News Digest – April 1, 2013
Saturday, April 6, 2013
Indonesia’s Healthcare Spending Set to Expand
March 30, 2013, The Jakarta Post
Indonesia’s healthcare expenditure is predicted to reach US$60.6
billion in 2018 with a growth of 14.9 percent over the 2012-2018
period on account of faster growth in age groups above 35 years,
urbanization and an increase of lifestyle-related diseases such as
cancer and diabetes, says research and consulting firm Frost &
Hannah Nawi, Frost & Sullivan’s Healthcare Practice Associate
Director for Asia Pacific, said Indonesia’s median age was 28 years
and that age groups beyond 35 years were projected to grow faster than
the average from 2010 to 2014.
“Urbanization and a slowly aging population will the drive demand
for healthcare in Indonesia,” Hannah said recently.
She added that increasing chronic and lifestyle-related diseases,
including cancer and diabetes, especially in big cities in the
country, would also play a large role in the increasing public demand
for healthcare services in the next few years.
“In terms of the healthcare burden, once you are a cancer patient,
you’ll be in treatment for life. The same goes for diabetes,”
Hannah said, adding that it could put a strain on healthcare
Separately, the head of the Indonesian Hospital Association (PERSI),
Sutoto said that the national healthcare system under the Social
Security Providers (BPJS) Law would also play a significant role in
increasing the country’s total healthcare expenditure.
The health insurance, which will cover 121.6 million people as of Jan.
1, 2014, will be made available in stages for all eligible Indonesians
“Many hospitals questioned their readiness ahead of the
implementation of the BPJS next year, when in fact it actually opens
more opportunities for the healthcare industry, especially for private
hospitals,” Sutoto said. “Around 86 million low-income people who
have no access to healthcare services, will be able to receive
hospital services by the time it is implemented, and the government
will pay their premiums,” he added.
The country, however, still faced a lot of challenges in fulfilling
the increasing demand for healthcare services, Nitin Dixit, Frost &
Sullivan’s healthcare senior industry analyst, said.
“The first challenge is the uneven distribution of resources. The
hospital, the doctors, the entire healthcare infrastructure is
unevenly distributed,” Nitin said.
Sutoto said that the country’s doctor-to-people ratio was only 3
doctors per 10,000 people, much less than Malaysia, which has 9
doctors for every 10,000 people and Cuba, which has 64 doctors for
“We have a total of 73 medical faculties across the country, but yet
we are still lacking doctors, especially specialist doctors,” he
He also said that hospitals should start recalculating their service
costs and make it more efficient ahead of the BPJS, as the government
would apply an equal healthcare tariff across all healthcare
institutions to ease insurance claims.
“We urge all hospitals to reduce their costs and make it more
efficient ahead of the BPJS,” Sutoto said. “At the same time, we
hope the government assists us and lowers taxes, as well as
electricity and water tariffs for hospitals, as we will have to
provide more third class rooms for low-income people,” he said.
The Living Noodle Bowl: ASEAN Trade Agreements
March 29, 2013, East Asia Forum
By Christopher Findlay and Shandre Thangavelu
Mega-regionalism is a major feature of trade strategies in the Asia
Pacific today. The ‘spaghetti bowl’ of interwoven bilateral FTAs
offers no real future, a realisation that has led to greater action on
multi-country agreements. These agreements include the Trans-Pacific
Partnership (TPP), the Regional Comprehensive Economic Partnership
(RCEP), ASEAN+1 agreements, and the proposed China–Japan–South
Korea Free Trade Area (CJK). The ASEAN Free Trade Area is a
longstanding regional initiative that lies at the core of RCEP. The
important question now is whether this work on multi-country
agreements will help with global integration, or whether it will it
simply add new noodles, like slabs of lasagne, to the ‘pasta bowl’
of Asian trade agreements.
East Asian economies have been debating the appropriate size and
makeup of regional arrangements. ASEAN chose the larger RCEP, which is
open to all its plus-one partners, due to recent progress on the TPP
in the light of renewed US interest, and a search for new sources of
growth and an increased focus on ASEAN centrality following the global
financial crisis. The CJK would have linked three of the big East
Asian economies and could have been a threat to the centrality of
ASEAN in regional trade, but the grouping is not big enough to manage
the relationships among its partners. Japan has been searching for a
way to manage the rise of China, largely through its relationship with
the United States, and has chosen instead to sign up with the TPP. The
tension between Japan and China over the Senkaku Islands would make
the CJK difficult to achieve in any case. South Korea already has an
FTA with the United States, meaning the TPP has less to offer it. The
South Koreans may prefer an FTA with China, but have decided to work
The prospect, then, is for an RCEP bloc on one side and a TPP bloc on
the other — although there will be some joint members, including a
number of ASEAN countries, Australia and most likely Japan.
TPP negotiations will progress slowly — new members will be added
and talks will be dominated by the US trade representative, whose
interests may derail negotiations. The TPP is open to new members, but
many, such as China and Indonesia, will find it difficult to meet the
agreement’s expectations. It is also less relevant to East Asian
supply chains. RCEP is likely to reach a conclusion sooner than the
TPP. The agreement is less demanding, and its contribution will depend
on whether it adopts a top-down or bottom-up approach. A top-down
approach would require new negotiations and would lead to a greater
‘lasagne risk’, with many layers of overlapping multi-country
agreements. A bottom-up approach would build on the existing plus-one
agreements between each of the members. This approach would not be
easy either because of the diversity of agreements, but it may offer a
more substantial outcome and could strengthen existing supply chains.
RCEP members, if they can agree early enough, can make significant
progress because of their size and the complementary nature of their
economies. They could headhunt new members in the TPP and in Central
Asia. Members could also establish a link with the European Union,
which would be a great advantage. The United States would likely then
take a concerted new approach to ASEAN. But several challenges remain.
For example, Hong Kong could be rolled into RCEP but how could Taiwan
The two economic agreements — RCEP aligned with China and the TPP
aligned with the United States — may add to the tensions surrounding
the global leadership ambitions of both these countries. But China and
the United States also have a lot of common interests, to the point
where the China–US relationship could arguably now become too big to
fail. On the other hand, RCEP could still be put at risk because of
tensions between its members. Tension between China and Japan is based
on domestic politics, which adds to the chance of accidental
escalation. And the South China Sea dispute involving China and
several ASEAN countries has still not been resolved. As Peter Drysdale
puts it: ‘political instinct might dominate rational calculation’.
