what's brewing?

what's brewing?

Emerging Market : Indonesia Growth Target

(Bloomberg) — Indonesian President Joko Widodo says Southeast Asia’s biggest economy can achieve the official growth target of 5.7 percent this year. That could be a taller order than he anticipates.Widodo, who took office in October, inherited an economy fettered by years of under-investment in infrastructure, plunging commodity prices and the withdrawal of U.S. monetary stimulus. The central bank has kept monetary policy tight to protect a vulnerable rupiah and gross domestic product probably grew 4.9 percent last quarter from a year earlier, the slowest pace since 2009, according to a Bloomberg survey.

The president, known as Jokowi, is promising to rev things up by fast-tracking large road, port and power projects and cutting red tape. He’s seeking to woo investment and boost non-commodity exports, targeting an expansion of as much as 6.3 percent to 6.9 percent next year.

“We are confident to have the target of our economic growth” of 5.7 percent this year, the president said in a Feb. 2 interview in Jakarta. “But we must increase our exports volume and we must reform our bureaucracy. We must invite FDI.”

Yet the World Bank sees Indonesia growing 5.2 percent this year and 5.5 percent in 2016. The economy probably expanded 5.06 percent in 2014, according to a Bloomberg survey ahead of data due Feb. 5 in Jakarta. Here are five things that could stand in the way of Indonesia’s growth goal for this year.

Commodity Prices

The prices of Indonesia’s key commodity exports may not recover anytime soon. Coal has fallen further this year and has now more than halved in price since the end of 2010. Palm oil capped the biggest January decline since 2010 as demand weakens amid a supply glut, after slumping 16 percent in the past year.

While the plummeting price of crude presented Jokowi with an opportunity to scrap gasoline subsidies, it will also sap government revenue.

The state will lose about 158.8 trillion ($13 billion) of revenue because of the drop in oil prices, according to a Nomura Holdings Inc. research note last week by economists including Euben Paracuelles in Singapore. That negates much of the 230 trillion rupiah of budget funds freed up by the fuel subsidy overhaul.

Sticky Deficit

Indonesia was dubbed one of the fragile five emerging-market economies by Morgan Stanley in 2013 because its large external deficit made it vulnerable to capital outflows. While the shortfall in the current account has narrowed from a record 4.4 percent of gross domestic product in the second quarter of that year, Bank Indonesia is forecasting a deficit of 3 percent to 3.5 percent of GDP this year, compared with an estimate for about 3 percent in 2014.

The big infrastructure projects being promised by Jokowi could spur imports, putting pressure on the balance, according to Ndiame Diop, the World Bank’s lead economist for Indonesia. This persistent deficit makes it more difficult for Bank Indonesia to follow global peers in cutting borrowing costs to bolster economic growth.

Standard Chartered Plc said most of its Indonesian clients see the central bank holding or increasing its policy rate in 2015, according to a note released Feb. 3.

Implementation Risks

The stand-off between Indonesia’s police force and its anti-corruption agency, the KPK, has dominated local media in recent weeks. A failure by the president to show strong leadership could undermine his credibility for pushing ahead with economic reforms and cracking down on graft.

“There could be a rippling effect,” the World Bank’s Diop says. He also points out that about 50 percent of the central government budget is actually managed by sub-national governments, raising the possibility that the implementation of infrastructure and social spending will be slower than expected because of the difficulty in transmitting policy from the top.

Global Risk

The global economy is unlikely to provide much support to Indonesia this year, with weaknesses in Japan, Europe and China, Indonesia’s largest export market. Meanwhile, a recovery in the U.S. is forecast to prompt the Federal Reserve to raise interest rates, reducing the appeal of higher-yielding assets in emerging markets like Indonesia.

“This is going to be a very tough year externally,” Mari Pangestu, a former Indonesian trade minister, said in an interview with Bloomberg Television on Wednesday.

A strengthening U.S. economy and slowing growth in China is a “bad combination” for Indonesia as commodity prices will probably keep falling, said Benedict Bingham, the International Monetary Fund’s senior resident representative in Jakarta.

Time Lag

The economic overhaul being promised by Jokowi could take time to benefit the economy. Large infrastructure projects may take a while and the goal of lifting non-commodity exports is dependent on increasing the supply of skilled labor.

“Whether we can actually roll out the infrastructure projects fast enough is really the big question mark,” said Pangestu. “The concern is about implementation.”

The government also needs to review its trade and labor policies, which look more defensive rather than focused on winning global market share, according to Bingham.

“2015 needs to be seen as a year in which the foundations for the medium-term strategy are set,” he said. “It’s not going to be a year where the pay-off from this strategy is going to become immediately apparent.”



The Big Durian


Kota Lama

Had an impromptu weekend trip with the girls at work to the Big Durian. We booked Air Asia a week before the trip, therefore had to pay exorbitant fees; amounting to RM424 per person (plus our share of 25kg luggage). But nevermind. The sole purpose of this trip was just to release and have fun with the friends.


