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CoordinatingMinister ofMaritimeAffairsIndonesia Development Strategy toAddress Growth, Inequality and SecurityIssuesGen. Army (Ret) Luhut B. PandjaitanCoordinating Minister of Maritime AffairsActing Minister of Energy and Mineral Resources
Table of Content1Introduction to Indonesia2Addressing Growth and Inequality Issues3Tackling Key Issues on Security MattersCoordinatingMinister ofMaritimeAffairs1
Table of Content1Introduction to Indonesia2Addressing Growth and Inequality Issues3Tackling Key Issues on Security MattersCoordinatingMinister ofMaritimeAffairs2
CoordinatingMinister ofMaritimeAffairsRepublic of Indonesia: largest ArchipelagoCountry in the World Total area is 1.9 million sqkm with 54.000 km ofcoastline17.500 of islands, some6000 of which is inhabited /- 7 hours flying timefrom eastern part ofIndonesia to the westernpart.3
CoordinatingMinister ofMaritimeAffairs4th Most Populous Country and 3rd LargestDemocracies in The World Total population in Indonesiais 255 million people, 59%of which are in productiveage (15-55 years). We are the 3rd largestdemocracies in the world,after India and United States Indonesia is the largestmuslim countries with morethan 220 million muslimpopulation. We have more than 300ethnic groups and 700languagesSource: CIA Factbook and BPS4
Indonesia General Election 2014: Volunteer andSocial Media1CoordinatingMinister ofMaritimeAffairs 133 million people (70% of eligible voters)participated in the 2014 presidential election. Itwas the largest since 2004. MoreIndonesians voted for Jokowi compared toAmericans who elected Barack Obama in2008.2It was the most transparent process in ourhistory. The general public had direct accessto monitor the result form from each availableballot.3Volunteer groups play a much more significantrole compared to previous elections,especially through social media and internet.5
CoordinatingMinister ofMaritimeAffairsJoko Widodo Road to Presidency.Jokowi ran for the mayor’s secondterm, and won 90% of the votes.2005 . Joko Widodo(Jokowi) ran for themayorship of the cityof Solo, CentralJava, and won by 37%.SOLO2010 .2012 .2014 Jokowi ran for theGovernorship of Jakartaagainst the incumbent,Fauzi Bowo. Jokowi and Jusuf Kallaran for the presidentialelection against PrabowoSubianto & Hatta Rajasa. Jokowi won with 54%,through 2 stage election. Jokowi won with 53.15%vs 46.58% He was the 1st nonincumbent candidate whowon since 2000.JAKARTAINDONESIA6
CoordinatingMinister ofMaritimeAffairsIndonesia Economic ProfileEconomic Profile: GDP: US 900 billion (16th largest in theworld by 2016). It is the largest economy inSoutheast Asia GDP growth: 5.18% in 2Q 2016 Inflation: 2.79% yoy August 2016 National Budget: US 157 billion in 2016 Unemployment rate: 5.5% in February2016 Public Debt : US 240 billion or 27% toGDP as of 2015 32% or 38 million people are working inagricultural sectorSource:CLSA and Badan Pusat Statistics7
Table of Content1Introduction to Indonesia2Addressing Growth and Inequality Issues3Tackling Key Issues on Security MattersCoordinatingMinister ofMaritimeAffairs8
CoordinatingMinister ofMaritimeAffairsHigh GDP Growth and Increased InequalityDuring 2008-2012 Due to Commodity PriceDuring 2008-2012, Indonesia enjoyed high GDP growth due to increase in commodities price,however these also followed by increase in income inequality, since the main benefit of increased incommodity prices is enjoyed only by selected group of 320082009201020112012GDP GrowthSource: Badan Pusat Statistik2013201420151Q-20162Q-2016Gini Coefficient (LHS)9
CoordinatingMinister ofMaritimeAffairsHigh Logistic Cost Lower Our EconomicCompetitivenessCost of Transportation as % to Total CostLogistic Cost to k SurabayaMedanMakasar Rata-Rata JepangIndonesiaSumber: CLSA and Ministry of Transportation10
Wide Gap on Poverty Rate Between PopulationLiving in The Village and Urban Area%45CoordinatingMinister ofMaritimeAffairsAlthough poverty rate in the village has decreased significantly, however the rate ofdecreased is lower than poverty rate in urban area4035302520Village1510Urban50Source: Badan Pusat Statistik11
