education department,Alexius Akim, said.

Elementary schoolsto continue English

The decision also had languageteachers worried about their future,as they were recruited to teachEnglish to primary school pupils.

But in a about-face last month,Musliar announced that Englishwould not be scrapped after all."Schools would be allowed to offerthe subject but as an electiveinstead. It should not be madecompulsory," he said.

English as a foreign language ismandatory only in lower secondaryor junior high school, although manyschools offer it from the fourth grade.

The interest in English is especiallypalpable in Jakarta and other majorcities, where tuition centers teachingEnglish have mushroomed. Even citykindergartens and play schools offerbasic English instruction for pre-schoolers as an attraction.

The swing toward English has beendriven by the growing recognition ofits importance in economic life. -The Straits Times

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Thousands of people crowd Depok beach in Bantul, Yogyakarta, lastweek as local fishermen send a pile of offerings to the sea in gratitude toGod for an abundant catch. (Jakarta Globe)

STATE-OWNED oil and gas com-pany PT Pertamina launched massiveexpansion plans last week, markedby the inauguration of eightupstream and downstream projectsworth a total of US$15.8 billion.

The company, once an icon of thecountry’s graft-ridden institutions,also plans to spend more than $100million on constructing an 80-story-high skyscraper as its new head-quarters on Jl. Rasuna Said, SouthJakarta.

President Susilo Bambang Yudho-yono said the projects would helpPertamina become a “world-classenergy company” and “Asia’s energychampion” by 2025.

“These projects will serve as thebackbone for national energyresilience and will be the main agentin encouraging the development ofthe economy,” said Yudhoyono.

The President was officiating theprojects on board the IndonesianNavy’s (TNI AL) KRI Makassar 590warship, which was off the coast ofWest Java.

Among Pertamina’s major projectsinclude enhanced oil recoverydevelopment by three Pertaminasubsidiaries - PT Pertamina EP, PTPertamina Hulu Energy and PTPertamina EP Cepu - that account for95% of the $15.8 billion investment.

Pertamina plansmassive expansion

The project is expected to producean additional 80,000 barrels per day(bpd) of crude oil by 2025, accordingto Pertamina president director KarenAgustiawan.

“These projects are part ofPertamina’s measures to ensure thatit stands equal to other globalcompanies,” she said.

Although controlling 47% of thecountry’s oil and gas concessions,Pertamina only ranked third in termsof output.

According to the Energy and MineralResources Ministry, Pertamina’s oiland gas production reached 290,000barrels of oil equivalent (boe) perday.

France-based Total E&P Indonesiehas the largest output with 382,000boe, followed by US-based Chevronwith 335,000 boe.

The company, which is also taskedwith a burdening subsidized fueldistribution, is also lagging behind itspeers in the region - particularlyMalaysia’s Petronas and Thailand’sPTT PCL - in terms of itsperformance.

Karen said that the planned projectswere not only aimed at catching upwith the regional peers but were alsoaimed at encouraging the growth ofthe national economy, as well asproviding more job prospects.

“We have the ambition of carryingout business diversification so thatPertamina will become an integratedenergy holding company by 2025,”she said.

Aside from the $15.8 billion projects,according to Karen, Pertamina wouldalso plan to construct a solar-panelfactory, a petrochemical businessscheme with global partners, andPertamina Corporate University.

During the inauguration ceremony,Yudhoyono also applauded Perta-mina’s contribution, which is worthmore than Rp 40 trillion ($4.1 billion)in tax annually.

“Pertamina has also increased capitalexpenditure from Rp 37 trillion in2011 to Rp 52 trillion this year. Thisis good for creating jobs and newbusiness opportunities,” Yudhoyonosaid.

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AS INDONESIA’S economy expandsat an impressive rate, Japaneseinvestors are committed to bringingmore investment into the country,while expecting Indonesia to improveits basic infrastructure, particularlyin industrial estates, to cater to theneeds of the firms, according to abusiness association.

“In general, the size of investmentfrom Japan will rise and accelerate.I am sure that as investment comesin, infrastructure is a must andtherefore, we ask the Indonesiangovernment to provide sufficientinfrastructure,” Japan IndonesiaAssociation Chairman Yasuo Fukuda

Japanese confirm commitment to Indonesiasaid after meeting Industry MinisterMS Hidayat.

Fukuda, who is the former Japaneseprime minister, was visitingIndonesia along with dozens of topJapanese executives of reputablefirms, such as the Japan Gas Corp.(JGC) and Chiyoda Corp., to explorenew business opportunities anddiscuss ways to solve majorbottlenecks hampering the businessclimate with the government.

The government welcomed thecommitment and would seek ways ofaddressing the concerns voiced bythe Japanese businesspeople, saidHidayat after the meeting.

Regarding land provision, thegovernment would prepare a newindustrial estate in Karawang, WestJava, where major Japanese auto-motive manufacturers were largelyconcentrated, he added.

“We will prepare an area of 3,000hectares in Karawang that will serveas a center for the automotive andelectronics industries,” he said.

Apart from that, the governmentplanned to build a new seaport, thelocation of which it was yet tospecify, to cater to the increasingneed to transport goods as requestedby Japanese firms, Hidayat added.

Several Japanese firms, like JGC, arealso looking into forming jointventures with local firms to set up astronger presence in the country,according to Hidayat.

