Month: April 2024

The Ministry of Industry targets the gross domestic product (GDP) of the manufacturing industry in 2024 to grow 5.8%, higher than the 2023 projection of 4.81%. On the other hand, safeguardglobal.com noted that last year, Indonesia was included in the top 10 contributors to world manufacturing products and was the only ASEAN country. Based on this publication, Indonesia contributes 1.4% to global manufactured products. This prestigious position is a significant increase, because four years ago, Indonesia was still in 16th position.
The increase in ranking also indicates that the manufacturing sector has a multiplier effect on other sectors. As an illustration, with increasing industrial output, the transportation sector will also increase, as will the energy, agricultural, plantation and maritime sectors which are sources of raw materials and production input factors for the manufacturing sector.
Indonesia’s position in the ranks of world manufacturing is strengthened by the value of industrial output which continues to increase in the period 2020 to September 2023. In 2020, the value of industrial output was recorded at US$ 210.4 billion, then increased to US$ 228.32 billion in 2021, and increased again amounting to US$ 241.87 billion in 2022. Meanwhile, until September 2023, the value of industrial output has reached around US$ 192.54 billion.
Responding to this, Economist from the Institute for Economic and Community Research, Faculty of Economics and Business (LPEM FEB) University of Indonesia, Kiki Verico, said that the manufacturing sector continues to show positive performance in its contribution to the Indonesian economy. It is hoped that this positive performance will become the main capital to attract more foreign investment with an export orientation.
“Indonesia currently cannot be called deindustrialized. Deindustrialization is experienced by countries that have reached the stage of advanced manufacturing or advanced manufacturing, then declined (sunset) and started to be replaced by other countries whose manufacturing was just taking off (sunrise). The advanced industrial countries then shifted their backbone. “the economy is moving from the manufacturing industry to the service sector,” explained Kiki, written Friday (29/3/2024).
Kiki also said that collaboration between ministries was needed to strengthen the manufacturing sector which in the future could increase Indonesia’s exports and make a bigger contribution to the national economy.
Throughout 2023, the manufacturing industry recorded impressive performance and contributed to the growth of national Gross Domestic Product (GDP). This can be seen from Bank Indonesia’s Prompt Manufacturing Index (PMI) in the fourth quarter of 2023 which reached 51.2% or is still in the expansion zone. This figure is in line with data released by S&P Global which shows the manufacturing sector has been at an expansion level above level 50 for 30 consecutive months. Only two countries were able to record this achievement, namely Indonesia and India. Manufacturing is still the number one contribution to GDP in Indonesia, namely 19% in 2023. In terms of labor absorption, the manufacturing sector also still contributes 16% of the total in Indonesia.
The manufacturing sector is also the highest tax contributor in Indonesia. “This means that manufacturing is very significant for the Indonesian economy, because the added value is the greatest, labor absorption is also the largest, formal activities that provide a fixed salary are also the largest, so tax revenues are also the largest from manufacturing,” he explained.

March 29, 2024, detikFinance
(https://finance.detik.com/industri/d-7267740/kinerja-manufaktur-ri-tumbuh-positif-begini-datanya)

The sustainability of the Indonesian Capital City (IKN) project was a big question before the 2024 presidential general election. However, the election of the candidate pair (paslon) Prabowo Subianto-Gibran Rakabuming Raka made the project provide certainty for IKN. It is hoped that this certainty will attract more interest from foreign investors, including from China. As is known, in the campaign and debate, Prabowo-Gibran expressed their intentions and plans to continue the IKN project initiated by President Joko Widodo.
Several countries have expressed interest in participating in the construction of a new capital city that represents the future of Indonesia’s central government. Among them are two neighboring countries, Malaysia and Singapore, and there are two large countries, namely China and the United States, which have also expressed their interest in participating in the development of IKN. The two countries’ commitment to investing is increasingly serious. Representatives from these countries are actively involved in meetings with local officials to further strengthen their commitment to investing in IKN.
Quoted from the South China Morning Post, China is positioning itself to become one of the largest foreign investors in IKN, Indonesia’s new capital city plan which will be built from scratch over the next 20 years amidst forests and palm tree plantations. This investment is expected to become a prominent feature in efforts to build smart cities and other important urban zones in other countries.
These projects will in turn help China connect with friendly countries to facilitate trade, thereby giving Chinese construction companies the opportunity to prove themselves abroad.
Beijing based state-owned construction company Citic Construction, has expressed interest in developing 60 residential towers in IKN, which would replace flood-prone Jakarta as the country’s capital. The move was delayed due to the coronavirus pandemic, but government offices may be relocated this year as officials seek to reduce the burden on Jakarta.
China will continue to invest in Indonesia, including IKN, as the goal of the Belt and Road Initiative (BRI). Beijing’s flagship Belt and Road Initiative (BRI) has given birth to Chinese-funded infrastructure projects in many countries, including ports, highways and power plants. Smart city construction, a term that usually refers to technology-aided management of traffic and urban resources, advances China’s goal of increasing “connectivity”, especially in countries near its borders such as those in Southeast Asia.
A number of Chinese analysts and economists are optimistic that China will enter the IKN project. This step was taken to expand China’s portfolio in Asian countries. China has also been heavily involved in building new cities in Asian countries so building IKN will be the next goal. Xu Tianchen, senior economist with the Economist Intelligence Unit, said Chinese construction companies are eager to prove themselves overseas. IKN is an interesting project.
“It can be said that China has a squad of technical and building experts that has developed rapidly since the 2000s. China also has an experienced team in providing development solutions from financing to maintenance.” Xu said, quoted from the South China Morning Post.
“Chinese construction companies are now very competitive in terms of skill capacity,” said Zha Daojiong, professor of international relations at Peking University.
Zhao Xijun, a finance professor from Renmin University in Beijing, explained that for China, Indonesia is the biggest partner in Southeast Asia. China and Indonesia have also collaborated a lot, from building high-speed trains to toll roads. According to him, the Jakarta-Bandung high-speed train is an example of China’s success that could be a model. However, he warned that China’s economic slowdown could become an obstacle to Chinese investment in IKN.