  • Since we opt for weekend trip, we had to rush to the airport immediately after work. Being close to monsoon season, it rained heavily every afternoon, including that fateful Friday. There was no taxi willing to pick us up, therefore we had to walk under the drizzling rain from our office to KLCC. From KLCC we took LRT to KL Sentral and then KLIA Express to Salak Tinggi and then a shuttle bus to LCCT Airport. Phew!
  • Bargain, but do not overdo it. In certain shopping areas like Tanah Abang, bargaining is a norm and expected. However there is no such thing as to ask for 70% reduction; the sellers won’t entertain you. Express your bargaining skills moderately.
  • Bajaj or the motorcycle trishaw charges similar fees to taxi. Use this when you’re in a hurry. It has the ability to maneuver through narrow passages and between vehicles. Your safety, however, is never guaranteed.
  • Jakarta is also one of the dustiest (if not the most) city that I’ve ever been. Use face mask when you’re expose to the vehicles on the road, hydrate well and use toner every time after cleaning your face.
  • Cheap food can always be found on the roadside. Similar items sold at the mall’s food court are priced thrice as much.
  • Being a huge city, its not always easy to go to places such as spa or hair salon from where you’re at the moment. Therefore its better to plan ahead and let the taxi drivers know exactly where you want to go; give them the exact location
  • Shopping experience at the malls are not that enticing. I think Indonesia is a bit late when it comes to sale season. The items in Forever 21 & Top Shop that are on sale in KL, however are sold at normal price in Jakarta.
  • We shop a bit at Martha Tilaar..I bought a lipstick at about RM10.
  • We ate too much nasi penyet and JCo donuts.

Places that we’ve been in a span of two days:

  • Tanah Abang
  • Mangga Dua (Pasar Pagi and the Mall)
  • Monas
  • Taman Anggerik Mall
  • Grand Indonesia Mall
  • Kota Lama area (the railway station, Museum Wayang, Cafe Batvia)

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Whatever it is, I love the city and its vibes. Won’t mind to re-visit this huge city again soon. Next time perhaps to venture into South area, such as Kemang, which I heard its the city’s trendier area.

Total expenses (minus flight) – Rp1,600,000 (RM457.60 @ 0.000286 rate on 18.10.2013)

Medan, Sumatera Utara

Sumatera Utara.

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Actually aku tak berminat sangat travel to this part of Indo, walaupun susur galur keluarga aku berasal dari Palembang. Sebabnya? Sumatera bagi aku kurang tempat menarik untuk traveler, berbanding dengan kawasan Indo yang lain, such as Tanah Jawa, Sulawesi dan Irian Jaya.

Akan tetapi.

Travel tetap travel. Hatta walaupun dah penah ke Medan suatu ketika dulu, tapi bila abang aku offer nak pegi lagi (cheap AA tix) so aku pun ikut lah depa. Lagipun ni cuma weekend trip, aku pun on kan saja.

Medan ni merupakan bandar ke-4 terbesar di Indo. Mempunyai ramai penduduk cina bertutur dalam bahasa hokkien, so rasa macam balik kampung plak (cina kedah & penang memang cakap hokkien). Kami di pertemukan dengan driver Kijang berketurunan cina yang baik hati. Bahasa indonesia bapak Ah Wan sangat flawless. Abang aku booked hotel Citi Inn International kat Jl. Sun Yat Sen (klakar dowh hotel ni) untuk kami berenam..kami share 3 connecting bilik. Aku tak amek gambar hotel..sebab haha…bodoh la hotel ni. Toilet takde pintu..cuma curtain jarang. Cermin dinding toilet pun yang jenis jarang..tak mampu aku nak berak dengan inzal. Hot shower tak berfungsi, lampu ketiga-tiga toilet tak boleh tutup, rasanya only 2 charging plug yang available untuk seisi rumah (wtf), tak ada sabun mandi, etc etc. Pendek kata memang lawak la aku rasa hotel ni. Tapi for RM160 per night for all 3 rooms, nak complain apa nya. Ha ha.

Kami sampai Kuala Namu International Airport (dulu Polonia) jam 9pm. Amek cab untuk ke bandaraya Medan. Airport baru ni jauh dengan town..about 45mins – 1 hour camtu. Singgah makan kat Restoran Ayam Penyet Surabaya otw to town. Biasa saja..waroeng penyet lagi sedap kot. Maybe sebab dah lewat, banyak item dalam menu tu dah abes. Hampa harapan aku nak minum alpokat.

Dah sampai hotel. Ingat maybe nak kluar balik ronda2 town..tapi memandangkan hotel tu far from town (cam kat area pekan koboi – kosong time malam tu) so makanya aku pun tido saja la.

