Month: December 2022

Indonesia’s exports increased by 5.58% year on year (YoY) to US$ 24.12 billion. While on a monthly basis there was a decrease of 2.46%. “November’s export value reached US$ 24.12 billion,” said BPS Deputy for Production Statistics M. Habibullah in a press conference, Thursday (12/15/2022).

Export developments were influenced by changes in international commodity prices which tended to decline compared to last year and the rupiah exchange rate which continued to depreciate. The market consensus compiled by CNBC Indonesia from 11 institutions estimates a trade balance surplus in November 2022 of US$ 4.4 billion. The surplus is lower compared to October 2022 which reached US$ 5.67 billion. The consensus also shows that exports will grow 8.98% (YoY) while imports will increase 5.04%.

If the trade balance returns to print a surplus, then Indonesia will have recorded a surplus for 31 consecutive months. For the record, the export value in October 2022 reached US$ 24.81 billion or jumped 12.30% (YoY). Imports were recorded at US$ 19.13 billion or shot up 17.44% (YoY).

December 15, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20221215104016-4-397143/ekspor-ri-tumbuh-55-tembus-us–2412-m-di-november-2022)

GoTo Financial (GTF) won 2 awards at an event titled Excellence and Strongest Banks in Asia Awards 2022. It is known that GTF is a digital financial service provider company that has services to support the financial activities of the community and business people, part of the GoTo Group. Organized by The Asian Banker, a banking and financial services industry platform based in Singapore, this award was given to the 22 strongest banks in 2022 after analyzing data from 500 banks from Asia, the Middle East and Africa.

The first award received was Best Digital Wallet in Indonesia (Best Digital Wallet in Indonesia) for GoPay. As an e-wallet platform in Indonesia, GoPay provides a one-click payment system, easy transfers, and payment solutions within the GoTo ecosystem as well as other providers. This is one of the main factors in the evaluation of awards at this event.

More than just a payment tool, GoPay helps users manage their finances through transaction history, paylater, and investment features. According to research from InsightAsia conducted in October 2022, GoPay is the leader in the e-wallet market in Indonesia with more than 71 percent of users who have been loyal to it for more than the last 5 years. Through consistency in providing the best service for users, GoPay has won the highest trust from consumers with a satisfaction level of 84% of users.

The next award was won by Midtrans, a business solution from GoTo Financial, as Best Merchant Service in Indonesia (Best Business Service in Indonesia). As a payment gateway service that is licensed and supervised by Bank Indonesia, Midtrans always supports business people to develop their business. With access to 25 payment methods, including GoPay and other electronic money, bank transfers, debit cards, credit cards, virtual accounts, QRIS, and payments at convenience stores, Midtrans is here to help businesses process transactions easily and facilitate the payment verification process. so merchants can focus on expanding their business.

December 13, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6459480/goto-financial-raih-2-penghargaan-di-ajang-the-asian-banker-2022)

Peruri is a state-owned enterprise that has a currency printing business unit. Perum Peruri does not only print rupiah currency to meet domestic needs. However, this state-owned company also prints money for foreign needs. Finally, Peruri managed to get an order to print money from Peru. Now, this State-Owned Enterprise is conducting assessments with Argentina.

Peruri’s Director of Finance and Risk Management, Winarsih Budiriani explained, Peru is the most recent market that Peruri has successfully penetrated. He said Peruvian money (Sol) was one of the most complicated that Peruri had printed.

“In fact, we can be proud of it, in fact we are from several countries, the last one being Peru. If we talk about Peruvian money, it’s the most complicated money, right? The money is the most complicated and of the best quality. One of the reasons for this complexity is the detailed design. “The design is very detailed, the quality is also very prime, indeed there are countries that have very complicated money designs,” he said at the Peruri Headquarters , Jakarta, Tuesday (13/12/2022).

Prior to Peru, he said, Peruri received orders to print money from Nepal and Sri Lanka. He said Peruri itself did not only print money, but also important documents such as passports. “That shows that we (Peruri) are trusted by countries that really print it in Peruri. Apart from Peru, previously we printed it to Nepal, Sri Lanka. And not only money, passports, excise actually we are not only local, but also we one of them has also been exported,” he said.

Currently, he admits that he is conducting assessments with Argentina. If successful, Peruri will start printing Argentine money next year.

December 13, 2022, detikFinance

(https://finance.detik.com/moneter/d-6459445/top-ri-cetak-duit-buat-peru-hingga-nepal-kini-incar-argentina)

Bank Indonesia (BI) has announced that its roadmap for the country’s own central bank digital currency (CBDC) named the “digital rupiah” will start with a wholesale design, in a move that may bring the country closer to finally implementing the long-awaited digital currency. The roadmap was launched within a white paper named after the country’s mythical creature “Project Garuda,” with an aim to explore possible designs to implement the digital rupiah. Its development will be divided into three stages with the first two only involving banks and BI’s roles.

