Category: Investment

The mysterious ways of the KPPU

The Jakarta Post’s front page lead today wonders what is behind the Business Competition Supervisory Commission”s (KPPU) zeal in investigating Temasek’s equity involvement in Indonesia’s telecoms industry.The article contains quotes suggesting that the KPPU may have been inspired by Russian company Altimo to investigate Temasek. The Singapore conglomerate’s movements have by and large been fairly transparent and known to Indonesians for sime time.

The timing of the KKPU’s decision to investigate Temasek now is curious, if not suspicious. More on Russian telco Altimo here.

clipped from thejakartapost.com
KPPU turns up heat on Temasek
Andi Haswidi, The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU), the country’s antimonopoly watchdog, said Wednesday it had uncovered prima facie evidence of monopoly practices by Singapore’s Temasek Holdings in Indonesia’s telecoms industry.

KPPU chairman Muhammad Iqbal told The Jakarta Post that the findings marked the end of the preliminary examination of the case, and the beginning of a more detailed investigation.

“We will start summoning witnesses some time next week, including from Temasek,” Iqbal said.

Iqbal said the evidence that had been uncovered included the fact that there was cross-ownership by Temasek in Indosat and Telkomsel, which violated article 27 of the 1999 Antimonopoly Law.

Temasek owns a 56 percent stake in the SingTel Group, which in turn holds a 35 percent stake in Indonesia’s largest mobile telecoms firm, Telkomsel.

  blog it

Russian ‘mafia’ in town?

It’s amazing the type of information when businesspeople get together. Unspun was in a committee meeting of a chamber of commerce this morning and these are some of the interesting information he’s heard:

  1. The Russian “Mafia” is in town. They are apparently trying to take over some huge business assets, some of which are owned by Temasek right now.
  2. Some investors are finding that once you set up processes, Indonesian workers actually perform very well, better than Chinese workers, in fact. A manufacturing firm here has been winning regional orders on the strength of that.
  3. The number of large advertisements in newspapers for senior executives has dropped by half since the beginning of the year.
  4. USAID chief Bill Frej is bound for Khazakhstan
  5. Where premans are concerned, a group from Ambon calling themselvesKey or Kei are active and are controlling the Kuningan area
  6. Bank Indonesia is putting the screws on foreign banks about employing foreigner. one of the reasons it is doing so is it believes this will help create jobs locally. The unemployed figure apparently is 40 million. The banks argue that unless they have adequate foreign senior workers they can’t expand their businesses and create employment. And so it goes.
  7. Businessmen are complaining that customs are holding up shipments during their clearing process. So some creative types are shipping them throughSumatran ports. It all depends on which contacts the transporters have and where their contacts have been posted to because the customs rotate their staff.
  8. Threat of terrorism down but there is still a need to be vigilant. Small bombs are in, big bombs out.
  9. The retail sector is looking good. There has been an upsurge of consumption over the past two months, according to one retailer.

Have very little idea of the veracity of some of these information, but I thought I’d pass them on.

Malaysia’s TNB pulls out of Tenaga Coal?

In yet another case of Malaysian investment gone sour, Malaysian utility giant Tenaga Nasional Berhad may pull out of  TNB Coal  in  Kalimantan.  See the story here and further reports on the background of the deal here.
When will Malaysians learn that investing in Indonesia is not a stroll in the park, that while the rewards can be great, you got to know the place and the people well to make your investments work?

Anybody home? Minister finally begins to coordinate food distribution

Bisnis Indonesia reports today that Trade Miniser Mari Pangestu says she will meet with relevant authorities, businessmen and retailers TODAY so that she can have accurate information on the food distribution situation as regards to the floods in the Greater Jakarta area.

While it is good that something is being done Unspun cannot help but marvel at the sense of urgency of this government.  Four days after the massive floods begin, nearly 200,000 made homeles, huge logistics problems regarding food and water distribution and the Minister is finally holding a meeting to get information? Did she have to wait until Monday? Why can’t it have been done over the weekend? A clash with the salon appointment?

But why is the Trade Minister getting into the shindig anyway? With most of Jakarta underwater (a radio report yesterday said 80% of north Jakarta was already under) and so many homeless, not to mention at least 20 deaths, what we have here is clearly a disaster of vast proportions. Jakarta should be declared a disaster area and come under national government control with one person or body controlling and directing all the relief and rescue efforts. But who? Nobody’s home, it seems.

The “akan” Government strikes again

One of the most trenchant analysis of the Indonesian Presidency Unspun’s heard of comes from a newspaper executive.

“We call him the akan President,” says the executive. “It’s always akan this or akan that. But nothing really happens. It’s a bit like waiting for Godot with this president.”

Today the xecutive’s words return to haunt Unspun when he read in the newspapers that the Indonesian government says it is hopeful to attract more investment next year because of all the things it has done to improve policy, infrastructure and laws.

The Indonesian Chamber of Commerce (KADIN), to its credit, is not buying any of this talk: The government should, it said, concentrate on implementing policies instead of satisfying target deadlines.

