GOVT PLANS MORE IMPORT, MARKET INTERVENTION TO CURB PRICE HIKE

JAKARTA (Jakarta Post): The government may have to import more rice over the year, on the likelihoods of a shortage in supply of the staple food from still limited local production, and their current prices still running high.

Indonesia's domestic rice production --having been affected by last year's drought-- may remain low until the harvest time in March, Deputy the Coordinating Minister Bayu Krisnamurthi said, while the government still needs to distribute subsidized rice for the poor and supply the market from its national rice stock to keep prices at check.

"If the government's rice stock declines by all of this, then we will continue our policy to import rice," he told reporters Thursday after a meeting on the issue with the Trade Ministry, Agricultural Ministry, the National Logistics Agency (Bulog) andthe Central Statistics Agency (BPS).

Bayu declined to mention how much more rice the government may have to import again, saying it will be determined after a full assessment of the situation in March.

The government had previously decided to import at least 500,000 tons of rice this month, already holding biddings for it earlier this month.

Bayu expected the imported rice to begin coming in next week, which the government will use partly for the national rice stock, and to distribute twice as much subsidized rice for the poor than usual, totaling more than 600,000 tons until the end of February.

The rice will also be used for price stabilization efforts, with the government having assigned Bulog to continue supplying the market with rice at an even lower price of Rp 3,700 per kilogram, from Rp 4,000 previously.

Trade Minister Mari Elka Pangestu, meanwhile, had said the government will ensure distribution of the rice, including prevention of any attempts of hoarding, to prevent any shortages and price spikes again in the market.

Bayu explained that the rice price stabilization efforts has shown results, but admitted that the prices were still relatively high at between Rp 4,400 and Rp 4,950 (55 U.S. cents) per kilogram.

He only referred to rice prices in March last year at some Rp 4,300 a kilogram, without specifying at what exact price level the government is targeting.

"We want to bring the rice prices back to their level in November before they fluctuated, which is still favorable for

The government's policy to import rice has gathered pros and cons, with those supporting it arguing its necessity to ensure food security for the poor, while those against argue the policy will only be at the expense of domestic rice farmers.

BPS head Rusman Heriawan also mentioned that the rice import plan this month has yet done much to bring down rice prices, which has 3 percent since December, and could therefore affect the inflation rate this month.

Monthly inflation rose higher at 1.21 percent in December, from 0.34 percent in November, as rice prices creeped up by the end of last year. Although 2006's full-year inflation at 6.6 percent was lower than its 8 percent estimate, the rising riceprices had foiled previous optimism that inflation could end up even lower at 6 percent.(Urip Hudiono)

RI, AZERBAIJAN EXPLORE COOPERATION IN OIL AND GAS SECTOR

JAKARTA (Jakarta Post): In a sign of a more concrete relations between Azerbaijan and Indonesia, ministries and companies from both countries have explored possible cooperation in education, transportation and energy.

In energy sector, both government officials and private sector have exchanged ideas on how they can embark on cooperation in oil and gas sector.

Azerbaijan Ambassador to Indonesia Ibrahim A. Hajiyev said that state-run oil and gas company Pertamina recently, for instance, had submitted to Azerbaijan government a proposal on possible cooperation in oil and gas sector for both countries.

"We have sent the proposals to our foreign ministry and our state committee on oil in Azerbaijan. They are now considering the proposals," he said during a press gathering at the Azerbaijan embassy on Thursday.

Hajiyev added that Azerbaijan and Indonesian companies have very good prospects in investing in both countries' oil and gas sector.

Located along petroleum-rich Caspian Sea, Azerbaijan, a nation of 8.5 million people, majority of them are Muslims, has huge oil and gas reserves.

With its booming oil industry, Azerbaijan was the world leader in economic growth last year, with 34 percent GDP growth from January-October 2006 while Indonesia, home to the world's largest Muslim population is Southeast Asia's biggest economy.

In transportation and education sectors, Azerbaijan has submitted its draft of treaties directly to the ministries to get a reciprocal responses.

"They have replied with their proposals. In general, they are acceptable for us. The final negotiation will take place, and the treaties will be signed soon. Transportation agreement will coveronly the air," Hajiyev said.

He said the agreement in education sector would enable both countries to have exchange of students.

Foreign Ministry director for South and Central Asia Mohamad Asruchin said that Indonesia and Azerbaijan will formalize its relations with establishment of a joint commission, paving wayfor regular meetings between officials from both countries.

"We already have draft agreement of establishing the joint commission. As a facilitator, foreign ministry hopes that private sector to seize business opportunities in Azerbaijan, and other Central Asian states.

Asruchin said that Indonesia could send skilled labor to Central Asian countries, especially in construction sector.(Abdul Khalik)