March 26, 2024, CNBC Indonesia
(https://www.cnbcindonesia.com/research/20240326113107-128-525483/analis-china-yakin-xi-jinping-serius-investasi-di-ikn)

The Indonesian Embassy in Hanoi together with the Vietnamese Ministry of Foreign Affairs and the Khanh Hoa Provincial Government held a Meet Indonesia event. This is a meeting place for governments and business people between Indonesia and Vietnam to explore various opportunities for cooperation. Apart from sharing information on strategic sector development, the event also brought together business partnerships in agriculture, fisheries, tourism, digital economy, energy transition and cutting-edge industrial sectors.
Indonesia and Vietnam plan to strengthen strategic sector economic partnerships through mastering the latest technology. This was the main discussion in the bilateral meeting between Deputy Minister of Foreign Affairs of Vietnam Nguyen Minh Hang and Deputy Coordinating Minister for Economic Affairs Edi Prio Pambudi in the middle of the event held in Nha Trang, Coastal City of Khanh Noa Province.
Nguyen Min Hang said that the opportunity for strategic sector economic partnerships came at the right moment ahead of the celebration of 70 years of diplomatic relations between Indonesia and Vietnam which has a strong foundation of friendship.
“I want a dialogue at the Deputy Minister level to discuss various important economic partnership issues,” said Nguyen in an official statement from the Coordinating Ministry for the Economy, Sunday (24/3/2024).
As a fellow country that is developing rapidly and a member of ASEAN, Nguyen Min Hang assesses that there are many similarities in Vietnam’s efforts with Indonesia which need to be collaborated to take advantage of opportunities from the current world dynamics, including mastery of technology in various sectors. Nguyen also congratulated Indonesia on Indonesia’s success in holding elections and the start of discussions on Indonesia’s accession to the OECD. As a member of the G20 and ASEAN, Nguyen believes that Indonesia is a strategic partner for Vietnam.
Meanwhile, Edi Prio also welcomed Vietnam’s proposal to strengthen strategic sector economic partnerships. He said that Indonesia was interested in investment progress in Vietnam’s rapidly developing advanced industrial sectors, such as electric cars, semiconductors, telecommunications and digital technology, in addition to agricultural and fisheries technology.
For this reason, it is important for Indonesia to partner through research and development (R&D), exchange of job opportunities and training for digital and engineering talents and make it easier for each other to open the door to investment.
“For a long time, we have wanted to form a strategic economic partnership forum with Vietnam,” said Edi.
Edi has submitted the concept of a partnership agreement through diplomatic channels and hopes it can be agreed soon. This agreement will later become an umbrella to accommodate strategic economic cooperation with concrete output, especially benefits for engineers and digital talents to jointly master advanced technology.
Indonesia and Vietnam have partnered in several forums other than ASEAN, such as IPEF and RCEP, which need to strengthen economic integration in ASEAN. Edi also asked for Vietnam’s help as a member of the Great Mekong Sub-region (GMS), which is a forum for ASEAN sub-regional cooperation in the continental ASEAN region, to communicate with other GMS partners.

