INDONESIA΄s HANDBOOK 2000

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CONTENTS

FOREWORD
LAND
PEOPLE
HISTORY
GOVERNMENT
DEVELOPMENT ACHIEVEMENTS
Economic Recovery
People's Welfare and Poverty Eradication
Food and Horticulture
National Logistics Agency
Investment
Agriculture
Industry and Trade
Mining and Energy
Cooperatives, Small and Medium Scale Enterprises
Transportation and Communications
Transmigration
The Law
The Environment
Defense and Security
Health
Social Affairs
Manpower
The Role of Women in National Development
Population and Family Planning
Religious Life
Education and Culture
Science and Technology
Housing and Settlement
Agrarian Affairs
The Younger Generation and Sports
Tourism, Arts and Culture
Empowerment of State Enterprises

INDUSTRY AND TRADE

The target and direction of industrial and trade development for the last year of the Sixth Five-Year Development and for the Seventh Five-Year Development are basically still relevant to be implemented, even though the challenges are different due to recent position of national economic growth and "unpredictable condition" and "unbelievable changes" of international economy and market. In addition, Indonesia is still facing other problems, such as:

•  to realize commitment with IMF to implement structural reform:

•  to carry out WTO obligation or Import Tariff Reduction schedule, TRIP'S, etc.

•  Early liberalization agreed in APEC forum:

•  Acceleration of AFTA from year 2003 to become 2002.

•  To Confront new issues which will become international regulations, such as electronic commerce, anti-bribery convention, etc.

During the period of the Development Reform Cabinet, considerable targets have been achieved in Industry and Trade sector. For instance. the government, by issuing Presidential Decision No. 7 of 1999 of 14'h January, 1999, has given incentives to new companies investing their capital in particular sectors (grouped as pioneers) in form of Income Tax borne by the Government.

In order to increase export, the government has expanded the scope of commodities that are given Particular Export Companies (PET) facility.

Policies in foreign trade field is directed to increase export value and foreign exchange receipt diversity types of commodities, strong competitiveness, expand market access, promote non-oil and gas commodities, and settle export problems.

Import policies are directed to control goods imported, for production and consumption needs, state security, and environment. The import policies are among others in forms of import restriction, import trading procedures consisting of permits, import executive appointment. and quota; import duty tariffs, overcoming unfair trade practices such as violation of Anti Dumping and countervailing Duty.

In the meantime, to improve Small and Medium-Scale Industries (IKM) in critical period, the government has allocated rolling fund assistance amounting to Rpl8.75 billion for 512 IKMs spread in 10 provinces covering handicraft industries and agricultural industries which have export potentials and their supporting businesses. The rolling fund assistance is still going to be provided from fiscal year 1999/2000 in the amount ofRpl6,895 million.

In the framework of facing market globalization and strengthening competitiveness of small industries' products, the government will implement ISO-9000 quality management absorption program, including small industry producing export commodities, component making (sub contracting) industry, types of industry that will and have applied SNI national standard, and industrial companies experienced in applying Group Quality Control (GKM). In 1998/1999 IKM has succeeded in applying ISO-9000, where 65 companies were able to apply Module A Certificate, and 91 companies applied Module B Certificate.

Regulations

By the legalizing Act Number 5 of 1999 on Prohibition of Monopoly Practices and Unfair Competition on 5'h March 1999 that will take effect one year after being sanctioned, the industrial competitiveness in the country has become healthy.

The creation of Act on Prohibition of Monopoly Practices and Unfair Competition is intended to give contribution to the efforts of improving natural economy efficiency, which in turn will increase social welfare.

The legalization of Act Number 8 of 1999 on Consumers Protection by the President of the Republic of Indonesia on 20'h April 1999 that will take effect in April 2000, in this reform era, is expected to be able to give freedom to consumers in enjoying a product and simultaneously to build business actors in selling their quality product as well as to protect consumers.

