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July
The Indonesian Central Statistics Agency on Thursday (15/7) launched Indonesia's trade balance, which experienced a surplus of US$1.32 billion dollars in June 2021. The total value of exports reached US$18.55 billion dollars and the total import value of US$17.23 billion dollars. Head of the Central Statistics Agency, Margo Yuwono said that this achievement was the 14th time in a row since May 2020. This shows that there is resilience in terms of national exports and imports, despite the current Covid-19 pandemic.
Responding to the report, Coordinating Minister for Economic Affairs, Airlangga Hartarto said that the momentum of Indonesia's trade balance surplus must be maintained through a number of strategies. He also remarked that to maintain the sustainability of the trade surplus going forward, several key factors need to be kept in mind. These key factors include maintaining stable global demand growth, particularly in key markets. Indonesia must also maximize the role and function of trade representatives in encouraging increased exports. Other efforts that need to be done are monitoring the dynamics of price developments and export volumes of main and potential commodities, as well as maintaining a balance of import growth, especially in the consumption import component.
Minister Airlangga believes that the increase in exports and imports in June 2021, both monthly and annually, shows that economic activity in Indonesia continues to recover. Indonesia's trade balance performance is still quite impressive even in the midst of Covid-19. The performance of the trade balance which is quite resilient amid the Covid-19 pandemic needs to be appreciated.
The surplus in June 2021, in particular, was supported by exports of some of Indonesia's mainstay non-oil and gas commodities, namely animal and vegetable fats and oils, mineral fuels, and iron and steel. The increase in exports was also influenced by movements in global commodity prices, such as coal and CPO.
Overall, this positive trade balance performance was also influenced by developments in manufacturing activity in major trading partner countries, particularly the USA and China. Head of the Central Statistics Agency, Margo Yuwono said that the countries that contributed to the surplus in Indonesia's trade balance in June 2021 were the United States, the Philippines and Malaysia.
July
Indonesian Investment Minister / Investment Coordinating Board Head (BKPM), Bahlil Lahadalia made a working visit to the US last week in a bid to strengthen economic relations between Indonesia and the US. During the visit, Minister Bahlil met American Indonesian Chamber of Commerce (AICC) in New York. He affirmed Indonesian government's commitment to keep improving the country to be friendlier for investors. One of which is through ease of licensing and investment monitoring.
Minister Bahlil further stated that the US is the most important investor for Indonesia. The two countries' relations need to keep being strengthened and improved. So, the US cooperation and investment potential in Indonesia also keep growing.
Furthermore, Minister Bahlil also explained the Risk-Based Online Single Submission System (OSS). With a digitalized and centralized investment permit application process in the OSS, American business people can apply without coming to Indonesia. He also pointed out the Job Creation Law. Besides providing facilities for investors, the law also opens the opportunities for micro small and medium businesses in Indonesia to grow.
Meanwhile, Executive Director of American Indonesian Chamber of Commerce (AICC), Wayne Forrest appreciated the improvement in investment climate done by Indonesia. He said that the Covid-19 pandemic made the US companies unable to be as aggressive as during normal times. However, some companies are still interested to invest in Indonesia, namely in the energy and electricity sector. Forrest also affirmed that his side will keep pushing the US companies to invest in Indonesia.
Indonesian Consul General in New York, Arifi Salman also gave appreciation for the Investment Minister who visited in the difficult time. He said the visit showed the earnestness of Indonesian government in increasing the two countries' economic cooperation.
The Investment Ministry / Investment Coordinating Board recorded the total investment realization from the US in 2016 - March 2021 reached US$6.6 billion dollars and was the 8th biggest. The dominant investment sectors during the period were mining, power, gas, water, hotel and restaurant, chemical industries, and pharmaceuticals. Location-wise, 85 percent of the investment realization is located outside Java with most of it in Papua.
July
Maritime and Fishery Ministry & WHO Agree I-Fish Cooperation until 2023
Written by Maryati
Indonesian Maritime and Fishery Ministry with the Food and Agriculture Organization (FAO) agreed to the extension of cooperation in conservation and sustainable use of freshwater fishery (I-Fish) until 2023. That was announced by the ministry's secretary general Antam Novambar in a press release in Jakarta on Sunday (11/07).
I-Fish is a cooperation between Indonesian Maritime and Fishery Ministry and FAO under the framework of Global Environment Facility (GEF) signed by the Ministry's Secretary General and FAO Representative for Indonesia and Timor-Leste in 2017. Initially the cooperation is valid from 2017-2021. However, at the end of June 2021, it was extended until 2023.
