Editorial

Editorial (475)

06
July

Last week, the World Bank upgraded Indonesia's status from a lower middle income country to an upper middle income country. The World Bank raises the status of Indonesia based on the latest assessment. Indonesia's Gross Domestic Product (GNP) per capita in 2019 recorded an increase to US$ 4,050 dollars from US$ 3,840 dollars in 2018. The World Bank classifies countries based on GNP per capita in 4 categories: Low Income (US$1,035), Lower Middle Income (US$, 036 – US$4,045), Upper Middle Income (US$4,046 – US$12,535) and High Income (more than US$12,535).

The World Bank uses this classification as one of the factors to determine a country eligible to use World Bank facilities and products, including loan pricing.

Upgrading Indonesia from Lower Middle to Upper Middle income country will provide several benefits, such as strengthening the confidence and perceptions of investors, trading partners, bilateral partners and development partners for the resilience of the Indonesian economy, increasing foreign investment both directly and indirectly, improving the performance of the current account which is still in deficit. In addition, the benefits can boost economic competitiveness and strengthen financial support. This is an important point in the strategic stages and a solid foundation towards Indonesia Forward in 2045.

In return of the benefits achieved by Indonesia with the upgraded rating, there is a challenging factor. Take for example; in terms of international trade, an increase in status has consequences for Indonesian products that might get fewer tariff relief facilities. The United States might revoke GSP (Generalized System of Preferences) facilities or import duty exemption facilities. In fact, many Indonesian products have benefited from the GSP facilities such as textiles, apparel, agriculture, fisheries, cacao and wood products. The increase in status will also have a significant impact on debt financing. With the status of an upper middle income country, Indonesia is considered capable to pay at a higher interest rate. While creditor countries will prioritize loans for countries that earn less than Indonesia, especially low-income countries. The increase in status will also threaten employment if not accompanied by changes in economic structure. This means that Indonesia does not need to be proud of this new status because there are still many challenges to be faced ahead.

01
July

Tension of relations between Iran and the United States continues to increase. The escalation of tension was triggered by the death Iran's elite Quds forces commander due to drone strikes in Baghdad.

Qasem Soleimani, one of the Generals at the Iranian Revolutionary Guards, was killed near Iraqi Baghdad International Airport. Tehran insists that the General died because he was killed by US troops. The death of General Qasem Soleimani, became a new issue that led to increased tensions with the United States. Especially with the statement of Tehran to arrest President Donald Trump.

Shortly after the death of Qasem Soleimani last January, the Iranian government issued an official statement. Tehran insists it will not comply with restrictions on nuclear production.

The poor relations between Iran and the United States also became worse when Ali Alqasimehr, a prosecutor in Iran, stated that the President of the United States and 35 others were accused of murder and terrorism. Tehran asks the Interpol to help arrest and detain Donald Trump.

It is very likely that the Interpol, based in Paris, France will not grant Tehran's request. The uncertainty that it was  Trump who ordered the killings might become a  consideration for Interpol not to  grant Iran's requests, in addition to several other reasons. Along with that, of course it is not easy for Iran to be able to arrest  Donald Trump. Washington itself does not appear to be responding seriously to the Iranian threat. The US special representative to Iran even still considers the order to arrest Donald Trump merely a matter of propaganda.

However, Tehran's statement to arrest the President of the United States, Donald Trump, at least to this day, can be considered a sign of Iran's resistance. This shows an increasingly intense hostility on the part of Iran.

29
June

Tourism is one of the sectors mostly affected by Covid-19 pandemic. The most affected businesses in this sector include travel agents, hotels, restaurants, transportation, tour guide services and souvenir shops.

The Central Statistics Agency recorded the number of foreign tourist arrivals to Indonesia in April 2020 decreased sharply, almost 88 percent, compared to the same month last year. The number of tourists in April 2020 only reached 160,000 people compared to the same period last year which was 1.27 million visits. Data shows the decline in foreign tourist arrivals started in February, March, and mostly in April 2020.

During January to April 2020, the tourism industry lost potential revenue from foreign tourist visits of around US$ 4 billion dollars or around Rp 62 trillion. From reports compiled by the Indonesian Hotel and Restaurant Association, until April 13, 2020, there were at least more than 1,600 hotels and 350 restaurants / entertainment venues that stopped operating.

Deputy of Marketing at the Ministry of Tourism and Creative Economy, Nia Niscaya in an online business discussion of  the Indonesian Travel Companies Association on Saturday (27/6) stated that low tourist confidence was one of the causes of the tourism sector being hit. According to Nia, Indonesia experienced a lack of trust from foreign and domestic tourists due to the Covid-19 pandemic. Therefore, Indonesian tourism must strive together to boost the trust. But as the government handled the Covid-19 incessantly, sentiment from a number of countries towards the Indonesian market had begun to experience positive growth. To re-increase tourist confidence and national tourism, the Ministry of Tourism and Creative Economy has drawn up protocols for Cleanliness, Health and Safety (CHS).