Yet RCEP also provides an opportunity to practice rational
calculation. Members can put immediate issues into a longer-term
context and identify common interests.
RCEP can establish good economic policy and integration as long it has
some higher-level principles. Without them, there is still the risk of
the ‘lasagne outcome’. This could be the case whether the members
take a top-down or a bottom-up approach. Jayant Menon argues, for
instance, for the promotion of multilateralisation as a guiding
principle. Members would pass on established preferences to
non-members, providing a way to manage the ‘lasagne risk’. The
principle of multilateralisation would also generate greater gains and
provide a way to deal with non-members of the formal agreement,
Christopher Findlay is Executive Dean of the Faculty of the
Professions at the University of Adelaide.
Shandre Thangavelu is Associate Professor in the Department of
Economics, National University of Singapore.
Indonesia Should Ban All Private Cars From Using Subsidized Fuel: Adviser
March 29, 2013, Reuters/Jakarta Globe
By Randy Fabi and Janeman Latul
Indonesia should slap a nationwide ban on the use of subsidized fuel
by the country’s 11 million private cars, a move that would save the
government $8.6 billion this year and erase a widening fiscal deficit,
a presidential adviser said.
President Susilo Bambang Yudhoyono is struggling to find a way to deal
with runaway fuel subsidy costs that now account for more than 30
percent of state spending and are draining funds that should be used
for much-need infrastructure in Southeast Asia’s largest economy.
Despite the massive cost, government officials have made clear that
raising fuel prices is not an option for the moment, fearful of the
impact on inflation and a repeat of the social unrest that past price
hikes have triggered.
“We recommended halting the subsidy for rich people by taking out
the subsidy from private vehicles,” said Chairul Tanjung, chairman
of Yudhoyono’s main economic advisory group.
The advisory committee’s proposed cuts would not cover motorcycles
and public transportation, including buses and taxis. Most Indonesians
cannot afford their own cars.
Tanjung, a 51-year-old billionaire and founder of CT Corp estimated
the bold measure would cut consumption of subsidized fuel by 52
percent. He spoke to Reuters on the resort island of Bali after
lengthy meetings there with the president on fuel subsidies and trade.
The president will discuss the recommendations in a cabinet meeting
next Thursday, when a final decision could be announced.
Critics say the plan would be difficult to enforce and that previous
measures, such as banning the use of subsidized fuel for government
cars, have done little to ease the crushing burden on the national
budget. Last year, the subsidy bill was $22 billion — nearly 4
percent of total economic output.
The committee estimated the proposed plan would save the government 84
trillion rupiah ($8.64 billion) this year, from a cost of more than
300 trillion if nothing is done.
The finance minister said earlier this month the subsidy bill would
likely drive the fiscal deficit to more than 2 percent of gross
domestic product and could force the government to cut spending in
Many economists, including senior officials from the International
Monetary Fund and World Bank, have urged the government to scrap all
subsidies and hike fuel prices to free up funds for infrastructure,
education and health care.
But with general and presidential elections looming next year, and
memories fresh of violent protests over fuel-price rises in 2005 and
2008, Yudhoyono has indicated he would only boost pump prices as a
Tanjung, whom Forbes says is the 5th richest Indonesian with a net
worth of $3.4 billion, argued that the rise in fuel prices for private
vehicle owners would not have a significant impact on inflation.
“This actually will not directly impact inflation because you are
taking the subsidy only from rich people,” he said.
The World Bank estimates the average car owner saves around $100 a
month from the cheaper fuel, while a motorcyclist’s benefit is $10
and those riding on public transport only $1.
The Much Needed EU Pivot to East Asia
March 29, 2013, East Asia Forum
By Patrick A. Messerlin, ECIPE and SNU
The EU is facing formidable challenges. The euro crisis is far from
over, with expected ‘debt walls’ higher than those predicted a
year ago. Less visible, but much more pernicious and damaging, is the
lessening of competition in many sectors due to the past several years
of crisis, a trend that is evident to varying degrees across all EU
member states. This lessening of competition favours the most powerful
rent-seekers, and is a sure recipe for increased inequality and
Against this backdrop, the EU’s current macroeconomic and budgetary
policies are not politically sustainable. One solution to the EU’s
predicament is further trade liberalisation, which could buttress
domestic reforms and boost growth. In the absence of an increasingly
unlikely Doha deal, steps toward greater trade liberalisation will
rely on preferential trade agreements (PTAs).
This raises two questions for the EU: first, which PTAs are most
likely to provide the biggest and fastest boost to its growth, and,
second, which PTAs will best insure EU member states against the
discriminatory effects of the PTAs concluded among large, non-EU
economies? The latter is a key question because PTAs, by definition,
favour trade between signatories to the detriment of trade between
signatories and the rest of the world.
The first question focuses on the ‘growth’ dimension of trade
policy. PTAs will only be able to boost domestic growth if the
economies of the EU’s PTA partners fulfil three conditions. They
should be big enough to generate economies of scale and scope capable
of having a substantial impact on the EU’s relative prices —
important because changes in relative prices are the source of welfare
gains. They should also be well regulated because modern economies are
dominated by services, the efficiency of which depend largely on the
quality of the regulatory schemes in place. Finally, they should have
a wide network of good-quality PTAs, capable of offering EU firms
better opportunities to access the economies already covered by those
PTAs (the ‘hub’ quality).
Apart from the US, Japan and Taiwan are the only economies in the
world that meet these three conditions (the EU already has an FTA with
South Korea). Although China, and to a much lesser extent India, offer
better growth opportunities in the long run when it comes to size,
they score poorly on regulatory quality, ranking 92 and 132
respectively in the 2012 Doing Business report. By contrast, Japan and
Taiwan are ranked 20 and 25 in the same report (better than many EU
Member States). Additionally, when it comes to the ‘hub’
criterion, Japan has PTAs with ASEAN countries, while Taiwan has a key
PTA in place with China. The capacity of Japan and Taiwan to meet all
three conditions indicates the need for a resolute EU pivot to East
The second question focuses on the ‘insurance’ dimension, which is
important given the emergence of non-EU ‘mega’ PTAs around the
world, such as the US-led Trans-Pacific Partnership (TPP) and the
China–Japan–Korea initiative. Remarkably, factoring in the
insurance dimension still leads to the same set of preferable PTAs for
the EU: a PTA with Japan will insure EU firms against the potential
discriminatory impacts of the TPP, while a PTA with Taiwan will do the
same with respect to the China–Japan–Korea initiative.