Two consumer protection agencies were born from this Act, namely the National Consumer Protection Board (BPKN) domiciled in the Capital City and Consumer Dispute Settlement Board (BPSK) in Second-Level District Territory. Both agencies' members consist of representatives of business actors, consumers, academicians and non-government consumer institutes, beside those of the government. The number of companies registered based on the Act on Company  registration Obligation from July are 1,376,426 companies, consisting of 199,588 limited liability companies (PTs), 26,9'86 Cooperatives, 198,248 CVs and 3,260 Firms, 936,875 individual firms, and 11,478 other types of companies.

The companies who have submitted their Company's Annual Financial Report (LKPT) up to 4'h June 1999 amounted to 45 companies, consisting of PT. (PT. Tbks) and State-Owned companies.

The Issuance of a series of policies free import trading and distribution of sugar arrangement and farmers' obligation to grow sugar cane and sell their harvest to BULOG (National Logistics Agency).

Thus, sugar trading is handed over to market mechanism, and General Importers (lUs) can carry out import with 0% import duty. To assist farmers in overcoming loss due to decrease in sugar prices in domestic markets, the government has decided that farmers' sugar should be bought by Sugar Factories at Rp2,500 per kilogram and the Sugar Factories have to buy farmers' sugar in 90% cash and the balance should be paid in form of kind (in accordance with Minister of Forestry and Plantation Decision Number 282/Kpts-IX/ 1999 of 17th  May, 1999).

Import trading arrangement of Automotive Industries which was formerly arranged through IU, TT/AT and subject to a very high percentage of import duty, has been reviewed and is planned to be altered to automotive import simplification by eliminating tariff barriers.

Now, an opportunity is increasingly opened to priority commodities, especially those with domestic natural resource base and high local contents.

Meanwhile, to assist the business world in trade financing in order to be more competitive in international economy, the Ministry of Industry and Trade has initiated the establishment of an Export Financing Institution (LPE). In the progress, by Government Regulation Number 37 of 1999, the government has established the Indonesia Export Bank (BEI), which is intended to assist export-import activities by providing finance and guarantee, and consultative services connected with financing and guaranteeing, and other businesses that support both of them.

Exhibition and Promotion

The performance of the Indonesian Resources Exhibition 1998 (PPE'98) in the middle of the economic crisis that overwhelmed Indonesia, in fact, was able to push active participation of around 800 Indonesia businessmen/exporters from 27 provinces. The exhibition was visited by 2,799 foreign buyers coming from 99 countries, and produced business transactions for export amounting to US $71.2 million originated from 78 countries. Indonesian business participation in Trade Exhibitions in 1998/1999 (32 exhibitions in II countries), was really able to open new opportunities and give positive contribution to increase and expand Indonesia export market share. This was reflected in the results of business contacts in forms of business contract/transaction, inquiry, marketing cooperation, and other business cooperation. The exhibition activities are utilized among others by businessmen of groups of leather products, textiles, garments, toys products, electronics, house wares and other handicrafts.

The execution of Trade and Investment Missions to five exportdestination countries, i.e. the United States of America, the United Kingdom, the Netherlands, Japan and Taiwan was directed toward recovering Indonesian image in international world. Trade contacts with the USA achieved transactions amounting to US$13.3 million, Japan and Taiwan US$21.2 million, and with UK and the Netherlands amounted to US$16. I million in value.

Batam Sands

In order to empower and to create simultaneously expanding the marketing network of UKM's products, the government has pushed for the establishment of "Indonesian Emporium Batam Sands" located at an area of l,800m2. The establishment of the Indonesian Emporium is intended as a "Marketing Point" in order to bring sales and promotion of export quality products closer to consumers/buyers, especially those of overseas. The establishment of Indonesian Emporium will be more expanded to other locations such as Entikong, West Kalimantan, and Bitung - Manado, and abroad such as Los Angeles - the USA, Johannesburg - South Africa, Amman - Jordan, and in European trade center cities.

The Research and Development body of sectoral and regional industries during 1998/1999 conducted color essence identification originating from nature in several provinces. In 1999/2000 it is planned to begin toxicity research phase to find out any kind of color essence material that can be used for food and non-food, so that from the outcome of the research it is expected to obtain color essence as import substitutes. Then the office will perform the next phase research. which will be viewed from its techno-economics intended to able to apply to IKM.

