Update News December 09, 2016

In The News

New Statistics To Track Development Of Create Economy
The Jakarta Post, 09 December 2016

The Central Statistics Agency (BPS), in collaboration with the Creative Economy Agency (Bekraf), has launched a new set of statistics to track progress in the country’s creative economy.The statistics consist of specific macro economic data on the industry and the results of a creative economy survey.

Bekraf head Triawan Munaf suggested the data would help Bekraf be more efficient in its financial planning, which was needed given that the government cut the institution's budget by Rp 100 billion (US$75.3 million) to Rp 900 billion for next year.

"The statistics are good, so we can track the effectiveness of the budget [spending]," he said during the launch event in Jakarta on Thursday.

According to the data, the creative economy contributes Rp 852.24 trillion (US$64.17 billion) to the country’s gross domestic product (GDP), employs 15.9 million people and exports goods and services valued at US$19.36 billion. Triawan said Bekraf was targeting to increase the workforce to 17 million people and exports to $21.5 billion by 2019.

BPS creative economy research and development director Wawan Rusiawan said the statistics would be improved in the future by adding more details, such as royalty income and loans obtained by the industry. BPS would issue the statistics every year.

"The creative economy research department is relatively new and still has a limited number of people; our capacity is currently one publication per year, but later we want to make it twice a year," he told The Jakarta Post.

Back to top

OJK Targeting Rp4.67tn Income From Charging Financial Businesses
Tempo, 09 December 2016

The Financial Services Authority (OJK) is targeting a revenue of Rp4.67 trillion from charging financial services businesses in 2017.
In a work meeting held on Dec. 8 with the House of Representatives' (DPR) Finance Committee, the OJK plans to charge Rp3.4 trillion from banks, Rp614 billion from non-bank financial institutions, and Rp589 billion from the capital market. The remaining Rp124 billion will be sourced from the management and fee posts.

OJK board of commissioners' deputy Rahmat Waluyanto said the charges are a form of industry players' participation in developing the financial services sector. "So, fundamentally, the charges should not burden the industry," he said on the sidelines of the work meeting, Bisnis Indonesia reported.

Rahmat said the prognosis for OJK's charges to the industry in 2016 was pegged at Rp4.37 trillion. So far, Rp3.81 trillion has been collected.

The regulator is confident that the target will be met by the end of this year."We made the prognosis as objective as possible, so that by the end of the year could it could reach Rp4.37 trillion," he said.

Back to top

Indonesia to Take 52% Share of SE Asia E-Commerce Market by 2025
Tempo, 09 December 2016

Indonesia is projected to take 52% share of Southeast Asia e-commerce market worth US$87.8 billion by 2025.A joint research conducted by Google and Temasek revealed that in 2015 Indonesia ranked first in the world in e-commerce market growth. The growth is projected to reach 19% by 2020.

The same is predicted to also happen to internet economy, in which e-commerce sits atop, followed by online media and online travels.SPV Strategic Partnership of Lazada Indonesia Miranda Suwanto said the projection is underpinned by the middle class’ growth, increased internet penetration and development of second and third tier cities.

“The higher the number of internet users in many cities and the more affordable mobile devices are, the more Indonesians can easily and comfortably shop online. Without having to worry about time lost from traffic jams or long travel.

It was one of the factors that boost online shopping in Indonesia,” said Miranda Suwanto, also organizing committee chief of National Online Shopping Day (Harbolnas) 2016, as quoted by Bisnis Indonesia.

This year, Harbolnas will be held on December 12-14. The transaction value is expected to increase two to three folds compared to that of last year Rp2.1 trillion.

Back to top

Infrastructure Development Can Create More Jobs: ILO Chief
Antara News, 09 December 2016

Boosting infrastructure development can help create more jobs amid a sluggish global economy, Director General of the International Labour Organization Guy Ryder has said.In a country as big as Indonesia, infrastructure is of great importance, he noted.

Inclusive development is necessary for maintaining the countrys economic growth, which is very critical for job creation, particularly for the youth, he said.

This means focusing on development in all regions of Indonesia rather than only the capital and major cities, he stated."In too many countries weve seen young people feel that the only way to get ahead in life is to come to the city and I think many policy makers thinks that progress lies in industrialization, sort of forgetting about the capacities and potential of the rural economy," Ryder told ANTARA News here.

Boosting the rural economy should be an important part of a countrys strategic planning because it is important to produce as many promising jobs in rural areas as in the capital city, Ryder stressed.

That way, the younger generation will have confidence in achieving their goals in the own regions instead of having to rely on jobs in major cities, he said.

In August, President Joko Widodo (Jokowi) stated that the government had changed the paradigm of the nations development from Java-centric to Indonesia-centric and from consumption-oriented to production-oriented.

"We should also significantly improve regulations and streamline bureaucratic processes by applying information and telecommunication technology," he noted.Indonesia must become a nation that is progressive and stands at par with other countries in the world, he remarked.