Indonesia’s automotive boom in thepast year has attracted globalautomotive firms, mostly Japanesefirms, to pour in more investment ina bid to tap further into the country’sfast-growing four-wheel and two-wheel markets, which this year areestimated to hit 1.1 million cars and7 million motorcycles, respectively.

Japan’s top automaker, Toyota MotorCorp., for example, has reaffirmedits commitment to Indonesia byinvesting up to Rp 13 trillion (US$1.35 billion) within the next fiveyears for a range of expansionactivities in Southeast Asia’s biggestautomobile market.

This significant investment haspushed the country’s spare parts andcomponent makers to set up manu-facturing facilities in areas near theproduction sites of the major auto-motive makers. Investment in spareparts and components manufacturingis estimated to reach $2.4 billion thisyear, according to statistics from theIndustry Ministry.

Some Japanese firms also haveshown interest in investing in coalliquefaction, as well as in the engin-eering, procurement and con-struction sectors to build oil and gasinfrastructure, petrochemical plantsand other manufacturing sites.

During the January-Septemberperiod this year, Japan pouredaround $1.8 billion in investment intoIndonesia. – The Jakarta Post

12

SPECIAL REPORT

China changingglobal commerce

hin Cheol-soo no longersees his future in theUnited States. The SouthKorean businessmansupplied components toAmerican automakers for adecade. But this year, he

uprooted his family from Detroit andmoved home to focus on selling to the neweconomic superpower: China.In just five years, China has surpassed the

U.S. as a tradingpartner for much ofthe world, includingU.S. allies such asSouth Korea andAustralia, accordingto an AssociatedPress analysis oftrade data. Asrecently as 2006, theU.S. was the largertrading partner for127 countries, versus

just 70 for China. By last year, the two hadclearly traded places: 124 countries forChina, 76 for the U.S.In the most abrupt global shift of its kindsince World War II, the trend is changingthe way people live and do business fromAfrica to Arizona, as farmers plant moresoybeans to sell to China and students signup to learn Mandarin.The findings show how fast China hasascended to challenge America’s century-old status as the globe’s dominant trader,a change that is gradually translating intopolitical influence. They highlight howpervasive China’s impact has been,spreading from neighboring Asia to Africaand now emerging in Latin America, thetraditional U.S. Backyard.Despite China’s now-slowing economy, itsshare of world output and trade isexpected to keep rising, with growthforecast at up to 8% a year over the nextdecade, far above U.S. and Europeanlevels. This growth could strengthen thehand of a new generation of just-namedChinese leaders, even as it fuels strainwith other nations.

13

SPECIAL REPORT

EDITOR’S NOTE - “China’sReach” is a project thatanalyzes China’s influencewith its trading partnersover three decades, andexplores how that ischanging business, politicsand daily life.

Last year, Shin’s ENA Industry Co. made half its salesof rubber and plastic parts to U.S. factories. But hisplans call for China, which overtook the U.S. as thebiggest auto market in 2009, to rise fivefold to 30% ofhis total by 2015. He and his children are studyingMandarin.

“The United States is a tiger with no power,” Shin saidin his office, where three walls are lined with books,many about China. “Nobody can deny that China is theone now rising.”

Trade is a bit like football - the balance of exports andimports, like the game score, is a snapshot of a jumbleof moves that make up the economy, and both sidesare apt to accuse each other of cheating from time totime. Also, the U.S. and China are both rivals andpartners who can’t have a match without each other,and a strong performance fromboth is good for the entireleague.

Trade may get less publicity thanmilitary affairs or diplomacy, yetit is commerce that generatesjobs and raises living standards.Trade can also translate intopolitical power. As shopkeeperssay, the customer is alwaysright: Governments listen tocountries that buy their goods,and the threat to stop buying isone of the most potentdiplomatic weapons.

China has been slow to flex itspolitical muscle on a large scalebut is starting to push back indisputes over trade, exchangerates and climate change.

“When a German chancellor or French president goes toChina, he’s trying to sell Airbuses and other productsand is being sensitive to China’s political concerns, likeon human rights,” said C. Fred Bergsten, a former U.S.Treasury Department official who heads the PetersonInstitute for International Economics in Washington.

The U.S. is still the world’s biggest importer, but Chinais gaining. It was a bigger market than the U.S. for 77countries in 2011, up from 20 in 2000, according to theAP analysis. The AP is using International MonetaryFund data to measure the importance of trade withChina for some 180 countries and track how it changesover time. The analysis divides a nation’s trade withChina by its gross domestic product.

The story that emerges is of China’s breakneck rise,rather than of a U.S. decline. In2002, trade with China was 3% of acountry’s GDP on average, comparedwith 8.7% with the U.S. But Chinacaught up, and surged ahead in 2008.Last year, trade with China averaged12.4% of GDP for other countries,higher than that with America at anytime in the last 30 years.

Of course, not all trade is equal.China’s trade is mostly low-end goods

and commodities, while the U.S. competes at the upperend of the market.

Also, even though Chinese companies invest abroad andemploy thousands of foreign workers, they lag behindAmerican industry in building global alliances and ininnovation, which is still rewarded in the marketplace.China’s competitive edge remains low labor and othercosts, while the U.S. is the world’s center for innovationin autos, aerospace, computers, medicine, munitions,finance and pharmaceuticals. The Chinese have yet tobuild a car that will pass U.S. or European emission

standards.

