Update News December 02, 2016

In The News

OJK and World Bank Discuss Future of Sustainable Finance in Indonesia
The Jakarta Globe, 02 December 2016

Indonesia's Financial Services Authority, better known as OJK, and the World Bank's financing arm for private sector — the International Finance Corporation — launched the 2016 International Sustainable Finance Forum on Thursday (01/12).

The two-day event is meant to serve as a platform to discuss the future of sustainable finance and market innovations in Indonesia. International commitment to sustainable development and low-carbon economy speeded up last year with initiatives such as the Paris Agreement and the Sustainable Development Goals.

"The government of Indonesia and OJK [Financial Services Authority] are both highly committed to the Sustainable Development Goals," OJK chairman Muliaman Hadad said, as he encouraged the country's financiers to follow suit.

"Social and environmental sustainability can only be achieved with the support of the private sector, in particular the financial sector," he said.

In 2014, OJK released the Sustainable Finance Roadmap to serve as a guideline for the financial sector.

The roadmap includes strategic long-term and short-term goals, such as increasing funding for environment-friendly businesses and products, and introducing appropriate monitoring of their activities.

OJK is one of the founding members of the Sustainable Banking Network, a global initiative established in 2012 to create a friendly environment for financial regulators and banking associations in emerging markets and promote sustainable financial services.

"Sustainable development cannot be achieved without a strong financial system," International Finance Corporation vice president for corporate risk and sustainability, Ethiopis Tafara said.

The Sustainable Banking Network consists of 31 countries which represent more than 85 percent of the banking assets across emerging markets and can play a critical role to deliver on the sustainable economic agenda. This year's International Sustainable Finance Forum also marks the fourth annual gathering of the Sustainable Banking Network.

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BKPM Upbeat Over $43b Investment Target
The Jakarta Post, 02 December 2016

The Investment Coordinating Board (BKPM) is upbeat that the country will reach the investment realization target of Rp 594 trillion (US$43.8 billion) this year, claiming that the country remains attractive to foreign investors despite the global economic slowdown.

“We will reveal the figure of 2016 investment realization soon. I am positive about it [the target]. Moreover, I think next year we can set a more ambitious target than this year,” BKPM chief Thomas

Lembong said on Thursday, expressing his confidence in President Joko “Jokowi” Widodo’s pro-investment policy.

BKPM data shows that Indonesia, as of September, pocketed Rp 453 trillion in realized investment, up 13.4 percent from the corresponding period last year.

The figure consists of Rp 295 trillion in foreign investment and Rp 158 trillion in domestic investment, an increase of 10.6 percent and 18.8 percent, respectively, from the same period last year.

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Indonesia To Host IMF-World Bank Annual Meeting In 2018
The Jakarta Post, 02 December 2016

Indonesia has been selected to host the 2018 Annual Meetings of the International Monetary Fund (IMF) and World Bank on the resort island of Bali, during which central bankers and finance ministers from across the globe will meet to discuss worldwide financial issues.

More than 13,000 participants from 189 countries are expected to join the event, to be held in October 2018, including official country delegations, international observers, academics, journalists and NGO representatives.

“You literally have all the senior people of the IMF there, and their officers are formally transferred from Washington to the site of this overseas meeting [in Bali]. The decision making will take place abroad, not in Washington,” IMF spokesperson Jeremy Edward Mark said on Thursday.

The meeting, Mark further explained, would address various global economic issues. In general, the IMF, he said, has been monitoring the slow global economic recovery from crisis, sluggish global economic growth, increasing domination of China in the global economy and world leaders’ concerns on the impact of globalization and global integration.

Bank Indonesia (BI) spokesperson Tirta Segara explained that the central bank and the Finance Ministry had formed a task force to work on the preparation of the annual meeting. They have also considered declaring the event’s dates as public holidays to help the event run smoothly.

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Indonesia`s Balance Of Payments To Show US$10 Billion Surplus
Antara News, 02 December 2016

Indonesias balance of payments throughout 2016 would book a surplus of US$10 billion, rebounding after it collapsed with a deficit of US$1.1 billion in 2015, Senior Deputy Governor of Bank Indonesia Mirza Adityaswara has predicted.

"With the repatriation of assets and capital inflow, this years overall surplus amounts to $10 billion, or even more," Mirza said at the seminar on "Policy Direction of Bank Indonesia in 2017" here Thursday.

Throughout 2016, Indonesias balance of payments recorded a positive trend with continuous surplus after deficit due to the external economic shocks in 2015.

