Infrastructure controversies weigh on Widodo’s growth strategy – Nikkei Asian Review

The Jatigede dam on Aug. 1 2015 (Photo: Simon Roughneen)

CIPAKU, Indonesia — It might have been just another arcadian Saturday morning on Aug. 1 in Cipaku, a farming village 240km east of Jakarta. The dawn euphony filled the air: a chorus of songbirds, crowing roosters and dogs offering up their first soft barks of the day. Shortly after, as the sun rose and as the first wan sunlight filtered a few beams through the tree-shaded village in West Java, drowsy parents swept doorways and ushered sprucely uniformed children out the gate ahead of the 7 a.m. start of school. That same day — if government plans had gone ahead — the newly completed 110-meter high Jatigede Dam, just 3km away, would have shut its floodgates, blocking the Cimanuk river and submerging Cipaku’s 1,200 homes under water 50 meters deep. But Aug. 1 came and went and the Cimanuk was left to flow as usual, marking yet another delay in the dam’s opening that Public Works and Housing Minister Basuki Hadimuljono attributed to “administrative glitches.”

Indonesia, increasingly protectionist, cracks down on foreign workers – Nikkei Asian Review

At Jakarta's Tanjung Priok port (Photo: Simon Roughneen)

JAKARTA — A new government directive requiring companies to hire 10 Indonesians for every expatriate is raising alarm among businesses and compounding concerns about the Joko Widodo administration’s growing protectionism. New labour rules, announced on June 29 by the Ministry of Manpower and Transmigration, were followed three weeks later by the introduction of higher import duties on a variety of consumer goods, such as clothes, carpets, cars, alcohol, tea and coffee. Boston University’s Emeritus Professor Gustav Papanek, who has studied the Indonesian economy for more than five decades, said the stiff new regulations are not the best way to go about reshaping employment conditions. F “Indonesia needs to attract three times as much foreign direct investment as it attracts now, not discourage people,” Papanek said.

Widodo’s first reshuffle targets trade, planning – Nikkei Asian Review

Indonesia President Joko Widodo listens as UK Prime Minister David Cameron speaks to media in Jakarta on July 27 (Photo: Simon Roughneen)

JAKARTA – Indonesian President Joko Widodo fired five ministers and transferred one in a long expected cabinet reshuffle announced Wednesday afternoon. Trade Minister Rachmat Gobel was replaced by Thomas Lembong, a Harvard graduate and former investment banker. Coordinating Economic Minister Sofyan Djalil was replaced by Darmin Nasution, the central bank governor from 2010 to 2013. Djalil’s new post is minister of national development planning. The appointment of Nasution and Lembong has been welcomed by those who feared party hacks might be appointed based on political connections. “As a former central bank governor, [Nasution] knows very well the fiscal and macroeconomic matters that need to be addressed,” said Djayadi Hanan, executive director at Saiful Mujani, a Jakarta political consultancy. Gobel’s decision to slash cattle imports led to beef prices surging and protests from consumers already struggling with a sliding rupiah and growing inflation.”It is no surprise that the trade minister was replaced,” said Yohanes Sulaiman, a lecturer at the Indonesian National Defense University. “Many business people said he was incompetent.”

In southeast Asia, Britain hedges against Eurozone troubles – Nikkei Asian Review

UK Prime Minister David Cameron and Indonesia President Joko Widodo outside the Presidential Palace in Jakarta on July 27 (Photo: Simon Roughneen)

JAKARTA – By choosing to visit Asia on his first major overseas trip after the May 2015 general elections returned him to office, British Prime Minister David Cameron signaled that the region’s dynamic economies will be a key focus of his new government. But the visit was neither to China, the world’s second-biggest economy, nor to India, the world’s most populous democracy and once the centerpiece of the massive British Empire, nor to Japan, the world’s third-biggest economy, which, like the U.K., is a close ally of the U.S. Instead, Cameron made a four-day, four-country swing through Southeast Asia, visiting Indonesia, Singapore, Vietnam and Malaysia. Talking up the need for Britain to do more business outside Europe, Cameron evoked British merchants of yore, saying, “No territory was too far. No opportunity was left untapped. We need to employ some of that Elizabethan endeavor today — to tell the world: ‘We’ve got the supply, you’ve got the demand — let’s do business.'”