And the U.S. still does moretrade overall - but just barely. Ifthe trend continues, China willpush past the U.S. this year, aremarkable feat for a country sopoor 30 years ago that theaverage person had never talkedon a telephone.

“The center of gravity of theworld economy has moved to theeast,” said Mauricio Cardenas,the finance minister in Colombia.Like most of Latin America, hiscountry is still more closely tiedto the U.S., but its trade withChina has risen from virtuallynothing to 2.5% of GDP, a morethan tenfold increase since 2001.

“There is nothing comparable in the last 50 years.”

In one sense, China’s growing presence in trade is justrestoring the Middle Kingdom to its historic dominance.China was the biggest economy for centuries until about1800, when the Industrial Revolution propelled firstEurope and then the U.S. into the lead.

China began its return to the global stage in the 1990sas a manufacturer of low-priced goods, from T-shirts totoys. Factories in other countries slashed costs to meetthe “China price” or were pushed out of the market.

As the new millennium dawned, the U.S. remained byfar the world’s dominant trader, rivaled collectively byEurope but no single nation. However, from 2000 to2008, China’s imports grew 403% and exports 474%,driven in part by its entrance into the World TradeOrganization and its move to higher-value production.

China’s imports of oil and rawmaterials for its factories propelledresource booms in parts of Asia,Africa and Latin America. China’sdemand for steel for manufacturingand construction grew so fast that itsmills now consume half the world’soutput of iron ore.

Continued from page 12

Continued on page 14

Masked employees work as Shin Cheol-soo, standing at right in the background,CEO of ENA Industry, tours hiscompany's assembly line in Gyeongsan,south of Seoul, South Korea. (AP)

14

SPECIAL REPORTContinued from page 13

Zambia, a major copper producer, switched to theChina column in 2000. Australia, a coal and iron oreexporter, followed in 2005. Chile, another coppersupplier, moved in 2009.

Meanwhile, exports surged as Apple, Samsung, Nokiaand other electronics giants shifted final assembly toChina. Shipments of mobile phones, flat-screen TVs andpersonal computers have jumped sevenfold over thepast decade to nearly $500 billion. That made China amajor customer for high-tech components supplied bycountries such as South Korea, which swung intoChina’s column in 2003, followed by Malaysia in 2007.

In the U.S., Vermont-based manufacturer SBE Inc.started exporting capacitors - energy-storage devicesused in computers, hybrid cars and wind turbines - in2006. The company now gets 15 to 20% of its revenuefrom China, and has hired 10employees there.

As China grew richer, its peoplespent more. Chinese ate morepork, fried chicken andhamburgers, rapidly sending upthe demand for soybeans tomake cooking oil and feed forpigs and cows. Some cattleranchers in Latin America turnedgrazing land into fields of soy, acrop few in their regionconsume. Soybean exportshelped push Brazil into theChina column in 2010, and putChina neck and neck with theU.S. as Argentina’s top tradingpartner.

In the Brazilian state of MatoGrosso, some 10,000 miles(17,000 kilometers) from Beijing, farmer AgenorVicente Pelissa and his family raise cattle and soy on54,300 acres, a farm twice the size of Manhattan. Halftheir 21,000-ton annual soybean harvest goes to China.

“We’ve invested more in technology and in bettermachines and equipment to meet this rising demand,”Pelissa said. “If it hadn’t been for China, we would nothave not modernized our operations, at least not asquickly as we did.”

Even in the U.S., better known for manufacturing,farmers are rushing to sell to China. The U.S. is thelargest exporter of soybeans to China, followed byBrazil and Argentina. China’s purchases of Americansoybeans have risen from almost nothing 20 years agoto a quarter of the crop: 24 million tons worth $12.1billion, America’s largest export to China.

The boom is having a profound effect on farmingcommunities, said Grant Kimberley, whose family farmnear Des Moines, Iowa, now grows 4,000 acres ofsoybeans, up from 3,500 eight years ago.

“It’s provided more revenue for these farmers thanthey’ve ever seen in their lives,” said Kimberley, who isalso director of market development at the IowaSoybean Association. He said he sees more young

people returning to the farm. “People can see there’s anopportunity to make nice livings for their families.”

It was the 2008 global crisis that showed the resilienceof China’s exporters. The recession set everyone back,but China less so than the U.S. or other major traderssuch as Germany. China does a bigger share of its tradewith developing countries that suffered less andrebounded faster, while the U.S. sells to rich economiesthat are struggling. Chinese companies have boostedexports by 7% this year despite anemic global demand.

During the recession, Shin, theSouth Korean auto partsmanufacturer, saw his sales fall50%. He shut one of threeproduction lines, and banksstopped lending him money.

But China’s auto market waspowering ahead. So Shin hired anemployee in China, and is nowmaking plans for his first factorythere. On a business trip toGermany, clients told him theirChinese factories would be largerthan those at home.

Parents like Shin, who work atcompanies doing business withChina, in turn fed enrollmentgrowth at schools such asTeacher Ching, a Chinese-language kindergarten in Seoul.

Nancy Ching, the daughter of immigrants from Taiwan,opened the school with 15 students in 2004, the yearafter South Korea first moved from the U.S. column tothe China column. Today, she has 60.