The socialization of research products are in forms of prototype of cassava chopping and dried cassava processing machines for IKMs in Lampung. and application of processing machines of pulp made of dried rice stalks materials in some PUSKUs in Indonesia, and the making of tire (motorcycle) vulcanization for IKMs applied in Medan.

MINING AND ENERGY

The development of mining and energy in the Reform Development Cabinet is aimed at making anticipative steps to create people's aspiration who need reform and improvement in economic, political, law, social and public administration.

To resolve the monetary crisis, it needs steps to defend and improve the role in mining and energy sector to support national economy. It should open a wide chance for the private sector to make tender to eliminate the practice of KKN (corruption, collusion and nepotism).

The target of mining and energy reform is to improve the achievement through the clean, effective, efficient and professional apparatus to create the clean government. The targets also include making amendments to the regulations as the basis of business development in mining and energy sector to support national economy, and increase people's role in improving the economy by giving a wide chance for small or middle business and cooperatives.

The government's reform agenda in the mining and energy sector were divided into three main parts: regulations, institutions and practices. At that moment there were 103 problems; 59 problems of regulations, 20 problems of institutions and 24 problems of practices.

The main issues in mining and energy sector are environment, poverty and social imbalance, employment field, the policy of processing natural resources, law, the improvement of human resources, conversion to the private sector to improve efficiency and expansion of national companies, etc. Those main issues will influence the policy in mining and energy development in the future.

Besides the main issues mentioned, the policy in mining and energy sector should notice the general planning of layout, marine development, deregulation and debureaucratization, autonomy, the Asia Pacific Economic Cooperation (APEC), the growth cooperation areas of ASEAN, and the development of mining area. Business in mining and energy sector should also notice the aspects of the availability of goods, requirement and supply, business pattern, human resources and technology and the policy.

The mining and energy policies in the reform period are as the following:

• completing the regulation of oil and gas, coal and mineral and energy and electricity as an insurance in business certainty;

• eliminating monopoly system;

• placing economic actors at the same level;

• implementing the market mechanism;

• completing institutional system at mining and energy ministry to create simple, modern and efficient bureaucracy.

• eliminating KKN practices; and
• noticing society and environment perception.

In the framework of developing humap resources, the government has the training and education in institution those are: the Oil and Gas Training Development Center in Cepu, Mineral Training Development Centre in Bandung, a Research Institution "Lemigas" in Jakarta, Mineral Technology Development Centre in Bandung, Marine Geology Development Centre in Bandung and Geological Research Development Centre in Bandung.

The government's important step in mining and energy sector since 1998 is to restructure oil and gas sector and electricity.

Restructuring in oil and gas sector is done through government and company restructure. The government has task to make policy to protect society and company's orientation in loss and profit. The government can make the policy in regulation, tax, environment protection, etc. Company operational aspect is how to operate and develop its business in getting profit.

In the framework of restructuring oil and gas sector, the government has made the bill concerning oil and gas. The substance of this bill is to eliminate monopoly business, to offer business to improve people's welfare, to develop national company capability and to guarantee a law in running oil and gas sector. Since March 1999, the House of Representatives and the government have discussed this oil and gas Bill continuously.

The oil and gas development need a lot of fund, hence the fulfillment of investment and control shall be transferred step by step to the society, whereas the government has a role in establishing the policy.

Restructuring in the electricity sector is done step by step, consisting of the arrangement of electric industry in Indonesia, and the government role in the power sector. The basic policy in restructuring the electric sector is to create an electric sector that can stand alone based on high efficiency principle through a healthy competition, transparency in business and the same level and fair treatment of all the business actors.

Electric restructuring specifically notices the electric condition and people's capability in each region, and the electric tariff cost will be made reasonable to reflect the economic aspect in providing electricity.

Electric subsidy is aimed for low income society. It is hoped that all process in the electric sector will be finished in the next four years.