March 24, 2024, detikFinance
(https://finance.detik.com/industri/d-7258820/ri-bidik-kerja-sama-litbang-teknologi-mobil-listrik-semikonduktor-ke-vietnam)

Economists say that the victory of Prabowo Subianto-Gibran Rakabuming Raka in one round of the 2024 Presidential Election has provided certainty to investors. As a result, investment flows from abroad are expected to return to Indonesia soon.
Staff for Economics, Industry and Global Markets from Bank Maybank Indonesia, Myrdal Gunarto, said that certainty regarding who will be elected in the presidential election has provided certainty to investors. He predicts that the flow of foreign capital in the form of Foreign Direct Investment will come soon.
“In terms of FDI, it seems that with this certainty, global-based companies really have a need to come immediately,” he said, quoted Friday, (22/3/2024).
Myrdal said the results of the legislative election contributed to the market’s positive response to Prabowo-Gibran’s victory. The results of the legislative elections, he said, show that the party supporting candidate number 2 will become the majority in parliament. “This causes euphoria from global investors,” he said.
Myrdal believes that with this sentiment, combined with Indonesia’s solid economic conditions and controlled socio-political conditions, global investors will soon enter Indonesia. However, the return of foreign funds to the Indonesian portfolio market is still very much influenced by the future attitude of the United States central bank, The Fed.
He predicts that the sectors that will be targeted by Foreign Direct Investment will be the sectors that are part of Prabowo-Gibran’s work program. These include the mining, agriculture and communications technology sectors, as well as green energy.
“The hope is that the election results that have been officially announced, and Prabowo-Gibran will support the continuity of the Jokowi government,” he said.
Meanwhile, Bank Mandiri Chief Economist Andry Asmoro said that his party had not calculated the detailed impact of the election results on the flow of foreign capital to Indonesia. However, according to him, the Fed’s decision will greatly determine the entry of foreign capital into the Indonesian market.
“We haven’t calculated the inflow projections in detail, but it should be that outside of the election there is a cut in the Fed’s benchmark interest rate, this will encourage inflows to emerging markets, including Indonesia,” he said.

March 22, 2024, CNBC Indonesia
(https://www.cnbcindonesia.com/news/20240322094214-4-524368/prabowo-gibran-pemenang-pilpres-investasi-ri-diprediksi-moncer-lagi)

The Indonesian government and Vietnam are accelerating the implementation of cooperation in lobster cultivation in the country. This implementation takes the form of opening the door to investment in lobster cultivation by Vietnamese business actors in Indonesia.
“Regarding the development of BBL, there is already an MOU, it remains at the Technical Implementation Agreement level. As a follow-up, we will create a team for this collaboration,” said Minister of Maritime Affairs and Fisheries Sakti Wahyu Trenggono in a written statement, Friday (22/3/2024).
This was expressed by him during a bilateral meeting with Vietnam’s Deputy Minister of Agriculture and Rural Development Phung Duc Tien at the Meet Indonesia event in Nha Trang, today. He explained that collaboration in developing lobster cultivation would provide benefits for both countries.
“Lobster cultivation in Indonesia will grow in terms of quantity and quality, while Vietnam gets clear lobster seeds as raw material for legal lobster cultivation,” he explained.
He said this collaboration is also a solution to suppress the illegal practice of trading lobster seeds which has been proven to threaten the sustainability of the ecosystem and is detrimental to the country. BBL smuggling practices also include IUU Fishing which is prohibited globally.
“In the future, we can create a hatchery for lobster development. We will maintain the quality and price so that it benefits both parties,” said Trenggono.
Additionally, Minister of Maritime Affairs and Fisheries (KKP) Sakti Wahyu Trenggono said that fisheries collaboration between Indonesia and Vietnam has the potential to make the two countries fisheries champions in the region. Trenggono even believes that he is not only a champion in the region, but even at the global level.
“If Indonesia and Vietnam unite, these two countries will become a power in the region,” said Trenggono in a written statement, Thursday (21/3/2024).
Meanwhile, Phung Duc Tien said that lobster cultivation has an important role in encouraging economic growth in his country. For this reason, his party focuses on maintaining the quality of cultivation and sustainability of these shell fishery commodities. Regarding follow-up cooperation, there are already several Vietnamese companies that meet the requirements of the two countries. He proposed a hotline as an official communication channel to accelerate the realization of agreed fisheries cooperation.
“There are several companies in Vietnam that meet the requirements of both countries, and I hope that from Indonesia there will be a draft cooperation document for this in the future,” he said.
As additional information, in the bilateral meeting, the two also discussed the potential for cooperation in developing seaweed, shrimp, tilapia, crab and tuna cultivation. This is a joint step to meet the needs of fishery products in the global market.

March 21, 2024, detikFinance
(https://finance.detik.com/berita-ekonomi-bisnis/d-7255837/ri-percepat-implementasi-kerja-sama-budidaya-lobster-dengan-vietnam)
(https://finance.detik.com/berita-ekonomi-bisnis/d-7253728/kolaborasi-perikanan-ri-vietnam-trenggono-jadi-kekuatan-di-kawasan)