“Mothers who send their kids here believe our children’sgeneration is the China generation,” she said inChinese-accented Korean. “In the future, withoutlearning Chinese, one won’t be able to get a job.”

China resumed its upward trajectory in the last twoyears. Even with key Western markets in a slump,exports are up 58% since 2009. Imports are up an evensharper 73%.

Rising incomes have driven demand for wine and otherluxury goods, making China a lifeline for European andAmerican vineyards when the global crisis batteredtraditional markets.

The Chinese have “helped Bordeaux a lot these pastthree years,” said Florence Cathiard, owner of ChateauSmith Haut Lafitte in the Pessac-Leognan area ofFrance’s southwest, home of high-end Bordeaux wine.

France’s wine exports to China first surged in 2009, andby last year, China had surpassed the U.S. as acustomer by volume. Americans still spend more,because they buy more expensive wines. But China is

Continued on page 15

A worker opens a portable silo bag to load intoa truck to be transported for sale at a farmnear Pergamino, Argentina. China is theleading buyer of Argentine soybeans, withmost of the country’s fertile land nowadayscovered with the crop, its principal export. (AP)

15

SPECIAL REPORTdeveloping a taste for grand cru wine, the “greatgrowths” that are considered exceptional and commandhigher prices.

Cathiard acknowledged that she was initially wary ofChina as a reliable market for her high-end wines. Butthe turning point for her came around 2008, when shewas blown away by the number of people showing upfor a master class by her chateau at a wine expo inHong Kong. China now accounts for 25% of Cathiard’ssales, making it her largest market.

The owners of Chateau Haut-Bailly, also in Pessac-Leognan, first traveled to China to test the waters in2000, and it was too early.

“At the time, they didn’t know what a cork or acorkscrew was,” said VeroniqueSanders, the chateau’s generalmanager. Chinese sophisticationhas since advanced rapidly, sheadded. “The difference with otheremerging markets we’ve goneinto in the past is the size of thecountry, which means it has anabsolutely incredible potential.”

The next step in China’s tradeevolution is to move beyondexporting TVs and lawn furnitureto selling services and investingabroad. The investment trendstarted with state-ownedcompanies that bought stakes inforeign mines and oil fields.Smaller and private Chinesecompanies followed, acquiringforeign enterprises to gain abigger foothold in overseasmarkets, more access toresources and better technologyfor their own development.

China is now pushing intoconstruction and engineering,where U.S. and Europeancompanies have long dominated.In Algeria, Chinese state-ownedcompanies pushed asideestablished French and Germanrivals to win contracts to build a $12 billion cross-country highway and the $1.3 billion Great Mosque ofAlgeria. The Chinese have also built highways, damsand other projects in developing countries and arestarting to win contracts in the U.S. and Europe.

On a new 50-kilometer (30-mile) highway leading northof Nairobi, the capital of Kenya, dark asphalt stretchesacross six to eight lanes. The $300 million road wasbuilt by three Chinese companies and financed by theAfrican Development Bank and the Export-Import Bankof China. It has cut a trip that took several hours 18months ago to 10 minutes, said Joseph Makori, aprofessional driver.

“When we see the people from America, they say, `Wewant to assist Kenya’,” said Makori as he looked forwork at an interchange about 10 kilometers from

Continued from page 14

downtown. “But I don’t see it. China comes and I seeone thing: the road.”

Chinese companies are starting to win governmentcontracts in Kenya, which has ports that offer access tolandlocked Uganda, South Sudan and Rwanda.Governments in Africa are keen to work with Chinabecause it does not tie development to human rights ordemocracy, said Stephen Mutoro, secretary general ofthe Consumer Federation of Kenya.

“China appears to have a long-term plan based on increasing itscommercial interests wheregovernance issues are given a backburner,” Mutoro said.

The experience of Congo mightforeshadow a more complexapproach that Beijing envisages forother African nations. In 2008, thetwo governments signed a $9billion deal for Chinese companiesto build 177 hospitals and healthcenters, two hydroelectric damsand thousands of miles of railwaysand roads. In exchange, Congowas to provide 10.6 million tons ofcopper and 600,000 tons of cobalt.The deal has since been scaledback to $6 billion under pressurefrom the International MonetaryFund, which felt Congo was takingon too much debt.

China’s outbound investmenttotaled $67.6 billion last year - justone-sixth of America’s nearly $400billion - but it could reach $2trillion by 2020. As a result,Chinese companies are using anew export - jobs.

Employees at Volvo Cars worriedafter Chinese automaker Geely

Holdings bought the money-losing Swedish brand fromFord Motor Co. in 2010. Two years later, instead ofmoving jobs to China, Geely has expanded Volvo’sEuropean work force of 19,500 to about 21,500.

Majority-owned U.S. affiliates of Chinese companiessupport about 27,000 American jobs, up from fewer than10,000 five years ago. In Goodyear, Ariz., Stacey Rassaswas laid off in May 2010 after a 16-year career in qualitycontrol for aerospace and aluminum manufacturers. Bylate autumn, she and her husband were worried theymight lose their house.

She finally landed a job that December at a new factorymaking solar panels for one of the world’s biggest solarmanufacturers. “It was the best day ever,” she said.

