Archive for the ‘Indonesia’ Category

Oil and Careless Geology: Was Eruption Caused By Poorly Planned Drilling?

November 1, 2008

The eruption of the Lusi mud volcano in Indonesia was caused by drilling for oil and gas, a meeting of 74 leading geologists has concluded.

Lusi erupted in May 2006 and continues to spew out boiling mud, displacing around 30,000 people in East Java.

Drilling firm Lapindo Brantas denies a nearby well was the trigger, blaming an earthquake 280km (174 miles) away.

Lusi

Above: Lusi has been erupting for two years, leaving 30,000 people homeless

Around 10,000 families who have lost their homes are awaiting compensation, which could run as high as $70m (£43m).

By James Morgan
Science & Environment reporter, BBC News

After debating new evidence at a conference in South Africa, most geologists voted drilling as the cause.

Correspondents describe the result a significant development in the tug-of-war to establish liability for the disaster.

Mud slinging

The debate on the cause of the eruption took place at a meeting of the American Association of Petroleum Geologists, in Cape Town.

It was the first time the two opposing sides had agreed to debate before an international conference of independent experts.

The contest was chaired by a professional football referee – Professor John Underhill, an Edinburgh University geologist, who is also a match official in the Scottish Premier League.

Read the rest:
http://news.bbc.co.uk/2/hi/science/nature/7699672.stm

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Russia pushes an ‘OPEC’ for natural-gas nations

October 30, 2008

The nations with the world’s three biggest reserves of natural gas – Russia, Iran, and Qatar – are quietly moving ahead to form a “gas OPEC,” an organization modeled after the oil cartel.

By Fred Weir
The Christian Science Monitor
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In Tehran last week, representatives of the Russian natural-gas monopoly Gazprom met with counterparts from Iran and Qatar and agreed to create “a big gas troika.” The group will meet quarterly to discuss pricing and supplies. Between them, these three countries hold an estimated 55 percent of known global gas reserves. The possibility of a cartel has long been opposed in Washington and European capitals.

The new cartel plan may be finalized Nov. 18, when Russia hosts a forum of gas-exporting countries in Moscow, including possible additions to the group such as Algeria, Indonesia, Libya, and Venezuela.

For Russia, which blames the US for causing the current global financial crisis and the attendant collapse of oil and other commodity prices, forging new energy-based international relationships holds political promise. “There is a clear desire in Moscow to work toward breaking what it perceives as US dominance of the world economy, but it’s way too soon to predict where this global crisis is leading,” says Masha Lipman, an expert with the Carnegie Center in Moscow. “If the US should really go into decline, I suppose we shall see new groups of states, and new contenders, come forward.”

As global energy prices plunge, cooperating with the Organization of Petroleum Exporting Countries (OPEC) to stabilize markets has gained fresh traction in the Kremlin while the long-discussed idea of creating a “gas OPEC” of leading producers is suddenly getting a big push from Moscow.

Read the rest:
http://news.yahoo.com/s/csm/2008
1030/wl_csm/oredopec_1

More Food Poison? Vietnam says Indonesian biscuits contain melamine

October 14, 2008

JAKARTA (AFP) – Vietnam has complained to Indonesia of possible melamine contamination in Indonesian-made biscuits, a report said Tuesday.

File photo shows a man riding his rickshaw heavily loaded with ... 
File photo shows a man riding his rickshaw heavily loaded with boxes of milk in Ho Chi Minh City. Vietnam has complained to Indonesia of possible melamine contamination in Indonesian-made biscuits, a report said Tuesday.(AFP/File/Hoang Dinh Nam)

Vietnamese authorities informed Indonesia’s embassy in Hanoi that Indonesian-made Khong Guan biscuits could be tainted with the chemical, Trade Ministry Director Subagyo was quoted as saying by the Antara news agency.

Indonesia’s food and drug monitoring agency has been ordered to probe the issue, Subagyo said.

