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August
Ministry of Energy and Mineral Resources spurs the growth of Rooftop Power Plant industry
Written by Maryati
The Ministry of Energy and Mineral Resources continues to spur the growth of the rooftop solar power plant industry in order to contribute significantly to the development of new and renewable energy in Indonesia. Director General of New Renewable Energy and Energy Conservation Dadan Kusdiana said it in an online discussion on Friday, August 27. According to him, the revision of the Ministerial Regulation regarding the use of rooftop solar power plant can answer the needs of its supporting industry. One of the urgency of the regulation revision is to answer the global challenges related to the consumption of green products, which must be met by the industrial sector quickly so that their products remain competitive and acceptable to consumers.
He further explained that the tendency of consumers for green products made from environmentally friendly processes requires factories to use clean energy. The presence of supporting industries for roof solar power plant or PV mini-grid will improve the economy, thus making the cost of installing PV mini-grid more competitive. Indonesia can increase its capacity and have an industry from the upstream side for the manufacture of cells which are still imported. If this develops later, the solar power plant industry in the country can grow.
Dadan said that he continues to communicate with the Ministry of Industry and associations regarding the capacity of the local PV mini-grid industry built in Indonesia.
The government's main goal is to open up as wide as possible the domestic PV mini-grid market, so that it can spur business actors to build supporting industries for roof PV mini-grid, both in laminating and upstream side of cell manufacture.
In January 2018, the number of rooftop solar power plant users in Indonesia was only 351 customers, so the growth rate of rooftop solar power plant customers reached 1,047 percent within three years. The current figure obtained by the Ministry of Energy and Mineral Resources is 22 to 26 ready manufacturers with a total capacity of around 500 megawatts.
August
A New Promising Agriculture Commodity to Improve the National Economy
Written by Maryati
President Joko Widodo said there is a new promising agriculture commodity to improve the national economy as well as farmers' welfare. The new commodity is porang (elephant foot yam).
The president during the 2021 Inflation Control National Coordination Meeting at the State Palace, Jakarta Wednesday (25/8) said porang is very promising and has a great market. He therefore hoped porang commodity can be encouraged into finished goods such as cosmetics or food ingredients.
President Joko Widodo recently visited a porang processing facility in East Java. Porang (elephant foot yam) is a type of tuber that contains glucomannan carbohydrate or a substance in the form of complex sugar. Porang is usually processed as shirataki; a mixed ingredient in cake, bread, ice cream, candy, jelly, jam; and as a thickening agent for syrups. Other than food, porang can be made into cosmetics.
According to the president, Indonesia must seriously work on this commodity. Not only to increase farmer's exchange value and welfare, but also to create a milestone so that agriculture can give greater contribution to the economy. He then asked for preparedness from the upstream to the downstream.
Jokowi affirmed the farmers' cluster model institution also needs strengthening. The farmers-owned business in the form of cooperatives and village-owned enterprises (BUMDes) also need to be developed so that the post-harvest added-value can keep increasing.
The other effort to be done, said the president, is expanding market access by means of partnership with the industries. Financial access alo needs to be made easier and simpler. In funding, the government will keep accelerating the supermicro loan (KUR). The agriculture KUR in 2021 was 70 trillion rupiahs of the total KUR, namely 253 trillion rupiahs. The KUR distribution scheme will keep being perfected so that it is suitable to the business characteristics in the agriculture sector.
President Joko Widodo also asked the ministers, heads of institutions, and regional heads to strengthen assistance for the farmers. He also asked all to use the technology, including digital platforms to increase farmers' productivity and cut short the lengthy marketing chain for the micro, small, medium businesses in the food sector.
August
Government Continues Burden Sharing with Bank Indonesia to Overcome Covid-19 Pandemic
Written by Maryati
The Indonesian Finance Ministry and Bank Indonesia continued burden sharing through the third joint decree (SKB). The burden sharing to overcome Covid-19 pandemic is effective until December 31 2022.
Minister of Finance, Sri Mulyani Indrawati in a press conference in Jakarta, Tuesday (24/8) said that the third joint decree was caused by the spike in Delta variant that requires a lot of funding, including for health and social treatments.
In general, the policy synergy in the third joint decree still holds the important principles of the fiscal, namely keeping the fiscal space and fiscal sustainability, or fiscal continuity for mid-term, as well as maintaining a productive quality spending. It also supports fiscal consolidation with deficit reduction policy in stages to be under three percent starting from 2023.
In the joint decree, Bank Indonesia will buy sovereign debt papers –SBN worth Rp 439 trillion, consisting of Rp 215 trillion in 2021 and Rp 224 trillion in 2022.
