Indonesia Economy Forum

[Indos]

PLN pledges carbon neutrality by 2050
​

PLN president director Zulkifli Zaini speaks in front of House of Representatives (DPR) Commission VII, which oversees energy, in Jakarta on Wednesday (17/6). The commission was grilling PLN about recent spikes in household power bills.(PLN/PLN)


Dzulfiqar Fathur Rahman
PREMIUM
Jakarta ● Sat, May 8, 2021


State-owned electricity monopolist PLN has pledged to become carbon neutral by 2050 with a plan to phase out fossil fuel-fired power plants and use more renewable energy in its networks.

PLN president director Zulkifli Zaini said the company was planning to develop new solar and wind power plants, mix biomass with coal – so-called co-firing – in existing coal plants and convert diesel-fired power plants to renewable energy-based power plants.

“After we finish developing the 35,000 megawatts [of additional power generating capacity], we will fulfil Indonesia’s electricity needs using only renewable energy,” Zulkifli said in an online briefing on Friday. Since 2015, PLN has been building new power plants to produce a combined 35,000 MW, 60 percent of which are coal-fired. The government-ma...

PLN pledges carbon neutrality by 2050

State-owned electricity monopolist PLN has pledged to become carbon neutral by 2050 with a plan to phase out fossil fuel-fired power plants and use more renewable energy in its networks.

www.thejakartapost.com

 

[Indos]

Indonesia is preparing to handle Covid second wave. Indian Covid variant has been detected in Indonesia and government and all experts are worry about what will happen in next June, whether Indonesia is able to make the Covid 19 infection remain low as what has been happening since March or they will be a spike remains to be seen. Malaysia has been seen a surge in Covid infection and has implemented another lock down measure.

Government allow Taraweeh mass prayer in Indonesia mosques during Ramadhan so I am quite worry but the Covid infection rate during Ramadhan so far is still stable Alhamdulillah

 

[Indos]

State owned Mining Holding, MIND ID, will spend more than 2 billion USD in the year 2021 alone for company investment plan.

https://www.cnbcindonesia.com/marke...arkan-investasi-rp-29-t-di-2021-buat-apa-saja

 

[Indos]

Miner MIND ID sets $2b annual capex with smelter focus​

MIND ID president director Orias Petrus Moedak speaks during the company's third anniversary celebration in this undated picture.(Courtesy of MIND ID/.)


Norman Harsono
PREMIUM
Jakarta

May 11, 2021


State-owned mining holding company MIND ID has set its capital expenditure (capex) at Rp 29 trillion (US$2.05 billion) for this year with a focus on developing an alumina smelter.

MIND ID president director Orias Petrus Moedak said on May 7 that, of the total funds, Rp 2 trillion would be used for working capital while the remaining Rp 27 trillion would go toward strategic projects in the pipeline, including metal smelters and a coal-gasification facility.

However, the largest chunk of project capex is earmarked for an alumina smelter at between $700 million and $800 million. The smelter, slated to begin operations in 2023, has a planned capacity of 1 million tons of smelter grade alumina per annum.

“That funding is around 70 percent of the [alumina] project’s total value,” said Orias during a virtual press conference.

Miner MIND ID sets $2b annual capex with smelter focus

Of the total funds, 7 percent will be used for working capital while the remaining 93 percent will go toward several mining downstreaming projects.

www.thejakartapost.com

 

[Indos]

Indonesian people have tradition to go back to home town and meet their parents during Idul Fitri celebration, this is called mudik. This activity is banned during this Ramadhan and Idul Fitri but nevertheless around 1 million people can escape according to government estimates

This you can see how hard Indonesian police must stop them doing "mudik"

 

[Indos]

Reviving investment to accelerate economic recovery
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Coordinating Maritime Affairs and Investment Minister Luhut B. Pandjaitan (left) and Finance Minister Sri Mulyani Indrawati (right) at the launch of Batam Logistics Ecosystem (BLE) in Batam, Riau Islands on Thursday, 18 March 2021.(Courtesy of the Coordinating Maritime Affairs and Investment Minister/-)


Dian Ayu Yustina (The Jakarta Post)
PREMIUM
Jakarta ● Tue, May 18, 2021



During the pandemic, the government stimulus has mostly been focused on supporting consumer spending and purchasing power. Throughout the year 2020 the government disbursed a Rp 579.8 trillion (US$40.60 billion) stimulus package to support the economy hit by the impact of the COVID-19 pandemic.

