Indonesia Foreign Trade Shows No Sign of Slowing Down

Indonesia’s import and export performance broke an all-time record in August due to the unprecedented volume of commodities sold, casting a positive outlook on the economy as the nation battles to subdue the effects of subsidized fuel price hikes.

Statistics Indonesia (BPS) reported on Thursday that August’s exports rose 30.15 percent year-on-year (YoY) to US$27.91 billion, topping the previous record of $27.32 billion in April. Crude palm oil (CPO), metals and electrical machinery mainly supported the export growth. Imports, meanwhile, were up 32.81 percent YoY to $22.15 billion, supported by mechanical and electrical machinery, signifying a robust manufacturing industry as the domestic purchasing managers’ index (PMI) hit 51.7 points in the same month.

            “The export performance of key commodities is still in good condition due to an increase in the volume sold, even as commodity prices fall,” BPS deputy head of distribution statistics and services Setianto said in a press briefing.

            Consequently, Indonesia’s trade surplus in August managed to reach $5.76 billion, jumping 21 percent from the previous month’s $4.22 billion, while also marking 28 consecutive months of surplus. Economists had their estimates beaten, with state-owned Bank Mandiri and financial research firm Moody’s Analytics predicting a $3.69 billion and $4.4 billion surplus, respectively.

            BPS data also showed that the monthly export performance in August was boosted by CPO sales, which increased by 25.40 percent, followed by metals and electrical machinery by 14.38 percent and 21.16 percent, respectively. Although global commodity prices have been lower than the all-time high prices of the previous month, Setianto added, the export volume of some key commodities skyrocketed drastically in August.

            The volume of CPO exports jumped 55.77 percent month-to-month (mtm) to 3.6 million tons, the highest increase this year, although CPO prices fell by 10.15 percent yoy to $1,026 per ton.  Nominal-wise, CPO exports reached $3.7 billion in August, with demands mostly coming from India, China and Egypt.

September 15, 2022, The Jakarta Post


Indonesia Unicorn, Tokopedia Named the Best Workplace in Asia-Pacific

Tokopedia won the annual Best Places to Work Asia-Pacific 2022 award from PRWeek Asia and Campaign Asia-Pacific in the ‘Best Employee Support’ category. This category is given to organizations or companies that have offered support to employees during the global health crisis. This award is held to assist companies in developing the best work environment for their employees and as an inspiration to show a good workplace and initiative.

“Tokopedia has a goal to become ‘the most admired technology company’ for workers and prospective workers in Indonesia. Through this award, Tokopedia is closer to fulfilling this mission,” said VP of People and Culture Tokopedia Nanang Chalid in a written statement, Thursday (15/9/2022).

Tokopedia is the only company in Indonesia to win this award. Has 6 health pillars; Mental Wellness, Physical Wellness, Emotional Wellness, Social Wellness, Purpose Wellness, and Financial Wellness. Employees can consult a psychologist to help increase motivation, while maintaining health – both physically and mentally – in the midst of a pandemic.

Tokopedia also created the Work Fun Home program, which is a program that encourages employees to have a more enjoyable and productive work experience from home through a series of virtual activities. In addition, Tokopedia has also provided video call facilities with company doctors.

September 15, 2022, detikFinance


There Will be a Bridge Connecting Indonesia-Malaysia via Sumatra

Indonesia will be directly connected to Malaysia via Sumatra. This is because a line will be built connecting Telok Gong at the Tanah Mosque, Malaysia with Dumai, Sumatra in Indonesia along a length of 120 km. The construction is in collaboration with the private sector.

Quoted from Bernama, Friday (9/9/2022), the Chairman of the Melaka Investment, Industry, Entrepreneur Development and Cooperatives Committee, Datuk Seri Ab Rauf Yusoh said, the proposed construction involves the construction of a tunnel or bridge. The construction will take 20 years and when completed will have a major impact on the economic development of both countries.

“The project proposal has been submitted by the private sector and the two countries have agreed in principle a detailed study of the matter. From the state government side, we have brought all government agencies to visit the area where the proposed new route will be built yesterday,” Bernama said.

