Indonesia Development Strategy to Address Growth, Inequality and Security Issues

Similar documents
Public Opinion in Indonesia. Post-Presidential Election Public Opinion Survey October 2014

Indonesia and The Implementation of ASEAN Economic Community

INDONESIA Rosemary Gallant. Counselor for Commercial Affairs

Indonesia - Political Risk Outlook

: Information from the CIA World Factbook INTRODUCTION GEOGRAPHY

COUNTRY DATA: Indonesia : Information from the CIA World Factbook INTRODUCTION GEOGRAPHY

18 th MIICEMA Seminar TOWARD ECONOMIC STABILITY AND SUSTAINABLITY

ASEAN Economic Community (AEC): Can ASEAN learn from the EU?

The One-Belt-and One-Road Initiative from a Global Perspective: Indonesia

FUTURE DIRECTION OF INDONESIA CHINA COMPREHENSIVE STRATEGIC PARTNERSHIP

Globetrotters of the Philippines. Carmen Ong Mitchell Todd Reed Bailey Gary Haack Grant Sander

Economic Indicator Evaluation Based on Shape Deformation Analysis of Indonesian Provinces Statistics

BADAN PUSAT STATISTIK KEPALA BADAN PUSAT STATISTIK 1

Push and Pull Factors for Japanese Manufacturing Companies Moving Production Overseas

Survey period October 8-24 th 2018

Chile s average level of current well-being: Comparative strengths and weaknesses

CHAIRMAN S STATEMENT OF THE 14 TH ASEAN-INDIA SUMMIT 8 September 2016, Vientiane, Lao PDR Turning Vision into Reality for a Dynamic ASEAN Community

Indonesia Now Insights and Opportunities

Trends in Poverty and Inequality in Decentralising Indonesia

Poverty Profile. Executive Summary. Republic of Indonesia

2. Economic Environment

Countering Violent Extremism. Mohamed A.Younes Future For Advanced Research and Studies

PAPUA NEW GUINEA COUNTRY STATEMENT DELIVERED BY. HON. PETER O'NEill, CMG, MP PRIME MINISTER OF PAPUA NEW GUINEA

CHAIRMAN S STATEMENT ON THE FOURTH ASEAN DEFENCE MINISTERS MEETING-PLUS (4 TH ADMM-PLUS) MANILA, 24 OCTOBER 2017

Djibouti. Country Overview Politics. Economy. Social/Human Development

Socio-Cultural Public Response on Morotai Island as Special Economic Zone (KEK) in Indonesia

Brunei Darussalam Indonesia Malaysia Philippines East Asian Growth Area (BIMP-EAGA)

Detailed Methodology

Guangxi Zhuang Autonomous Region 2013

Australian Consortium for In-Country Indonesian Studies (ACICIS) Public Health Study Tour 2017

Present by Mr. Manothong VONGSAY Deputy Director General of Investment Promotion Department Ministry of Planning and Investment Seoul, 20 June 2012

Briefing Paper Pakistan Floods 2010: Country Aid Factsheet

PROMOTING PEACE, COUNTERING TERRORISM IN INDONESIA : THE ROLE OF INDONESIAN MEDIA

Case Study on Youth Issues: Philippines

Licensing Reform : Online Single Submission (OSS)

H.E. Dr. Rangin Dadfar Spanta Minister of Foreign Affairs of the Islamic Republic of Afghanistan. at the General Debate

strategic asia asian aftershocks Richard J. Ellings and Aaron L. Friedberg with Michael Wills

EU-EGYPT PARTNERSHIP PRIORITIES

The Habibie Center, Jakarta February 24, 2015

IYS, BLO Offices, Jl. Umalas No. 1A, Kerobokan, Kuta, Bali 80361, Indonesia

Indonesia: Middle Income Country in Transition

Countering ISIS in Southeast Asia : ASEAN s Efforts at the Regional Level by Ibrahim Almuttaqi

Indonesia's Foreign Policy

Asia-Pacific to comprise two-thirds of global middle class by 2030, Report says

NATURAL RESOURCES, CORRUPTION, & THE SDGS

Lecture II North Korean Economic Development: from 1950s to today

THAILAND SYSTEMATIC COUNTRY DIAGNOSTIC Public Engagement

Politics of ICT in Southeast Asia

Singapore 18 Apr 2013

Lesson Learned from Building Back Aceh & Nias Better. THE ROLE OF INFRASTRUCTURE IN WOMEN s ECONOMIC EMPOWERMENT

Statement By: On Presenting Indonesia's 2017 Voluntary National Review

Indonesia. Context. Featured project. Indonesia. Vegetable Production and Marketing with Impact (VEGIMPACT) programme in Indonesia.

