Indonesia Economy Forum

[NEKONEKO]

Semarang named cleanest tourist destination in Southeast Asia

Semarang, a Central Java city known for its acculturation of Javanese and Chinese cultures, has been named as the cleanest tourist destination in Southeast Asia.

The ASEAN Clean Tourist City Standard (ACTCS) bestowed the title on Semarang for the year of 2020 to 2022.

Semarang city secretary Iswar Aminuddin received the award on behalf of Mayor Hendrar Prihadi in Brunei Darussalam on Thursday.

Hendrar said the city owed various parties for the accomplishment, including members of the public.

“Stakeholders, the Semarang administration, members of the public, and the media [played a role],” he said on Sunday on the sidelines of an event in Semarang.

“Everyone has committed to changing Semarang for the better.”

The ACTCS initiative is meant to provide ASEAN member countries with tools that will help improve the quality of tourism in their cities, as well as improving the livelihood of local residents by alleviating poverty, according to the official ASEAN website.

Hendrar went on to say that the administration would remain focused on maintaining the city’s cleanliness through a number of public campaigns such as the Semarang Won’t Litter Movement, which was also expected to reduce plastic waste. Other measures would entail reducing vehicle emissions and increasing the amount of green public spaces (RTH) to more than 30 percent of the region, he said.

Semarang is home to 259 parks and green spaces, both private and public, at the time of writing. Around 29 parks were revitalized in 2018. In addition, the administration also managed three new park projects last year.

Semarang Culture and Tourism Agency head Indriyasari said Semarang was much less polluted than any other city across the province.

“It explains why the number of tourists visiting the city increased to 7.2 million in 2019. I hope the number, as well as the quality of the tourist experience will keep improving this year,” she said, adding that the majority of tourists spent a day or two in the city.

In an effort to improve the quality of the tourist experience, the local administration has announced that 72 tourist events are in the pipeline. Two such events, the Sam Poo Parade (traditional Chinese carnival commemorating the arrival of Admiral Cheng Ho in Semarang) and the Old Town Festival, have been included on the Tourism Ministry’s Calendar of Events this year. (rfa)

https://www.thejakartapost.com/amp/...st-tourist-destination-in-southeast-asia.html

 

[katarabhumi]

Indonesia’s Tokopedia looks to secure fresh $1.5bn in funds
22 January 2020

Tokopedia, Indonesia’s largest ecommerce marketplace, is in the final stages of preparing a fundraising of up to $1.5bn from investors including Temasek, Alibaba and SoftBank that would cement its position as the country’s second-biggest unicorn.

The fundraising, which could come as soon as next quarter, would value Tokopedia at between $8bn and $9bn, according to several people familiar with the matter.

That is up from a valuation of $7bn in 2018 and brings it closer in value to ride-hailing group Gojek, which is valued at about £10bn. People familiar with the deal, however, cautioned that the size of the fundraising and valuation could change.

Singaporean wealth fund Temasek is expected to lead the round with a $500m investment, with existing Tokopedia investors Japan’s SoftBank and China’s Alibaba joining in to avoid any dilution to their existing stakes. The fundraising was likely to be the last before a possible stock market listing, the people added.

The additional capital would give Tokopedia fresh ammunition in its fight to dominate the ecommerce market in south-east Asia’s biggest economy.

“We use capital and fundraising to find the right partners and accelerate our business strategy,” said Patrick Cao, Tokopedia’s president.

SoftBank’s involvement would come at a time when the valuation of many of its portfolio companies is under pressure. The Japanese group has faced criticism following large falls in the value of high-profile investments including property leasing business WeWork and ride-hailing company Uber.

Temasek and other arms of Singapore Inc have been active in Jakarta’s growing start-up industry, backing young technology companies and the venture capital firms that invest in them. Temasek is a major investor in Gojek.

Tokopedia is the market leader in Indonesia ahead of rivals Shopee, Lazada — in which Alibaba has a controlling stake — and Bukalapak. It has benefited from a combination of its status as a first mover, its local roots alongside a relentless focus on its core business.

The company’s planned fundraising could trigger a new capital arms race in Indonesian ecommerce comparable to last year’s war among ride-sharing companies. Some investors are anticipating consolidation in Indonesia’s ecommerce sector in the coming months in the face of the potential entry of Amazon.

“All the players are talking to each other all the time,” says one executive with first-hand knowledge of the market.

