At least 116 feared dead in Indonesia military plane crash

Many passengers were likely to be family members of servicemen and women, said a spokesman for Medan airbase, where the plane took off. At least one child has so far been confirmed killed.

MEDAN: At least 116 people are feared dead after an Indonesian air force transport plane crashed Tuesday into a major city shortly after take-off and exploded in a fireball, officials said.

Buildings were left in ruins and cars reduced to flaming wrecks when the Hercules C-130 came down in a residential area of Medan, a city of two million on the island of Sumatra.

Air force chief Agus Supriatna said the manifest showed there were 113 people on board the plane — 12 crew and 101 passengers — when it crashed, and he did not believe any had survived.

"No, no. No survivors, I have just returned from the site," he told AFP in answer to a question.

So far, 49 bodies had been recovered and taken to hospital, he said.

Many passengers were likely to be family members of servicemen and women, said a spokesman for Medan airbase, where the plane took off. At least one child has so far been confirmed killed.

The local search and rescue agency also said that three people were killed on the ground when the 51-year-old plane went down near a newly built residential area, hitting a massage parlour and a small hotel.

A rescue operation swung into action, with ambulances ferrying bodies from the site, and crowds of anxious residents gathering around a police cordon to view the smouldering wreckage.

Residents of Medan described the terrifying moment just after midday when the plane came down.

"It was very scary," said Novi, an employee of an international school who goes by one name, describing how she heard the plane and saw it flying very low before the crash.

Another local resident Januar, 26, said the aircraft appeared to be in trouble just before the accident.

"I saw the plane from the direction of the airport and it was tilting already, then I saw smoke billowing."

'Crushed by debris'

Medan's police chief described the bodies as "crushed by debris of the buildings and the fuselage".

Indonesian President Joko Widodo expressed sorrow at the accident, tweeting: "May the families be given patience and strength… May we remain protected from disaster."

The plane took off at 12:08 pm (0508 GMT) from the airbase and crashed in the city about two minutes later, about five kilometres (three miles) from the base, according to the military.

Shortly after take-off, the pilot had asked to return to base, Supriatna said, adding the aircraft might have suffered engine trouble.

But he added the plane was in "very good condition" and had made several stops before arriving in Medan.

It was the second time in a decade that Medan had suffered a fatal plane accident. A Mandala Airlines domestic flight crashed shortly after take-off in 2005 into a densely populated suburb, killing at least 150 including passengers, crew and people on the ground.

Medan is the biggest Indonesian city outside the main island of Java and is a major economic centre.

The Indonesian air force has suffered accidents before.

At least 11 people were killed when a Fokker-27 military jet crashed into a housing complex in the capital Jakarta in June 2012.

In April an F-16 fighter jet caught fire as it was about to take off from an airbase in Jakarta, prompting the pilot to jump to safety as flames and thick smoke engulfed the plane.

The pilot escaped with minor injuries from the jet, which had been due to provide security at a summit of Asian and African leaders in Indonesia.

Indonesia also has a poor civil aviation safety record, and has suffered many fatal crashes in the past.

An Indonesia AirAsia plane crashed in December en route from Indonesia's Surabaya to Singapore, killing all 162 people on board.

- AFP

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Source: At least 116 feared dead in Indonesia military plane crash

US asked Indonesia to send troops to fight Islamic State, says former Jakarta foreign minister

Indonesia's former foreign minister Marty Natalegawa said Jakarta felt sending troops to fight IS would have been ''cosmetic''. Photo: AFP

Indonesia was asked by the United States to send troops to join the fight against the Islamic State terror group in Iraq but declined because it feared a backlash among radical Muslims at home, the country's former foreign minister has revealed.

Marty Natalegawa, the long-serving top envoy under Jakarta's previous administration, said Indonesia felt it could better contribute by tackling its own domestic extremism problem, whereas sending forces would be "cosmetic".

Despite Washington's eagerness to pull together as broad a coalition as possible to fight the terror group, the US had accepted Jakarta's refusal, Dr Natalegawa said at an event at the Australian National University's Crawford School.

"When Indonesia was asked to join in the coalition of forces to fight ISIS on the ground at one time, our response at that time was our best contribution to fighting the ISIS menace would be to ensure such an ideology, such a menace, does not proliferate in what is the world's largest Muslim-populated country," he said, using an alternative acronym for the group.

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"That to us is a more meaningful contribution ... Having to join such an effort to simply make up the numbers ... makes for a wonderful photo opportunity whenever these friends or groups meet in Geneva or some other European capitals, but it can create a backlash, an unintended backlash, back home."

Dr Natalegawa did not name the US. But asked which country had made the request of Jakarta, he joked: "Who would be the main proponent of the gathering of [countries]? So that country would be the one."

The US pulled together a broad coalition including many Muslim countries in the Middle East. While deciding the Islamic State group needed to be stopped, the Obama administration was wary of creating perceptions of another Western invasion of Iraq.

Dr Natalegawa continued: "To be fair, the country concerned got the point that we could do far more by addressing our own internal situation rather than deploying just for superficial, cosmetic, perception purposes of this small number of troops."

His mention of fighting "on the ground" apparently refers to a request for trainers or advisory troops, as Washington has so far refused to get involved in ground combat in Iraq.

Australia is the second-largest contributor to the fight against the Islamic State after the US, having sent about 500 training and advising troops, as well as about 400 RAAF forces as part of an air campaign.

RAAF Hornets are carrying out bombing raids, while air-to-air tankers are refuelling coalition aircraft and a Wedgetail radar plane is helping co-ordinate the air campaign.

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Source: US asked Indonesia to send troops to fight Islamic State, says former Jakarta foreign minister

President Jokowi Urged to Include Opposition Parties in Reshuffled Cabinet

Sliding approval in public-opinion polls was pointed out as a sign for Widodo to inject 'fresh blood' to his cabinet. (Photo source: Cabinet Secretary website)

Jakarta, GIVnews.com – A senior official of the Indonesian Democratic Party of Struggle (PDI-P) on Sunday (28/6) urged President Joko 'Jokowi' Widodo to include cadres from opposition parties if he is to reshuffle the cabinet this July, according to speculations. The PDI-P politician said that such an inclusion aims to end the prevailing tensions at the House of Representatives (DPR) between the PDI-P-led coalition of parties (KIH) and the Red and White Coalition (KMP).

Jokowi's government would easily win support from DPR if KMP cadres are given seats in the cabinet, PDI-P vice secretary general Ahmad Basarah told reporters at his party's headquarters in South Jakarta.

(Read more: Cabinet Reshuffle for the People or the Parties?)

"If Pak Jokowi wants to reshuffle his cabinet, in our opinion (he should be aware that) the need for political support in the parliament is a real need," Ahmad Basarah said as reported by Detik.com.

Basarah pointed out that at this time the number KIH seats at DPR is smaller than that of KMP's. Ideally, the number of DPR members from KIH should be 50 percent plus one, the PDI-P politician  noted.

Currently, of the 560 DPR seats, only 207 go to the PDI-P-led coalition while the KMP holds 314 seats. The KIH also comprises of three other parties namely National Awakening Party (PKB), National Democrat Party (Nasdem) and People's Conscience Party (Hanura). The PDI-P led coalition took the lead in supporting Jokowi in last year's presidential election. Meanwhile, the KMP coalition of opposition parties comprises of the Great Indonesia Party (Gerindra), Golkar Party and Prosperous Justice Party (PKS). Gerindra chairman Prabowo Subianto narrowly lost to Jokowi in the 2014 presidential election.

(Read more: VP Jusuf Kalla Says Cabinet Reshuffle Imminent, President Jokowi Remains Tight-Lipped)

Ahmad Basarah also said on Sunday that Jokowi's cabinet reshuffle should focus on economic ministerial posts.