OPENING STATEMENT BY THE HEAD OF DELEGATION OF INDONESIA AT THE 27TH SESSION OF THE COMMITTE ON MIGRANT WORKERS GENEVA, 5 SEPTEMBER 2017

I. Economic Islamicity Index

EXECUTIVE SUMMARY FOREIGN DIPLOMACY AND THE DEVELOPMENT OF INDONESIA MARITIME CONNECTIVITY. Researhers:

IB Diploma: Economics. Section 4: Development Economics COURSE COMPANION. First Edition (2017)

Benin. Country Overview Politics. Economy. Social/Human Development

Worldwide Caution: Annotated

Geography Advanced Unit 3: Contested Planet

Growing Optimism That Obama Will Improve US Relations: Global Poll

Radicalization/De-radicalization:

Asia and the Pacific s Perspectives on the Post-2015 Development Agenda

8 September 2016, Vientiane, Lao PDR. Turning Vision into Reality for a Dynamic ASEAN Community

respect to its external environment (Anton, 2015). Further, it undertakes the most crucial factors

RESPONSES BY PRIME MINISTER LEE HSIEN LOONG TO QUESTIONS FROM AUSTRALIAN MEDIA

Human development in China. Dr Zhao Baige

Assignment. "Economic Profile of Vietnam"

RECOMMENDATION of the Committee on Economic and Financial Affairs, Social Affairs and Education

Development Dynamics. GCSE Geography Edexcel B Practice Exam Questions and Answers

2015 Biennial American Survey May, Questionnaire - The Chicago Council on Global Affairs 2015 Public Opinion Survey Questionnaire

and the role of Japan

Singapore 4 July 2014

UPDATE. Asia at the Crossroads: 5 forces transforming Asia-Pacific region Fraser Thompson, AlphaBeta

GA Committee 2 Topic Preparation Guide. Topic 1. Political Corruption and Bribery

Embassy of the Republic of Indonesia Moscow INDONESIA March 24, 2015 INDONESIA. and the world

The Evolving Anti-terrorist Coalition in Southeast Asia: The View from Washington

WHEN April 14-15, 2014

COUNTRY DATA: Belgium : Information from the CIA World Factbook

CGI URGES GOVERNMENT TO MAINTAIN STABILITY AND DEEPEN REFORM

9.1 Human Development Index Development improving the material conditions diffusion of knowledge and technology Measure by HDI

PRESIDENTIAL REGULATION OF THE REPUBLIC OF INDONESIA Number 105/2015 FOREIGN YACHT VISITS TO INDONESIA WITH THE BLESSING OF GOD THE ALMIGHTY

ACCELERATING GLOBAL ACTIONS FOR A WORLD WITHOUT POVERTY

European Union : dynamics and development of the territories of Europe

MACN Collective Action Brief

By: Dorothy Guerrero

COUNTRY DATA: UNITED KINGDOM: Information from the CIA World INTRODUCTION GEOGRAPHY

THE INDICATORS FOR SUSTAINABLE DEVELOPMENT:

Neighbourly Love? Jack Taylor. 72 What Difference Does Writing Make?

Development Strategy. for. Myanmar

ASEAN: One Community, One Destiny.

THE 14 TH ANNUAL MEETING OF THE ASIA PACIFIC PARLIAMENTARY FORUM (APPF) January 2006, Jakarta Indonesia JOINT COMMUNIQUÉ

Poverty in the Third World

Summary of the Results

ASIA S DEVELOPMENT CHALLENGES

How s Life in Slovenia?