Her new employer? Suntech Power Holdings Co., aChinese company.

Stacey Rassas, a quality controlmanager at Suntech Power HoldingsCo., a Chinese-owned solar panelmanufacturer, examines a solar panelat a company facility in Goodyear,Ariz. The factory makes solar panelsfor one of the world’s biggest solarmanufacturers. (AP)

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THERE IS nothing wrong with raisingwages, as long as they are justifiedby higher productivity because, in thelong run, wage increases that are notsupported by a corresponding rise inproductivity will lead to higherunemployment as factories reducepayrolls or investors shun labor-intensive industries.

The dilemma is that as long as theissue of minimum wage in Indonesiais concerned, it seems there has beenno correlation between a rise inwages and the level of productivitybecause trade unions have claimed

Tripartite mechanism in doubtthat the regional minimum wagesacross the country have always beenway below the basic cost of living.

The governor of Jakarta’s decision toraise minimum wage by 44% to Rp2.2 million (US$230)per month in thecapital starting nextyear and similardemands made by workers in otherprovinces seem completely detachedfrom the employers’ perspectiveregarding higher productivity andcost structure.

Workers tend to take such wageincreases for granted, reckoning thatthe increase is meant only to meetthe basic cost of living. No wonderemployers seem always outman-euvered in the deliberations withinregional wage councils, which aresupposed to nurture consensusamong the three parties (tripartite)- representatives of the government,trade union federation and employer.

Worse still, lulled by the long stringof rosy international reports onIndonesia’s robust economic growth,trade unions have as of late tendedto resort to strikes and streetdemonstrations to push through theirwage-raise demands.

We should remember that we havebeen facing simmering labor prob-lems, with more than seven millionremaining unemployed and over 35million underemployed. Moreover,more than 70% of our 118 millionstrong labor force has been trappedin the informal sector, meaning theyare not protected at all by the labor

regulations and they do not get anybenefits from the minimum wages.

Our biggest concern is that thetripartite wage councils will even-tually lose their credibility if workersfrequently got their demands fulfilledthrough strikes or street demon-strations rather than through mean-ingful negotiations and deliberations

under the councils.

The three partiesrepresented in thecouncils should

always share the basic principles thateconomic growth and job creation arecommon goals and they can beachieved only if there is industrialpeace and if the gains from growthare fairly distributed. The economywill not be able to grow if employersand unions are constantly atloggerheads with each other.

We fully support the workers’ fight tomake the mandatory minimumwages meet, at least, the basic costof living to sustain a decentlivelihood. But, we also understandthe big disadvantages encounteredby our manufacturing companies astheir logistics costs and local lendingrates are much higher than those inother ASEAN countries, not tomention the numerous illegal leviesbusinesses have to pay at the variouschains of the widely corrupt govern-ment bureaucratic system.

These big cost-disadvantages oftencompel labor-intensive manufac-turers, especially such industries asfootwear, garment and electronicsindustries that depend mainly onimported inputs and components tosave on labor costs in a bid to remaincompetitive in the internationalmarket. – The Jakarta Post

SUPREME Rp 80,000Beef, Chicken, Ham, Paprika, Onion, Mushroom, Black Olive,Cheese

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0778 423 539 0822 6805 1918 Chef@goodiesatsmilinghill.com

ALL Pizzas LARGEeconomy size (8 slices)

Your choice of Thin &Crispy or Thick & Chewy

Nagoya town area, BatuAmpar, Sukajadi, Batam Centre

Outer areas

Orders welcome from 7am to 9.30pm

Extra meats Rp 5,000 per Item Extra Veg Rp 3,000 per ItemExtra Cheese Rp10,000

HELP us to ensure your order is handled promptly and accurately EVERYtime. To avoid language issues, please send us a TEXT message or email,including your order, your location and your phone number. We will callback to confirm we have received your request or you can make a quick

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HOME AND WORKPLACE DELIVERY MENU

HELP us to ensure your order is handled promptly and accurately EVERYtime. To avoid language issues, please send us a TEXT message or email,including your order, your location and your phone number. We will callback to confirm we have received your request or you can make a quick

follow-up call to check that we have received it.

0778 423 539 : Chef@goodiesatsmilinghill.com

BURGERSBonza Burger (King-size with the works) Rp 80.000Lunch Burger (Beef or Chicken) Rp 60.000Turkey Burger Rp 60.000Schnitzel Burger Rp 60.000

SANDWICHESGoodies Club (Man-sized Triple Decker) Rp 60.000Roast Beef &Gravy Roll Rp 60.000BLT (Bacon, Lettuce & Tomato with Mayo) Rp 60.000Ham Sandwich (With Salad or Mustard) Rp 55.000Tuna Sandwich Rp 55.000Luncheon Steak Sandwich Rp 60.000(With Salad, Onion, Egg, Cheese & mayo)

Lean Striploin Steak Sandwich Rp 65,000(With Salad & Onion)

PIES

Chunky Meat Pie Rp 35.000Ground Beef Pie Rp 35.000Turkey Pie Rp 35.000

SMILING SUPER DOGThe Famous Jumbo Hot Dog on a bed of salad,topped with Grilled Onion, Cheese and your choiceof Ketchup and/or American Mustard and/or RedChile Sauce Rp 65.000