Finally, the EU should ask itself how it will balance any pivot to
East Asia with the PTA negotiations that it already has underway. This
is important when it comes to creating an order of priority for
negotiations, all of which will inevitably consume a huge amount of
time, staff and funds.
Regarding the US, the EU should bear in mind that despite fitting the
three conditions related to the first ‘growth’ dimension of trade
policy, any negotiations on an EU–US PTA are likely to be difficult.
This is mostly because the US insists on harmonisation and/or
convergence with US regulations in its TPP negotiations (as the EU was
systematically doing a few years ago). This is inconsistent with the
EU’s current approach, which increasingly insists on unconditional
mutual recognition, as it does internally among member states.
The cases of South Korea and China are quite different. They raise the
problem of time consistency, since PTAs are negotiated one after the
other. In both cases, the EU, Japan and Taiwan should eliminate
possible negative spillover effects on any earlier negotiated trade
agreements with South Korea and China.
Finally, Brazil and India raise the issue of what to do with
negotiations that are currently going nowhere. In both instances, the
EU should consider abandoning the too-ambitious goal of gaining
full-fledged PTAs for the time being. It should instead focus on
narrower topics with higher chances of success, such as building norms
on some key farm and manufacturing goods, and regulations in services
of prime interest to both sides.
None of these major trading partners has as much to offer the EU
through a PTA as Japan and Taiwan. To improve its domestic growth
prospects, the EU should pivot to East Asia by concluding ambitious
PTAs with both economies.
Patrick A. Messerlin is Chairman of the ECIPE Steering Committee and a
Visiting Professor at Seoul National University, South Korea.
Indonesia's Brand Baron Reaches Out to Backwaters
March 28, 2013, The Wall Street Journal
By Eric Bellman
MAKASSAR, Indonesia — The Indonesian retailer that built Starbucks,
Barbie, Burger King and 100 other global brands into one of the
archipelago's biggest retail empires is taking its brand wagon to the
country's booming backwaters.
PT Mitra Adiperkasa has grown as Indonesia's brand-loving middle class
has ballooned, snapping up more from its diverse portfolio of Western
food and clothing chains. It is the master franchisee for everyone
from Domino's to Krispy Kreme to Lacoste to OshKosh B'gosh. It runs
more than one out of three stores in many of Jakarta's top malls.
Bolstered by Indonesia's continuous shopping spree, the company
announced Wednesday that its revenues jumped 29% last year to 7.59
trillion rupiah ($780 million), pushing its profits up 22% to 761
The strong earnings come as the company is building up its presence in
far-flung islands of the archipelago, in places such as Makassar, a
sprawling city of 1 million on the southern tip of Sulawesi, 1,500
kilometers across the Java Sea from the capital, Jakarta. Few large
global brands had set up shop here until recent years. Now, new retail
spaces are sprouting across the city thanks to economic growth,
turbocharged by sales of the island's coal, cocoa and minerals.
Past the city's new floating mosque and construction sites for a
hotel, a hospital and a highway is Trans Studio Mall, the city's
newest mall and theme park. What used to be a stretch of rice paddies
is now more than 500,000 square feet of air-conditioned shopping and
"The city now has lots of new buildings and roads, but the biggest
change is this mall," said Sintya Kusumawati as she sipped an iced
cocoa at Starbucks.
For Mitra Adiperkasa, which also runs the Payless Shoes Source and
Samsonite 1910.HK -0.92% stores as well as its own toy and sports
stores in the mall, Makassar represents one of the world's greatest
growth opportunities. For Indonesia's economy—which is 60% powered
by domestic demand rather than exports—international brand expansion
into the country's smaller cities demonstrates how far down the income
ladder Indonesia's consumption explosion is spreading.
The size of Indonesia's consumer class will triple to 135 million
people in the next 17 years and they will be spending $1 trillion a
year more than they do today, according to a recent McKinsey & Co.
report. The Boston Consulting Group this month said a growing slice of
the middle class will live outside of the main island of Java. On
Sulawesi, the number of people in the middle and affluent class will
grow more than anywhere else, the BCG report said.
International brands looking to venture beyond the islands of Java and
Bali usually look to local partners such as Mitra Adiperkasa to
navigate confusing local laws as they choose locations, hire employees
and set up supply chains.
Mitra Adiperkasa, or MAP, was set up in 1995 with just a few
international brands, including Lacoste. With the rest of the region,
it struggled to survive during the 1997 Asian financial crisis. But as
many of its competitors went out of business, it took over troubled
franchises and signed long-term leases on retail space at record-low
rates. As Indonesia's economy found its feet and took off over the
last decade, MAP has grown to more than 16,000 employees working at
more than 1,400 retail outlets selling more than 100 brands.
"After China, Indonesia is the world's biggest opportunity," said V.P.
Sharma MAP's group chief executive who has led the company since its
birth in the 1990s. "This is the last Shangri-La for retail."
Mr. Sharma's growth with the company over two decades has given him
unique insight into the Indonesian consumer. Indonesian spenders, he
says, like a little flash for their funds, so they prefer clothes with
character or kitsch, such as Zara or Massimo Dutti, rather than The
Gap or Levi's. Indonesians love rice. That's why he convinced Burger
King last year to allow him to sell chicken and rice sets at their
Rich Indonesians like luxury, he says, but won't pay extra for it.
Charge them a little more for a bag or expensive shoe and they will
pop over to Singapore or Paris to buy.
In new markets such as Makassar, the emerging middle class likes to
splurge first on their children and on sportswear. So MAP usually
reaches out to a new city with its sports store Sports Station and toy
store Kidz Station before it takes in a Starbucks.
It is not just Mr. Sharma's picks that are thriving in Indonesia
today. Yum Brands Inc.'s YUM +0.67% KFC has hundreds of outlets across
the archipelago, and there are more than 115, 7-Eleven convenience
stories in the country already. European brands, such as Spanish
clothing store Mango and Japanese beef bowl giant Yoshinoya, 9861.TO
-0.18% are also chasing the new Indonesian consumer.
Some retailers and even the government are worried that large
international chains are going to overwhelm local players. Indonesia
recently slapped new restrictions on franchises in Indonesia so that
any food or beverage franchise with more than 250 branches or any
convenience store chain with more than 150 stores will have to bring
in more local partners.