However, there was a deficit of $300 million in the first quarter of 2016. The gap was due to the weak performance of the trade balance and the lack of improvement in the flow of foreign capital.

In the second quarter of 2016, the balance of payments had a surplus of $2.2 billion, while in the third quarter, the balance of payments recorded a surplus of $5.5 billion.

The repatriation funds from a tax amnesty program will be increasingly continued until the end of the year, Mirza believed. At the end of 2016, estimated commitments of repatriation reached Rp140 trillion.

Moreover, Mirza also saw the trend of trade surplus up to November 2016 reducing the current account deficit.In the third quarter of 2016, the current account deficit narrowed to 1.8 percent of the gross domestic product (GDP) or $4.5 billion.

The current account deficit throughout 2016 will be between 2and 2.5 percent of the GDP, Mirza believed. The balance of payments is an indicator of economic transactions between residents of Indonesia with foreign residents.

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Foreign Investors Observe Indonesia`s Economic Growth Positively: President
Antara News, 02 December 2016

Foreign investors have seen Indonesias economic growth positively, President Joko Widodo has stated.

"Even though the economic growth of India and China has been better than Indonesias, the quality of Indonesias economic growth is more real and concrete," President Joko Widodo said in his remarks during the opening of a meeting of the leaders of the Indonesian Chamber of Commerce and Industry (Kadin) here on Thursday.

The president remarked that the economic growth was seen through a countrys gini ratio. The poverty rate and the unemployment rate also witnessed some decline.

The president said several foreign investors have expressed interest to invest in Indonesia, also because of the ease of licensing policies.

"Now, they have started discussions on specific projects. The foreign investors are discussing the investment period and the total number of investments," the president pointed out.

In his speech, the president urged Kadin to ensure that foreign investors interest in Indonesia remains high.

"The investors will look for domestic partners. Kadin can utilize the momentum to help development in Indonesia," the president added.

The Indonesian central bank, Bank Indonesia (BI), earlier revised down its forecast for Indonesias economic growth in 2017 from 5.1-5.5 percent to 5.0-5.4 percent, because the global economy is not expected to fully recover next year.

"We have to make adjustments by revising down the previous growth forecast, because the world economic growth in 2016 has turned out to be worse than last year," BI Governor Agus Martowardojo told a press conference here on Thursday.

Agus has predicted that the global economic condition in 2017 would be affected by the impact of the 2016 economic downturn. This is a challenge that forces BI to continue revising down its growth forecast.

"Various international bodies and research results of qualified institutions have also revised down their global economic growth predictions for 2017," Agus explained.

Apart from that, the revision of the growth projection was also based on credit growth, which is expected to increase only after the end of the second quarter of 2017 following the gloomy global economic period in 2016.

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Jakarta Smart City Targets Young People to Acknowledge App
Tempo, 02 December 2016

The Jakarta Provincial Government opens chance for people to know the application of Jakarta Smart City.

Head Unit of Technical Management (UPT) Jakarta Smart City, Setiaji, said that the agency keeps socializing applications owned by the Jakarta Provincial Government such as Qlue and Pangan Jakarta.

“We often visit universities to disseminate the app. Young people are gadget lover. It is hoped that the knowledge will be given to their family also,” he said, Thursday (12/1).

He hoped that the digital era will increase university student’s interest to utilize online media for better ways. One of them is developing micro-small-middle enterprise.

“We also acknowledge facilities such as co-working space to give room to young people to contribute,” he closed.

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Korean Fintech Firms Seek To Collaborate With Indonesian Peers
The Jakarta Post, 02 December 2016

Financial technology (fintech) industry players from Indonesia and South Korea are considering cooperating to develop a supportive fintech ecosystem to help boost the relatively young sector in their respective countries.

“Indonesia and Korea need to develop a strong and integrated fintech ecosystem through a collaborative partnership, within the ecosystem and across different ecosystems,” Keunju Lee, secretary-general of Korea Fintech Industry, said on Thursday during the 2016 Korea-Indonesia Fintech Seminar and Business Meetings in Jakarta.

Representatives from 10 South Korean fintech companies and a fintech industry association are visiting Jakarta from Wednesday to Friday to talk with their Indonesian counterparts about the latest updates in the Korean fintech industry landscape and to explore potential partnerships with local firms.

Among the Korean fintech companies participating in the event are smartphone application developer Paycock, finance security and mobile solution provider Crizen Solution, digital asset trading and money transfer platform provider Korbit and online asset management service provider Fount.

