[Kabar-indonesia] 19 RI Biz/Econ Reports: Budget Deficit Likely 1.1% Of GDP; Tobacco Tax; Nissan

[JoyoNews at aol.com]

19 Reports:

- Indonesia Financial Minister: 07 Budget 
  Deficit Likely 1.1% Of GDP
- Indonesia President: Export Growth Needs 
  Political Stability
- Indonesia says may lift tobacco tax,
  minimum prices
- Indonesia government proposes higher
  '07 bond issues
- Bank Indonesia awards 26 trln rupiah worth 
  of 1-mth SBIs at fixed rate 10.75 pct
- JP: BII launches promotions to clean up 
  in holiday season 
- Indonesia Deposit Insurance Corp cuts
  rupiah deposit rate to 10.75 pct
- Indonesia Bank Jabar To Issue Up To
  IDR1T In 5-Year Bonds
- Indonesia's Astra Intl Sept car sales
  18,300 units vs 14,872 in Aug
- Stock alert - Indonesia's Astra Intl higher
  after rise in vehicle sales for Sept
- Chinese small car Chery QQ makes
  good start in Indonesia
- Japan's Nissan Motor to introduce
  Rivina mini-van in Indonesia
- Lippo Buys Sentosa Condominium Site
  For $817.66 psf
- Japan agrees to modify terms for
  Jakarta's MRT project
- Russia, Indonesia sign bilateral trade,
  investment cooperation deal
- Indonesia intensifies effort to lure
  Taiwanese investors
- Brazil To Pressure WTO On
  Indonesia Beef Ban -Report
- China, Asean speed up tariff
  reduction process
- Indonesia palmoil mostly easier on
  Malaysia, soyoil

Indonesia Financial Minister: 07 Budget Deficit Likely 1.1% Of GDP

JAKARTA, October 11 (Dow Jones)--Indonesia's government is seeking 
a higher deficit in the 2007 state budget from the originally proposed
amount as it plans to spend more, Finance Minister Sri Mulyani
Indrawati said Wednesday.

The government will propose a deficit equal to 1.1% of gross domestic
product for 2007, from the 0.9% that President Susilo Bambang
Yudhoyono announced in August, Mulyani told reporters.

"At that level (1.1% of GDP), the deficit will remain safe and
manageable," she said.

The minister said the government plans to increase spending next year
to IDR763.6 trillion from the IDR746.5 trillion it originally planned,
but she didn't elaborate.

The government will also increase the target for net bond issues next
year to IDR40.6 trillion from the previously planned IDR34.2 trillion
due to the higher deficit, she said.

Parliament must approve the higher deficit proposals, and a decision
is expected before the end of the year.

----------------------------------

Indonesia President: Export Growth Needs Political Stability

JAKARTA, October 11 (Dow Jones)--The total value of Indonesia's
exports may reach $100 billion by the end of this year, but continued
strong growth may hinge on political and legal stability, President
Susilo Bambang Yudhoyono said Wednesday.

"We expect that, by the end of 2006, the value of exports from
Indonesia to other countries will reach $100 billion," Yudhoyono told
reporters prior to the launching of an export product exhibition in
Jakarta.

"To realize continued growth in exports, political stability will
continue to be created, and policies will be integrated," he said.

"We will implement synchronization of policies between the capital and
(outlying) regions, aimed at pushing export growth." [ 11-10-06
0540GMT ]

Indonesia this year leapfrogged 19 spots to 50th place in the world
Economic Forum Global Competitiveness Report, with export growth a
strong driving factor behind its surge.

"In 2005, Indonesia's exports reached $85.7 billion, while in the
January to August period of 2006 (export value) rose 17.1% (on year),
or as much as $64.6 billion," Yudhoyono said.

While Yudhoyono didn't elaborate on his comments regarding political
stability, foreign entrepreneurs have in the past viewed resource-rich
Indonesia as a shaky investment climate due to rampant corruption in
the legal system and the decentralized nature of its government.

The sprawling nation is made up of many provinces populated by
historically disparate ethnic groups, and some provincial governments
are allowed a degree of autonomy by the central government.

This can lead to unclear chains of command between provincial and
central governments, which have sometimes raised concerns among
producers of export commodities.