The sovereign debt papers issuance scheme is divided into two clusters. First, Bank Indonesia contributes to all interest costs for vaccination and Covid-19 health treatment. Then, the government bears the interest rate from sovereign debt papers issuance for Rp157 trillion in 2021 and Rp 184 trillion in 2022, with a three-month tenor of BI reverse repo rate.
The sovereign debt papers issuance whose interest rate was paid by the government will be used for health and social treatments. The health treatment budget includes vaccination, diagnostics (testing, tracing, treatment), therapeutic or Covid-19 patients treatment costs, incentive for health workers, medicine, health equipment, Covid-19 handling in regions, and other Covid-19 related health treatments.
While the social treatment budget includes funding for various protection programs for affected underprivileged people.
Governor of Bank Indonesia, Perry Warjiyo in a press conference affirmed that the state budget burden sharing extension will not reduce Bank Indonesia's independence as a central bank.
He also said that the third joint decree will not affect the financial condition of Bank Indonesia. Although the cooperation will expand the deficit, Bank Indonesia's capital is still very huge and enough to maintain the continuity and financial condition of the central bank.
August
Ministry of Industry holds Indonesia 4.0 Conference & Expo 2021
Written by Maryati
Indonesian Ministry of Industry held the Indonesia 4.0 Conference & Expo 2021 online from August 18 to 20, 2021. Minister of Industry Agus Gumiwang Kartasasmita said in a written statement, Thursday (19/8) that this event could be a venue for showing the world about the capabilities of manufacturing sector and other sectors in Indonesia to transform to industry 4.0.
The Indonesia 4.0 Conference & Expo 2021 was organised by the Industrial Services Policy and Standardization Agency of the Ministry of Industry. It was held to coincide with the celebration of the 76th Independence Day of the Republic of Indonesia. Thus, according to the Minister of Industry, this event is also the right momentum to continue to improve national unity and integrity through collaboration towards Indonesia 4.0. In accordance with the theme of this year's celebration, 'Indonesia Resilient, Indonesia Grows', it is hoped that the manufacturing industry sector will be independent, sovereign, advanced, just and inclusive. He added that the implementation of Making Indonesia 4.0 would be able to encourage the growth of real gross domestic product (GDP) by 1-2 percent per year. Thus, it will increase from the baseline of 5 percent to 6-7 percent in the period 2021-2030.
The Indonesia 4.0 Conference & Expo 2021 is also intended to be a forum to strengthen networks between policy makers, industry players, technology providers and academics. In this activity they can share ideas and research results related to the latest technology and solutions as a formula to support the acceleration of industrial transformation in Indonesia.
The Head of the Standardization and Industrial Services Policy Agency of the Ministry of Industry, Doddy Rahadi, said that the acceleration of the transformation of industry 4.0 in Indonesia is one of the government's efforts to restore the national economy. Synergy and collaboration between parties in the industrial 4.0 ecosystem in Indonesia is very important in order to accelerate the transformation process of Industry 4.0. These parties include the government, industry players/associations, universities, academics and R&D institutions, technology providers, consultants, and financial players.
August
Bank Indonesia and Bank of Thailand launched a cross-border quick response (QR) payment system between Indonesia and Thailand in order to facilitate financial and economic transactions between the two countries. The pre-official launching of the international QRIS was held in Jakarta on Tuesday (17/08). On the occasion, Governor of Bank Indonesia, Perry Warjiyo thanked the Bank of Thailand because they have jointly realized the two countries' dream to connect the Quick Response Code Indonesian Standard (QRIS) and QR Thailand Standard to bring the economy forward.
Governor Perry said that with the cross-border QR, consumers and sellers in both countries can perform and accept instant payments for goods and services. Perry also stated that the pre-official launching of the cross-border QRIS is also a historical moment for Indonesia. This shows that Indonesia cannot stand alone. Instead, Indonesia must synergize and help each other for the nation's advancement.
At this stage, Indonesian users can use the cellular payment app to scan the Thailand QR codes. While Thailand users can also use their own apps to scan the QRIS. This is the first connection that links retail payment system operators in the two countries. So, this becomes a milestone in the ASEAN Payment Connectivity initiatives that aims to promote financial integrity in the region.
In this pre-official phase, Bank Indonesia hopes that there will be more banks and non-banks that participate while processing to the full commercial phase to be launched in the first quarter of 2022. Later, the service will be expanded to allow the users in two countries to perform a real-time fund transfer easily just by referring to the recipient's phone number.