Ab Rauf said the project to be built uses the ‘One Belt One Road’ concept. This project will become a new icon for Malaysia and Indonesia. The project will also involve the construction of various infrastructures, including traffic deployment areas and the Immigration, Custom, Quarantine and Security (ICQS) Complex.

Ab Rauf added. the new industrial area which will accommodate various industrial activities will be developed in stages in the Tanah Mosque covering an area of about 2,023 hectares. The development of the area will be carried out by the Melaka Corporation and is expected to also contribute to the opening of a new city at the Tanah Mosque.

September 9, 2022, detikFinance


AWS to Invest $5b in Indonesia’s Digital Transformation

Amazon Web Services (AWS), one of the biggest global players in internet technology, says it is ready to help Indonesia embrace the digital transformation. The US-based company set up its Jakarta infrastructure “region” in December 2021 and has committed to investing US$5 billion in the country over a period of 15 years. AWS ASEAN managing director Conor McNamara spoke to The Jakarta Post’s Deni Ghifari about the company’s philosophy, its views on Indonesia and the digital transformation.

AWS has plans in Indonesia, AWS is easily a billion-dollar run rate business globally and growing at 33 percent year-on-year. In Indonesia, the region announcement was a really big statement for us. We made a commitment to invest $5 billion in the country over the next 15 years. So that’s a forward-looking commitment to the country, and that investment will be broken into multiple different categories.

The first one, obviously, is the infrastructure. We have a three-availability-zone region. An availability zone is one or more data centers, separate power grids, separate floodplains, physically separated. It gives customers a level of resiliency and redundancy for how they run their workloads. And how we operate and run that infrastructure also requires big investment.

The second one is our extended team. We will also allocate a sum of that investment to all of our team in Indonesia over that 15-year period in terms of our support organization, official services organization, our public policy, and legal and marketing departments, etc.

The third pillar is our partners. We really think about our partners as an extension of our own team. We’re focused on building local partners in Indonesia who can help our customers leverage the cloud. We make a lot of investments, upskilling those partners, giving them credits and incentive programs to drive workload adoption. In addition, we also look to get partners who have international businesses to invest in the nation, like GSI, Accenture, Deloitte or TCS and so on, to further invest in building practices with us here.

Then, the fourth big pillar is skills. We’ve already trained 300,000 Indonesians on the AWS cloud, and we plan to train hundreds of thousands more over the years. We look at that through various vectors; we look at how we’re training customers who are currently using us. And then we also look at how we’re training the next generation of builders.

In terms of second-level education, third-level education, we have Laptops for Builders, where we provide laptops for students across Indonesia, because we believe that’s kind of the barrier for them to access cloud technologies. That’s a big area of focus for us as well.

September 9, 2022, The Jakarta Post


Indonesia’s Manufacturing PMI Rises to 51.7 in August 2022

Indonesia’s manufacturing industry has improved at the fastest pace in four months on the back of rising demand. The latest report by IHS Markit, now part of S&P Global, shows that Indonesia’s manufacturing purchasing manager’s index (PMI) reached 51.7 in August, a slight increase from 51.3 in July.

PMI readings above 50 indicate overall expansion in the manufacturing sector, while figures below that threshold denote contraction. The PMI has been in expansionary territory for each of the past twelve months. S&P Global Market Intelligence economist Laura Denman explained that more pronounced growth in both output and total new orders was an “encouraging sign for the future health of the Indonesian economy”, with firms frequently mentioning firmer underlying demand.

“The continued easing of inflationary pressure was another positive aspect of August’s survey, which saw both input and output cost inflation moderate to a 14-month low. We can hope to see a sustained easing of price pressures as the impacts of COVID-19 continue to recede,” she said in the report released on Thursday.

Furthermore, the report highlighted that manufacturing production in the country surged for a third consecutive month in August and at the quickest rate in seven months, reflecting a steady post-pandemic economic recovery. In line with that, the new orders subindex also rose at the fastest pace in six months in August on the back of firmer domestic demand, while new export orders contracted for the third month in a row.

Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman Bobby Gafur Umar admitted that industrialists were still experiencing challenges in expanding their businesses due to logistical problems and global production chain disruption, as a residual result of the massive efficiency measures carried out by many manufacturers throughout the pandemic in the past two years.

