Category: Goverment

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China Buys Indonesian CPO, the Value is IDR 40 Trillion

Indonesian businessmen and China have signed contracts to purchase crude palm oil (CPO) products and their derivatives. The export value of the signed CPO reached US$ 2.6 billion, equivalent to Rp. 40.3 trillion (exchange rate of Rp. 15,500). The memorandum of understanding on trade cooperation was signed by the China Chamber of Commerce for Import and Export for Foodstuffs, Native Produce and Animal By-Products (CFNA) with four Associations for Indonesian palm oil products and their derivatives.

 Minister of Trade Zulkifli Hasan alias Zulhas previously said that the agenda for signing a trade contract at the Ministry of Trade signed the purchase of 1 million tons of CPO products. Where the figure was previously planned during President Joko Widodo’s meeting with Chinese President Xi Jinping. However, not long ago the Ministry of Trade reported that the trade agreement that had been made suppressed the purchase contract of 2.5 million tons with a transaction value of US$ 2.6 billion. The transaction was carried out in the signing of 16 trade contracts by 9 Indonesian business actors with 13 Chinese buyers assisted by the China Chamber of Commerce for Import and Export for Foodstuffs, Native Produce and Animal By-Products (CFNA). Zulhas also expressed a request to make it easier for other Indonesian products to enter the Chinese market. In this way, it is hoped that the cooperation between the two countries will continue to be profitable.

For information, in January to August 2022 exports of Indonesian palm oil products and their derivatives to China reached US$ 3.6 billion. Based on data from the Central Statistics Agency processed by the Ministry of Trade, the export volume of palm oil products and their derivatives from Indonesia to China in 2021 will reach 6.6 million tons. That value increased 14.17% from the previous year. In 2021, the export value of Indonesian palm oil products to China reached US$ 6.06 billion, an increase of 82.87% from the previous year. This increase was due to the increase in world CPO commodity prices in the last year.

On the same occasion, Deputy Minister and Deputy Minister for International Trade of China Wang Shouwen, said he acknowledged that Indonesia had been a source of palm oil for China for 7 consecutive years. His party is committed to continuing to improve bilateral relations, both for CPO imports and others.

November 11, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6400751/china-borong-cpo-ri-nilainya-rp-40-t)

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Indonesia’s GDP Growth Accelerates to 5.72 Percent

Amid concerns over global economic activity and reduced cross-border trade, Indonesia has posted another solid GDP reading, setting the country apart from many others ahead of the Group of Twenty (G20) Summit to be hosted in Bali this month. Indonesia’s GDP was up 5.72 percent year-on-year (YoY) in the third quarter, Statistics Indonesia reported in an online press briefing on Monday. That exceeds the 5.44 percent YoY growth rate recorded in the second quarter and 5.01 percent YoY logged in the first. The domestic economy is benefiting this year from relaxed pandemic restrictions at home and higher prices for key export commodities in global markets.

The figures presented on Monday are lower than forecasts from state-owned Bank Mandiri and financial research firm Moody’s Analytics, which had predicted third-quarter GDP growth of 6 percent YoY and 6.01 percent YoY, respectively. Compared to the second quarter, Indonesia’s GDP was up 1.81 percent, which is lower than Bank Mandiri’s forecast of 2.09 percent and marks a slowdown from the quarterly growth of 3.72 percent registered in the second quarter. Other economic indicators also pointed up in the third quarter, such as a trade surplus that increased 12.58 percent YoY, retail sales that rose 5.52 percent YoY, and income tax receipts that were up 26.10 percent YoY.

“The pattern of the preceding years shows that quarterly growth in the third quarter is always slower than in the second quarter because of seasonal factors. We are an open economy, hence very dependent on major trading partners,” BPS head Margo Yuwono said on Monday.

Indonesia’s latest GDP report comes after several other major economies also posted improved growth for the same quarter. Household spending, which currently accounts for 50.38 percent of the economy, was up 5.39 percent YoY in the third quarter. Investment, also known as gross fixed capital formation, was a drag on overall GDP growth as it was up just 4.96 percent YoY. International trade contributed to annual economic growth due to stellar exports of coal, processed oil, and natural gas, which grew by 21.64 percent YoY. However, imports outpaced exports with a growth of 22.98 percent YoY, driven by increased industrial imports of capital goods and raw materials. Government spending, meanwhile, continued to decline, dropping 2.88 percent YoY due to lower state budget spending on goods and services. Transportation and warehousing remained the sector logging the highest growth with 25.81 percent YoY, followed by hospitality services with 17.83 percent YoY. Manufacturing sector production, meanwhile, grew 4.83 percent YoY, while mining expanded only 3.22 percent YoY and agricultural output rose at a lackluster 1.65 percent YoY.

