Editorial

Editorial (343)

20
November

 

The government has just launched the 16th Economic Policy Package on relaxation of policies for economic resilience. In this package, there are three points that are renewed, namely expansion of facilities for reducing corporate income tax (tax holiday), relaxation of negative investment list (DNI) and optimizing utilization of export proceeds (DHE). Of the 16 sectors, there are now 18 industrial sectors that get tax incentives. What's special about this policy package? Coordinating Minister for Economic Affairs, Darmin Nasution in his announcement at the Presidential Palace in Jakarta last Friday (11/16) explained that the policy is interconnected. He added that this policy is also connected with the Online Single Submission system –OSS. With this system, once investors meet the criteria, they can immediately get incentives.

 

The main objective of the policy is to improve current account deficit -CAD. Two weeks ago, Bank Indonesia -BI announced that CAD in the third quarter of 2018 had increased, namely US$ 8.8 billion dollars equivalent to 3.37 percent of Gross Domestic Product -GDP. This value is higher than the first quarter period which reached US$ 5.7 billion dollars. Minister Darmin Nasution believed that the CAD will not exceed 3 percent after the adoption of this new policy package.

 

Minister Darmin perceived that the 16th economic policy package is medium and long term. However, there are short-term elements to strengthen the self-confidence of fund owners. He acknowledged that the problem of the Current Transaction Deficit could not be completed in 1-2 quarters. For decades, the Current Transaction Deficit was indeed a deficit.

 

Businesspeople welcomed the new economic policy package. Chairman of the Chamber of Commerce and Industry, Roesan Perkasa Roeslani said that the government is regarded appropriate to take the right time to release the policy package in a bid to respond to current economic conditions.

 

By issuing a series of economic policy packages, the government is working hard to improve economic conditions amid global uncertainty and a trade war between two super-powerful countries: China and the United States. However, this positive effort must be accompanied by comprehensive implementation in the field. Cooperation is needed, especially with regions. Regional regulations may not hinder the realization of various central economic policies. In this case, good coordination is needed between the center and the region. If not, good policies will be ineffective and it will bring about distrust among investors.

 

That’s Commentary! 

20
November

The government has just launched the 16th Economic Policy Package on relaxation of policies for economic resilience. In this package, there are three points that are renewed, namely expansion of facilities for reducing corporate income tax (tax holiday), relaxation of negative investment list (DNI) and optimizing utilization of export proceeds (DHE). Of the 16 sectors, there are now 18 industrial sectors that get tax incentives. What's special about this policy package? Coordinating Minister for Economic Affairs, Darmin Nasution in his announcement at the Presidential Palace in Jakarta last Friday (11/16) explained that the policy is interconnected. He added that this policy is also connected with the Online Single Submission system –OSS. With this system, once investors meet the criteria, they can immediately get incentives.

 

The main objective of the policy is to improve current account deficit -CAD. Two weeks ago, Bank Indonesia -BI announced that CAD in the third quarter of 2018 had increased, namely US$ 8.8 billion dollars equivalent to 3.37 percent of Gross Domestic Product -GDP. This value is higher than the first quarter period which reached US$ 5.7 billion dollars. Minister Darmin Nasution believed that the CAD will not exceed 3 percent after the adoption of this new policy package.

 

Minister Darmin perceived that the 16th economic policy package is medium and long term. However, there are short-term elements to strengthen the self-confidence of fund owners. He acknowledged that the problem of the Current Transaction Deficit could not be completed in 1-2 quarters. For decades, the Current Transaction Deficit was indeed a deficit.

 

Businesspeople welcomed the new economic policy package. Chairman of the Chamber of Commerce and Industry, Roesan Perkasa Roeslani said that the government is regarded appropriate to take the right time to release the policy package in a bid to respond to current economic conditions.

 

By issuing a series of economic policy packages, the government is working hard to improve economic conditions amid global uncertainty and a trade war between two super-powerful countries: China and the United States. However, this positive effort must be accompanied by comprehensive implementation in the field. Cooperation is needed, especially with regions. Regional regulations may not hinder the realization of various central economic policies. In this case, good coordination is needed between the center and the region. If not, good policies will be ineffective and it will bring about distrust among investors.

16
November

 

The 33rd ASEAN Summit has just been held in Singapore. In addition to the ASEAN Summit, several forums were also held in the ASEAN initiative: ASEAN Plus One, ASEAN Plus Three, East Asia Summit, ASEAN Regional Forum, and ASEAN Defense Ministers Meeting. Some important issues are the Rohingya problem, trade protectionism, the Indo Pacific and the South China Sea.

One of the issues discussed more deeply is the resolution of the South China Sea conflict. After a while the agreement has not been reached, finally the ASEAN countries in the 20th meeting with China agreed to start negotiations on the Code of Conduct, even though they have not yet decided when to start.

