Category: Goverment

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Indonesia and South Korea Central Banks Ink Partnership Deal

Bank Indonesia (BI) and Bank of Korea signed on Wednesday a memorandum of understanding (MoU) to work closer together on monetary-related issues. The MoU covers policy dialogue, technical discussions, capacity building, joint research, and other relevant forms of cooperation in the area of monetary and macroprudential policy, financial system stability, and payment and settlement systems, among other things. The latter issue includes jointly developing cross-border and digital payment infrastructure.

“Going forward, the cooperation also provides a strong framework for partnership in responding to the future challenges and in embarking on various innovations,” BI communication head Erwin Haryono in a statement.

The announcement of the MoU came just a day before the Group of 20 (G20) Finance Ministers and Central Bank Governors Meeting. The MoU adds to the central bank’s long list of cooperation with other central banks and is the second to be signed during Indonesia’s G20 presidency that started on Nov. 1 last year.

“The MoU is expected to serve as an opportunity to substantially strengthen future cooperation with Indonesia, the largest economy in the ASEAN region and one with high growth potential,” said the Bank of Korea in a statement.

On Nov. 8 last year, BI signed a similar MoU with the Central Bank of the United Arab Emirates (CBUAE) to cooperate in developing cross-border payment systems, securing transactions, addressing money laundering, and combatting terrorism financing. In the statement, BI pledged to continue expanding partnerships with many other international partners.

“Such cooperation is an integral part of BI’s contribution to the national economy while also serving as an important development in line with the spirit of the 2022 Indonesia G20 Presidency,” Erwin said.

Feb 17, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/02/17/indonesia-s-korea-central-banks-ink-partnership-deal.html)

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Erick Thohir Says Telkom the Biggest Digital-Telco in ASEAN

            I Minister of State-Owned Enterprises (BUMN) Erick Thohir is optimistic that in the next three years, PT Telkom Indonesia Tbk (TLKM) can become the largest digital telecommunications company in Southeast Asia. Based on the development of tower construction carried out by the company’s subsidiary, PT PT Dayamitra Telekomunikasi Tbk (MTEL) or Mitratel in the last three years.

            “I am optimistic with the planning and implementation of this tower infrastructure development, in the last three years. Telkom can become the largest digital telco company in Southeast Asia,” Erick said in a short video received by CNBC Indonesia, Friday (11/2/2022). Telkom’s task, continued Erick, through the construction of this telecommunication tower is to capture new values that support the company’s income. “New value capture,” said Erick.

            Mitratel development, said Erick, is in line with the agenda of building a 5G ecosystem. This project has started with the 5G Mining Project in collaboration between Freeport and Telkom. “In addition, we have also carried out other initiative programs to support digitalization, including in the financial sector (using artificial intelligence), health (via telemedicine), logistics (integrated logistics system), and transportation (ecosystem for autonomous vehicles),” said Erick.

            Telkom President Director Ririek Adriansyah said “Telkom is currently continuing to accelerate the transformation and structuring of its portfolio for optimal value creation for TelkomGroup, stakeholders and the nation and state. Focus on increasing tower business, data center, infrastructure managed services, cloud computing, big retail data, and services will strengthen Telkom’s position as a business partner providing digital connectivity, digital platforms, and digital services for both domestic and regional”.

Feb 11, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220211145306-17-314759/wow-erick-sebut-telkom-jadi-digital-telco-terbesar-di-asean)

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This is the Official Name of the MotoGP Race in Indonesia

            The MotoGP race held at the Mandalika Circuit now has an official name. In collaboration with Pertamina as a sponsor, the king of the motor racing event is entitled Pertamina Grand Prix of Indonesia. The inauguration of the official name of Pertamina Grand Prix of Indonesia occurred after Pertamina signed a partnership with Dorna. The signing was carried out directly by the President Director of Pertamina, Nicke Widyawati, and the Managing Director of Dorna Sports, S.L, Carlos Ezpeleta (online). The Minister of Stated-Owned Enterprises, Erick Thohir, also witnessed the signing in Jakarta, Wednesday (9/2/2022).

