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April
Amid the unfavorable situation due to the Covid-19 pandemic, the Indonesian Ministry of Maritime Affairs and Fisheries keeps pushing the economic growth through fishery product exports. This was stated by Minister of Maritime Affairs and Fisheries, Edhy Prabowo when releasing exports of fishery products at Koja Container Port (PTK), Tanjung Priok Port, North Jakarta, Wednesday (1/4). The volume of exported fishery products reached 3,200 tons worth Rp194.6 billion. The export destination markets for these fishery products are 13 countries such as Japan, South Korea, Malaysia, Mauritius, Taiwan, Thailand, United States, Vietnam and Lithuania. The exported fishery commodities consist of 28 types such as shrimp, squid, cuttlefish, skipjack, yellow fins tuna, red snapper, white pomfret, canned crab, salted shrimp, fish meal and fish oil.
Minister Edhy Prabowo said that his side hopes that the presence of the government in supporting the production and export of fishery products would be able to provide a positive signal for fisheries sector businesses. On the occasion, he also handed over the Health Certificate of Fish to exporters of fishery products and witnessed the loading of export commodities on board. He also added that he would continue to make breakthroughs and streamline export procedures according to fiscal policy and he asked all related Ministries/Institutions to coordinate with each other.
Meanwhile, Commercial Director of PT Pelindo II, Rima Novianti who was also present to accompany Minister Edhy Prabowo said that export-import services at Tanjung Priok Port keeps operating amid restrictions on community activities. She also explained, until Wednesday (April 1), Pelindo II still enforced Covid-19 preparedness and prevention procedures with high anticipation to protect all field employees. Regarding the Large-Scale Social Restrictions (PSBB) policy which was decided on Tuesday (March 31), according to Rima, Pelindo II continues to pay close attention to the direction and further regulations of the government.
March
President Signed Presidential Instruction on Budget Reallocation for Covid-19 Handling
Written by MaryatiIndonesian President Joko Widodo had signed the Presidential Instruction (Inpres) No. 4/2020 on Activity Refocusing, Budget Reallocation, and Service and Goods Procurement for Covid-19 Handling Acceleration.
On official website of Financial Ministry, the Presidential Instruction asked ministries and state institutions to prioritize available budget allocation to accelerate Covid-19 handling according to the protocol.
Indonesian government on March 11 2020 had mentioned about activity refocusing, budget reallocation, and service and goods procurement as measure for Covid-19 handling acceleration.
After the President ratified the Presidential Instruction, the ministries, state institutions, and regional government were asked to immediately revise their budget and then submit it to Minister of Finance, Sri Mulyani Indrawati.
The Presidential Instruction regulates the ministries and institutions to accelerate activity refocusing, budget reallocation, and service and goods procurement for Covid-19 handling acceleration by expanding and opening access according to Disaster Mitigation Law and its regulations.
Previously, Minister Sri Mulyani stated that her side had identified ministry and institution budget in the State Budget 2020 amounting to 62.3 trillion rupiahs that can be reallocated for Covid-19 spread handling fund.
Reallocation will be used to procure health equipment such as test kit, hospital equipment, Wisma Atlet preparation, and Covid-19 hospital development in Galang Island, Riau Islands.
Minister Sri Mulyani also explained, the budget reallocation can be done directly. She exemplified, it took less than two days for Health Ministry to revise their budget for import of test kit, protective equipment, and ventilator.
March
Indonesian furniture industry was one of priorities and top sector which can give significant contribution towards national economic growth especially foreign exchange. That was stated by Cooperatives and Small Medium Enterprises Minister Teten Masduki when opening the 5th Jogja International Furniture and Craft Fair Indonesia (JIFFINA) in Yogyakarta over the weekend. This exhibition was held at Jogja Expo Center Yogyakarta on March 17.
Teten Masduki said, Indonesia has long tradition, raw material, strong craftsmen, and high demand of domestic furniture abroad. In addition, Indonesian president has also set furniture as a top product for export.
Therefore, Cooperatives and Small Medium Enterprises gave appreciation for the exhibition, since it can facilitate interaction between furniture businesspeople, buyers, and other parties.
However, the minister also reminded that Indonesian export is still the smallest or only two percent in the available global market. Therefore, this became a challenge for all especially the industry players to seize the great export opportunity to be synergized. Teten Masduki also reminded, furniture sector is very dynamic and rapidly developing. If Indonesia cannot follow global market’s taste both in design material, and other things, the country can lose the competition. World also pays more respect to environment. Therefore, Indonesian furniture industry must also be sustainable.
Related to that, Cooperatives and Small Medium Ministry joined hands with Industry Ministry to develop human resources, technology application, funding, and partnership amongst craftsmen, big businesspeople, and buyers.