“Based on the results of our own tests the product is not contaminated with melamine,” food and drug agency chairman Husniah Rubiana Thamrin Akib was quoted as saying.

Khong Guan biscuits had already been tested in Indonesian and Vietnamese laboratories and had come up negative for melamine, usually used in making plastics, she said.

“Our products are safe because we import milk from Europe, Australia and New Zealand,” Akib said.

Indonesia ordered food producers to avoid using Chinese-made milk products in September after four Chinese children died and at least 53,000 fell ill from drinking milk or milk products laced with melamine.

Read the rest:
http://news.yahoo.com/s/afp/20081014/wl_asia_afp/
indonesiafoodsafetyvietnam_081014055422

Perils in The Price Of Each Grain of Rice

April 3, 2008

By David Ignatius
The Washington Post
Thursday, April 3, 2008; Page A17

You may have missed the front-page article in the New York Times last Saturday, with the one-column headline written in clipped newspaperese: “High Rice Cost Creating Fears of Asia Unrest.” But this little story could be an early warning of another big economic problem that’s sneaking up on us.

The new danger is global inflation — most worryingly in food prices, but also in prices for commodities, raw materials and products that require petroleum energy, which includes almost everything. Prices for these goods have been skyrocketing in international markets — at the same time the Federal Reserve and other central banks have been hosing the world with new money in their efforts to avoid a financial crisis.

That’s an explosive mixture. It risks a kind of inflation that would trigger panic buying, hoarding and fears of mass political protest. Actually, this is already happening in Asia, according to the Times.

The price of rice in global markets has nearly doubled in the last three months, reports the Times’s Keith Bradsher.
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Fearing shortages, some major rice producers — including Vietnam, India, Egypt and Cambodia — have sharply limited their rice exports so they can be sure they can feed their own people.

Bradsher summarizes the evidence that food shortages and inflation are fueling political unrest: “Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortage, and China has put price controls on cooking oil, grain, meat, milk and eggs. Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.”

World Bank President Robert Zoellick rang the alarm bell in a speech yesterday. He noted that since 2005, the prices of staples have risen 80 percent. The real price of rice rose to a 19-year high last month, he said, while the real price of wheat hit a 28-year high.

Zoellick warned that this inflation is having political repercussions: “The World Bank Group estimates that 33 countries around the world face potential political and social unrest because of the acute hike in food and energy prices.” To cope with the topsy-turvy economy, Zoellick made an innovative proposal that countries running a surplus, such as Saudi Arabia and China, devote 1 percent of their “sovereign wealth” funds to investment in Africa‘s poor countries. That could yield up to $30 billion in development spending.

Now, cut to the Federal Reserve. At a time when global inflation is raging, you might expect that the central bank’s first priority would be to dampen inflationary expectations in the United States. But because of its worries about a financial meltdown, the Fed has been doing the opposite — drastically cutting interest rates in an effort to unclog the financial markets. The cheap money didn’t stop the Wall Street bank run — it was the Fed’s bold plan to absorb subprime debt that did that — but it may well add fuel to the inflation fire.

Related:
Lowly Rice Grain Impacts Global Economy

Vietnam and India move to limit rice exports

Inflation and Food Shortages?

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/02/AR2008040202997.html?hpid=opinionsbox1

Coal Can’t Fill World’s Burning Appetite

March 20, 2008

By Steven Mufson and Blaine Harden
Washington Post Staff Writers
Thursday, March 20, 2008; Page A01

Long considered an abundant, reliable and relatively cheap source of energy, coal is suddenly in short supply and high demand worldwide.

