Update News February 07, 2017

In The News

SOE Assets to Grow 11% in 2017
Tempo, 07/02/2017

The Ministry of State-Owned Enterprises (SOE) projected SOE assets to reach Rp7,035 trillion in 2017, or an 11.22 percent increase compared to last year’s figure of Rp6,325 trillion.

Data from the SOE Ministry as of February 6 shows that the projected SOE assets in 2016 increased by 9.8 percent compared to Rp5,760 trillion in 2015.

“Assets growth was, among others, helped by improved SOE investments, which were funded by PMN [state capital investment],” the data revealed.The projected assets of SOE in 2016 were higher than the government’s initial target of Rp5,632 trillion.

Meanwhile, SOE liabilities are projected to hit Rp4,643 trillion in 2017 or an increase compared to last year’s projected liabilities of Rp4,091 trillion. As such, the following are Indonesia’s top ten state-owned enterprises by assets in 2016.

PT Perusahaan Listrik Negara (Persero) PT Bank Mandiri (Persero) Tbk PT Bank Rakyat Indonesia (Persero) Tbk PT Pertamina (Persero) PT Bank Negara Indonesia (Persero) Tbk PT Bank Tabungan Negara (Persero) Tbk PT Taspen (Persero) PT Telekomunikasi Indonesia (Persero) Tbk PT Perkebunan Nusantara III (Persero) PT Pupuk Indonesia (Persero).

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Sri Mulyani: Economic Growth of 5.02% Not Bad 
Tempo, 07/02/2017

Finance Minister Sri Mulyani said that he was not surprised by Indonesia’s economic growth of only 5.02 percent, below the target set in the 2016 revised state budget (APBN-P) of 5.2 percent. “As for 2016, I did predict a 5.02 percent [growth],” Sri said at the Presidential Palace on Monday, February 6, 2017.

According to Sri Mulyani, the economic growth of 5.02 was not a bad result. On the contrary, she said that the figure reflects the government’s success in keeping the economic growth momentum going despite expenditure cut that affected the projected revenue.

Minister Sri underlined that last year’s government expenditure was slashed to compensate for lower revenue. High target on revenue collection was imperative to avoid a budget deficit of over 3 percent of GDP.

The Finance Minister said that export and import positive growth in Q4 last year due to improved global commodity prices was among the factors that keep the momentum going. “It’s a positive development since export and import typically saw negative growth,” Sri said.

Sri Mulyani expects to keep up the momentum in 2017 to achieve economic growth of 5.1 percent. The former World Bank director added that U.S. President Donald Trump’s America First policy could pose risks to Indonesia’s export performance.

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IMF Keeps Positive Assessment, Outlook on Indonesia
The Jakarta Globe, 07/02/2017

The International Monetary Fund has lauded Indonesia's prudent mix of macroeconomic policies and structural reforms which have preserved stability amid challenging shifts in the global environment, an IMF end-of-mission statement released on Friday (03/02) said.

The Indonesian government managed to keep a robust economic growth of 5 percent last year — compared to 4.8 percent a year earlier — on the back of solid economic policies and increased household consumption, keeping it among large emerging market economies with the highest growth .
The IMF's latest assessment is similar to its previous report in November. The Indonesian government expects a 5.1 percent growth this year.

"Private consumption remains the main driver of growth, but higher inclusive growth will require deeper structural reforms," Luis E. Breuer, IMF mission chief for Indonesia, said in a statement dated Feb. 3.

The IMF encouraged the Indonesian government to continue expanding investment in public infrastructure, reducing over-complicated regulations and opening up new areas of the economy to private investment.

"Directors considered that the current monetary policy stance is broadly appropriate and encouraged the authorities to remain vigilant to the resurgence of inflationary pressures, and to stand ready to adjust the policy stance as needed," the statement said.

The IMF encouraged the government to strengthen tax collection and improve tax base through tax reform in a bid to generate additional collection to the state coffer.