The CHS protocols are carried out as one of the programs to accelerate tourism recovery in Indonesia so that the country's economy improves immediately. Besides foreign tourists, the Ministry of Tourism and Creative Economy also tries to attract domestic tourists in the New Normal Order. Thereby, it  launched a movement called ‘Just Travelling to Indonesia.

Of course, travelling during the Covid-19 pandemic is very different from traveling in a normal situation. In the current condition, there are several protocols that must be maintained and implemented by both visitors and managers of tourist attractions, such as limiting the number of visitors, the obligation to wear masks for everyone and maintain physical distance from each other.

26
June

"Without Putin, there is no Russia." These words seem to be the general view of the Kremlin staff, including millions of Russians. Over the last two decades, they have placed Vladimir Putin in power as prime minister and president. The mandate is very likely to be renewed on July 1, after millions of Russians participated in a referendum to change the constitution, Vladimir Putin opened the door to constitutional changes that would allow him to remain in power until 2036. A public vote on constitutional reform has been scheduled for July 1. Analysts see Putin's plan to change the constitution as a preliminary preparation for succession when his term will come to an end in 2024. Putin is a figure who has dominated Russia's political world for the past two decades, both as president and prime minister. In January, Putin announced the proposed constitutional change but needed further approval from parliament. Then, he suddenly appeared and gave a speech before members of the parliament. In essence, he submitted a proposed amendment to the decision of the constitutional court, which would formally calculate the period of his administration from zero. The constitutional court is expected to give its approval for the proposed amendment and support it in the national vote. Thus, Putin could return to office as president for a period of six years. Putin, who is currently 67 years old, in January launched a major overhaul of Russian politics. Constitutionally, his term as president will end in 2024. But after he spoke to the Duma, which is the Lower House of the Russian parliament, on Tuesday (10/3), there emerged a proposal that would formally reset the president's term to zero. In principle, this is indeed possible, but one condition is that the constitutional court must give an official ruling that such an amendment will not contradict with the main principles and provisions of the Constitution.

24
June

Since the fall of the Muamer Gaddafi regime, in 2011, Lybia has continued to flare up. Armed conflict between the government and opposing parties continues. Lately, the conflict has been getting hotter with the intervention of foreign parties.

After Egypt said it would support the rebels, Turkey insisted it would soon assist the government in military and weapons form.

The Turkish government firmly supports the ruling Lybia government and ensures it will send military assistance to fight the rebels. The decision declared by the Turkish president, Erdogan, ignited the opinions of other countries in favor of General Khalifa Haftar who opposed the government.

For Turkey, its attitude and commitment are reasonable because the government it supports is internationally recognized. From Ankara came strong criticism of France of  Erdogan's policies. A spokesman for the Turkish Foreign Ministry said that France only increased tension in Lybia. France, Egypt and the United Arab Emirates are supporters of the rebel General Khalifa Haftar.

Indeed the path of violence is not the best way to resolve disputes that have manifested in war. The attitudes and decisions of foreign parties, both those supporting the Government and the rebels, especially in the form of the military and weaponry, have proven to be increasingly fueling wars. The government and the rebels not only feel they have moral support, but also political, military and weapons support. The war keeps on going, Lybia's natural resources continue to be depleted, people are divided and increasingly suffer from the chaos that has eroded people’s life, especially the economy.

The United Nations views the importance of a peaceful effort to resolve the conflict in Lybia which has lasted for almost ten years. This UN initiative needs to be supported. There must be concrete steps to encourage the government and rebels in Lybia to sit at one table. Foreign countries whether supporting the government or vice versa must hold back. There needs to be other countries or parties who are willing and able to become mediators with UN support. Otherwise Lybia will be increasingly torn to pieces by war and its people will suffer even more.

22
June


 
The Indonesian government announced to delay the discussion about the bill of Pancasila Ideology last week. Coordinating Minister for Political, legal, and security affairs, Mahfud MD said, the government also asked the House of Representatives -DPR as the initiator of the bill to further absorb the people’s aspirations.

The bill has brought about a public controversy. It contains Trisila and Ekasila clauses for one of its reasons. The concepts of Trisila and Ekasila are contained in article 7 with three verses. Paragraph 1 mentions the main characteristics of Pancasila which are justice and social welfare with the spirit of family is that there is a combination of the principle of deity, humanity, unity, societal/political democracy and economy in one unity. Verse 2 states that the main characteristic of Pancasila is Trisila, consisting of socio-nationalism, socio-democracy, and cultural deity. Verse 3, Trisila as referred to in the paragraph (2) are crystalized in the Ekasila, i.e. mutual cooperation/assistance. The discussion about this bill was judged to have no urgency and was vulnerable to ideological conflicts. Many circles argue that the concept of Pancasila to become Trisila and Ekasila is a form of betrayal of the nation and state ideology.