The development of electric power supply in 1998/99 has achieved to 20,580 MWs with capacity of 77,422 Wh. This electricity power can fulfill community's need. The operation of development of gas transmission network in South Sumatera has saved the using of oil amount to 50 thousand barrels per day.

In the framework of eliminating KKN in national economy and creating a healthy climate for investment, based on MPR Decree No.XI/1998, measures have been taken to control on 159 projects that are indicated having KKN with Pertamina: reviewing Presidential Decisions that are indicated as KKN including the projects of stateowned companies that use state budget. Among the 159 projects, the state can prevent a loss amounting to Rp212 billion and US$92.9 million.

Reform in the mining and energy sector consists of restructuring institutions, the regulations and unhealthy practices: the development of mining and energy sector to compete in other countries; the increase of added value through the industrial development in mining manufacture and mastering technology.

The results of the reform in mining and energy sector are as the following:

•  The Bill concerning oil and gas are being discussed in the House of Representatives since March 4, 1999;

•  The Bill concerning electric power is being discussed in the State Secretariat;

•  The Bill concerning general mining is ready to be submitted to the President;

•  Completing some government regulations, Presidential decisions and the lower regulations;

•  Eliminating unhealthy practices; and

•  Making communication forum concerning mining and energy system and making face-to-face communication between the minister of mines and energy and society.

COOPERATIVES, SMALL AND MEDIUM-SCALE ENTERPRISES

Facing the economic crisis and anticipating global economic changes marked with tight competition, several policies and programs focused on the new paradigm of Indonesia's economy are continuously being developed and decided.

The People's Consultative Assembly (MPR) Decision No. XVI/MPR/1998 concerning Economic Politics in the framework of Economic Democracy has been issued considering that: Economic Democracy as mandated by article 33 of the 1945 Constitution has not been realized; the National Development is faced with challenges that need economic-political attention for further opportunity, support, and development to people's economy, covering cooperatives, the small and medium-scale enterprises.

Basically, the MPR decision is meant to create national economic structure, which is conducive for the existence of strong and largernumber of medium-scale enterprises as well as mutual beneficial partnership among entrepreneurs.

As a follow-up of MPR Decision No. XVI/1998, the President of the Republic of Indonesia has launched the date of October 17, 1998 as the People's Economy Awakening Day. On the occasion it was stated that economic reform has taken place from the old economic policy into a new people's economy, with the foundation of a system that continuously evenly distribute ownership of economic resources, including productive assets of which, previously the ownership was mainly concentrated on the state and big conglomerates.

In an effort to increase the people's participation, especially in meeting their basic needs, and to support the growth of the people's economic activities. Presidential Instruction No. 18/1998 was issued, to amend Presidential Instruction No. 4/1984. By Presidential Instruction No. 18/1998 it is made easier to establish cooperatives when deemed feasible and in accordance to needs and economic interest.

Act No. 5/1999 concerning the Ban of Monopoly Practice and Unhealthy Business Competition has been issued in the effort to create conducive climate, increase efficiency of the national economy, and create business effectivity and efficiency for the development of the small and medium-scale enterprises and cooperatives. It is also to improve efficiency of national economy; guarantee the certainty of equal business opportunity for the big, medium and small-scale enterprises and to prevent monopoly practice by businessmen which could inflict loss upon the others.

Policies have been made for implementation of breakthrough programs in effort to empower the people's economy, such as:

a.  Rehabilitation of food production and distribution, in which cooperatives and the small and medium-scale enterprises are given opportunity in food production and distribution.

b.  Increase credit access for members, cooperatives and the small and medium enterprises in the effort to meet the need of capital for business development.

c.  Institutional structuring which is directed at developing cooperatives institutions reflecting the needs and identity in accordance with members' economic activities including members as producers, consumers, and debtors. Also, in developing cooperatives synergy, cooperative networks are developed horizontally and vertically.

d.  In asset redistribution's, cooperatives and the small and medium enterprises are given the opportunity to own and  manage productive assets. In order to support the policy, a capital institution for cooperatives and the small and medium enterprises namely Permodalan Nasional Madani Limited Company (PT.PNM) is being developed.