November 7, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/11/07/indonesias-gdp-growth-accelerates-to-5-72-percent.html?

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Jakarta-Surabaya High Speed Train Wants To Be Built, Here’s The Route

The government plans to continue the high-speed rail project. After Jakarta-Bandung, the high-speed train project will continue to Surabaya. With the fast train, Jakarta-Surabaya can be reached in 4 hours. The Jakarta-Surabaya high-speed rail project will pass through a number of areas.

Minister of Transportation Budi Karya Sumadi explained that the Jakarta-Surabaya high-speed rail plan is being prepared. According to him, the planning would not be possible without the Ministry of Public Works and Public Housing (PUPR). Budi said the project is planned to cross Jakarta, Bandung, Yogyakarta, Solo to Surabaya.

“We really control this fast train. The planning concept is being carried out together, because it is impossible without PU we can carry out. So the plan is Jakarta, Karawang, Bandung, Kertajati, Purwokerto, then Jogja, Solo, Madiun, Surabaya for 4 hours. Pak President (Jokowi) as a visionary leader laid the foundations of the MRT, which we will oversee next will lay the foundations of the high-speed train. Our first stage is to make Jakarta-Bandung, now it must be guarded, the more people who guard it, the better,” he explained in National Seminar on ‘Sustainable Smart Transportation’, Thursday (27/10/2022).

According to Budi Karya, the construction of the Jakarta-Surabaya high-speed train can be carried out.

October 28, 2022, detikFinance

(https://finance.detik.com/infrastruktur/d-6373692/kereta-cepat-jakarta-surabaya-mau-dibangun-ini-rutenya)

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Indonesia Extends Gas Exports to Singapore by Five Years

The Energy and Mineral Resources Ministry has extended its contract to supply gas to Singapore for five years from the initial expiry date of 2023. Energy and Mineral Resources Minister Arifin Tasrif told reporters that the government would continue supplying gas to the city-state until 2028, having considered domestic supply and demand.  He added that the volume exported under the extended contract would be lower than before to prioritize domestic demand.

“[Indonesia] still has [adequate] gas reserves, so we’re extending [gas exports to Singapore] for the next five years. We need to help each other,” he said on Friday.

Upstream Oil and Gas Regulatory Task Force (SKK Migas) head Dwi Soetjipto explained that declining gas export volumes were due to increased demand from the domestic fertilizer industry.  He estimated a 30 to 40 percent cut from the previous gas contract.

“We predict that [gas] prices will increase due to high demand,” Dwi said, also on Friday. He added that the government had yet to sign the five-year contract extension but expected it to be signed in November.

The energy minister announced in 2020 a plan to stop supplying gas to the city-state in the hope of creating added value for the nation’s natural gas and reducing its trade balance deficit.

Indonesia’s gas exports to Singapore come from several sources, including from the Corridor Block operated by ConocoPhillips (Grissik) Ltd., Repsol’s Talisman Corridor Ltd. and Pertamina upstream oil sector arm Pertamina Hulu Energi Corridor, which has a supply of 300 million standard cubic feet per day (mmscfd). Singapore’s natural gas consumption in 2020 was approximately 1.22 billion cubic feet per day (bcfd), according to a 2021 British Petroleum (BP) statistical review.

October 28, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/10/28/indonesia-extends-gas-exports-to-singapore-by-five-years.html?)

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Indonesian Online Transactions of IDR 401 Trillion, Ministry of Trade Wants to Digitize 250 Thousand MSMEs

Minister of Trade Zulkifli Hasan (Zulhas) is targeting 250,000 small, micro and medium enterprises (MSMEs) to be digitized through electronic/e-commerce (e-commerce) platforms. To that end, the Ministry of Trade is strengthening collaboration with GoTo (Gojek and Tokopedia). It was noted that throughout 2021, online shopping was able to generate transactions of up to IDR 401 trillion. He hopes that with the digitization of MSMEs, especially people’s market traders, the number of transactions can continue to increase.

“To achieve the target of 250,000 digitized MSMEs, we are ready to continue to work with PT GoTo. I believe GoTo can play an important role as a digital platform that integrates on-demand services through entities within the company,” Zulhas said in a written statement, Thursday ( 27/10/2022). He conveyed this at the Advanced Digital Conference: Market Digitization Via the GoTo Ecosystem today, Thursday (27/10) in Jakarta. This event was held by Gojek, Tokopedia, and Goto Financial.

Digitizing the people’s market is one of the tasks given by President Joko Widodo to the Ministry of Trade. Because, this encourages people’s market traders to compete with traders who sell online.