The government has a number of reasons for postponing the discussion about the bill; one of which relates to its substance aspect. President Joko Widodo affirmed that the decree of the People's Consultative Assembly No. XXV/1966 is still valid, binding and no need to be questioned. Such decree cannot be revoked by the State institution or the draft rules that are rolled out by the House of Representatives themselves. The government sees that the legitimate formulation of Pancasila is the one ratified by the Preparatory Committee of Indonesian Independence on 18 August 1945. This means that there is no need for any discussion about new ideological formulation outside Pancasila.

19
June

US State Secretary, Mike Pompeo met China’s Foreign Policy Chief, Yang Jiechi in Hawaii on Wednesday (17/6) for rare negotiations held amid increasingly heated conflicts.

The two largest economic powers in the world are in a matter of various issues, ranging from coronavirus pandemic problems, Chinese steps to implementing security legislation in Hong Kong, the issue of territories in the South China Sea to trade war. Amid the global Covid-9 pandemic, China and the United States of America are mutually accused about the origins of Corona viruses. Americans accuse the Corona virus derived from the Wuhan Virology laboratory, either created or leaked from there. Meanwhile, China accuses Corona viruses were created in America and brought to Wuhan by military personnel.

China and the United States also face the risk of increasing conflict in the South China Sea. To avoid this, both sides should be able to manage the crisis like when their warship was in an adjacent location. It is difficult to determine exactly when the U.S. and Chinese relations began to deteriorate, but the conflict in the South China Sea was one of the earliest conflicts that occurred.

A Chinese military source said that in an April incident, ships from both countries were adjacent to 100 meters. Such incidents show a lack of political confidence between the two militaries. This source was quoted by the South China Morning Post.

According to the Chinese Foreign Ministry in a statement reported by   Reuters, Washington needed to respect Beijing's position in major matters, stop intervention on China’s domestic issues, such as Hong Kong, Xinjiang,  and Taiwan, and  start working to improve relations. While the U.S. State Department Spokesman, Morgan Ortagus in a statement emphasized the need for a reciprocal relationship between the two countries. 

The U.S. and Chinese relations often experienced ups and downs. But nowadays, the relations are increasingly worsening. It's a little hard to guess how or when this feud will come to an end. Without the goodwill and intention of the two countries to settle their problems peacefully, the circumstances will not improve. Indeed, as parts of the world community,  both   of them  should  realize   that  the conflict   between  the world's two largest economies must  bring about an impact  on other countries.

15
June

As of April 12, 2020, the Corona or Covid-19 virus pandemic has spread to more than 200 countries in the world. The number of cases of infection has reached more than 1.7 million with more than 100 thousand deaths, while the number of patients who managed to recover is more than 400 thousand people. Of the cases that occurred in various countries, there are 5 countries that reported the highest number of corona virus infections, above 100,000 cases, namely the United States, Spain, Italy, France and Germany.

In Indonesia as of June 14, 2020, the number of Covid-19 cases has reached more than 36 thousand with a total recovery of more than 4 thousand patients and more than 2100 people died. This number cannot be said to be small considering the increasing number of cases every day. Even on Wednesday 10 June 2020, the number of Covid-19 patients in Indonesia rose by more than 1.200 people.

The Indonesian Government’s efforts to impose a variety of policies, ranging from social distancing to Large Scale Social Restrictions in some areas with high Covid-19 cases to urging people to implement health protocols, are not enough to control the spread of the Covid-19 virus. Other more effective methods are needed, namely finding vaccines and special drugs to combat the Covid-19.

Apparently, the result of efforts to find Covid-19 antidote will be getting closer. After conducting various researches, a team from the Stem Cell Research and Development Center of Airlangga University in Surabaya, East Java invented five combinations of drug regimens derived from drugs that have been circulating in the market and have the potential to be a special drug for the Covid-19 patients. Researchers at Airlangga University, Doctor Purwati along with the National Intelligence Agency and the Covid-19 Handling National Task Force continue to conduct research to update Covid-19 healing prescriptions. She said that she was conducting research related to drug combination regimens and also effective types of stem cells. The regimen is the composition of the type and amount of drug as well as the frequency of drug administration as a treatment therapy.

