Updates News 12 October 2017

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President Jokowi opens Trade Expo Indonesia
Antara News 12 October 2017

Jakarta (ANTARA News) - President Joko Widodo (Jokowi) officially inaugurated the 32nd Trade Expo Indonesia (TEI) at the Indonesian Convention Exhibition in BSD City, Tangerang, Banten Province, on Wednesday.

The head of state outlined three efforts to boost Indonesian trade, the first being to improve product quality and the delivery of goods.

"Buyers should pay attention to the aspect of specifications of the goods that should be in accordance with the order. Another important factor is the budget, meaning the price should be competitive, and the delivery should be on time," Jokowi said in his opening remarks. 

Secondly, Indonesian products must be able to penetrate non-traditional markets in Africa, Eurasia, the Middle East, South Asia, and South America, among others.The president urged Indonesian embassies overseas to identify products in demand that Indonesian businessmen could meet.


The third aspect is taking precautionary steps and adapting to the current shift in trade from offline to online.Digital change is unavoidable and should be embraced to boost the nations trade, he added.

Jokowi was accompanied by Trade Minister Enggartiasto Lukita during the opening of TEI.
Several foreign businessmen are attending the expo. More than 700 Nigerian businessmen have confirmed their participation in the TEI being held on October 11-15, 2017.

Last year, the TEI had recorded trade transactions amounting to US$974.76 million, or Rp12.7 trillion. It further increased to $1.02 billion following trade deals after the expo, or an increase of 12 percent as compared to those in 2015.

This year, the TEI organizing committee has set a trade transaction target of $1.1 billion.(*)

 

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Adhi Karya secures new contracts worth Rp30 trillion
Antara News 12 October 2017

Jakarta (ANTARA News) - State-owned construction firm PT Adhi Karya (Persero) Tbk secured new contracts worth Rp30 trillion in September, up 11.9 percent from Rp28.6 trillion a month earlier.

The new contracts in September included the construction of the phase I of the light rail transit (LRT) line in Greater Jakarta, Adhi Karta Corporate Secretary Ki Syahgolang Permata said in a press statement released on Wednesday.

The projects signed in the new contracts in September include the section of Pasuruan-Grati toll road worth Rp429.3 billion, a raw water project worth Rp135.6 billion in Sambas, West Kalimantan, and the construction of retaining wall and pier at the Belawan port worth Rp131.1 billion.

"Construction and energy business lines still dominated the new contracts in September 2017, contributing 96.3 percent (of the overall contracts), while the rest came from other business lines," he said.

He said 76.9 percent of the contracts came from the government, 11.4 percent from state-owned companies and 11.7 percent from the private sector.
He said road, bridge and LRT projects accounted for 71.9 percent of the new contracts, while buildings and other infrastructure projects contributed 21.3 percent and 6.8 percent respectively. (*

 

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Jokowi lauds Indonesia`s export hike
Antara News 12 October 2017

Jakarta (ANTARA News) - President Joko Widodo (Jokowi) has praised the private and government sectors for increasing the countrys exports by 17.58 percent, to US$108.79 billion, in the January-August 2017 period. 

"Likewise, the non-oil/non-gas exports in the January-August 2017 period also rose by 17.73 percent to $98.76 billion. 
The increase is fairly high as compared to the same period last year," the president stated, in his opening address at the 32th Trade Expo Indonesia (TEI), held at the Indonesia Convention Exhibition (ICE) in Tangerang district, Banten province, on Wednesday.

The export hike is the result of joint efforts between the government and private sectors, in addition to the infrastructure development and connectivity that the government has pursued in the past three years, he noted.

With the progress, Indonesia has also managed to improve its global competitive index, set by the World Economic Forum (WEF), from the 41st to 36 position, he remarked.
"We should be self-confident and optimistic when we hear that our rating has improved.

There should never be pessimists among us. In case of problems, let us solve them. If we still have something to improve, we should improve it," he explained.