While some retailers complain this could discourage international
investment just as Indonesia needs more dollars to grow and better
serve its increasingly affluent consumers, Trade Minister Gita
Wirjawan says the restrictions are just to force the chains to share
the opportunity with more entrepreneurs.
Local and international franchises say they are not too worried about
the new restrictions as few of them have reached the ceiling yet, and,
even when they do, it should be easy to bring in new franchisees
without hurting their brands.
Mitra Adiperkasa still plans to reach out to all members of the middle
class, no matter where they live. It is planning to double sales over
the next three years to close to $2 billion and it has new brands
begging to come to Indonesia every month. Years ago, the company had
to beg for years to get the Starbucks franchise. Today, it has to
regularly turn down big international names.
Bali UN Panel Sets ‘Ambitious yet Achievable’ Framework
March 28, 2013, The Jakarta Post
By Ina Parlina and Novia D. Rulistia
Bali talks on the global agenda beyond 2015 concluded with an
“ambitious yet achievable” framework ready to be submitted to the
UN secretary-general in May.
The co-chairs of the fourth High Level Panel Meeting on Post-2015
Millennium Development Goals (MDGs) stated the panel agreed to renew a
global partnership “that enabled a transformative, people-centered
and planet-sensitive development agenda that was realized through the
equal partnership of all stakeholders.”
The co-chairs — President Susilo Bambang Yudhoyono, Liberian
President Ellen Johnson Sirleaf and UK Prime Minister David Cameron
— agreed that financing for the development agenda would be clearly
The agenda would require honoring international, regional and national
financing commitments as well as finding innovative sources of finance
such as private investment, public-private partnerships and market
mechanisms, they said.
Yudhoyono said the panel discussed a framework that resulted from the
international Rio+20 conference on the environment.
“We promote a single and coherent post-2015 development agenda that
integrates economic growth, social inclusion and environmental
sustainability, known as the Sustainable Development Goals (SDGs),”
At the Rio+20 meetings, governments agreed to launch a process that
would set up an open working group, composed of 30 government
representatives from all regions, to develop a stakeholders engagement
plan to build the framework for the SDGs.
The communiqué apparently failed to please the Civil Society
Organizations Forum , which was tasked with submitting input to the
panel. Sugeng Bahagijo of the International NGO for the Indonesian
Development Forum (INFID) questioned Indonesia’s position between
the two sides.
“Which side does Indonesia take on this matter? The side of the SDG
as resulted from Rio+20 or that of the UK, which wants a bigger role
for market in the new framework?” he said.
Earlier on Wednesday, Cameron said he opted for the involvement of
private sectors for sustainable growth.
“I don’t think the market approach can link up with the SDGs as
the market will also mean consumption. SDG tries to reduce it and will
highly regulate investment,” Sugeng said.
Sugeng said Indonesia should be able to bridge the two ideas, saying
that in inclusive growth, as Yudhoyono offered, the government’s
role was supposed to be bigger “by imposing stern regulations
and solid financing to encourage private sectors to pay higher
Heru Prasetyo, of the Presidential Working Unit for Development
Monitoring and Control (UKP4), which oversees the Bali meetings, said
he hoped the new framework would not repeat the dominant feature of
charity from rich to poorer countries in the current MDG framework.
Listed Firms Step in to Oppose OJK Fee scheme
March 28, 2013, The Jakarta Post
By Tassia Sipahutar
Opposition to the Financial Services Authority’s (OJK)
fee-collection scheme continues as several publicly listed companies
demand a delay in implementation.
The Indonesian Publicly Listed Companies Association (AEI) expressed
its objection to the scheme during the association’s gathering in
Jakarta on Wednesday, attended by OJK commissioner Nurhaida and
Indonesia Stock Exchange (IDX) business development director Friderica
AEI deputy chair Haryanto Adikoesoemo, who is also the president
director of petroleum and chemical distributor PT AKR Corporindo
(AKRA), said the fee would be a burden that would deter new companies
from venturing into the country’s stock market.
“We did not pay fees when supervision was by Bapepam-LK [the Capital
Market and Financial Institutions Supervisory Agency], but now we are
obliged to finance OJK’s operations,” he said.
The OJK was created to monitor financial services, a duty previously
carried out by the Bapepam-LK and Bank Indonesia. The fee-collection
scheme was floated last November.
Financial institutions must pay 0.06 percent of total assets to the
OJK, starting this year with 0.03 percent, rising to 0.045 percent in
2014 and ultimately to 0.06 percent in 2015.
For a company like Bank Mandiri, this means hundreds of billions of
The AEI believes the amount is too much. AEI executive director
Isakayoga says member companies object because they have already paid
“Our financial burden will increase with this fee and we are worried
that the fee will jeopardize OJK independence. An independent
supervisor should not have financial relations with the companies it
supervises,” he said.
With the fee already regulated by the OJK Law, the AEI wants
implementation postponed until 2018.
Nurhaida thinks it unlikely that the scheme will be implemented in
2013 because of the objections and says the OJK is developing a new
“We may base the fee on the type of industry instead of assets. We
have not decided on any amount because every option is on the table
right now. The fee may be able to reduce the APBN [state budget]
allocation for the OJK,” she said.
There are 465 firms listed on the IDX and the bourse hopes as many as
30 new companies will enter the stock market this year, higher than
last year’s figure of 22.
Event organizer PT Dyandra Media International (DYAN), the latest
company to go public, would prefer the OJK to base the scheme on share
Dyandra corporate secretary Budi Yanto Lusli said, “We will study
the future results, but we hope the government will come up with a
policy that will boost companies’ interests in going public, not the
opposite,” he said.
Govt Opens Tender for $2.15b Projects
March 28, 2013, The Jakarta Post
By Nurfika Osman
About 2,000 packages of road and bridge construction projects worth Rp
20.98 trillion (US$2.15 billion) across the archipelago are currently
under auction as part of the government’s long-term
infrastructure development plan.
Djoko Murjanto, the director general of highways at the Public Works
Ministry, said in Jakarta on Wednesday that the road projects would
begin in the second half of 2013 through to the end of 2014.
“The figure represents 87.94 percent of the total [project] packages
we plan to put on tender this year. We started the tender process in
November last year because we need to accelerate the development of
our infrastructure,” Djoko said on the sidelines of a hearing with
the House of Representatives’ Commission V overseeing transportation
The packages included major projects like Tebing Tinggi-Medan in North
Sumatra and Pekanbaru-Dumai in Riau to the Pemali Sipait bridge
project in Central Java that is aimed to help reduce congestion
between Semarang and Tegal.