The response to the agreement sounds positive because the hopes to end the South China Sea conflict will turn to reality. At least, that is what emerged from the results of the ASEAN and China meetings. ASEAN is one of the world's regions with positive economic growth, while other regions are growing more slowly. If political and security issues disturb ASEAN, it will have a direct impact on economic growth in the region. However, ASEAN cannot stand alone. One of ASEAN's main partners is China. Interference in relations with China can hamper growth in ASEAN. Take for example; it’s the conflict with China related to the South China Sea.

One of the key points to ASEAN's success was made by an Indian academic, Amitav Acharya who said that there is no identity without an institution and no institution can last long without an identity. Thus, SEATO fails and ASEAN succeeds. ASEAN with the togetherness and solidity of its members tries to overcome the problem of the South China Sea to find the best solution. In fact, China has set about 3 years to be able to agree on the Code of Conduct in resolving the South China Sea conflict.

This agreement is a progress to solve the South China Sea problem. This also proves that ASEAN can solve the problem directly without outside intervention.

15
November

 

November 16 is commemorated as International Tolerance Day. The United Nations Educational, Scientific and Cultural Organization -UNESCO set November 16 as the International Tolerance Day which aims to provide public awareness of the importance of tolerant attitudes in maintaining relations among communities. International Tolerance Day has been commemorated since 1996.

How is the tolerance in Indonesia today? Indonesia is known as a plural society with around 1,300 ethnic groups with diverse cultures and languages. Indonesia also has six official religions recognized by the state. These religions are Islam, Protestantism, Catholicism, Hinduism, Buddhism and Confucianism. Although various ethnicities, languages, cultures and religions, Indonesians still live in harmony, because Indonesia highly upholds the values of tolerance until today.

There are many examples that show how inter-religious tolerance in Indonesia has been established. Commemorating religious holidays is one example and this is recognized as national holidays, although the number of followers of the religion is few.

Indonesia as a country that highly upholds the values of tolerance has been recognized by the world. Some world leaders who have visited Indonesia praised Indonesia's tolerance. The 44th President of the USA, Barack Obama while speaking at the 4th Diaspora Forum in Jakarta in July 2017 appreciated tolerance in Indonesia. Chief adviser of the Iranian Spiritual Leader, Mohsen Araki, during a visit to the Office of the Vice President, Jusuf Kalla in December 2016 praised Indonesia for being able to show tolerance among religious communities. He said that Indonesia is one of the countries that becomes an example for living side by side, living peace, and brotherhood

Nevertheless, Indonesia is not free from some cases of intolerance. in recent years, some groups of people showed that attitude. Low  enforcement of law may be a trigger for the emergence of intolerant attitudes apart from economic and political factors.

All stakeholders of the Indonesian nation are accountable to care, maintain and foster an attitude of tolerance so that Indonesia's future is protected from fanaticism conflicts among groups. Thus, both government and mass organizations have to care more and always instill national values, and fight for a culture of tolerance and diversity in Indonesia. So, peaceful Indonesia without inter-group conflict is not just a dream.

19
November

Micro, Small and Medium Enterprises -UMKM are the backbone of the economy. This statement was again affirmed by President Joko Widodo in Working Lunch: Promoting Inclusive Growth in The Digital Age at the APEC 2018 Summit in Papua New Guinea -PNG on Sunday (18/11). During the meeting, President Joko Widodo remarked that talking about inclusive development is to obviously talk about the Micro, Small and Medium Enterprises - UMKM. Based on 2017 data, the total number of Indonesian UMKM reached 62.9 million business units. As many as 6 million of UMKM have carried out their activities online. On that occasion, President Joko Widodo also emphasized that the world has entered the era of the Industrial Revolution 4.0. For Indonesia, the new cycle is seen by the President to open opportunities to adjust development orientation. Another point affirmed by President Joko Widodo is the reduction of inequality on human and development. Reducing inequality has indeed become Indonesia's priority. The government continues to make efforts to reduce inequality in each of its programs. This focus is indeed included in the Nawa-Cita program of the Indonesian Working Cabinet. Other programs are to develop Indonesia from the periphery, to strengthen regions and villages within the framework of unitary states of republic of Indonesia. The most obvious reduction in inequality is through infrastructure development, such as roads, toll roads, harbors, dams and airports in areas that are in need. All of them are currently the focus of the Indonesian government. Now, the border regions have become the foremost veranda, which is expected to become an Indonesian display. The priority of human development has been proven by the preparation of a roadmap of Economic Policy and Vocational Training in Indonesia in 2017-2025. Next year's Indonesian state budget will also be focused on the development of human resources. The quality of human resources is a key factor in inclusive development, namely development that benefits the community in general. With skilled human resources, the number of Indonesian UMKM will increase and be better prepared, especially entering the era of industrial revolution 4.0. Having skilled workers and mastering information technology will open even greater opportunities for Indonesian UMKM to enter the global market. With good quality and integrated human resources, potential resources can be processed and maintained to support sustainable inclusive development. So, there will be no development inequality in the country. At last, this will make Indonesia equal to other developed countries.

