Category: Goverment

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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.

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Indonesia Exports Refrigerators to Cambodia to Japan Rp 5 Trillion

Indonesia exports refrigerators to Cambodia through PT Panasonic Manufacturing Indonesia (PMI). This is related to the import substitution program and activities to increase exports of domestic products.
“I convey my highest appreciation to all ranks of Panasonic Manufacturing Indonesia for their support for the government’s efforts to encourage export activities of the electronics industry,” said Industry Minister Agus Gumiwang in a statement, Monday (26/9/2022).
According to Agus, this effort is a clear proof that the synergy between the government and industry players is going well. “The receipt of this Panasonic refrigerator product proves that the quality of electronic products made by Indonesian children has been recognized by the international market,” he added.
Refrigerator is one product that has a high export value in Indonesia. In 2021, the refrigerator export value will be US$ 374.4 million or Rp5.65 trillion (exchange rate of Rp15,014) of which 40% comes from the contribution of PT PMI which has exported refrigerators to Asian and Middle East markets.
Cambodia is the 8th country for PT PMI in terms of refrigerator export destinations besides Japan, Hong Kong, Malaysia, Myanmar, UAE, Kuwait and Oman. Apart from refrigerators, PT PMI has also exported other electronic products such as audio products, water pumps and washing machines.

September26, 2022, detikFinance
(https://finance.detik.com/industri/d-6312873/ri-ekspor-kulkas-ke-kamboja-hingga-jepang-rp-5-t)

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Indika, Foxconn Sign JV Agreement on EV Factory

Electric vehicle (EV) company PT Mitra Motor Group (MMG), a subsidiary of coalminer PT Indika Energy, created a joint venture (JV) with EV component producer Foxteq Singapore on Sept. 22. According to an information disclosure released on Friday, the JV will be called PT Foxconn Indika Motor (FIM), which is licensed to build EVs with four wheels or more, produce batteries and provide management consulting services.
“MMG’s participation in FIM is the company’s step toward expanding its business activities into the electric vehicle sector, especially four-wheeled electric vehicles, in Indonesia,” Indika Energy corporate secretary Adi Pramono said in the disclosure.
Focusing on manufacturing commercial electric cars and batteries, the JV was followed by an investment of Rp39 billion (US$2.5 million) from MMG, equivalent to 60 percent of the paid-up capital. An affiliation of Hon Hai Technology Group, known as Foxconn, Foxteq Singapore paid in capital of Rp 29 billion, the equivalent of 40 percent of the paid-up capital.
Indika Energy director and group chief investment officer Purbaja Pantja said that the company saw huge potential in EV development in Indonesia. “This collaboration will create a comprehensive electric vehicle ecosystem that aims to support Indonesia in becoming one of the leading electric vehicle and battery ecosystem developers,” Purbaja said.
Foxconn battery strategy head Troy Wu said that this JV showed the firm’s commitment to developing a sustained EV ecosystem in the country. “Indonesia is the largest economy in Southeast Asia and holds the current G20 presidency and the next ASEAN chairmanship, and has committed to an ambitious net-zero emission target,” Wu added.
Previously, another Indika Energy EV manufacturing arm PT Ilectra Motor Group (IMG) launched the indigenous fully electric Alva One Motorcycle, which will be manufactured in a factory in Cikarang, West Java. In order to develop the two-wheeler brand and its supporting ecosystem, IMG raised a total of US$7.5 million in May from Alpha JWC Ventures, Horizon Ventures, equal to 21.4 percent of the company’s shares, while Indika Energy added another $7.5 million.

September23, 2022, The Jakarta Post
(https://www.thejakartapost.com/business/2022/09/23/indika-foxconn-sign-jv-agreement-on-ev-factory.html?)

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Astra Invests $259m in BJJ to Form Digital Bank

Diversified conglomerate Astra International has completed a transaction to acquire a stake in private lender Bank Jasa Jakarta (BJJ) for Rp 3.88 trillion (US$259 million) with a view to forming its own digital bank. The transaction was done through Astra subsidiary PT Sedaya Multi Investama, also known as Astra Financial, alongside WeLab Sky, a consortium led by Hong Kong-based fintech platform WeLab, with each entity to own 49.56 percent of BJJ.
“BJJ as a digital bank will complement many financial products and services that we could offer to our customers,” Astra financial director in charge Suparno Djasmin said in a statement on Monday.
Astra’s acquisition comes after a wave of new digital banks in the country, like GoTo-backed Bank Jago, CT Corp-backed Allo Bank and Sea Group-backed Sea Bank. Digital banks have gained traction in Indonesia, where their investors look to capitalize on the country’s large market with consumers who are accepting of the fintech industry.
Simon Loong, founder and group CEO of WeLab, said the acquisition would allow the fintech firm to expand its digital bank services beyond Hong Kong. In 2018, WeLab partnered with Astra to form a fintech lending company, PT Astra WeLab Digital Arta.
“Our partnership with Astra will support our strategic focus to increase our cooperation and business with partners in expanding the scale and reach to strengthen our network in pan-Asia fintech platforms,” Simon said in the same statement.

September20, 2022, The Jakarta Post
(https://www.thejakartapost.com/business/2022/09/20/astra-invests-259m-in-bjj-to-form-digital-bank.html?)

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Jeju Air to Open Direct Manado-South Korea Flight in Tourism Bid

South Korea’s Jeju Air has inked a deal with the North Sulawesi administration to offer direct flights between Manado and South Korea. Jeju Air CEO Kim E-bae and North Sulawesi Governor Olly Dondokambey signed the agreement at the Indonesian ambassador’s residence in Seoul on Friday.
“I’m very grateful because we are sure that our company can help with Korean and Indonesian economic development. We will try our best to open direct flights to Manado, Bali, Lombok, Jakarta and Yogyakarta,” Kim said, noting that such flights were in the pipeline.
Olly said North Sulawesi was well situated for the deal, being only five hours by plane from South Korea, and he expressed hope that the flight route could boost tourism for both North Sulawesi and South Korea.
“What makes North Sulawesi ideal is how relatively close it is to South Korea. North Sulawesi’s location and geostrategy offer benefits for water transportation to and from Bitung Harbor, which is not far from Sam Ratulangi Airport. Manado people love to travel. So, this deal is beneficial to both parties. I hope Mr. Kim and the Busan Authority can come to North Sulawesi in the near future to see other potential projects we can work on together because Manado and South Korea have a lot of similarities. For example, you have a lot of ginseng plants, and liquors too,” said Olly.
Tourism and Creative Economy Minister Sandiaga Uno said the new route could increase international tourists’ awareness of attractions near Manado, particularly Likupang, a government “super priority” tourist destination. “The Tourism and Creative Economy Ministry fully supports the signing of this deal, as it can have a multiplier effect in the future for tourism and the creative economy in North Sulawesi. This route can serve as an opportunity for local creative industry players to showcase quality products and services to South Korean tourists,” Sandiaga said.

September20, 2022, The Jakarta Post
(https://www.thejakartapost.com/business/2022/09/20/jeju-air-to-open-direct-manado-south-korea-flight-in-tourism-bid.html?)

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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

(https://www.thejakartapost.com/business/2022/09/15/ri-foreign-trade-shows-no-sign-of-slowing-down.html?)