Jokowi inaugurated his cabinet last November. However, 100 days later it was viewed as performing poorly, which incited public calls for an immediate cabinet revamp. While Jokowi remains tight-lipped, Vice President Jusuf Kalla had said repetitively that the cabinet would be reshuffled. Furthermore, many speculate that Jokowi will perform such cabinet reshuffle this July, after the Idhul Fitri Holiday.

Source: President Jokowi Urged to Include Opposition Parties in Reshuffled Cabinet

Terror fears mount in France

LYON, France – Following Friday's attempted assault at a chemical plant that officials described as a terrorist attack, France was hunkering down Saturday for what politicians and analysts warned could be a prolonged period of uncertainty and fear.

Yassin Salhi, the 35-year-old delivery man who allegedly beheaded his boss and assaulted a chemical plant near this city, was refusing to cooperate with police, authorities said.

But a clearer picture was emerging of his background, including his suspected ties to an outlawed French Islamist group. Salhi had also reportedly associated with a French national who was wanted for questioning in the 2009 bombings of the Marriott and Ritz Carlton hotels in Jakarta.

The assault, however, drove home the scope of the threat now facing France. Five months after three homegrown extremists killed 17 people in and around Paris in January, officials, including Prime Minister Manuel Valls, were already warning the nation to brace for more terror attacks.

[Explosions hit French factory; terrorist probe opened]

Despite a number of steps taken to bolster counter-terrorism and de-radicalization efforts here – including a sweeping new surveillance law passed last week — analysts warned that the size of the security problem now confronting France outweighed the ability of the nation's intelligence services to cope.

"We probably have 3,000 to 5,000 people in France who should be under surveillance," said Jean Charles Brisard, a counter-terrorism expert based in Paris. "And we've got 3,000 people, a few more, doing that job. It's just not possible to watch everyone."

France, which is home to Europe's largest Muslim population, has seen more of its nationals and legal residents – more than 1,200 – leave in recent years to join radical Islamists fighting in Syria and Iraq than any other nation in the region. In April, Valls said that French authorities had, in recent months, already foiled five terror plots.

On Friday, Salhi drove a delivery truck onto the grounds of an American-owned chemical factory. He drove the truck into a shed, apparently attempting to spark a large explosion. Only a minor blast ensued, and moments later, he was apprehended by a firefighter.

During his assault, Salhi had placed the severed head of his boss on a fence post, along with flags carrying an Islamic declaration of faith. One question authorities were probing was whether Salhi had committed an independent act, or whether he had taken direction or counsel from foreign or domestic radical groups.

Salhi had recently moved to the area, and officials were trying to establish whether he had purposely sought a job at the delivery firm because its trucks had access to the plant. During the attack, Salhi took a "selfie" of himself with his boss's decapitated head, and sent it to a Canadian phone number, the Associated Press reported.

In Lyon, France's third-largest city, which is known for sausages and fish dumplings, local residents spoke of a rising sense of insecurity.

"This could happen anywhere," said Gérard Combe, 70, a local shop owner. "In airports, in malls, in crowded places. Is the state doing enough? It's hard to say. The secret service are monitoring people, but it's not enough."

France is taking steps to strengthen its counter-terror operations — sometimes, critics say, at the risk of civil liberties. Last week, the French parliament passed a surveillance law allowing its intelligence services to collect vast amounts of Internet metadata, as well as eavesdrop on terror suspects without a court order. The controversial law, however, will not take effect until a court decides whether it violates the French constitution.

In January, Valls announced that 2,680 new counter-terrorism positions would be created within the next three years. France has also sought to introduce more moderate imams into its prisons to combat homegrown extremism.

But some here are pushing for far more controversial steps. On Saturday, Marine Le Pen – head of the far right National Front party – was pushing for far more radical measures, including a construction freeze on new mosques and the monitoring of sermons.

Some in France's Muslim community – the largest in Europe – voiced concern that growing terror fears would empower those with a broader anti-Islam agenda.

"In France, we feel isolated as Muslims," said Elbagli Kadoug, 52, a maid who was waiting for a bus outside the suburban apartment building where Salhi lived with his family. "Now they will want to point the finger at us all."

In addition to Salhi, his wife and sister were also in custody.

French officials had had Salhi under surveillance from 2006 to 2008, citing his associations with known radicals. Due to lack of evidence, he faced a reduced level of scrutiny in later years.

In 2014, French intelligence compiled a report on Salhi, according to one person briefed on the document. It noted that he had, in the past, been linked to the members of Forsake Eliza, a group whose leaders faced terror charges in court this month. Police raids of group members' homes uncovered a cache of weapons and a list of alleged terror targets.

Virgule Demoustier contributed to this report.

Read more

Explosions hit French factory; terrorist probe opened

ISIS claims to be behind deadly Tunisia attack

French leader declares 'war' on radical Islam after attacks

Anthony Faiola is The Post's Berlin bureau chief. Faiola joined the Post in 1994, since then reporting for the paper from six continents and serving as bureau chief in Tokyo, Buenos Aires, New York and London.

Source: Terror fears mount in France

Owl City On The ‘Mobile Orchestra,’ Jake Owen Collab & Copyright Lawsuit Implications

Owl City creator Adam Young is out on the Verge of the rest of his life, pulsating and lifting to new heights on his forthcoming new full player titled Mobile Orchestra (out July 10). As the title suggests, the mastermind concocts a melting pot of sonic experiences so wholly unique that it could only come from a willingness to explore and observe the world in a new way. Jumping on a phone call recently with Popdust, Young discusses how the record was sewn together from his travels around the world the past few years. "It's a melting pot of different cities. They all kind of run together," he shares with us exclusively. "Although, a lot of the music was conceptualized in Asia. There's a lot of stuff I remember beginning in Japan when I was there, like Tokyo, Osaka, Nagoya. Those are the three cities I always try to visit when I tour over there. Seoul, South Korea; Jakarta, Indonesia; Manila, Philippines, too."

The album's lead single, the Aloe Blacc-assisted Verge, proclaims "ain't too sure what I believe in, but I believe in what I see" in it's opening moment. For Young's stake in the track, he relates how that specific lyric informs the rest of the collection. "It was definitely a process from beginning to end. I think that line in particular speaks to the idea that for me I have to get into this mindset and erase everything (in my mind) I've built up before in my work. Mentally, I try to clear the palette and look at what's there in front of me. I really can only believe in what's right there in front of my eyes. I don't want to draw too much on the past bodies of work, and certainly, I don't want to repeat myself. Aloe wrote that line, but that's what happened in my mind when I hear it."

He continues, detailing the direction the song itself took early on: "The concept of the song was the idea that everybody has some kind of event in their lives that signifies one close of a chapter and a whole new beginning of another. It's about a whole new story, basically. That transition between eras is what I wanted to capture. Maybe that could be like a wedding or (in the case of the music video) a graduation or a even new job…or anything that signifies a change in gears. It was my own personal transition between my quitting my day job back in the day and beginning to focus on writing music as my career. That was very sudden for me and so cool. It's still one of the coolest times in my life. The beauty of it is this song speaks to each individual, wherever they are in their own lives. Hopefully, it's a suggestion for them and to be an encouragement, too, over anything."

Stylistically, Young wanted to capture the essence of what he has accomplished to this point, but venture into an exciting new direction. "My approach was to try to retain what was familiar about this running thread that's recognizable as my sound," he says. "I try not to over think it. I wanted to carry that thread. My sound has these sonic motors, I like to call them. There are these little synthesizers and patches and different elements that propel the music. A lot of the time, they remind me of something U2 would do on guitar. The opening intro on 'Verge' has this motorized sound. In that case, it is a guitar. That's the kind of thing I try to keep as a sonic element continuing through my records. Beyond that, anything goes for me. I like to have those motors, though, to make it all recognizable."