DRAFT REPORT. EN United in diversity EN 2014/2230(INI) on the current political situation in Afghanistan (2014/2230(INI))

Strengths (+) and weaknesses ( )

Asian Democracy Index 2014: Dynamics in Civic Participation and the Continuing Economic Inequality in Indonesia

United Nations Regional Centre for Preventive Diplomacy for Central Asia (UNRCCA) Programme of Action for

Following the Money to Combat Terrorism, Crime and Corruption

Transcription:

Indonesia Development Strategy to Address Growth, Inequality and Security Issues Gen. Army (Ret) Luhut B. Pandjaitan Acting Energy and Mineral Resources

Table of Content 1 Introduction to Indonesia 2 Addressing Growth and Inequality Issues 3 Tackling Key Issues on Security Matters 1

Table of Content 1 Introduction to Indonesia 2 Addressing Growth and Inequality Issues 3 Tackling Key Issues on Security Matters 2

Republic of Indonesia: largest Archipelago Country in the World Total area is 1.9 million sq km with + 54.000 km of coastline 17.500 of islands, some 6000 of which is inhabited +/- 7 hours flying time from eastern part of Indonesia to the western part. 3

4 th Most Populous Country and 3 rd Largest Democracies in The World Total population in Indonesia is ~255 million people, 59% of which are in productive age (15-55 years). We are the 3 rd largest democracies in the world, after India and United States Indonesia is the largest muslim countries with more than 220 million muslim population. We have more than 300 ethnic groups and +700 languages Source: CIA Factbook and BPS 4

Indonesia General Election 2014: Volunteer and Social Media 1 2 ~ 133 million people (70% of eligible voters) participated in the 2014 presidential election. It was the largest since 2004. More Indonesians voted for Jokowi compared to Americans who elected Barack Obama in 2008. It was the most transparent process in our history. The general public had direct access to monitor the result form from each available ballot. 3 Volunteer groups play a much more significant role compared to previous elections, especially through social media and internet. 5

Joko Widodo Road to Presidency.. Jokowi ran for the mayor s second term, and won 90% of the votes. 2005. 2010. 2012. 2014 Joko Widodo (Jokowi) ran for the mayorship of the city of Solo, Central Java, and won by ~37%. Jokowi ran for the Governorship of Jakarta against the incumbent, Fauzi Bowo. Jokowi won with ~54%, through 2 stage election. He was the 1st nonincumbent candidate who won since 2000. Jokowi and Jusuf Kalla ran for the presidential election against Prabowo Subianto & Hatta Rajasa. Jokowi won with 53.15% vs 46.58% SOLO JAKARTA INDONESIA 6

Indonesia Economic Profile Economic Profile: GDP: ~US$ 900 billion (16 th largest in the world by 2016). It is the largest economy in Southeast Asia GDP growth: 5.18% in 2Q 2016 Inflation: 2.79% yoy August 2016 National Budget: US$ 157 billion in 2016 Unemployment rate: 5.5% in February 2016 Public Debt : US$ 240 billion or 27% to GDP as of 2015 32% or 38 million people are working in agricultural sector Source:CLSA and Badan Pusat Statistics 7

Table of Content 1 Introduction to Indonesia 2 Addressing Growth and Inequality Issues 3 Tackling Key Issues on Security Matters 8

High GDP Growth and Increased Inequality During 2008-2012 Due to Commodity Price During 2008-2012, Indonesia enjoyed high GDP growth due to increase in commodities price, however these also followed by increase in income inequality, since the main benefit of increased in commodity prices is enjoyed only by selected group of population 7.0% 0.45 6.0% 5.0% 4.0% 3.0% 6.01% 4.63% 0.37 6.22% 6.17% 6.03% 5.58% 5.02% 0.41 0.41 0.41 0.41 0.38 4.79% 0.40 4.92% 0.39 5.18% 0.42 0.39 0.36 2.0% 0.35 1.0% 0.33 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 1Q-2016 2Q-2016 GDP Growth Gini Coefficient (LHS) 0.3 Source: Badan Pusat Statistik 9

High Logistic Cost Lower Our Economic Competitiveness Logistic Cost to GDP Cost of Transportation as % to Total Cost 18 % 16 14 15.3 13.7 15.6 14.1 12 11.7 10 8 6 4.9 4 2 0 Jabotabek Surabaya Medan Makasar Rata-Rata Indonesia Jepang Sumber: CLSA and Ministry of Transportation 10