A labourer searches for usable coal at a cinder dump site at ...
A labourer searches for usable coal at a cinder dump site at Daming Coal Mine in Diaobingshan, Liaoning province February 24, 2008. China, the world’s top steel producer, is struggling with a shortage of coking coal after a power crisis in the country prompted Beijing to urge its mines to focus their efforts on raising thermal coal supplies.
REUTERS/Stringer (CHINA) CHINA OUT
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An untimely confluence of bad weather, flawed energy policies, low stockpiles and voracious growth in Asia‘s appetite has driven international spot prices of coal up by 50 percent or more in the past five months, surpassing the escalation in oil prices.The signs of a coal crisis have been showing up from mine mouths to factory gates and living rooms: As many as 45 ships were stacked up in Australian ports waiting for coal deliveries slowed by torrential rains. China and Vietnam, which have thrived by sending goods abroad, abruptly banned coal exports, while India‘s import demands are up. Factory hours have been shortened in parts of China, and blackouts have rippled across South Africa and Indonesia‘s most populous island, Java.

A labourer searches for usable coal at a cinder dump site in ...
A labourer searches for usable coal at a cinder dump site in Changzhi, Shanxi province.  China has the world’s deadliest mines, where explosions, cave-ins and floods killed nearly 3,800 people last year. Coal accounts for about 70 percent of electricity production for the booming economy. But efforts to improve safety have been frustrated by lax enforcement, weak safety regimes and corruption among local officials and mine owners chasing profits.
REUTERS/Stringer (CHINA) CHINA OU

Meanwhile mining companies are enjoying a windfall. Freight cars in Appalachia are brimming with coal for export, and old coal mines in Japan have been reopened or expanded. European and Japanese coal buyers, worried about future supplies, have begun locking in long-term contracts at high prices, and world steel and concrete prices have risen already, fueling inflation.

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/19/AR2008031903859.html?hpid=topnews

Vietnam Hub Of Illegal Timber Trade

March 19, 2008

The BBC

Vietnam has become a major South-East Asian hub for processing illegally logged timber, according to a report from two environmental charities.

The trade threatens some of the last intact forests in the region, say the UK-based Environmental Investigation Agency (EIA) and Indonesia’s Telapak.

Because Vietnam has increased measures to protect its own forest, producers are getting timber from other nations.

The authors add that some of the timber is reaching the UK as garden furniture.

“Over the last decade, governments around the world have made a raft of pronouncements regarding the seriousness of illegal logging and their determination to tackle it,” the authors of the Borderlines report say.

The cost of such unfettered greed is borne by rural communities in Laos who are dependent on the forests for their traditional livelihoods.

Julian Newman,Head of forest camaigns, EIA, said, “The stark reality is ‘business as usual’ for the organised syndicates looting the remaining precious tropical forests for a quick profit.”

The report says that an increase in the price of raw timber has prompted some wood producing countries, such as Indonesia, to take steps to combat illegal logging.

But, they explain, as tougher measures were enforced by one country, the problem shifts to another.

Uncertain future

EIA and Telapak say they have gathered evidence that “Vietnam is now exploiting the forests of neighbouring Laos to obtain valuable hardwoods for its outdoor furniture industry”, which contravenes Laotian laws banning the export of logs and sawn timber.

They add that they also obtained evidence that timber traders from Thailand and Singapore were also securing raw materials from Laos.

Many rural communities’ long-term survival depend on forests.

The researchers who compiled the report said they met a Thai businessman who openly admitted paying bribes to secure a consignment of timber with a potential value of half a billion dollars.

“The cost of such unfettered greed is borne by rural communities in Laos who are dependent on the forests for their traditional livelihoods,” said EIA’s head of forest campaigns, Julian Newman.

“They gain virtually nothing from this trade; instead, the money goes to corrupt officials in Laos and businesses in Vietnam and Thailand.”

The authors estimate there are about 1,500 wood processing enterprises in Vietnam with a total processing capacity of more than 2.5m cubic metres of logs a year. They believe outdoor furniture accounts for about 90% of the country’s total wood exports.

Although the Vietnamese government has been tightening controls on logging since the early 1990s, it is also encouraging the wooden furniture industry to expand.

