Economy and Business


Bali Could Open By July

The government is mulling a plan to vaccinate most of the Bali residents in the next two months and to open the islands for foreign tourists by July to reinvigorate its economy, a senior minister said last week. Today, Indonesia still prohibits foreigners from entering Indonesia, with few exceptions. Only foreigners holding diplomatic visas, official visiting service visas of foreign officials at ministerial level and above, diplomatic residence permits, official residence permits, limited stay permit cards (KITAS), or permanent residence permit cards (KITAP) can enter the country. “But we are evaluating the regulation because we are trying to vaccinate 1.8 million to 2 million people by next month,” the Coordinating Minister of Economic Affairs Luhut Binsar Pandjaitan said in a statement on Friday.
“From April to May, we can add 1 million people so that in July, we hope to achieve herd immunity. Then Bali becomes a green zone,” Luhut said. (Jakarta Globe)

Japan May End Support for Coal

In a decision that would affect Indonesia, a large coal producer, Japan announced it s considering ending state support to build coal-fired power plants abroad in line with international efforts to curb global warming, government sources said Monday. Prime Minister Yoshihide Suga could announce the move as early as an April 22-23 virtual summit on climate change hosted by US President Joe Biden, the sources said. Japan has been criticized for continuing to give state support to export coal-fired power plants in the form of loans from the Japan Bank for International Cooperation. Last July, Japan tightened its criteria for backing such projects, only allowing them in countries that are making efforts to reduce carbon emissions and those that have no choice but to turn to coal due to financial reasons. (Jakarta Post)

Vaccination Key to Economic Recovery

In a recent speech former Finance Minister Chatib Basri said Indonesia lacked the discipline to implement social distancing and vaccination was the only way forward for the nation’s economic recovery. Basri said the primary engine of economic growth was consumption in the middle-to-upper income brackets, and the prolonged social distancing measures had adversely impacted those activities. “Private investment will happen if we have an economy of scale, and we only have economy of scale if mobility happens. This mobility can only happen with social distancing and vaccination,” “Social distancing can only happen effectively in places like China, in Wuhan, Singapore or Australia. As for us, we lack that discipline,” he said.

EV Battery Holding Company

Indonesia has established a government holding company for electric vehicle batteries. Given its position as one of the world’s largest nickel producers, a key battery component, Indonesia intends to build a substantial EV downstream industry. Under the agreement, state-owned oil giant Pertamina, electricity monopoly PLN, mining holding company MIND ID and nickel and gold miner PT Aneka Tambang (Antam) will each own 25 percent of IBC, an electric vehicle (EV) battery holding company. IBC plans to partner with other companies, most notably China’s CATL and South Korea’s LG Chem, the world’s top two EV battery producers, to establish several joint ventures to create an end-to-end EV battery supply chain in Indonesia.

New Tariffs on Apparel and Garments

Indonesia has proposed a 20-50% tariff on all imported clothing (any source) and has notified the WTO that the measures are compliant with its “Agreement on Safeguards”. The policy is, according to industry sources, aimed at “dumping” from China, especially women’s Islamic apparel.

$10 Billion for Sovereign Wealth Fund

The United Arab Emirates (UAE) has become the largest anchor investor in Indonesia’s sovereign wealth fund (SWF) to date after announcing plans to inject US$10 billion at the directive of UAE Crown Prince Mohammed bin Zayed al-Nahyan.

New Cable Connection

Facebook said it planned two new undersea cables to connect Singapore, Indonesia and North America in a project with Google and regional telecommunication companies to boost internet connection capacity between the regions. The cables, according to the executive, will be the first to directly connect North America to some of the main parts of Indonesia, and will increase connectivity for the central and eastern provinces of the world’s fourth most populous country. “Named Echo and Bifrost, those will be the first two cables to go through a new diverse route crossing the Java Sea, and they will increase overall subsea capacity in the trans-pacific by about 70%,” Facebook VP of Network Investments Kevin Salvadori told Reuters. Salvadori said Echo is being built in partnership with Alphabet’s Google and Indonesian telecommunications company XL Axiata and should be completed by 2023.

Controversial Indonesian Group Seeks US Listing

PT Asia Vision Network (AVN) announced in a statement on Monday that it would list its shares on the United States’ Nasdaq Composite index to become a US-listed Indonesian holding company, through a special purpose acquisition company (SPAC) merger with Malacca Straits Acquisition Co. Ltd. Part of the MNC Group media conglomerate, AVN is the subsidiary of Indonesian media giant PT MNC Vision Networks (MVN) whose group chairman, Hary Tanoesudibyo, is former US President Trump’s business partner on hotel projects in Indonesia. Editor’s Note: MNC is also a party to lawsuits in Singapore and Indonesia involving non-payment after purchasing American technology from Blu Tether, an AICC member.

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