The largest portion of the national economic recovery budget was in the form of social transfers, primarily aimed at supporting spending mostly by middle- to low-income consumers.

The pandemic crisis has weakened social economic indicators. The unemployment rate rose from an average of 5 percent to the current 7.07 percent. The pandemic has also caused the proportion of people living under the poverty line to increase to 10.2 percent in September 2020 compared with a historic low of 9.2 percent in September 2019. Now, with the economic situation gradually improving, we need to think o...

Reviving investment to accelerate economic recovery

Now, with the economic situation is gradually improving, we need to think of ways and policies to absorb back the laid-off workers back to employment. One of the keys to do this is by reviving the growth of investment.

www.thejakartapost.com

 

[Indos]

Indonesia miss universe representative once again enter top 21 in the competition, free promotion for Indonesian tourism industry if the video shows Indonesian tourism sites like this from Roro Ayu Maulida video.

 

[Indos]

Latest projection coming from Fitch Rating, just being released 4 hours ago after reading and analyzing first quarter result and of course Covid latest data.

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What Investors Want to Know: Indonesian Sovereign and Corporate Credits in 2021
Tue 18 May, 2021 - 7:08 AM ET

Indonesia’s economy is recovering from the shock caused by Covid-19, but the sovereign’s credit profile could still face risks in the event of a weakening of its policy framework or sustained outflows from a shift in global investor sentiment.

We forecast Indonesia's GDP growth to recover to 5.3% in 2021 and 6.0% in 2022, which will also support the recovery of corporate issuers. However, slow progress on vaccination and the continued spread of Covid-19 mean near-term growth is subject to downside risks. Lingering risks to Indonesia’s economic outlook will not necessarily pose a threat to its ‘BBB’/Stable credit rating, which we affirmed in March 2021.

We expect growth to return to relatively high rates in comparison with rating peers after the pandemic, based on our view that medium-term economic scarring for Indonesia should be modest. We view a further significant rise in the overall public debt burden over the next few years as unlikely, given Indonesia’s prudent fiscal record.

However, continued resort to monetary financing of the deficit, beyond that currently envisaged by the authorities through 2022, could be negative for the credit profile to the extent it weakens the policy framework and undermines macroeconomic stability.

From an external financing perspective, a sustained decline in reserves, resulting from capital outflows and foreign-exchange intervention, would be negative for the credit profile.

Indonesia is often hit hard during bouts of global risk aversion, given its open capital account and relative dependence on portfolio inflows to finance its current-account and budget deficits. We believe the impact of higher US rates on the credit profile over 2021-2022 will ultimately depend on the authorities’ policy response.

https://www.fitchratings.com/research/sovereigns/what-investors-want-to-know-indonesian-sovereign-corporate-credits-in-2021-18-05-2021

 

[Indos]

Until 2024 I hope government take a good effort to be very prudent in managing the economy, unnecessary foreign loan like for defense acquisition should be slashed.

I suggest Fighter jet acquisition should be delayed and we should wait for KFX/IFX program to complete its development inshaAllah. MALE UCAV acqusition also should be halted and better wait our own MALE UCAV program to complete its development in 2025 inshaAllah.

Acquisition coming from local defense industry should be prioritized and also increase R&D budget for several program that could improve our industrialization like N 245 and KFX/IFX.

New capital city construction should be halted and better the money is disbursed to pay government debt to state owned construction companies and also state owned companies like Pertamina and PLN so they can get more loan to invest new projects.