It considered Indonesia's banking sector "broadly healthy" and noted the efforts made by the country's financial sector authorities to keep the sector's stability in check.

The fund also reminded Indonesia to strengthen its economic productivity by investing in vocational training for workers, which will close the gap between what employers need and what employees have to offer.

These reforms should improve economic growth while providing a bumper from global uncertainties — including new policies from a Donald Trump-led United States administration and China's economic slowdown.

The executive board of the IMF concluded its "Article IV" regular consultation with Indonesia on Jan. 25. During the consultation, a team of IMF economists visited Indonesia to assess its economic and financial development and discuss the country's policies with representatives from the government and the central bank.

Bank Indonesia, in a separate statement, said it welcomed the IMF's assessment and reinforced its commitment to maintain stability of Indonesia's macroeconomic and financial system while at the same time optimizing its domestic economy amid global uncertainties.

"Bank Indonesia also supports the government’s structural reform programs to improve the country's economic capacity and move toward inclusive growth," Tirta Segara, an executive director at Bank Indonesia, said.

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Indonesia Strengthens Bilateral Ties with South Korea
Tempo, 07/02/2017

Indonesian Vice Foreign Minister A.M. Fachri has met with Vice Foreign Minister of the Republic of Korea Lim Sung-Nam to strengthen bilateral relations between the two countries.

The Ministry of Foreign Affairs press release stated that the meeting discussed agenda items of bilateral cooperation, which includes defense cooperation, economic cooperation, social and cultural, consular, and labor cooperation.

“The First Meeting of High-Working Level Strategic Dialogue was held to strengthen bilateral relations as the implementation of the outcomes of President Joko Widodo’s state visit to the Republic of Korea in 2016,” the Ministry of Foreign Affairs stated in a press release on Monday, February 6, 2017.

Both Vice Ministers for Foreign Affairs had also shared their views on strategic regional and global issues of common interests.

The Republic of Korea is a strategic partner for Indonesia. In 2016, ROK is the sixth largest trading partner for Indonesia, and ranks as the ninth largest foreign investment contributor for Indonesia, the Ministry stated.

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Indonesia, Egypt To Strengthen Economic Partnership
Antara News, 07/02/2017

Indonesia and Egypt have agreed to strengthen economic cooperation after a bilateral meeting between Minister of Foreign Affairs Retno LP Marsudi and Egypts International Cooperation Minister Sahar Nasr.

"We agreed to immediately reactivate the Ministerial level commission bilateral mechanism, which was last carried out in 2007, in order to strengthen the economic partnership between Indonesia and Egypt," Marsudi said, in a press release cited from the Ministrys official site in Jakarta, on Monday.

The statement was made after a bilateral meeting with Nasr in Cairo, Egypt, on Sunday (Feb 5). During the meeting, Marsudi specifically requested for a wider market access for Indonesian products in Egypt.

She stressed that the import fees for Indonesian products were still rather high."We need to come up with a bilateral mechanism that can lower the tariff for Indonesian products in Egypt," she told her Egyptian counterpart.

Marsudi further stated that strengthening Indonesias economic diplomacy with countries in the African region is one of the priorities for 2017.
The move was lauded by Nasr, who believed that Indonesia has recognized the huge potentials possessed by Africa.

He also explained a number of economic priorities shared by both countries, which include special attention to Small and Medium Enterprises (SMEs).

In relation to that, the ministers were committed to boost cooperation between SMEs of both the countries."The SMEs play such important roles in both Egyptian and Indonesian economies. Hence, we need to push them forward so that they can take all the opportunities they get," Marsudi stated.

To prepare for the joint commission, the ministers have ordered their Directorate Generals to collaborate and identify various opportunities and technical obstacles in the economic sector in April.

The results of the meeting will then be the foundation for the agreement that aims to intensify the bilateral economic relationship between Indonesia and Egypt, especially in trade.