With only 10 tracks to unfold Young's new musical tale, the album involves far more than just his pounding, explosive upheaval. Fans will be able to dig into jazz, country and even rock, at times. "I really wanted every song to stand apart from the rest. That approach is a lot different than how I approached my earlier records, which is to have every song flow into the next and have this recurring theme throughout. This time, I wanted to turn that upside down and hopefully have each song feel a little bit different than the rest, in terms of sonic palette," he shares. "There are songs inspired from rock music. My love of Blink-182 and Green Day came out in a song called 'Bird with a Broken Wing.' There's the dance-EDM vibe in 'Verge.' There's a song called 'Can't Live Without You' that is sort of more of the ballad, acoustic-based. There's another called 'My Everything' [above] and 'You're Not Alone.' I tried to hit everything across the board ."

On another song called Back Home, Young basks in the relief his hometown brings every time he travels back from a long stint of touring. "It's actually been kind of a long-running inspiration since I began. [The song] really is so literal in the sense that whenever I come home from a long tour, I drive home on the same freeway. I take the same turns, and I pass the same stuff on the way home. It's a sense of accomplishment and relief. I'm from a small town in Minnesota. It's the polar opposite from a place like Tokyo or Beijing. When I come home, I always feel this total sense of release. I wanted to capture that (finally) on this record. I've been feeling that for so many years now. Because I spent so much time away, especially in Asia, on the other side of the planet, I wanted to pay respect to that feeling of finally going home."

The track features country singer Jake Owen (What We Ain't Got, Real Life), an unlikely collaboration which came about via email. "I've been such a huge fan of Jake's for a few years now. I was so familiar with his work before I wrote that song. The collaboration came about rather spontaneously," Young recalls. "I had written the song, subconsciously inspired by his work. Then, my manager sent me an email and said 'you should ask him to feature on it. What do you have to lose?' I thought 'yea, right. He probably doesn't know me from anybody.' I was too starstruck, too scared to ask him, you know?"

He adds:

"I went out on a limb and sent him this song. I introduced myself. I didn't really expect to hear back from him. But he wrote back right away. He was like 'yea, I'm a fan of your work, as well. I'd be thrilled to do this.'"

Musically, the song sits somewhere between Young's "electronic" work and a "country sensibility." "It's definitely my first experimentation in the more pop-country hybrid sound. I loved working on it. My hope is that it does have this cool cross between the [two]. What I think Jake lent to the song, just vocally, is incredible. That is really half the weight and value of the song right here." Elsewhere, Young enlisted Nineties pop group Hanson on Unbelievable (listen below). He explains how they teamed together to create such a magical strip of music: "I'm a child of the mid- to late-Eighties, so I was in the studio thinking about stuff that isn't around anymore (like fads or clothing or styles or food, whatever it is) from my childhood. I started to think. I had this whole list of things. I wrote this song based on that nostalgia. Hanson popped into my head right away. Of course, they really paved the way for me when I was in fourth or fifth grade. They real ly introduced me to my first love of music. They were the first music that I ever really started loving. I noticed that as a kid, too. It was a thing where I cold turkey reached out to them and sent them this song. Again, I didn't really know what to expect. They were so gracious and so kind and agreed to sing on it. I think it's way better because of their involvement."

And speaking of fusing together two vastly different sounds, Young shares his thoughts on whether music could ever reach a point where genres no longer exist. "I think a big thing for me and seeing that tendency in myself has definitely been due to how accessible music is now. I open Spotify and I can spend all day exploring and finding stuff I never would have found otherwise. As a songwriter, spending an hour doing that right before I try to write a song of my own, it erases the genre mindset like 'oh, this won't work because it should only be under these parameters.' It'd be amazing if one day those lines were blurred."

Previously, Young teamed up with pop goddess Carly Rae Jepsen on 2012′s hit Good Time, featured on his Midsummer Station disc. Following moderate success, they were slapped with a $500,000 lawsuit. Singer-songwriter Allyson Burnett claimed the summer anthem ripped off her own Ah, It's a Love Song. After a lengthy debacle and thorough investigation, her allegations were unfounded and the lawsuits were dropped. A similar copyright infringement lawsuit was forged last year in regards to Robin Thicke, Pharrell and T.I.'s 2013 sultry smash Blurred Lines, by the Marvin Gaye estate. In the initial order, the children of the music legend alleged the song was a replication of Gaye's Got to Give It Up. As a result, the federal court ruled in favor of the plaintiff and a $7.4 million payout. According to an account statement, Blurred Lines racked in a whopping $16.7 million in total profit. But will the final ruling adversely affect content creation, especially in music, going forwar d? Young gives his thoughts, "I think it could play on influence in the way songs are written. I can definitely envision writers in the studio throwing away ideas, thinking, 'that's too close to this song.'"

"When I'm in the room with other writers, and someone comes up with a melody, that's so powerful," he says. "That's almost like we have to go with this, and it has to see the light of day. It's exciting. That overshadows the 'what if we're stepping on toes and don't know it.' Ultimately, there are only 12 notes in the scale. There's multiple octaves, but you only have 12 to work with. At some point, something is going to sound like something else. As long as you're honest and not doing the wrong thing, you should be good."

Make sure you grab a copy of Owl City's new single Verge and pre-order Mobile Orchestra on iTunes now!

[PHOTO CREDIT: Pamela Littky]

Stay tuned for Owl City updates. Be sure to follow @Popdust and @JasonTheScott on Twitter!

Source: Owl City On The 'Mobile Orchestra,' Jake Owen Collab & Copyright Lawsuit Implications

TV Stations Urged to Review ‘Sinetron’ Soap Operas and Variety Shows

Illustration. (Image courtesy of Salvatore Vuono at FreeDigitalPhotos.net)

Jakarta, GIVnews.com – The Indonesian Broadcasting Commission (KPI) has called on all television stations in Indonesia which air variety shows and locally made soap operas to undertake a thorough evaluation of such programs.

The commission had conducted a survey in nine largest cities in Indonesia and had come to the conclusion that the two program categories were at the very lowest quality. Some of them do little to help shape viewers' characters and identity. Moreover, many of their contents are about mystical things, horrors and violence despite their huge viewers base, KPI said.

"We are still at the very lowest quality in terms of 'sinetron' films (soap operas) and variety shows. We call on television stations to review them further," KPI Chairman Judhariksawan told a news conference at its office in Central Jakarta on Monday (22/6), Kompas.com reported.  On the occasion, the KPI made presentation about the results of its survey.

KPI's survey discovered that among the lowest quality 'sinetron' operas are Mak Ijah Pengen ke Mekah (SCTV), 7 Manusia Harimau  (RCTI) and Sinema Pintu Tobat  (Indosiar). In addition, poor quality variety shows include Late Night Show (Trans TV), Duo Pedang  (Global TV) and Pesbukers  (ANTV).

Meanwhile, not all television stations agreed with KPI's evaluation. On 7 Manusia Hariamu, for example, RCTI insists that the physically fierce fighting scenes in that film are based on a long-held legend in Bengkulu in southern Sumatra. "It is unfair to compare it with other sinetrons which do not have fight contents," said RCTI's government relations chief Ida Yuanita.

Source: TV Stations Urged to Review 'Sinetron' Soap Operas and Variety Shows

Indonesia Risks Own Goal as Rupiah-Only Rule Lifts Company Costs

For Indonesian drug maker PT Kalbe Farma, a ban on using currencies other than the rupiah for local transactions is coming at the worst possible time.

Bank Indonesia will prohibit an estimated $12 billion a day of such trades between domestic parties from July 1. Kalbe Farma pays local suppliers in dollars for many raw materials and the rule will push up procurement expenses by 0.5 percent to 1 percent, said Director Vidjongtius. It will also have to rely on more expensive rupiah loans for working capital, boosting its cost of funds by 5 percent to 6 percent, he said.