High way road program in Sumatra should be prioritized and completed in 2024. This program are essential to propel our economy by making our industry in Sumatra competitive so that we can speed up the overall economy growth while reducing our debt to equity ratio in the process.

 

[Indos]

France’s Total exits Indonesia fuel retail market​

French oil company Total headquarters in La Defense business district, near Paris, on Oct. 21, 2014. (AFP/Martin Bureau)


Total Oil has closed all of its gas stations in Indonesia as the French oil and gas supermajor throws in the towel in a market overwhelmingly dominated by state-owned Pertamina.

Total Oil Indonesia marketing manager Magdalena Naibaho said on Tuesday that the Paris-based company had closed all 18 of its gas stations across Greater Jakarta and Bandung.

“This decision is in line with Total’s global strategy to actively manage our business portfolio,” she told The Jakarta Postvia text message. Magda noted that Total would still continue its lubricant selling operations as the other component of its local downstream business. However, she declined to comment on the tight market competition.

The decision makes Total the second oil and gas company to exit Indonesia’s fuel retail market after Malaysia’s Petronas...

France’s Total exits Indonesia fuel retail market

The decision makes Total the second oil and gas company to exit Indonesia’s fuel retail market after Malaysia’s Petronas in August 2012.

www.thejakartapost.com

 

[Indos]

Billionaire Chaerul Tanjung’s CT Corp To Receive $916 Million Investment From Mitsui & Co

Chaerul Tanjung (sorry I use another photo since original photo cannot be copy pasted)

May 4, 2021,

CT Corp., the Indonesian conglomerate founded by tycoon Chairul Tanjung, has secured a 100 billion yen ($916 million) investment commitment from Japanese trading house Mitsui & Co.

Mitsui & Co said its investment will be made in two tranches comprised of 67 billion yen in a convertible issue and 33 billion yen to replace the existing corporate bonds it subscribed to in November 2018. The investment will made through CT Corp.’s holding company PT CT Corpora.

The bond issue is expected to be completed by the second quarter of this current financial year, subject to mutually agreed conditions, Mitsui said in its statement.

“Mitsui aims to contribute in accelerating CT’s growth in the consumer-related industries through joint businesses which leverage Mitsui's proven business development capabilities,” the company said.

Upon completion of the subscription agreement, Mitsui will despatch key executives to CT Corp. to help develop its business and eventually become a multinational company.

CT Corp. is a leading Indonesian consumer-focused conglomerate with interests in financial services, media, lifestyle, retail, property and entertainment. Founded by Tanjung in 1987, the group’s prominent businesses include Bank Mega and Transmart Carrefour, the largest hypermarket operator in Indonesia. CT stands for the initials of Tanjung, 58, who currently has a net worth of $4.2 billion, according to the Forbes Real-Time Billionaires List.

Mitsui’s investment in CT Corp. is in line with the company’s strategy of building a new pillar of growth in Asia, among the world’s fastest-growing regions. Indonesia is the largest country in Southeast Asia with a population of 270 million and a fast growing middle-income and digitally savvy consumers, it said.

Billionaire Chairul Tanjung’s CT Corp. To Receive $916 Million Investment From Mitsui & Co

TC Corp., the Indonesian conglomerate founded by tycoon Chairul Tanjung, has secured a 100 billion yen ($916 million) investment commitment from Japanese trading house Mitsui & Co.

www.forbes.com

 

[Indos]

​

During the pandemic, the government stimulus has mostly been focused on supporting consumer spending and purchasing power. Throughout the year 2020 the government disbursed a Rp 579.8 trillion (US$40.60 billion) stimulus package to support the economy hit by the impact of the COVID-19 pandemic.

The largest portion of the national economic recovery budget was in the form of social transfers, primarily aimed at supporting spending mostly by middle- to low-income consumers.

Reviving investment to accelerate economic recovery

Now, with the economic situation is gradually improving, we need to think of ways and policies to absorb back the laid-off workers back to employment. One of the keys to do this is by reviving the growth of investment.

www.thejakartapost.com

There are still around 9 billion USD left over budged from previous year that can be used this year. The money is a transfered budget from central government into local government. The money is currently stored in local government banks (almost all Indonesian local government in provincial level has their own bank).