In the framework of implementing the above-policies, various programs have been carried out, such as providing 17 credit schemes, namely KUT (credit for farming undertakings), KKOP, KKPA (credit for primary cooperatives members) consisting of 7 kinds of credit, KPRS, KMKBPR/PMKBPRS, KPKM/PPKM, KPTTG-Taskin, KMK-PKM, KPT-PUD, Taskin Koppas credit and KUA (Credit for Transportation Business).

In an effort to improve services to cooperatives members and realizing the limited ability of cooperatives and small and medium-scale enterprises human resources, PER (the People's Economy Post) has been developed through strengthening the function of the existing KKB (Business Consultation Clinic) and establishment of new PER. The establishment of PER is aimed to give information services and/or advocation to cooperatives, the small and medium-scale enterprises in developing their economic activities.

Until May 6, 1999, 2,215 units of PER have been established, consisting of one unit of National PER, 27 units of Provincial PER, 264 units of District PER and 1,923 units of sub-district PER.

In the framework of PER development, training of TOT (Training of Trainers) were carried out for lecturers and NGOs. Also for consolidation of PER development, a workshop on the adaptation of information technology in rural development was carried out on March 31, 1999.

The role and needs of cooperatives institutions for credit guarantor as one of cooperatives financial sub-system have become very strategic. In an effort to increase service of credit guarantor institutions to cooperatives, beside PKK company and FT. Askrindo, institutions of credit guarantor in the form of KPKKUK (Credit Guarantor Cooperatives for Cooperatives and Small-scale businesses) are being developed. It is expected that the activities of this credit guarantor cooperatives, besides providing service of guarantee for its members of primary cooperatives, would also provide business consultation services. By developing credit guarantor cooperatives, it is also hoped that the absorption process of 17 available credit schemes could accelerate.

From the institutional aspect, until December, 1998, the number of cooperatives was 59,441 units which consist of 58,800 units of primary cooperatives, and 641 units of secondary cooperatives. Of the total number 46,420 units or 78% are active cooperatives and the remaining 13,021 or 22% are in-active cooperatives. The growth of cooperatives and members of cooperatives within four months (December 31, 1998 to April 30, 1999) showed a small increase number. The total number of cooperatives as of April 30, 1999 was 62,285 units consisting of 59,441 units of active cooperatives and 10,634 units of in-active cooperatives. Cooperatives members amount to 20,411,807.

The equity amounted to Rp5,121,962.85 and debt Rp4,330,986.05. While sales volume reached Rpl2,952,140.48 and SHU (profit) gained amounted to Rp508,925.09 million.

The above-figures show that the average equity of each cooperatives is Rp 110.33 million, the average sales volume is Rp279.02 million per cooperatives and the average SHU per cooperatives is Rpl0.96 million.

From the total sales volume of cooperatives the largest contribution came from undertakings activities. Until the end of 1998, from the total undertakings volume of Rpl2,952.13 billion, the biggest contribution came from KUT activities with the amount of Rp366.18 billion, followed by food providing activities Rpl22.9 billion and KSP/USP (the cooperatives credit units) Rp4,056.78 billion. The rest came from activities of Waserda undertakings, fertilizer, services and others.

After launching 18 credit schemes for cooperatives and UKMs which came from KLBI (Liquidity Credit of Bank Indonesia) and nonKLBI with asset amounted to Rp9,806.73 billion, until the end of March, 1999 realization of credit has reached Rp941.47 billion or 162.55% of the total credit ceiling.

SOCIAL SAFETY NET (JPS)

In an effort to accelerate national economic recovery as part of economic crisis impact, various programs have been prepared, including JPS program. Iplementation of JPS is hoped to be able to directly bring real impact to the people's economic improvement.