In a press statement released on Wednesday, Trade Minister Engartiasto Lukita believed that Indonesia was ready to become a supplier of resources to global business agents in a sustainable manner.

"The main focus of TEI is the long-term and international-scale business-to-business transactions. The ultimate goal of TEI is to increase Indonesias exports," the minister elaborated.The Trade Ministry expects at least 33 trade contracts to be signed during the five-day expo.

The countries that will send business missions to the expo include Saudi Arabia, Malaysia, Egypt, Australia, Thailand, India, Brazil, Britain, and the United States.The ministry expects the value of trade contracts signed in the expo to reach $223.23 million. (*)

 

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Sri Mulyani to Speak in the IMF and World Bank Annual Forum
Tempo.co 12 October 2017h

TEMPO.CO, Washington DC - Indonesian Minister of Finance Sri Mulyani Indrawati is set to speak in a number of economic forums and debates during the annual meeting of the International Monetary Fund (IMF) and World Bank that will be held this weekend in Washington DC.

hy, the former Executive Director of the World Bank acted as a speaker in a discussion about East Asia’s inclusive growth and the emergence of the middle class. 
Sri Mulyani will then apphde, France’s Finance and Economy Minister Brunohhe Marie, Canadian Finance Minister William Morneau, and Harvard professor of economy Harvard Gita Gopinath.

Several Indonesian state Officials will also be present in Washington to accompany Sri Mulyani, such as Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan and Governor of Bank Indonesia Bambang Brodjonegoro, who will also speak in several forums.

Luhut is present as the official delegate of President Joko Widodo or Jokowi and the coordinator of the organizing committee of the IMF and World Bank in 2018 which will be held in Bali. The large-scale event is predicted to attract 18 thousand participants and international media outlets too.

 

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Senior Economist Predict Minor Crisis caused by Govt Spending
Tempo.co 12 October 2017

TEMPO.CO, Jakarta - Senior Economist Faisal Basri predicts that Indonesia will be struck by a minor financial crisis in December if the Government does not slash its spending on infrastructure.
“Pak Jokowi talks about not reducing its spending on infrastructure. [It would lead to a minor financial crisis],“ said Faisal on Wednesday, October 11.

Faisal claims a minor financial crisis would cause the weakening of Rupiah exchange rate to a predicted level of Rp14,000 per US Dollar, followed by a drop in economic growth to the level of 4.9 percent. 

His prediction is based on the fact that government spending on infrastructure is not backed by the growth of tax revenues.
According to his data, Indonesia’s tax revenue in 2016 dropped 3.5 percent compared to the previous year, even though that number has been backed by the tax amnesty program. Without the tax amnesty, tax revenue would have reached a minus 4.8 percent.

Meanwhile, tax revenue up until September of 2017 dropped 2.7 percent.
Faisal said that if the state spending is not reduced, the Government will automatically increase its tax revenue. “Now the effect will be felt by the public, which will always be bothered by tax officers. I personally have received two ‘love’ letters from the tax office,” said Faisal  Basri

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Go-Jek CEO Responds to Govt Regulation on Taxi Fares and Quota
Tempo.co 12 October 2017

TEMPO.CO, Jakarta - Go-Jek Founder and CEO Nadiem Makarim responded to the government’s plan on imposing regulations for the application based taxi-hailing services regarding its area of operation, fare, and quota.

Nadiem said that the Transportation Ministry should only regulate the fares of app-based taxi services to make it competitive with conventional taxi services. “It would be difficult [to regulate] its quota. I personally disagree on a restricted quota,” said Nadiem on Wednesday, October 11.

He explained that the transportation business is currently thriving in several Indonesian regions. The company’s market share in West Java is also starting to grow larger. “The government must introduce a fair regulation.”

Go-Jek will continue to support what the government decides to do in managing the existence of app-based and conventional taxi services.
Although, according to Nadiem, the government should avoid imposing restrictions for app-based taxis to operate in every region.

The West Java Provincial Government imposed a ban on app-based taxi hailing services on Tuesday, October 10, which includes Go-Jek services. 
The restriction was introduced following a string of protests from public transport drivers and to avoid further clashes that have happened in the past.