Back to top

Jakarta Continues to Fix Pulogebang Bus Terminal`s Facilities
Tempo, 09 December 2016

Jakarta Transportation Dept continues to fix the shortage of facilities in Pulogebang bus Terminal. The role of Transportation Ministry is also urgently needed to speed up the terminal operation.

"We try to fix the shortage and the problem of Pulogebang Terminal, thus it can be active fully," said Andri Yansyah, Head of Jakarta Transportation Dept, after joint meeting along with DPRD Commission B, Wednesday (12/7).

He disclosed that a number of issues still to be addressed among others the implementation of IT system. His side also corresponded to the Inspectorate asking providers who build IT system in Pulogebang Terminal to finish their work immediately.

"Indeed, there has been handover sign. We hope the provider help us to activate the network system that has been built in the terminal," he expressed.

Andri furthered, improvement is also focused on providing road markings and traffic signs. "Road markings and signs are closely related, must be clear thus people are not confused," he stated.

His dept also intensively controls illegal terminals in the capital. Even, Transportation Dept has requested for assistance from Transportation Ministry to hold controlling together to control the buses that operate in such terminals."They should dare to revoke the bus operation license in illegal terminal thus people will automatically follow the rules," he stressed.

Back to top

Jonan: Gov`t to Add 19,000 MW of Installed Capacity by 2019
Tempo, 09 December 2016

Energy and Mineral Resources Ignasius Jonan said that the national installed power capacity and reserve margin could reach 70,000 MW by 2019.

“[National] installed power capacity which is currently used is roughly at 51,000 MW. We will add around 19,000 MW more, so the target until 2019 is 70,000 MW,” Jonan said Thursday in a discussion on electricty in Jakarta, as quoted by Antara news agency.

According to Jonan, the additional 19,000 MW will be inclusive of reserve margin. The calculation was based on economic growth assumption at 6 percent until 2019.

“On economic growth assumption, please don’t argue with me. Nobody can predict [it]. If economic growth is 6 percent until 2019, 19,000 MW of additional electricity will be needed,” he said.

Back to top

Jonan to Send Team, Studies UAE's Cheap Electricity
Tempo, 09 December 2016

Energy and Mineral Resources Minister Ignasius Jonan said that he is planning to send a team to United Arab Emirates (UAE) to study the renewable energy development in a bid to produce cheap electricity."I attended an OPEC meeting in Vienna, Austria, last week. I had a meeting with the Energy Minister of United Arab Emirates.

It turns out that the country that produces 3 million barrels of oil per day uses renewable energy," Jonan said in a discussion held in Jakarta on Thursday, December 8, 2016.

According to Jonan, the country pays attention to electricity generated from renewable energy. On the contrary, Indonesia consumes oil in a large scale but lags behind in the renewable energy utilization.

"The UAE produces 3 million barrels of oil per day, but its oil consumption only accounts for 5 percent. Meanwhile, we produce 800,000 barrels of oil per day, but our consumption reaches 1.6 million barrels per day. They use solar power," Jonan added.

Jonan added that the UAE is planning to develop a solar power plant with a tariff of US$2.99 cents per kilowatt hour (kWh). In addition, the country is set to realize a 5,000-megawatt solar power plant with a tariff of US$2.25 cents per kWh.

Fabby Tumiwa, an energy expert from the Institute for Essential Service Reform, said that the information received by Jonan was incomplete.

According to Fabby, the UAE Energy Minister’s explanation about cheap electricity generated from solar power plants was retrieved during a tender before the development plan and delivery.

"The UAE started the tender with a capacity of hundreds of megawatt so that they can have the most competitive tariff. However, the delivery will be realized in 2020, and the construction will commence in 2018 when the technology price decreases," Fabby said.

In addition, Fabby revealed that the competitive price can be achieved since the UAE government is paying for the land and taxes.Therefore, Fabby suggested that the government should conduct an in-depth study to realize the cheap electricity plan.

Back to top

Lower Gas Prices To Boost Industrial Sector
The Jakarta Post, 09 December 2016

The government has cut gas prices in three industries to curb ongoing de-industrialization and create a significant multiplier effect in the economy.

Energy and Mineral Resources Ministry regulation No. 40/2016 issued on Tuesday set the gas prices at around US$6 per million British thermal units (mmbtu), down about one third from its current price, starting from Jan. 1, 2017.

The lower prices, expected to enhance industrial productivity, will be enjoyed by the petrochemical, fertilizer and steel industries, with five state-owned companies, namely fertilizer producers Pupuk Kujang Cikampek, Pupuk Sriwidjaja Palembang, Pupuk Iskandar Muda; petrochemical producer Petrokimia Gresik and steel manufacturer Krakatau Steel slated to benefit most.

Apart from getting lower prices for gas as a raw material in their production, the state-owned companies will also obtain cheaper gas transportation rates.

