Indonesia & East Timor News Updates - August 15, 2018

* Ma'ruf 'orchestrated' Jokowi's VP choice, says Mahfud
* Indonesia polls: Jokowi's social media presence overwhelms Prabowo's by far
* Indonesia steps up forest, land fire prevention to ensure haze-free Asian Games
* Indonesia tops destination for international schools in Southeast Asia: Report
* Government debt reaches Rp 4.25 quadrillion in July
* Trade deficit swells to US$2.03b in July
* FDI declines in Q2, investors wary of weakening rupiah, trade war
* Indonesia considers reducing imports of 500 consumer goods
* Spy row a threat to Australia's ties with Timor-Leste


Ma'ruf 'orchestrated' Jokowi's VP choice, says Mahfud

Jakarta Post - August 15, 2018

Karina M. Tehusijarana, Jakarta -- Former Constitutional Court chief justice Mahfud MD has said that vice presidential candidate Ma'ruf Amin was behind the statement from Islamic mass organization Nahdlatul Ulama (NU) that "threatened" to withdraw its support for President Joko "Jokowi" Widodo if the incumbent picked Mahfud as his running mate.

In a tell-all appearance on popular talk show Indonesia Lawyer's Club, Mahfud provided details on the circumstances surrounding the surprise announcement of Ma'ruf as Jokowi's running mate.

"[NU executive] Robikin delivered the statement and Kiai Ma'ruf Amin was the one who ordered it," he said. "How do I know it was Kiai Ma'ruf Amin? Muhaimin told me," he said, referring to National Awakening Party (PKB) chairman Muhaimin Iskandar.

The day before Jokowi's choice of Ma'ruf was announced, NU executive Robikin Emhas stated that the NU leadership wanted Jokowi to pick an NU member for running mate.

"If the vice presidential candidate is not from among the NU's ranks, then the Nahdliyin [NU followers] will feel no moral responsibility to help [Jokowi] win," he told reporters, adding that the NU did not consider Mahfud to be a member.

Mahfud said that Muhaimin told him it was Ma'ruf who dictated the statement to Robikin with instructions to give it to the press.

Mahfud was considered a near certainty as Jokowi's vice president in the days leading up to the close of the presidential candidate registration, but Indonesian Ulema Council (MUI) chairman and NU Rais Aam (supreme leader) Ma'ruf was given the nod instead.

"On August 1 at 11 pm, I was invited by State Secretary Pratikno [to his house]," Mahfud said. "I was told, 'Pak Mahfud, now the [running mate] choice has narrowed down to you, please get ready.'"

He added that he had heard from Jokowi himself that the change had been made at the last minute to appease the parties in Jokowi's coalition. Mahfud implied that the PKB, the NU's unofficial political arm, was one of the parties that had pressured Jokowi into making the switch.

Mahfud is closely affiliated with the NU, having been educated at an NU-run pesantren (Islamic boarding school) and for his long involvement in NU-related organizations such as GP Ansor, the NU's youth wing, and the Wahid Institute.

However, in the weeks before the VP announcement, NU executives seemed to play down Mahfud's involvement in the organization, and things came to a head with Robikin's statement.

NU and PKB representatives did not immediately respond to The Jakarta Post's requests for a comment. (swd)



Indonesia polls: Jokowi's social media presence overwhelms Prabowo's by far

Asian Correspondent - August 15, 2018

Indonesian President Joko "Jokowi" Widodo's presence on social media far outweighs that of his sole opponent, Prabowo Subianto, barely a month before the republic's election campaign season goes into full swing.

Jokowi is dominating on Twitter with 10.2 million followers while Subianto has only a third of the figure at 3.17 million followers, Bloomberg reported.

On Instagram, Jokowi's 10.8 million followers outnumber Prabowo eight-to-one, but the incumbent president is behind Prabowo on Facebook with one million fewer followers.

With more than half a million followers on YouTube, Jokowi regularly updates his channel with vlogs but Subianto does not appear to have a dedicated channel.

With over 100 million smartphone users in the country, social media is expected to be a key battleground for the two politicians who are wooing an estimated 70 million first-time voters. And until polling day in April next year, the candidates are expected to be using technology like never before.

On Thursday, Jokowi announced the selection of 75-year-old Islamist cleric and nonpolitical party figure Ma'ruf Amin as his vice-presidential candidate as he looks to boost his Islamic credentials.

Ma'ruf's selection comes at a time when the Muslim-majority country is experiencing the decline of its pluralistic brand of Islam and the rise of religious fundamentalism promulgated by influential far-right groups.

Prabowo had picked the deputy governor of Jakarta, Sandiaga Uno to be his running mate. The two Jokowi opponents are nationalists with deep ties to the business and military elite, as well as popular ultraconservative religious groups like the Islamic Defenders Front (IDF).