Low Dependency Ratio, But Diverse HumanDevelopment Index (HDI)CoordinatingMinister ofMaritimeAffairs Those gap may change our demographicbonus into a demographic disaster if we don’tfix the problemGap of HDI between population in Java andEast Indonesia (Papua, Maluku, NTB, andNTT) is still wide80Dependency Ratio7570656055Population50JawaPapua dan MalukuSource: Badan Pusat 0021999199645NTB dan NTT12
Reform is Needed to Improve Investment andBusiness ClimateCoordinatingMinister ofMaritimeAffairs2016 World Bank Ease of Doing BusinessSource: CLSA and WorldBank13
CoordinatingMinister ofMaritimeAffairsDevelopment StrategyEquitableDevelopment(Mainly OutsideJava Island) DevelopmentStrategyIncreasingCompetitiveness Transforming theeconomy fromcommodity basedto value addedcreation Promoting Developments andGrowth Outside Java IslandReconstructing andDeveloping InfrastructuresOutside Java IslandImproving the Quality ofHuman ResourcesCreating ConduciveInvestment AtmosphereDeveloping national logisticconnectivityProhibiting Exports of RawMaterials/unprocessedcommoditiesDeveloping SME businessProviding Tax Holiday14
Government Commit to Build Infrastructure andReduce SubsidiesCoordinatingMinister ofMaritimeAffairsSince President Joko Widodo is inaugurated in Oct 2014, He took out the fuel subsidy(although it is unpopular policy) and re-allocate the budget to build infrastructure15
US 450 Billion to Fund Infrastructure Roll-OutUntil 2019CoordinatingMinister ofMaritimeAffairsMore than 50% of the fund will be allocated to build power/electricityinfrastructure as well as seaport and roadSource: Bappenas and CLSA16
Extensive Toll Road Construction from 20152020Road Density in Indonesia is The LowestAmong its peersSource: CIA Factbook, Badan Pusat StatistikCoordinatingMinister ofMaritimeAffairsToll Road Network inIndonesia17
Construction of Trans Java Toll RoadSource: Kementerian PUPR and CLSACoordinatingMinister ofMaritimeAffairs18
Construction of Trans Sumatra Toll RoadSource: Kementerian PUPR and CLSACoordinatingMinister ofMaritimeAffairs19
Increasing Port Capacity is Imperative toSupport Higher Economic GrowthPort Capacity Comparison Between Indonesia andSurrounding CountriesSource: Pelindo I-IV and CLSACoordinatingMinister ofMaritimeAffairsIndonesia Port Capacity Expansion Plan Until 203020
Port Expansion in Tanjung PriokCoordinatingMinister ofMaritimeAffairsTj Priok Capacity Expansion PlanMain and Feeder/Supporting Seaports in IndonesiaNew Tj Priok Container TerminalSource: CLSA and Pelindo II21
One Stop Services (OSS) to Simplify and SpeedUp Business and Investment LicenseCoordinatingMinister ofMaritimeAffairsSectorsBefore OSSAfter OSSPower Plant49 Licenses923 days25 Licenses256 daysLand(4 simplifications)Building Use licenses3k-5k ha-123 days90 daysForestry(13 simplifications)Land Use Licenses111 days47 daysTransport(4 simplifications)Special TerminalLicenses-30 days5 daysAgriculture(9 simplifications)Plantation Licenses751 days182 daysIndustry(8 simplifications)Industrial BusinessLicenses-672 days152 daysTourism Area(6 simplifications)Tourism Area Licenses661 days188 daysTax AllowanceApplicationsNot Specified28 daysSource: BKPM22
Result from The Implementation of OSS isFavorableTime Saving in Processing License AfterImplementation of OSS Based on Research toEnd UserSource: BKPMCoordinatingMinister ofMaritimeAffairsRealization of Domestic and ForeignDirect Investment Continue to Increase23
CoordinatingMinister ofMaritimeAffairsGovernment Revenue From Tax AmnestyProgramComparing with similar program in othercountries, our program could be consideredas one of the most succesfull tax amnestyprogram in term of revenueGovernment revenue from tax amnestyprogram as of 29 Sept 2016 is US 7.3billion. This is collected less than 3 monthsout of 9 months period for the tax amnestyTax Amnesty Revenue % GDPAsset Declared to GDP Ratio(US 275 04%2%0%0%0.0%Indonesia(29 Sept2016)ChileSource: Ministry of FinanceIndiaItalySpainAustraliaIndonesia(29 Sept2016)ChileIndiaItalySpainAustralia24