August
President Sets Economic Growth Target upto 5.5 percent by 2022
Written by Maryati
President Joko Widodo set the target for Indonesian economic growth around 5.0 upto 5.5 percent by 2022. The target was stated by the President in his annual address on the 2022 State Budget Draft and Financial Note during the House of Representatives' Plenary Session 2021-2022 at the parliament office in Jakarta, Monday (16/8).
President Joko Widodo affirmed that the economic growth target estimation considered the dynamics of Covid-19 pandemic development.
Some assumptions had been prepared by the government to achieve the target. The main one is preparing the 2,708.7 trillion rupiahs for the 2022 State Budget. It consists of 1,938.3 trillion rupiahs for the central government budget, 770 trillion rupiahs for regional transfer and village fund, 255.3 trillion rupiahs for health, 427.5 trillion rupiahs for social security, 541.7 trillion rupiahs for education. The government will also continue the infrastructure projects worth 384.8 trillion rupiahs for next year.
President Joko Widod hoped the state budget could support achieving the development target in 2022. The targets are open unemployment index around 5.5% - 6.3% and poverty index 8.5% - 9.0% that is focused on decreasing extreme poverty.
The government also set the target for state revenue upto 1,840.7 trillion rupiahs. It includes 1,506.9 trillion rupiahs tax revenue and 333.2 trillion rupiahs non-tax revenue. Meanwhile, the deficit was predicted to be around 4.85% from the Gross Domestic Product or around 868 trillion rupiahs.
Economy expert from the University of Indonesia, Teuku Riefky said that the economic growth target above five percent in 2022 is quite realistic if the Covid-19 pandemic would not have a new and worse variant next year. Therefore, Riefky recommended that the government must still focus on handling the Covid-19 pandemic.
Underprivileged and vulnerable people's purchasing power must also be maintained until the pandemic is handled. He added that the government will then focus on economic recovery to boost purchasing power, such as through stimulus to business sectors both in taxation and other forms.
August
Micro, Small and Medium Enterprises (MSMEs) have a role and strategy in building the nation's economy. In addition, they also play a role in economic growth and employment. This was said by the Vice President of the Republic of Indonesia, Maruf Amin, at the peak of the commemoration of Micro, Small and Medium Enterprises (MSMEs) Day, Thursday, August 12. He also conveyed, during the pandemic which has lasted for almost 1.5 years, MSME players are increasingly integrated in all aspects of the national economy. The pandemic that has hit most of their businesses, in fact still has a positive impact, one of which is accelerating the digitization of MSMEs. In this era of disruption, digitalization is increasingly relevant and strategic for MSMEs to survive and play a role as the main driver of national economic recovery. Therefore, the Vice President hopes that MSMEs, as the frontline of economic revival, can achieve success in achieving economic growth and achieving social welfare in a fair and equitable manner.
However, Ma'ruf Amin also advised that the digitization must be balanced with two things. First, increasing the capacity of human resources for MSME business actors. Second, support for market access policies for the products. For this reason, he invites all parties to continue to increase their commitment, namely, in coaching and mentoring, to encourage productivity. In addition, the assistance and development of MSMEs, especially those with export potential, must be supported by easy financing facilities, as well as collaboration with large businesses.
At the same event, the Minister of Cooperatives and Small and Medium Enterprises Teten Masduki said that the COVID-19 pandemic still poses challenges for business activities, even though the economic growth rate improved in the second quarter of this year. According to Teten, the implementation of emergency Community Activity Restrictions (PPKM) in the second quarter certainly presents challenges for business activities. However, he also hopes that the commemoration of National MSME Day 2021 will be an opportunity to revive MSME transformation efforts for the future. He hopes that this opportunity is used to prepare for the rise of Indonesian MSMEs to dominate and expand while adapting in the midst of a pandemic disruption.
August
PT Chevron Pacific Indonesia officially ended the almost one century of oil-gas block management in Rokan, Riau Province on Sunday (8/8). Now, state-owned PT Pertamina Hulu Rokan officially takes over the oldest oil and gas mine in Riau for the next 20 years. The takeover was in line with the government's mandate through the Energy and Mineral Resources Ministry in 2018.
President Director of Chevron Pacific Indonesia, Albert Simanjuntak thanked for the trust given by the Indonesian government for Chevron in managing the Rokan block for 97 years and in making the block as the greatest oil producer in Indonesia.
Meanwhile, Minister of Energy and Mineral Resources, Arifin Tasrif welcomed the Rokan takeover. He hopes that PT Pertamina Hulu Rokan could increase the oil and gas production in Rokan through a massive drilling investment.