Foreign mining companies in particular have encountered problems with
their operations in remote regions, and some have said Indonesia's
legal system doesn't adequately protect foreign investors.

The provincial and central governments have also wrangled over
regulations regarding mining concessions, sparking fears among
investors that Indonesia presents a risky regulatory environment.

Resolving these policy disconnects and creating legal certainty will
be vital to maintaining strong export growth, Yudhoyono said.

----------------------------------

Indonesia says may lift tobacco tax, minimum prices

JAKARTA, October 11 (Reuters) - Indonesia may raise minimum retail
prices and excise tax rates for cigarettes in a bid to meet the
country's excise tax revenue target in 2007, a senior finance ministry
official told reporters on Wednesday.

The country intends to raise its overall excise revenue target to 42
trillion rupiah ($4.55 billion) next year, up around 10 percent from
38.5 trillion this year.

In the case of cigarettes, which accounts for the bulk of excise
revenue, the government has not made it clear whether it would
increase the excise rate or the government-set minimum prices, which
serve as a base for calculating the excise.

"We might combine it, raising the minimum retail prices and the excise
tax rate," Anwar Suprijadi, director of excise and customs, told
reporters on the sidelines of a parliamentary hearing.

"We have proposed the hike take place early next year, but some people
from the (cigarette) industry have suggested it be done later, in the
middle of the year."

The government is currently having discussions with tobacco industry
associations over when a possible hike could be made without harming
the industry, Suprijadi added.

Analysts said that a possible 10 percent hike in the excise revenue
target was unlikely to significantly hurt tobacco firms, some of which
are among the largest listed firms on the Jakarta stock market, as a
rise had largely been discounted.

"The hike had been largely expected. There won't be any detrimental
impacts on production volume," said a Jakarta-based tobacco analyst
with a local brokerage firm.

Indonesia's tobacco industry supports about 7 million people and
budget figures show the sector accounts for about 10 percent of the
country's tax revenue.

Cigarette makers such as Gudang Garam and Sampoerna are among the
biggest blue chips on the stock exchange. Tobacco giant Philip Morris
International bought Indonesia's third-biggest cigarette producer,
Sampoerna, for around $5 billion last year.

The finance ministry expects cigarette firms in Indonesia to to
produce 220 billion sticks this year, unchanged from last year but
well below a peak of 239 billion in 2000 before Jakarta stepped up its
moves to hike cigarette tax revenue.

-------------------------------------------------------------

Indonesia government proposes higher '07 bond issues

JAKARTA, October 11 (Reuters) - The Indonesian government has proposed
revising up net bond issues in 2007 to help plug a wider budget
deficit and seeks to raise spending to stimulate Southeast Asia's
biggest economy, the finance minister said on Wednesday.

The proposal to revise up net bond issues to 40.6 trillion rupiah
($4.40 billion) from a previous forecast of 34.27 trillion for 2007
was submitted to a parliamentary working committee on Wednesday. Full
parliamentary approval is expected later this month.

"The net bond issues in 2007 have to be increased to 40.6 trillion
rupiah," Sri Mulyani told a parliamentary hearing on Wednesday, citing
the move was needed to help plug an expected higher budget deficit in
the year.

Net bond issues are total government bond issues minus maturing bonds
and buybacks.

The Indonesian government and a parliamentary working committee are
also currently discussing the prospect of slightly revising up the
estimated budget deficit for 2007.

The government has proposed raising the state budget deficit to 1.1
percent of gross domestic product from 0.9 percent in the original
draft budget.

It expects to spend around 763.6 trillion rupiah in 2007, larger than
the previous draft budget of 746.5 trillion. "This is partly because
we would like to give more fiscal stimulus," the finance minister told
parliament.

Many analysts believe higher spending is needed to stimulate the
economy, after household consumption was squeezed by a big rise in
fuel prices last October.

-----------------------------------------------------------

Bank Indonesia awards 26 trln rupiah worth 
of 1-mth SBIs at fixed rate 10.75 pct

JAKARTA, October 11 (XFN-ASIA) - - Bank Indonesia has awarded 26 trln
rupiah worth of one month Bank Indonesia Certificates (SBIs) at its
regular auction at a fixed interest rate of 10.75 pct.

The auction absorbed 91.14 pct of bids.

In its previous acution of 1-month SBI's, the fixed rate awarded was 11. 25 
pct.