Investors have also pointed to Tokopedia’s business model of connecting buyers with sellers, which is less capital-intensive than that of other ecommerce companies because it does not require extensive logistics facilities. That has taken on added importance as investors focus on start-ups’ profitability.

Tokopedia has benefited from first-mover advantage in Indonesia, which has helped it to secure the biggest slice of the country’s ecommerce market, ahead of rivals Lazada, Bukalapak and Shopee, as well as a focus on its core business.

Indonesia is also luring more Chinese investors who are seeking to diversify their holdings away from their home country, but are put off by high valuations for start-ups in markets such as India.

“Many mainland [Chinese] investors have been burnt by high valuations in India. They look at [Indonesia and south-east Asia’s] higher income per capita and other metrics, and are doubling down,” said Ying Lan Tan, founder of Insignia Ventures Partners, who invests in south-east Asia for wealthy Chinese entrepreneurs.

His fund manages money on behalf of mainland Chinese technology entrepreneurs and high-profile Singaporean investors. It invests almost exclusively in south-east Asia. “Indonesia is just at the inflection point where China was when Alibaba’s Taobao took off,” he added.

Tokopedia, Temasek, Alibaba and SoftBank all declined to comment on the potential fundraising.

https://www.ft.com/content/ac24232e-3c1a-11ea-a01a-bae547046735

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[katarabhumi]

Indonesia, Southeast Asia Enter Golden Age of Economy: HSBC
BY DIANA MARISKA - JANUARY 23, 2020

Despite the forecast of slow global economic growth in 2020, Southeast Asia, including Indonesia, is expected to enter an economic golden age that will take the region well on the path to become the world's fourth-largest economic bloc in the next decade.

HSBC Private Banking's chief market strategist for Southeast Asia, James Cheo, said he is convinced the region could ride out the current global slowdown and soon catch up with the world's economic powerhouses.

"The most exciting story, if we look at the next decade, is Southeast Asia. The next ten years could very well be the region's golden age because if it continues to grow, say, at its current pace, it can become the fourth largest economic bloc, behind the US, Europe and China," Cheo said to the Jakarta Globe.

Cheo pointed out there are at least three supporting factors behind Southeast Asia's economic rise. First is the demographic bonus that many countries in the region are already enjoying.

"Sixty percent of Southeast Asians are under the age of 35. In the next ten years, they will come of age: they'll start working and get their first paycheck. They will increase their purchases. They'll buy cars. They'll get married and buy a house. They'll have kids and spend more money on education, and of course, they'll travel to see the world," Cheo said.

Second, urbanization is getting more widespread in Southeast Asia, not only in big metropolitans but also in second-tier cities.

The third is the fact that Southeast Asia is "more digital" than the rest of the world. Southeast Asians spend an average of four hours on their mobile phones every day, much longer than people in other areas of the globe. "There are around 360 million mobile phone users in the region, but still only half use them to make transactions. There's a huge opportunity here as well," Cheo said.


Indonesian Economy Going in Right Direction

Cheo believes these three factors are going to be very relevant in Indonesia. Especially since surveys and studies have suggested Indonesia could be one of the leading emerging markets in 2020.

Cheo said Indonesia is going in the right direction, particularly in terms of investment.

"Indonesia has moved up consistently in the world's investment ranking in the past few years. This is what investors are looking out for: you don't always have to be number one or be perfect, but it's better if you always move up. If Indonesia continues to improve its ranking, investors will believe this is a place to invest in," he said.

There are several investment sectors with bright potentials in Indonesia this year. The first is consumption – the backbone of global economic growth.

The next one is infrastructure, currently one of the Indonesian government's priority sectors. Cheo noted the increase in infrastructural spending is not only happening in Indonesia but also in other Southeast Asian countries, including Malaysia and Thailand.

The government's focus on infrastructure development will benefit the overall investment climate – and may bring in more foreign direct investment. As Cheo pointed out, government support is a crucial consideration for direct investors before investing in a country.

"They will compare countries – which is the best in terms of cost and accessibility, and quickness of manufacturing. The government can make a lot of things easier for investors, from setting up investment to infrastructure and labor costs," Cheo said.

Meanwhile, investors may want to avoid investing in the commodity sector this year. Particularly, in commodities sold in the global market, since with the forecast of slow growth, global demand is expected to be weak, he said.

Cheo did not think Indonesia posed any particular risks for investors, but they should still watch out for global risks that may affect their investment in Indonesia.