“Some of the multiyear projects will need around two years to finish
but some are more than that, depending on the size of the project,”
Out of the 2,378 packages, he said that 496 packages worth Rp 4.04
trillion were now entering the tender process.
The ministry aims to tender as many as 3,134 packages with an
investment of Rp 28.45 trillion throughout 2013, around a 10 percent
increase from last year.
In addition, he said that several major projects using soft loans from
foreign companies were hampered because the funds had not been
The first phase of the Cileunyi-Sumedang-Dawuan (Cisumdawu) toll road
worth Rp 1.02 trillion, which will connect Cileunyi and Rancakalong in
West Java, and the Medan-Kuala Namu toll road in North Sumatra, are
among the affected projects.
He said that 90 percent of the project would be financed by a loan
from the Export-Import Bank of China with the remaining 10 percent
from the state budget.
“We have disbursed our part but we cannot continue the project
because we have not received the loan,” he went on.
Cisumdawu was part of the TransJava toll road project that is
projected to smooth the transportation of both people and goods across
Meanwhile, Medan-Kuala Namu is a project that will connect the
province’s capital city to the new airport, Kuala Namu International
Airport, that is expected to commence operations in August.
Moreover, Toll Road Regulatory Agency (BPJT) head Achmad Gani Ghazaly
said that 11 sections of toll roads across Java were currently below
minimum service standards and needed improvement. The sections include
Cawang-Tomang-Cengkareng, Jakarta-Cikampek, Jakarta Outer Ring Road,
Cipularang-Padaleunyi and Surabaya-Gresik.
Four out of 11 sections are operated by state run publicly listed toll
road firm PT Jasa Marga. Most of the problems are potholes,
insufficient lamps and traffic signs.
Indonesian Licence Reciprocity Issue May Impact M'sian Banks
March 28, 2013, The Star (Malaysia)
By Ng Bei Shan
PETALING JAYA: Indonesia's incoming central bank governor Agus
Martowardojo's comments have reignited concerns on the reciprocity in
dealing with foreign bank licences, an issue that could affect
Malaysia's biggest banks.
Agus is Indonesia's Finance Minister and has been approved by a
parliamentary panel for financial affairs to be the next governor of
the banking regulator Bank Indonesia starting May. He had reiterated
his stance on reciprocal banking policies during a parliamentary
He was quoted by the news wires as saying: “Regarding banking
regulations, there's a need to apply reciprocal regulations to foreign
banks on ownership and licences, based on the mutual benefit
An industry observer told StarBiz that the impact on Malaysian banking
players was unknown as it was in the preliminary stage and that the
issue was now at the regulatory level.
Local banking groups with sizeable stakes in Indonesian units include
Malayan Banking Bhd with a 97.3% shareholding in PT Bank Internasional
Indonesia (BII) and CIMB Group Holdings Bhd with a 92.3% stake in PT
Bank CIMB Niaga Tbk, Bloomberg data showed.
Meanwhile, RHB Capital Bhd is in the process of acquiring a 40% stake
in PT Bank Mestika Dharma.
Last year, Bank Indonesia announced that the regulator would impose a
cap on single ownership in the country's banks at up to 40% for
financial institutions and up to 30% for individuals or families.
However, the rule was applicable for new investors only.
Following this announcement, it was reported that Maybank was required
to refloat 20% of its stake in BII.
A banking analyst said the notion should be aimed at the Singaporean
central bank as Bank Negara had allowed Bank Mandiri to enter
The Malaysian regulator had granted a full banking licence to
Indonesia's largest lender to perform full banking services, including
raising third party funds, opening automatic teller machines and
channeling loans in the country.
Bank Mandiri is the only bank from the Asean region of five foreign
banks that received a full-fledged banking licence here.
Singapore's DBS Group Holdings' bid for Indonesia's Bank Danamon had
been long delayed. “There will be a lot of factors and challenges in
meeting this reciprocity issue as central banks or regulators of
different countries work at a different pace,” the analyst
Other factors like the maturity of the market and the country's
economic development would affect the feasibility of reciprocity, he
added. “It is natural for the Indonesian central bank to press for
reciprocity as foreign banks had benefited from the economic growth
there so they would also hope to grow in other markets now that some
of the Indonesian banks had the capital and capacity to expand
overseas,” he said.
Indonesia to Rely on Soybean Imports Beyond 2014
March 27, 2013, Reuters
Indonesia will miss its ambitious goal to be self-sufficient in
soybeans by next year due to a shortage of convertible land, its
agriculture minister said, signalling the nation will continue to rely
heavily on imports of the meat substitute.
Indonesia, which has a rising population of more than 240 million,
last year abandoned a 2014 self-sufficiency target for white sugar and
has been struggling to meet similar aims for staples corn, beef, rice
“We are facing problems on soybean and sugar,” Agriculture
Minister Suswono told Reuters in an interview on Wednesday. “The
problem for soybeans and also on sugar is limited farm land.”
He said the country would need at least 500,000 more hectares of
soybean plantation area if it were to achieve its 2014 goal, nearly
doubling the current 600,000 hectares.
It would require more than 350,000 hectares of extra sugarcane
farmland to meet its objective for sugar, he added, way more than the
450,000 hectares cultivated now.
“It is so difficult for us to achieve the sugar and soybean
Soybean shipments to Indonesia, which meets around 70 percent of its
annual needs of the oilseed through imports, are likely to rise 3
percent to 1.8 million tons this year, say industry groups.
Major buyers include FKS Multiagro, Sungai Budi Group and Cargill.
Indonesia, which mostly uses soybeans as a protein-rich substitute for
costlier meat, largely ships in the oilseed from the United States,
and imposes a 5 percent import duty.
Consumption is about 2.5 million to 2.7 million tons of soybeans each
year, with the main domestic harvest in late August.
Last week, an industry ministry official said it aims to link
traders’ imports of soybeans to the volume of the oilseed they buy
at home, to help protect domestic farmers and promote their interests.
Southeast Asia’s largest economy, which relies on agriculture for
about 15 percent of GDP, is struggling to balance the interests of
farmers and consumers.
As wealth increases in Indonesia, changing eating habits incorporate
more meat and convenience foods, boosting imports of grains used in
feed, such as corn and soybeans.
The government has put in place strict import controls and often uses
import tariffs or quotas to protect domestic farmers.