Antam Novambar said the 6.1 million USD cooperation will be in effect for the next two years. It aims to strengthen the management framework for sustainable use of Indonesain freshwater biodiversity.
Public Relations and Foreign Cooperation Head of the ministry Agung Tri Prasetyo said the I-Fish strategy is an integration of freshwater biodiversity mainstreaming into the policy through demonstrations.
The conservation and sustainable use will be implemented mainly for critical habitats at five locations in Kalimantan, Java, and Sumatra. The I-Fish main activities include the demonstration sites for belida fish (Chitala lopis) in Kampar, Riau; eels in Sukabumi and Cilacap, West Java; arowana and "beje" fishery in Kapuas and South Barito, South Kalimantan.
Agung Tri Prasetyo explained that the I-Fish is the greatest freshwater fishery management cooperation in Indonesia between the Maritime and Fishery Ministry and FAO. It is expected to contribute directly to the freshwater fishery village development. Agung also said that freshwater fishery is usually small-scale, namely in communities across the riverbank. He therefore affirmed the importance of freshwater fishery in fulfilling people's welfare and food security.
Agung also said in the future, the best I-Fish study and practices will become a reference in making the policy for freshwater fishery management across Indonesia. Some better policies and management will be a catalyst for freshwater management in other various land habitats.
July
Indonesian Coordinating Minister for Economic Affairs, Airlangga Hartarto along with the United States Ambassador to Indonesia, Sung Kim discussed various matters from improving the trade balance to vaccination through a virtual meeting. The trade value between Indonesia and the United States is currently around US$30 billion dollars, smaller than the bilateral trade between the United States and other ASEAN countries.
Minister Airlangga Hartarto in his statement in Jakarta, Thursday (8/7) said that Indonesia could increase the value of trade by two or three times, considering that Indonesia is the largest economy in ASEAN. There is plenty of room for trade between the two countries.
Meanwhile, the United States Ambassador to Indonesia, Sung Kim hopes that economic relations, including in the fields of trade and investment, between the two countries will continue to grow. There are various investment prospects from US companies that are attracted to Indonesia.
In addition, Ambassador Kim stated, the United States government expressed concern over the difficult times faced by Indonesia due to the Covid-19 pandemic and would donate vaccines to help deal with the pandemic in Indonesia. According to Ambassador Sung Kim, the United States government has donated 4 million doses of the Moderna vaccine along with other technical and medical assistance, as well as oxygen. The Indonesian government also appreciates the support and supply of the Moderna vaccine from the United States.
Minister Airlangga Hartarto, who is also the Chairman of the Committee for Handling COVID-19 and the National Economic Recovery, further said that vaccine support could help and increase the level of confidence of health workers as front-liners. He added that in serving the community's need for medical care during the pandemic, the government uses health equipment both from within the country and import, supported by relaxation of import duties.
The virtual meeting also discussed prospects for renewable energy cooperation. Minister Airlangga also explained that various potential renewable energy resources, such as solar, wind and geothermal exist in Indonesia. The government is also encouraging the use of solar panels on several islands, such as Batam and Bintan through the solar program, to increase the market demand for solar panels. Minister Airlangga emphasized that Indonesia is open to cooperation with the United States to accelerate the transition to renewable energy in Indonesia.
July
Government Instructs 100 percent Oxygen Production for Medical Needs
Written by Maryati
Coordinating Minister for Maritime and Investment as well as the Coordinator for Java-Bali Emergency Public Activity Restrictions (PPKM Darurat), Luhut Binsar Pandjaitan instructed the oxygen production to be directed for medical needs. This was announced on Sunday (04/07). He also said that the oxygen supply is an issue that must be handled immediately.
Data from the Health Ministry and Industry Ministry showed that oxygen demand rose 5 times. Therefore, Minister Luhut in the meeting coordinated directly with the Industry Ministry so that the recording of oxygen demand is tidied up in every city.
Responding to that, the Industry Ministry stated both big and small producers are obliged to convert their oxygen 100 percent for medical oxygen. Therefore, the national target of 1,700 tons oxygen per day can be achieved. From that, 1,400 ton per day will be used in Java.
Besides, some companies in some regions, such as Morowali, Balikpapan, Belawan, and Cilegon also sent ISO tanks to handle oxygen supply. Some oxygen manufacturers, such as Samator Group, LINDE Indonesia, Petrokimia Gresik, Air Products Indonesia, Air Liquide Indonesia, and Iwatani Industrial Gas Indonesia were also committed to supplying medical oxygen into Java that can reach 1,315 ton per day.