Uncontrollable and sudden inflation in the US is probably the most significant threat there is, even if the probability of that happening is pretty low. "If inflation gets out of control, global central banks, particularly the Federal Reserve, will have to raise rates instead of cutting or holding them steady. It's a key risk," Cheo said.

Speaking of sweeping regulatory reforms – especially in taxation and labor laws – promised by the Indonesian government, Cheo said now is the right time to push through significant changes. However, he warned foreign investors not to expect a complete overhaul of local bureaucracy, though they should still see the government's insistence on reform as a sign of good things to come.


Slowing Global Economy

HSBC Private Banking predicted the slow global economic growth might last well until 2021. Global GDP growth is expected to reach 2.5 percent in 2020 and then up slightly to 2.6 percent in 2021.

Manufacturing, trade and investment are expected to remain weak, with consumer spending being the one sector strong enough to become the backbone of global growth.

However, despite the generally underwhelming prediction, news of a new trade deal between the United States and China comes as a bit of fresh air.

"[The deal] is good news after 18-20 months of tension and negotiation. It would help us by creating at least some semblance of stability because last year things had gone downhill very dramatically," Cheo said while reminding that the new deal is still a long way from complete.

According to Cheo, even if global growth remains slow, the Asian market will stand out since consumers in the region do not seem to be affected by "the rest of the world going down."

He said investors should target sectors popular with Asian consumers: service, travel and entertainment.

https://jakartaglobe.id/business/indonesia-southeast-asia-enter-golden-age-of-economy-hsbc

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[NEKONEKO]

 

[Indos]

Indonesia to have four new smelters this year as mineral ore export ban nears

• Norman Harsono
  The Jakarta Post
  

Jakarta / Fri, January 24, 2020 / 12:40 pm

Nickel ore processing carried out at a factory owned by PT Vale Indonesia. (JP/Ruslan Sangadji)

The government expects four smelters with a combined annual input capacity of 2.07 million tons and output capacity of 200,923 tons to begin operations this year.

An Energy and Mineral Resources Ministry official told reporters on Thursday that the smelters would produce ferronickel, nickel pig iron, lead bullion and ferromanganese. Their annual production outputs are 64,655 tons, 72,965 tons, 22,924 tons and 40,379 tons, respectively.

“The government guards these projects. The point is to get them done,” said the ministry’s mineral business development director Yunus Saefulhak in Jakarta.

Among the upcoming smelters, the largest one by output is publicly listed diversified miner PT Aneka Tambang’s (Antam) nickel smelter in East Halmahera, North Maluku. The smelter, last valued at US$1.6 billion, will produce 64,655 tons of ferronickel each year.

Read also: Indonesia tightens grip on nickel and coal exports

The four projects add to a list of 29 smelters expected to be operational by 2022, which is when Indonesia will ban all mineral ore exports and, thus, needs a sizeable downstream mining industry to absorb excess domestic supply. The country is particularly expediting nickel smelter development because it is the only metal whose export ban starts this year.

Yunus said some nickel miners were “relayering ore on bedrock” to reserve supply while waiting for local smelters to become operational.

He added that there was a fifth smelter expected to come online in June, namely PT Elit Kharisma Utama’s (EKU) nickel smelter in Banten. However, EKU’s smelter, which can produce 97,458 tons of nickel pig iron each year, will only begin operating at half capacity this year.

https://www.thejakartapost.com/news...his-year-as-mineral-ore-export-ban-nears.html

 

[NEKONEKO]

Indonesia Courts Investments for New Capital

• Indonesia has courted investments from the UAE and SoftBank for the development of its new capital.
• The President will establish a sovereign wealth fund to attract investments for the new capital as well as other national projects.
• Despite recent developments, Jakarta will continue to be Indonesia’s economic center.

Indonesia is trying to court major investments for the development of its new capital in East Kalimantan province on the island of Borneo. Construction is set to begin in early 2021 on the new 632,850-acre site – four times the size of Jakarta – at an estimated cost of US$33 billion.

The government aims to have this administrative center operational by 2024 and be a smart and green city equipped with modern infrastructure and public utilities.

Some 80 percent of the total costs of construction will be footed by public-private partnership initiatives, with the government funding the rest. As such, President Joko Widodo (Jokowi) will establish a sovereign wealth fund in addition to a steering committee to oversee the funding and construction efforts.

