Budi Akmal Djafar wrote a very interesting article in Jakarta Globe about the lacking of education system improvement here in this country, Whilst Indonesia is still in the booming mode, there are still lots of areas to improve, notably education. He mentioned that South Korea and Japan used government enforced education decades ago to bring them to where they are now.
Check out the article here.
Thursday, December 30, 2010
Focus on Commodities
As we all have witnessed in 2010, extreme weather has greatly impacted price of commodities around the world. The scarce supply and increasing demand have driven the price up through the roof. Many many investors and brokers have devoted more attention to the commodities market for the lucrative rate of return.
Based on all these facts, I have decided to focus more on the news and analysis about commodities in Indonesia. My wish is this blog can be used to help you to gather information or discuss about what's going on the Indonesian and global business world.
Thanks and God bless.
Based on all these facts, I have decided to focus more on the news and analysis about commodities in Indonesia. My wish is this blog can be used to help you to gather information or discuss about what's going on the Indonesian and global business world.
Thanks and God bless.
Happy New Year IDX!
IDX (Indonesian Stock Exchange) has performed really well this year with its astounding 46% jump during 2010 period, continuing its 87% gain during 2009. We started off in the region of 2500ish and ended the year in 3700ish. Hopefully 2011 will be another wonderful year for us. Well done Indonesia!
Happy New Year!
To get an interactive chart, click the link below.
Happy New Year!
Tuesday, December 28, 2010
Indonesia (might) finally get Invesment Credit Rating
News reported that Moody's might upgrade Indonesia's credit rating from Ba2 into an investment grade. This will put Indonesia on the same level as Greece, Egypt and Colombia.
Indonesia has been one of the most exciting economies to follow this year, with the national stock exchange IDX has outperformed most of the major indexes around the globe. So, let's just hope the best for this upgrade and hopefully it will bring even more business opportunities in this country.
Check out the link for the complete news.
http://www.bloomberg.com/news/2010-12-01/indonesia-s-credit-ratings-on-review-for-possible-upgrade-moody-s-says.html
Indonesia has been one of the most exciting economies to follow this year, with the national stock exchange IDX has outperformed most of the major indexes around the globe. So, let's just hope the best for this upgrade and hopefully it will bring even more business opportunities in this country.
Check out the link for the complete news.
http://www.bloomberg.com/news/2010-12-01/indonesia-s-credit-ratings-on-review-for-possible-upgrade-moody-s-says.html
Palm Oil Certification
There have been arguments about sustainability certification of palm oil products for the past year or two. The Europeans as the consumer would like to apply certain standards, called RSPO (Roundtable on Sustainable Palm Oil), regarding amount of deforestation and other environmental issues to palm oil producer countries. However, many of the producers have complained the amount of cost and energy spent on abiding to the regulation does not worth the result since the Europeans are not major players in the market anyway.
During the past year, Indonesia as the number 1 producer in the world has planned to apply its own standard called ISPO (Indonesian Sustainable Palm Oil) which is similar to but less stringent than RSPO. Those who has qualifed for RSPO will automatically be ISPO certified. Therefore it will not hassle those who has been certified earlier. Malaysia as the number 2 producer is planning to join Indonesia on pushing this standard.
During the past year, Indonesia as the number 1 producer in the world has planned to apply its own standard called ISPO (Indonesian Sustainable Palm Oil) which is similar to but less stringent than RSPO. Those who has qualifed for RSPO will automatically be ISPO certified. Therefore it will not hassle those who has been certified earlier. Malaysia as the number 2 producer is planning to join Indonesia on pushing this standard.
Friday, December 24, 2010
Indonesia is number 121 in the world!
I came across this report from World Bank called Doing Business which ranks each of 183 countries by their easiness of doing business. Out of 183 countries, Indonesia is ranked at 121 for 2011, went down from 2010's 115.
Now remember that 121 is the overall ranking, and that there is a ranking for each areas graded. The areas are:
1. Starting a business: 155. It is not a good grade, and I believe its because of the complexity of paperworks and procedures necessary to establish a business.
2. Dealing with Construction Permits: 60. Not bad. I think there is definitely an improvement over getting the permit, on the simpler procedures and faster processing time.
3. Registering Property: 98. Now getting the permit does not include the registering part of the property. Apparently there is still some lagging in this area.
4.Getting Credit: 116. I believe the low score on this area is caused by the lack of law enforcement regarding the repossession of collateral in the case of credit default. This is the reason of why financial institutions in Indonesia are making it tougher for businesses to get credit. Especially after the 2008 global crisis, everyone is now taking a more conservative approach in giving credits. Also on this area, it involves the registration of individual citizens for their credit profile. So far, Indonesia has none of this records whatsoever. This non-existent credit profiling system drops our score.
5. Protecting Investors: 44. This is a very good score for Indonesia. It is witnessed by the gigantic amount of money flowing into the country from foreign investors in 2010. Really a job well done here.
6. Paying Taxes: 130. I guess this is sort of expected of Indonesia to be lagging in this area because corruption has been "flowing in our vein." Over the course of my lifetime, I have seen countless amount of corruption both in small and larger scale done by all sorts of people. Its been a public secret that many businesses avoid formal taxes by paying a sum of money to the tax collector to get a lower rate (much lower).
