Jamu: Why Isn’t Indonesia’s Ancient System of Herbal Healing Better Known?

In 1990, Irish journalist Susan Jane-Beers noticed an herbal-medicine clinic in the corner of a hair salon in the Indonesian capital of Jakarta, her adopted home. A victim of age-related chronic knee pain that conventional pharmaceuticals couldn’t numb, let alone heal, Jane-Beers decided to try jamu — traditional Indonesian medicine.

The results astounded her. After three days of taking only one-third of the prescribed dose of herbal pills, the pain had vanished, making her wonder if she’d found “the magic bullet of all time.”

Jane-Beers spent the next decade researching the origins, myths, tightly guarded recipes and commercial applications of herbal medicine in Java, where plants have been used for medicinal purposes since prehistory. Her 2001 opus Jamu: The Ancient Art of Herbal Healing remains the only definitive English guide on the subject. It’s also the most widely read outside Indonesia since Herbarium Amboinense, a catalog of plants completed by German botanist Georg Rumphius in 1690 — more than three centuries earlier.

A holistic therapy based on the notion that if disease comes from nature, then so must the cure, jamu uses a dazzling array of teas, tonics, pills, creams and powders to cure — or prevent — every ailment imaginable. The ingredients are by definition cheap, widely available and simple: nutmeg to treat insomnia, guava for diarrhea, lime to promote weight loss and basil to counter body odor.

Jamu has also been used to treat cancer. In her book, Jane-Beers writes of a traditional healer in the city of Jogjakarta who apparently cured what had been diagnosed as a terminal case of cervical cancer with a tea made of betel nut, Madagascar Periwinkle and mysterious benala leaves. By combining the tea with a strict soybean diet, the patient was said to have made a full recovery in 18 months.

Sound far-fetched? A 2011 study by Virginia Tech’s Department of Food Science and Technology on the soursop tree — whose leaves are used to relieve gout and arthritis in Indonesia — found evidence showing that extracts from soursop fruit inhibit the growth of human breast cancer. Vincristine, one of 70 useful alkaloids identified in Madagascar Periwinkle, radically ups the survival rate of children with leukemia, while turmeric is being looked at as a treatment for Alzheimer’s.

“Western medicine tries to destroy cancer, but at the same time it destroys elements of the body. Jamu helps the body produce its own antibodies to fight the cancer by itself,” says Bryan Hoare, manager at MesaStila, a wellness retreat in central Java that serves jamu shots with breakfast and employs a tabib, or indigenous healer, for private consultations. “Coming from the earth, jamu also makes you feel good. When you take it you experience a positive feeling.”

But if jamu is the magic bullet, why isn’t it better known in the West, where natural Asian medicines like India’s ayurvedic system and Chinese herbal healing have been growing in popularity for years?

The answer can be found on the streets of Indonesia, where jamu is consumed regularly by 49% of the population, according to the country’s Ministry of Health. Valued at $2.7 billion annually, the industry covers an incredibly wide gamut of products and regimens, including homemade tonics sold by street hawkers, slimming powders, cosmetics and jamu for babies and postnatal care. Yet the best sellers in terms of value are invariably the dodgiest: those claiming to boost sexual performance or suppress appetite.

“Indonesians may well have been amused when Viagra was released in 1998,” Jane-Beers says, noting the popularity of brands like Kuat Lekali (Strong Man), Kuku Bima (Nail of God) and Super Biul Erection Oil. “They have had their own remedies for years.”

Then there’s the association between jamu and white magic. Many indigenous healers insist on dispensing jamu on auspicious dates or in conjunction with animist spells that predate the arrival of Islam in the archipelago.

Mbah Ngatrulin, a Buddhist tabib I met in Ngadas, the highest village in Java, told me that spells are the key and that jamu may as well be “mineral water.” It’s the kind of comment that prevents many physicians across Southeast Asia from endorsing jamu lest patients take them for quacks.

