Latest

Indonesia looks to Islamic finance for infrastructure needs – Nikkei Asian Review

Indonesian President Joko Widodo awaits heads of government at the World Islamic Economic Forum in Jakarta on Aug. 2. (Photo: Simon Roughneen)

JAKARTA — Measures to boost Indonesia’s relatively small Islamic finance sector could help the government implement an ambitious infrastructure modernization program across the 13,000-island archipelago, according to the country’s recently appointed finance minister. A week after she was appointed finance minister by President Joko Widodo in a cabinet shake-up, Sri Mulyani Indrawati described Indonesia’s infrastructure development needs as “huge.” Indrawati was speaking at the World Islamic Economic Forum in Jakarta. After taking office in late 2014, Widodo pledged to improve Indonesia’s notoriously rickety infrastructure by building or improving dozens of ports, airports, power plants and roads. Total spending could reach around $500 billion — equivalent to more than half the country’s gross domestic product — an outlay that the government says it cannot fund alone. “I am sure there is the potential to develop instruments for financing based on Shariah (Islamic law), we will look at this, the need is there,” said Indrawati, who resigned from a senior World Bank role to rejoin the Indonesian government.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

New finance minister Indrawati chops $10bn from Indonesia’s budget – Nikkei Asian Review

Indonesian Finance Minister Sri Mulyani Indrawati poses for selfies with well-wishers at the World Islamic Economic Forum in Jakarta on August 4 (Photo: Simon Roughneen)

JAKARTA — Sri Mulyani Indrawati, Indonesia’s new finance minister, said on Wednesday that 133.8 trillion rupiah ($10 billion) will be cut from government spending this year in anticipation of a widening shortfall in tax revenue. The former World Bank Group managing director, who also served as finance minister from 2005 to 2010, was brought back into cabinet a week ago. “The President’s theme is strengthening credibility, confidence, and trust,” Indrawati told reporters on Aug. 3 following a meeting with President Joko Widodo and his economic ministers. A day later, speaking to reporters at the World Islamic Economic Forum in Jakarta, Indrawati said the finance ministry should use “all tools to improve the business climate”. “Job creation is not coming from the government — it is from the private sector,” the minister said.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

Sri Lanka-China rapprochement rolls on – Nikkei Asian Review

Kabir Hashim, Sri Lanka's Minister of Public Enterprise Development, at the World Islamic Economic Forum in Jakarta on Aug. 2 (Photo: Simon Roughneen)

JAKARTA — After deteriorating during the early part of President Maithripala Sirisena’s tenure, Sri Lanka’s relations with China appear to be on firmer footing as both sides continue to iron out differences over Chinese investments in the island country. “In most of the cases, we found we got better terms,” Kabir Hashim, Sri Lanka’s minister of public enterprise development, told the Nikkei Asian Review. He added that a few more Beijing-backed projects are currently under review. “In some cases we renegotiated the loans, in some cases the contracts had legal issues, which we cleared up,” Hashim said, without going into detail about specific projects. Under the previous president, Mahinda Rajapaksa, Sri Lanka forged close relations with China as Beijing’s economy boomed and China’s overseas economic reach grew rapidly during Rajapaksa’s decade in office from 2005.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

Under pressure, Najib slams “foreign intervention” – Nikkei Asian Review

Malaysian Prime Minister Najib Razak speaks at the World Islamic Economic Forum in Jakarta on Aug. 2 (Photo: Simon Roughneen)

JAKARTA — With investigations ongoing in several countries into the international financial activities of scandal-plagued state development fund 1Malaysia Development Berhad, Malaysian Prime Minister Najib Razak slammed “foreign intervention” as a threat to stability in peaceful Muslim-majority countries such as Malaysia and Indonesia. “We have seen the devastating results of foreign intervention in the Muslim world, often based on incomplete, wrong or partisan information,” Najib said, citing the U.S. invasion of Iraq in 2003 and the Arab Spring a decade later, a series of anti-government uprisings in Egypt, Libya, Syria and Tunisia, some of which had U.S. support. Najib has been under pressure over allegations that around $731 million received from 2011 to 2013 was diverted from 1MDB into his personal bank account in 2013 — a charge that Najib has denied, saying the money came from an unnamed Saudi Arabian donor.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