14
November

The idea of French President Emmanuel Macron to form a joint European army continues to roll. Unlike US President Donald Trump, Russian President Vladimir Putin expressed support for Emanuel Macron's idea. Since becoming President of France last year, Macron continues to push for his idea to form a joint European army. Macron based his argument that Europe must protect itself from China, Russia and the United States. Trump declared the statement, made to reporters a few days ago, an insult. However, this provocative statement was welcomed by Vladimir Putin. From Moscow, Putin expressed full support for the idea of French President Emmanuel Macron. According to Vladimir Putin, Macron’s idea is a positive development at multilateral level. Putin argued, Europe has the right to be sovereign and independent in the security sector. From his statement, Putin gave a signal that Europe would reduce its dependence on the United States, that is,  its subsidy to NATO. The controversy between Putin and Trump has therefore become a new issue that might lead to a new discourse on the existence of NATO. From the United States side, actually Macron and Putin's statement cold be considered as a counterattack to Trump. Some time ago Donald Trump  stated that he would quit the nuclear weapons limitation agreement-INF which was formed in 1980. Trump's statement raises concerns over the condition of European security. Whether the idea of Emmanuel Macron will be realized soon, the multilateral dynamics and the opinions of European leaders are yet to be seen.  France still has to wait for a response from others. Of the many European leaders, the new Chancellor of Germany, Angela Merkel, has showed positive response. Although Macron's ideas may still require struggle and time to be realized, the idea of the young president has at least influenced relations between Europe, Russia and  the United States. The formation of a joint European army will be an alternative defense outside NATO.

14
November

The idea of French President Emmanuel Macron to form a joint European army continues to roll. Unlike US President Donald Trump, Russian President Vladimir Putin expressed support for Emanuel Macron's idea. Since becoming President of France last year, Macron continues to push for his idea to form a joint European army. Macron based his argument that Europe must protect itself from China, Russia and the United States. Trump declared the statement, made to reporters a few days ago, an insult. However, this provocative statement was welcomed by Vladimir Putin. From Moscow, Putin expressed full support for the idea of French President Emmanuel Macron. According to Vladimir Putin, Macron’s idea is a positive development at multilateral level. Putin argued, Europe has the right to be sovereign and independent in the security sector. From his statement, Putin gave a signal that Europe would reduce its dependence on the United States, that is,  its subsidy to NATO. The controversy between Putin and Trump has therefore become a new issue that might lead to a new discourse on the existence of NATO. From the United States side, actually Macron and Putin's statement cold be considered as a counterattack to Trump. Some time ago Donald Trump  stated that he would quit the nuclear weapons limitation agreement-INF which was formed in 1980. Trump's statement raises concerns over the condition of European security. Whether the idea of Emmanuel Macron will be realized soon, the multilateral dynamics and the opinions of European leaders are yet to be seen.  France still has to wait for a response from others. Of the many European leaders, the new Chancellor of Germany, Angela Merkel, has showed positive response. Although Macron's ideas may still require struggle and time to be realized, the idea of the young president has at least influenced relations between Europe, Russia and  the United States. The formation of a joint European army will be an alternative defense outside NATO.

12
November

The Government of the Republic of Indonesia along with the United Nations Industrial Development Organization -UNIDO held the 1st Regional Conference on Industrial Development -RCID in Bali on 8-9 November 2018. This activity aims to open opportunity and potential in the application of the industrial revolution 4.0 in developing countries in the region of Asia Pacific. The 4th generation industry or Industry 4.0 is currently often highlighted by President Joko Widodo. On several occasions, he always mentioned industry 4.0. In fact, President Joko Widodo also has a roadmap called ‘Making Indonesia 4.0’ which will provide direction for the national industry movement in the future in a bid to make Indonesia a developed country. The Making Indonesia 4.0 roadmap was determined by President Joko Widodo as one of Indonesia's national agendas. The program coordinator is the Ministry of Industry. Actually, what is meant by Industry 4.0? According to the Acting Director General of Resilience and Development of International Industrial Access at the Ministry of Industry, Ngakan Timur Antara stated that industry 4.0 is a trend of transformation of industrial processes driven by rapid technological developments, especially in the process of automation and data exchange. The implementation of the fourth generation industrial revolution involves several key aspects of the transformation of the latest technology. The 4.0 industrial revolution that relies on the internet certainly makes it easier for humans. Today, the fourth industrial revolution has also changed the economy, work, and even society. This revolution instills smart technology and is connected not only within the company, but also everyday human life. Like coins that have two different sides, industry 4.0 brings not only benefits, but also new challenges, especially for the workforce. The automation or utilization of robots in the manufacturing production process allows for a reduction in labor, even though the number is not significant. To deal with changes in industry 4.0, Indonesia is ready to anticipate it. One of them is by improving the competence of Human Resources -HR through a link-and-match program between education and industry. This link-and-match policy is implemented to ensure that the competencies of Indonesian human resources are in line with the needs of industry based on digital technology, as well as the industrial revolution 4.0. Hopefully with the Making Indonesia 4.0 roadmap launched by President Joko Widodo and efforts to improve the competence of human resources through the link-and-match program between education and industry, Indonesia will be ready to face the Industrial Revolution 4.0 and Indonesia can increase productivity and competitiveness.