"We don't see it as good timing in this situation to increase the selling price where the consumer is in quite a weak situation," Jakarta-based Vidjongtius said in a phone interview. "It will mean higher costs for companies like us that depend on imported ingredients."

The transactions rule, aimed at stemming a drop in Asia's fastest-falling and most volatile currency, will affect companies already under pressure after the economy grew at the slowest pace since 2009 in the first quarter. Dollars, from property rents to commodity deals, are often favored in a country where the rupiah has plunged 29 percent over the last three years.

About 45 percent of Indonesian working capital and investment lending in the last year was in foreign currencies, according to a June 9 research note by Irene Cheung, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd.

Natural Hedging

The rupiah rule puts a lot of the currency risk onto Indonesian companies, said Joel Hogarth, a partner at Ashurst LLP in Singapore, who has been advising clients on the regulation.

For onshore service providers, such as law firms, quoting in dollars is a natural hedge because they typically don't get paid for several months after doing the work and the rupiah may have weakened during the period, he said. The Indonesian currency has dropped 6.9 percent this year.

At the same time it's moving ahead with the rupiah rule, Bank Indonesia is requiring companies to hedge at least 25 percent of their short-term external debt that's not offset by their foreign-currency assets, with sanctions coming into effect from October.

"On the one hand, they are saying companies shouldn't be taking offshore currency risk," said Hogarth. "On the other hand they're saying they can't do natural hedging by simply quoting to their offshore clients in foreign currencies."

Inflationary Impact

Listing prices in dollars is common in the property market, particularly for apartment rentals and offices. About 30 percent of office rents are in dollars, said PT Colliers International Indonesia Managing Director Michael Broomell.

"It's basically going to force people to borrow in rupiah," he said in an interview in Jakarta. "This is an issue for developers that were looking at building office buildings. The numbers may not make any sense anymore."

The rule will also be disruptive for companies in the energy and mining industries as dollars are commonly used to buy and sell commodities and equipment that are priced in the U.S. currency, said Bill Sullivan, foreign counsel with law firm Christian Teo Purwono & Partners in Jakarta.

"Companies are going to simply increase the price in rupiah" to mitigate the risk, Sullivan said. It will also complicate pay arrangements for foreign executives who will now have to be paid in rupiah, he said.

'Tough' Timing

Bank Indonesia doesn't expect the rule to have a major impact on inflation, which is at the highest rate in Asia.

"In the beginning there may be one-off adjustments to prices and rates, but in the long run, it should make them more cost-efficient," Peter Jacobs, a director at the monetary authority, said in an e-mailed response on Wednesday. "There's a cost to mitigating foreign-currency risk, but this is good corporate governance and when hedging products become more common in Indonesia, the cost will fall."

The rupiah's volatility makes it relatively expensive for companies to hedge their exchange-rate risk. The currency is also not expected to stop weakening anytime soon. It will drop a further 2.2 percent by the end of the year and then another 2.2 percent in 2016, according to the median estimates in Bloomberg surveys.

"Timing-wise, it's a tough thing to do, when you have the U.S. about to hike interest rates and the Indonesian economy slowing down," said ANZ's Cheung. "I don't think it's going to turn around the rupiah, at least not in the near term."

Source: Indonesia Risks Own Goal as Rupiah-Only Rule Lifts Company Costs

Jakarta Police Probe Complaints Against Uber by Rivals

Updated June 23, 2015 4:11 p.m. ET

JAKARTA, Indonesia—Uber Technologies Inc., the ride-hailing company that has exploded in popularity in its first year in Indonesia, suddenly finds itself the target of a police investigation following claims by traditional taxis that the startup's practices are illegal.

Police in Jakarta confirmed this week that they are investigating complaints made in late February by a group representing taxis and other transportation operators, known as the Organization of Land Transportation Owners, or Organda.

The group argues Uber is violating Indonesian laws by not using meters or having a taxi license, and by making transactions with credit cards. Those practices, it claims, amount to fraud, information and electronic transaction crime and money laundering.

Police said the accusations led them to set up an operation on Friday in which five Uber drivers were asked for rides by a team of police, Organda, and Jakarta's transportation agency. The unnamed drivers were summoned via the Uber app, then detained for questioning, before being released by the police without being charged with any crime. Instead, they will be used as "witnesses" in the investigation, said Sr. Comr. Muhammad Iqbal, head of Jakarta Police's public relations division.

Uber says it isn't guilty of breaking any Indonesian laws, and isn't a taxi business, owning no cars and employing no drivers. Instead, it connects those who need rides with available drivers, billing the credit cards of clients directly through their smartphones.

"Every vehicle in Jakarta on the Uber platform is a registered for-hire car with full commercial insurance that is thoroughly inspected by Uber, meeting all local licensing and registration requirements," said Karun Arya, Uber spokesman for South Asia and India.

Addressing the Friday police operation, Uber said in a statement that it would "stand by our partner drivers 100% and help them resolve this matter amicably."

The San Francisco-based startup, which operates in more than 300 cities world-wide, has faced complaints when setting up shop, including in Thailand, Singapore and Vietnam.

Uber has faced regulatory hurdles in many parts of the world, including in the U.S. and particularly in Europe. Courts in Spain, Germany, Italy and the Netherlands have banned a low-cost Uber service that uses nonprofessional drivers. France last year passed a law that, among other things, bans companies from showing the locations of available cars other than traditional taxis on a smartphone app—one of Uber's main features.

Uber has fought those rulings and the French law, arguing in court and before the European Union that they violate EU principles of free establishment. The strategy may be bearing some fruit: The EU last month sent a letter to France outlining concerns with the new French law, the first step in a process that could block it from being implemented.

Meanwhile, an Indian court this month left a ban on the service in place in Delhi and asked transport regulators to respond to the company's challenge to an order barring the service.

Uber has been banned in Delhi since December when a woman alleged that a driver booked through the firm's app raped her. The driver is on trial and denies wrongdoing.

The Indian arm of Uber sought to overturn the prohibition on Uber in the city after the court lifted the ban on the company's main rivals, ANI Technologies Pvt. Ltd.-owned Ola and TaxiForSure last week.

Police in Delhi had impounded hundreds of vehicles belonging to the firms after the Transport Department rejected the companies' applications for radio-taxi licenses, saying they had failed to provide evidence that they were complying with a ban on their services.

The Delhi High Court judge hearing Uber's petition earlier this month said the company was still subject to the ban and the next hearing on the matter would take place July 8.

A spokesman for Uber said at the time that the company had "full faith in the judicial process." A senior transport official declined to comment.

In Indonesia, Uber operates in Bali and Bandung, as well as in Jakarta, which "is the fastest growing city ever," according to the head of Uber Indonesia, Alan Jiang. While declining to give specific revenue or rider figures, Mr. Jiang said Uber has attracted hundreds of thousands of riders in Indonesia, where it launched last August, and partners with thousands of drivers.

With little overhead, Uber can often charge lower fares than taxis—which may explain the strong opposition by Organda and other rivals elsewhere. While figures aren't available for the value of the annual taxi business in Indonesia, more than nine million people live in Jakarta, which has poor public transportation and where many people can't afford to own cars.

Shafruhan Sinungan, Jakarta's Organda chairman and director of one of the largest taxi operators in Indonesia, said Uber cars "have no logo, special color, yellow plates, and taxi meter. They can't just set their own fare in this country."

Taxi fares in Indonesia are regulated by local governments under the traffic and public transportation law.

"Uber must leave Indonesia," he said.

—Newley Purnell in Singapore and Sam Schechner in Paris contributed to this article.