According to Charles Saerang, head of the Indonesian Jamu Entrepreneurs Association, the primary impediment to a worldwide jamu craze is that locally produced jamu products don’t meet international manufacturing standards. That hasn’t stopped entrepreneurs from buying raw herbal materials in Indonesia, processing them in India and Malaysia and selling them in the U.K. — a market Indonesian-made jamu products can’t access. That’s a double whammy for Indonesia, which loses out on value added by third parties and the chance to promote the jamu brand name abroad.

It’s impossible to say when, or even if, jamu painkillers will be stocked at supermarkets and convenience stores in countries like the U.K. Yet inroads are already being made by small businesses like the Origin Spa in Melbourne. There, highly skilled practitioners apply massage techniques developed by 16th century Indonesian royalty — the founders of modern jamu— using creams and oils containing turmeric, betel leaves and crushed eggshells. There’s a minimum two-month waiting list for Origin’s five-day post-pregnancy treatment that is said to help women regain their figures quickly, improve lactation and dispel wind, dizziness and aches and pains.

“It’s surprisingly popular with the Asian mums throughout Australia,” says partner Jessica Koh. “But it’s still unfamiliar to most of the locals.”

— With reporting by Theo Manday / Ngadas

Read more: http://www.time.com/time/world/article/0,8599,2107489,00.html#ixzz1rWR9XrLy

Jogja Hip Hop Foundation dalam Iklan Intel Visibly Smart

Jogja Hip Hop Foundation (JHF) adalah salah satu grup hip hop populer yang berasal dari Yogyakarta. Salah satu ciri khas JHF adalah lirik-lirik berbahasa Jawa. Grup yang satu ini juga selalu mengenakan kemeja batik di setiap konsernya. Di bulan Mei lalu JHF berhasil menampilkan hip hop Jawa di New York, kota sakral bagi para pecinta hip hop. JHF pun mulai dikenal publik tanah air karena berani berbeda dengan mengkolaborasikan budaya tradisional Jawa dengan musik modern.

JHF Crew di Time Square, New York

Kabar terbaru dari JHF adalah kerjasama mereka dengan Intel Indonesia dalam iklan terbaru Intel Indonesia dengan tagline Visibly Smart. Versi lengkap iklannya sudah bisa disaksikan di YouTube sejak tanggal 14 Oktober. Video berdurasi hampir 6 menit itu menceritakan JHF secara singkat hingga saat ini. Marzuki Muhammad alias Kill The DJ mengatakan di blognya :

“Kami sangat berbangga atas kerjasama mutualis dengan Intel Inside ini, dimana telah menempatkan kami tetap sebagai diri kami sendiri dengan segala kemandirian dan idealisme yang kami percaya dan telah kami bangun selama ini. Sebuah apresiasi atas dedikasi yang membanggakan.

Dalam video tersebut Kill The DJ menuturkan sumber-sumber inspirasi JHF yang begitu beragam, mulai dari kehidupan sehari-hari di Jogja, puisi-puisi tradisional Jawa hingga pementasan wayang kulit. Kill The DJ juga menceritakan bahwa JHF selalu mendokumentasikan perjalanan dan pementasan yang mereka lakukan, karena JHF yakin itu akan menjadi sesuatu yang bermanfaat di masa depan. Kill The DJ merasa bahwa kemudahan akses pada sosial media di era digital ini bermanfaat bagi musisi untuk mengenalkan karya-karyanya pada masyarakat tanpa tekanan dari pihak luar seperti pihak label misalnya.

Semoga dengan adanya video ini bisa lebih mengenalkan dan melestarikan budaya Indonesia kepada masyarakat luas terutama generasi muda agar Indonesia menjadi Indonesia yang sebenarnya di masa depan, seperti diungkapkan Kill The DJ:

“Ketika generasi mudanya bangga dan memahami dan mau belajar kembali kepada akarnya, itulah Indonesia yang sebenarnya, Indonesia ke depan”

Salut untuk kreatifitas dan prestasi kawan-kawan JHF, semoga sukses terus! Apalagi sudah ada tawaran untuk tur di Amerika Serikat tahun depan. Membanggakan Indonesia dan tentu saja Jogja.