An observer said although the president has consolidated his Islamic image with Ma'ruf by his side, Jokowi faces another challenge in the form of youth voters interested in his running mate's opponent, Sandiaga, who is a younger candidate.

Sandiaga has 1.5 million followers on Instagram and nearly a million followers each on Facebook and Twitter, while Ma'ruf has only 105,000 Instagram followers and no verified Twitter account. Ma'ruf's last Facebook post was in Feb 2016.

However, Jokowi, who is regularly seen sporting T-shirts and jeans and who has a love for superbikes and heavy metal music, might be more popular among the millennials than 66-year-old Subianto, a former armed forces general.

"The number of millennials could be about 40 to 50 per cent of total voters," said Usep Ahyar, a director at Populi Center, a Jakarta-based pollster, told Bloomberg. "Candidates who can secure the millennials have a bigger chance to win the election."



Indonesia steps up forest, land fire prevention to ensure haze-free Asian Games

Straits Times - August 15, 2018

Jakarta -- The government is determined to carry out all necessary measures to prevent forest and land fires from spreading on the island of Sumatra, as the Asian Games are set to kick off on Saturday (Aug 18) in Jakarta and Palembang, South Sumatra, at the peak of the dry season.

Coordinating Political, Legal and Security Affairs Minister Wiranto held a meeting on Tuesday (Aug 14) with relevant officials, discussing anticipatory measures to address the potential increase in hot spots.

"Learning from our experience... and with solid coordination (among stakeholders) as well as proper procedures in both prevention and mitigation, all regions are prepared to mitigate potential forest fires," General Wiranto said on Tuesday.

"We need to work hard to ensure that South Sumatra will be haze-free. Weather forecasts say that the peak of the dry season will happen during the Asian Games," he added.

The Meteorology, Climatology and Geophysics Agency (BMKG) detected 169 hot spots in Sumatra Island on Tuesday, with 47 hot spots in South Sumatra alone. Riau recorded an increase in hot spots to 90 from 65 on the previous day, while there were 11 hot spots in Jambi and 55 hot spots in Bangka Belitung province.

The Environment and Forestry Ministry's director-general of climate change Ruandha Agung Sugadirman said a coordinated team, including police and Indonesian Military (TNI) personnel, routinely carried out patrols in areas prone to forest fires.

Sixteen helicopters have been on standby across South Sumatra and can be deployed for water bombing at any time when forest fires are detected. Another 10 helicopters are also on standby in Riau, director-general Ruandha said.

The government has also used 51 tonnes of salt to intensify cloud-seeding operations to help stimulate rainfall since May, he said, adding that rain had fallen in the province from Monday evening to Tuesday morning. "As long as the land and peatlands are wet, fires will not occur," he added.

-- The Jakarta Post/Asia News Network



Indonesia tops destination for international schools in Southeast Asia: Report

Jakarta Post - August 15, 2018

Jakarta -- Indonesia remains a leading destination for international schools in Southeast Asia, according to ISC Research data announced on Tuesday.

The data, which was released ahead of the GESS Indonesia education exhibition and conference slated for Sept. 26-28 at the Jakarta Convention Center, shows Indonesia leading the region with 198, followed by Thailand with 192, Malaysia with 187, Singapore with 119 and Vietnam with 118.

"The growth of the international schools' sector in Indonesia is a testament to the far-reaching education reforms being undertaken by the government, with significant inputs from the private sector. We intend to support this development by gathering some of the world's leading experts to share their insights on the latest education trends," said the project director of GESS Indonesia organizer Tarsus F&E, Matt Thompson in a statement.

Additionally, the report reveals that student enrollment in Indonesia's international schools has also grown from 53,000 in 2013 to 61,000 in 2018.

"Mid-price range international schools are increasingly in demand, particularly by local families and Asian expatriates and this is where there is most growth in the market," said ISC Research's head of Southeast Asia research Sam Fraser.

As the world's fourth most populous country and the largest in Southeast Asia, Indonesia is considered a hotbed of opportunities for education-related UK companies, according to the British Educational Suppliers Association (BESA).

"Sixty percent of global growth is expected to come from Asia by 2025. Indonesia is part of ASEAN which has a free trade zone. It is also strategically placed to do business with China, Japan and Australia," said William Prieto-Parra, the head of events -- UK & International at BESA.

GESS Indonesia is said to feature educational talks and workshops, including the latest technological advances as supporting tools for educators. It will also host discussions on bullying, creativity in classrooms, and adopting technical/vocation literacy in the early years.