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Bolognaise Rp 70,000Carbonara Rp 70,000Marinara Rp 70,000Creamy mushroom & chicken Rp 70,000Ponedoro Rp 60,000

FISH & CHIPSBattered or Crumbed Dory with French Fries and Lemon

Wedges Rp 60.000

CHICKEN QUESADILLASThe Mexican classic - Chunks of chicken with threekinds of bell peppers, onion and spicy seasoning ina tortilla wrap, topped with grated cheddar andsour cream Rp 60.000

CURRIES & TANDOOR

Chicken Tandoori Rp 75,000

Chicken Tika Masala Rp 75,000

Madras Curry (chicken, prawn or beef) Rp 75,000

Indonesian Curry with Rice Rp 55,000(Chicken or beef - no condiments)

SNACKSChicken Wings Rp 45.000

Chinese style Dumplings Rp 55.000(Chicken/Seafood )

Spring Rolls Rp 55.000(Veg, Chicken, Seafood )

0822 6805 1918

Orders welcome from 7am to 9.30pm

PIZZAYour choice of Goodies LARGE economy-sizedpizzas (eight slices) with Thin and Crispy orThick and Chewy base. Check our special

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Oil & Gas News

Monadelphous to addover 200 new jobsAUSTRALIA’S Monadelphous hasbeen awarded a contract by QGC toprovide maintenance services at theQueensland Curtis LNG (QCLNG)plant; one of Australia’s largestprojects that involves an initialdrilling program of more than 2,000gas exploration wells.

The deal, valued at more than $83million (AUD80 million), will seeMonadelphous provide up to 40workers for daily checks and repairs,and up to 200 workers duringscheduled shutdown maintenance,BG Group, the operator for QCLNGsaid.

The contract - whichstarts from January2013 and runs for aninitial six-and-a-half-year term, will seethe company under-take multidisciplinarycore maintenanceand shutdown ser-vices to support theoperations phase of the plant; whichis currently under construction atCurtis Island, near Gladstone inQueensland.

QGC’s Operations Director WalterSimpson said Monadelphous wouldemploy local people where possibleand workers will be based inGladstone.

Besides a drilling program, the$20.4-billion QGC project alsoinvolves constructing 336 miles (540kilometers) of main pipe networkthat connects the gas fields to twoLNG processing trains on CurtisIsland. The two LNG trains have acombined processing capacity of 8.5million metric tons per annum. –RigZone

Beach to increaseemployee countAUSTRALIAN OIL and gas pro-ducer Beach Energy said it will boostthe  number of workers it employs to180 people in its 2013 financial year- which ends in June next year - upfrom 131 employees a year ago,amid the company’s aggressivegrowth phase in the onshoreconventional Cooper Basin.

Chairman Glenn Davis noted thatBeach’s employees are relativelyyoung; 70% of its work force is

under 50 years of age. Davis saidBeach’s goal is to maintain a youngwork force backed by the skills andknowledge of experienced people.Davis also added that Beach is keento grow both the involvement ofwomen and indigenous people in theindustry.

One People HR’s co-founder KevinChandler had noted earlier in Julythis year at a gas technologyconference in Perth that indigenousworkers in Australia represent atalent pool that is “sadly overlookedby many companies.”

Beach also revealed that thecompany will spend a record $426million (AUD410 miilion) to drillmore than 100 wells in the Cooper

Basin to identifymore gas reserves.The company alsodisclosed that it isalready negotiatingfor the sale of a“significant” positionin the Cooper Basin.– RigZone

Gazprom world’s topoil and gas producerOAO GAZPROM has been namedthe biggest overall producer of oiland gas, almost trebling the levels ofits nearest rival, concludes the latestreport from industry expertsGlobalData. The new publicationshows the Russian petrochemicalsgiant produced 3,340 million barrelsof oil equivalent (MMboe) last year,exceeding the company’s 2010 totalby 35 MMboe and substantiallyoutweighing competitor levels.

Venezuelan state-owned firm,Petróleos de Venezuela, S.A., placeda distant second, producing 1,400MMboe, while Mexican companyPetróleos Mexicanos (Pemex)followed with 1,332 MMboe.

Gazprom’s dominance is firmlyestablished by its pre-eminent pos-ition in the gas production sector,producing 18,121 billion cubic feet(Bcf) in 2011 alone – more thanseven times that of the nearest rival.

With a primary focus on natural gas,the Russian company holds a lessimpressive position in the oil sectorhierarchy, although last year’sproduction of 320 MMbbl still earnedthe firm a respectable seventh place.PDVSA were 2011’s number one interms of oil production, coming upwith 1,142 MMbbl. - RigZone

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INDONESIA IS ready to offer 14major infrastructure projects valuedat $6.1 billion to the private sectornext year, as part of an effort toboost economic growth. A $100-million waste-management facility inBatam is among the projects.

“These projects have a comparativeadvantage,” said Dedy SupriadiPriatna, deputy for infrastructuredevelopment at the NationalDevelopment Planning Agency(Bappenas), said. “Its feasibilitystudy, bidding documents and landsare already available.”

The projects - which are offeredthrough a public-private partnership

$100M Batam WM facilitypart of $6.1B investment

scheme - are scheduled to betendered in mid-2013.