App-based taxi hailing services in West Java are forced to oblige to a mandatory halt that will last for four days until October 13. Nadiem regrets that there are still rejections against app-based services in several regions. He reasons that services such as Go-Jek help the economy.

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West Java Administration Bans Online Transportation Services
Tempo.co 12 October 2017

TEMPO.CO, Jakarta - The West Java government on Monday, October 9, announced bans online-based transportation services after a negotiation with the West Java Transportation Aspiration Alliance Forum (WAAT).

Bandung Mayor Ridwan Kamil extended the announcement via his Instagram account.“Based on a press conference held by the West Java Transportation Agency on October 9, 2017, public transportation drivers canceled their plan to launch a strike,” Ridwan Kamil said on Monday.

In addition to banning online transportation services, the West Java administration said that they will consult with police and the central government to decide steps to be taken furtherThe West Java administration also called on all stakeholders to maintain order, security, and conduciveness when providing public transportation services.

The WAAT finally decided to postpone the strike that was scheduled to be launched on October 10-13, 2017.However, the decision sparked protests among Ridwan Kamil’s followers on social media. Most of them complained about the difficulties of finding convenient public transportation in Bandung.

 

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Govt Expects Freeport`s Share Divestment to Be Complete in 2019
Tempo.co 12 October 2017

TEMPO.CO, Jakarta - State-Owned Enterprises Minister Rini Soemarno said the divestment of 51 percent of Freeport`s shares will be completed in the first quarter of 2019.
“We demand the divestment process and the calculation to be completed in the first quarter of 2019,” Rini said at the Coordinating Economic Affairs Ministry on Wednesday, October 11.

According to Rini, the government is still discussing the investment certainty, which is currently handled by the Finance Ministry. In terms of the share value to be divested, the minister said that the number is still being negotiated.

Earlier, Freeport McMoran Inc. CEO Richard Adkerson sent a letter to the government in relation to the share divestment plan. The letter was sent on September 28, 2017, to Finance Ministry's secretary general Hadiyanto.

Freeport's Adkerson in the letter said that he had received the government’s position for the divestment plan.
He also expressed his disagreement with the statement included in a document and clarified inaccuracies in the government’s position.

 

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AP II Welcomes Plan to Build Airport in Reclamation Island
Tempo.co 11 October 2017

TEMPO.CO, Jakarta - State-owned airport operator PT Angkasa Pura (AP) II positively welcomed Soekarno-Hatta Airport 2 in a reclamation island in Tangerang.“This is an alternative to anticipate the Soekarno-Hatta Airport saturation,” AP II corporate secretary Agus Haryadi told Tempo today, Oct. 11.


Agus revealed the AP II has been in communications with the Tangerang administration to discuss the cooperation scheme.Earlier, the government pitched a plan to build Soekarno-Hatta Airport 2 in Islet 4 located on the north coast of Tangerang Regency.

Tangerang Spatial Planning Agency head Taufik Emil said the plan is still being finalized by the Transportation Ministry’s Air Transportation Directorate General.
“It’s still in the feasibility study stage.

There’s no prediction yet when the Transportation Ministry will commence the construction,” Emil said.
The Islet 4 is one of the seven islets to be developed in the Tangerang reclamation project. About 9,000 hectares of the sea territory along the north coast of Tangerang will be turned into seven man-made islands.

 

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IDX May Exceed 2017 IPO Goal
Tempo.co 11 October 2017

TEMPO.CO, Jakarta - The Indonesia Stock Exchange (IDX) said that the number of initial public offerings (IPO) this year may exceed the bourse`s initial target, which is by 35 companies.
IDX director for Corporate Assessment Samsul Hidayat said on Wednesday that, so far this year, 26 companies have listed their shares on IDX through IPOs.
He said that 10 to 11 more companies will go public in the remaining months of 2017.