Government debt reaches Rp 4.25 quadrillion in July

Jakarta Post - August 15, 2018

Jakarta -- The Finance Ministry recorded Rp 4.25 quadrillion (US$290.33 billion) of government debt in July, slightly higher than the figure in the previous month, said Finance Ministry financing and risk director general Luky Alfirman on Tuesday.

He said the figure was equal to 29.74 percent of the country's gross domestic product (GDP), lower than 29.79 percent in the previous month.

The realization of debt financing in July reached Rp 205.6 trillion, or 51.5 percent of the target in the state budget, which was set at Rp 399.2 trillion, he said.

Up to July, the government's debt paper (SBN) issuance had reached 61.3 percent of the target in the state budget, with a total value of Rp 221.9 trillion, Luky added.

"It is still on the track up to the end of the year," he said, as quoted by, adding that SBN issuance had tended to decrease since 2016.

The government collected Rp 312.5 trillion from SBN issuance in 2016 and Rp 307.6 trillion in 2017, he said, adding that this was in line with the government's program to reduce government debt, manage cash-flow and control financial market volatility. (bbn)



Trade deficit swells to US$2.03b in July

Jakarta Post - August 15, 2018

Rachmadea Aisyah, Jakarta -- High imports of oil and gas, consumer goods and raw materials dragged the trade deficit to US$2.03 billion in July; the largest deficit recorded this year, according to the Central Statistics Agency (BPS).

Indonesia recorded a trade surplus of US$1.74 billion in June. The BPS said on Wednesday that an increase in exports had not been able to balance soaring imports.

Imports increased 62.17 percent from June to $18.27 billion, which was also 31.56 percent growth year-on-year (yoy).

Imports of consumer goods rose even higher than overall imports to $1.72 billion, up 70.50 percent month-to-month (mtm), followed by raw and auxiliary material imports to $13.67 billion, a 59.28 percent increase mtm, said BPS head Suhariyanto.

"That is hopefully an indication that [imports] will be able to boost investment and economic growth," Suhariyanto said Wednesday in Jakarta.

Meanwhile, exports in July increased 25.19 percent from June and 19.33 percent yoy at $16.24 billion, helped by non-oil and gas exports, which had increased by 31.18 percent to $14.81 billion.

Indonesia's trade balance has been suffering this year, having only recorded a trade surplus in March and June, owing to high global oil prices and strengthening of the United States dollar. (bbn)



FDI declines in Q2, investors wary of weakening rupiah, trade war

Jakarta Globe - August 15, 2018

Adinda Normala, Jakarta -- Foreign direct investment in Indonesia declined by 12.9 percent to Rp 95.7 trillion ($6.66 billion) in the second quarter, compared with the same period last year, the Investment Coordinating Board, or BKPM, said on Tuesday (14/08).

The board cited the weakening rupiah and a possible negative impact of the trade war between China and the United States as investors take a wait-and-see approach.

Azhar Lubis, deputy chairman for investment control and implementation at BKPM, said this was the first quarterly contraction since 2013. In the first quarter last year, FDI realization stood at Rp 109.9 trillion.

Combined with the first quarter FDI realization, which stood at at Rp 108.9 trillion, investment realization in January-June was Rp 204.6 trillion.

"Amid uncertainties, investment usually slows down. Investors are now in wait-and-see mode," BKPM chairman Thomas Lembong told reporters on Tuesday.

BKPM's data excludes investment in the banking and oil and gas sectors.

The rupiah declined to its lowest since October 2015, standing at 14,625 a dollar on Monday morning, and weakened further to 14,630 a dollar by 12:42 p.m., according to Reuters' spot exchange rate.

Full-year target at risk?

Singapore remains the biggest source of investment, with $2.4 billion, followed by Japan, China and Hong Kong. Sectors that received the biggest investment were mining, industry, estate, utilities, metallurgy and transportation.

Meanwhile, domestic direct investment (DDI) grew 32.1 percent to Rp 80.6 trillion, compared with the same period last year. Most of the DDI was in transportation, mining, the food industry, utilities and plantations.

With weak FDI in the second quarter and careful investors, the board said the FDI target of Rp 477.4 trillion this year may be hard to reach.

"Unless we can stabilize or convince the market and investors that the rupiah has achieved stability, investors will tend to wait and see or delay [their investment]. Rupiah stability is important for investment sentiment," Thomas said.

The government's plans to reduce imports of raw materials and capital goods to help narrow the current account deficit gap and prop up rupiah value by delaying some infrastructure projects, also pose threats to investment.



Indonesia considers reducing imports of 500 consumer goods

Jakarta Post - August 15, 2018

Marchio Irfan Gorbiano, Jakarta -- Finance Minister Sri Mulyani said on Tuesday the Finance Ministry, together with the Industry Ministry and Trade Ministry, would team up to identify more than 500 imported consumer goods that could be replaced by local substitutes.