JPS programs related to people's economic empowerment were implemented in the fiscal year of 1998/1999, among others the in forms of:

a.  Roll over working capital assistance to 1000 groups.

b.  LEPMM (self-supporting productive economic institutions) in 26 provinces, 100 districts.

c.  Training for  100 facilitators,  1000 assistant officials,  and  1000 managers of LEPMM.

d.  Pilot Project for Integration of people's economic businesses which consist of:

1.  Pilot project for integration of people's economic undertakings in the field of small-scale palm oil processing  
     (1.5-2 ton/hour) in Ogan Komering Ilir District, South Sumatra Province.

2.  Pilot project integration of people's economic undertakings in the field of livestock fish feed processing (2 ton/hour) 
     in the regions of Cirebon, West Java; Pekalongan regency, Central Java; and Pacitan District, East Java Province.

3.  Pilot project integration of people's economic undertaking in the "garut" processing as alternative raw material for food industry at Ngawi District, East Java Province and Banyumas District, Central Java Province.

TRANSPORTATION AND COMMUNICATIONS

The vision of the government in the field of transportation and communication is the realization of transport organization in one unitary, advance and reliable national transportation system, the smooth post and telecommunication that have a good quality and wide coverage, comprises the artery of economic, social, cultural, political and defense-security lives in supporting national developments as vehicle in the efforts to improve people's welfare. While the mission is to perform reliable transportation,  post and telecommunication services, which are supported by professional human resources and advance science and technology in order to realize its vision.

The objective of the development in the field of transportation and communication is to realize transportation system that ensuring the integration of inter and among transportation modes, the supply of transportation, post, and telecommunication services that can reach all regions, including isolated, remote and strategic areas. The availability of those services is designed to meet regional needs in accordance with their potential, condition and characteristic.

Strategies taken by the government in efforts to implement its policies in the field of communications are divided as follows:

(a) to provide facilities and incentives in transportation sectors that experiencing obstacles due to economic crisis;

(b) to give priority in accomplishing communication means and infrastructures development;

(c) to simplify and abolish permits;

(d) to optimalize the utilization of existing means;

(e) to keep a conducive business climate:

(f) to refresh the BUMN (The State-Owned Enterprises);

(g) to support the budget and optimalize existing technology;

(h) to modernize telecommunication network and execute limited open sky gradually;

(i) to organize business cooperation and alliance.

Land Transportation

In order to enhance the smoothness of distribution, the government has implemented the program of roads network management.In 1998/1999, there has been accomplished the program of roads management through:

•  the rehabilitation and maintenance of 1,067 km of national roads and 15,535 meter of national bridges and routine maintenance of 15,345 km of roads.

•  the improvement of 2,180 km of roads and reconstruction of 4,369 m or national bridges, including transmigration roads.

•  the construction of 1,379 km of roads and 1,744 meters of bridges.

•  the improvement of 3,125 km of provincial roads and 7,972 km of regencial roads.

•  the construction of 53,429 km of village roads through P3DT program.

In the meantime, the number of operated busses now is 32.92% of AKAP (Inter-city, inter-province) and 67.07% of AKDS (Inter-city, within province), while for urban transportation in DKI (The Special Territory of Jakarta), the number is 58.26% (41.74% decreased). The economic crisis also makes PERUMKA (the Railways Public Company) facing the rise of operational cost. This company also accepts the transfer of passengers from land, sea, air, river, lake, and ferry transportation.

Besides, there are also a fairly luxurious passengers train "Argo Dwipangga" to link Solo Balapan-Jakarta that taking only 8 hours journey started operating on April 21, 1998. There has been also operating "Mahesa" train of Bandung-Semarang direction since July I, 1,998; Brantas train (economic class) of Tanah Abang-Kediri direction since October 1, 1998; Argo Wilis Express train of Bandung-Surabaya direction with ten and a half hours duration of journey since November 8, 1998: Logawa train (economy plus) of Purwokerto-Surabaya direction since April 21, 1999.

To re-operate railways service in Aceh, it is required to widen railtrack from 750 mm to 1,067 mm as found in North Sumatra. Since the fiscal year of 1991/1992, the government has gradually reconstructed those railways tracks. In the fiscal year of 1999/2000, the government will establish a project for rehabilitation of railway services domiciled in Aceh with the task to compose its detail design. This step has a great meaning for the Aceh community and it will directly help to overcome the existing physiological problems.