BI will start the CBDC development for wholesale digital rupiah, but the functions will be limited to issuance, redemption, and transfer of funds, which the central bank sees as the most feasible for the initial stage. For the next phase, the digital currency will be expanded to support financial market transactions and monetary operations. The last stage, meanwhile, will integrate wholesale and retail design with the latter involving functions of distribution and collection, as well as peer-to-peer transfers and payments, which will finally be available for the general public.

“At the end, we will integrate both wholesale and retail digital rupiah end-to-end with synergy and collaboration nationally and internationally,” BI Governor Perry Warjiyo told audiences in BI’s annual meeting on Wednesday.

The white paper also stated that only limited parties designated by BI could have access to the wholesale rupiah by converting their reserves at the central bank. These wholesalers could be the ones distributing digital rupiah to customers through retailers such as banks and digital payment system firms or distributing it directly to consumers by themselves.

BI, too, could interact with consumers without the need to be bridged by wholesalers or retailers as intermediaries. The white paper wrote that banks generally are those considered suitable for the wholesalers’ role, whereas involvement from non-bank financial institutions will further increase operational exposures and systemic risk.

December 3, 2022, The Jakarta Post

(https://www.thejakartapost.com/paper/2022/12/03/bi-to-develop-wholesale-cbdc-soon-experts-suggest-prioritizing-on-retail.html)

Indonesia has successfully held the G20 Summit in Bali on 15-16 November 2022. A number of compliments from world leaders were also expressed for Indonesia, which succeeded in holding this grand world-level event.

Indonesia has received funding commitments of up to US$ 929.4 billion for a number of infrastructure projects up to the energy transition. Indonesian President Joko Widodo also detailed the amount of the funding commitment, including at least 226 multilateral projects with a value of US$ 238 billion and 140 bilateral projects with a value of US$ 71.4 billion which need to be followed up immediately.

“This must be ensured that all of these projects, programs and initiatives can be executed quickly,” said Jokowi while chairing a limited meeting on evaluating the implementation of the G20 Summit which was held at the Presidential Office, Jakarta, Monday, November 28, 2022.

The President also asked his staff to oversee the acceleration of various investment commitments so that they can be realized in the field. A number of these investment commitments include commitments from the United States government through the Partnership for Global Infrastructure Investment scheme of US$ 600 billion. US$ 20 billion for the development of fossil-based electric vehicles through the Just Energy Transition Partnership. Investment commitments from Japan, UK and South Korea for the Jakarta MRT, as well as cooperation with Turkey for the construction of the Trans-Sumatra toll road and others.

November 29, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20221129145309-4-392154/fantastis-hasil-ktt-g20-ri-terima-janji-manis-us–1-triliun)

Indonesia is said to be one of the countries that will avoid dark clouds next year. Even with this year’s G20 Summit, many commitments that ensure investment next year in Indonesia remain convincing. A nickel trading company from China, Lygend Resources & Technology, will soon conduct an initial public offering on the Hong Kong exchange and place Indonesia at the central point of the company’s massive expansion.

Launching the IPO prospectus, Lygend has ambitions to raise up to US$ 594 million or the equivalent of IDR 9.21 trillion (assuming an exchange rate of IDR 15,500/US$) to finance business expansion in Indonesia. The company’s shares will begin trading on the Hong Kong Stock Exchange on December 1.

The company said it would use 56.4% of the IPO funds for the development and construction of a nickel production project on Indonesia’s Obi Island. Then 24% of the IPO funds will be used for additional capital in Contemporary Brunp Lygend (CBL), a joint venture with Contemporary Amperex Technology (CATL).

CBL will focus on projects in Indonesia across the entire new electric vehicle (NEV) industry value chain, from nickel mining exploration, production of nickel and NEV battery materials, to NEV battery manufacturing and recycling. CBL is currently planning to set up a joint venture with Indonesian partners, namely PT Aneka Tambang Tbk (ANTM) and PT Indonesia Battery Industry (IBI).

Approximately 9.6% of the IPO funds will be used to invest in potential nickel mines in Indonesia to secure the supply chain given the increasingly crowded landscape of the nickel downstream industry. Meanwhile, the remaining 10% will be used for working capital and general company activities.

This massive expansion has enabled the nickel trading company to significantly increase exports of the metal, for which demand for nickel is very high in China. For information, Lygend itself is the largest nickel product trader in the world and the largest in China with a market share of 26.8% in 2021.

November 26, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20221126141052-17-391449/korporasi-china-ini-ipo-rp-9-triliun-demi-garap-nikel-ri)

Indonesia and Chile have added a services trade protocol to their bilateral trade agreement as the two emerging economies brace for a potential global recession. At a signing ceremony on Monday, Indonesia’s Trade Ministry said the Indonesia-Chile Comprehensive Economic Partnership Agreement (IC-CEPA) could become a gateway to South America for Indonesian export goods.

“Chile has competitive human capital, is one of the developed countries in South America, and I think its economy is the best among countries [of that region],” Trade Minister Zulkifli Hasan told participants at the event in Jakarta.