Late last year, the president signed a new food law to hasten
self-sufficiency targets that critics say will further add to curbs on
the trade of staples.
Such policies on food and agriculture trade have been criticized by
international trading partners, including the Organization for
Economic Cooperation and Development.
Suswono said domestic rice output would meet 90 percent of the
country’s needs by 2014 - which is the government’s benchmark for
Earlier this week, an agriculture ministry official told Reuters that
due to a rising rice surplus, imports of the staple grain would not be
necessary this year.
Indonesia usually imports around 1-2 million tons of rice each year
from Thailand, Vietnam, India or Cambodia, in order to build stock
levels and guard against possible food inflation.
Consumers have also been critical of government policies, after it
slashed import quotas for beef, which then helped drive up prices in
Java. The country is also battling a garlic and onion shortage.
High Food Prices Cause Grief in Indonesia
March 27, 2013, The Straits Times
By Zubaidah Nazeer
First the price of soya beans soared. Then up went beef, garlic and
onions. Now the price of sugar is not sweet any more.
In fact, the costs of some staple foods have shot up five times.
Critics blame Indonesia's import policies that aim to promote
self-sufficiency. These have led to cartels, they say, with large
players sometimes sitting on their stocks in an attempt to drive up
prices and fatten profits.
Ahmad Junaidi, a spokesman for the Business Competition Supervisory
Committee (KPPU), said: "In the case of garlic and onions, some
approved importers park their goods in the warehouse and delay
completing administration procedures while waiting for prices to
In one instance, KPPU's investigations revealed that at least 109
containers of garlic with their permits in order remained parked in a
warehouse at Surabaya's Tanjung Perak port early last week, while the
importers dragged their feet on distributing them.
Meanwhile, the price of garlic shot up to 100,000 rupiah (US$10) per
kg in areas like Malang, Central Java, from a low of 20,000 rupiah per
kg last November. Last month, inflation rose to its highest level
since June 2011. The consumer price index hit 5.3 per cent, led by
escalating food prices.
Members of the Indonesian Traditional Market Traders Association
questioned the government's lack of foresight. They argued the
Agriculture Ministry should have been able to predict when stocks of
such commodities would rise and fall, depending on harvests.
In a knee-jerk response, the Trade Ministry forced importers to
deliver supplies stuck at the ports, a move that lowered the price of
garlic and onions by 15 per cent. It told importers to sell the stock
at 15,000 rupiah per kg.
But critics say this remains a short-term solution because the import
system is riddled with complex processes that require permits to be
approved by two ministries - agriculture and trade.
Agriculture Minister Suswono told reporters: "The approval process
takes time... with sometimes over 3,000 documents (for one permit)...
One company should just require one document."
Trade Minister Gita Wirjawan said there ought to be one window to
approve the process, and advocated putting it online to ensure
transparency. Yesterday, his director-general inspected a warehouse to
ensure onions were being distributed, not withheld.
While some say a better distribution process will reduce price
fluctuations, others like Hermanto Siregar of the National Economic
Committee, which advises the President, said import quotas should be
replaced with food tariffs to prevent abuse.
The import quotas encouraged bribes and price spikes in Indonesia. One
high-profile politician has been charged with accepting bribes in
return for preferential treatment for a beef importer.
The recent price hikes prompted an irate President Susilo Bambang
Yudhoyono to tell the two ministries to sit down and stabilise prices.
"What I heard was blame pointed out from one ministry to another. This
is bad," he said last week. "(The Trade Ministry and Agriculture
Ministry) should work night and day. People need certainty and
solutions from these ministries."
Depok mayor Nur Mahmudi Ismail has taken matters into his own hands,
urging 900 housewives in a family welfare movement to plant garlic and
shallots. "(Home gardening) could become a solution in dealing with
the increasing prices of shallots and garlic," he was quoted by The
Jakarta Post as saying.
7-Eleven Indonesia Franchisee Plans Hundreds of New Stores
March 26, 2013, The Wall Street Journal
By Eric Bellman
JAKARTA, Indonesia—The operator of 7-Eleven convenience stores in
Indonesia will open hundreds of new outlets in the coming years,
seeing no sign that strong consumer demand is slipping despite rising
Henri Honoris, chief executive of PT Modern Putra Indonesia, one of
Indonesia's largest retailers, told The Wall Street Journal that the
country's growing middle class, particularly its youth, still has the
extra cash and time to splurge on snacks and prepared meals.
"Indonesians' lifestyles have been changing," Mr. Honoris said. "They
now want ready-to-eat food, packaged food and chilled food," and they
want access to it 24 hours a day.
Indonesia's robust economy has given greater spending power to a wider
portion of the population, driving domestic demand and making the
country an attractive destination for multinational businesses. Around
74 million of 250 million people in the country live in households
that spend more than $200 a month, and that number is likely to rise
to 141 million by 2020, according to a report by the Boston Consulting
Seven-Eleven is the world's largest convenience store chain, with more
than 40,000 outlets from Mexico to Malaysia overseen by parent Seven &
i Holdings Co. 3382.TO 0.00% of Tokyo.
In Indonesia, 7-Eleven has evolved into a kind of self-service cafe.
In addition to the standard chips, Slurpees, hot dogs and beer,
Jakarta's 7-Eleven stores offer salads, lasagna, fried chicken and
even rice and noodle dishes.
Most of its 119 outlets have tables and chairs, restrooms, free Wi-Fi
and even valets to help park people's scooters. All the extras are
aimed at encouraging customers to linger.
PT Modern Internasional, MDRN.JK -1.01% the listed parent company of
Modern Putra Indonesia, is still doing the final calculation of last
year's earnings but is likely to report a 20% jump in sales for 2012
to around $100 million, said Mr. Honoris, who is also a director of
Modern Internasional. Most of the growth and around half of those
sales came from 7-Eleven, he said.
Modern Internasional also controls a national chain of around 1,200
Fuji Image Plaza photo processing shops. The company plans to convert
nearly 200 of them into 7-Eleven stores, Mr. Honoris said. In the long
run, he said there could be more than 2,000 7-Elevens in Jakarta
Whether the company can follow through on its optimistic plans depends
on Indonesia's middle class expanding as expected and the company
being able to withstand competition from big local and international
chains. Meanwhile, some analysts are worried that the consumption boom
is already slowing in some parts of the country.