- – -

Ditulis untuk Good News From Indonesia oleh Alfonsius Johannes

Sumber:

Video
Blog Kill The DJ
Hiphopdiningrat

Heru, Indonesian Multi-Talented Musician on Europe Tour with French DJ

Far from infotainments spotlights, this man from Yogyakarta flew to Europe on July 19 for a tour with French DJ, Chinese Man Records.

This man, Heru Wahyono, describes himself on his Twitter (@HERUWA) as “The singer of your favorite band @shaggydogjogja and the mastermind behind Indonesia’s wildest dance unit @dubyouth_yk”. First meeting between Heru and Chinese Man Records was In June 2009, when Dubyouth was being the opening act of Chinese Man Records’ show at Yogyakarta. In November 2009, Dubyouth came to Paris for collaboration show with Chinese Man Records and Rollin’ Rockers. Few stories of their collaboration also recorded and published in YouTube (click here to watch the video).

Then, in 2010 Heru met Chinese Man again when Chinese Man was on a vacation trip; the trip also looked for some inspirations for Chinese Man Records album entitled Racing With The Sun. The album released on April 2011, including one song entitled J.O.G.J.A., a song where Chinese Man Records collaborate with Indonesian musician: Kill The DJ, M2MX, and of course Dubyouth. Heru also participated as co-producer of the album, and then Chinese Man Records invited him to join the tour.

The first show of the tour has just finished on July 21. Via his Twitter Heru said there were about 3000 people dance together and enjoy the show which was held in Vienne, France. Here are some photos of the show, check ‘em out!

Chinese Man Records and Heru will have more gigs in France and also in Belgium until August 2011. Indonesia should be proud that Indonesian musicians are really appreciated by other country. Heru also tweeted that his friends in Europe give big respect to Indonesian musicality. They are amazed that averagely people in Indonesia can play guitar.

Source :

http://twitter.com/HERUWA

http://jogjanews.com/2011/07/19/heru-shaggy-dog-bersiap-tour-eropa/

written by Alfonsus D Johannes
edited by Farah Fitriani

http://www.facebook.com/pages/Chinese-Man/100103787370

A Land of Contrast

There are many reasons Americans should be watching events in Indonesia, the Southeast Asian archipelago nation of more than 17,000 islands. While its booming economy is attracting millions in U.S. investments, officials are concerned about growing Islamic extremism.

The nation’s tolerant brand of Islam blends piety with modernity. While many Indonesians answer the call to prayer five times a day, they also answer friends on Facebook. Women in miniskirts amble alongside friends clad in the jilbab headscarf, and bars, nightclubs, karaoke and alcohol are easily found in most cities.

Indonesia, with 240 million inhabitants, is the world’s fourth-most-populated country and the world’s third-largest democracy. Secretary of State Hillary Rodham Clinton has praised Indonesia as a place where “Islam, democracy, modernity and women’s rights can coexist.”

Indonesia: A few facts

• Indonesia’s economic revival is based largely on domestic consumption and its rich natural resources of oil, natural gas, coal and palm oil.
• Its annual per capita income has more than tripled from $1,000 in 2000 to a projected $3,500 in 2011.
• Foreign investment skyrocketed 52 percent last year to $16.2 billion; annual economic growth is projected at 6.4 percent.
• The rupiah is at a seven-year high against the U.S. dollar, and, according to the Wall Street Journal, “Indonesian stocks are perkier than a cup of java.”
• Economic progress has largely occurred since the fall of the 31-year authoritarian rule of Gen. Suharto (1967-1998), and has been made possible by a stable democracy led by President Susilo Bambang Yudhoyono, the nation’s first president to win by direct vote in 2004, who easily won re-election in 2009.

