Tag: Indonesia and China business

President Joko Widodo (Jokowi) has just received a delegation from the World Bank. During the meeting, the World Bank delegation praised Indonesia’s economic development. The delegates who attended were Axel van Trotsenburg as Managing Director of Operations, Manuela V Ferro as Regional Vice President of East Asia and Pacific, and Satu Kahkonen as Country Director of Indonesia and Timor-Leste. At the meeting, Jokowi was accompanied by the Minister of National Development Planning (PPN)/Head of Bappenas Suharso Monoarfa. Suharso said the World Bank congratulated Indonesia’s G20 presidency. The World Bank delegation also has high hopes for Indonesia in this G20 presidency.

            “The World Bank hopes that Indonesia can do something with this presidential opportunity. Then the President said that he hopes that later there will be a communique that can be produced at the next meeting in Bali,” said Suharso in his statement, Thursday (14/7/2022).

            The World Bank also gives a positive assessment of Indonesia’s current economic development. Among countries that are currently facing a difficult situation, Indonesia is relatively able to maintain economic stability by maintaining an economic growth rate of around 5%. The World Bank also advises Indonesia to boost its economic growth from other sources, such as exports. Regarding exports, the World Bank considers the need for a structural reform that can reduce tariffs. The World Bank also stated its commitment to support Indonesia in terms of food security and energy transition, including praising Indonesia for preparing a roadmap for a green economy going forward.

            “Indonesia has done it in stages and then has also stated the World Bank’s commitment to supporting financing in energy, blue economy, food security, mangroves, and climate change, approximately around US$ 1.6 billion,” Suharso Monoarfa said.

July 14, 2022, DetikFinance(https://finance.detik.com/berita-ekonomi-bisnis/d-6179119/bertemu-jokowi-delegasi-bank-dunia-puji-ekonomi-ri

The Indonesian government targets the rail network in the country to reach 10,524 kilometers (km) by 2030. The construction will cost up to Rp853 trillion. The target is already in the Decree of the Minister of Transportation Number 296 of 2020, in which there are several efforts to develop trains according to the National Railway Master Plan (RIPNAS).   

            “The implementation of the main program requires a large amount of funding, referring to the RIPNAS, there is a budget requirement of almost Rp. 853 trillion with a proportion of alternative financing of 68% and the State Budget of 32%,” said Director General of Railways of the Ministry of Transportation Zulfikri in a hearing (RDP) with Commission V DPR RI, Wednesday (6/7/2022).

            The priority trains to be built are the network in Sumatra and Sulawesi, the construction of double track and electrification of the Java main line, as well as the operation of high-speed trains on the island of Java. In addition, the financing also includes the availability of passenger train facilities, consisting of 2,839 locomotives and 34,178 train carriages. Furthermore, freight train facilities are 2,475 locomotives and 48,364 carriages.

            “This is an effort to create a competitive, integrated, and responsive railway to developments. Another target is for railways to become the backbone of inter-city, urban, and freight mass transportation,” Zulfikri said. Currently, the national strategic project (PSN) in the railway sector consists of 10 inter-city activities and 6 urban PSN activities. Of these4 PSNs haveve been completed, namely the Tebingtinggi-Kuala Tanjung Railway, the South Sumatra Province LRT (Metro Palembang), the Double Track and  Crossing South Java, and the Yogyakarta-Kulon Progo Airport Train. For the PSN trains that are in process, there are Rantau Prapat-Duri-Pekanbaru, Lahat-Muara Enim-Prabumulih-Tarahan and Prabumulih-Kertapati Logistics Trains, MRT Jakarta East-West Phase I, LRT crossing JIS-Kelapa Gading, MRT Jakarta North- South, Jabodebek LRT, Jakarta-Bandung fast train, increasing the speed of the Jakarta-Surabaya railway line, especially the segment for the Jakarta-Semarang and Makassar-Parepare trains, all of which are still in the progress stage,” he said.