Though consumption in some of Indonesia's far-flung islands has fallen
as lower commodity prices have left less spending money to the
country's mine and plantation workers, domestic consumption is
expected to continue to power growth, said John Rachmat, head of
equity research at PT Mandiri Sekuritas in Jakarta.
"The retail sector is doing extremely well," and investors have been
bidding up the prices of retail stocks like Modern, he said.
The rapid rollout of 7-Eleven stores and more than 10,000 other
convenience stores across the archipelago has spooked some mom-and-pop
shop owners, who say they are having trouble competing with the low
prices and long opening hours at branded convenience stores. The
government has recently added new restrictions on local and
international franchises, requiring master franchisees to bring in
more local entrepreneurs as they grow.
Mr. Honoris said the company had always planned on offering the
franchise to small-business entrepreneurs.
One restriction on 7-Eleven's growth, however, has been Jakarta's
traffic jams, he said. The store chain has to grow slower than it
would like to ensure it can deliver fresh food to each store every
"The challenge is infrastructure; we could open faster with better
infrastructure," Mr. Honoris said. "Our product is fresh so we have
one-day and two-day expiration dates."
Jakarta Taking the Slow Route on Traffic
March 26, 2013, The Wall Street Journal (Blog)
By Resty Woro Yuniar
Jakarta transportation officials took their foot off the pedal this
week on a plan to try to loosen up the notoriously horrible traffic in
Indonesia’s capital city.
The idea is to restrict which days cars can be on the road by whether
their license plate’s last digit ends in an odd or even number.
Taxis and similar business-type vehicles, motorcycles and public
transportation wouldn’t be covered by the 6 am to 8 pm regulation.
The plan had already been delayed twice and was aimed to start in
June. Officials say they need more time to get reliable public buses
to provide wheels for drivers suddenly limited, and to figure out how
to enforce the rule, given they don’t feel they have enough police
to do so now.
Andi Riccardi supports the odd-even license plate idea, and would
start taking the bus half the time. He recalled that it took him 25
minutes to get to his office in central Jakarta from his home in
Pejaten, in south Jakarta.
Now it is takes more than three times longer.
“Jakarta’s traffic is intolerable now. This rule is the correct
short term solution to fix it,” Mr. Riccardi said.
The odd-even idea has been tried elsewhere, with mixed results.
Mexico City and Beijing, for example, have tried it out. Air pollution
in Beijing dropped to 19% after the odd-even plan went into effect,
according to a study published in 2011 by Shihe Fu, professor at
Xiamen University, and Brian Viard, of the Cheung Kong Graduate School
of Business. But the World Bank said the odd-even rule increased
congestion in Mexico City because people bought second cars to try to
outsmart the system.
Last year, the Ministry of Public Works of Jakarta predicted that the
city’s gridlock will be worse in 2014. There just isn’t enough
road to handle the number of cars. There just isn’t enough road to
handle the number of cars. If fact, the actual length of Jakarta roads
– 7,208 kilometers – should be 12,000 kilometers to handle
Jakarta’s 13. 3 million vehicles, explained Setiabudi Albamar, a
transportation expert at the ministry.
The government says the odd-even rule would increase traffic speed in
the city’s inner ring, to 47 kilometers per hour from today’s 16.8
kilometers per hour. It would also reduce how much subsidized gas
Jakartan’s use, which would help the country’s budget.
The Jakarta government says it expects to implement the rule next
But Rheza Gusman, a 26-year-old lawyer, will be hoping for another
“This will only limit my mobility on a daily basis,” said Mr.
Gusman, who said if the rule eventually goes into effect, he will
share commuting by car with a friend from his home in Tangerang to his
office in western Jakarta.
Three Contenders Emerge for Indonesia Finance Minister Post
March 26, 2013, The Jakarta Globe
By Muhammad Al Azhari
As Finance Minister Agus Martowardojo undergoes vetting to become the
central bank governor, attention is now turning to who will fill his
shoes should he land Bank Indonesia’s top job.
A number of government sources with direct knowledge of the matter
said that potential candidates for finance minister included Anny
Ratnawati, Gita Wirjawan and Chatib Basri.
Anny, currently serving as deputy finance minister, has emerged as the
most likely replacement for a departing Agus, given her wealth of
experience in the ministry itself and other endeavors in the economics
and financial sectors.
“Anny is the most likely candidate,” said a source from the office
of the coordinating minister for the economy.
With a PhD in agricultural economics from the Bogor Institute of
Agriculture, Anny previously served as the Finance Ministry’s budget
affairs director general.
Gita, the trade minister, is tipped as another possibility, with his
strong background in investment banking. Gita is the founder of the
private equity firm Ancora Capital and was once a top executive at the
US investment bank JPMorgan.
Chatib is the chief of Indonesia’s Investment Coordinating Board
(BKPM). He is an economist and former senior lecturer at the
University of Indonesia. Chatib was once an adviser to the
coordinating minister for the economy.
“Ideally, Agus’s successor should not come from a political party,
because we are getting close to the general election,” said Eric
Alexander Sugandi, an economist from Standard Chartered bank.
It would be easy for political opponents to make accusations of
misappropriate budget spending to support election campaigns if the
appointment was factionally driven, he added. The new finance minister
will assume the post for 18 months, until the next general election.
Property Still Among Most Lucrative in 2013
March 25, 2013, The Jakarta Post
By Raras Cahyafitri
Jakarta -- Property could be one of the most profitable business
sectors listed on the Indonesian Stock Exchange (IDX) last year and is
expected to continue growing although at a slower pace on the back of
Most property companies posted two-digit growth in net profits during
last year’s nine month period to September, outperforming the
average increase of more than 400 listed firms, according to a number
of financial reports.
The bourse corporate listing director Hoesen said that the average
profit recorded by listed property companies far exceeded the 4
percent average growth of the net earnings of all listed companies
during the January to September period last year. Most listed firms
have yet to submit their financial reports for the full year 2012.
Among the companies to already submit full year reports is PT Bumi
Serpong Damai (BSDE), which saw its profit rise around 53 percent in
2012 to Rp 1.29 trillion (US$132.87 million). Another example, Jakarta
listed PT Alam Sutera Realty booked 98 percent increase in net profit
An analyst at PT Samuel Sekuritas Benedictus Agung Swandono noted that
property developers reported a 32 percent increase in revenue on
compound annual growth rate (CAGR) basis during the 2009 to 2012
“This year, property companies will continue to grow. In terms of
amount, the growth won’t be far different from last year’s,
however in term of percentage increase it will be smaller due to a
lower base number in 2012 from 2011,” Agung said.