Wide Gap on Poverty Rate Between Population Living in The Village and Urban Area % 45 Although poverty rate in the village has decreased significantly, however the rate of decreased is lower than poverty rate in urban area 40 35 30 25 20 15 10 Village Urban 5 0 Source: Badan Pusat Statistik 11

1996 1999 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 80 Low Dependency Ratio, But Diverse Human Development Index (HDI) Gap of HDI between population in Java and East Indonesia (Papua, Maluku, NTB, and NTT) is still wide Those gap may change our demographic bonus into a demographic disaster if we don t fix the problem 75 Dependency Ratio 70 65 60 55 50 Population 45 Jawa Papua dan Maluku NTB dan NTT Source: Badan Pusat Statistik 12

Reform is Needed to Improve Investment and Business Climate 2016 World Bank Ease of Doing Business Source: CLSA and WorldBank 13

Development Strategy Equitable Development (Mainly Outside Java Island) Promoting Developments and Growth Outside Java Island Reconstructing and Developing Infrastructures Outside Java Island Development Strategy Increasing Competitiveness Improving the Quality of Human Resources Creating Conducive Investment Atmosphere Developing national logistic connectivity Transforming the economy from commodity based to value added creation Prohibiting Exports of Raw Materials/unprocessed commodities Developing SME business Providing Tax Holiday 14

Government Commit to Build Infrastructure and Reduce Subsidies Since President Joko Widodo is inaugurated in Oct 2014, He took out the fuel subsidy (although it is unpopular policy) and re-allocate the budget to build infrastructure 15

US$ 450 Billion to Fund Infrastructure Roll-Out Until 2019 More than 50% of the fund will be allocated to build power/electricity infrastructure as well as seaport and road Source: Bappenas and CLSA 16

Extensive Toll Road Construction from 2015-2020 Road Density in Indonesia is The Lowest Among its peers Toll Road Network in Indonesia Source: CIA Factbook, Badan Pusat Statistik 17

Construction of Trans Java Toll Road Source: Kementerian PUPR and CLSA 18

Construction of Trans Sumatra Toll Road Source: Kementerian PUPR and CLSA 19

Increasing Port Capacity is Imperative to Support Higher Economic Growth Port Capacity Comparison Between Indonesia and Surrounding Countries Indonesia Port Capacity Expansion Plan Until 2030 Source: Pelindo I-IV and CLSA 20

Port Expansion in Tanjung Priok Main and Feeder/Supporting Seaports in Indonesia Tj Priok Capacity Expansion Plan New Tj Priok Container Terminal Source: CLSA and Pelindo II 21

One Stop Services (OSS) to Simplify and Speed Up Business and Investment License Sectors Before OSS After OSS Power Plant Land (4 simplifications) Forestry (13 simplifications) Transport (4 simplifications) Agriculture (9 simplifications) Industry (8 simplifications) Tourism Area (6 simplifications) Tax Allowance Applications 49 Licenses 923 days Building Use licenses 3k-5k ha-123 days Land Use Licenses 111 days Special Terminal Licenses-30 days Plantation Licenses 751 days Industrial Business Licenses-672 days Tourism Area Licenses 661 days Not Specified 25 Licenses 256 days 90 days 47 days 5 days 182 days 152 days 188 days 28 days Source: BKPM 22

Result from The Implementation of OSS is Favorable Time Saving in Processing License After Implementation of OSS Based on Research to End User Realization of Domestic and Foreign Direct Investment Continue to Increase Source: BKPM 23

Government Revenue From Tax Amnesty Program Government revenue from tax amnesty program as of 29 Sept 2016 is US$ 7.3 billion. This is collected less than 3 months out of 9 months period for the tax amnesty Comparing with similar program in other countries, our program could be considered as one of the most succesfull tax amnesty program in term of revenue 0.9% 0.8% 0.79% Tax Amnesty Revenue % GDP 35% 30% 30% Asset Declared to GDP Ratio (US$ 275 billion) 0.7% 0.6% 0.5% 0.62% 25% 20% 0.4% 0.35% 15% 0.3% 0.2% 0.1% 0.0% Indonesia (29 Sept 2016) 0.24% 10% 0.12% 5% 0.04% 0% Chile India Italy Spain Australia Indonesia (29 Sept 2016) 8% 4% 2% 2% 0% Chile India Italy Spain Australia Source: Ministry of Finance 24