The nation’s challenges

• Endemic corruption has worsened under a Yudhoyono reform program to transfer political and economic power from Jakarta to the provinces.
• The United Nations says half the population lives on less than $2 a day.
• Millions still lack potable water, adequate sanitation and electricity.
• About one-third of children under 5 suffer from malnutrition.
• Violent attacks by Islamic fundamentalists are growing.
• Indonesia’s population is also soaring, which could negate future economic gains. At an annual growth rate of 1.3 percent, the population will reach 470 million by 2060, and 940 million by 2110, according to the National Family Planning Coordination Agency.

Source: www.sfgate.com

‘We Can be Model for Islam and Democracy’

Indonesia’s transition from an autocracy to a vibrant democracy can be an example to those countries in the Middle East experiencing political upheaval, says the country’s President Susilo Bambang Yudhoyono.

“Indonesia can be a model where Islam and democracy exist hand in hand, with no contradiction between the two,” he told CNN.

“We are still facing some challenges to becoming a role model… there have been some difficulties, some ups and downs, setbacks, but we insist that democracy, Islam and modernity can exist together.”

President Yudhoyono became Indonesia’s first democratically-elected president in 2004 and has steered the country’s fledgling democracy towards greater political transparency and economic growth.

Countering religious extremism

Indonesian president on corruption We are still facing some challenges to becoming a role model but democracy, Islam and modernity can exist together.

A former general under the autocratic regime of President Suharto, Yudhoyono is seen by many as successfully taking a steady path towards confronting the problems inherited after 32 years of Suharto’s rule.

One of those was divorcing the military from the country’s political set-up.

“During our reform process, I was actively involved in implementing internal reforms in the military. Afterwards, the military relinquished its political role. The military started respecting democracy and human rights,” he said.

“So what’s happened in Egypt, the political power has to be first reformed, including the military, and together with the rest of society they can push forward reforms. Perhaps those are the lessons that can be learned by our friends in the Middle East and North Africa.”

Combating corruption and Indonesia’s reputation for “crony capitalism” has also been high on the agenda for Yudhoyono. The World Economic Forum has stated that corruption is still rife in Indonesia and Yudhoyono believes it will need to be addressed long beyond his term in office ends in 2014.

“Corruption is indeed our biggest challenge — my biggest challenge. I have to be frank on that,” he said.

“The practice of collusion between government officials and business has been rectified and it is not like what happened 10 or 20 years ago. I see that we are headed in the right direction. I expect that Indonesia will need about 15 to 20 years to implement a system that would spur a stronger culture or a climate of a fear of corruption.”

Yudhoyono credits better ties to the private sector as a reason for Indonesia faring well during the recent global economic crisis, unlike the financial meltdown that affected Asia in 1998 and led to the collapse of Indonesia’s currency.

Indonesia’s economic forecast is for 6.4% growth this year and is predicted to rise, but balancing that against other concerns is key, believes Yudhoyono.

“Growth is not our only economic target. We have other targets as well — such as job creation, poverty reduction and the protection of the environment,” he said.

“We choose to grow by about 7%… and I think this is achievable and we can do this without damaging our environment. This is important because we want to protect our planet, the environment and the future of our children and grandchildren. My government has declared that we are committed to a 26% reduction of emissions by the year 2020.”

(source : CNN Asia)

A Role Model for Myanmar

Our country is probably in a transition, but in ASEAN, we are expected to influence Myanmar (originally known as Burma) to improve its human right records. History has shown that Indonesia can survive from dictatorship and have been developing faster than other countries which were in the same condition. therefore, many countries believe that Indonesia has become a positive example of how a democracy can emerge from a dictatorship.