KADIN couldn’t be more right. Ths government is so good at talking the talk and not walking the walk that it’s becoming a joke. It has great speechwriters, it would seem, but no implementors. At very opportunity SBY and his officers talk about what they akan do and then nothing gets done.

Investors are not stupid people: they want to see action and results, not hear empty talk. Until the government gets this, investment is something that akan happen in Indonesia but, like Godot, will never arrive on these shores.

Kalla on graft and civil servants

Vice President Jusuf Kalla has told the Corruption Eradication Commission (KPK) that we (who’s this we?) are all for the anti-corruption movement but please do not spark extraordinary fear.”  He says this fear is slowing down the decision making process in government as nobody wants to make a decision lest they be accused of corruption.

Kalla is not known for perspicacity but in this instance he is right. Civil servants are so afraid of making any decisions now that little gets decided on. Projects are stalled.

The answer, of course, is not a slow down of the KPK’s work. In fact, they should continue doing a good job in keeping civil servants afraid. Rather, it lies in the Government balancing out the KPK’s efforts and any overzealous actions with a justice system that is swift, fair and transparent.

It’s back to legal certainty that is the biggest need for the business community in Indonesia. Without legal certainty that is also swift and transparent, there will not be much investment coming in, the corrupt will bide their time before emerging again once the KPK runs out of steam and the Indonesian taxpayer will continue to be screwed.

So back to you Kalla: You’re No.#2 in the government. Get it to give ther nation legal certainty, fast. Or stop complaining.

Dammit it’s the summit again

The newspapers these couple of days have been replete with news about the Infrastructure Summit, only that it’s now called a forum instead of a summit. Humility in the face of failure can be a powerful weapon.

It is this weapon that President SBY wields like a big, swinging stick at this summit. We have learned form our past mistakes, he intones. We now know where we are weak and have taken steps to make sure that this time it is really worthwhile investing in Indonesia.

The investors smile at this. They make mild admonishments of how Indonesia should change if it wants to be competitive. get rid of corruption. Rile of law blah blah. Then, like embarrassed guests at a dinner party, make polite noises about how they’d be interested to look at the projects on offer.

At this the recovers from its bout of humility and proclaims the talkfestsummit a success. It begins communicating a vision of investments pouring into Indonesia… creating a new era of economic recovery and prosperity.

WAIT A MINUTE…hasn’t it all happened before? This is what Unspun, in our alter-ego wrote for The Jakarta Post during Infrastructure Summit I. Read it and see if it gives truth to the saying that There is nothing new under the sun except only the history you do not know…

(more…)

Mining for trouble

Word on the street is that a certain international mining company, that has already been in big trouble with the Indonesian Government over the past two years, is about to get into trouble again – this time its credibility would be shot without repair.

A few months ago, in a desperate effort to shore up its credibility and bring in some brains, for a change, to manage its operations in Indonesia, the mining company hired a man that is considered one of the best, most savvy Indonesian executives in the industry.

That relationship has apparently turned sour and Unspun’s sources say that an announcement is imminent soon of the paeting of the ways.

One insider says both sides were unimpressed by each other, but the truth is probably that there are some companies so chronically ill that no one, not even the brightest talents can help it.

Once this Indonesian executive announces his resignation Unspun expects that the company reputation, already tarnished, will loose whatever lustre it has. Ah well, as they say, it is not all gold that glisters.

Hotel Kalla

Indonesia Matters reports that VP Yusuf Kalla has told businessmen of Chinese descent to regard Indonesia as a home, not a hotel.

It is precisely statements like this, uttered by pribumi or bumiputra leaders in Indonesia and Malaysia, that make them feel like leaving the country or at least headging some of their money overseas.

Go to fullsize image

The truth of most businessmen of Chinese descent in Southeast Asia is that they have become loyal citizens of the countries in which they, and very often generations of their family, have been born and grew up in. many of them would never want to live in China, the home of their ancestors but a land which has become alient to them as they developed local preferences and tastes.

Many of these Chinese are also nationalistic and have done more for the country than many other people. They have built roads, schools, hospitals, temples, mosques and churches for the local communities when they did not have to.

Yet most of them at some level are considered second class citizens by the local nationalistic jingoists. (more…)

The Infrastructure Thingamajig

Once again we are assailed by the Infrastructure Thingamajig organized by Kadin, whose putative purpose is to attract investment in infrastructure projects. It is being held between November 1 and 3 and being hailed as a “landmark event” that would miraculously bring investment to the country.

The spin not withstanding,The Infrastructure Thingamajig started life as the Infrastructure Summit but now it has been downgraded to a Conference and Exhibition instead. Why? Perhaps it is because the last Infrastructure Summit in January 2005 had very little to show. I’m bad with details but if I remember correctly less than over 90% of the 90 plus projects pledged at the last summit have failed to materialize.

Now Kadin and its sponsors are again splashing out on an Infrastructure Thingamajig. But have they learned the lesson that spin convinces no one, and that if they fail to deliver on their promises they would be sooner or later be unspun? (sorry, couldn’t resist that one).

As W.H. Auden would say: “Time will will tell”. Until then, however, here’s a little something that I wrote in The Jakarta Post on the Infrastructure Summit of 2005 headlined Actions Speak Louder than Words