The SBI rate is pegged to the central bank's key policy rate, BI rate,
which was cut by 50 basis points to 10.75 pct last week.

-------------------------------------

The Jakarta Post
October 11, 2006

BII launches promotions to clean up in holiday season 

The Jakarta Post, Jakarta

Spend hard, save hard. That might be the message Bank International Indonesia 
(BII) wants to convey to its customers with two new promotions launched 
Tuesday to greet the holiday season.

The upcoming Idul Fitri, Christmas and New Year celebrations are times when 
most Indonesians have extra cash in their pockets and celebrate consumerism 
with shop-till-you-drop determination -- a situation that the nation's sixth 
largest bank is eager to take full advantage of. 

"We know that there will be a lot of people receiving annual bonuses, which 
will encourage them to either save or spend more. Our new promotions are 
designed to provide answers to these choices," BII general manager Sudono J. Wong 
told The Jakarta Post after the launch of the bank's Cash-Bonus and Cash-Back 
promotions. 

The Cash-Bonus promotion, aimed at potential new customers, is designed to 
encourage people to open a BII Gold Rupiah Saving Deposit account. New customers 
that manage to keep a minimum of Rp 10 million (US$1,084) in their accounts 
for three months will receive a bonus of Rp 300,000, which will be credited 
directly to their accounts. 

The bonus comes on top of regular interest payments. 

As for big spenders, the bank is offering its new Cash-Back promotion, which 
is aimed only at the bank's existing debit cardholders. 

Customers who make minimum purchases worth Rp 5 million in a month and 
maintain a minimum average balance of Rp 10 million will be paid a bonus of Rp 
500,000. The precise amount of the cash-back bonus will fluctuate in line with the 
value of both purchases and the average balance. 

The Cash-Bonus promotion will run from Oct. 9 to Dec. 31, while the Cash-Back 
promotion lasts from Oct. 1 to Nov. 31 2006. 

The bank hopes the two new promotions will attract up to 30,000 new 
customers, Sudono said. 

BII consumer banking director Rudy N. Hamdani said the Cash-Bonus scheme was 
part of BII's efforts to boost its third-party funds by around Rp 75 billion. 

BII successfully attracted Rp 34.39 trillion in third-party funds in the 
first semester of 2006, an increase of 19 percent compared to the same period in 
2005, when the equivalent figure stood at Rp 31.43 trillion. 

"The Cash-Back promotion is being offered as a token of appreciation to BII's 
Gold and Platinum ATM/Debit Cardholders, as well as being intended to 
increase the use of these cards for purchase and payment transactions," Rudy said. 

Currently, the total number of holders of these cards stood at 17,000, he 
said, with that figure expected to hit some 47,000 as a result of the Cash-Back 
promotion. 

BII recently reported a second-quarter net profit of Rp 352 billion. 

-----------------------------------

Indonesia Deposit Insurance Corp cuts rupiah deposit rate to 10.75 pct

JAKARTA, October 11 (XFN-ASIA) - Indonesia Deposit Insurance Corp,
which guarantees bank deposits, said it has cut its maximum rupiah
deposit rate by 50 basis points to 10.75 pct for the Oct 15-Nov 14
period.

The cut follows Bank Indonesia's decision last week to reduce its key
policy rate, called the BI rate, also by 50 basis points to 10.75 pct.

Beginning Sept 22, the guarantee scheme applies only to personal
deposits in banks of up to 1 bln rupiah, against from 5 bln
previously.

The maximum amount eligible for the scheme will fall further to 100
mln rupiah from March 22, 2007.

--------------------------------------------------------------

Indonesia Bank Jabar To Issue Up To IDR1T In 5-Year Bonds

JAKARTA, October 11 (Dow Jones)--PT Bank Jabar will issue between
IDR750 billion and IDR1 trillion of five-year bonds later this year to
raise cash for new loans, the bank said Wednesday.

The bank, which is owned by West Java's provincial government, will
start book building on Monday and end Nov. 6. It plans to list the
paper on the Surabaya Stock Exchange on Dec. 4, the bank said in a
preliminary prospectus.

The Bandung-based lender will pay the coupon, which will be determined
later, every three months, and it has an option to buy back the
proposed bonds after one year.

