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February
Indonesian Economy Grows by 3.69 Percent, People's Purchasing Power Improves
Written by Maryati
Data of IndonesianStatistics Agency (BPS) showed that Indonesian economic growth in Q4 2021 was 5.02 percent year on year. Therefore, the 2021 economic growth was 3.69 percent.
Head of BPS, Margo Yuwono in a press conference on Monday (7/2) said that the main supporter of Q4 2021 economic growth based on expense was still dominated by household consumption with 3.55 percent so that the share towards the economy surpassed 52.91 percent. The household consumption contributed 1.91 percent of the 5.02 percent year-on-year growth in Q4 2021. This indicated that the people started shopping when the economy recovers.
More in detail, Margo Yuwono also explained that the booster of the household consumption was the increasing sales of retail, wholesale, and motor vehicles. Meanwhile, the transaction value of electronic money, debit card, and credit card grew 9.11 percent, strengthening compared to Q4 2020 which was minus 0.88 percent. Another indicator by BPS was 18.23 percent growth in flight passengers.
Another important component was investment or Gross Fixed Capital Formation (GFCF). In Q4 2021, the GFCF grew by 4.49 percent, contributing 31.01 percent to the Gross Domestic Product. This was supported by the growth of capital equipment, such as machinery and equipment, domestic vehicles, and other imported capital equipment.
The next component is that goods and services export grew significantly by 29.83 percent year on year. The export was the 3rd biggest structure of GDP with 23.70 percent share. Various other phenomena that supported export included some partner countries' growing economies such as China, U.S., and South Korea.
Meanwhile, some international commodity prices, such as palm oil and coal also improved Indonesian export performance.
The fourth contributor of GDP was 11.82 percent government consumption which grew 5.25 percent. This growth was supported by the 25.13 percent increase in goods and services spending realization.
February
Indonesia and New Zealand discuss trade and energy cooperation
Written by Maryati
Indonesian Coordinating Minister for Economic Affairs, Airlangga Hartarto along with New Zealand Ambassador to Indonesia, Kevin Burnett discussed economic recovery efforts in the trade, agriculture, industrial sectors and energy. Ambassador Burnett in his statement in Jakarta, Thursday (3/2) said that Indonesia and New Zealand have a target to increase trade value in two ways, amounting to 4 billion New Zealand dollars or around 38 billion rupiahs until 2024. So, it is important for both countries to increase cooperation in a bid to achieve the target. Currently, the trade value between Indonesia and New Zealand reaches 1.5 billion New Zealand dollars or around 14 billion rupiahs. New Zealand’s main exports to Indonesia include various dairy products, such as milk, cheese, and yogurt.
In addition to being interested in knowing Indonesia's priorities in this year's G20 Presidency, Ambassador Burnett also expressed his gratitude for Indonesia's support for the implementation of the New Zealand APEC Chair. He offered assistance to Indonesia's G20 Presidency and opportunity for cooperation in various sectors of both countries.
Meanwhile, Minister Airlangga Hartarto stated that the meeting discussed restoring the global economic order after the pandemic to become stronger, more inclusive, and more collaborative by utilizing digitalization. According to Minister Airlangga, the digitalization is a game changer in a pandemic, and it grows rapidly compared to pre-pandemic. Digital transformation supports Indonesia's efforts to rebuild post-pandemic economic governance and architecture, and very high growth, especially in the online education and telemedicine sectors. The digitalization also supports registration and implementation of Pre-Employment Card Program training.
On that occasion, Minister Airlangga Hartarto also invited New Zealand to become a partner in the energy transition program. One of the collaborations that can be developed is geothermal power. The energy sector, especially the transition of fossil energy into new and renewable energy, has become a priority agenda of G20.
February
The Indonesian government officially reopened the coal export in February (1/2). This decision was made after the government previously issued the coal export ban for one month - on January 1 until 31 2022.
Director General for Mineral and Coal Ridwan at the Energy and Mineral Resources Ministry, Djamaluddin in a statement in Jakarta on Tuesday (1/2) said that the coal supply and stock at coal power plants have been improving. However, the coal export is still limited to companies that have fulfilled the domestic market obligation. These companies must also submit an affidavit of payment for fine or compensation for the DMO deficit in 2021.
Ridwan further remarked that during the coal export ban, the government, state-owned power company PT PLN, Indonesian National Shipowners Association (INSA), and coal suppliers have worked hard to ensure the coal supply to coal power plants in a bid to fulfill the coal need in January 2022.
Meanwhile, President Director of PT PLN, Darmawan Prasodjo previously claimed he would take firm action towards coal miners who neglected or violated the 25 percent coal DMO from the coal production plan, which was made by PT PLN for a year.
Darmawan added that his side will terminate the contracts and blacklist the violating suppliers so that they cannot do export.