July 06, 2022, DetikFinance

(https://finance.detik.com/infrastruktur/d-6165779/ri-kejar-target-10524-km-jaringan-jalur-kereta)

Indonesia and the United Arab Emirates on Friday signed a free trade agreement, strengthening economic ties between Southeast Asia’s largest economy and the major oil-producing Gulf state. The accord, reached during a visit by President Joko Widodo to Abu Dhabi, will remove or sharply reduce duties on most goods traded between the Muslim countries.

            The UAE economy ministry said palm oil, food products, fashion wear, and Emirati petrochemicals, rubber products, plastics, and steel would benefit from reduced or eliminated tariffs. The accord includes chapters on services, investments, intellectual property rights, and mutual recognition of each other’s halal certification, Indonesia’s trade ministry said.

            The text of the agreement was not released and still needs to be ratified by both countries, which is largely procedural in the autocratic UAE but could take months in democratic Indonesia.

Indonesia’s main exports to the UAE are palm oil, jewelry, and precious metals, while Emirati exports to Indonesia are mostly petroleum gases and non-crude oils, iron, and non-alloy steel, according to the Observatory of Economic Complexity Oil rich UAE has forged closer trade ties with Indonesia as part of an ambition to double its own economy to US$ 816 billion by the end of the decade, in part by signing free trade, agreements.

Emirati Economy Minister Abdullah bin Touq told reporters the deal with Indonesia could increase bilateral non-oil trade to US$ 10 billion within five years, up from around US$ 3 billion last year. Indonesian Trade Minister Zulkifli Hasan said that Jakarta expects more UAE investment in Indonesia following the pact, which he said would boost exports to the Middle East and elsewhere. The UAE, a country of about 10 million people, is a major trade hub for the Middle East and parts of Africa, Asia, and Europe. The UAE will benefit from greater access to the Indonesian market of over 270 million people at a time when it is diversifying its trade links and seeking to create jobs for its 1 million citizens.

Emirati Minister of State for Foreign Trade Thani Al Zeyoudi told Reuters the government estimated the trade pact would create 55,000 highly skilled jobs in the UAE by 2030. “It’s going to add about US$ 4.6 billion to our GDP by 2030. It’s going to increase the exports by $3.2 billion and increase the imports by US$ 2.6 billion by 2030,” he said in an interview.

July 04, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/07/04/indonesia-uae-trade-pact-to-create-55000-highly-skilled-jobs-by-2030.html)

President Joko Widodo visited Moscow, Russia. During his visit, Jokowi and Vladimir Putin held talks regarding the potential for cooperation in the Indonesian capital city (IKN). Putin offered Indonesia to build transportation at IKN Nusantara. Putin said Russia and Indonesia have the potential for business cooperation in the development of transportation and logistics infrastructure.

“For example, Russian Railways can take part in implementing Indonesia’s large-scale initiative to move the nation’s capital to the island of Borneo. Moscow can also provide assistance for the IKN Nusantara project. Moscow has developed rapidly and rapidly and has succeeded in raising its high level of quality. IKN Nusantara is an ambitious project”, said Putin, quoted from the official website of the Russian Presidency, Friday (1/7/2022).

In his meeting with Jokowi, Putin expressed his interest in developing Indonesia’s nuclear industry. He said that many Russian energy companies were already operating in Indonesia. “Many of our companies, including energy companies, operate in Indonesia. There is interest in developing the national nuclear power industry. Including projects related to the non-energy use of nuclear technology, for example, in medicine and agriculture,” Putin said.

Putin claims Russian energy companies are quite competent and experienced. Putin also boasted that the technology owned by Russian companies is unmatched. Putin offered the name Rosatom State Corporation which is willing to take part in the development of the joint project. Rosatom is a leading nuclear energy company, with partners in 50 countries around the world.

            Putin really appreciates his meeting with Jokowi. He mentioned Indonesia as one of Russia’s main partners in the Asia-Pacific. Putin reminded Russia’s role and participation in the development in Indonesia.