Source: Jakarta Police Probe Complaints Against Uber by Rivals

Indonesian Car Sales Plunge by 13.7%

Illustration. (Image courtesy of Praisaeng at FreeDigitalPhotos.net)

Review

Jakarta, GIVnews.com – In a recent sign of slowing economic growth, the 2015 number for car sales have plunged by 13.7 percent in May. This is according to the Chairman of the Indonesian Automotive Association (Gaikindo), Sudirman M. Rusdi.

"Last year, sales (have reached) 1.2 million units. This year, we have revised (the number after) observing that in May, there is a decreasing sales of up to 13.7 percent. We expect there is only 1.1 million (units sold)," said Sudirman in Jakarta after a meeting with Vice President Jusuf Kalla as quoted by Tempo.co on Monday (22 Jun 2015).

The decreasing number of car units sold is probably a sign of a weakening consumer's purchasing power. "We know there is a decreasing trend of export of commodities. In a number of regions, the economy is weakening," Sudirman was quoted as saying.

From January to May 2015, car wholesales to distributor companies have reached 443,000 units, a 16.6% drop compared to the same period last year, which have reached 531,000 units of car sales.

Despite the drop, Gaikindo had previously shared that creditors are still experiencing significant growth, which has reached Rp 246.9 trillion in June 2015, compared to a total of Rp 230.81 trillion last year.

Meanwhile, in contrary to the slow growth of new car sales, there is a significant increase in financing activities for the purchase of used cars. The trend is experienced by several multi-finance companies, such as PT Al-Ijarah Indonesia Finance (Alif Finance), which sees a 100 percent increase in financing value in May 2015.

"Till May 2015, the composition of used cars (financing) is 78 percent," said Krisdianto Soedarmono, Marketing Head of Alif Finance, a shariah based financial company, Tempo.co reported.

His company's recent addition of distribution channels, Krisdianto said, contributed to the increasing volume of used cars financing. This is despite the decreasing purchasing power, which does not notably affect used cars financing. Alif Finance is targeting to disburse up to Rp 400 billion worth of financing by the end of the first semester, less than half of the 2015 target of Rp 1 trillion.

The same experience is also shared by another used cars financing company, PT Magna Finance Tbk, which is not affected by the recent slow growth of new car sales. Magna Finance conducted 95% of its finance disbursement activities for the purchase of used vehicles.

"The drop of new car sales will effectively increase the sales for used cars. The current condition is not a problem for us," said Marcia M. Rahardjo, the General Director of Magna Finance, which has disbursed Rp 145 billion worth of financing for used cars in the first quarter of 2015, a 40 percent increase compared to the same period last year.

Currently, the market for used cars is more stable compared to its new vehicles counterpart, a view that was shared by the General Director of PT Andalan Finance Indonesia (AFI), Sebastianus H. Budi. Up till May 2015, his company has accumulated Rp 1.7 trillion worth of funds for financing purposes, 30% more compared to the same period last year.

Source: Indonesian Car Sales Plunge by 13.7%

RPT-Rising unemployment piles up problems for Indonesian president

(Repeats Sunday story with no changes)

* Feb unemployment data 5.81 pct, up from year-ago 5.7 pct

* Official data don't fully capture huge informal sector

* Economists say youth unemployment worse than 20 pct

* Government's infrastructure splurge stalled

By Eveline Danubrata and Cindy Silviana

JAKARTA, June 21 (Reuters) - Indonesian companies are shedding jobs as they grapple with the weakest economic growth in six years, adding to the troubles facing President Joko Widodo, who was elected last year on pledges to dig the country out of a rut.

Government data might suggest no cause for alarm - unemployment was 5.81 percent in February, up only slightly from 5.70 percent a year earlier - but the official numbers are notoriously unreliable and don't adequately cover the informal sector, which is two-thirds of Southeast Asia's biggest economy.

Recent reports of heavy lay-offs across the country paint a bleaker picture, and business executives, recruitment firms and jobseekers say it is getting worse.

Young people are being hit hardest; the International Labour Organization estimated the youth jobless rate was more than 20 percent in 2013, and economists believe it is higher now.

About a third of the workforce is aged 15 to 29, a youth bulge that could bring Indonesia, a country of 250 million people, the sort of demographic dividend China and South Korea enjoyed a generation ago - but only if there are jobs for the 2 million people joining the workforce every year.

"The government doesn't have a blueprint for labour absorption," said property businessman Hariyadi Sukamdani, chairman of the Indonesian employers' association.

"If this condition is allowed to continue, what we would get is not a demographic bonus, but a demographic disaster. There could be social turmoil and higher crime rates."

JOBLESS IN JAKARTA

When he took office eight months ago, Widodo said he would pour billions of dollars into infrastructure and foster growth in manufacturing.

But the promised splurge on roads, power plants and ports has not materialised, largely because of bureaucratic hold-ups and land disputes, and a shortage of skilled labour is holding back growth in value-added industries.

Miners have been hammered by a double whammy: a ban on mineral ore exports and a sharp drop in commodity prices.

Meanwhile, labour-intensive industries such as textiles and manufacturing have been hit by the rupiah's slide to a 17-year-low, which has raised the cost of imported raw materials.

Hundreds of redundant garment factory workers protested for hours this week in the financial district of Jakarta, the capital, after their company was declared bankrupt and its assets seized by two banks.

Unemployment in turn is hitting consumption, which makes up more than half of Indonesia's economy. Automobile sales in May fell 18.4 percent from a year earlier, the ninth decline in a row.

"Stocks are piling up because nobody is buying. The people's purchasing power is weak," said Ade Sudrajat, head of Indonesia's textile association. "This has never happened before in the last 45 years."

EXPAT EXIT

Arif Budimanta, adviser to the finance minister, said the government was introducing measures such as halving lending rates for small businesses and exempting most goods from a luxury tax to stimulate consumption.

At job fairs in Jakarta the gloom is palpable.

Naomi Octiva Naibaho, a manager at the Kompaskarier.com portal that ran one such fair recently, said about 6,000 jobseekers turned up every day, roughly triple the number of positions on offer.

Gita Harahap, 26, has been sending resumes for weeks since the bank where she worked as a teller started a round of lay-offs, but she has had no luck. "No one has called me back," she said. "The competition is tighter."

In the first five months of this year, 79 companies approached Universitas Indonesia for potential recruitment, down from 110 over the same period of 2014, said Sandra Fikawati, head of the university's career development centre.

The slowdown is also affecting higher-paid jobs, including in financial services, said Rob Bryson, Indonesia country manager for recruitment firm Robert Walters.

From mid-2013 to late last year, the number of foreigners holding work permits in Indonesia is estimated to have dropped 20 percent to around 62,000, partly because expatriate jobseekers saw more opportunities in Western countries, he said.

"Companies here are looking to increase productivity," Bryson said. "They will happily hire one person and let go of two in many circumstances, so that adds pressure to the employment scene." (Additional reporting by Klara Virencia; Editing by John Chalmers and Will Waterman)

Source: RPT-Rising unemployment piles up problems for Indonesian president

Japan announces humanitarian aid for Rohingya migrants fleeing Myanmar by boat

Rohingya migrants on a boat off the coast near Kuala Simpang Tiga in Indonesia's Aceh province last month. Photo: Januar

Tokyo: Japan's Foreign Minister Fumio Kishida has used a keynote address during an international conference at the United Nations University in Tokyo to announce emergency aid measures for Rohingya Muslim minority migrants from Myanmar.

Mr Kishida told the conference on Saturday that Japan would assist Rohingya migrants by providing $4.5 million in emergency grants via international organisations.

Japanese Foreign Minister Fumio Kishida has announced an aid package for Rohingya migrants who have fled Myanmar, where they face discrimination and persecution. Photo: Toshifumi Kitamura

He also unveiled plans for an exchange program between Japan and other Asian countries, in which about 300 young people from abroad would be invited to Hiroshima and Nagasaki – both atomic-bombed cities – to discuss issues related to peace-building.