The value of bilateral trade between both countries is recorded to have reached US$1.23 billion between January and October 2016.

Indonesias main exports to Egypt include palm oil, tire products, cotton, coffee and automotive spare parts. As of 2016, Indonesias investment in Egypt had reached $50 million.

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Bali`s Economy Grew By 6.24 Percent In 2016
Antara News, 07/02/2017

Balis economy registered a growth of 6.24 percent in 2016, a 0.20 percent increase as compared to 6.04 percent recorded in the previous year.
The increase was sustained by a high growth of nine percent registered in the health services and social activities sector.

"This was followed by an 8.91 percent growth in the education sector as well as a rise of 6.04 percent in the information and communication sector," Head of the Bali Bureau for Statistics Adi Nugroho stated in Denpasar, Bali, on Monday.

He further noted that each of the three sectors contributed significantly to the islands economic growth.

Meanwhile, the highest expenditure came from household expenses, recorded at 48.30 percent in 2016, indicating a 6.69 percent increase as compared to the previous year.

Balis economy, calculated on the basis of the gross domestic product (GDP), had reached Rp195.38 trillion in 2016 based on the constant price of Rp137.19 trillion and regional GDP recorded at Rp46.52 million.

Nugroho added that looking at the islands GDP economic structure based on the work fields, it is dominated by three main activities comprising food and beverage provision, at 22.82 percent; agriculture, forestry, and fishery, at 14.74 percent; and transportation and storage, at 9.48 percent.

The bureaus head stated that Balis economic growth in the fourth quarter of 2016 was noted at 5.47 percent as compared to the same period in 2015 (year-on-year).Growth was recorded in almost all sectors except for electricity and gas provision, which experienced a decrease of 1.63 percent.

The highest growth came from the information and communication sector, at 9.15 percent; followed by finance services, at 9.08 percent; and insurance services, at 8.92 percent.

Balis economic structure in the fourth quarter of 2016 was still dominated by three sectors comprising accommodation and food services, with 22.52 percent; agriculture, forestry, and fishery, with 15.07 percent; and transportation and storage, with 9.25 percent.

Compared to the same period in 2015, all three sectors indicated an increase of between three and six percent. The main growth contributors were agriculture, forestry, and fishery, with 2.92 percent, and construction, with 1.69 percent, Nugroho noted.

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Govt Preparing Regulation For Cashless Aid Disbursement
The Jakarta Post, 07/02/2017

The government is trying to complete a draft presidential regulation concerning the cashless distribution of government aid to low income people. Officials gathered to discuss the matter on Monday.

The conversion of rice distribution into a non-cash system is slated to begin this month, Coordinating Human Development and Culture Minister Puan Maharani said after a meeting at his office in Central Jakarta.

Finance Minister Sri Mulyani Indrawati, Social Affairs Minister Khofifah Indar Parawansa, Bank Indonesia Governor Agus Martowardojo and Financial Services Authority (OJK) chairman Muliaman D. Hadad attended the meeting."Each ministry and institution has to [prepare itself to] anticipate the implementation so that it can run well," Puan said.

During the initial stage of the altered program, as many as 1.4 million people in 45 cities and six regencies from a total of 15.5 million aid recipients nationwide will receive cashless aid worth Rp 110,000 (US$8.20) through a card, called a “combo card”, every month.

The card can be swiped at designated “e-warungs” (e-shops) to buy staple foods such as rice and eggs.Currently, as many as 9,782 e-warungs have already carried out these kinds of transactions, Khofifah said. Assuming one e-warung can serve 150 aid recipients, the program will need around 10,753 e-warungs.

"We still need more agents and so we will relax the requirements [to open an e-warung] and try to encourage existing warungs and grocery shops to act as agents too," Muliaman said, adding that the card was linked to a bank account opened at one of four participating state-owned lenders.