09
November

Australia under Prime Minister Scott Morrisson's government seems more open to its neighbors in the Pacific than the previous regime. One of the reasons for this is that Australia's opposition is more proactive with the Pacific region by disbursing funds worth A$2 billion dollars or about Rp. 20 trillion. Based on advantage or disadvantage, in fact, Australia doesn't gain huge financial benefits by investing the amount of money. Prime Minister Scott Morrison in her speech on Thursday (November 8) said that Australia has its lasting interest in the Pacific region that is safe, strategic, economically stable and politically sovereign. These aspects have become Australia’s perspective since China began to approach this region. China has, of course, interest in this region. With the influx of Chinese influence into the region, support for Taiwan is also declining. Several countries in the Pacific support Taiwan. Taiwan, which does not want to lose its pacific supporters, competes with China after Taiwan lost support from Fiji, which chose to close relations with Taipei and open the door to relations with China. But the influence makes Australia uncomfortable. The Australian opposition which is concerned about strengthening the influence was first planning a proposal to strengthen Australian influence. Soon, Australia disburses funds into the region; apparently Australia and China themselves face investment problems. Minister of Treasury (Treasurer), Josh Frydenberg said that he would block China's efforts to take over the gas pipeline business in Australia, which is worth US$13 billion dollars. There are foreign ownership concerns there. In addition, Australia also prohibits Huawei's involvement in the construction of the 5G network for reasons of national security. At present, the rivalry between Australia and China in seizing regional influence should continue to maintain a peaceful Pacific. We would like to see that whether both countries will win the sympathy of the Pacific countries in an elegant manner. The answer might be at the APEC Summit in Papua New Guinea –PNG next week.

06
November

From 1 to 9 November 2018, Maluku region to East Nusa Tenggara –NTT becomes the transit areas of Bank Indonesia mobile cash -BI. This activity is part of Bank Indonesia's services on remote, foremost and outermost islands (3T) with the name "Exploring the Archipelago, Defending Country without Weapons". This was affirmed by Head of the Bank Indonesia Money Management Department, Heru Pranoto to the media on Jamdena Island, West Southeast Maluku Regency, Maluku province on last Sunday (4/11).

Head of Expedition Team of mobile cash at the 3T, Bonaryadi said that BI in collaboration with the Indonesian Navy holds a Mobile Cash Expedition to renew the physical rupiah owned by residents in the 3T islands. In detail, the activities include the exchange of new money, the socialization of the authenticity of the rupiah to minimize counterfeit money, and worn-out or improper circulation of money. Besides, there is also provision of social assistance such as free medical examinations and treatment. Heru added that the mobile cash activities on the 3T islands have been carried out by BI and the Indonesian Navy since 2012 for 38 times and with the Coordinating Ministry for Economic Affairs for 9 times.

For this year, BI will conduct 14 mobile cash activity, and this is the 12 times held on 3T islands. Meanwhile, BI will also implement it on some islands in East Java, Ambon and Papua.

The struggle of Bank Indonesia and Indonesian Navy to reach remote, foremost and outermost islands deserves being appreciated. Strong sea waves and bad weather become a distinctive challenge. They are likely to take high risk of bringing new money to the people of Indonesia in remote places. The exchange of the worn-out money aims to enable people in the 3T region to feel or see the latest money of Indonesia issued by the government recently.

It is still inherent in the Indonesian nation's memory of how Indonesia lost its two islands: Sipadan and Ligitan over the dispute against Malaysia. The reason was that there was no rupiah circulating on the two islands. For this reason, Indonesian’s central bank -BI must strengthen the distribution of national currency on the border and outermost islands so that similar problem will not occur anymore.

Actually, what can Indonesian citizens do in big cities to maintain rupiah sovereignty? Of course, it is by loving the rupiah without buying dollars or other foreign currencies for personal gain. They should also prioritize the consumption of domestic products instead of foreign ones.

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