EIA said the nation had relaxed regulations concerning ownership in order to facilitate foreign investment, and it was also actively promoting the sector in overseas markets.

Mixed message

The groups said that ultimate responsibility had to rest with western markets that imported products made from the uncertified timber.

Illegal logging is a long-standing concern for environmentalists”To some extent, the dynamic growth of Vietnam’s furniture industry is driven by the demand of end markets such as the European Union and US,” the report concludes.

“Until these states clean up their act and shut their markets to wood products made from illegal timber, the loss of precious tropical forests will continue unabated.”

The team found that many leading brands and retailers had “taken the necessary steps” to ensure that certified and legal timber was used in products they sourced from Vietnamese producers.

But researchers, posing as furniture buyers, found that a number of companies operating in the UK had failed to take the appropriate measures to ensure illegal timber was not entering the country.

Stemming the flow

In an effort to prevent illegal timber entering its borders, the EU developed an initiative called Forest Law Enforcement, Governance and Trade (Flegt) in 2003, aimed at forming partnerships with timber producing countries.

The scheme is underpinned by Voluntary Partnership Agreements (VPAs), which involve establishing a certification system to ensure only legally sourced timber enters EU markets.

Global demand for wood products is driving the trade, the report saysMalaysia began negotiations in 2006 to establish a VPA, and Indonesia embarked on a similar process in 2007.

EIA says the system focuses on direct shipments from the country, and does not take into account the fact that raw timber can pass through several countries, eg from Laos into Vietnam.

“Another problem with VPAs is that end products such as furniture are currently not included on the list of timber categories to be controlled,” the report says.

Gareth Thomas, the UK’s International Trade and Development Minister, said the report raised a number of concerns.

“Through the EU, we will be raising this with the Vietnamese government. I personally will be raising this with my Vietnamese counterpart,” he told BBC News.

“We will explore with G8 colleagues whether there is G8 action we can take in this area.”

Corruption of Asian Economies Rated By Expats

March 12, 2008

From The Daily Tribune
Manila
March 12, 2008

It seems that no country in Asia can beat the Philippines under President Arroyo in the corruption game, with the country again seen by expatriates as tops in corruption.

The Philippines, Thailand, Indonesia and China are among the most corrupt Asian economies, according to results of a regional poll of expatriate businessmen released Monday, with the Philippines topping it, having obtained a 9.0 out of a possible 10 points under a grading system where 0 is the perfect score and 10 the worst.

While the Philippines retained its number one ranking in corruption, Singapore and Hong Kong retained their rankings as the cleanest economies, the Political and Economic Risk Consultancy (PERC) said in its report.

A man uses his mobile phone as he walks past a stock exchange ...
A man uses his mobile phone as he walks past a stock exchange board inside a bank in Taipei March 10, 2008. Asian stocks hit their lowest in nearly seven weeks on Monday, while the dollar was near a record low against the euro and an eight-year low against the yen after weak employment data fuelled U.S. recession fears. Shares in China, Taiwan and Singapore were down more than 2 percent.REUTERS/Nicky Loh (TAIWAN)

The annual survey covers only 13 economies in Asia and excludes other countries notorious for corruption, such as Myanmar and Bangladesh.

Some 1,400 expatriates were polled in January and February this year, PERC said.

Corruption remains a problem in the region despite huge economic progress made over the years, with governments generally lacking the political will to tackle the problem, the Hong Kong-based PERC said.

“The Philippines is a sad case when it comes to corruption,” the consultancy said in a summary report made available to Agence France Presse.

The Philippine situation is “probably no worse than in places like Indonesia and Thailand” but corruption has become politicized and is openly discussed in the media, unlike in authoritarian countries like China and Vietnam, it said.

The Philippines scored 9.0 out of a possible 10 points under a grading system used by PERC under which zero is the best score and 10 the worst.

Even in Philippine based surveys, the government of Mrs. Arroyo is seen to be very corrupt, with some seven out of 10 Filipinos distrusting Mrs. Arroyo as well as her spouse, who is perceived to be part of the conjugal partnership involved in alleged corrupt deals.