Government should stop transfered money to them this year and use the intended money for something more productive like for infrastructure or production facility. I think government can build KFX/IFX production facility using that money.

 

[Indos]

AlhamduliLLAH good news

Indonesia trade surplus widens to US$2.2b as exports surge 51.9% in April
Thursday, May 20, 2021 - 16:53

Jakarta. PHOTO: AFP/Bay Ismoyo

INDONESIA'S trade surplus widened in April to US$2.2 billion as exports surged 51.9 per cent year on year, partly due to the low base last year and outperforming economists' expectations.

This compares with the 30.5 per cent year-on-year jump in exports in March, which led to a US$1.6 billion surplus. Private sector economists had expected a 40.7 per cent expansion, according to a Bloomberg poll.

At the same time, imports grew 29.9 per cent year on year, following a 25.7 per cent rise in March.

UOB economist Enrico Tanuwidjaja noted that Indonesia's positive performance in exports and imports is due in part to China, a crucial trading partner, playing a big role in supporting both supply and demand.

"The largest increase in non-oil and gas exports for April, compared to March, was the exports of iron and steel, as China's steel production continued to expand," said Mr Tanuwidjaja.

In contrast, the largest decline was in the export of palm oil, as lockdowns in India dented demand, he said.

Although exports had strong sequential expansion, Barclays regional economist Brian Tan estimated that imports experienced a broad-based decline of 6.4 per cent month-on-month after seasonal adjustment, partly reversing the 13.4 per cent jump in March.

"The outperformance in exports and surprising weakness in imports suggest the current account deficit may not widen by as much as we expect this year," said Mr Tan.

Sung Eun Jung, an economist at Oxford Economics, believes a strong global growth recovery and rising commodity prices will buttress Indonesia's exports for the remainder of the year.

Ms Jung added that progress on coronavirus containment domestically also lays ground for a sustained recovery in domestic demand.

"However, pandemic challenges persist amid new virus variants, renewed lockdowns in neighbouring economies, and the recent slowdown in the pace of vaccination in Indonesia due to supply shortages," she said.

https://www.businesstimes.com.sg/asean-business/indonesia-trade-surplus-widens-to-us22b-as-exports-surge-519-in-april

Other related news

Indonesia books trade surplus for 12 consecutive months

Indonesia’s trade surplus was at US$2.19 billion in April, widening by 39.5 percent from March, marking a rebound from a deficit seen last year.

www.thejakartapost.com

 

[Indos]

Idul Fitri cash withdrawals surge 61% in Greater Jakarta
​

Dzulfiqar Fathur Rahman (The Jakarta Post)
PREMIUM
Jakarta ● Mon, May 24, 2021


Greater Jakarta residents withdrew trillions more rupiah over Idul Fitri this year compared to last year, as consumption started recovering from the pandemic-induced economic downturn.

Over the two-day holiday on May 13 to 14, cash withdrawals in Greater Jakarta surged 61 percent to Rp 34.8 trillion (US$2.42 billion) from Idul Fitri 2020, said Coordinating Economic Minister Airlangga Hartarto, quoting data from Bank Indonesia (BI).

Idul Fitri cash withdrawals surge 61% in Greater Jakarta

Authorities have attributed the upsurge in withdrawals over the two-day holiday to rising consumer confidence as well as the government ban on mudik (exodus).

www.thejakartapost.com

 

[Indos]

Until 2024 I hope government take a good effort to be very prudent in managing the economy, unnecessary foreign loan like for defense acquisition should be slashed.

I suggest Fighter jet acquisition should be delayed and we should wait for KFX/IFX program to complete its development inshaAllah. MALE UCAV acqusition also should be halted and better wait our own MALE UCAV program to complete its development in 2025 inshaAllah.

Acquisition coming from local defense industry should be prioritized and also increase R&D budget for several program that could improve our industrialization like N 245 and KFX/IFX.