JAKARTA—Twenty-five years ago, both Indonesia and Burma were ruled by totalitarian regimes known for their human rights abuses, lack of genuine democracy and corrupt leaders who siphoned off national resources. Indonesia is now a functioning democracy and human rights advocate with a relatively transparent, free market economy. Burma, on the other hand, has slid further into the pit of oppression and corruption.

Former Burmese dictator Ne Win, left, and Indonesia’s then President Suharto in Jakarta in September 1997. Less than a year later, in May 1998, Suharto was forced to step down after 32 years of military-dominated rule. (Photo: AFP)

With Indonesia set to chair the Association of Southeast Asian Nations (Asean) in 2011, and given its recent transformative history, some observers believe Jakarta is the best suited of all Asean members to influence Burma. But if Indonesia is able, directly or indirectly, to effect a positive change in Burma, it will have to succeed where Asean and the international community have previously failed.

Although Asean’s general-secretary, Surin Pitsuwan, once vowed that Asean would be a “wheel of change” in the region, observers say that since its establishment in 1967, the organization has come up short in its meager efforts to improve the human rights record of member states. While Indonesia, the Philippines, Thailand and Malaysia have recently become more active in calling on the Burmese regime to institute democratic reforms, members such as Brunei, Singapore and Vietnam are still reluctant to pressure the junta.

Observers hope that when Indonesia—Asean’s largest and most populous country— takes over as chair of Asean, it can help find a common platform among Asean members that could provide a basis for calls for reform in states such as Burma. Sources within Asean also said that Indonesia may use its chair position to actively pressure the Asean Intergovernmental Commission on Human Rights (AICHR) to push Burma to improve its human rights records and institute democratic reforms.

Ready to Lead?

Jakarta may already be laying the groundwork for that push. At the 16th Asean summit that took place in Hanoi in July, Indonesian Foreign Minister Marty Natalegawa said the bloc wants very much to see an election in Burma that meets international standards for recognition and credibility. And in March 2010, Natalegawa told his Burmese counterpart in Naypyidaw that Jakarta expected the regime to “uphold its commitment to have an election that allows all parties to take part.”

This is not the first time, however, that expectations were raised regarding Indonesia’s potential influence on Burma. In August 2009, the executive director of the US Campaign for Burma, Aung Din, said “Indonesia is a leading member of Asean, a close friend of Burma and has access to the generals in Naypyidaw. Indonesia is also a reliable partner of the US and EU in many areas. Therefore Indonesia can help to build a bridge between the Western powers and the generals in Burma.”

News Source : Irrawaddy

Photo Source : saveburma

Thank you Mr. Ahmad Saiful for the news tips!

The $ 672 billion roars !

Indonesian stocks are traded by Japanese investors every day, but one recent request from Tokyo was out of the ordinary. A big investor phoned up a local fund manager asking to buy $1bn in equities on the Jakarta stock exchange within just 20 days.

Jakarta is not liquid enough to handle that kind of money. But the anecdote shows the scale of interest that has made it one the world’s best performing stock markets this year.

According to EPFR, a research firm that tracks fund flows, net inflows into equities in the first half of 2010 were $971m. At that rate, net inflows are on track to top last year’s $1.1bn. Much of that came from Japan, which recently upgraded Indonesian government debt to investment grade and is the largest foreign, long-term investor in the nation. With sturdy economic growth, stable politics, low inflation and a consumer market of 240m people, there is an unusual absence of bears questioning Indonesia’s prospects. It seems Asia’s sleeping $672 bn tiger has finally awoken.

“You’ve got a scenario of very sustainable 5.5 per cent to 6 per cent growth, historically low inflation prevailing for some time, a stable currency and bond yields falling to record lows,” says Tim Condon, chief economist for ING Asia. “This is a very attractive climate for investors.”

Indonesian equities are now valued at an average multiple of 17.5 times the consensus of forecast earnings this year and 15 times 2011 profits. That compares with an average multiple for the emerging markets universe of 11.9 times 2010 earnings and 9.9 times next year’s profits. The Jakarta composite index rose 86 per cent in 2009 and is up 19.4 per cent this year. It was a safe haven when most economies slipped into recession, largely because two-thirds of gross domestic product is generated by domestic consumption.