The government also decides Sabang town as an Integrated Economic Growth Area (KAPET) that covering Sabang Municipality and its surroundings and West Aceh District. There are also still many development activities of transportation implemented in Aceh such as the construction of ports in Kuala Langsa, Lhokseumawe, Sabang, and the expansion of lskandar Muda Airport.

Sea Transportation

During the latest year, there has been operating some express ferry ships of Surabaya-Ujung Pandang line since September 17, 1998; Seroja of  Surabaya-Banjarmasin and Surabaya-Balikpapan lines since May 29, 1999; Mahakarn of Kumai-Semarang line since June 31,1999.

Overseas transportation either for export or import activities is dominated by foreign ships. In 1998, domestic shipping fleet transported 53,650,000 tons/meter cubic of cargo, while in 1997, it carried 72,250,000 tons/meter cubic of cargo or decreased by 25.74%. In 1998, the overseas shipping fleet carried 239,190,000 tons/meter cubic of cargo or decreased by 27.17%. A number of 6,765,998 passengers were transported in 1998, while in 1997 it only carried 4,693,382 passengers or increase of 44.16%.

Air Transportation

The crisis of economy has resulted in the fall of air transport demand optimited by the decrease of people's purchasing power and it inflicts a loss to airline companies.

Financial condition of airline companies is worsen by the fact that 80% of their operational cost must be paid in US$ currency.

The increasing of tariff has been done five times, of equivalent with 121.5% but it did not help to overcome operational deficit, even making the fall of demand. Meanwhile, to improve the quality of air transport services in Irian Jaya, the government had conducted development activities during the fiscal years of 1998/1999 and 1999/2(300 that covering the enhancement of building facilities in 20 airports, including those of pioneer airports, the supply of operational subsidy for 28 flight routes.

Furthermore, in anticipating condition in East Timor, in order to prevent disintegration, the development is still continued, that covering the maintenance of runway facilities, prevention of erosion in Komoro airport, Dili, supply of subsidy for two pioneer air transports.

Haj-Pilgrims Transportation

The implementation of Haj-Pilgrims transportation in 1999 was not dominated anymore by PT. Garuda Indonesia, but it was also carry out by Saudi Arabia Airlines. Realization of Haj-Pilgrim number in 1999 transported from six airport embarkation since February 24, 1999 until March 21, 1999 was 70.695 persons of 99.46% of 71.078 persons registered, consisting of 182 "klotters" (flight groups).

Telecommunications

In the framework of telecommunications reform, the government has carried out the formation of Blue Print on Reform Policy for Telecommunication sector in order to organize the industries in the future. There are three principal innovations implemented essential by Indonesian in telecommunication sector, namely: (a) to abolish all forms of monopoly: (b) to remit all discriminations and restrictions to private sectors: (c) to specialize the government role as promoter.

The government also started operating the Sea Cable Communication System of optical fiber to link Surabaya-Ujung PandangBanjarmasin on May 31. 1999 which will be operated as the nodes to connect Indonesia's West Region and East Region.

Further on May 17. 1999. the government signed the issuance of the first day stamp and telephone-card and the officiation of Homepage MKT-2000.

Foreign Cooperation

Indonesia also enhances foreign cooperation in transportation sector in the type of bilateral, regional and multilateral cooperation. At present, Indonesia has signed four MOU's (Memorandum of Understanding) in transpiration sector between Minister of Communications and his counterparts from Australia, the Netherlands, the UK, and France. In air transport sector, the government has signed the agreement with 61 countries in the world. At present, 34 international airline companies from 29 countries operating to and from Indonesia.

Indonesia also actively participates in international transportation organization, such as International Civil Air Transport Organization (ICAO), International Maritime Organization (IMO), World Meteorological (WMO), Economic and Social Commission for Asia Pacific (ESCAP), WTO/GATS cooperation. International Telecommunication Union (ITU) and Universal Postal Union (UPU).

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