Britain seeks far-flung business opportunities – Nikkei Asian Review

UK Prime Minister David Cameron and Indonesia President Joko Widodo at the Presidential Palace in Jakarta on July 27 (Photo: Simon Roughneen)

JAKARTA – Meeting Indonesian President Joko Widodo on Monday to discuss mutual trade and investment prospects, UK Prime Minister David Cameron told media that “we [the U.K. and Indonesia] are natural business partners and there is much more we can do.” In return for considering British investments, Indonesia wants greater access to the U.K. and to the wider European market for its exports, which are mostly commodities such as palm oil, rubber, coal, coffee, copper, oil and natural gas. “The lower tariff [is] needed on Indonesian [primary] products like wood, clothing, coffee and fisheries,” Widodo said after meeting Cameron, adding that British applications for investment in Indonesian infrastructure would be considered.

NLD decision to contest vote sets scene for possible power shift – Nikkei Asian Review

Former student leader Min Ko Naing (in white) and Tin Oo, a senior NLD member, chat before constitutional reform rally in Yangon on May 17 2014 (Photo: Simon Roughneen)

NAYPYITAW — Although the opposition National League for Democracy boycotted Myanmar’s last national elections in 2010, it always seemed unlikely it would do likewise in this year’s vote, despite some earlier suggestions to the contrary. In early 2012, the NLD won 43 out of 45 seats in parliamentary by-elections, and is widely seen by most observers as the party likely to win the lion’s share of votes in any free and fair nationwide poll. So, on July 11, just a month after party founder Tin Oo said it was unlikely that the NLD would boycott this election, party leader Aung San Suu Kyi put an end to any doubts by announcing on Saturday that the party would compete on Nov. 8. “Our aim in running is to implement the unfinished democratic reforms,” Suu Kyi said, speaking in Burmese in the capital Naypyitaw on July 11

The earth still moving for Penang’s tech sector – Nikkei Asian Review

Seagate plant under construction at Batu Kawan, Penang (Photo: Simon Roughneen)

GEORGE TOWN – Penang’s metamorphosis into a tech hub began when U.S. tech giant Intel set up its first base outside the homeland. Intel now employs 7,000 people in 12 buildings across the state; its total investment of $4 billion has resulted in the production of 4 billion microprocessors. “What drew Andy Grove and Intel to Penang in 1972 remains true today: an openness to investment and partnership, an avowal to innovation, and a long-term commitment to education,” Intel spokesperson John Mandeville told the Nikkei Asian Review. “One of the main drivers was the establishment of a Free Trade Zone in Penang in the early 1970s, which provided attractive incentives to foreign investors,” said Simon Song, managing director of Bosch Malaysia, which has three manufacturing facilities in Penang, making power tools, car multimedia systems and automotive steering units.

Hipsters vs heritage – Bangkok Post

Haja Mohideen at work (Photo: Simon Roughneen)

GEORGE TOWN – Haja Mohideen is the last of his kind, the sole fashioner of the traditional Malaysian hat called songkok melayu who is still working on Penang island. With that impending finality on his mind, the 69 year old milliner sits at his street-side desk for 11-12 hours a day, cutting and stitching the 5 or 6 hats that make up his daily output. “Most of the orders come when there are ceremonies, holidays,” Haja said.

Ruling party backs Najib despite 1MDB scandal – Nikkei Asian Review

Malaysia PM Najib Razak writes a note wishing the Thai king well, while attending the ASEAN summit in Hua Hin, Thailand, in October 2009 (Photo: Simon Roughneen)

KUALA LUMPUR – However despite Mahathir’s recent outbursts on social media about the 1MDB allegations and his criticism of Najib, the incumbent appears to have the backing of the United National Malays Organisation (UMNO), the main party in Malaysia’s ruling coalition. UMNO Secretary General Adnan Mansor said that the party was holding together, despite rumors of a split over Najib’s position. Mahathir, who celebrated his unofficial 90th birthday on Friday, remains an influential figure in party circles and continues to call for Najib’s ouster. “UMNO is intact. We are united behind the prime minister to protect his [party] presidency. For those who wish to see UMNO disintegrate, it will not happen,” Adnan said, speaking at the iftar event attended by Najib.

Myanmar’s workers, employers clash over minimum wage – Nikkei Asian Review

Khine Khine Nwe, S-G of the Myanmar Garment Manufacturers Association, speaks at press conference in Yangon on March 24 (Photo: Simon Roughneen)

YANGON — Myanmar’s garment manufacturers have signaled their opposition to a proposed national minimum wage of just over $3 per day, saying the increase could force factories in the vital industry to close. “With that wage, businesses cannot survive,” said Khine Khine Nwe, secretary general of the Myanmar Garment Manufacturers Association, which represents 280 factories employing around 200,000 workers. The apparel industry’s resistance to the proposed minimum wage drew a sharp rebuke from local labor groups, as well as the International Trade Union Confederation. “The new minimum wage will still leave workers and their dependents just above the global severe poverty line of $1.25 per person, and many will still struggle to make ends meet,” said ITUC General Secretary Sharan Burrow.