Morgan Stanley warns that the country’s stock market is over-priced compared with India and China or south-east Asian peers. Others analysts say Indonesia is too poor and has too small a middle class to be ranked investment grade.

But Mr Condon says: “In a world of considerable uncertainty, countries that are able to show resilience and some insulation from that uncertainty, like Indonesia has shown, will remain standouts … that will continue into the second half.”

Foreign buying of bonds has driven down the yield on the 10-year government issue to slightly more than 8 per cent this year. EPFR says net inflows into the country’s bond markets have been $2.1bn this year, making Indonesia second only to Mexico among emerging markets in attracting bond investors. Investors are optimistic about the rupiah and sound monetary policies under the first directly elected leader, President Susilo Banbang Yudhoyono. The economic outlook is also robust. Interest rates are expected to remain steady, although a surprise spike in July inflation above 6 per cent could prompt a sooner-than-planned rate hike.

Ito Warsito, president director of Jakarta’s stock exchange, says market capitalisation has more than doubled since the end of 2008 to more than $250bn. His goal is to take public 75 companies and boost the market capitalisation to $300bn by the end of 2012.

“My main focus is market capitalisation,” Mr Warsito says. “The current appreciation of our index and prices also creates a burden, but it is a nice problem for us.”

Investors are looking to buy shares in the natural resources, banks, infrastructure and consumer goods industries. Upcoming IPOs will include miner PT Berau Coal, telecommunications company Tower Bersama Group, Krakatau Steel and the national airline, Garuda.

[via Financial Times]

New Celebrities of the Sea

by Ahmad Saiful Muhajir

We already posted some new rare species found in Indonesia, but it seems that more and more beautiful and fabulous rare species are found gaian, by the joint expedition between Indonesia and NOAA called Indonesia-USA Deep-Sea Exploration of the Sangihe Talaud Region (INDEX 2010).

This expedition started from June to August 2010 with collaboration from Indonesian scientists will work side-by-side on two ships, the Okeanos Explorer and the Indonesian research vessel Baruna Jaya IV, and at Exploration Command Centers ashore. The areas of expedition is surrounding the Sangihe and Talaud island chains northeast of North Sulawesi, where there are sure to be many geological and biological discoveries.

Until today, Tuesday, they found 52 new species and eight sea mounts in deep waters. The species were found at the depth between 300 to 2,000 meters beneath the ocean’s surface including fish, shrimp, coral and shells.

Researchers also identified six sea mounts near North Siau Island and two sea mounts near Bunaken in 700-1,600 meters below the sea. Here are some pictures that’ll amaze you.

Check more pictures and stories at INDEX 2010′s site. All images courtesy of NOAA Okeanos Explorer Program, INDEX-SATAL 2010.

Global Companies Should Be In Indonesia

A fertile archipelago of 17,500 islands, and one of the world’s most populous countries, Indonesia is enjoying an unprecedented consumer and resource-driven boom. In April, the International Monetary Fund predicted that its $514 billion economy, the biggest in Southeast Asia, would grow 6 percent this year, up from 4.5 percent in 2009.

James Castle, a Michigan native who founded the CastleAsia consulting firm, has been doing business in Jakarta for more than 30 years and has more than 100 multinational clients, including Citigroup, Siemens and Shell. Mr. Castle spoke in an interview this month about why the Indonesian market was starting to get the recognition it deserved.

Q. What are some of the pleasures and pitfalls of doing business in Indonesia?

A. The real pleasure is that it’s a good place to make money. Companies tend to be quite profitable here. The pitfalls are that it is highly bureaucratic, regulations can be confusing and sometimes implementation can be inconsistent. These things can be intimidating, especially for new-to-market people. But it’s also a very practical country where most problems get worked out, and not in a corrupt manner; most multinationals can do business here consistent with other codes of conduct around the world.