            Pertamina has also become the main sponsor of the Mandalika Circuit. The agreement between the two parties made the name of the Mandalika Circuit officially changed to Pertamina Mandalika International Street Circuit. Pertamina Grand Prix of Indonesia” is expected to help the national economic recovery, increase tourism potential, and advance the motorsports ecosystem in Indonesia. “Hopefully the presence of this SOE synergy will provide a multiplier effect and become part of the national economic recovery, as well as an opportunity for broad global market penetration for Pertamina, BUMN, and SME products located in Mandalika and other areas,” said Nicke Widyawati.

Dorna Welcomes Pertamina

Carlos Ezpeleta positively welcomed the inclusion of Pertamina as the main supporter of the Grand Prix of Indonesia. Previously, Pertamina had been wara-wiri in the Grand Prix racing event by supporting the SAG Pertamina Mandalika team that competed in the Moto2 World Championship.”Dorna Sport is proud to announce a cooperation agreement for the Pertamina Grand Prix of Indonesia. And will ensure that Pertamina, Indonesia, and Lombok Island are at the forefront and become the center of attention on the international stage,” said Carlos.

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Having Super Rare Treasures, Indonesia Becomes China’s Main Competitor

            Indonesia also keeps a super rare ‘treasure’ called Rare Earth Metals (LTJ) or Rare Earth Elements (REE). Based on data from the Ministry of Energy and Mineral Resources (ESDM) as of 2015, the total potential of rare earth metals in Indonesia is estimated at 1.5 billion tons. The potential of these rare earth metals is spread in several areas, especially in the Bangka Belitung Islands, West Kalimantan, Central Kalimantan, Sulawesi, to Papua.

            Citing “Study on Potential Associated Minerals in Tin Mining” released by the Energy and Mineral Resources Ministry of Energy and Mineral Resources Data and Information Center 2017, of the 17 rare earth elements, six elements are indispensable for the development of electric vehicles, namely lanthanum (La ), cerium (Ce), neodymium (Nd) for batteries, praseodymium (Pr), neodymium (Nd), terbium (Tb), and dysprosium (Dy) for generators and electric motors. It is known that obtaining the LTJ can be done in two approaches, namely obtaining from upstream tin mining with a higher grade and lower cost, and from processing tin slag with a relatively lower grade compared to the first one and the cost is relatively higher. In fact, if Indonesia works on and exploits this LTJ seriously, it is predicted that Indonesia will become China’s main competitor in meeting the world’s LTJ demand.

            China is the largest LTJ producer in the world today. This is because China has LTJ deposits in the primary form in the form of by-products from iron ore mining, and secondary in the form of alluvial deposits and lateritic deposits. “Recovery of LTJ will be much greater if it is carried out from upstream of tin mining, capable of reaching 74% by 2045, and Indonesia is predicted to become China’s main competitor in meeting world demand,” reads the executive summary of “The Study of Potential Associated Minerals in Tin Mining” which released by the Ministry of Energy and Mineral Resources in 2017.

            From slag processing, the six highest levels that can be recovered are cerium (16,400 parts per million, ppm), yttrium (13,900 ppm), lanthanum (7,470 ppm), neodymium (6,470 ppm), dysprosium (2,210 ppm), and praseodymium (1,810 ppm). ppm). If the smelter capacity for slag processing is increased to 3,000 tons per year, it will be able to meet world demand up to 1.13% in 2045 amounting to 360 thousand tons. The capacity of 10,000 tons per year can meet world demand around 4.23% in 2056 amounting to 437 thousand tons. 

It should be noted that until now the Government of Indonesia has not issued a special regulation regarding the management of rare earth metals. However, the Director-General of Mineral and Coal (Dirjen Minerba) of the Ministry of Energy and Mineral Resources, Ridwan Djamaluddin, said that currently, the government has formed a team called the rare earth metal-based industry development team. In addition, the government is also preparing a Presidential Instruction (Inpres) to accelerate the development and downstream of rare earth metals.