Widodo defies controversies to form ‘solid team’ – Nikkei Asian Review

Luhut Panjaitan, Indonesia's newly appointed maritime affairs oversight minister, is accosted by press covering the inauguration of new ministers in Jakarta on July 27 (Photo: Simon Roughneen)

JAKARTA — There is a sense of urgency in Indonesian President Joko Widodo’s appointment of new members to his Cabinet — notably in the selection of the high-profile managing director of the World Bank, Sri Mulyani Indrawati. Indonesia’s economic growth has been slower than expected, infrastructure development — intended to leverage the economy — has been sluggish, while tax revenue is falling short of ambitious targets. Poor coordination among ministries has been partially blamed for hampering many important infrastructure projects. In the meantime, Widodo’s new flagship policy to boost tax revenues to finance development projects — a tax amnesty — is progressing very slowly. It is against this background that Widodo announced on Wednesday his new Cabinet lineup — which includes major changes in the economic team. “I want all the ministers, all heads of government institutions to work faster, to work more effectively, in a team that is solid and is supportive to one another,” Widodo told a Cabinet meeting less than two hours after nine new ministers were sworn in.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

Malaysia’s 1MDB woes deepen with US lawsuit – Nikkei Asian Review

Malaysia Prime Minister Najib Razak and wife Rosmah Mansor awaiting ASEAN heads of government at the ASEAN and related summits in Kuala Lumpur on Nov. 22 2015 (Photo: Simon Roughneen)

JAKARTA — bad penny keeps turning up, as the old saying goes. And so it goes for Malaysia’s Prime Minister Najib Razak, who has spent more than a year trying to fend off allegations that around $700 million was stolen from troubled state development fund 1Malaysia Development Berhad and diverted into his bank account. The prime minister first said he did not take money “for personal gain,” then said he received a $681 million donation from Saudi Arabia — the latter claim eventually backed in April by the Saudi foreign minister. Malaysian law enforcement agencies ruled that Najib has nothing to answer for, but foreign counterparts are hunting for billions of dollars of 1MDB money allegedly laundered through jurisdictions such as Singapore, Switzerland and the U.S.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

South China Sea arbitration ruling brings no closure to regional disputes – Nikkei Asian Review

Chinese Premier Li Keqiang and Malaysian Prime Minister Najib Razak heading for the signing ceremony of the ASEAN community on Nov. 22 2015 (Photo: Simon Roughneen)

JAKARTA — The international tribunal decision against Beijing’s claims to much of the South China Sea has provoked a mixed response in the region, with indications that it may tone down some rivalries while sharpening others. Most revealingly, after years of acrimony with China over rival claims in the disputed waters, the Philippines initially took a conciliatory tone, inviting China to bilateral talks over the matter. Despite a jubilant reaction from his countrymen following the July 12 ruling, which was overwhelmingly in favor of Manila, the normally strident new President Rodrigo Duterte said he would not “flaunt” the decision. Instead, he reiterated his desire to improve relations with China, his country’s biggest source of imports. “War is not an option,” Duterte said. “So, what is the other side? Peaceful talk.” Despite Duterte’s muted response, China has refused to compromise — insisting that any talks must exclude mention of the tribunal’s verdict. The tribunal, convened at the Permanent Court of Arbitration in The Hague, suggested that Chinese naval maneuvers in waters around islands near the Philippines are illegal. Yet Beijing has continued to block Filipino fishermen from working around Scarborough Shoal, 190km off the Philippine coast and 800km from mainland China.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

Tribunal’s blunt ruling against China fuels South China Sea tensions – Nikkei Asian Review