Zulhas explained that his party is collaborating with various market locations/ride hailing to help the merchants’ onboarding process into the application. One of the things that has been done is collaborating with Tokopedia to push the market into the application. It is known, currently the program has been running in 10 markets throughout Indonesia.

Due to the COVID-19 pandemic, people’s spending patterns in the era of e-commerce development have changed. These changes increase the increase in consumers who shop through e-commerce. In 2021, consumers who shopped through e-commerce were recorded at 25% from the previous year which was only 11%.

October 27, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6373272/transaksi-online-ri-rp-401-t-kemendag-mau-digitalkan-250-ribu-umkm)

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Instant Noodles to Indonesian Coffee ‘Fly’ to Poland

The government is boosting exports to various countries. Central and Eastern Europe can be a potential market for Indonesian export products, with Poland being the main entry point. Poland has great potential to channel export products from Indonesia to the European Union, Western and Southern Europe, and Central Asia. Throughout 2021, Indonesia’s export value will reach US$ 1.78 billion to the region, with Poland being the highest export destination.

This data is contained in the book Road to Poland which was launched at the Indonesia Central and Eastern Europe (INACEE) Business Forum 2022 event on October 19, 2022, with the theme ‘Connecting Businesses’. This forum facilitates the signing of business agreements between Indonesian business actors and partners in several Central and Eastern European countries.

The book Road to Poland reviews the opportunities, developments and projections of the Polish economy amidst the dynamics of global trade developments, including with Indonesia. This book reviews the competitiveness of Indonesia’s leading export products to Poland, including the potential for export development and cooperation or business opportunities that can be increased between the two countries.

“This is a form of adaptation in finding solutions to overcome today’s world challenges, in an effort to increase cooperation and collaboration in the economy, trade, investment and other fields between Indonesia and partner countries, especially in the Central and Eastern Europe region,” said the Head of the Division. Indonesia Eximbank Institute (IEB Institute) LPEI Rini Satriani, written Thursday (27/10/2022).

Poland is Indonesia’s largest export destination for Central and Eastern Europe with a total export value of US$ 654.6 million in 2021, up 48.40% (YoY) and January-August 2022 of US$ 662.30, up 54.13% (YoY). Some Indonesian products that are in demand in Poland include instant noodles, coffee candy, batik, furniture, coffee and palm oil. Entering new markets is a challenge for exporters.

October 27, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6371540/mi-instan-sampai-kopi-asal-ri-terbang-ke-polandia)

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Indonesia to Rank Fourth for Airline Passengers in 2040

Airports Council International (ACI) Asia-Pacific says Indonesia is poised to become one of the fastest-growing markets for the airline industry despite the current global economic slowdown and relatively slow growth in the Asia-Pacific region. ACI director general Stefano Baronci said that, according to an ACI projection, Indonesia would rank fourth in the world in terms of passenger traffic by 2040.

“Indonesia is seen to be in a better position than other countries in the region to see its passenger traffic bounce back to the pre-pandemic levels,” Baronci told on Tuesday.

He said he expected Indonesia to grow much faster than other countries in the region at approximately 11 percent annually up to 2040, given the archipelagic nation’s geography and its economic growth forecast. ACI forecasts indicate that close to 19.7 billion passengers are expected to traverse the world’s airports in 2040, more than double the 9 billion passengers recorded in 2019. The Asia-Pacific region is expected to have approximately 8.9 billion passengers by 2040.

“So, what [does this mean for] Indonesia? [Stakeholders need to] improve predictability and certainty,” he said, adding that every country had its own capacity and level of maturity to find a way to reach that objective.

In Indonesia’s case, he referred to the implementation of the airport collaborative decision-making (ACDM) process currently taking place in Jakarta as a way to coordinate ground operations and air traffic. The ACDM is a process in which the stakeholders of operations, such as airport operators and air traffic controllers share information to improve policies, planning, real-time coordination as well as decisions regarding operations.

October 21, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/10/21/indonesia-to-rank-fourth-for-airline-passengers-in-2040.html?)

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Minister of Trade, Zulkifli Hasan Says Indonesia
Could Become a Global Smartphone Production Base