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"To maintain economic growth in Asia, it is essential to keep the peace," Mr Kishida said. He presented Japan's ideas for peace-building at the conference titled 'High-Level Seminar on Peacebuilding, National Reconciliation and Democratization in Asia.'

The announcement marks the first action the Japanese government has taken to support Rohingya migrants. The government intends to undertake humanitarian activities – such as setting up evacuation shelters and feeding Rohingya people migrating on boats via the Indian Ocean – through the International Organisation for Migration (IOM) and the Office of the UN High Commissioner for Refugees (UNHCR).

Mr Kishida also announced a multi-billion dollar five-year financial plan to promote peace by building ties between the Myanmar government and minorities in that country.

Other initiatives include training more than 1,800 local administrative officials to support national reconciliation in Sri Lanka. The Japanese government's ongoing contributing to restoration and reconstruction in Nepal, which was devastated by massive earthquakes in April, was also underlined.

Nobel Peace Prize recipient and former East Timor President Jose Ramos-Horta also delivered a speech at the conference. He argued that although Asia has seen progress in terms of peace, stability, economic prosperity and democracy, persistent and sustained efforts are still needed to ensure that real democracy takes root.

The Washington Post

Source: Japan announces humanitarian aid for Rohingya migrants fleeing Myanmar by boat

Total, Inpex to share 30% stake in Indonesia’s Mahakam gas block

JAKARTA: Indonesia said on Friday it will allocate Total and Japan's Inpex a 30 percent stake in the offshore Mahakam oil and gas block once the French major's operating rights to Indonesia's top gas field expire in December 2017.The decision resolves a more than seven-year tussle over the future of the block, and follows nationalistic calls for it to be handed over entirely to Indonesia's state-owned enegy giantPertamina."We want to show our appreciation to the (current) contractors that have shown their commitment to invest," Energy and Mineral Resources Minister Sudirman Said told reporters. The division of the 30 percent stake between Inpex and Total was still subject to discussion, he added.Spokesmen for Total and Inpex did not answer phone calls or respond to written requests for comment.Indonesia is one of the world's top five liquefied natural gas (LNG) exporters, but has started to consume more of its output to feed growing local demand.The Indonesian government said in F ebruary it would hand 100 percent of the block to Pertamina, while Total had previously proposed a five-year transition period and warned of a declinein production.Mahakam is one of numerous Indonesia oil and gas contracts due to expire under uncertain terms.Said said President Joko Widodo's administration had now made decisions on the future of five expiring contracts since taking office last October as it works to clear a backlog that has frustrated foreign companies.Pertamina will operate the Mahakam block from January 2018 and will share a 70 percent participating interest with a regional government-owned enterprise, Said said, noting that this stake would not exceed 10 percent."Pertamina must truly be able to act as an operator controlling a majority participating interest," he said.Pertamina CEO Dwi Soetjipto said he expected the firm to invest $2.5 billion a year on Mahakam once it becomes operator.Total has said it expects output from Mahakam of 1.4 billion cubic feet per da y (bcfd) in 2016, down around 12.5 percent from its targetted 1.6 bcfd this year. Total's spending is also expected to drop by at least 35 percent to below $1.5 billion in 2016 from a targetted $2.3 billion this year.Total has held a 50 percent operating interest in the Mahakam block since 1970, when it took over as operator from Inpex, which had operated the block independently since 1966 and holds the other 50 percent.

Source: Total, Inpex to share 30% stake in Indonesia's Mahakam gas block

Indonesia's central bank holds interest rate as rupiah weakens

Jakarta

INDONESIA'S central bank kept its main interest rate unchanged for a fourth month, as a weakening rupiah curbs room for policy easing to boost growth.

Governor Agus Martowardojo and his board held the reference rate at 7.5 per cent, Bank Indonesia (BI) said in Jakarta on

Source: Indonesia's central bank holds interest rate as rupiah weakens

Twitter Could Shape Flood Disaster Response

In late January 2014, Jakarta was inundated with heavy rain. So much rain fell that the region saw 16 inches more rainfall than normal for the month.

Rivers rose and punctured their banks, spilling onto the streets of the Indonesian capital. Flood waters reached over 6 feet in some areas and affected nearly 135,000 residents. Those with smartphones and a Twitter account rushed to relay information about the extreme rise of waters to family, friends and follower alike.

The tweets made for compelling retweets and news reports, but Dutch researchers have also figured out another use for the tweets: real-time flood maps. Their efforts are currently being piloted in Jakarta, but they could eventually change the way that disaster response agencies,  like the Red Cross, address weather disasters globally. And in a warming world where heavy downpours are likely to increase (as are the number of social media users), the project represents a sweet spot that addresses a need with a growing source of data.

"There are a lot of people tweeting about locations of floods, and they often describe the water level in their tweets,"Arnejan van Loenen, a flood expert at Netherlands-based research institute Deltares, said. "That gave me the idea that well, if there's this amount of information, then each tweet could be seen as an observation. That was a lot of observations about floods that are not being used."

The project, called Floodtags, uses an algorithm and spam filter to find tweets about floods and identify clusters of tweets about a certain location — usually a strong sign of something major happening. Van Loenen and his colleagues are then able to translate the ephemera of Twitter into detailed flood maps that pinpoint flood levels and hard-hit areas. The project doesn't currently analyze image data in tweets, but van Loenen said that could eventually become another rich source of information for their tool.

The technique is particularly useful in cities or locations that have a lot of active Twitter users. During the January 2014 floods, more than 360,000 tweets were posted about the floods, including 15,000 with flood depth information. For a major event like Hurricane Sandy, more than 20 million tweets were posted over a five-day period, providing an even bigger bounty of data (and of course, a lot of noise).

But unlike New York and other areas on the Eastern Seaboard, Jakarta and other urban areas across the developing world have fewer weather stations and data (though many are home to some of Twitter's 302 monthly million users). That means the tool could be a major boon for disaster responders in developing countries. After the waters recede, the data can help assess damage and recreate a timeline of flooding for future planning.

"The Red Cross already uses Twitter; the Philippines Red Cross monitors it; the American Red Cross monitors it,"Erin Coughlan, a senior climate specialist with the Red Cross Red Crescent Climate Centre, said. "Floodtags has this approach that uses an algorithm that allows people to tackle the big data problem — there are so many tweets — and make it useful and helpful for us."

Van Loenen said it's unlikely to completely replace tools already at disaster responders' disposal, including satellite images and good old-fashioned phone calls. But he said it's possible that as the project expands to include other countries, they could also tap into other social networks such as Instagram, which boasts 300 million monthly users, and Weibo, a Chinese social media platform with nearly 200 million monthly users.

Floodtags isn't the only application of the millions of pieces of data people inadvertently generate everyday on social networks.

"At this moment, there is a lot of potential for projects (like this)," van Loenen said. "For example, like famine alert systems that focus on words like cholera, or other epidemics, or even earthquake response systems. It's all in the first development phase."

This article is reproduced with permission from Climate Central. The article was first published on June 17, 2015.

see also:

Source: Twitter Could Shape Flood Disaster Response

Widodo to Switch Off Middle Class Power Subsidy in Budget Reform

Having watched his economic reform momentum falter in recent months, Indonesian President Joko Widodo is resurrecting his biggest policy success by cutting more subsidies. That will test his support with voters.

The government is proposing to remove electricity subsidies next year for households that use between 450 and 900 watts, a common level among middle class families in the capital. Rather than subsidizing state power company PT Perusahaan Listrik Negara, money will be shifted directly to the poor, Askolani, a director general at the finance ministry, said on Tuesday.

The plan by Jokowi, as the president is known, would build on the scrapping of decades-old gasoline subsidies this year, which freed up billions in the budget. With growth in Southeast Asia's largest economy at the slowest in more than five years and government spending so far struggling to revive it, the move risks a backlash from an emerging middle class that voted the former Jakarta governor into power last year.