June 30, 2022, DetikFinance

(https://finance.detik.com/infrastruktur/d-6156350/temui-jokowi-putin-tawarkan-bangun-proyek-kereta-di-ibu-kota-baru)(https://finance.detik.com/energi/d-6156392/putin-minat-bangun-industri-nuklir-di-indonesia)

Taiwanese giant Hon Hai Precision Industry Co. Ltd (Foxconn) plans to invest in Indonesia. The chairman of Foxconn, Young Liu, and President Joko Widodo met on Saturday (25/6) at the Bogor Palace. The meeting discussed the follow-up to the previously agreed Memorandum of Understanding related to the investment plans of Foxconn, Gogoro, PT Industri Battery Indonesia (IBC), and PT Indika Energy Tbk in Indonesia on January 21, 2022. According to the records of the Investment Coordinating Board (BKPM), the investment plan is US$ 8 billion or Rp118.4 trillion (exchange rate of Rp14,800), with estimated employment of more than 10,000 people.

            Foxconn Chairman Young Liu expressed his appreciation for the support of President Joko Widodo and the Minister of Investment/Head of BKPM Bahli Lahadalia who will fully facilitate Foxconn’s investment. Foxconn offers a new business model, namely BOL (Build, Operate, Localize) for its investment in Indonesia. Regarding his interest in investing in IKN Nusantara, East Kalimantan, Foxconn also expressed his interest in developing smart cities through an electric bus (e-bus) infrastructure and IoT (Internet of Things) networks.

            Foxconn, Gogoro, IBC, and Indika’s investment plans cover the electric vehicle industry: four-wheeled, two-wheeled, and electric buses; electric vehicle battery industry; and supporting industries: energy storage system, battery exchange station, battery recycling industry, Research & Development (R&D) and training. The agreed collaboration includes the development of a new sustainable energy ecosystem through investment in electric batteries, electric vehicles, and various supporting industries through the BOL cooperation scheme in Indonesia.

June 27, 2022, DetikFinance

(https://finance.detik.com/properti/d-6149263/foxconn-kepincut-bikin-smart-city-di-ikn)

Indonesian President Joko Widodo (Jokowi) and Chinese President Xi Jinping will test the Jakarta-Bandung high-speed train. The trial is planned to be carried out in November 2022. President Director of PT Kereta Cepat Indonesia China (KCIC) Dwiyana Slamet Riyadi explained the electric multiple unit (EMU) circuit is planned to arrive in Indonesia in September. After that, the two heads of state will test the Jakarta-Bandung high-speed train in November.

“This November is a dynamic test, so we plan to test the EMU which has arrived in Indonesia in September. So we hope that later the two leaders of the country, Mr. President Jokowi, and President of China Xi Jinping, will try the EMU from casting yard 4 towards Tegalluar”, Dwiyana Slamet Riyadi said.

The investment progress of this project has reached 84%, the physical progress of 76% of the total. This project is still running on the target. The Jakarta-Bandung high-speed rail project is targeted for operation in June 2023.

June 21, 2022, DetikFinance

(https://finance.detik.com/infrastruktur/d-6138969/november-jokowi–xi-jinping-bakal-jajal-kereta-cepat-jakarta-bandung)

Fresh Factory, an Indonesian cold-chain fulfillment start-up, has secured US$4.5 million in seed funding to expand its business. The early funding round was led by Singapore-based East Ventures with involvement from Indonesian firms PT Saratoga Investama Sedaya, Indogen Capital, Prasetya Dwidarma and Number Capital, US-based Y Combinator, and Singapore’s Trihill Capital. Several angel investors also participated, according to a press release published by East Ventures on Monday. Fresh Factory, according to the release, aims to provide a network of hyperlocal cold-chain fulfillment centers and a fulfillment management system.

            “We are elated to have Fresh Factory as part of East Ventures’ portfolios. Seeing the huge gap in cold-chain solutions and how it has led to many issues of food loss in the supply chain, we believe Fresh Factory will serve as the solution to improve the cold chain logistics for perishable goods and benefit micro, small and medium enterprises [MSMEs],” said Avina Sugiarto, venture partner of East Ventures.

“This fund will accelerate our mission of supporting all the business players in Indonesia, especially SMEs, in driving growth and scaling their businesses,” said Fresh Factory founder and CEO Larry Ridwan.