Minister of Trade Zulkifli Hasan (Zulhas) released the export of smartphones produced by PT Samsung Electronics Indonesia (PT SEIN) in North Cikarang, Bekasi Regency, West Java. PT SEIN succeeded in exporting 8 million units of smart phones from 2018 to the third quarter of 2022. Seeing this achievement, Zulhas said that Indonesia could become a production base for smart cellular phones to be exported to various countries.
“The release of PT SEIN’s exports is a tangible form of the role of Indonesian business actors who continue to encourage exports to various Indonesian trading partner countries. In addition, this export achievement can certainly encourage Indonesia to become a production base for electronic products, including cellular phones (smartphone),” said Zulhas in a written statement, Thursday (13/10/2022).
Zulhas explained that the electronics sector is a leading sector that is included in the Making Indonesia 4.0 priority. In fact, it is included in the 4th largest export component in Indonesia’s export structure. In the January-July 2022 period, he said, the value of Indonesia’s electronic exports reached US$ 9.43 billion. Or up 18.9% from the same period the previous year, amounting to US$ 7.93 billion.
Meanwhile, in 2021, the value of Indonesia’s electronic exports will reach US$ 14.1 billion with a positive five-year trend (2017-2021) of 6.54%. In the same year, the export value of Indonesian cellular phones (HS 851712) reached US$ 305.8 million.
To note, Making Indonesia 4.0 is a Government program in preparing Indonesia to face the digital industrial era 4.0 which is focused on 7 industrial sectors. Namely, food-beverage, textile, automotive, chemical, electronic, medical devices and pharmaceuticals, which account for 70% of industrial gross domestic product (GDP), 65% of industrial exports, and 60% of Indonesia’s industrial workforce.

October 13, 2022, detikFinance
(https://finance.detik.com/berita-ekonomi-bisnis/d-6346684/zulhas-sebut-ri-bisa-jadi-basis-produksi-smartphone-global)

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Jokowi Opens Up Why He Is Hard to Build Infrastructure in Indonesia

The government in the era of President Joko Widodo (Jokowi) continues to encourage domestic infrastructure development. Jokowi emphasized that the decision was one of the efforts to increase competitiveness with other countries. Jokowi explained that infrastructure is the most important fundamental foundation to make this happen.
“Without it (infrastructure), we shouldn’t dream of competing with other countries. So, why do we build roads, build ports, build dams massively, because in the future we will compete with other countries,” he said. Jokowi in his speech at Balai Sarbini Jakarta, Tuesday (11/10/2022).
Jokowi said that in the next 5-10 years, the benefits of the development carried out from today will be seen. Although in the beginning there was a bit of sacrifice required. “This is a fundamental thing, although it may hurt at first, but in the next 5-10 years the benefits will be seen from the development that we are doing today,” he said.
Furthermore, Jokowi also discussed the issue of downstream industrialization which is no less important. According to him, the export of goods which are dominated in raw form makes Indonesia lose the opportunity to obtain additional value.
“We have been independent for 77 years, we always export raw materials. We export raw nickel, we export raw copper, we export oil in unprocessed raw form. We export tin, we export CPO palm, but not in semi-products. finished goods or finished goods,” said Jokowi.
Therefore, he said the Indonesian government would gradually stop exports of raw materials. Like the stop nickel exports that have been carried out since 3 years ago.

October 11, 2022, detikFinance
(https://finance.detik.com/infrastruktur/d-6341608/jokowi-buka-bukaan-alasannya-getol-bangun-infrastruktur)

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Indonesia’s Manufacturing PMI at Eight-Month High

Indonesian factories are in good shape as a key forward-looking indicator that has reached the highest level in eight months thanks to strong order books. According to London-based data firm IHS Markit, part of S&P Global, Indonesia’s manufacturing purchasing managers’ index (PMI) rose to 53.7 in September. Up 2 points from August, that is the highest reading since January for the index, which measures factory activity based on a survey of 400 firms.
“Latest survey data was consistent with the strongest improvement in the health of Indonesia’s manufacturing sector since January,” S&P Global economist Laura Denman said in a press statement on Monday.
Indonesia’s manufacturing PMI has been on a steady upward trend since a low point in May, when it tanked to 50.8 points, though still signifying an expansion in activity by remaining above the threshold of 50 points. Indonesia’s performance was slightly above the ASEAN headline PMI of 53.5 points and the second-best among emerging economies of the region, trailing only behind Thailand’s 55.7 points. The Philippines and Vietnam followed Indonesia with 52.9 points and 52.5 points, respectively, while Malaysia’s manufacturing PMI fell into contraction territory with a reading of 49.1 points, down from 50.3 points in August and the lowest figure this year.
In response to the latest manufacturing PMI readings, Coordinating Economic Minister Airlangga Hartarto said average manufacturing utilization had increased since August, which included expansion in the motor-vehicle industry and the food-processing industry. “The expansion reflects a consistent recovery in the manufacturing industry, at least in the last few months, and a domestic economic recovery after the [COVID-19] pandemic,” Airlangga said on Monday.
Industry Minister Agus Gumiwang said that a production increase in September was visible in the electronics industry, which had seen significant laptop production due to government procurement, and in the non-metal mineral industry, with huge demand for cement, ceramics and glass due to public infrastructure and private-property construction. “Production activity played a key role in the higher readings in the index, which are supported by high domestic demand,” Agus said on Monday.