The Philippine Senate has an ongoing investigation on the alleged corrupt deals with China where huge kickbacks have reportedly been received by what has been termed “The Greedy Group” plus plus, where ZTE National Broadband Network witness Dante Madriaga, linked the presidential couple to the scam.

There are two other projects also in partnership with China, that are said to be corruption-filled, and where kickbacks have also been received by top Malacañang officials. These are the NorthRail and SouthRail projects, both of which are also scheduled for hearings at the Senate.

The latest fray on corruption, coupled with the sovereignty issue is the joint exploration agreement with China.

Expatriates who were surveyed by PERC also found China to be mired in corruption, coming in at number three.

China’s score worsened to 7.98 from 6.29 last year with corruption seen to be as widespread as ever despite Beijing’s efforts to clamp down on it.

“The economy is growing so rapidly that even low-level officials are able to amass illicit fortunes.

“The penalties for getting caught might be draconian, but graft is so widespread and the potential rewards so great that people seem to be more than willing to take the risks.”

As in the 2007 survey, Thailand remained the second most corrupt economy after the Philippines with a score of 8.0 after the military, which seized power in a coup in 2006, was seen to have failed to tackle the problem.

“The kingdom’s economy has been marking time for two years while it sorts out political problems in which allegations of corruption figure prominently,” said PERC.

Indonesia, which ranked behind Thailand with a score of 7.98, has made improvements under President Susilo Bambang Yudhoyono but the perception of the civil service as one prone to graft remains strong, said PERC.

“International ratings agencies might have improved Indonesia’s foreign and domestic currency debt ratings recently, citing the government’s efforts to tackle corruption… however, the problem is still very serious,” said PERC.

Corruption is also perceived to have worsened in Malaysia, which scored 6.37 in the survey, worse than last year’s grade of 6.25, but the country retained its number six ranking in the poll.

Malaysian Prime Minister Abdullah Ahmad Badawi’s failure to carry out his promise to fight graft was one of the key reasons his ruling coalition suffered its worst ever results during last Saturday’s elections, PERC said.

“A promise to fight corruption was the main campaign theme that won (Abdullah) a big increase in voter support in the last national elections (in 2004),” the consultancy said.

The pressure is now on Abdullah, who rejected pressure to step down despite the poll setback, to show he is serious about fighting corruption in his second term as prime minister, said PERC.

It is not only PERC that has come out with these findings of a corrupt Philippine economy.

Poor governance and corruption are two major complementing constraints on growth of the local economy, which has fallen behind its neighbors in East and Southeast Asia, the Asian Development Bank (ADB) said in its latest country report.

The ADB report also cited poor national revenues, lack of infrastructure and waning investor confidence as hurdles to growth.

In its report “Philippines: Critical Development Constraints,” the ADB said the country’s economy has fallen behind its neighbors in East and Southeast Asia over the past five decades.

It cited studies suggesting that the Philippines ‘ ranking in the control of corruption and maintaining political stability have worsened.

It also said that the pace of poverty reduction has been slow and income inequality remains stubbornly high.

The report added the Philippines has lost momentum in controlling corruption, and has allowed Vietnam and fairly soon, Indonesia, to pass it.

“In the case of political stability, the Philippines has slipped, particularly relative to the 1998 level,” the report added.

The ADB cited studies that show causal relationships between corruption, political instability and weak rule of law, on one hand, and investment, on the other hand, in the country.

“The perception of worsening corruption was found to partly explain the low investment rate in the Philippines. Poor governance was also found to translate into higher lending rates, reflective of premiums for worsening corruption, political instability, and internal conflict, acting as disincentives to private investment,” it said.

The study noted a key reason for weak revenue generation, which are leakages in revenue collection, was “rooted in persistent corruption and patronage problems.”