President recruits’ heavyweights
Following his recent visit to the United Arab Emirates (UAE) on January 12, 2020, the President announced that the UAE was to invest US$22 billion into Indonesia’s proposed sovereign wealth fund. The UAE has also shown interest in developing properties in Aceh province as well as the energy and telecommunication sectors.

Furthermore, Abu Dhabi Crown Prince Muhammad bin Zayed Al Nahyan will be part of the new capital’s steering committee. Other political and business heavyweights the President has recruited include former British Prime Minister Tony Blair, and SoftBank CEO Masayoshi Son.

SoftBank has offered to invest US$40 billion for the new capital, keen to support the President through the company’s expertise in artificial intelligence and other advanced technologies. Indonesia’s Coordinating Minister for Maritime and Investment Affairs, Luhut Pandjaitan, will meet Son again in Tokyo to develop the financing structure.

Hong Kong and South Korean investors have also shown interest, making offers of US$40 billion and US$50 billion, respectively, for the new capital’s development.

Indonesia is also seeking investments for its nationwide infrastructure projects. The President’s ambitious program will require more than US$400 billion over the next five years to modernize the archipelago.

Jakarta and Java to remain Indonesia’s economic hub
Despite moving the administrative capital to East Kalimantan, Jakarta and Java (the island where Jakarta is found) will remain Indonesia’s economic hub.

The government is planning to inject some US$40 billion into urban regeneration projects in Jakarta. This includes investing in infrastructure, mass transportation, and improving waste management systems.

The city’s metropolitan area, with a population of more than 30 million, already contributes to one-fifth of Indonesia’s total GDP and is home to a variety of important industries, such as manufacturing and financial services. Additionally, Java also accounts for 60 percent of Indonesia’s population and more than 50 percent of the country’s GDP, highlighting the large regional income disparities.

https://www.aseanbriefing.com/news/2020/01/23/indonesia-courts-investments-new-capital.html

 

[Kansel]

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[Indos]

Move On From ENI, Pertamina Builds Green Refineries Independently
PT Pertamina (Persero) and the Italian oil and gas company ENI have canceled building a joint green refinery.

Muhammad Ridwan - Bisnis.com29 January 2020 | 14:15 WIB

Pertamina refinery in Cilacap, Central Java. - Reuters / Darren Whiteside

• Pertamina Continues to Work on Green Refinery with Eni
  
  
  "So finally we then cut off this cooperation and decided to build it ourselves," he said in the Commission VII Meeting Room of the Indonesian House of Representatives, Wednesday (01/29/2020).
  
  Actually, the appointment of ENI as the company's strategic partner to mitigate technical risks associated with the construction of a green refinery that will produce B100 fuel. ENI is considered to have good competence in producing B100 fuel because it has been producing since 2004.
  
  Also read: Green Refinery in Dumai Refinery and Plaju Will Absorb 1 Million Tons of CPO Per Year
  
  
  For this reason, Nicke said, Pertamina initially planned to produce at B100 at ENI's green refinery in Milan. However, the existence of a ban on the use of CPO by the European Continent renders Indonesian CPO unable to be processed in Milan, which is caused by the application of international certification, which has largely not been fulfilled by Indonesian CPO producers.
  
  In addition, the application of the use of international certification is hampering the cooperation plan of Pertamina and ENI because most domestic CPO producers do not have it.
  
  That way, continued Nicke, Pertamina continued the plan by building a green refinery in Plaju, South Sumatra using technology licensed directly from UOP.
  
  Nicke explained that the B100 production was carried out at an old refinery that was added by a new unit. Later, each unit can produce 20,000 barrels of B100 fuel and is targeted to produce 1 million kiloliters per year.
  
  The use of the old refinery is considered to save investment by 40% when compared to building a new green refinery.
  
  "This project will be completed by the end of 2023, so that by 2024 we will be able to produce," he explained.
  
  Previously, Pertamina and ENI established cooperation between the two parties by signing 3 agreements on Wednesday (1/30/2019) in Rome, Italy.
  
  In this cooperation, there are at least two agreements including those related to the development of Green Refinery, namely the Head of Joint Venture Agreement for the development of Green Refinery in Indonesia and the CPO Term Sheet processing in Italy.
  
  The agreement is a continuation of the memorandum of understanding of cooperation signed by Pertamina with ENI in September 2018 and the signing of a further agreement in December 2018. Meanwhile, another agreement is the MoU related to circular economy, low carbon products and renewable energy.
  
  
  https://ekonomi.bisnis.com/read/202...-pertamina-bangun-kilang-hijau-secara-mandiri

Look like 100 % biofuel program will be implemented in 2024 right after the green refinery is expected to complete. The question is whether it is biodiesel or biogasoline that will be produced from the refinery ?