Petrokimia Gresik will see its transportation fees decline to $0.5 per mmbtu, from $0.84, on the Pagerungan-Porong-Gresik-PKG toll roads, while Krakatau Steel will pay $0.3 per mmbtu, down from $0.6 per mmbtu, for the Cilamaya-Citarik-Tegal-Gede-Nagrak-Bitung-Cilegon toll roads.

Energy and mineral resources deputy minister Arcandra Tahar said the reduced prices would have a positive effect on the domestic manufacturing sector.

 At around $9 per mmbtu, Indonesia’s gas price is much higher than most of its Southeast Asian neighbors. Gas costs approximately $4 per mmbtu in Malaysia and Singapore.

Business players have long voiced their concern over such high gas prices as they erode the competitiveness of the local manufacturing industry, the contribution of which to economic growth has gradually dwindled in the past decade.

Industry Minister Airlangga Hartarto recently said the economic benefit of more affordable gas prices could amount to Rp 31 trillion ($2.39 billion) if prices were slashed to $4 per mmbtu, with an additional distribution cut of $1.50 to $2.

He added that with economical gas prices, the three industries, along with seven other industries, would contribute around Rp 1,200 trillion, or 10 percent of the gross domestic product (GDP) as costs fell.

The Energy and Mineral Resources Ministry previously passed a regulation that allowed seven less gas-reliant industries, including textiles, pulp and paper, ceramics and latex, to obtain an additional price cut of $2 per mmbtu if gas prices climb higher than $6 per mmbtu.

Meanwhile, ReforMiner Institute researcher Pri Agung Rakhmanto said the new lower gas rates would not have a significant effect on the country’s economy as the coverage would be limited.

“The price reduction isn’t significant and only applies to three industries. So, it has yet to be in accordance to President Jokowi’s instruction to lower gas prices to around $5 to $6 for all industries,” Pri said.

“Nonetheless, we still have to applaud it as it shows the commitment of the government, especially the Energy and Mineral Resources Ministry, to make it really happen in the near future,” he added.

Back to top

Gov't Woos Middle Eastern Investors to Develop Tourism Sector
Tempo, 09 December 2016

The Tourism Ministry announced a plan to attract Middle Eastern companies investing in the Indonesian tourism sector. The total investment needed to develop ten tourist destinations is Rp 200 trillion (US$15.3 billion).

"There are ten tourist destinations to be developed to match Bali," Tourism Ministry's investment division head Hengky Manurung said in a seminar held in Malang on Thursday, December 8, 2016.

Among the destinations are Bromo, Tengger Semeru, Toba Lake, and Mandalika. Hengky revealed that several business owners from Saudi Arabia have expressed interest in investing in Mandalika development. Hengky added that the tourist destinations would be managed by special authorities.

In addition to investment, Hengky said, the development plan included a target to attract 27 million Middle Eastern tourists to enjoy Indonesian halal tourism. In relation to the target, the government will facilitate Middle Eastern tourists with Visa on Arrival (VoA).

Over the last nine month, Indonesia booked a total investment of US$1 billion in the tourism sector, of which 54 percent of the figure were invested in Jakarta, and 22 percent in Bali. The rest of the investments were allocated to other regions."Sixty five percent of the money was invested in hotels," Hengky added.

The tourism sector has created 9.8 million jobs, increasing by 30 percent over the last five years. The sector contributed 10 percent of GNP and 9.8 percent of foreign exchange.

Back to top

Jokowi Highlights Pressing Global Issues During Opening of 9th Bali Democracy Forum
The Jakarta Globe, 09 December 2016

President Joko "Jokowi" Widodo opened the ninth Bali Democracy Forum in Nusa Dua, Badung, on Thursday (08/12). In his opening speech, Jokowi welcome distinguished guests, including former United Nations secretary general Kofi Annan, before acknowledging some pressing global issues.

"This include the struggle for Palestinian independence that is still far from the expected result; rapid development of radicalism and extremism in various parts of the world; as well as the decline of tolerance and the will to accept diversity in many communities, or growing xenophobia," he said.

The president also urged optimism in addressing domestic challenges related to politics, the economy and social affairs in almost every country.

"In these situations, we need optimism that result from discussion; optimism that can be developed from an exchange of ideas and experience; the one that I hope to ignite with our presence in this democracy forum," Jokowi said.

The theme of this year's forum, which is taking place at the Bali International Convention Center, is "Religion, Democracy and Tolerance."

"Tolerance is needed because we are diverse," Jokowi said. He added that religion plays a crucial role in people's lives in terms of their social, economic and political existence on a national, regional and global scale. "And I believe that all of us in this room agree on the importance of democracy for a nation, as well as for international relations," he said.

The president concluded by saying that all stakeholders have a duty to ensure that democracy is implemented properly to support stability and peace, as well as improve people's welfare.

Jokowi, who was accompanied by Foreign Minister Retno Marsudi, former foreign minister Hasan Wirayuda and Bali Governor Made Mangku Pastika, hit a gong to signify the official start of the event.

Back to top