According to Samsul, 80 percent of the companies that are in the process of IPOs will be listed on the development board, while the rest will be listed on the main board.
The IDX's main board lists the shares of issuers with a minimum net asset value of Rp100 billion and have operating experiences of at least 36 months.

The development board is to list the shares of issuers with net assets of at least Rp5 billion and has been operating for at least 12 months.
For 2018, the IDX is targeting to list 35 new issuers.IDX president director Tito Sulistio sometime ago said that the addition of newly public companies will increase the exchange's daily transaction value.


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Global firms join rush to bet on Indonesia
The Jakarta Post  12 october 2017

Big-name investors including Expedia and Alibaba are pumping billions of dollars into Indonesian tech start-ups in a bid to capitalise on the country’s burgeoning digital economy and potential as Southeast Asia’s largest online market.

Indonesia has seen a surge of cash into its technology sector over the past two years, helping support dozens of homegrown start-ups ranging from ride hailing apps to e-commerce firms.
And with a population of more than 250 million, a swelling middle class and growing availability of cheap mobile devices, firms from across the world are piling in.

"We believe that Indonesia is poised for a huge leap forward for its digital economy, following China's growth and becoming the leading tech destination in the Southeast Asia region," Adrian Li, a partner in Jakarta-based Convergence Ventures, told AFP.

Last year $631 million in disclosed venture capital was ploughed into the country, according to research firm CB Insights, up from $31 million in 2015.
But that figure has already been shattered in 2017, with $3 billion worth of deals clinched as of September 2017, said Meghna Rao, a tech industry analyst at the firm.

Tokopedia  -- a marketplace that allows users to set up online shops and handles transactions -- won $1.1 billion in capital from China’s Alibaba in August.
Motorbikeon-demand service Go-Jek secured $1.2 billion from Chinese tech giants JD.com and Tencent Holdings in May, according to data from Crunchbase.
In another sign of confidence, Koison became Indonesia's first e-commerce service to go public in October.

"While it's too soon to say that this investment is indicative of a larger pattern of Indonesian startups pulling in many big ticket investors, it is part of a growing clutch of mega-rounds," Rao said.
Internet use is growing faster in Southeast Asia than any other region in the world, with 124,000 users coming online every day over the next five years, according to a 2016 report from Google and Singapore’s Temasek Holdings.

By 2020 an estimated 480 million people are expected to be connected to the internet, up from 260 million in the region last year.
Indonesia's mobile-first market will comprise more than half of Southeast Asia’s e-commerce market by 2025, with an estimated value of $46 billion, the Google report said.

"When you do startup business in Malaysia, Singapore, Thailand and Indonesia, the cost, effort and time that you spend is almost even. But when you go to Indonesia (growth) is unlimited -- the market is so big," said Willson Cuaca, whose venture capital firm East Ventures specialises in early-stage investments.

As a result, big names like US venture capitalist Sequoia Capital, Japan's Rakuten Ventures and travel company Expedia -- as well as Chinese tech giants -- have all made investments in the country.

Indonesian president Joko Widodo has been a vocal supporter of digital innovation, most notably in his plan to create 1,000 local tech start-ups worth $10 billion by 2020. But the sector still faces a number of challenges.

A limited pool of engineering talent to draw from, low rates of internet penetration outside densely populated Java, bureaucratic delays, and poor quality infrastructure are all obstacles to growth.
For e-commerce companies, the large number of "unbanked" Indonesians limits the scope of online transactions, and logistics problems make it hard to move goods.

While young entrepreneurs and small businesses are flocking to co-working spaces springing up in major centres, it is a decidedly different scene in most parts of the country.
Farid Naufal Aslam, the chief executive of Aruna, an e-commerce company that links fishermen to buyers, said navigating Indonesia's disparate communities is a challenge too.

"One of the biggest challenges faced is on social approach," Aslam, 23, said. "Indonesia is a unique country with diverse communities and different customs in each region."
Yet many venture capitalists and entrepreneurs remain optimistic."The window of opportunity is there," Cuaca said. "As long as you can innovate and solve real problems using technology, you can be successful."

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