Feb 08, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20220208112507-4-313699/punya-harta-karun-super-langka-ri-jadi-pesaing-utama-china)

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International Flights Return to Bali

            Indonesian, Singaporean and Australian airlines have set plans to resume international direct flights to Bali after the government further reopened the island’s borders, addressing a key challenge in efforts to boost economic recovery in the tourist-dependent province. Flagship carrier Garuda Indonesia initiated the opening by resuming its weekly flights from Narita International Airport in Japan to I Gusti Ngurah Rai International Airport in Bali on Feb, 3.

I Gusti Ngurah Rai Airport spokesperson Taufan Yudhistira said the Garuda flight was the first international regular flight to land on the island after nearly two years since Indonesia’s border closed due to the COVID-19 pandemic. “There are some other regular flights that have plans to land in Bali, including Garuda from Haneda Airport in Japan,” he said. He went on to say that Garuda would fly from Japan to Bali every Thursday.

The government has allowed Bali to receive international direct flights from 19 countries since October last year but demand has been lackluster, with Tourism and Creative Economy Minister Sandiaga Uno saying that not a single such flight had been scheduled to the island province until January this year. The absence of international flights was a major roadblock in Bali’s tourism recovery plans as foreign tourists generally spend more than domestic tourists and contribute more toward hotel occupancy rates. International travelers who wanted to go to Bali had to take the costly option of flying and quarantining in either Jakarta or Manado before taking a domestic flight to Bali.

Latest Statistics Indonesia (BPS) data show that Bali’s gross regional product contracted 2.91 percent annually in the third quarter of last year as foreign tourist arrivals plummeted from 36 individuals to zero over the same period. As such, the government announced that it would shorten the mandatory quarantine period to five days from seven starting Feb. 4 for travelers with two doses of COVID-19 vaccine. The government also reopened Bali to international travelers from all countries.

Singapore Airlines has announced that it would start regular direct flights to Bali starting Feb. 16. Meanwhile, Sandiaga said that Emirates and Qatar Airways were among the next batch of airlines that would fly passengers to Bali. Australian low-cost carrier Jetstar has scheduled to commence flights from Sydney and Melbourne to Bali from March 1, while Qantas Airways also plans to open the same route beginning March 28.

Feb 07, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/02/06/international-flights-return-to-bali.html)

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Indonesia Now Export Biomass to Japan and the European Union

            The largest biomass energy provider in Indonesia, PT Internasional Green Energi, opened access to export its products to Japan and the European Union after the company won the Green Gold Label (GGL) Certificate. The certificate indicates that the production of palm kernel shells for biomass products from the company comes from sustainable sources. International Director of Green Energy (IGE) Dikki Akhmar said that the certificate opened up more access for companies to export biomass products to a number of major import countries, such as Japan and the European Union. So far, many countries and regions have given quite stringent requirements to receive biomass products.

            “We have met international standards regarding the need for sustainability certification for products sold or exported. IGE means that it is credible to export to countries that require sustainability certification,” he said in an official statement, Saturday (29/1/2022). The GGL certificate received by IGE is awarded by the Control Union, a certification body based in Zwolle, The Netherlands. GGL standardization is one of the pioneers of sustainable certification schemes for biomass products that have been recognized and applied worldwide.

            The GGL standardization audit process is carried out covering traceability of oil palm plantations from which shell supplies are supplied, energy producer utilities, including energy and carbon data that must be provided in the entire supply chain system.

Jan 29, 2022, DetikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-5920334/top-ri-kini-bisa-ekspor-biomassa-ke-jepang-dan-uni-eropa)

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IMF Prediction: The Indonesian economy grew 5.6% in 2022

            The International Monetary Fund (IMF) issued the latest forecast on the Indonesian economy this year and in 2023. The IMF estimates that the Indonesian economy is able to grow 5.6% and 6% respectively. The IMF said the Indonesian economy was supported by the still-high price of global commodities, easing of mobility and sustainable policies, and acceleration of vaccination.