Local rating agency PT Pefindo has rated the issue A- with a stable outlook.

PT CIMB-GK Securities Indonesia and PT Indo Premier Securities are
joint-book runners for the issue.

Bank Jabar booked IDR208.27 billion in net profit during the first
six-months of 2006, after recording IDR320.79 billion in net profit
for full 2005.

The bank is one of several companies planning to tap the local debt
market as interest rates continue to fall in Indonesia. Property
developer PT Bumi Serpong Damai is offering IDR600 billion in
five-year bonds at an annual coupon of 15%.

---------------------------------------------------------------

Indonesia's Astra Intl Sept car sales 18,300 units vs 14,872 in Aug

JAKARTA, October 11 (XFN-ASIA) - PT Astra International sold 18,300
vehicles in the local market in September, up from 14,872 units in
August, general manager Richard Santosa said.

He said the September sales were the highest for any month in the year to 
date.

He added that Toyota sales accounted for 73 pct of the group's total
sales in September.

-------------------------------------------------------------------

Stock alert - Indonesia's Astra Intl higher after rise in vehicle sales for 
Sept

JAKARTA, October 11 (XFN-ASIA) - PT Astra International was higher
following news of a pickup in car sales in September.

The stock rose 400 rupiah or 3.0 pct to 13,700.

The firm said earlier that it sold 18,300 vehicles in the local market
in September, up from 14,872 in August.

A dealer with a state brokerage said the rise in the stock price
suggests investors are becoming more optimistic that demand for
vehicles is picking up against a backdrop of declining domestic
interest rates.

------------------------------------------------------------------

Chinese small car Chery QQ makes good start in Indonesia

JAKARTA, October 11 (Xinhua) -- Since its launch on the Indonesian
market last month, Chinese small city car Chery QQ has booked sales of
200 units with more on the waiting list, the local distributor said
Wednesday.

"We don't expect the demand will be quite big. We also have orders on
the waiting list," said Gunadi Shinduwinata, president of the
country's leading automotive distributor Indomobil Group.

Given the promising market, Indomobil plans to open 11 new outlets
across Java and Bali islands, he said.

Manufactured by Chery Automobile Co. Ltd., the 800-cc car is priced at
around 67 million rupiah (7,334 U.S. dollars), available in standard
and luxury models.

The manufacturer claimed Cherry QQ has the best mileage in its class,
with 25 km per liter of gasoline.

Indomobil has targeted sales of 1,000 units by the end of the year.

-----------------------------------------------------------------

Japan's Nissan Motor to introduce Rivina mini-van in Indonesia

TOKYO, October 11 (XFN-ASIA) - Nissan Motor Co will begin selling its
Rivina seven-seat mini-van in Indonesia in early 2007, the company
said.

The Rivina is due to be launched in China next month.

Nissan Motor said it and its Indonesian sales partner, PT Indomobil
Sukses Internasional, were spending 7.14 bln yen on expanding their
dealer network in Indonesia to 48 in 2008 from 42 now and on building
an assembly line for the Rivina.

The introduction of Rivina is part of a broader effort to boost sales
in Indonesia to 40,000 in 2008 from 10,551 last year.

-----------------------------------------------------------------

Lippo Buys Sentosa Condominium Site For $817.66 psf

SINGAPORE, October 11 (Dow Jones)--A unit of Indonesia's Lippo Group
(LPG.YY) has bought a waterfront condominium site on Singapore's
resort island of Sentosa for S$234.7 million, the government-linked
company handling the sale said Wednesday.

Sentosa Cove Pte. Ltd. said Lippo Global Assets Ltd. beat six other
bidders for the 2.2 hectare Marina Collection site with a bid that
worked out to S$817.66 per square foot per plot ratio.

Lippo can build a condominium of up to four storeys, with a maximum of
170 units, Sentosa Cove said.

------------------------------------------------------------------

Japan agrees to modify terms for Jakarta's MRT project

JAKARTA, October 11 (Asia Pulse/Antara) - The Japanese government
represented by Japan Bank for International Cooperation (JBIC) agreed
to modify tied terms for Jakarta's Mass Rapid Transport (MRT) project.

Japan agrees that tender will be open for 40 per cent of the project
content and increase the local content for the 15.4 kilometer subway
between Lebak Bulus and Hotel Indonesia roundabout.