The projects include a $1.56-billioncoal-fired power plant that willfeature two 600-megawatt gener-ators in coal-rich South Sumatraprovince; a $780-million mine-mouth coal-fired plant generating600 MW, also in South Sumatra; anda $1.33-billion municipal watersupply in the West Semarangmunicipal water supply area.

There will also be a $870-millionproject to revitalize the Maliobororail station in Yogyakarta; a $435-million monorail in Makassar; a$287-million water supply station in

southern Bali; a $200-million water-sewage treatment plant in Jakarta;and a $189-million water supplyfacility that will serve Jakarta andthe outer city Bekasi.

Other projects include a $177-million Jakarta Integrated UrbanTransport Club; a $78-million hydro-power plant in Karama in SouthSulawesi; a $30-million municipalwater supply station in Palu, achartered city on the Indonesianisland of Sulawesi; and a $17-millionwater supply facility in Lamongan.

Dedy said that for this year thegovernment has tendered 17 PPPprojects valued at $10.63 billion,and those are now entering theconstruction phase.

The 17 projects already underconstruction include a $3-billionpower plant in Central Java; a $1.5-billion railway stretching 185 kilo-meters that connects coal mines andplantations at Bangkuang to ports atPuruk Cahu in Umbulan, East Java;and a $204-million water supplystation in Umbulan, East Java.

Additionally, a $196-million toll roadwill connect Benoa Harbor, NgurahRai International Airport and theNusa Dua tourist area and a watersupply in Maros, a district in SouthSulawesi.

Armida Alisjahbana, the head ofBappenas, said the agency is makingefforts to help the private sectorobtain financing for the projects. Thegovernment is now studying the saleof bonds with underlying assets ininfrastructure projects, which wouldbe known as infrastructure bonds.

Indonesia, currently the world’s16th-largest economy, with grossdomestic product at $846 billion lastyear, needs to speed uprevitalization of its ailing infrastruct-ure to support growing demandamong its rising middle class, as wellas the higher need for “inter-connectivity” among its regions.

Global consultant McKinsey & Co.said that Indonesia may add 90million people to its “consumingclass” by 2030, the most after Chinaand India. Energy demand maytriple from current levels, whileconvenience stores will lead to a“revolution” in retail. These all willrequire better infrastructure forbetter distribution of goods andservices. – The Jakarta Globe

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Ministry to install ITin 100,000 schoolsTHE EDUCATION and CultureMinistry is planning to install infor-mation technology (IT) networks in100,000 public schools across thecountry by 2014. The head of theTechnology, Information and Com-munication Department of the Minis-try, Ari Santoso, said the ministryhad so far installed internet networksin around 23,000 out of 254,000schools managed by the ministry.

“We hope to install networks in40,000 schools next year and fulfillour target of 100,000 schools by2014,” he added.

Ari said the ministry would buildsmall wind and solar power plants tosupport the network for schools inmountains or isolated areas.

This year, the ministry has spent Rp162 billion (US$16.87 million) fromthe state budgets to develop the ITnetwork in those schools. – TheJakarta Post

Apple launchesiTunes IndonesiaAPPLE finally launched the long-awaited iTunes Store in Indonesialast week, after skipping the countrywhen it rolled out its online store toseveral Asian countries last June.

Indonesia was among 56 newcountries in which the companyintroduced the iTunes Store. Othercountries include India, Russia, SouthAfrica and Turkey.

Besides songs, Apple also offersmovies to purchase and downloadfrom the store. iTunes Storepurchases require a valid credit card

with a billing address in the country,the company said.

According to DailySocial blog,a song’s average price rangedfrom Rp 5,000 (52 U.S.cents) to Rp 7,000, whilethat of an album wasbetween Rp 45,000 and Rp65,000. In addition, a high-definition movie will cost upto Rp 149,000 to download. –The Jakarta Post

Jakartans to taketurns drivingTHE JAKARTA administration isplanning to impose a restriction thatwould limit cars on streets based on

even-odd license plate numbers,beginning in March 2013 at the latest.

The policy would temporarily replacethe current “3-in-1” car pooling zonesand would be effective from 6 a.m.to 8 p.m. on weekdays. It would alsoaffect roads used by the TransjakartaBus Rapid Transit (BRT) system anda number of other main roads.

Cars with odd-numbered licenseplates will be banned on even datesand vice versa. The vehicles wouldbe marked with stickers, red for oddnumbers and green for evennumbers.

City Transportation Agency chiefUdar Pristono said he agency had

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calculated that the restriction wouldincrease the average speed onJakarta’s roads from 16.8 kilometersper hour to 47 kilometers per hourand cut down roads affected by jamsfrom 43.7% to 32.7%.

The restriction is also expected tosave 345,000 liters of subsidized fueleach year.

The agency has also calculated thatcutting almost half of the vehiclesused each day would result in a needto provide an alternative for around2.6 million person trips each day.Udar said that the city wouldcompensate by providing about 500new buses in the BRT, granting 1,000new minibuses to replace decade-oldpublic minibuses, and integrating theminibus services to the BRT system.– The Jakarta Post

Italian police arrestmafia boss in BaliITALIAN POLICE have arrested afugitive mafia boss living in a luxuryhome on the island of Bali in a jointoperation with Indonesian author-ities, the police said last week.