From 2019 to 2021, the trade volume between Indonesia and Chile increased by around 54 percent to US$424.6 million. The minister called for a further increase to $1 billion over the next two or three years and said Chile could become an export “expansion hub” to the markets of Argentina, Ecuador, Peru and Colombia.

“The potential is very big. Because they have money, they can pay for our export goods,” Zulkifli added.

Striving to be a developed country by 2045, he said, Indonesia should expand its export markets and “dominate” the world market instead of only the traditional market of Europe, the United States, and Asia. Given the slow growth and even possible recessions in Western countries, Zulkifli said, it was necessary to find alternative export markets. He said Indonesia needed 7 percent annual GDP growth to become a developed country by 2045, which required a vast expansion of exports to Latin America, Africa, the Middle East, Central Asia, Eastern Europe, and South Asia.

Speaking at the same event, Chilean Deputy International Economic Relations Minister Jose Miguel Ahumada said the newly signed protocols would allow Indonesia and Chile to use the IC-CEPA as an “import and export platform” to each respective region. He called for a “substantial step forward” in the implementation of this protocol, which included contemplating greater access of professional services and the movement of people, instead of just focusing on trade in services. Signed in Santiago in December 2017 and taking effect in August 2019, IC-CEPA is the only CEPA-level agreement between Indonesia and a Latin American country.

November 21, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/11/21/indonesia-chile-add-services-deal-to-trade-agreement.html)

The Asian Development Bank has approved a US$500 million loan for the Indonesian government to reform state-owned enterprises (SOEs) in the country with the aim of improving their efficiency, resilience and corporate governance. The program will support efforts to reduce the number of SOEs and require them to focus on core operations, so that they can be financially viable and efficiently provide essential public services. Other areas include measures to improve the quality of SOE boards, strengthen financial monitoring and disclosure, and help SOEs transition to a climate-compatible business model. The German development-bank KfW will provide co-financing with a loan equivalent of €300 million (US$310 million).

“SOEs can play a vital role in fostering inclusive and sustainable recovery from the COVID-19 pandemic in Indonesia. But to deliver greater value to the public, their structural weaknesses must be addressed,” ADB senior public-management specialist for Southeast Asia Yurendra Basnett said in a statement on Friday.

The Indonesian government has made efforts to downsize SOEs in the country. In 2019 alone, there were around 143 state-run firms, or more if one includes all subsidiaries. SOEs Minister Erick Thohir has asked two deputy ministers to help with dividing these SOEs into two main groups of 48 and 73 companies respectively. The effort included forming holding companies, especially for firms with good prospects and in a healthy financial state, while some firms that are underperforming or that depend on regular state-capital injections were to be liquidated, merged or divested.

The number of SOEs has been brought down to 41 firms as of March. Erick said he aimed to push their number down further to 37 and hope a future SOEs minister could slash it again to below 30.

“So, the important note is that the corporations are shrinking but the net profit is increasing. The government efforts to downsize SOEs had made them much more efficient, enabling them to book profits. In 2021, total combined-net profits of SOEs were IDR 90 trillion, up from IDR 13 trillion a year earlier” Erick Thohir said as quoted by Kompas on March 17.

November 20, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/11/20/adb-provides-us500-million-loan-to-help-indonesia-downsize-soes.html)

Indonesia has attracted new investment into the electric vehicle (EV) sector, coinciding with the Group of G20 forum, where global leaders and businesses agreed on commitments to lower carbon emissions.

Indonesia Investment Authority (INA), Contemporary Amperex Technology Co. Ltd. (CATL) and CMB International Capital Corporation Ltd. (CMBI) signed a memorandum of understanding (MoU) on Monday to establish a Green Fund, which they will jointly invest in. The fund, which is expected to grow up to US$2 billion, will focus on EV value chain investment primarily in Indonesia from downstream to upstream. In addition, Chinese conglomerate Envision Energy is set to enter Indonesia’s EV battery industry, particularly in the area of raw materials.

“Electrification is an attractive solution for conventional energy in helping to reduce the environmental impact while also tapping into a potential growth market,” INA CEO Ridha Wirakusumah said in a statement.

Indonesia possesses roughly a quarter of the world’s nickel reserves amounting 21 million tonnes on a par with Australia that holds the same amount, followed by Brazil and Russia, according to the United States Geological Survey (USGS). Indonesia is expected to emerge as a global nickel hub with nearly half of the globe’s refined nickel to be supplied by Indonesia by 2030.

The fund and the Chinese firm added to a long list of investments drawn to Indonesia, as more businesses sought to harness the country’s EV ecosystem potential, along with Foxconn and Hyundai, among many others.

State-Owned Enterprises (SOEs) Minister Erick Thohir lauded the recent INA cooperation with several investors. He added that SOEs too have caught the opportunity by forming Indonesia Battery Corporation (IBC), a joint venture from four mining and energy state-run firms, that focuses on developing the country’s EV ecosystem.