            “Indonesia continues to respond with brave, comprehensive, and well-coordinated policy measures to protect the lives and livelihoods of the impact of the covid pandemic,” the IMF wrote. Even though the risk of uncertainty is still high. Among other things, the presence of the latest Covid-19 variant, Omicron was able to reprimand the mobility and economic recovery. Then there is also a risk of changes in developed countries that become more stringent, so they are able to make the financial market shake.

            Even though there is a positive side, the price of commodities is still at a high level and helps state revenue. Especially next year is the last for the deficit of the State Revenue and Expenditure Budget (APBN) above 3% of GDP. In terms of inflation, the IMF estimates to be maintained at a low level. There is an increase but will take place gradually this year.

Jan 26, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20220126105848-4-310528/ramalan-imf-ekonomi-ri-tumbuh-56-pada-2022)

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The Boramae Fighter Jet Project Moves On!

            Minister of Defense, Prabowo Subianto could smile widely because the continuation of the South Korean-Indonesian KF-21 Boramae fighter jet project is increasingly showing progress. The latest, prototype aircraft numbers 03 and 04 are undergoing development at the Korea Aerospace Industries (KAI) production facility in the city of Sacheon. This fighter jet has a tandem-seat configuration, meaning that the rear seat is occupied by the navigator. This aircraft can be useful for combat training or reconnaissance.

            One of the visible improvements is that the fins of the two prototypes have been colored. Aircraft 03 gets a touch of blue dominant color with white and red designs, also written KF-21 003. Meanwhile, aircraft 04 has a touch of yellow domination with additional white and black stripes and written KF-21 004.

            South Korean authorities have not provided further statements regarding the latest developments of the fighter jet. However, reported by the Korea Joong Ang Daily, the KF-21 fighter jet project called KF-X (Korean Fighter eXperimental) and IF-X in Indonesia is said to be the most expensive military project in Korean history, with a price tag of around 8.5 trillion. won for development only.

            Indonesia plans to produce 48 KF-21 jets locally after receiving one prototype and technical data. During a state visit to Korea in September 2018, President Joko Widodo asked South Korean President Moon Jae-in to reduce 5% of payment obligations. Initially, Indonesia was required to pay 20% but there was a demand that it fell to 15%.    

Through renegotiations since October 2018, the two countries narrowed their differences over Indonesia’s current 20 percent contribution ratio, agreeing on payments in several other forms. However, according to the details of the renegotiated cost-sharing agreement announced by the Korean Defense Acquisition Program Administration (DAPA) last November 2021, the two countries decided to maintain a 20% cost-sharing ratio for Indonesia and a payment schedule from 2016 to 2026.

Jan 24, 2022, CNBC Indonesia

(https://www.thejakartapost.com/world/2022/01/25/indonesia-to-take-over-airspace-from-singapore-in-quid-pro-quo-deal.html)

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Jokowi Has Inaugurated, Ready to Use LPG Substitutes

            President Joko Widodo on (24/01/2022), inaugurated the groundbreaking procession for the coal gasification project to become Dimethyl Ether (DME) in the Tanjung Enim Industrial Estate, Muara Enim Regency, South Sumatera. The President said the DME project is very important because it can act as a substitute for Liquefied Petroleum Gas (LPG), so that it can reduce LPG imports which so far have reached 6-7 million tons per year or around 80% of domestic LPG needs.

            “I have said many times about downstream, industrialization. The importance of reducing imports. I ordered this six years ago but thank God, today even though in the long term it has not been able to start, thank God we can start today, groundbreaking the coal downstream project has become DME,” he said.

            Jokowi said that so far, Indonesia’s LPG imports were huge, around Rp80 trillion from the Rp100 trillion needed. On the other hand, the government still provides subsidies of around Rp60-70 trillion per year. “My question is, do we want to continue to do this? Continue to import? The profit is in other countries, which also create job opportunities in other countries, even though we have the raw material, namely coal which is converted into DME,” he said.