Antonino Messicati Vitale has served10 years in prison in the past formafia association and is wanted onnew charges of extortion. He isbelieved to be head of the SicilianMafia clan of Villabate, which was atthe center of a bloody gang war inthe 1990s. Messicati Vitale, whosefather Pietro was gunned down in1988, was one of the most high-profile mafia bosses still on the run.

Investigators tracked Messicati Vitaleby bugging and wiretapping hisfamily and allies and then tracking agroup of his relatives who traveled toBali. Agence France-Presse

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After I retired, my wifeinsisted that I accompany

her on her trips to Target.

Unfortunately, like most men, Ifound shopping boring and preferred

to get in and get out.

Equally unfortunate, my wife is like mostwomen - she loves to browse.

Yesterday, my dear wife received thefollowing letter from the local Target:

Dear Mrs. Harris,

Over the past six months, yourhusband has caused quite acommotion in our store.

We cannot tolerate thisbehavior and have been forcedto ban both of you from thestore. Our complaints againstyour husband, Mr. Harris, arelisted below and aredocumented by our videosurveillance cameras:

1. June 15: He took 24 boxes of condoms andrandomly put them in other people’s cartswhen they weren’t looking.

2. July 2: Set all the alarm clocks inhousewares to go off at 5-minute intervals.

3. July 7: He made a trail of tomato juice onthe floor leading to the women’s restroom.

4. July 19: Walked up to an employee andtold her in an official voice, “Code 3 inhousewares. Get on it right away.” Thiscaused the employee to leave her assignedstation and receive a reprimand from her

supervisorthat, in turn,resulted with auniongrievance,causingmanagementto lose time

and costing the company money. We don’thave a Code 3.

5. August 4: Went to the service desk andtried to put a bag of M&Ms on layaway.

6. August 14: Moved a ‘CAUTION - WETFLOOR’ sign to a carpeted area.

7. August 15: Set up a tent in the campingdepartment and told the children shoppershe’d invite them in if they would bringpillows and blankets from the beddingdepartment, to which 20 children obliged.

8. August 23: When a clerk asked if theycould help him he began cryingand screamed, “Why can’t youpeople just leave me alone?”EMTs were called.

9. September 4: Looked rightinto the security camera andused it as a mirror while hepicked his nose.

10. September 10: Whilehandling guns in the huntingdepartment, he asked the clerkwhere the antidepressants were.

11. October 3: Darted around thestore suspiciously while loudly humming the“Mission Impossible” theme.

12. October 6 In the auto department, hepracticed his “Madonna look” using differentsizes of funnels.

13. October 18: Hid in a clothing rack andwhen people browsed through, yelled “PICKME! PICK ME!”

14. October 22: When an announcementcame over the loud speaker, he assumed afetal position and screamed “OH NO! IT’STHOSE VOICES AGAIN!”

15. Took a box of condoms to the checkoutclerk and asked, “Where is the fitting room?”

And last, but not least:

16. October 23: Went into afitting room, shut the door,waited awhile, and then yelledvery loudly, “Hey! There’s notoilet paper in here.” One ofthe clerks passed out.

Retired husband,shopping nota good mix

www.smilinghillbatam.com

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PLANET

Palm Hill BungalowsBlok A No. 18,Bukit SenyumBATU AMPAR 29456

+62 778 450 533

+62 778 450 183

+62 778 423 387

HOLIDAY

Palm Hill Bungalows

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Info@smilinghillbatam.com

THURSDAY December 13th8.00 am (STAR) Golf : Austalian PGA Championship

6.30 pm (GOLF) EPGA : Alfred Dunhill Links Championship

FRIDAY December 14th

8.00 am (STAR) Golf : Austalian PGA Championship

6.30 pm (GOLF) EPGA : Alfred Dunhill Links Championship

SATURDAY December 15th

8.00 am (STAR) Golf : Austalian PGA Championship

4.45 pm (A814) Alpine Skiing : World Cup France (women)

5.30 pm (GOLF) EPGA : Alfred Dunhill Links Championship

5.45 pm (A817)Classic Boxing :Ali v Oscar Bonavena

6.15 pm (A814)Alpine Skiing : World CupItaly (men)

7.40 pm (ESPN) BPL :Newcastle v Manchester City

8.30 pm (A814) Rugby : Heineken Cup - Ospreys v Toulouse

10.00 pm (ESPN) BPL : Manchester United v Sunderland

10.00 pm (STAR) BPL : Liverpool v Aston Villa

10.00 pm (A817) BPL : Stoke City v Everton

10.40 pm (I304) Rugby : Heineken Cup - Leinster v Clermont

SUNDAY December 16th

8.00 am (STAR) Golf : Australian PGA Championship

3.15 pm (A814) Alpine Skiing : World Cup Italy (men)

5.30 pm (GOLF) EPGA : Alfred Dungill Links Championship

7.45 pm (A814)Rugby : HeinekenCup - Castres vGlasgow

8.20 pm (ESPN)BPL: Tottenham vSwansea City

10.00 pm (A814)Rugby : HeinekenCup - Saracens v Munster

10.50 pm (ESPN) BPL : West Brom v West Ham United

VISA and MasterCard welcomeYES, you can now use your plastic to

pay for food, drinks and room chargesat GOODIES and Smiling Hill.

SMILING HILL

Wats on....Sports

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World Cup

Heineken Cup