Indonesia has asked for modification of tied terms to reduce costs and
increase local content, which has been the main causes of delay in
reaching the final agreement on the project earlier estimated to cost
US$800 million.

Work was originally expected to started in 2006 for engineering design 
service.

State Minister for National Development Planning Paskah Suzetta said
international tender for the project content is expected to reduce the
cost.

Earlier a consortium of state companies said it could build the
project with a much lower cost of US$500 million.

--------------------------------------------------------------------

Russia, Indonesia sign bilateral trade, investment cooperation deal

JAKARTA, October 11 (Asia Pulse/Antara) - Indonesia and Russia have
agreed to promote bilateral trade and investment cooperation, Trade
Minister Mari E. Pangestu said.

A group of Russians business leaders and investors met Pangestu
yesterday discussing ways of expanding trade and investment
cooperation between the two countries.

Pangestu said after the meeting Russia is a potential market for
Indonesian exports.

In 2005, bilateral trade between Indonesia and Russia was valued at
US$680 million, a 76 per cent increase from the previous year.

In the first half of this year Indonesia exported goods valued at
US$321 million to that country and the amount is estimated to reach
US$700 million by the end of this year, Pangestu said.

Indonesia's imports from Russia include fertilizers, steel and
phosphate, while its main export items are crude palm oil, chemicals,
tea, coconut oil, tobacco, rubber and textiles to that country.

-------------------------------------------------------------------

Indonesia intensifies effort to lure Taiwanese investors

JAKARTA, October 11 (Asia Pulse/Antara) - Indonesia has intensified
its effort to lure Taiwanese investors to the country, as more
Taiwanese foreign investors begin to show interest in Chinese
projects.

"Taiwan has been one of the the big five investors in Indonesia in the
1990s but its investment had dropped in value," Muhammad Lutfi, head
of the Investment Coordinating Board (BKPM) said after attending the
celebration of the 95th Double Tenth Day held by the representative of
the Taipei Economic and Trade Office here on Tuesday night.

Lutfi said Taiwanese investment had dropped drastically from US$3.5
billion in 1997 to US$130 million in 2006. But, its value increased to
US$230 million in Feb 2006, up by 88 pct.

He expressed optimism that Taiwanese investsment would increase in the
future and the board had projected the value at US$2 billion in 2007.

BKPM launched an integrated promotion in Taipei last week to attract
investors with various incentives.

David Y.L. Lin, head of TETO, hoped the promotion would increase
economic cooperation between Taiwan and Indonesia.

He said it would take some time to attract investors to Indonesia.


"But I am optimistic Taiwan investors will come to Indonesia and my
office, in collaboration with BKPM, will facilitate them," Lin added.

--------------------------------------------------------------------

Brazil To Pressure WTO On Indonesia Beef Ban -Report

SAO PAULO, October 11 (Dow Jones)--Brazil will ask the World Trade
Organization Wednesday to investigate Indonesia's ban on Brazilian
beef, the local Estado newswire reported from Geneva.

Indonesia has had a full ban on Brazilian beef since last year because
of foot-and-mouth disease cases in Mato Grosso do Sul and Parana
states. Initially, the island nation banned non-related farm goods as
well, including soymeal and farm equipment. Indonesia agreed to remove
those bans but hasn't agreed to Brazil's request to concentrate the
ban on the two states affected by the disease.

No new foot-and-mouth cases have been reported in Parana since last
year. The last case in Mato Grosso do Sul was reported in early 2006.

Indonesia isn't a major importer of Brazilian beef, but is part of the
$3 billion a year industry's strategy to grow in emerging market
nations.

Brazil will present their case to the WTO committee on sanitary
measures, the newswire reported.

Brazil is the world's No. 1 beef exporter.

------------------------------------------------------------------

China, Asean speed up tariff reduction process

BEIJING, October 11 (Asia Pulse) - China and the 10 members of the
Association of Southeast Asian Nations (ASEAN) are speeding up the
tariff reduction process to facilitate establishment of the free trade
area (FTA), said a senior foreign trade official yesterday in Beijing.

China's average tariff on ASEAN countries' goods was slashed from 9.9
per cent to 8.1 per cent last year, while the ratio will drop to 6.6
per cent next year, said Yin Zonghua, deputy director with the
Department of International Trade and Economic Affairs of the Ministry
of Commerce.