Revitalization of Agricultural Infrastructure Dam Jatigede West Java (90.000 ha irigation) Dam Bajulmati Jatim (1.800 ha irigation) Source: Bappenas 25

Involvement of The Army in The Revitalization of Government Aid 26

Village Fund Programme to Empower Local Economy in the Villages Village Funds Priorities Fulfillment of Basic Needs Development of Village Infrastructure Development of Local Economic Potentials Natural Resources and Environment Utilisation Development & Maintenance: 1. Clean water 2. Sanitation 3. New and sustainable energy Construction & Maintenance: 1. Village roads 2. Retention basins Development & Maintenance: 1. Tertiary irrigation 2. Fishery 3. Village production facilities Commodity Development 1. Mining 2. Seaweeds 3. Village-owned forests 4. Waste management Source: Ministry of Village and Underdeveloped Regions 27

Estimates of Village Funds 2015-2019 *In USD million Source of Village Fund 2015 2016 2017 2018 2019 Central Government 1,538 3,614 6,245 8,603 7,984 Local Government 2,420 2,890 3,253 4,637 4,303 Tax and Retribution Sharing 155 186 210 260 235 Total 4,113 6,689 9,708 13,500 12,522 # of Village 74,093 74,754 74,754 74,754 74,754 Average/Village 0.06 0.09 0.13 0.18 0.17 28 Source: Ministry of Finance

Monitoring and Evaluation Involving Army and Police Government Program Implementation Monitoring: head of Sub-District level government, army, and police Babinsa (Army staff assigned to village) Head of Village (Kepala Desa/Lurah) Bhabinkamtibma s (Police staff assigned to village) Agriculture Program: 1. Construction and maintenance of irrigation systems 2. Subsidised fertilizers distribution 3. Distribution of agricultural tools from government Fund for Village Program: 1. Planning of village development 2. Use of Village funds 3. Monitoring of village funds Promotion of conducive situation: 1. Promote potential conflict settlement peacefully 2. Monitoring of radical movements and drugs abuses 3. Briefing and socialisation of law and regulation 29

Survey on The Confidence to Public and Government Institutions 92.0% 90.0% 88.0% 91.0% CSIS Survey on The Confidence to Public and Government Institutions, August 2016 87.6% 86.0% 84.0% 85.0% 84.3% 83.1% 82.0% 80.0% 79.3% 78.0% 76.0% 74.0% 72.0% Army (TNI) The President Corruption Eradication Commission National Human Rights Commission Vice President National Election Commission Source: CSIS 30

Table of Content 1 Introduction to Indonesia 2 Addressing Growth and Inequality Issues 3 Tackling Key Issues on Security Matters 31

Violent Extremism: Tip of The Iceberg Phenomena 32

ISIS Recruitment Pattern in Indonesia Recruitment Pattern Newspaper, Books ISIS PROPAGANDA Religius School, Fund Raising Funding Social Media: Facebook Deployment to Syria and Iraq: Hajj. Tourism Tour, Study purposes, visiting famili Personal Approach Offering High Salary/Income Facilitator 33

Key Characteristics Comparison on Terrorists Profile Between Al Qaeda and Indonesia Al Qaeda (400 inmates) Aceh military Training & Book-Bombing (195 inmates) 75% 75% are professionals with variety high-skilled jobs i.e. engineers, architects. 64% 64% are working in informal sectors as small trader, farmers, or entrepreneurs. The rest working as teachers or low level employees 63% 63% had tertiary education (universities/collage degrees) 63% 63% of inmates only had senior high or elementary education 34