July
Minister of Industry, Agus Gumiwang Kartasasmita said that Indonesia's manufacturing Purchasing Managers Index (PMI) in June was still massive, showing the expansion of the manufacturing industry. He refers to the IHS Markit report which puts Indonesia's manufacturing PMI at 53.5. Based on the survey conducted by IHS Markit, Indonesia's PMI index fell to 53.5 in June compared to May's 55.3. IHS Markit used a value of 50 as neutral. An index above 50 indicates that manufacturing companies are expanding. Meanwhile, the index below 50 weakens.
Minister Agus Gumiwang Kartasasmita further stated in Jakarta, Thursday (1/7) that there is still a passion for business amid the impact of the increase in Covid-19 cases. He remains optimistic that the national economy will grow positively in the second quarter of this year. This belief is based on a number of indicators, including the performance of the manufacturing sector.
He also explained that in the last eight months, Indonesia's manufacturing PMI continued to be above 50. This means that the domestic manufacturing industry is in an expansive level. Industrial growth is expected to reach a positive point in the second quarter of this year. The good performance of the manufacturing industry sector in Indonesia, for example, can be seen in the export value of the manufacturing industry which was recorded at US$66.70 billion in January-May 2021, up 30.53 percent compared to the same period in 2020. Of the achievements, the processing industry contributed the highest, almost 80 percent of the total national exports.
He emphasized that the large proportion of exports of processing industry products also illustrates that there has been a shift in Indonesia's exports from primary commodities to manufactured products with high added value. This means that Indonesia has carried out an economic transformation, no longer being an exporter of raw materials, but of finished products or semi-finished goods.
In addition, during the first quarter of 2021, the investment value realized by the manufacturing industry reached an increase of 38 percent compared to the achievement in the same period last year.
July
Indonesia and Austria Cooperate in Developing Maritime Skill Training Center
Written by Maryati
Indonesian government through the Manpower Ministry joined hands with Austrian Government in developing a maritime skill training center (BLK) in Serang, Banten. Manpower Minister Ida Fauziyah gave appreciation to Austrian government for their commitment in supporting the maritime skill training center development in Indonesia. Minister Ida Fauizyah said that during the MoU signing, Forum for Communication between Training Center and Industry (FKLPI) board inauguration, and the Maritime Skill Training Center Development first milestone planting at the Job Training Development Center (BBPLK) Serang Banten on Monday (28/06).
Ida Fauziyah said the maritime skill training center development project scope includes four main working components. They are building construction, training equipment procurement, curriculum development, program syllabus, and training modules that meet with the Europe-recognized Austrian standards which are recognized in Europe. The training will be adjusted to the local needs in Indonesia.
Minister Ida Fauziyah further explained the cooperation is a comprehensive development of the four existing vocational trainings namely mechanical, welding, electrical, and mechatronic engineering, with special strengthening for welding and electrical engineering.
Meanwhile, Austrian Ambassador for Indonesia Johannes Peterlik also appreciated the maritime vocational training workshop at Serang Job Training Development Center. The Austrian embassy will keep monitoring the project development. This cooperation is expected to give a significant contribution, not only for the people around the Serang Job Training Development Center, but also Indonesian welding and electric industry in the future.
June
The Ministry of Industry continues to encourage the acceleration of battery-based electric motor vehicles and new renewable energy development. This step is in line with the government's vision of targeting Indonesia to become a major player in the global automotive industry.
Minister of Industry, Agus Gumiwang Kartasasmita said in Jakarta, Thursday (24/6) that the automotive industry is one of the priority sectors based on the Making Indonesia 4.0 roadmap. The main target is that Indonesia will become an export hub for motor vehicles, both for fuel-based and electric vehicles.
Director General of Metal, Machinery, Transportation Equipment and Electronics at the Ministry of Industry, Taufiek Bawazier said that Indonesia is also targeting to develop the main component industry for electric vehicles in the form of batteries, electric motors and inverters. So far, the automotive industry has been able to make a significant contribution to the national economy.
Indonesia's potential is currently supported by 21 automotive manufacturers. The total production capacity reaches 2.35 million units per year, by absorbing 38 thousand direct workers and more than 1.5 million people working along the value chain of the automotive industry.