Quoting the press release of the Energy and Mineral Resources Ministry on August 8, Minister Arifin Tasrif hopes that PT Pertamina Hulu Rokan would submit a proposal for an aggressive production increase activity for the remaining 2021 and beyond. He also explained that this must be Pertamina's commitment, considering the Rokan block is one of the biggest Working Areas in Indonesia with a strategic value in fulfilling the 1 million barrels per day of oil production target and 12 billion cubic feet gas production target by 2030.
Answering the minister's request, President Director of PT Pertamina, Nicke Widyawati as the parent company of PT Pertamina Hulu Rokan said that the trust given by the government to manage the Rokan block will be carried out as best as they can for the people and the country. She further remarked that the Rokan working area management takeover by Pertamina as a state-owned company will give a bigger benefit for the country both from the management and revenue. She added that this will strengthen PT Pertamina, especially Pertamina Hulu Rokan, as the driver for national development and economy.
Until the end of 2021, Pertamina Hulu Rokan plans to drill 161 new wells, including the available wells from the previous operator's commitment. For 2022, Pertamina Hulu Rokan plans to drill around 500 new wells. This commitment is the biggest investment commitment and number of wells among other oil and gas working areas in Indonesia.
August
Agriculture Ministry Increases Elephant Foot Yam and Swallow's Nest
Written by Maryati
Indonesian Agriculture Ministry's Secretary General Kasdi Subagyono said the government focuses on increasing agricultural export, especially for commodities with great opportunity such as elephant foot yam and swallow's nest. Kasdi on Monday (02/08) said the government's focus is raising agricultural productivity to be exported in a greater sum. One of the strategies is opening investment opportunities in the agriculture sector for domestic and foreign business people.
According to Kasdi, the Agriculture Ministry facilitated the export by creating ease of doing business for the employers. The ministry also opened the opportunity and knowledge to manage the elephant foot yam and swallow's nest. He said the export market for swallow's nest is China. While the elephant foot yam is mostly exported to China and Japan.
Based on Agriculture Quarantine Center, Indonesian export of elephant foot yam was 14.8 thousand ton in the first half of 2021. This surpassed the year on year export value of the 2019's first semester with 2.7 thousand ton. So it increased by 160 percent. Meanwhile, the swallow's nest export has kept growing since 2015 until 200, namely starting from 800 ton in 2015 up to 1,300 ton in 2020.
Kasdi further remarked that the agriculture export in 2020 rose by 15.5 percent with 451 trillion rupiahs in value. It is greater than the previous year's 390 trillion rupiahs. According to Kasdi, the agricultural export increase was still dominated by plantation sub sectors such as palm oil.
August
Indonesian Maritime and Fishery Ministry Boosts Fishery Export to Middle East
Written by Maryati
Indonesian Maritime and Fishery Ministry has encouraged fishery export increase to the Middle East since it is a market opportunity that needs to be optimized. That was stated by Head of National Fish Quarantine, Quality Control, and Fishery Products Safety (BKIPM), Rina in a press release on Saturday (31/7).
Rina also stated that Indonesia needs to recognize the regulations on fish health guarantee systems and special export regulations in the Middle East. This international-standard fish health guarantee system refers to the World Organization for Animal Health (OiE), FAO (Codex), and special regulations of the trade partner countries, including the Middle East. She further remarked that referring to the International Trade Center (2020), in 2017 until 2019, the average fishery product demand from Middle Eastern countries grew by 4.3 percent year on year. The Middle Eastern fishery commodity import value in the same period was averagely 2.64 percent from the total world's fishery commodity import value.
Rina said that Indonesia has been importing canned tuna into some Middle Eastern countries. However, the export value is still far behind Thailand that controls 71 percent of the Middle Eastern import market for tuna, mackerel-tuna, and skipjack. Meanwhile, the potential markets for Indonesian business people can include shark catfish and other freshwater fishes. Currently, the top shark catfish exporter to the Middle East is Vietnam.
Besides commodities for consumption, Rina ensured that there is still an export opportunity for ornamental fish, which is one of the most popular hobbies in the world. Indonesia has the production and highest diversity of ornamental fish in the world.
Previously, Director General of Maritime and Fishery Product Competitiveness Value Strengthening, Artati Widiarti said that the maritime and fishery sector made a positive performance in the first five months of 2021. The trade value surplus of this sector was US$1.9 billion. It increased by 3.72 percent compared to the same period last year. Cumulatively, the fishery product export value in January until May was US$2.1 billion or increasing by 4.94 percent compared to the same period in 2020.
These export values came from the main commodities, including shrimp, tuna, skipjack, mackerel-tuna, squid, cuttlefish, and octopus. The main export destination is the U.S, followed by China and ASEAN countries.