Governance concerns not only weaken investor confidence, they underlie most other critical constraints. For instance, corruption undermines tax collection; political instability hinders investment and growth and reduces the tax base; and both contribute to the tightness of the fiscal space.

Poor infrastructure is a result of insufficient development spending and of poor governance, the latter causing leakages and misappropriation of public funds, it added.

Similarly, poor governance hinders the pace of poverty reduction, as it reduces growth of incomes and productive employment opportunities. It is also a major factor contributing to inequalities in access to education, health, infrastructure, and other productive assets, as well as to weaknesses of many poverty reduction programs, it said.

“The Philippines must raise revenues, improve infrastructure, strengthen governance to build investor confidence, expand its industrial base and improve access to employment and development opportunities to increase growth and reduce poverty,” the ADB said.

It noted the data released by the government wherein 26.9 percent of families in 2006 were below the official poverty threshold, up from 24.4 percent in 2003.

“While growth has picked up in recent years, with the economy in 2007 posting its highest growth of 7.3 percent in the last three decades, both public and private investment remain sluggish and their share in gross domestic product has continued to decline, raising the question of whether the current economic momentum can be sustained,” the report said.

It also identified a number of critical constraints to economic growth and the fight against poverty in the next five to eight years for the Philippines .

“Targeting and removal of the most critical constraints will lead to the highest returns for the country. It will spur investment, which in turn will lead to sustained and high growth and create more productive employment opportunities,” said Ifzal Ali, Chief Economist of ADB.

“This would ensure that the fruits of development are shared by all,” he added. With Michaela P.del Callar and AFP

For Japan, a Long, Slow Economic Slide

February 3, 2008

By Blaine Harden
Washington Post Foreign Service
Sunday, February 3, 2008; Page A17

TOKYO — As the United States frets noisily about a recession, Japan is quietly enduring a far more fundamental economic slide, one that seems irreversible.

This country, which got rich quick in a postwar miracle of manufacturing and alarmed Americans by buying up baubles such as Rockefeller Center, is steadily slipping backward as a major economic force.

Fifteen years ago, Japan ranked fourth among the world’s countries in gross domestic product per capita. It now ranks 20th.

Read the rest:
 http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200913.html?hpid=topnews

3 big threats to China’s economic miracle

December 20, 2007

By Jim Jubak
MSN Investing

To many people in the United States, the China story goes like this: A huge emerging industrial power eats U.S. jobs and buries the U.S. economy under a mountain of cheap imports while erecting barriers to U.S. goods. The only suspense in that story is whether America will fight back or simply roll over.That storys easy to grasp, and theres enough real pain in the U.S. economy these days over lost jobs to China to give it emotional clout.

Unfortunately, its wrong.

It’s much more complicated
That story is too narrowly focused on the relationship between the United States and China. In fact, China (with a big assist from other big-population developing economies such as India and Vietnam) is a leading player in a global economic makeover that presents much of the rest of the world with challenges that dwarf any U.S. problems.

And the ending of ….

Read the rest:
http://moneycentral.msn.com/content/P82353.asp

Indonesia, Russia bolster military ties

September 7, 2007

By ROBIN McDOWELL, Associated Press Writer

JAKARTA, Indonesia – Russia signed a $1 billion deal with Indonesia on Thursday to provide the world’s most populous Muslim nation with assault helicopters, amphibious tanks and advanced submarines — expanding Moscow‘s military clout in Asia.

The two nations also signed energy and mining agreements worth up to $8 billion and sent a pointed message to the United States: They oppose Washington on many key international issues, from the war in Iraq to the crisis in the Middle East.

President Vladimir Putin, the first Russian — or Soviet _leader to visit Indonesia in nearly five decades, wants to reclaim some of the military and economic muscle Moscow had in Asia before the collapse of the Soviet Union in 1991.

Readthe rest at:
http://news.yahoo.com/s/ap/20070907/ap_on_
re_as/indonesia_russia_4