New capital city construction should be halted and better the money is disbursed to pay government debt to state owned construction companies and also state owned companies like Pertamina and PLN so they can get more loan to invest new projects.

High way road program in Sumatra should be prioritized and completed in 2024. This program are essential to propel our economy by making our industry in Sumatra competitive so that we can speed up the overall economy growth while reducing our debt to equity ratio in the process.

AlhamduliLLAH good decision is made by President, Mindef and Bappenas officials, better support KFX/IFX program and MALE UCAV program and wait until mass production phase is started in 2026 inshaAllah for both program.

This is how to make the acquisition effecient and effective for both Indonesian AirForce and Indonesian economy by not buying Rafale until 2024 and wait for indigenous program instead.

Positive effects :

1. Air Force

Improve capability since KF 21/IFX is 4.5 generation fighter and upgradable to 5 generation fighters

Possible more fighters are acquired due to cheaper price of KF 21/IFX for both acquisition (65 million USD) and maintenance cost

Communality in maintenance and operation by not operate too many of fighter type thus create less complexity and also lower maintenance and operation cost since PTDI is part of the OEM.

Increase deterrence by :

Decrease dependency on foreign country in the acquisition. local Upgrade and Future Refurbished program by local industry.

2. Indonesia local defense industry

Improving knowledge, technology and human resource base, boosting production and Indonesian Aerospace brand name.

Giving opportunity for other related Aerospace related company like InfoGlobal, PT LEN Industry, PT Nusantara Turbin to contribute on the program and thus giving them chance to grow in fighter jet components market.

3. Indonesian economy

Current situation: Lower Debt to equity ratio by not adding unnecessary foreign loan. Giving the government better image in the perception of Rating agency like Fitch rating due to its prudent economic policy

After KF 21/IFX reach mass production inshaAllah: local production, possibility to grow avionics and other aerospace related industries, much cheaper than Rafale and F 15 EX.

Effective and efficient spending

Retain more foreign exchange, hence strengthen currency

4. Indonesian brand image

Important to boost Indonesian hightech products like aircraft, electronics, sofware, and others image in the perception of both domestic and foreign market.

5. Geopolitics

Developing and making 5 generation fighter will increase the global leaders perception toward Indonesia

6. Mental Revolution

Giving high confident to all Indonesian and improve "We can make it" mind set among Indonesian.

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Threat analysis


The situation in SCS is still relatively calm since USA is still very strong and China will not want to jeopardize its economic development by launching any military assault in the region at least until 2040.

Any way, it will be Vietnam, Philippine, and Malaysia/Brunei who will be targeted by China if that country is lead by crazy (which is not the case of current leadership). Indonesia will likely be spared by China as the dispute is not significant and happen in the edge of China nine dash claim.

We should focus on how to accelerate our local defense program and put more R&D on it. Radar acquisition IMO should also wait our two radar programs that are planned by Bappenas and PT LEN Industry (3 D radar). Getting foreign join program should also be done with the promise to make many RADAR so that TOT packet can be really significant.
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25 May 2021

Indonesia's plan to procure Rafale fighters hampered by funding roadblock

by Ridzwan Rahmat

However, a schedule of national projects that have been approved for foreign funding was obtained by Janes on 21 May. It confirms that Rafale programme has not been included.

The schedule is published annually by the Indonesian Ministry of National Development Planning (Kementerian Perencanaan Pembangunan Nasional: BAPPENAS), and it spells out national programmes for which foreign loans can be obtained for the year.

As such, given the lack of endorsement from the BAPPENAS, the bid to procure 36 Rafale fighters has not been gazetted by the Indonesian Ministry of Finance (MOF) as a defence procurement programme for the 2021 financial year.

Full article

Indonesia's plan to procure Rafale fighters hampered by funding roadblock

The Indonesian Ministry of Defense (MOD) has made further progress in its effort to procure 36 Rafale multirole fighter aircraft from Dassault Aviation but a formal...

www.janes.com