The average tariff level will continue to drop to 2.4 per cent in
2009, and finally in 2010, which is the scheduled time for the
establishment of the China-ASEAN FTA, 93 per cent of products from
ASEAN countries will be tariff-free, according to Yin.

Yin disclosed the tariff reduction plan at the third China-ASEAN FTA
Seminar, which was organized by the ASEAN Committee in Beijing and the
China-ASEAN Business Council.

ASEAN countries have also made similar arrangements, said Yin, citing
Thailand as the example.

Thailand reduced its average tariff for Chinese products from 12.9 per
cent to 10.7 per cent last year, while it plans to further lower it to
2.8 per cent in 2009, according to Yin.

"The practice shows that tariff reduction has remarkably boosted trade
between China and ASEAN," said Yin.

Official statistics show that China's trade with ASEAN totalled
US$130.4 billion last year, with imports valued at US$75 billion and
exports at US$55.4 billion.

In the first eight months of this year, China imported US$56 billion
of products from ASEAN and exported US$44.9 billion. And the total
trade with ASEAN this year is expected to surpass US$150 billion,
according to Yin.

Both China and ASEAN benefit from the tariff reduction practice and
they will achieve win-win results from the FTA, he noted.

China's then Premier Zhu Rongji proposed the establishment of
China-ASEAN FTA in November 2000 and it was approved by leaders next
year.

In November 2002, the leaders signed the Framework Agreement on
China-ASEAN Comprehensive Economic Cooperation, and set the ball
rolling on the FTA.

By 2010, China will establish FTAs with Brunei, Indonesia, Malaysia,
the Philippines, Singapore and Thailand, while Vietnam, Laos, Cambodia
and Myanmar can enjoy five more years of transition.

Besides pushing the development of goods trade, China and ASEAN will
also speed up negotiations on service trade and investment so as to
construct the FTA in a comprehensive way, according to Yin.

Bambang Khaeroni, trade attach with the Indonesia Embassy in China,
said that co-operation between China and ASEAN "has been working
dynamically."

Indonesia has long been involved in regional co-operation initiatives
such as ASEAN and APEC (Asia-Pacific Economic Co-operation), said
Khaeroni.

"These experiences can be implemented to promote strategic
co-operation between China and ASEAN through China-Indonesia bilateral
co-operation," he noted, showing great enthusiasm towards pushing the
establishment of the FTA.

------------------------------------------------------------------

Indonesia palmoil mostly easier on Malaysia, soyoil

JAKARTA, October 11 (Reuters) - Indonesian palm oil prices were mostly
lower on Wednesday, dragged down by losses in Malaysian crude palm oil
futures and soyoil, traders said.

In North Sumatra's Medan, the main port for palm oil exports, crude
palm oil fell to 4,180 rupiah ($0.453) per kg from 4,200-4,225 on
Tuesday.

"The market is tracking losses in Malaysia and soyoil prices in
Chicago," a Medan-based trader said, adding 1,000 tonnes of crude palm
oil changed hands.

By the midday break the benchmark third-month December contract
<KPOZ6> on the Bursa Malaysia Derivatives had dropped 5 ringgit to
1,553 ringgit a tonne ($420).

On Tuesday November soybeans <SX6> on the Chicago Board of Trade
closed 14 cents lower at $5.60-1/2 per bushel -- near a 50-day moving
average of $5.59-3/4.

Losses in Malaysian and Chicago put presure on a PT Astra Agro Lestari
Tbk tender, which failed to sell 2,000 tonnes of palm oil due to low
bids.

The losses were also reflected on the cooking oil market in Jakartam
with olein slightly lower at 4,630 rupiah per kg from 4,650 on
Tuesday.

On the export front, crude palm oil was down, with offers seen at
$427.5 a tonne for October shipment, free on board Belawan, and bids
at $417.5.

November and December shipments were offered at $427.5 per tonne,
while buyers bid $420.

However, there was some demand supporting prices at the state
marketing centre auction in Jakarta, which sells palm oil from state
plantations, with crude palm oil marginally higher at 4,180 rupiah per
kg compared with 4,178 on Tuesday.

------------------------------------------
Joyo Indonesia News Service
------------------------------------------