Meanwhile, Java-Bali Jogja International Furniture and Craft Fair Indonesia-JIFFINA Forum Head Timbul Raharjo in his remark said this exhibition became important strategic program for promotion and effort to seize creative product market to the buyers.
Timbul Raharjo further said, the 5th JIFFINA is important, because related ministries also gave support and they already had significant number of confirmed foreign buyers. By displaying furniture designs and crafts with artistic presentation, JIFFINA becomes the best exhibition in Indonesia.
March
The Government Launches the Second Stimulus Package to Overcome the Impact of Covid-19
Written by MaryatiThe government announced a second economic stimulus to overcome the impact of the spread of the Corona virus -Covid-19 to the manufacturing industry sector and overall economic activity. Coordinating Minister of Economic Affairs, Airlangga Hartarto at a press conference in Jakarta, Friday (13/3) as released by Antara, said that fiscal stimulus such as Income Tax (PPh) in Article 21 is borne by the government for the manufacturing sector for six months and for workers with income gross no more than Rp200 million per year. Other sectors that get facilities are Taxpayers who obtain Import Importance for Export Purpose (KITE) and KITE Small and Medium Industry. The purpose of this stimulus is to provide additional income for workers in the manufacturing sector to maintain purchasing power.
Based on this stimulus, the amount of the income tax value borne by the government reached Rp8.6 trillion. Then, the exemption of import tax article 22 for six months for 19 manufacturing industry sectors affected by COVID-10 aims to keep the pace of imports maintained. In addition, there is a reduction in article 25 income tax by 30 percent for six months for 19 manufacturing industry sectors to maintain domestic economic stability and improve export performance. The value of the income tax delays for this stimulus reaches Rp4.2 trillion. The government also provides an accelerated six-month Value Added Tax (VAT) restitution for exporters without restrictions and non-exporters with a maximum value of Rp5 billion in restitution. With the acceleration of restitution given up to Rp1, 97 trillion, taxpayers can be more optimal in cash management.
On this occasion, the government also formulated a non-fiscal stimulus in the form of simplifying or reducing limited export and import prohibited goods to facilitate the flow of goods. Another non-fiscal stimulus is the acceleration of the export-import process for reputable traders or reputable entrepreneurs and improving the National Logistic Ecosystem. According to Minister Airlangga Hartarto, the impact on the economic sector was inevitable.
Meanwhile, Minister of Finance, Sri Mulyani ensured that this second stimulus is not the last step taken by the government. This is because the government and the relevant authorities continue to monitor the developments and the current economic situation that is still dynamic. The government also opens itself to the situation and continues to prepare policy instruments to mitigate and minimize impacts, whether it's for entrepreneurs, companies, corporations or from the public side.
March
Currently, there are 3.6 million traditional shops in Indonesia need to be empowered because they are families’ economic backbone amidst pressure from retailers. That was stated by Minister of Cooperatives and Small Medium Enterprises Teten Masduki after the launching of Bukalapak Partner’s Latest Virtual Program in Bandung, West Java on Sunday (March8).
Teten Masduki appreciated the effort by e-commerce startups which had empowered small-medium enterprises or traditional shops in Indonesia. Teten also said, with support from digital platform, traditional shop owners had increased number and types of products they sell. Besides that, the market reach can also be wider with competitive price. Not only selling daily needs, they can also be agent for electricity bill payment, money transfer, and many other.
About corona virus outbreak, Teten Masduki believed that the affected sectors are industry which import raw material. The impact was even felt internationally. However, the corona outbreak became opportunity for Small Medium Enterprises -SME, because many products with imported materials, including consumption, can be replaced by SME products.
According to Euromonitor International in 2018, most people in Indonesia, India, and Philippines shop in traditional grocery stores. From the total retail market value around 7.5 million trillion Rupiahs, 6.85 million trillion Rupiahs or 92 percent of them were transaction at traditional stores.
Teten Masduki explained, capital facility for SMEs is needed in this chance by allocating fund from banks, so that SMEs can increase production capacity. This year, budget allocated for SMEs funding is more than 220 trillion rupiah
Therefore, Teten Masduki asked SME players not to worry. Covid-19 outbreak must be a moment to get better condition. Even if economic slowdown happened, SMEs must be able to take over. He added, there must be support from regional and central government as well as massive funding. Therefore, 18 ministries that handle SME have to hold consolidation. Cooperatives and SME Minsitry will make acceleration, so that SMEs can be the mainstay and savior during crisis, just like in 1998 economic crisis. At that time, SMEs saved Indonesia with export value increased for 350 percent.
March
Indonesian government discounted flight ticket to ten domestic destinations beginning from March 1 until May 31 2020. The ten destinations are Batam, Denpasar, Yogyakarta, Lombok, Labuan Bajo, Malang, Manado, Silangit, Tanjung Pandan, and Tanjung Pinang. That was announced by Transportation Minister Budi Karya Sumadi during a press conference at Soekarno-Hatta airport, Tangerang, Banten on Saturday (29/02). This move was taken following Covid-19 outbreak that had dropped off tourism in the whole world.