Revitalization of Agricultural InfrastructureCoordinatingMinister ofMaritimeAffairsDam Jatigede West Java (90.000 hairigation)Dam Bajulmati Jatim (1.800 ha irigation)Source: Bappenas25
Involvement of The Army in The Revitalizationof Government AidCoordinatingMinister ofMaritimeAffairs26
Village Fund Programme to Empower LocalEconomy in the VillagesCoordinatingMinister ofMaritimeAffairsVillage Funds PrioritiesFulfillment of BasicNeedsDevelopment &Maintenance:1. Clean water2. Sanitation3. New andsustainableenergyDevelopment ofVillageInfrastructureConstruction &Maintenance:1. Village roads2. RetentionbasinsSource: Ministry of Village and Underdeveloped RegionsDevelopment ofLocal EconomicPotentialsDevelopment &Maintenance:1. Tertiaryirrigation2. Fishery3. VillageproductionfacilitiesNatural Resourcesand EnvironmentUtilisationCommodityDevelopment1. Mining2. Seaweeds3. Village-ownedforests4. Wastemanagement27
CoordinatingMinister ofMaritimeAffairsEstimates of Village Funds 2015-2019*In USD millionSource of Village FundCentral GovernmentLocal GovernmentTax and Retribution SharingTotal# of VillageAverage/VillageSource: Ministry of Finance2015 20161,538 3,6142,420 2,8901861554,113 6,68974,093 20187,9848,6034,3034,63723526013,500 12,52274,754 74,7540.170.1828
CoordinatingMinister ofMaritimeAffairsMonitoring and Evaluation Involving Army andPoliceMonitoring:head of Sub-Districtlevel government,army, and policeGovernmentProgramImplementationBabinsa (Armystaff assigned tovillage)Agriculture Program:1. Constructionandmaintenance of irrigationsystems2. Subsidised fertilizersdistribution3. Distribution of agriculturaltools from governmentHead of Village(KepalaDesa/Lurah)Bhabinkamtibmas (Police staffassigned tovillage)Fund for Village Program:1. Planning of villagedevelopment2. Use of Village funds3. Monitoring of village fundsPromotionofconducivesituation:1. Promote potential conflictsettlement peacefully2. Monitoring of radicalmovements and drugsabuses3. Briefing and socialisationof law and regulation29
CoordinatingMinister ofMaritimeAffairsSurvey on The Confidence to Public andGovernment Institutions92.0%CSIS Survey on The Confidence to Public andGovernment Institutions, August 2.0%80.0%79.3%78.0%76.0%74.0%72.0%Army (TNI)Source: CSISThe PresidentCorruptionEradicationCommissionNational HumanRights CommissionVice PresidentNational ElectionCommission30
Table of Content1Introduction to Indonesia2Addressing Growth and Inequality Issues3Tackling Key Issues on Security MattersCoordinatingMinister ofMaritimeAffairs31
Violent Extremism: Tip of The IcebergPhenomenaCoordinatingMinister ofMaritimeAffairs32
CoordinatingMinister ofMaritimeAffairsISIS Recruitment Pattern in IndonesiaRecruitment PatternNewspaper, BooksISISPROPAGANDAFundingReligius School, Fund RaisingSocial Media: FacebookPersonal ApproachDeployment to Syria and Iraq:Hajj. Tourism Tour, Studypurposes, visiting familiOffering High Salary/IncomeFacilitator33
Key Characteristics Comparison on TerroristsProfile Between Al Qaeda and IndonesiaAl Qaeda(400 inmates) 75% 63%75% are professionals withvariety high-skilled jobs i.e.engineers, architects.63% had dinatingMinister ofMaritimeAffairsAceh military Training & Book-Bombing(195 inmates) 64% are working ininformal sectors as smalltrader, farmers, orentrepreneurs. The restworking as teachers or lowlevel employees 63% of inmates only hadsenior high or elementaryeducation64%63%34