 

[Nike]

Jokowi inaugurates Nanjung tunnel in Bandung District, West Java
29th Jan 2020 15:38

Bandung, West Java (ANTARA) - President Joko Widodo (Jokowi) inaugurated the Nanjung tunnel, with an inlet length of 28 meters and outlet length of 100 meters, in Lagadar Village, Margaasih Sub-district, Bandung District, West Java on Wednesday.

Jokowi, along with West Java Governor M. Ridwan Kamil, Bandung District Head Dadang M. Naseer, and Minister of Public Works and Public Housing M. Basuki Hadimuljono, pressed a siren button to mark the inauguration of the tunnel.

"Alhamdulillah (Thank Allah), the construction of Nanjung Tunnel, which is part of the flood control system in the Bandung basin area, has been completed, and we have inaugurated it today," President Jokowi noted in his remarks.

The president remarked that the flood control system in the Bandung basin area comprised several large projects: normalization in the upper reaches of the river, construction of reservoirs, construction of retention ponds, and construction of flood pathways in Cisangkuy.

"Now, it is the construction of Nanjung Tunnel. We hope there will still be one or two that we want to complete in 2020. A lot of homework still remains in the form of a flood way and retention pond," he stated.

"If this can be completed, Insya Allah, after 2020, these floods that always occurred in the Bandung basin area, Insya Allah, would not occur after 2020," he affirmed.

He quoted West Java Governor Ridwan Kamil as saying that the Nanjung tunnel has had a positive impact on flood management in the Bandung basin area.

"Earlier, (the governor of West Java) said that this year, floodwaters had receded quickly, from 490 square kilometers to 80 square kilometers. The drop is drastic. In the past, (floods) had affected 159 thousand residents, and now, down to 77 thousand people. Insya Allah, we will deal with (the problem) in the upstream area," he stated.

Bandung's flood management in the upstream region does not only concern infrastructure but also rehabilitation of landforms in the Citarum watershed and reforestation.

"If this is completed, then we will go downstream that also requires attention. This is a huge amount of work that we complete one by one. Hence, once again, we are optimistic that by the end of 2020, flooding could be significantly minimized in the Bandung region," he added.

Related news: Indonesia, Japan to extend cooperation on infrastructure development
Related news: Floods swamp 3,744 homes in Bandung District
Related news: Bandung District's flooding shows no signs of receding
Translated by: Ajat Sudrajat, Fardah
Editor: Sri Haryati

https://en.antaranews.com/news/1404...-nanjung-tunnel-in-bandung-district-west-java

 

[Indos]

"Although Still Next Year, 3,000 Indonesian MotoGP Tickets Have Been Ordered"

JAKARTA, KOMPAS.com - PT Indonesia Tourism Development (SOE) or ITDC has made an official website for pre-booking tickets for the Indonesian MotoGP which will take place in Mandalika , West Nusa Tenggara (NTB), 2021. It is known that until now, there have been 3,000 people who have ordered these tickets out of a total offer for 10,000 from the promoter. "For the new tickets we opened on January 20, yesterday, 3,000 and will soon run out, but that is pre-booking tickets, we will buy the rest when the race starts," said ITDC Managing Director Abdulbar M Mansoer in Jakarta, Wednesday (29 / 1/2020).

Artikel ini telah tayang di Kompas.com dengan judul "Although Still Next Year, 3,000 Indonesian MotoGP Tickets Are Ordered", https://money.kompas.com/read/2020/...an-3.000-tiket-motogp-indonesia-telah-dipesan.
Penulis : Ade Miranti Karunia
Editor : Bambang Priyo Jatmiko

 

[Kansel]

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[striver44]

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We should invest more in critical areas such as batam and medan.
Long term we must find a way to take the crown from singapore as a major sea transport hub.

 

[Kansel]

We should invest more in critical areas such as batam and medan.
Long term we must find a way to take the crown from singapore as a major sea transport hub.

Indeed, thats what i thought on the first time seeing this post.

 

[striver44]

Indeed, thats what i thought on the first time seeing this post.

Kra canal if built will significantly drew the shipping traffic out of the singapore strait. Making medan port even more and more important

 

[Bungaterakhir]

NYIA - New Yogyakarta International airport - Progress per 25 Jan 2020