Minister Budi Karya Sumadi explained, government provided more than 500 billion Rupiahs fund. While the discount from government is 30 percent to ten destinations. The fund might be increased if followed by the total passenger increase. The Minister predicted, around 430 thousand seats will get the discount in three months. The discount will be given to 25 percent of every flight.
President Joko Widodo had two closed meetings to alleviate the falling domestic tourism activity, mainly because of coronavirus epidemic.
Meanwhile, Transportation Ministry’s Air Transport Director General Novie Riyanto said that coronavirus had made some countries issued travel ban and hence significant decrease in flight passenger. For instance, the flights from and to Bali that averagely were around 470-480 flights per day, now had only 400 flights.
Besides flight discount, the government also gave incentive to hotel operators in the ten destinations by waiving value-added tax (PPN). This policy was done through Finance Ministry that will give subsidy to hotels or value-added tax delay. Additional incentive is also given by Tourism Ministry to travel agency that serves international tourists.
March
Government launches a green investment concept for Papua and West Papua
Written by MaryatiIndonesian Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan launched a green investment concept or environmentally friendly investment in the High Level Meeting on Green Investment for Papua and West Papua in Sorong on Thursday (27/2). In his written statement, Minister Luhut said that the green investment which utilizes natural resources while maintaining sustainability would be the right scheme to promote the development of Papua and West Papua. He perceived that the green investment is very appropriate to be implemented in Papua and West Papua which have abundant natural resources. He also explained that the green investment aims to preserve forests in Papua to remain the world's 'carbon stockpile'.
The green investment concept in the initial stages will target agricultural products and fisheries in Papua and West Papua that have the potential to be exported, as well as ecotourism. In this area, cacao, Arabica and Robusta coffee, seaweed and nutmeg are ready to be improved and developed. Minister Luhut Pandjaitan hopes that the concept of environmentally friendly investment will be applied in Papua and West Papua to spur economic growth in the regions. Through the investment, people will start doing economic activities.
Meanwhile, Program Director of the Green Trade Initiative Foundation, Zakki Hakim said that the investment fund needed in the green investment program is US$200 million dollars. This will have a direct economic impact on 60 thousand families in Papua and West Papua. In this regard, the Green Trade Initiative Foundation acts as a government partner. He said that the fund is aimed at empowering the farmers, strengthening institutions, cooperatives, and Micro, Small and Medium Enterprises, increasing farmer capacity, training agricultural cultivation, and having an access to better inputs, such as seeds.
On the same occasion, Governor of West Papua, Dominggus Mandacan said that the contribution of the sustainable sector from agriculture, fisheries, and forestry had only reached 10.46 percent of the West Papua Gross Domestic Product (GDP). He emphasized that the potential of the green investment could be developed because only 22.3 percent of the 2.7 million sustainable sector land were utilized. That means that there are still 2.09 million of land that can be used for the green investment.
February
President Joko Widodo inaugurated an Asia-Pacific Rayon textile factory (APR) in Pelalawan Regency, Riau, Friday (21/2). In his speech, President Joko Widodo said that he was surprised to find out that the Asia Pacific Rayon textile factory has sophisticated technology to produce 200 million industrial plant seeds in the form of acacia and eucalyptus. He also admired the APR technology which converts wood fiber into rayon type textile. The President said that the Government of Indonesia is committed to supporting the investment climate because many people do not realize that the business community is very large in favor of the circulation of money and also the wheels of the economy. Therefore, he asked Minister of Industry, Agus Gumiwang Kartasasmita to support the development of the Indonesian garment industry to go more globally. On this occasion, President Joko Widodo also sent off containers containing over 10,000 tons rayon fiber for export to Turkey and 12,000 tons for shipping to Central Java. He appreciated the Asia Pacific Rayon investment which supports the development of the national textile industry. In addition, the presence of the Asia Pacific Rayon is also expected to be an alternative to reduce dependence on imports of textile raw materials, especially cotton. On that occasion, Minister Agus Gumiwang Kartasasmita said that optimizing the use of textile raw materials originating from within the country is very important in improving the performance of the textile industry and Indonesian textile products. According to Minister Agus Gumiwang, his side is currently carrying out several steps to continue to improve the performance of the labor-intensive industry. To improve the competitiveness of the textile industry and textile products, he has endorsed many aspects. One of them is to facilitate the availability of domestic raw materials. Meanwhile, Director of Asia Pacific Rayon, Basrie Kamba said that the presence of Asia Pacific Rayon could have a positive impact on employment and business opportunities for small and medium enterprises in the upstream-downstream textile and textile products (TPT) industries. Besides Turkey, he said that Asia Pacific Rayon products were also exported to 14 other countries, including the world textile markets such as Pakistan, Bangladesh, Vietnam, Brazil, and a number of countries in Europe. In addition to exports, Asia Pacific Rayon production is also intended to meet the needs of domestic textile raw materials.
