According to the Law of the Republic of Indonesia No. 8 concerning the Capital Market, guidance, regulation, and day-to-day supervision of capital market is provided by Bapepam in order to implement an orderly, fair, and efficient capital market activities and protect the interests of investor and public.

According to Article 3 Minister of Finance Decree No:503/KMK.01/1997 concerning Organization of Capital Market Supervisory Agency, the functions of Bapepam are:

-	drafting Capital Market rules and regulations;
-	guiding and supervising any Person granted business license, approval, registration from Bapepam and other Person related to Capital Market;
-	establishing disclosure principles for Issuers and Public Companies;
-	settlement of the objection by Person imposed sanction by Stock Exchange, Clearing Guarantee Corporation, and Central Securities Depositary;
-	establishing Capital Market accounting standards;
-	protecting technical implementation Bapepam's main function according to the policy required by Minister of Finance and based on the Law.

In implementing the function, Bapepam has the authority to grant:

-	licenses
-	approvals
-	effective registrations to capital market participants
-	provide effective registration statement								source : www.bapepam.go.id

BI Rate to Endure Future Fuel Price Rise

BI will in the short run shape up the monetary operations in controlling liquidity. 

Bank Indonesia (BI) predicted that if the benchmark interest rate (BI rate) is at around 5.7%, it would still be capable of withholding inflation which may be a result of the rise in subsidized fuel price. 

“We are improving monetary operations. Due to the short-term inflation pressure, we are performing a simulation on whether or not BI Rate can withhold the expected fuel price rise. The simulation proves the BI Rate can endure at the level of 5.75%,” Director of BI’s Economic Research & Monetary Policy Directorate, Pery Warjiyo, told VIVAnewson Tuesday.

Pery figured the BI Rate would be unharmed over future inflation fundamental provided the solid economic outlook of 2012-2013.

“With the economic forecast in 2012-2013, the BI Rate is still in agreement with the future inflation fundamental,” he said.

The central bank will in the short run shape up the monetary operations in controlling liquidity.

However, Pery said that with the strengthening of monetary operations, the monetary interest rate and stock market interest rate will rise slightly, especially for one day tenure.

“As an illustration, if the overnight interest rate of monetary operation in early march was 3.75%, then the tenure of nine months would be almost 3.8% flat. With last month’s monetary operations, the overnight deposit monetary interest rate stays at 3.75%, but the 9 months’ tenure would be 4%,” explained Pery.


Source : VIVAnews

Soaring Oil Prices Halt Indonesia's Economy

"The increase in world's crude oil prices in turn cripples the State Budget "

Deputy Finance Minister, Mahendra Siregar, said the increase in subsidized fuel prices is inevitable as world's crude oil price and the global economic downturn have led to a halt in the economy. 

"The soaring prices of [world]'s oil prices have interrupted the economic growth. As a result, the economic growth is revised to 6.5 percent compared to the previous projection of 6.7 percent," said Mahendra today in a discussion.

As regards the planned rise in fuel prices, Mahendra said the government focuses more on the repercussion of the hiking world's oil price. The government looks ahead to further impact of the situation upon the State Budget.

"The increase in world's crude oil prices in turn cripples the State Budget following the huge fuel subsidies," he said.

Should the House of Representatives (DPR) nod to the proposed fuel subsidies, the government will allocate the budget to sectors that are more important.

To date, the government and House's Budget Committee accepted the 2012 Revised State Budget posture with fuel subsidies worth Rp 137 trillion (US$14.9 billion) and electricity subsidies worth Rp 64.9 trillion (US$7.06 billion).  

In the 2012 State Budget, the specified allocation for fuel subsidies reaches Rp 123 trillion while electricity subsidies get Rp 45 trillion.

Source : VIVAnews

Indonesia Economic Situation

The Indonesian economy grew less dependent on oil and agriculture during the Soeharto New Order. The severe contraction of Indonesia's economy at the time of the 1997 Asian financial crisis, however, highlighted the shortcomings of the New Order economic model (increasingly wasteful use of foreign investment, declining international competitiveness). Indonesia's GDP contracted by 13% in 1998. GDP per capita in 2000 was US$671, well down on the 1996 level of US$1,150. The economy has shown signs of recovery more recently, and GDP per capita (PPP) was estimated at US$3,600 in 2007. Economic growth has gradually increased from 3.3% in 2001 (led by the export sector) to 6.3% in 2007; the figure for 2008 is estimated to be about 6.1%. Services (which represent 42% of GDP), manufacturing (28%), agriculture (15%) and mining (9%) account for most of the origins of Indonesia's GDP.

The Indonesian Government initiated a wide-ranging economic reform programme in 1998, with strong IMF advisory and financial support, to address the impact on Indonesia of the 1997 Asian financial crisis and to lay the foundations for long-term sustainable growth. On 1 January 2004 Indonesia graduated from the IMF's lending programme, and in early 2007 took the decision to disband the Consultative Group on Indonesia, a donor forum of which New Zealand was a member, preferring instead to focus on bilateral development assistance. The World Bank welcomed this step as a further sign of Indonesia's renewed economic confidence.
Despite improved macroeconomic conditions, prospects for a sustained high level of economic growth will depend to a large extent on the pace of critical economic reforms, particularly those concerning investment, tax and labour laws, and the economic impact of decentralisation. All of these factors are relevant to the restoration of investor confidence, which the IMF regards as central to Indonesia's long-term economic recovery. The Investment Law passed by the Parliament in early 2007 is seen as a crucial step in stimulating renewed investor interest. Indonesia operates a relatively open economy, but non-tariff barriers (NTBs) remain an impediment to trade. With a strong programme of administrative decentralisation in place, there are sharp contrasts between the economies of Indonesia's 33 provinces. Certain provinces with a major export resource base (particularly hydrocarbons or minerals, but also specialist agricultural commodities) are becoming markedly wealthy.

The impact of the current global economic turmoil has been felt in Indonesia, but aside from the collateral risks of capital outflow due to tighter global liquidity conditions, the country's fundamentals and economic structure mean it is not in apparent danger right now. Indonesia has been feeling the effects principally through pressure on the value of the rupiah, a significant weakening of the stock market, and falling commodity prices. Policymakers are wary, however, about prospects for 2009, when worsening economic conditions in Indonesia's key export markets may lead to significant effects on the domestic economy, such as large-scale job losses. The government has developed a number of policy responses to that threat, including a package of fiscal stimulus.


*Source :  http://www.asean.fta.govt.nz/indonesia-economic-situation