The Indonesian Fintech Association’s director of public policy Ajisatria Suleiman said the visit would create opportunities for local firms to adopt new technology from their Korean counterparts.

A Korean company called Fount, for instance, offers robo-advisor technology, which refers to a computer-advised asset management system that can provide a tailored investment portfolio based on sophisticated computer algorithms, Investree cofounder Adrian Gunadi said.

“This kind of technology has yet to exist in Indonesia. So, rather than developing it ourselves, we can adopt their technology,” he said.

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Coral Triangle Initiative Partners With Australian University for Research, Capacity Building
The Jakarta Globe, 02 December 2016

A multilateral government partnership in marine conservation on Wednesday (30/11) signed a Memorandum of Understanding with Australia's James Cook University to further marine research and capacity building.

With the MoU, the Coral Triangle Initiative on Coral Reefs, Fisheries and Food Security (CTI-CTFF) hopes to tackle issues on climate change, marine biodiversity, sustainable fisheries and food security through research and mobility programs.

Marine studies students hailing from partner universities in member states — Indonesia, Malaysia, Papua New Guinea, the Philippines, Solomon Islands and Timor Leste — will be eligible for an exchange program with James Cook University.

"The agreement between CTI-CFF regional secretariat with James Cook University, Australia, in the field of science and marine research is expected to be one of the best solutions in overcoming the accelerating decline in the quality of the marine environment, challenges that arise in the world of fisheries, including food security issues with a scientific approach and capacity building of stakeholders in the six CTI-CFF member states,” Widi Pratikto, CTI-CFF regional secretariat executive director, said on Wednesday (30/11) in Jakarta.

James Cook University will also provide technical assistance to strengthen the capacity of CTI-CFF regional secretariat through training, as well as capacity building for senior government officers, local leaders, especially in Papua New Guinea, Timor Leste and Solomon Islands. According to Widi, James Cook University is well-respected in the marine sciences field with an extensive coral reef research center that focuses on the Great Barrier Reef.

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Indonesia Gets More Foreign Tourists In October
The Jakarta Post, 02 December 2016

The number of foreign tourists arriving in Indonesia in October increased by 18.5 percent year-on-year to 1.04 million, with visitors from China, Malaysia, and Australia dominating the inbound trips.

Data from the Central Statistics Agency (BPS) showed that the number of incoming Chinese tourists had increased by nearly 20 percent yoy to 121,880, while Malaysian and Australian tourists increased by 22.8 percent and 6 percent respectively.

BPS deputy head of distribution and statistics Sasmito Hadi Wibowo said the offer of free visas to citizens of 169 countries had helped boost tourist arrivals, especially over the past three months.

“Tourism events held by regional administrations, such as a sailing festival and a bicycle race, have also helped keep the number of foreign tourist arrivals stable at 1 million per month, despite it being the traditional low season,” Sasmito told reporters on Thursday. 

From January to October, Indonesia welcomed 9.4 million foreign tourists, up by 9.5 percent compared to the same period last year.

Sasmito said he was optimistic that Indonesia would be able to meet its target of attracting a total of 12 million foreign tourists in 2016.

“We still have another holiday season in December,” he said.

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Jokowi Urges Kadin to Improve Quality of Vocational Schools
Tempo, 02 December 2016

President Joko Widodo (Jokowi) has urged the Indonesian Chamber of Commerce and Industry (Kadin) to help improve the quality of education at the vocational schools in the country.

"We need millions of skilled human resources, and therefore, Kadin can help improve the quality of education at the vocational schools," President Jokowi said while opening the 2016 Kadin Leadership National Meeting at the Borobudur Hotel on Thursday.

The president stated that Indonesia will benefit from a demographic bonus after 2020 when the number of people of productive age will be higher than the elderly and children.

The younger generation should continue to build its capacity and capabilities, in accordance with both formal and non-formal education they acquire. Only then will Indonesia be able to take advantage of the demographic bonus.

This demographic bonus will help the development of the creative economy sector in the country.
The greater the number of people of productive age in Indonesia, the more the number of internet users. This will increase the ability and throw up new ideas to create value-added products of high quality.

In the light of this, President Jokowi noted that the quality of education needs to be improved not only for human resources capability but also because it will boost Indonesias morale to compete with other countries.

The head of state explained that the business realm, through Kadin, can play an important role in improving human resources capability to meet the needs of the industry through the vocational schools.

President Jokowi opined that students not only need normative lessons, but also need to taught certain specific technical subjects so that they can master a certain skill.

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