Agung also cited that property developers enjoyed a growing average
selling price of their products during the 2010 to 2012 period, which
contributed to companies’ higher profit margins.
Developers with portfolios in industrial estates enjoyed higher growth
on the back of a jump in industrial land prices on growing demand. PT
Bekasi Fajar Industrial Estate saw its net profits during the January
to December period last year jump 293 percent. PT Jababeka also
reported 126 percent growth in net profits during the first nine
months of 2012. PT Surya Semesta Internusa — which runs its
industrial estate business through a subsidiary called PT Suryacipta
Swadaya — had a 174 percent jump in its net profit in 2012.
“The industrial estate sector remains attractive, benefiting from a
high foreign direct investment in Indonesia in the next few years on
the back of potential relocation of investment from China, which has
higher labor cost and a renminbi appreciation issue. Indonesia has a
demographic bonus with a potential labor supply and big consumer
base,” Agung of Samuel Sekuritas said.
Figures from the Investment Coordinating Board (BKPM) showed that
foreign direct investment reached Rp 206 trillion last year, a 17
percent increase compared to Rp 175 trillion in 2011. The Board is
expecting that foreign investment will touch Rp 270 trillion this
As investment is expected to grow, industrial estate players are
preparing to acquire more land to support their revenue increases.
Bekasi Fajar’s corporate secretary Khrisna Daswara said that the
company planned to acquire 200 to 250 hectares of land.
“That is our plan in the next two years,” Khrisna said. Bekasi
Fajar has around 766 hectares in land bank as of the end of last year.
The index of property stocks rose by 42.44 percent in 2012, the best
performer among other sectoral indices, according to figures from the
bourse. The property stock index has increased by 34.86 percent in the
year to date — the best performer so far — according to figures
from the bourse, as of March 22.
“Property stocks gave the highest yield last year. The drivers were
booming residential projects, economic growth, housing backlog and the
steady central bank interest rate, which helped people looking for
mortgages,” Probo Sujono, an analyst with PT Millenium Danatama
Indonesia to Override Patents for Live-saving Medicine
March 25, 2013, IRIN News
JAKARTA - The Indonesian government hopes to implement one of the
largest ever examples of “compulsory licensing”, which will enable
the generic manufacture of drugs still under patent.
Advocates of the move say the reduced drug costs achieved through
compulsory licensing have been instrumental in reducing HIV mortality
rates in Indonesia.
“One of the major reasons for decreased HIV mortality rates is the
provision of anti-retroviral [ARV] treatment, and if [Indonesia]
can’t afford the anti-retroviral treatment, the mortality rate will
return” to the higher levels of previous years, Samsuridjal Djauzi,
chairman of the Association of Indonesian Physicians Concerned about
HIV/AIDS, told IRIN.
The latest use of compulsory licensing - Indonesia’s third to date -
will allow the government to expand its access to the second-line
ARVs, he said, including tenofovir, emtricitabine, and
Under the World Trade Organization's Trade Related Aspects of
Intellectual Property Rights (TRIPS), countries can override patents
for public health purposes by issuing compulsory licenses that enable
the generic manufacture of drugs still under patent.
In this latest move, a September 2012 presidential decree announced
the government would procure generic equivalents of the international
patents for seven HIV/AIDS and hepatitis B medicines, citing the
“urgent need” to control these diseases.
“The implementation of the third compulsory licensing depends on the
capability/readiness of the manufacturer [Kimia Farma]. I estimate
efavirenz [another HIV medication on the list] will be available in
the next three to six months. For other drugs, [we] will need more
time,” Djauzi said.
According to UNAIDS, an estimated 380,000 people are living with
HIV/AIDS in Indonesia. The number may not appear alarming considering
that Indonesia is a developing country with nearly 250 million people,
but the prevalence rate is now 25 percent higher than it was a decade
The spread of HIV is attributed to low condom use and epidemic-level
infection rates - 36.4 percent - among injecting drug users, experts
The cost of normal treatment is around US$90 per person per month,
Usep Solehudin, who coordinates free distribution of ARVs for some 120
patients at a clinic in Jakarta called Yayasan Pelita Ilmu (YPI), told
IRIN. This is beyond the means of most of his patients, whose incomes
are generally $100 to $200 per month.
“The patients would not otherwise be able to buy it [the ARVs]
because they cannot afford it,” he said. “They would just ignore
Jakarta first used compulsory licensing in 2004, ushering in increased
The number of Indonesians receiving ARVs has quadrupled since 2008, to
30,000 today, and the government is looking to maintain this rate of
expansion, said Cho Kah Sin, country director of UNAIDS in Indonesia.
The latest government license focuses on second-line ARVs, which are
prescribed to patients who have developed resistance to first-line
treatment. Resistance in a population tends to develop within several
years of a drug’s introduction. The government is therefore
expecting that increasing numbers of Indonesians with HIV will require
second-line treatment, said Cho Kah Sin.
Critics of compulsory licensing say its usage undermines medical
“Systematic issuance of compulsory licenses sets a negative
precedent and can reduce the incentive to invest in the research and
development of new medicines that address unmet medical needs,” said
Andrew Jenner, director of innovation, intellectual property and trade
at the Switzerland-based International Federation of Pharmaceutical
Manufacturers and Associations, in a written statement to IRIN.
“We believe that negotiated approaches, such as tiered pricing and
voluntary licensing, are generally more effective and sustainable,
both medically and economically,” said Jenner, whose organization
represents four pharmaceutical companies whose medicines are to be
generically replicated by Indonesia. Tiered pricing is the practice of
setting different prices for different markets.
Others studies, however, argue there is no empirical evidence that
patents increase innovation and productivity.
Peter Maybarduk, who directs the Global Access to Medicines Programme
for Public Citizen, a US-based NGO, advocates wider use of
“compulsory licensing” by developing countries. “We don’t
think compulsory licensing should only be used in the most dire
scenarios,” he said.
Switzerland-based Michelle Childs, who heads the Campaign for Access
to Essential Medicine for Médecins Sans Frontières, agrees: “If
there is a clash between access to [essential] medicines and patent
rights... the primacy of access should be promoted,” she said.
Maura Linda Sitanggang, director-general of the pharmaceutical
department at Indonesia’s Ministry of Health, did not respond to
requests for an interview.