February
Minister Agus Suparmanto Visits the United States to Increase Export
Written by MaryatiIndonesian Trade Minister Agus Suparmanto visited the United States on February 13 to 15, to increase export and remove trade barriers between the United States and Indonesia.
On the first day, Minister Agus Suparmanto met representatives from the United States Trade Representative –USTR in Washington. They discussed import duty relief facility or Generalized System of Preferences. Minister Agus explained that in the meeting on Thursday morning, the US Trade Representative had agreed on some matters that had not been negotiated yet.
A number of un-negotiated matters including issues relating to joint insurance with the Financial Services Authority (OJK) and new horticulture product import regulation after the US won a lawsuit against Indonesia at the Dispute Settlement Body of World Trade Organization-WTO. The Minister hoped, the Generalized System of Preferences discussion can be finished before Indonesian President Joko Widodo visits Las Vegas to attend the ASEAN-US Summit in mid March 2020.
On the second day, Minister Suparmanto received some US business people representative joined in US-ASEAN Business Council (US-ABC). They discussed some trade barriers, including e-commerce sector. After the meeting, the Minister said, e-commerce regulation is purposely made to record businesses on electronic platform taking place in Indonesia. The regulation is aimed at protecting consumers in Indonesia.
Meanwhile, US-ABC delegation led by President and CEO of US-ASEAN Business Council Alexander C. Feldman hopes, Indonesia can increase the effort thereby it is ready to receive Information and Communication Technology investment, mainly in terms of regulation, infrastructure, and investment barrier reduction in that sector.
Minister Agus Suparmanto also explained about the development of Omnibus Law that will facilitate investors and businesspeople to invest in Indonesia. Omnibus Law was also called as a policy expected by businesspeople because there were many regulations burdening the businesspeople, especially related to licensing, that soon will be simplified.
In the meeting, there were also Indonesian Coordinating Minister for Maritime and Investment Luhut Binsar Pandjaitan, Minister of Communication and Information Technology Johnny G. Plate, as well as Deputy Minister of Foreign Affairs Mahendra Siregar.
Besides discussing on trade development, in the meeting Indonesian delegations also promoted investment, including development investment opportunity in the new capital city.
February
The Indonesian government continues to open a wider export access to New Zealand, especially in labor market and agricultural products so that bilateral relations continue to improve. Director General of International Trade Negotiations, Iman Pambagyo who was Head of the Indonesian Delegation at the 7th Senior Official's Meeting on Trade and Investment Framework (SOMTIF) in Wellington, New Zealand on Wednesday, February 12 said.
Iman Pambagyo through his statement in Jakarta On Friday, February 14, revealed that at the SOMTIF this time, the Indonesian delegation fought for access to enter New Zealand labor market. In addition, there is also access to Indonesian tropical fruit products, specifically related to solving non-tariff barriers for mangosteen, banana, pineapple, snake fruit, and mango products.
According to Iman Pambagyo, in addition to the issue of labor and agricultural market access, Indonesia also invited New Zealand investors to invest in Indonesia in the livestock, tourism, vocational and tertiary education sectors, as well as the creative economy. Collaborations offered in the creative economy sector include film and animation. He asserted, New Zealand has a fairly advanced film industry. Many box office films are made in New Zealand, such as the Hobbit and Lord of the Ring. Therefore, Indonesia wants to establish cooperation through the forum. He added, the issues that the Indonesian delegation was seeking at the SOMTIF meeting were in line with President Joko Widodo's vision to develop human resources and improve export performance, including to New Zealand. He reiterated, amid of the current world economic slowdown, SOMTIF has an important meaning in increasing cooperation between Indonesia and New Zealand.
The Senior Official’s Meeting on Trade and Investment Framework -SOMTIF is a regular annual bilateral forum between Indonesia and New Zealand. It discusses trade and investment issues and it is a momentum for improving trade and investment performance through technical cooperation. SOMTIF was formed in 2005 and was first held in Wellington on July 14 and 15, 2008. Furthermore, the SOMTIF agenda is carried out alternately by the two countries.
Indonesia's main export products to New Zealand are oil cake, coal, wood and tires. Meanwhile, Indonesia's main import products from New Zealand are dairy products, wheat flour, and chemical wood pulp. Data from the Investment Coordinating Board shows the value of New Zealand's investment realization in Indonesia was recorded at US$2.6 million dollars in 81 projects. The majority of investment is in the tertiary / service sector such as hotels, restaurants and tourism. While Indonesian companies investing in New Zealand engage in the distribution of phosphate and surfactant.