According to Taufiek Bawazier, the demand for electric vehicles in the world is expected to continue to increase and will reach around 55 million units by 2040. Eenvironmentally, this growth encourages an increase in the need for lithium ion batteries. The increasing use of batteries also encourages an increase in the raw materials so that Indonesia with the abundant source of this battery raw material will play a very important role.
Currently, there are nine companies in Indonesia that support the battery industry. Five companies provide raw materials, while the other four are battery manufacturers. The development of batteries will also be directed to support the government's renewable energy program; one of which is through solar energy. Batteries that are included in the solar energy ecosystem will encourage the adoption of renewable energy, as well as spur the growth of the solar cell industry that already exists in the country.
June
Government Targets 6.1 Million Small Medium Industry Go Digital
Written by Maryati
Indonesian Ministry of Industry keeps trying to accelerate the small and medium industries to have digital transformation in their production and business process. Minister of Industry, Agus Gumiwang said in Jakarta on Tuesday (22/06) that this strategy is done through the "e-Smart IKM" which aims to boost competitiveness and expand market access. According to Minister Agus, the e-Smart IKM has been ongoing since 2017 and has trained 13,184 small and medium industry owners in Indonesia. They have now been able to enter and run digital marketing on the available marketplace.
Minister Agus Gumiwang further explained that the e-Smart IKM program is held to allow the small and medium industry owners in accessing partners that can support ‘the go digital’ such as marketplace, information and communication technology volunteer, as well as state-owned business that supports the small and medium industries. He also affirmed that the government targets 6.1 million micro small and medium businesses to enter the digital marketplace in 2021.
Minister Agus added that the target is in line with the priority program in the Making Indonesia 4.0 roadmap. The great idea is to make Indonesian industry sector have more global competitiveness. So, Indonesia can join the world's 10 strongest economies by 2030. Therefore, one of their priority is empowering the small and medium industries to be more optimal in using digital technology and running e-business. This is also in line with ‘the Proud of Indonesian Product National Movement’ launched by President Joko Widodo in 2020. Through this movement, the government is synergizing with the businesspeople and the public to love and buy local products.
Meanwhile, Director General of the Small Medium and Multifarious Industry, Gati Wibawaningsih said that the e-Smart IKM will be held in the form of workshops in various regions. The workshop materials will include online marketing video contents, tips and tricks for product photographing, and the use of a marketplace for marketing. She also affirmed that this year, her side targets to provide e-business education, training, and assistance for 4.000 small and medium industry owners in Indonesia.
June
Indonesian Minister of Trade, Muhammad Lutfi along with Canadian Minister of Small Business, Export Promotion, and International Trade, Mary Ng officially launched the beginning of Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) negotiation. The launching was held virtually on Monday (21/06).
Minister Muhammad Lutfi remarked that the ICA-CEPA launching is a milestone in Indonesia-Canada relations that have been ongoing for 69 years. This agreement is expected to support the economy, trade, and investment growth, including to create jobs for the people of both nations. He added that this is foreign cooperation relations of strengthening the strategy for Indonesia and Canada as equal, important, and strategic partners - mainly amid the very dynamic global geopolitics.
Minister Muhammad Lutfi also explained, this is also a follow-up of President Joko Widodo's direction to make Indonesia actively form international trade negotiation with potential trade partners to open new market, especially to create an export opportunity amid the pandemic.
He further stated that the Indonesia-Canada agreement is a strategic move to open the chance for greater penetration of Indonesian products in North America. Until now, Indonesia only has one trade agreement in the American continent namely with Chile in South America.
Meanwhile, Director General of the Trade Ministry's International Negotiation, Djatmiko Bris Witjaksono remarked that both ministers gave instructions for the two negotiation teams to immediately prepare the technicalities before starting the negotiation.
The first round of negotiation is planned to be held before the end of 2021. During the first quarter of 2021, both nations have had some online intensive discussions on potential issues to include in the agreement. The issues to be discussed include market access for goods trade, services trade, investment, and economic cooperation.
Djatmiko also said that Indonesian government hopes that with the ICA-CEPA, Indonesia can compete better with her neighbors in Southeast Asia that have earlier made trade agreements with Canada or joined in the Trans-Pacific Partnership trade agreement.
Meanwhile, quoted from Canadian government official website canada.ca, Minister Mary Ng said that the trade relations between Canada and Indonesia have a significant growth potential. According to her, a comprehensive agreement can give the citizens of Canada a better access to Southeast Asian supply chain, open opportunities for Canadian goods and services into the world class in the rapidly developing market, as well as push long-term job creation and sustainable inclusive growth for the next generation.