February
Smart City and Community Innovation Center at Bandung Institute of Technology (ITB) in Bandung, West Java released research about Indonesian Digital Transformation and Smart City Rating 2021. Based on the research, five cities rank the highest in the City Caring for Climate Change category.
Head of the Smart City and Community Innovation Center, Prof. Suhono Harso Supangkat in a written statement in Bandung, Tuesday (1/2) said that the five cities are Semarang, Surabaya, Bogor, Bandung, and Tangerang. He further explained that a smart city is a city that is able to manage various resources effectively and efficiently to solve various urban challenges by using a smart solution. They must provide city infrastructure, facility and service that can improve their people's life quality. There is a special assessment for this category to find a city's support in facing climate change that affects the earth surface's temperature resulting from the increasing carbon dioxide.
The indicators for it include the use of renewable energy, vehicle reduction, and environment management. These indicators also discuss more detail about energy substitution, energy-saving vehicle implementation, public transport use, and green open space increase.
Prof. Suhono also stated that along with urbanization, issues in the cities also grow. Population density with an uncontrolled carbon condition can threaten the world's climate change.
Meanwhile, according to the City Transition Coalition, cities are responsible for 75 percent of global carbon emission. Some cities in Indonesia have been aware of the importance of focusing on reducing the impact of global climate change.
February
MSMEs and Hotel Business Meeting in NTB Make transsaction worth Rp 1.74 Billion
Written by Maryati
PT Pertamina along with Indonesian Tourism and Creative Economy Ministry and West Nusa Tenggara government held a business meeting between micro small medium enterprises (MSMEs) and hotel industry to support the MotoGP Mandalika 2022. The event held in Lombok on January 27 and 28 2022 made a transaction worth Rp 1.74 billion.
The business meeting was joined by 93 MSMEs and 27 hotel industries. Director of Industry Management at the Tourism and Creative Economy Ministry, Anggara Hayun Anujuprana in a statement on Saturday (29/1) hoped the achieved transaction would continue although the MotoGP Mandalika ends.
Meanwhile, PT Pertamina's Vice President Corporate Communication, Fajriyah Usman said that six of the 93 MSMEs are the partners of PT Pertamina. They joined the event after undergoing a tight curation process.
January
Indonesia invites G20 and B20 to collaborate for economic recovery
Written by Maryati
President Joko Widodo said the Indonesian G20 Presidency invited the G20 group and the B20 community to collaborate to create real actions for global economic recovery. He conveyed the invitation at the inauguration of the virtual opening of the B20 "Inception Meeting" from Bogor Palace, West Java on Thursday (27/1). The group B20 or the Business 20 is an international business community within the framework of the G20 group. On that occasion, President Joko Widodo stated that the Covid-19 teaches all parties that the pandemic is not only a problem but also an opportunity to grow better.
President Joko Widodo invites the G20 and B20 groups to take advantage of this opportunity to realize a more just world governance, provide prosperity and ensure more inclusive and sustainable economic growth./ In line with the main focus of the Indonesian G20 Presidency, there are 3 main opportunities that must be addressed and exploited. They are first transition to a green economy, second increasingly rapid digital economy trends and third improvement of the global health architecture that is more responsive in the face of a global pandemic.
In terms of the transition to a green economy, the President expects the contribution of the B20 community to accelerate a smooth energy transformation without causing negative impacts on small communities. The President also emphasized that Indonesia invites investors that can encourage mutually beneficial added values.
In terms of the increasingly rapid digital economy trend, President Joko Widodo emphasized that Indonesia pays serious attention to the development of digital technology, especially those that have a direct contribution to the empowerment of Micro, Small and Medium Enterprises and the development of human resources.
In terms of improving the global health architecture, Indonesia invites the B20 community to collaborate in mobilizing resources to finance innovation and equitable production of vaccines, medicines and medical devices. The President also pointed out that Indonesia has encouraged investment in the health sector to meet domestic needs. He hopes that the B20 community will provide concrete offers that can be part of the concrete achievements of the G20 Summit.
January
President Joko Widodo released the 2022 first export of smelter-grade alumina from PT Bintan Alumina Indonesia in the Galang Batang Special Economic Zone in Riau Islands on Tuesday (25/10. In a press release of the Presidential Secretariat Press Bureau, the President appreciated the company that was brave enough to downstream the mineral and mining industry. He also reaffirmed the importance of industrial downstream by stopping raw material export. Then, the President encouraged companies to process the raw materials into finished goods and semi-finished goods in order to increase the product's added value.
On the occasion, the President further remarked that Indonesia has a great potential to downstream coal into dimethyl ethyl (DME). The downstream will bring about a lot of profits for the country from personal and company tax to jobs for the people. He also affirmed again that the government will keep stopping raw mineral and coal export despite getting protests from many countries via the World Trade Organization.