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Jakarta Administration Launches Online Business Licensing Logbook
The Jakarta Post, 07/02/2017

People seeking a business license from the Jakarta administration can now track their order online as the city administration’s investment coordinating agency and one-stop integrated service agency have together launched an online licensing tracking logbook.

This service also helps the agency document and search for licensing orders that have been processed.Tracking can be done by accessing the agency’s website at http://pelayanan.jakarta.go.id and scanning the QR code that will be written on the receipt. Edy Junaedi, the agency’s head, said the online logbook could only be used by those who had submitted an online order.

“But there is possibility that offline orders could also be processed and monitored through the online logbook,” Edy said as quoted by beritajakarta.com on Feb. 3.

This online logbook service is part of the city administration’s Smart City program, first introduced by Jakarta Governor Basuki “Ahok” Tjahaja Purnama in 2016.

This program has been developed using technological innovation to help people struggling to conduct business with the administration.

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LRT To Set Example For Future Projects, Technology Transfer
The Jakarta Post, 07/02/2017

Light rail transit (LRT) projects in Jakarta and in Palembang, South Sumatra, are expected to set an example for similar projects in the future and also facilitate technology transfer, President Joko “Jokowi” Widodo has said.

"We do not have any experience in this field — in the construction of MRT, LRT and even high-speed rail. We hope that these constructions can be a sort of technology transfer," he said before a closed-door meeting at the State Palace in Jakarta on Monday.

Furthermore, he highlighted the need to improve cooperation between the central government and local administrations in order to complete projects on schedule."We can use this as a cooperation model in the future that can be implemented in other cities," Jokowi said.

The construction of both LRT projects is expected to support the upcoming Asian Games. The LRT from Sultan Mahmud Badaruddin II International Airport in Palembang is expected to span 23 kilometers and pass through 13 stations.

Meanwhile, the Jakarta LRT project will connect a number of sports arenas in Jakarta for the Games and connect Jakarta to neighboring cities.

State-owned construction firm PT Adhi Karya previously said it would need an additional Rp 7 trillion (US$525.6 million) in funding for the development if the Jakarta LRT project this year. So far, the company has spent Rp 2.5 trillion on the project.

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Minister Seeks Solutions To Combat Pollution From Marine Plastic Wastes
The Jakarta Post, 07/02/2017

The office of the coordinating minister for maritime affairs is seeking solutions to tackle pollution arising from marine plastic garbage, according to an official of the maritime coordinating ministry.

"We are drawing up an action plan on handling plastic trash and are in the process of discussing it with the World Bank for a budget intervention," Deputy I for Maritime Sovereignty of the Coordinating Maritime Affairs Ministry Arif Havas Oegroseno stated in Jakarta on Monday.

Oegroseno said the problem of plastic garbage has a direct impact on the sustainability of the fisheries sector as well as on the marine health and environment.

Oegroseno noted that starting this year, efforts have been made to tackle wastes at sea. As many as 15 cities are participating in a study to seek solutions to the issue of marine plastic wastes. 

Among the 15 cities are Jakarta, Makassar, Semarang, Surabaya, Medan, and Batam."The study has been conducted since last week and will be continued for three days," he revealed.

The results of the study will be used to decide the steps to be taken by the ministries and government institutions to handle plastic wastes at sea.

The involved ministries and government institutions comprised the Public Works and Public Housing Ministry, Environment and Forestry Ministry, Maritime Affairs and Fisheries Ministry, Agency for Assessment and Application of Technology, and Education and Culture Ministry.

"The ministry of education and culture will be involved, as the waste problem is closely related to the mindset of the people," Havas remarked.

Havas said that the government will also cooperate with several countries facing the same problem, such as Denmark, the US, Australia, and the Netherlands.

"The US is also facing the same problem, so we can exchange information on ways to solve it," he stated.Based on a study, Indonesia ranked as the second plastic waste contributor to the worlds maritime waters.

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