            The DME project whose groundbreaking ceremony was inaugurated is a project worth Rp33 trillion which was jointly carried out by PT Bukit Asam Tbk (PTBA), PT Pertamina (Persero), and Air Products & Chemicals Inc (APCI), a petrochemical company from the United States. The investment for the construction of this project is entirely carried out by Air Products, while PTBA will play a role in supplying coal, and Pertamina as the buyer of DME products later.

            The DME project in Tanjung Enim is planned to operate for 20 years. With the utilization of 6 million tons of coal per year, this project can generate 1.4 million DME per year to reduce LPG imports by 1 million tons per year, to improve the trade balance. This DME project can already be operational and will begin to be distributed as early as mid-2024.

Jan 24, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/news/20220124120227-4-309864/sudah-diresmikan-jokowi-siap-siap-ya-bun-pakai-pengganti-lpg)

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Jokowi Directly Reviewing Mandalika 2022 MotoGP Preparations

            President Joko Widodo visited Lombok, West Nusa Tenggara on Thursday (13/1). One of Jokowi’s agendas there is to directly review the preparations for the 2022 Mandalika MotoGP. Jokowi and First Lady Iriana departed from Jakarta at around 07.00 WIB. They used the Indonesia-1 Presidential Aircraft from the Halim Perdanakusuma Air Force Base.

            “Arrived at Lombok International Airport Zainuddin Abdul Madjid, Central Lombok Regency, President Jokowi is scheduled to review a number of airport facilities that will be used by MotoGP 2022 participants and spectators,” quoted from a written statement by the Presidential Secretariat. After that, Jokowi will visit the Mandalika Special Economic Zone (SEZ), Central Lombok Regency. He will review the readiness of the bypass route and supporting facilities in the area where the 2022 MotoGP will be held.

The former mayor of Solo will also inaugurate the launch of In journey Holding BUMN for Tourism and Support. The event was held at Kuta Mandalika Beach, Central Lombok Regency. This is Jokowi’s second working visit to Mandalika in the last three months. On November 12, 2021, Jokowi visited Mandalika to review the preparations for the Superbike World Championship (WSBK). At that time, Jokowi tested the circuit that would be used in WSBK. He rode a motorbike accompanied by a number of officials, such as PUPR Minister Basuki Hadimuljono and MPR Chairman Bambang Soesatyo.

Dorna CEO: MotoGP Mandalika in Indonesia is Important

            CEO of Dorna Sports, Carmelo Ezpeleta, revealed how important the MotoGP Mandalika 2022 in Indonesia is for the future of Grand Prix racing. Indonesia for the first time since 1997 will hold a MotoGP race. The Mandalika Circuit, Central Lombok, will hold the Mandalika MotoGP race on March 18-20, 2022.

            Ezpeleta at the EFE Forum Sports Business Days event in Spain, Thursday (13/1), revealed how important the Mandalika MotoGP race is in Indonesia. For Ezpeleta, the Southeast Asian region is very important for the MotoGP event, that’s why holding a race in Indonesia is very necessary. “Universality is very important for MotoGP, especially above all, when it is the Southeast Asian region,” said Ezpeleta as quoted by Mundo Deportivo.

            There are a total of 21 races in MotoGP 2022, including the Mandalika MotoGP in Indonesia. Ezpeleta said one of the conditions for a country to be able to hold a MotoGP race is that there is no long quarantine regulation. “The truth is, if they tell us that we have to be quarantined for 14 days, the answer is clear: No, I’m not coming! That’s the limit.” Said Ezpeleta. Currently, the Indonesian government is still implementing quarantine rules for 14 days, to prevent the new variant of Covid-19, Omicron. We’ll just see the regulations related to quarantine rules in the future.

January 13, 2022, CNN Indonesia

(https://www.cnnindonesia.com/nasional/20220113075441-20-745976/jokowi-tinjau-langsung-persiapan-motogp-mandalika-2022)

January 14, 2022, CNN Indonesia

(https://www.cnnindonesia.com/olahraga/20220114114159-156-746592/ceo-dorna-motogp-mandalika-di-indonesia-sangat-penting)