It has a stereotype of not being a very efficient manufacturing economy, but that’s not true. There are exporters here, aside from the normal natural resource and commodity exporters, who are gaining market share and are reasonably competitive.

Q. Has it become easier to do business here as Indonesia’s political system has stabilized into a relatively solid democracy?

A. We’ve had pretty stable politics here for a decade now, since ’99. That’s certainly a big plus and one reason companies are profitable. Because the democracy is young, you do get a lot of bureaucratic uncertainty. People aren’t quite sure where the political power lies. But our regulatory uncertainty is not political instability. In terms of law, order and safety, it’s a very good place to operate.

Q. You have survived two separate terrorist blasts in Jakarta, one of which took place just last July. How real is the threat of terrorism in Indonesia? Should it scare off investors?

A. That last blast was the first attack in several years. It’s part of the global trend in political terrorism we see around the world, and it’s a tragedy. But as I’ve said before, more people die of dengue fever than die of terrorist activity here.

I think it does deter some businesspeople, but not too many. Indonesia, because of its performance economically and because it’s one of the faster-growing members of the G-20, has got a lot more interest at headquarters. I think most companies, if they don’t have a position on Indonesia, want to have one.

Q. Do you think Indonesia should be a contender for the BRIC club (the group of powerful emerging economies named after Brazil, Russia, India and China)?

I think BRIC is a catchy term, but the countries in the group are so different. What’s the common denominator of a BRIC? That said, the world is changing, countries that were low-income are able to move up, a variety of political and social systems can make that happen. I would say that the long-term stability ones are India, Indonesia and Brazil. I think both China and Russia have tremendous political obstacles to overcome, though meanwhile they both can be very good places to do business. Large companies will have the resources to go into all these countries if they want to. So it’s really just a question of, ‘Is that particular market ready for us right now?’

Q. Does Indonesia get forgotten by the global business community amidst all the attention lavished on India and China?

A. After ’98 and the Asian financial crisis, Indonesia just got ignored. Now it’s in the discussion. Some companies may for very good reasons decide that now is not the right time for them to come here, but they will have made a conscious decision. Indonesia can no longer be ignored. If you’re a global company, and you’re not in Indonesia, you really have to ask yourself why, or why not.

It’s really starting to get the attention it deserves, and that I attribute to its visibility in the G-20 and the fact that it was one of the high-growth countries in the slowdown of the last 18 months. Most big companies are looking at Indonesia and trying to find opportunities here.

And if they’re not, they should.

Q. What important changes does the government need to implement to improve the country’s business climate?

A. Where the government has made some progress is the anti-corruption movement. I’ve been here a long time, and this is the first government that’s made a real, noncynical attack. But they’re still not halfway there, whether you’re talking about judicial reforms or bureaucratic reforms.

The other area where the government is being too slow is in all the regulations that are preventing infrastructure investment, whether public or private sector. They ought to be able to forge a political consensus on how to move ahead. That we haven’t had more infrastructure investment and that Indonesia’s been unable to create the policy environment to make that happen has been the big disappointment of the last number of years. It’s been a huge loss to the country.

Q. Do you have any advice for newcomers to the market?

A. If you think there’s a market for your product here, there’s a legal way to get into the market. It just may take more time and energy. Indonesia’s what I call a ‘management intensive market.’ It takes a lot more senior management time. If you’re confused, there are plenty of lawyers and accounting firms and consultants here who can give you advice and help you through the thicket. The Investment Coordinating Board has a new chairman now, Gita Wirjawan, who is very much pro-business. We’ve never had a head who has understood the private sector as much as he has and he’s instilled that spirit through the board.

You can’t do something here overnight. You can’t fly into town, set up a company and be operating in 48 hours like you can in some countries.

