3. Security

The planned visit by US president Barak Obama has been postponed, last bid is June, but that remains to be seen. The security forces in town, both American and Indonesian, is taking a deep breath. April will now be a calm month where everyone gears up for this possible event. The Easter holidays is normally not something that increase any risks, more than possibly the traffic to Puncak might be a bit more hostile.

Nature is during April one of the larger security concerns, with heavy rains in Java and stormy weather in some outer areas of the Indonesian archipelago. Be prepared for flooding, especially if you are in an area that normally have this problem.

The discussion on terrorism has again begun with the successful operations to unfold and apprehend suspects in Java. It is clear that the government is serious and that it is working in the right direction. The main problem is still the financing. As long as there are money, these groups will continue to be a threat to society. There are the moment to indication on any imminent attacks from terrorists, but with the current high pressure, desperate acts are always possible. It is extremely important for everyone to keep an eye on things around, if something is unusual, react, ask and question the situation. There are “manuals” on how to handle different situations in most companies, if you don’t have one, ask for it. Even though I do not believe we will see any attacks during the Easter and the calm remains in Indonesia.

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4. Economy

The Century case is starting to settle, even if it is clear that it is not going to go away and many questions remains. The Economist conference in late March gave some indications on the position of the government and it has not changed, even if it is more humble and careful ministers we see acting in public.

The new negative list is on its way and we have written some more about it under other. My Easter jokes had to stand back for this more important subject. The effects from the “new” BKPM hasn’t shown yet, but the new director is giving a very good impression and he really seems to understand the approach expected from a promotion agency.

BPOM has really shaped itself up and we have seen clear improvements on performance. The regulations are still there creating problems, but I am sure that we will soon see changes on this as well. Unfortunately, the new alcohol tax has set a direction with special taxes on certain items, which I am sure is going to hit several imported product groups. This is not done for any other reason that increase tax revenue, which makes it a bit harder to lobby against, at least before the black market taken over. Today over 95% of all imported premium cigars are smuggled. Of 32 distribution companies, only 2 is properly licensed. Over 60% of all alcohol sold in Indonesia is smuggled or counterfeited. All due to the high taxes and the extreme profitability, combined with low penalties, on the products. We will surely see a lot of luxury items in a similar development no when the minister of finance is on a tax hike spree.

The IDR will stay rather stabile against the USD, while the Euro will weaken due to the current problems in Europe. April will be good for the stock exchange and I do believe we might even see some improved export figures. I do believe that the inflation will be a bit more aggressive though, so some price hikes are to expect.

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5. Other

The long anticipated update of the negative list is now ready to be signed by the president. We have yet to get the details of attachments what we have seen so far, that content of the new presidential regulation was approved at a "limited coordinating ministers meeting" on 19 March. Main points:

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