After breakfast kami hire cab (turned out to be our designated driver kat sana sampai balik) bawa kami ke Pajak Ikan. Pajak Ikan ni tak jual ikan, tapi jual telekung, kain lace, barang2 ke haji, etc. Mak aku pun suka lah. Shopping serba sedikit then kami ke few places pulak. Semuanya bercirikan shopping. Tapi Medan ni nan hado..as compared to Bandung. Aku beli telekung sepasang and kain lace. Lunch kat Garuda Nasi Padang..sedap tapi mahal la. 6 orang RM100+-. Mahal la tu for nasi padang standard, and dekat indo plak tu.

Then petang tu aku dengan abang aku naik motor beca pegi spa. Spa yang ermm..busuk sikit aa as compared to the ones in Bali or Bandung. Harga kemain lagi..urut plus lulur Rp270k. Mahal la bagi aku. Tapi dah sangap plus sakit badan, aku pun bayar je la. Lepas abes session, lebih kurang 2 jam, aku tengok2 abang aku dah takde. Dia whatsapp suruh aku balik sendiri sebab dia pegi tempat lain. So ok la..aku pun jalan2 sikit tapi ya ampun there’s nothing there. Kawasan tu walaupun kat town tapi cam takda benda menarik. Aku pun malas nak pegi jauh2..just singgah Indo Mart beli coffees & nuts then aku amek motor beca balik hotel. Kat sini nescafe kotak dia macam-macam jenis weh..ada caramel, mocha etc.

OK tips, harga teksi and motor beca adalah sama..walaupun teksi jauh lebih selesa dan kurang bahaya berbanding beca. Tapi bak kata abang aku, kesian kat depa ni competition too steep & tak ada peluang kerja yang lain, so amek lah service beca depa. Terpulang la.

Malamnya kami semua pi Sun Plaza, tak silap aku shopping mall paling gah kat Medan kot. Jangan tak tau, kat situ ada MNG, Sogo etc. Kedai makan pun best2 la. Ada 3 bookstores, Gramedia, Popular dan Times Bookstore. Dinner kat Waroeng Ubud, food not bad..aku makan mee goreng indo, small portion tapi mengenyangkan la.

Kami balik after that. Capik mengantuk semua ada. Abang aku keluar balik pi mana ntah..aku terus tido.

The next day aku bangun sesudah subuh sapi’e. Gara-gara arahan shopaholic yakni mak aku, yang nak ke Pajak Ikan sekali lagi. *pitam. Tapi aku ada agenda lain, nak pegi Pasar Buku..nasib baik dekat2 je. So aku ke Pasar Buku dulu then meet up dengan diorang kat Pajak Ikan. Aku beli buku-buku Pramoedya Ananta Toer, tak terdapat di Gramedia mahupun kedai buku lain. And satu buku dari Habiburrahman El Shirazy. Total tak sampai RM60 untuk semua buku tu. Good investment rasanya.

Tips. Dekat Pasar Buku tu ada Merdeka Walk, terdapat cafe2 & fast food cam Pizza & McD. Go to McD for wifi, tapi jangan masuk toilet dia. Nanti menyesal.

Lepas aku shopping buku dan mak & aunty aku shopping kain, kami pun balik dan check out. Zas pi shopping cake & bika ambon pulak..kat kedai Zulaikha ni. Famous orang kata. Then beli peanut cookies kat tempat lain plak. Singgah toko buah, aku beli alpukat 3 biji, tak sampai RM6 weh murah gila. Kat Malaysia sebiji pun dah RM5.

Then Ah Wan si cab driver pun menurutkan kehendak kami untuk makan seafood. Maka kami terus ke Pantai Cermin, sejauh 2+-jam dari Kota Medan.


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He he.

Air coklat tu pun beratus orang mandi. Ombak ngan angin kuat gila. Tapi tengah2 laut tu air biru muda…cam mengancam jugak kan. Cuma depan2 ni air kaler milo la..milo sedap, air laut ni aku no komen. Oh pasir dia kaca2, hence the name Pantai Cermin. Tak sure betul ke tak tapi aku rasa betul la.

Seafood chinese style..sedap, kepiting (ketam) gemuk2 and murah. Masakan tak jauh beza dengan local chinese seafood. Enjoy la kami makan tepi laut dengan angin kuat tu.

Lepak buang masa sekejap then kitorang pun terus ke airport. Dari Pantai Cermin to Kuala Namu I’national Airport amek masa lebih kurang 45 minit. Ada juga train yang menghubungkan airport dengan kota Medan. Tak salah aku bayaran Rp80k sorang. Airport depa ni besar dan moden..tapi maybe sebab baru, ada banyak lagi kedai tak buka. Siap ada retail boutique bagai.

Kali ni jugak first time dalam sejarah kami sampai 3 jam sebelum scheduled flight. Awal gila! ha ha tapi tu la..tau2 dah abes journey di kota Medan ni. Balik KL esok keja!