He added that Indonesia’s manufacturing expansion had also been boosted by the government’s efforts to push the domestic content obligation (TKDN) above 45 percent, which encouraged local manufacturers to rely on domestic demand.

September1, 2022, The Jakarta Post


Practical! QRIS Can Be Used in Thailand, Malaysia-Singapore Next

QRIS or QR Indonesia Standard made by Bank Indonesia can now be used in Thailand. Governor of Bank Indonesia (BI) Perry Warjiyo stated that it would be easier for Indonesians to make shopping transactions in Thailand. No need to exchange money, only mobile phone capital to scan the QRIS barcode, transactions can already be done.

This is because BI and the Bank of Thailand have collaborated to form a cross-border payment system via QR. Perry said all Indonesian transactions in Thailand could use QRIS. For example, for tourism and other trade transactions.

In addition to Thailand, currently QRIS can also be used in Malaysia, but its nature is still a trial and has not yet been fully implemented. “We have tested Malaysia since January. QRIS is also being prepared to be tested in Singapore. Currently, the central banks of the two countries are preparing to sign a cooperation,” Perry said.

August 29, 2022, detikFinance


142,000 Cars Exported from Tanjung Priok, Indonesia

In recent years, Indonesia has grown and is known as an exporter of vehicles to various countries in the world. What a very prestigious achievement! Now, don’t be surprised if we are in various countries such as Saudi Arabia, the UAE, the Philippines, and even Latin American countries, seeing cars milling about similar to a number of cars passing by in Indonesia. Even though these cars were originally produced in Indonesia.

Data from the IPCC Vehicle Terminal in Tanjung Priok – the main port of export and import of cars in Indonesia – data shows the rate of increase in car exports continues to increase from year to year. For the first semester of 2022 (January-June 2022) there were more than 142,155 CBU cars of various brands and models which were exported to various countries through the Tanjung Priok Vehicle Terminal IPCC dock.

Toyota produced by Indonesia still dominates the highest number of car exports from Indonesia in the first half of 2022. Followed by Suzuki, Mitsubishi, Hyundai, Isuzu, Honda, Daihatsu, Nissan, Mazda, VW and Geely. While last year, the order of car exports from the largest Indonesian manufacturers was Toyota, Mitsubishi, Suzuki, Daihatsu, Honda, Isuzu, Hyundai, KIA, and various other brands.

The export surge occurred in Hyundai brand cars from PT Hyundai Motor Indonesia, which rose very significantly compared to last year. The famous car brand from South Korea, in the first half of 2021, exported only 214 CBU cars, but in the first half of 2022 it jumped up by exporting 11,385 cars to various countries.

According to Agus Hendrianto, there are many advantages offered by the IPCC Tanjung Priok Vehicle Terminal, North Jakarta, making it the mainstay terminal for car manufacturers in Indonesia for managing their product exports. In addition to facilities and services, the location of the Terminal is also relatively strategic and close to the location of car factories which are usually located around Sunter, Bekasi, Karawang, and Tangerang; and the Tanjung Priok IPCC Vehicle Terminal is also directly connected to the inner city toll road.

Indonesia Will Have the Largest Hydropower Plant in Southeast Asia, Here’s the Progress

The construction of the Kayan Hydro Power Plant (PLTA) project by PT Kayan Hydro Energy (KHE) is currently in the road construction stage. Director of Operations of PT KHE Khaerony said that later this PLTA will become the largest power plant in Southeast Asia. He said that the hydropower plant will have an integrated power source and become the main power source for the Tanah Kuning-Mangkupadi Industrial and International Port (KIPI) Zone, North Kalimantan. Meanwhile, PT Indonesia Strategic Industries (ISI) is the manager of the industrial area and PT Pelabuhan Internasional Indonesia (PII) which is the developer of international ports to support industrial areas.

With an investment value of more than US$ 17 billion or equivalent to Rp252.49 trillion, assuming an exchange rate of Rp14,852. PT KHE also cooperates with foreign partners. Many mentioned, the foreign partner who entered was Sumitomo from Japan.

The Kayan Cascade hydropower plant which was built by PT KHE utilizes the area along the Kayan river and consists of 5 dams with 5-6 units of generating turbines per dam. The first stage of the Kayan Cascade hydropower plant has a capacity of 900 Megawatts (MW), the second stage is 1,200 MW, the third and fourth stages are 1,800 MW each, and the fifth stage is 3,300 MW.