Indeed, it is not only Indonesia that is trying to find an antidote to the Covid-19 virus. Director of the World Health Organization (WHO), General Tedros Adhanom Ghebreyesus, as quoted by CNBC page, Monday (April 6, 2020) said that research into developing vaccines and drugs to fight the Covid-19 had been accelerated. According to him, more than 70 countries and 20 institutions joined WHO for research trials on effective treatment and developing vaccines.

Hopefully, the efforts made by researchers from Indonesia and various countries in the world can soon produce results so that more Covid-19 patients can be recovered.

17
June

The issue that the United States would withdraw some of its troops from Germany became real. Calling the German Government acting naughty, US President Donald Trump, Monday, June 15, 2020, said he would withdraw US troops from Germany. In his statement at the White House, Trump said he would reduce the number of troops to just 25 thousand. Data shows that so far the United States has around 38,000 troops in several regions of Germany.

In addition to considering the large costs of mobilizing troops in Germany, Donald Trump cited German weak commitments as another reason. Trump uses the term naughty for the policy of Angela Merkel government who does not meet commitment to use two percent of the country’s GDP for the defense sector as required by NATO. Since the end of the second world war, the United States has incurred huge costs to place its troops in Germany. Donald Trump's complaint was not only conveyed to Angela Merkel, but also to other Nato member countries.

Whatever the reason Donald Trump reduces the number of US troops in Germany, criticism has arisen. Not only from Germany, but also from domestic political opponents. The NATO alliance states that Trump's decision shows the weak commitment of his administration to work with NATO and other European countries. German Foreign Minister Heiko Maas indicated increasingly complicated relations between the United States and Germany since Donald Trump became President. However, Trump's decision was welcomed positively by the leftist party in Germany who wanted a complete withdrawal of US troops from Germany.

The decision also reinforced criticism of Trump at home, even from the Republicans themselves. Republicans had previously reminded Trump that the withdrawal of troops from Germany and Europe would bring the security consequences that Russia and China could cause. Trump's steps may have consequences for his re-election as President. Especially following the antipathy of some people in the United States due to his response to the death of George Floyd. However, the eyes of the world still have to wait until the time comes.

12
June


After 3 months of strict lockdown, several countries in ASEAN have begun to loosen isolation to prevent the spread of the corona virus. Malaysia began to reopen almost all economic and social activities on Wednesday (10/06). This was done after implementing a policy known as Malaysia’s Movement Control Order (MCO) for almost three months. Prohibition of flights and domestic travel has also been lifted. Activity at the Bandar Tasik Selatan integration terminal in Kuala Lumpur was reported to be slowly returning to normal. While Thailand is currently planning to lift more restrictions related to Covid-19 in the business sector. This policy was taken after it was reported that there were no local transmissions in the country in the past 16 days. Spokesperson for Thailand's COVID-19 Situation Administration Center, Taweesin Wisanuyothin, said it would hold a meeting to discuss the plan on Friday (12/06) today. Revocation of restrictions is planned to take effect on June 15 tomorrow. In this phase, schools, restaurants, concert events, amusement parks and playgrounds, as well as outdoor sports facilities have been allowed to reopen by implementing health protocols. However, the lifting of this limitation does not yet apply to nightclubs.

It was noted that there were several countries that decided that easing in the midst of the number of people with coinfection infection19 had not yet declined, in fact there was still an increase. For example, what happened in Pakistan. The World Health Organization (WHO) called on Pakistan to re-implement lockdown after COVID-19 positive cases in the South Asian country increased significantly. There have been at least 5,000 positive cases reported in Pakistan in the past 24 hours, the highest among neighboring countries. This happened after the Pakistani government announced the easing of lockdown. The Prime Minister of Pakistan, Imran Khan, firmly refused the lockdown policy because it was considered to bring down the country's economic conditions. In fact, Khan asked four provinces in Pakistan that are still implementing the policy to immediately revoke it.

India also carries out a similar policy. Easing lockdown even though the distribution rate of covid19 virus is still quite high. Malls, hotels, restaurants and places of worship in India reopened as of June 8, 2020, marking the end of the first phase of lockdown, which began in late March 2020. But areas with high coronary virus cases are required to undergo a second phase of lockdown to 30 June 2020. Mumbai and Delhi are some cities where Covid-19 cases are still high. Later it was reported, after several days of loosening the lockdown, India decided to close the place of worship again, worried that the number of covid19 distribution would increase.

A research team from University College London (UCL) in collaboration with China Tsinghua University has created a model to predict the impact of lockdown easing in various countries. Found a tight Lockdown for 3 months will have a negative impact on the economy. However, lockdown easing will make handling covid 19 will run slower than before.

So which choice will you make? Of course it is up to the governments of each country. In fact, each country has different situations and conditions. And only they are the ones who know the most urgent thing to do right now.

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