According to the press release, Fresh Factory has more than 20 warehouses located in cities in Java, Sumatra, Sulawesi, and Bali and plans to use the new funds to expand further in Sumatra and Sulawesi as well as to secondary cities in Java. According to the release, Indonesia’s cold-chain infrastructure has big gaps as development so far has focused on central warehouses, leaving deficiencies in mid-and last-mile logistics, notwithstanding Indonesia’s potential in agriculture and aquaculture. For that reason, cold-chain infrastructure is expected to grow significantly in the near future.

Cold Storage Association (ARPI) chairman Hasanuddin Yasni told The Jakarta Post on Thursday that it expects 32,000 tons of cold storage to be installed this year, up 50 percent from last year’s capacity increase, as the industry expands to accommodate growing production in the marine products and fishery sector.

As information, a 2020 Food and Agriculture Organization (FAO) report ranked Indonesia the second-largest country in marine fishing, after China, with a total capture of 6.74 million tons in 2018. But Indonesia was not among the 10 largest exporters of fish and fish products, a list topped by China with $21.6 billion in 2018, followed by Norway, Vietnam, and India with $12 billion, $8.8 billion, and $7 billion, respectively.

Fresh Factory also has technological solutions integrated into its business, namely geotagging and geolocation for storage, artificial intelligence to forecast and manage warehouse stocks as well as internet-connected devices to monitor freezer and chiller temperatures.

June 28, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/06/28/indonesian-cold-chain-start-up-gets-4-5-million-in-seed-funding.html)

(https://www.thejakartapost.com/business/2022/06/27/cold-storage-to-grow-50-as-fishery-firms-push-for-export-markets.html)

Minister of Maritime Affairs and Fisheries Sakti Wahyu Trenggono held a meeting with a number of representatives of countries and world institutions participating in the 2022 United Nations Oceans Conference (UNOC) event. The meeting was organized by the United Nations and held in Lisbon, Portugal, from Monday (27/6) to Tuesday (28/6). UNOC 2022 in Lisbon raised the big theme ‘Scaling up ocean action based on science and innovation for the implementation of Goal 14: stocktaking, partnerships, and solutions’. Through this theme, conference participants are encouraged to come up with innovative, science-based solutions that are urgently needed in the world that aim to start a new chapter of global action.

During the event, Trenggono met the Assistant Secretary of the United States Department of State’s International and Scientific Affairs Bureau of Marine and Environmental Sciences Monica Medina, and the World Bank’s Managing Director of Development Policy and Partnerships Mari Elka Pangestu.

            “In the meeting, I conveyed what the Indonesian government had done in fulfilling its commitments at the first UNOC in 2017. I also conveyed the action plans and work programs of the Ministry of Maritime Affairs and Fisheries related to supporting marine health. Thank God they gave their appreciation and said they were amazed by the breakthroughs made by the Indonesian government,” said Minister Trenggono.

            Tranggono conveyed three important things related to the blue economy program in Indonesia. These three important things also invite the admiration of the UNOC participants.

First, is the successful expansion of conservation areas by the Indonesian government to support marine health. Indonesia was able to exceed the target of 20 million hectares of conservation areas. Meanwhile, in 2030, Indonesia commits to achieve the target of marine conservation areas covering an area of 32.5 million hectares. The plan is optimistic that it can be achieved because Indonesia has managed to reach an area of more than 28 million hectares, or 86.5% by 2021.

Second, the Indonesian government plans to implement a quota-based measurable fishing policy in all fisheries management areas of the Republic of Indonesia (WPPNRI) through the Ministry of Maritime Affairs and Fisheries. This policy aims to maintain the sustainability of fish populations and encourage equitable economic growth in coastal areas.

Third, I convey the Ocean Love Month (BCL) program, which we initiated to solve the sea’s waste problem. We are currently designing in more detail about this program, in which later in one month fishermen go to sea not to catch fish but to pick up trash in the sea, one of which is plastic.

June 28, 2022, DetikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6151942/di-konferensi-kelautan-dunia-trenggono-ungkap-3-jurus-ekonomi-biru-ri)