7. Trading across Borders: 47. This involves amount of paperwork, cost and speed in completing export and import activities. With the establishment of free trade among the ASEAN members, this has to be kept really well in order to take advantage of the trading system.
8. Enforcing Contracts: 154. An area that we really need to improve here. Our worst point in this area is that on average, the cost of enforcing the contract is 122.7% of the claim. This makes it useless to be pursued. I mean why bother wasting money, time, and other resources just to end up losing more money than we already had?
9. Closing a Business: 142. It takes an average of 5.5 years to close a business in Indonesia . Also, the average recovery rate is only 13.2 cents of a dollar (compared to 69.2 cents from the best practice). This area is closely related with the other areas mentioned previously. If we can enforce contracts better, then we can expect an improvement on this.
Given the fact that Indonesia still falls in the category of Developing Country, then we are not doing too bad. But there is a large room for improvement of course. And hopefully, we are heading that way.
For more information, check out http://doingbusiness.org/data/exploreeconomies/indonesia/
Now remember that 121 is the overall ranking, and that there is a ranking for each areas graded. The areas are:
1. Starting a business: 155. It is not a good grade, and I believe its because of the complexity of paperworks and procedures necessary to establish a business.
2. Dealing with Construction Permits: 60. Not bad. I think there is definitely an improvement over getting the permit, on the simpler procedures and faster processing time.
3. Registering Property: 98. Now getting the permit does not include the registering part of the property. Apparently there is still some lagging in this area.
4.Getting Credit: 116. I believe the low score on this area is caused by the lack of law enforcement regarding the repossession of collateral in the case of credit default. This is the reason of why financial institutions in Indonesia are making it tougher for businesses to get credit. Especially after the 2008 global crisis, everyone is now taking a more conservative approach in giving credits. Also on this area, it involves the registration of individual citizens for their credit profile. So far, Indonesia has none of this records whatsoever. This non-existent credit profiling system drops our score.
5. Protecting Investors: 44. This is a very good score for Indonesia. It is witnessed by the gigantic amount of money flowing into the country from foreign investors in 2010. Really a job well done here.
6. Paying Taxes: 130. I guess this is sort of expected of Indonesia to be lagging in this area because corruption has been "flowing in our vein." Over the course of my lifetime, I have seen countless amount of corruption both in small and larger scale done by all sorts of people. Its been a public secret that many businesses avoid formal taxes by paying a sum of money to the tax collector to get a lower rate (much lower).
7. Trading across Borders: 47. This involves amount of paperwork, cost and speed in completing export and import activities. With the establishment of free trade among the ASEAN members, this has to be kept really well in order to take advantage of the trading system.
8. Enforcing Contracts: 154. An area that we really need to improve here. Our worst point in this area is that on average, the cost of enforcing the contract is 122.7% of the claim. This makes it useless to be pursued. I mean why bother wasting money, time, and other resources just to end up losing more money than we already had?
9. Closing a Business: 142. It takes an average of 5.5 years to close a business in Indonesia . Also, the average recovery rate is only 13.2 cents of a dollar (compared to 69.2 cents from the best practice). This area is closely related with the other areas mentioned previously. If we can enforce contracts better, then we can expect an improvement on this.
Given the fact that Indonesia still falls in the category of Developing Country, then we are not doing too bad. But there is a large room for improvement of course. And hopefully, we are heading that way.
For more information, check out http://doingbusiness.org/data/exploreeconomies/indonesia/
Thursday, December 23, 2010
Introduction
To start off, I would like to introduce myself. My name is Fandy Santoso. I had the privilege of going to the United States to get my bachelor and graduate degrees. I went to Pensacola Christian College in Pensacola, Florida and took Marketing as my major. After graduating with a bachelor degree, I decided to pursue an MBA degree in the same school. Thankfully, I got into a scholarship program where I did not have to pay a penny for my education but instead I got paid by my job at school. After finishing the rigorous program, I decided to go back to Indonesia to start my career.
I just returned from the US in June 2010, and was and still am amazed on how much Indonesia has to offer to the global business world. We have vast resource of commodities and so much more. Indonesia is currently the top producer for palm oil (the booming product of the year), coffee, rubber, and many other traded commodities around the world. Well, given all the deficiencies that we still have, Indonesia is doing very well in 2010, and hopefully in the years to come.
Through this blog, I will try to filter out good quality news and updates related to business opportunities in Indonesia, so that you don't have to browse around the internet to find them.
I just returned from the US in June 2010, and was and still am amazed on how much Indonesia has to offer to the global business world. We have vast resource of commodities and so much more. Indonesia is currently the top producer for palm oil (the booming product of the year), coffee, rubber, and many other traded commodities around the world. Well, given all the deficiencies that we still have, Indonesia is doing very well in 2010, and hopefully in the years to come.
Through this blog, I will try to filter out good quality news and updates related to business opportunities in Indonesia, so that you don't have to browse around the internet to find them.
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