Meanwhile, Coordinating Minister for Economy, Airlangga Hartarto said that the Smelter-grade Alumina (SGA) production in the future will accelerate the downstream of bauxite into the aluminum ingot. It needs domestic industry for various products, such as plate, billet, scrap, and profile that are required in many industrial processes such as aircraft, ship, automotive, and construction.
January
President Joko Widodo inaugurated the groundbreaking of coal downstreaming into dimethyl ether (DME) at Tanjung Enim Industrial Area in South Sumatera on Monday (24/1). The coal gasification is the result of the cooperation among PT Pertamina (Persero), PT Bukit Asam, and Air Products and Chemicals Inc.
In his remarks, the President said that through this project, Indonesia will reduce dependence on LPG import. He also remarked that until now LPG imports by Indonesia reaches Rp 80 trillion annually. Moreover, the government must subsidy LPG from Rp 60 trillion to Rp 70 trillion per year to make it affordable. Head of state believed that if coal gasification can operate, Indonesia may save Rp 7 trillion every year.
President Joko Widodo further affirmed that if Indonesia keeps importing LPG, only other countries will get the profit and new jobs. There will not be any investment so that jobs will not be created. Therefore, through this project, LPG import can be reduced. This will improve the current account balance that often experiences a deficit.
Meanwhile, Minister of Investment/Chairman of Indonesia Investment Coordinating Board, Bahlil Lahadalia in his written statement explained that the investment for this project came from the US Air Products and Chemicals, Inc (APCI) invested Rp 33 trillion.
Director of PT Bukit Asam Business Development, Rafli Yandra said that this project will process 6 million ton of coal into 1.4 million ton of DME every year.
January
Indonesian President Joko Widodo said the country has made the Covid-19 pandemic period as a period of self-improvement, by laying new foundations for stronger and sustainable growth. In addition, Indonesia also continues to reform the economic structure and improve the business climate. The Head of State conveyed this in his remarks at the World Economic Forum: State of the World Address virtually last Thursday, January 20. President Joko Widodo emphasized Indonesia has improved the investment ecosystem, facilitated licensing, provided legal certainty and special incentives for priority investment sectors.
He also said apart from the economic sector, Indonesia also continues to improve the quality of human resources through various programs, ranging from up-skilling and re-skilling, formation of polytechnics in collaboration with industry to collaboration with universities abroad.
Indonesia also continues to accelerate infrastructure development that contributes to increased investment and business climate. New sources of growth, especially the green economy will continue to be developed, among others, development of the electric vehicle industry ecosystem and the construction of the largest green industrial area in North Kalimantan.
President Joko Widodo added collaboration with the private sector will also continue to be strengthened. In addition, investment opportunities will also be opened as wide as possible for the six priority sectors, namely, export-oriented labor-intensive industries, renewable energy, infrastructure, automotive, tourism and mining. In addition, a number of development priorities have also been set by the government, including increasing food production through the development of food estates, implementing the concept of low carbon development (green recovery) and transformation to a digital economy through expansion, equity and improving the quality of digital infrastructure and services. President Joko Widodo invites stakeholders in the forum to partner with Indonesia.
January
President Joko Widodo has approved the extension of the luxury tax (PPnBM) for automotive products. This was announced by Coordinating Minister for Economy, Airlangga Hartarto in an online press conference recently.
Minister Airlangga explained that cars worth less than Rp 200 million or low-cost green cars (LCGC) are imposed a 3% luxury tax and the government will cover that tax in Q1 2022. Then in Q2, 2% of luxury tax will be subsidized by the government, and 1% in Q3. Then in Q4, people will pay fully the 3% luxury tax.
Meanwhile, automotive products worth Rp 200 million to Rp 250 million with 15% luxury tax, the government will subsidize half of the tax in Q1 2022. In Q2, the people must fully pay 15%. He added that President Joko Widodo also approved the extension of property fiscal incentive or value-added tax subsidy (PPN DTP) until June 2022. Apartments and houses worth more than Rp 2 billion will be given a 50% value-added tax subsidy from the beginning of the contract. Then, a 25% value-added tax subsidy is given for apartments and houses worth from Rp 2 billion to 5 billion.
Minister Airlangga further remarked that President Joko Widodo also approved social assistance, namely cash assistance for street vendors, shop owners, and fishermen. The total social assistance for each person is Rp 600 thousand. Meanwhile, the total number of recipients reaches 2.76 million people. They consist of 1 million street vendors and shop owners, as well as 1.76 million fishermen and extremely poor people. The assistance will be carried out in Q1 2022.
Therefore, the government prepares the National Economic Recovery fund in 2022 worth Rp 451 trillion, which was approved by President Joko Widodo. Besides fiscal facilities and social security, the National Economic Recovery fund will also be given for the health sector.