We Need to Classify Convicted Terrorists intoDifferent Categories for Different Treatment Ideologues Militants/Operatives Supporters/Sympathizers CoordinatingMinister ofMaritimeAffairsThe people who teach radical or extreme doctrines. Usually are notdirectly involved in the terrorist attack.Many of them, although in prisons, are able to radicalize other convictedinmates. Hence, it is dangerous to put them together with other convictedinmates. It is difficult to perform de-radicalization program to ideologues.Examples include: Abu Bakar Ba’asyir and Aman Abdulrahman.They have already accepted radical doctrines.They usually have received military or bomb-making training or haveexperiences in conflict areas (such as Afghanistan, Mindanao, or Poso)Extensive de-radicalization not only in the prison but also outside theprison.Examples: Iwan RoisThey usually provide logistic supports for the militants or the operatives incarrying out terror attacks.It is also extremely dangerous to put supporters/sympathizers togetherwith the ideologues or the militants in prisons, as they can radicalize thesupporters.35
Comprehensive and Systematic Action toCounter Terrorism and onLaw nCoordinatingMinister ofMaritimeAffairs1. Intelligence cooperation andexchange information betweenSoutheast Asia countries and theirneighbours/counterparts areimportant to counter ISIS movement.2. Media campaign and deradicalization involving moderatemuslim organizations such asNahdlatul Ulama andMuhammadiyah in Indonesia.3. Synergy and good coordinationbetween institutions such as police,army, and intelligence body in theform of information exchange andjoint operation.Synergy andCoordination36
CoordinatingMinister ofMaritimeAffairsDrugs Cases Increase by 13.5% from 2014 67--29.713 11,64 %3201218.9771.7297.917--28.623 3,67 %4201321.1191.61212.705--35.436 8,86 %5201422.75083510.891498935.469 0,09 %6201527.9508859.83721.57940.253 13,49 %Source: National PoliceNARKOTIKA PSIKOTROPIKATREND %37
HIV Prevalence Rate is High in Papua and WestPapua RegionSource: Department of HealthCoordinatingMinister ofMaritimeAffairs38
Drugs and Narcotics AbusesIndonesia is One of theMain Markets in AsiaRehabilitation for DrugUsersSevere Punishments forDrug DealersCoordinatingMinister ofMaritimeAffairs Currently Indonesia is one of the main drug markets in Asia.We estimate that there are around 5.1 to 5.6 million drugusers in Indonesia, increased sharply form around 4.2million in 2011. We separate drug users (victims) from drug dealers.Rehabilitation, both medical and social, is compulsory fordrug users who are not involved in the selling of drugs. 75% drug dealers in custody are still controlling their drugsbusinesses from inside the prisons.Isolated/confined/remote prisons for drug dealers to beconstructed.Death penalty for drug dealers. 39
Resolution for South China Sea DisputeCoordinatingMinister ofMaritimeAffairs In our view, there is potential conflict inSouth China Sea. Indonesia has a duty toparticipate in resolving this potential conflictby initiating Code of Conduct (CoC). As to China “nine-dash line”, Indonesiaconsiders such claim as lacks ofinternational legal basis.China Reclamation in Subi&Mischief Reef – Sept2015 Therefore, Indonesia urges all countriesinvolving in South China Sea disputeshould restrain from any provocative actionthat may disturb stability in that region. Werefuse any power projection from anycountry in that region. Resolution on this dispute should be basedin a good faith and peacefuldialog/negotiation, and the unity of ASEANis important to resolve this potential conflict.Source: UNCLOS, CIA, RSIS40
CoordinatingMinister ofMaritimeAffairsPublic Satisfaction to Government Performanceis IncreasingOveral Satisfaction to Government is Increasingin August 2016 compare to October 201570.0%Public Satisfaction to Government Based on 4Key 0%20.0%20.0%10.0%10.0%53.0%30.0%1.20% 0.7%0.0%0.0%SatisfiedNon SatisfiedOctober 2015Source: CSISAugust 2016OthersEconomyLawOctober 2015PoliticMaritimeAugust 201641
CoordinatingMinister ofMaritimeAffairsThank YouGen. Army (Ret) Luhut B. PanjaitanCoordinating Minister of Maritime AffairsActing Minister of Energy and Mineral Resources
Plantation Licenses 751 days Tourism Area Licenses 661 days Not Specified 90 days 25 Licenses 256 days 47 days 5 days 152 days 182 days 188 days 28 days Source: BKPM. Coordinating . Implementation of OSS Based on Research to End User Source: BKPM. Coordinating Minister of Maritime Affairs Government Revenue From Tax Amnesty Program 24
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