Singapore is friendly in that way. So are some of the Middle Eastern countries. But they don’t have the market.

Study the market very carefully. Don’t come in with a very short-term objective of getting something going in three to six months. Don’t cut corners, don’t get frustrated by the bureaucracy, because you will get through it.

One of the reasons a lot of the new investment here is coming from people already in the market is because some new-to-market companies give up too soon. Indonesia is a little harder than some of the other markets to get into. But it’s worth the effort.

[Source / image credit: Digirain]

Moody’s: Indonesia’s Credit Rating is Positive

Indonesia’s credit rating outlook was raised to positive by Moody’s Investors Service, highlighting the strength of Asia’s emerging economies amid soaring debt burdens in developed nations from Greece to Japan.

The outlook on Indonesia’s Ba2 local-and foreign-currency sovereign ratings was changed from stable, Moody’s said in a statement today, three months after Standard & Poor’s raised the country’s credit rating to a 12-year high. Moody’s last upgraded Indonesia’s debt, to two levels below investment grade, in September 2009.

“The core of Indonesia’s growth story is driven by a large domestic market that is appropriately managed by a well-tested economic policy framework,” Aninda Mitra, Moody’s vice-president and its lead sovereign analyst for Indonesia, said in the statement.

The rupiah has risen 15 percent against the dollar in the past 12 months, the biggest gainer in Asia, as investors poured money into an economy that expanded even as the global financial crisis pushed Japan, the U.S. and Europe into recession. Southeast Asia’s largest economy is less reliant on exports than its neighbors, and the re-election of President Susilo Bambang Yudhoyono to a second term last year boosted confidence.

“In the eyes of the international investor, the Indonesian story is a good one,” Fauzi Ichsan, a Jakarta-based senior economist at Standard Chartered Plc, said in a telephone interview today. “In Asia, after China and India, where can investors go?”

Stocks, Rupiah
The benchmark Jakarta stock index rose 1.5 percent to 2,973.36 at noon local time, exceeding its April 30 record close. The rupiah gained 0.9 percent to 9,013 per dollar as at 12:23 p.m.

Moody’s said it expects Indonesia to post “sustained strong growth” and further improvements in the government’s financial and debt position. External disturbances such as the “instability in several European sovereign debt markets” have had no serious implications on Indonesia’s “improving” credit fundamentals, Mitra said.

S&P raised Indonesia’s sovereign credit rating to BB from BB- on March 12, with a positive outlook. S&P and Moody’s both rank Indonesia two levels below investment grade, while Fitch Ratings on Jan. 25 raised its rating to one step below investment.

Race to Raise
Improvements in the level and composition of the government’s debt, along with sustained gains in the country’s external position or a deepening of domestic markets, would be the most likely triggers for a rating upgrade, Moody’s said.

“The three houses are racing in raising Indonesia’s” ratings, said Ichsan. “If the government’s fiscal policy stays conservative and stable with a budget deficit below 3 percent of the gross domestic product, investors will be more convinced that from a fiscal perspective the Indonesian government is prudent.”

Indonesia’s central bank unveiled measures last week to encourage investors to keep their money in the economy longer and reduce volatility in capital flows and the rupiah. The move is “ratings neutral as it does not fundamentally restrict the timely and comprehensive servicing of credit obligations,” Mitra said today.

In the past five weeks, President Yudhoyono has moved to fill a yearlong leadership vacuum at the central bank by nominating Bank Indonesia Acting Governor Darmin Nasution to take the job permanently. He also named Agus Martowardojo as finance minister to replace Sri Mulyani Indrawati, who joins the World Bank as one of three managing directors this month.

“Recent appointments and nominations at the finance ministry and at the central bank are supportive of policy continuity and institutional credibility,” Moody’s said. “The increase in Indonesia’s foreign currency reserves is also notable, while better prospects for foreign direct investment could sustain further improvements in the overall external position in line with its sovereign ratings peers.”

(source)