We Need to Classify Convicted Terrorists into Different Categories for Different Treatment Ideologues The people who teach radical or extreme doctrines. Usually are not directly involved in the terrorist attack. Many of them, although in prisons, are able to radicalize other convicted inmates. Hence, it is dangerous to put them together with other convicted inmates. It is difficult to perform de-radicalization program to ideologues. Examples include: Abu Bakar Ba asyir and Aman Abdulrahman. Militants/Operat ives Supporters/Sym pathizers They have already accepted radical doctrines. They usually have received military or bomb-making training or have experiences in conflict areas (such as Afghanistan, Mindanao, or Poso) Extensive de-radicalization not only in the prison but also outside the prison. Examples: Iwan Rois They usually provide logistic supports for the militants or the operatives in carrying out terror attacks. It is also extremely dangerous to put supporters/sympathizers together with the ideologues or the militants in prisons, as they can radicalize the supporters. 35

Comprehensive and Systematic Action to Counter Terrorism and Radicalism Counter Terrorism Hard Approach Intelligence/Military Operation Law Enforcement Rehabilitation/Deradi calization 1. Intelligence cooperation and exchange information between Southeast Asia countries and their neighbours/counterparts are important to counter ISIS movement. 2. Media campaign and deradicalization involving moderate muslim organizations such as Nahdlatul Ulama and Muhammadiyah in Indonesia. Soft Approach Counter Radicalism/Media Campaign 3. Synergy and good coordination between institutions such as police, army, and intelligence body in the form of information exchange and joint operation. Synergy and Coordination 36

Drugs Cases Increase by 13.5% from 2014 to 2015 K A S U S NO TAHUN NARKOTIKA PSIKOTROPIKA BAYA PSIKOAKTIF BARU OBAT- OBATAN JUMLAH TREND % 1 2010 17.834 1.181 7.599 - - 26.614 2 2011 19.045 1.601 9.067 - - 29.713 11,64 % 3 2012 18.977 1.729 7.917 - - 28.623 3,67 % 4 2013 21.119 1.612 12.705 - - 35.436 8,86 % 5 2014 22.750 835 10.891 4 989 35.469 0,09 % 6 2015 27.950 885 9.837 2 1.579 40.253 13,49 % Source: National Police 37

HIV Prevalence Rate is High in Papua and West Papua Region Source: Department of Health 38

Drugs and Narcotics Abuses Indonesia is One of the Main Markets in Asia Currently Indonesia is one of the main drug markets in Asia. We estimate that there are around 5.1 to 5.6 million drug users in Indonesia, increased sharply form around 4.2 million in 2011. Rehabilitation for Drug Users We separate drug users (victims) from drug dealers. Rehabilitation, both medical and social, is compulsory for drug users who are not involved in the selling of drugs. Severe Punishments for Drug Dealers 75% drug dealers in custody are still controlling their drugs businesses from inside the prisons. Isolated/confined/remote prisons for drug dealers to be constructed. Death penalty for drug dealers. 39

Resolution for South China Sea Dispute In our view, there is potential conflict in South China Sea. Indonesia has a duty to participate in resolving this potential conflict by initiating Code of Conduct (CoC). As to China nine-dash line, Indonesia considers such claim as lacks of international legal basis. China Reclamation in Subi&Mischief Reef Sept 2015 Therefore, Indonesia urges all countries involving in South China Sea dispute should restrain from any provocative action that may disturb stability in that region. We refuse any power projection from any country in that region. Resolution on this dispute should be based in a good faith and peaceful dialog/negotiation, and the unity of ASEAN is important to resolve this potential conflict. Source: UNCLOS, CIA, RSIS 40

Public Satisfaction to Government Performance is Increasing Overal Satisfaction to Government is Increasing in August 2016 compare to October 2015 Public Satisfaction to Government Based on 4 Key Issues 70.0% 60.0% 50.0% 50.6% 66.5% 48.20% 70.0% 60.0% 50.0% 46.8% 51.1% 62.1% 53.0% 63.9% 59.4% 40.0% 30.0% 32.8% 40.0% 30.0% 30.0% 40.0% 20.0% 20.0% 10.0% 10.0% 0.0% 1.20% 0.7% Satisfied Non Satisfied Others 0.0% Economy Law Politic October 2015 August 2016 October 2015 August 2016 Source: CSIS 41

Thank You Gen. Army (Ret) Luhut B. Panjaitan Acting Energy and Mineral Resources