The development of this hydropower plant has good prospects, and creates jobs for residents around the location, residents of Tanjung Selor and the people of North Kalimantan in general, many parties provide support. In working on this project, KHE deliberately involved local contractors and workers. The empowerment of local contractors and workers is not without reason. This is done so that the surrounding community can also benefit from this project.

Kayan Cascade 1 hydropower plant is targeted for completion in 2026. For Cascade 2-5, parallel work is also being carried out. While Cascade 2-5 each takes 2-3 years from Cascade 1.

August 27, 2022, detikFinance


Indonesian State-Owned Enterprises Build Roads in Timor Leste

PT Waskita Karya (Persero) Tbk won the tender for the Noefefan – Oenuno Road project in Oé-Cusse, Timor Leste worth US$ 22.1 million or around Rp322 billion. This is the pride of state-owned companies because they continue to contribute to the country. This project is not Waskita’s first project in Timor Leste. Previously, Waskita had completed several large infrastructure projects such as Suai Airport and Jalan Sakato – Noefefan which were completed in 2020.

Waskita Karya I & QSHE Director of Operation I Ketut Pasek Senjaya explained that the work that Waskita was doing included improvement/rehabilitation and maintenance. This project is expected to support the connectivity of road infrastructure which will also connect with the Indonesian border. Thus providing benefits to the people of Oé-Cusse, Timor Leste.

“We are targeting this project to be faster than the planned completion in the 18-month contract, and to be able to complete this project on time even faster than the contract, we sent the best team as a form of responsibility and gratitude to the Special Economic Social Zone no. Merkadu (ZEESM Timor 4 Leste) for trusting Waskita Karya as the implementing contractor,” explained Pasek in his statement, Sunday (21/8/2022).

Pasek hopes that the company can contribute further to the development of infrastructure and other public infrastructure facilities in Timor Leste.

Waskita Karya SVP Corporate Secretary Novianto Ari Nugroho added that until July 2022 the company had obtained a new contract value (NKB) of Rp9.90 trillion, an increase of 130.98% compared to last year’s Rp4.29 trillion.

NKB revenue comes from government projects by 75.21%, private projects by 10.95%, business development of the company’s subsidiaries by 9.80%, and projects by State-Owned Enterprises and Regional-Owned Enterprises by 4.05%.

August 21, 2022, detikFinance


Jokowi : Indonesia Must Boost Downstream Investment, Take Over Global Green Market

Indonesia will pursue greater production in downstream industries and take over the world market in green products, President Joko Widodo said on Tuesday. Jokowi noted that Indonesia’s commitment to strengthening its downstream industry had proved to be fruitful, as it allowed the country to gradually shift from selling raw materials to value-added goods.

In the case of nickel, for instance, Jokowi said the downstream project had increased Indonesia’s steel export value by 18 times compared with the last seven years, to Rp306 trillion (US$20.7 billion) last year.  This year, Jokowi expects the value to rise to Rp440 trillion, a more than 43 percent year-on-year (YoY) increase. The downstream sector has provided an opportunity for the country to become a part of the global supply chain in the electric vehicle (EV) industry, with EV-producer countries from Asia, Europe, and the US showing their interest in taking part in the development.

“The government will push for downstream [production] in bauxite, copper, and tin. We must keep on pushing downstream on our natural resources,” Jokowi said during his State of the Nation speech for the 77th anniversary of the country’s independence.

Downstream projects in Indonesia have been Jokowi’s solution to the country’s sluggish manufacturing contribution to the economy and to reducing its reliance on extractive industries. Jokowi went on to say that the country would not stop pursuing downstream projects, but would also ensure they would be “green” as well, hoping they would be more competitive in the global markets. Jokowi said the government would integrate the downstream projects with renewable energy-based power plants that would utilize solar, wind, geothermal, wave, and bioenergy sources.

“We need to build an integrated ecosystem for the industry in our country that will support the development of a global green economy ecosystem. I believe that we will become a competitive green product manufacturer in international trade,” Jokowi said.

August 16, 2022, The Jakarta Post