"It will make the government look bad: it looks for more money while it needs to improve spending," said Rangga Cipta, an economist at PT Samuel Sekuritas in Jakarta. "We're still not sure if the government is able to spend, and without any improvement in spending quality, the impact will be negative."

The proposal follows a raft of micro-measures in recent weeks to revive waning domestic demand, from cutting luxury taxes to loosening mortgage rules. Yet the stock market has fallen 6.6 percent in June and the rupiah is Asia's worst-performing currency this year, as investors are looking for bolder structural reforms such as improving the bureaucracy and getting subsidy savings spent on infrastructure projects.

Poor, Vulnerable

"As long as he continues with reforms, it will be a show of commitment, and I think that's what investors want to continue to see," said Christy Tan, head of markets strategy for Asia at National Australia Bank Ltd. "I think it's a move in the right direction."

The government has allocated 73.1 trillion rupiah ($5.5 billion) for power subsidies in the 2015 budget. Last year it gave a subsidy of 99.3 trillion rupiah to Listrik Negara, which reported net income of 11.7 trillion rupiah. The company raised electricity tariffs for heavier power-using households and industrial companies last year under the previous government.

"The subsidies will be shifted to the needy, that is households that are poor and vulnerable," said Suahasil Nazara, head of the finance ministry's fiscal agency.

Parliamentary Opposition

Jokowi has pledged to address a "dangerous" level of inequality that threatens the stability of the world's fourth most-populous nation. While wages have risen steeply for unionized workers in recent years, protesters have rallied outside the state palace over the cost of fuel, food and corruption during his first nine months in power.

The 2016 budget proposals still need to be approved by parliament, where the president's coalition has a minority. His ability to weather opposition depends on convincing the public that the savings will be used to improve their lives.

"This will be an additional burden on the people, as electricity is a basic need," Cipta said. "Eventually people will have to cut other spending, and purchasing power will fall."

The government will strive for 5.2 percent economic growth this year, down from its target for 5.7 percent, Finance Minister Bambang Brodjonegoro said this week. It has been rolling out free health and education cards to poor families this year, in a country where 43 percent of people lived on under $2 a day in 2011, according to the World Bank.

Sugenda, a 39-year-old father of three who uses 900 watts of power at his rented house in Jakarta, hasn't got any such cards and is unhappy about Jokowi's subsidy moves.

"And now he want to raise electricity prices?" said Sugenda, who spends 10 percent of his outgoings on power. "I'm very disappointed since I didn't get any compensation. I will protest on that."

Source: Widodo to Switch Off Middle Class Power Subsidy in Budget Reform

Indonesia Accepts Islamic Megabank Challenge Shelved by Malaysia

Indonesia is taking on the challenge of creating an Islamic megabank that has so far proven too difficult for lenders in Malaysia and the Middle East.

The government plans to merge the Shariah-compliant units of state-owned PT Bank Mandiri, PT Bank Negara Indonesia, PT Bank Rakyat Indonesia and PT Bank Tabungan Negara with paid-up capital of more than 15 trillion rupiah ($1.13 billion) next year, Gatot Trihargo, deputy minister for government-run enterprises, said in a June 10 interview in Jakarta. Financial Services Authority Chairman Muliaman Hadad said in January that the plan may materialize this year.

Malaysia has been touting the idea of forming an Islamic megabank that can compete with the likes of HSBC Holdings Plc for six years and a three-way merger to create one fell apart in January. The Islamic Development Bank, an institution based in Saudi Arabia with 56 member countries, previously planned to set up such a lender in 2012 with capital of $1 billion.

"We have seen the challenges that come with wanting to create a mega-Islamic-banking entity," said Raj Mohamad, managing director at Five Pillars Pte, a consulting firm in Singapore. "If it materializes, it will augur well for Islamic banking and finance for not only Asia but also globally."

Lagging Malaysia

In the Indonesian plan, the government will ask the four lenders to provide 5 trillion rupiah to 10 trillion rupiah of capital to their Shariah banking units before the planned merger, Trihargo said. The combined entity will help manage about 70 trillion rupiah and this would be used to fund infrastructure projects, he said.

"Because of budget limitations, it's hoped that the parents of the Shariah banks will inject capital," said Trihargo.

The proposed amalgamation is one of three options the authorities first mooted in May 2013 to boost Islamic banking assets, which are just over a 10th of neighboring Malaysia's. The government also considered setting up a new state-controlled Islamic lender or converting an existing non-Islamic bank into a Shariah-compliant one.

The combined entity is expected to result in a quadrupling of Islamic banks' share of total banking assets to 20 percent by 2018, compared with 10 percent without the merger, the Indonesia Islamic Banking Association said in February.

Shariah share

"After each bank has reached a sufficient and healthy economic scale, only then should they be merged," said Imam Teguh Saptono, Jakarta-based director at PT Bank BNI Syariah, the Islamic unit of Indonesia's fourth-largest lender. "The intention is really to increase the Shariah banking market share and produce an Islamic bank that's large and competitive."

The assets of Shariah-compliant lenders in Indonesia rose 12 percent to 272 trillion rupiah in 2014, while those in Malaysia recorded a similar pace of growth to 625 billion ringgit ($166 billion), official data show. Islamic banks in Southeast Asia's biggest economy had a combined 213 trillion rupiah of deposits at the end of March, 18 percent more than a year earlier, according to the Financial Services Authority.

Latest Attempt

Indonesia's move marks the latest effort by the $1.7 trillion Islamic finance industry to form a megabank.

Malaysia's central bank in 2009 proposed the creation of one to cement the nation's position as a sukuk hub. A license slated to be awarded in 2011 for a multinational lender to be formed between Asia and the Middle East didn't materialize. The second attempt was a merger between CIMB Group Holdings Bhd., RHB Capital Bhd. and Malaysia Building Society Bhd., announced in October and aborted in January.

In the Middle East, the IDB's 2012 plan to form a mega lender with Riyadh-based Dallah Albaraka Group and the Qatari government also failed to materialize.

Indonesia's proposal aims to "create a catalyst in its Islamic banking sector," said Abas A. Jalil, chief executive officer at Amanah Capital Group Ltd., a consultancy in Kuala Lumpur. "Indonesia needs to have bigger Islamic banks to finance infrastructure development programs and manage the growing Shariah-compliant deposits."

For more, read this next:
Source: Indonesia Accepts Islamic Megabank Challenge Shelved by Malaysia

Labor, Greens push for investigation into 'breathtaking' people smuggler claims

Labor and the Greens have requested investigations into claims that taxpayer funds were used to pay people smugglers to turn back an asylum seeker boat.

14 Jun 2015 - 2:06 PM  UPDATED 32 MINS AGO

Prime Minister Tony Abbott has repeatedly refused to deny or confirm the reports despite growing pressure for answers from Indonesia, the United Nations, Labor and the Greens.

Labor immigration spokesman Richard Marles wrote to the Auditor-General on Sunday night requesting an investigation into whether the payments were made.

"If this happened, there are serious questions about the legal basis upon which it has happened," Mr Marles told ABC radio on Monday.

Greens senator Sarah Hanson-Young will ask the Australian Federal Police to investigate the claims and whether any laws have been broken.

She says Australians have a right to know whether taxpayer funds have been used.

"(Mr Abbott) doesn't have a mandate to break the law," Ms Hanson-Young told ABC radio.

"He doesn't have a mandate to hand out wads of cash on the ocean to people smugglers."

Jakarta seeks answers on 'boat payment'

Jakarta wants to know if the Australian navy paid people smugglers to turn their boat around and sail back into Indonesian waters.