The Finance Ministry's fiscal policy head Suahasil Nazara said the import reduction measures for consumer goods were under discussion and that the ministry would issue a regulation on the matter.

"We are signaling that imported consumer goods that have locally-produced substitutes would be identified for an additional import income tax or duty," he said.

Indonesia imported consumer goods worth US$8.18 billion during the first half, up 21.64 percent compared to $6.73 billion over the same period last year, data from the Central Statistics Agency show.

Despite the increase, consumer goods represented a relatively small share of the country's total imports at 9.19 percent, compared to the share of raw materials and capital goods at 74.67 percent and 16.14 percent respectively.

The rupiah appreciated slightly by 0.16 percent to Rp 14,584 per United States dollar on Tuesday from Rp 14,615 a day earlier. After depreciating in the past few months, the rupiah is facing new pressures from global concerns that Turkey, also an emerging market, is heading toward a serious crisis.

Meanwhile, the current account deficit widened to $8 billion in the second quarter from $5.7 billion a quarter earlier. The latest figure was equal to 3 percent of the country's GDP.

The deficit in the current account means the country imported more goods and services compared to those it exported, adding to currency vulnerabilities as it needs foreign capital to fulfill demand in the domestic foreign exchange market. (bbn)



Spy row a threat to Australia's ties with Timor-Leste

Straits Times - August 15, 2018

Australian Foreign Minister Julie Bishop has held the position for five years but made her first official visit to Timor-Leste, a country Australia helped found, only two weeks ago.

In promising a "new chapter" in the bilateral relationship, Ms Bishop aimed to end a period of testy ties over the placement of the maritime boundary and the division of a lucrative US$65 billion (S$89 billion) in oil and natural gas reserves.

But the conciliatory move has been undermined by a spy scandal that threatens to do more damage.

About five years ago, a former Australian spy revealed that Canberra had bugged Dili's Cabinet offices during sensitive negotiations over the maritime boundary in 2004.

Australia has now angered Timor-Leste by announcing it would prosecute the spy -- known only as "Witness K" -- and his Australian lawyer, Mr Bernard Collaery, for revealing state secrets.

Witness K, reportedly a former head of technical operations for the Australian Secret Intelligence Service, allegedly helped to install listening devices under the cover of office refurbishment work that was part of Australia's aid programme. The decision to prosecute the duo has been denounced by prominent figures, including current and former Members of Parliament and judges, as well as Human Rights Watch.

A legal expert at the University of New South Wales, Professor David Dixon, said Australia's actions were vengeful and "shameful". "Their real offence was not breaching secrecy, but embarrassing Australia," he wrote in Fairfax Media newspapers last month.

For Australia, the prosecution has revived a long-running debate over the nation's approach to Timor-Leste. Australian activists were at the forefront of the campaign to secure the nation's independence from Indonesia and the Australian military led the peacekeeping effort as Indonesia withdrew in 1999.

Canberra's subsequent close ties with the fledgling nation grew as its military remained in Timor-Leste until 2013 to help quell civil unrest.

But the maritime boundary dispute seriously frayed relations. It was brought before the Permanent Court of Arbitration but finally ended when the two countries signed a treaty in March.

The new treaty will deliver 70 to 80 per cent of the revenue from the undersea resources to Dili and the remainder to Canberra. This was more favourable to Timor-Leste than the original deal, which split the reserves between the two. The treaty paved the way for warmer ties and for Ms Bishop's visit.

Asked about the prosecutions, Ms Bishop said the move was "a domestic legal issue" and not directed at Timor-Leste. But the prosecutions have cast a new shadow over Australia's handling of ties with its small, poorer neighbour.

Former Timor-Leste president Jose Ramos-Horta, a Nobel Peace Prize winner, has urged Canberra to drop the prosecutions, saying the duo had not committed treason. "It was a case of moral conscience... that had zero impact on Australian national security," he said.

The federal government's decision to prosecute the pair was revealed in Parliament in late June by independent MP Andrew Wilkie, a former intelligence official who famously came to prominence in 2003 after resigning and speaking out against assessments of Iraq's weapons programme in the lead-up to the Iraq war.

He and three other MPs also urged the police to investigate the initial decision to spy on Timor-Leste. He said Mr Collaery and Witness K were "political prisoners".

"It's time to get to the bottom of this shameful chapter in Australian history when we sold out an old friend for commercial gain," he said.
A version of this article appeared in the print edition of The Straits Times on August 15, 2018, with the headline 'Spy row a threat to Australia's ties with Timor-Leste'.



Asia Pacific Solidarity Network (APSN)