New Philippine President Rodrigo Duterte campaigning in Angeles City on March 19 2016 ,  prior to the May 9 2016 elections (Photo: Simon Roughneen)

TOKYO/JAKARTA — China’s claims to historical rights in the South China Sea have no legal basis, an international tribunal at The Hague ruled on Tuesday. In the first international ruling on artificial islands and military facilities built by Beijing in the disputed waters, the tribunal sided with the Philippines, flatly denying China’s historic claim to the “nine-dash” line, which encompasses most of the sea. A panel of five judges at the Permanent Court of Arbitration in The Hague in the Netherlands also noted that no maritime feature claimed by China along the Spratly Islands constitute a fully entitled island, and therefore cannot generate an exclusive economic zone or a continental shelf. The tribunal, established under the United Nations Convention on the Law of the Sea, said there was “no evidence” China had historically exercised exclusive control over the waters in the South China Sea or its resources. Moreover, the tribunal said any historical rights “were extinguished” when the U.N. convention established EEZs.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

Opposition concedes defeat in Australian poll – Nikkei Asian Review

Lining up to vote in Strathfield in western Sydney on July 2  (Photo: Simon Roughneen)​

MELBOURNE/SYDNEY — Malcolm Turnbull is set to continue as Australia’s prime minister after opposition leader Bill Shorten on Sunday conceded defeat in the national election — eight days after voters went to the polls. Shorten’s announcement came as Turnbull’s conservative Liberal-National party coalition inched closer to the minimum seats required — 76 out of 150 — to govern in its own right. However, the coalition may still need the support of independents and minor party members if votes yet to be counted contribute to it falling short of that majority. “I respect that Mr Turnbull has won government — be it a minority government or a majority of one or two seats,” Shorten said on Sunday. That was still the question as Turnbull declared victory about an hour later. With votes still to be counted, it remained unclear whether the coalition would secure a majority. With around 80% of the votes counted on Sunday, the Australian Electoral Commission had the coalition ahead in 76 seats. Turnbull had used the days prior to shore up support from crossbenchers. Three out of the five elected had agreed to back the coalition when it came to supply and confidence matters, a move that effectively ended talk of Shorten leading a minority government or Australians being forced back to the polls. “It looks like he [Turnbull] will cross the 76 seat threshold and, even if not, he has support from a couple of independents,” said John Warhurst, emeritus professor of politics at Australian National University.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page

Annual trafficking report spreads dismay and relief in Asia – Nikkei Asian Review

Protesting at the US embassy in Yangon on April 28, monk asks the new Myanmar government to say that Rohingya are not citizens of the country (Photo: Simon Roughneen)

SYDNEY — The U.S. government’s latest annual Trafficking in Persons report, published on June 30, generated the usual mix of dismay and relief among countries named. In Asia, countries including Myanmar responded angrily to their downgrading in the influential rankings, which can affect their standing as U.S. trade partners among other aspects of their ties with Washington. The Philippines — despite, as the report noted, having a “significant problem” of sex trafficking — was upgraded to the top tier of countries for its efforts to counteract trafficking. The list, which this year rated 190 countries — two more than last year — includes countries which the state department says “fully meet the Trafficking Victims Protection Act’s (TVPA) minimum standards,” a level attained by only two other Asian countries, South Korea and Taiwan. The Obama administration’s “Asia pivot,” an attempt to enhance diplomatic and commercial ties with the world’s most economically dynamic region and to counter the growing sway of China, saw a thawing of ties with Myanmar. As well as relaxing most of its economic sanctions on the country, the U.S. quickly lifted Myanmar out of the bottom tier of its trafficking rankings under the quasi civilian government of former President Thein Sein. But the 2016 report saw Myanmar demoted to Tier 3, the bottom rank, alongside countries such as North Korea and Sudan.

ShareEmail this to someoneShare on Google+Share on LinkedInShare on FacebookTweet about this on TwitterPrint this page