Meanwhile, Foreign Minister Julie Bishop has urged Indonesia to enforce sovereignty over its own borders, after Indonesia's Foreign Minister Retno Marsudi sought an explanation from Australia's ambassador Paul Grigson over the allegations.

Ms Bishop told The Australian the best way for Indonesia to resolve its concerns about Australia's operations to stop asylum seeker boats was to "enforce sovereignty over its borders".

Mr Marles says the claims are affecting Australia's relationship with Indonesia.

Asked whether he agreed with Ms Bishop that Indonesia needed to get its own house in order, Mr Marles said: "I don't think now is the time for the Australian government to be walking down that path."

The Australian Greens on Monday will try to win Senate support for a motion requesting the government table documents detailing any payments to individuals on board asylum seeker boats.

Passengers tell UNHCR the crew received a payment

The United Nations refugee agency says it's interviewed the 65 passengers from the boat who claim the crew were paid by Australian officials to return to Indonesian waters.

The UNHCR's James Lynch has told the BBC the passengers were transferred to a customs boat for four days before being put on two boats and sent back to Indonesia.

"The boat that was rescued by the Indonesian navy on 31 May - we have interviewed the 65 passengers and they have said that the crew received a payment," Mr Lynch said.

Indonesia's Foreign Minister Retno Marsudi sought an explanation from Australia's ambassador Paul Grigson on Saturday over the allegations.

Mr Abbott has repeatedly refused to confirm or deny the allegations, or whether the government would investigate them.

"The only question that matters is, is this government prepared to do what's necessary to keep the boats stopped?" he told reporters in Canberra on Sunday.

"The answer is yes."

He said it was important for Indonesia to know the government was "absolutely resolute" in its determination not to allow the people smuggling trade to resume.

Immigration Minister Peter Dutton refused to comment on the allegations on Sunday after denying them earlier in the week.

"From day one we have not commented on operations," he said, following the line taken by Mr Abbott and several other senior ministers on Operation Sovereign Borders.

Opposition Leader Bill Shorten said Australians deserved an answer following Mr Dutton's backflip.

"It is now time for Mr Abbott to make it clear ... has Australian taxpayer money been paid by the Abbott government to criminal people smugglers or not?" he told reporters in Canberra.

Opposition immigration spokesman Richard Marles said the claims were affecting Australia's relationship with Indonesia.

If the claims were true, Mr Dutton would have a "serious problem".

"If he has denied this up front and it turns out to be true, Peter Dutton is seriously injured," Mr Marles told ABC TV.

Finance Minister Mathias Cormann said the proposition that Mr Abbott's refusal to deny the allegations translated into payments having been made was "just wrong".

Former Howard government treasurer Peter Costello said it was appropriate that the government neither confirm or deny the reports.

"There's a lot of stuff that happens in the security area which a government neither confirms nor denies - that doesn't mean it happens," Mr Costello told Network Ten's Bolt Report.

"You don't want the smugglers to know what you're doing."

Greens Leader Richard Di Natale said any government payments to people smugglers would effectively put Australia in the people smuggling business.

Calls for truth from PM on asylum boat pay off claims

Prime Minister Tony Abbott says his government will do whatever is reasonably necessary to protect Australia from people smuggling.

Source: Labor, Greens push for investigation into 'breathtaking' people smuggler claims

Indonesian volcano unleashes fresh burst of clouds and ash

© AP Photo/Binsar Bakkara A farmer watches as Mount Sinabung releases pyroclastic flows in Tiga Pancur, North Sumatra, Indonesia, Saturday, June 13, 2015. The volcano, which was put on it highest alert level last week, has sporadically erupted since 2010 after being dormant for 400 years.

JAKARTA, Indonesia — A volcano in western Indonesia unleashed a new powerful burst high into the sky on Saturday, sending hot ash far down the mountain's slopes, an official said.

Authorities have been closely monitoring 2,460-meter (8,070-foot) -high Mount Sinabung on Sumatra, one of Indonesia's main islands, since June 2, when its status was raised to the highest alert level due to the growing size of its lava dome.

Hot ash tumbled down the slopes of the mountain as far as 3 kilometers (2 miles) southeastward on Saturday, said Wendy Cahya, an official at the mountain's monitoring post.

No injuries were reported from the latest eruption, he said.

Cahya said that as of Saturday evening, 11 avalanches of hot ash had been recorded, with volcanic ash released as high as 2 kilometers (1.2 miles) into the air.

Volcanologists have warned that smoldering rocks mixed with hot gases may tumble down from the mountain at any time.

More than 2,700 people from villages within the danger zone of 7 kilometers (4.4 miles) from the crater have been evacuated to temporary shelters. No casualties have been reported from this month's eruptions.

Mount Sinabung is among about 130 active volcanoes in Indonesia, which is prone to seismic upheaval due to its location on the Pacific "Ring of Fire," an arc of volcanoes and fault lines encircling the Pacific Basin.

The volcano has sporadically erupted since 2010, after being dormant for 400 years. An eruption last year killed at least 17 people.

Mount Sinabung releases pyroclastic flows as seen from Tiga Pancur, North Sumatra, Indonesia, Saturday, June 13, 2015. The volcano, which was put on it highest alert level last week, has sporadically erupted since 2010 after being dormant for 400 years.

© AP Photo/Binsar Bakkara
Source: Indonesian volcano unleashes fresh burst of clouds and ash

Jakarta decries Australia PM’s asylum boat stance

JAKARTA: An Indonesian official on Friday criticized Australia's prime minister as "unethical" for sidestepping allegations the Australian navy paid the crew of a boat carrying 65 migrants to return to Indonesian waters.Indonesia's Foreign Ministry has said it is "very concerned" by a report from police in East Nusa Tenggara province that the boat's captain and five crew members detained on remote Rote island had about $30,000 in cash. The group said they were paid to return the migrants to Indonesia after being intercepted by an Australian navy ship on May 20.Australian Prime Minister Tony Abbott did not deny the payment claim in a radio interview Friday. He said border officials are being "incredibly creative" in coming up with responses to human trafficking.Agus Barnas, spokesman for Indonesia's coordinating ministry for political, legal and security affairs, said Abbott's comments could be interpreted by Australian officials as endorsing bribery and might encourage people smuggling."His statement is very unethical," Barnas said.The sharp rhetoric from Jakarta is the latest flaring of tension over Australia's policy of turning back and refusing to settle any migrant who arrives on its shores by boat. Migrants escaping poverty or oppression use Indonesia as a transit point for the perilous journey in often barely seaworthy vessels to Australia.Abbott also dodged questions about the allegation during a subsequent news conference. Asked whether the government had paid people smugglers to turn back boats, he replied, "We've used a whole range of measures to stop the boats because that's what the Australian people elected us to do."Australian opposition lawmakers jumped on the controversy, accusing the government of creating an incentive for people smugglers.

Source: Jakarta decries Australia PM's asylum boat stance

1,200 Workers Recruited to Rehabilitate Drug Users

A total of 700 social workers and 500 counselors will be equipped with the knowledge and skill to handle problems pertaining to narcotics, psychotropics and other addictive substances. (AFP Photo/Choo Youn-kong)

Jakarta. The Ministry of Social Affairs has recruited a total of 1200 social workers and counselors in an attempt to provide rehabilitation services for drugs addicts throughout the country, an official said on Friday.

"The recruitment is done to comply with the demand of social workers and counselors at the ministry," said Mu'man Nuryana, the ministry's education and research body chief.

Mu'man said that 700 social workers and 500 counselors will be equipped with the knowledge and skill to handle problems pertaining to narcotics, psychotropics and other addictive substances (NAPZA) before being sent off to 24 provinces to serve at the IPWL.

As for the first batch, 168 social workers and 118 counselors are in ongoing two-weeks training in Yogyakarta.

Source: 1,200 Workers Recruited to Rehabilitate Drug Users