Economy and Business

World’s 7th Largest Crypto Investors

The Financial Services Authority (OJK) said Indonesia was ranked seventh as the country with the largest number of crypto asset investors in the world, with a total of 19.18 million investors as of February 2024.

“Currently, Indonesia is ranked seventh as the country with the largest number of crypto asset investors in the world,” said OJK’s Chief Executive of Financial Sector Technology Innovation, Digital Financial Assets and Crypto Assets Hasan Fawzi at a press conference in Jakarta, quoted from Antara, Wednesday, April 3.

Izuzu Relocates from Thailand to Indonesia

JAKARTA, June 7 (Reuters) – Japanese truck maker Isuzu Motors (7202.T), opens new tab plans to relocate a factory from Thailand to Indonesia and could start production as early as next year, Indonesia’s industry minister said on Wednesday.Minister Agus Gumiwang Kartasasmita met with Isuzu’s executives in Tokyo on Tuesday, the ministry said in a statement.
Isuzu in Thailand did not immediately respond to a request for confirmation.

Inflation Up Over 3%

Inflation rose to 3.05 percent year-on-year (yoy) in March, following continued increases in key food prices across the country amid the Ramadan festive period, Statistics Indonesia (BPS) said on Monday. March’s figure is the first time since September last year that inflation has risen above 3 percent. However, it remains within Bank Indonesia’s (BI) target of between 1.5 and 3.5 percent this year. Acting BPS head Amalia Adininggar Widyasanti said March’s inflation marked a jump from 2.8 percent yoy recorded in the previous month. She attributed the trend largely due to rises in rice, chicken and chili pepper prices amid increased demand during Ramadan, which began on March 12. “The monthly inflation rate in March 2024 is relatively higher than the previous month and the same month last year,” Amalia said. On a monthly basis, eggs also contributed significantly to inflation this March along with chicken and rice. (Jakarta Post)

Finance Minister Speculation

Indonesian financial regulator Mahendra Siregar and former finance minister Chatib Basri are among the top choices Prabowo Subianto is considering for the role of finance minister, sources close to the president-elect told Reuters. Investors are closely watching Prabowo’s pick for the key role after ratings agencies warned of the cost of the programs the president-elect had campaigned on, raising the risk of slippage in the country’s hard-won record for fiscal discipline. The former special forces commander and current defense minister will pick a professional with market credibility to head the finance ministry, said three sources, who all sought anonymity as the matter is a sensitive one. “Mr. Prabowo prefers a future finance minister with great competence and well welcomed by market,” one of the sources said. Basri and Siregar did not immediately respond to requests for comment. (Jakarta Post)

Struggling With High Rice Prices

El Nino’s dry weather pattern always affects Indonesia’s rice harvest, causing shortages. Given rice’s central role in daily diets, and a natural reluctance to switch to other products (cassava, corn, potatoes), prices are critical. Last year was relatively hot due to the El Nino weather pattern, and a prolonged dry season in parts of Indonesia saw rice production fall by around 18 percent, said Aryal. Indonesia is due to enter the dry season again next month.

In the 1980’s Indonesia briefly achieved rice self-sufficiency. Loss of farmland and a growing population has changed this. 90 percent of Indonesian families still consume rice every day, providing more than half their daily calories. Although the government provides drought warnings in advance and has distributed drought-resistant rice strains along with subsidized rice when needed, prices can still spike as they are currently.
As reported in the Jakarta Post: “Even though dry weather fueled by El Nino has led to a rice shortage and sent prices to record highs, the 52-year-old from the East Java town of Pasuruan was still shocked to see hundreds of like-minded residents already waiting patiently in line. “By the time we got here it was already busy, we still had to queue. We had no other choice because the price of rice in the market is very expensive,” said Sutinah. The mother-of-two queued for two hours to buy two 5 kg bags of rice for Rp 102,000 ($6.51) – a saving of about 50,000 rupiah compared to supermarket and market prices.”

Manufacturing Up Driven By Local Demand

Indonesia’s manufacturing purchasing managers’ index (PMI) rose to a 27-month high in March on the back of strong domestic demand, while export demand waned. The PMI report published by S&P Global on Monday showed that the index jumped by 1.5 points to 54.2 in March, the highest since December 2021, from 52.7 in February. That marks the 31st consecutive month in which Indonesia’s manufacturing PMI points to an expansion of factory activity, as marked by readings above the 50-point threshold that separates expansion from contraction. The report is based on a survey of purchasing executives from around 400 manufacturing companies across Indonesia to determine business conditions. The survey results detail that the upturn in total orders was driven by the domestic market, given that the subindex for new export orders slithered into contraction in March, after stagnating in the preceding month.

Massive Fraud in State-Owned Export Financing Company

Finance Minister Sri Mulyani met Attorney General Sanitiar Burhanuddin at the Attorney General’s Office, South Jakarta on Monday, March 18, 2024 to report on alleged corruption at the Indonesian Export Financing Institution (Indonesia Eximbank) worth Rp2.5 trillion($157.5 million)
“Today we submit four debtors who have indications of committing fraud worth Rp2.5 trillion,” Sri Mulyani said at the Attorney General’s Office, South Jakarta today. The report submitted by Sri Mulyani was the result of research conducted by an integrated team consisting of the Financial and Development Supervisory Agency (BPKP), the Deputy Attorney General for Civil and State Administration, and the Inspectorate General of the Ministry of Finance. The integrated team found non-performing loans that pointed to alleged criminal acts by four debtors. Attorney General Sanitiar Burhanuddin said this report was still in its first phase. The second phase will concern six other companies that are indicated of committing corruption worth Rp3 trillion($189 million).

Kentucky Passes a Kratom Protection Act

Kentucky H.B. 293, An ACT Relating to Kratom, was signed today by Kentucky Governor Beshear and that makes Kentucky the 12th state with a Kratom Consumer Protection Act. Indonesia supplies 90% of the leaves used in kratom products sold in the US. Kratom leaves produce alkaloids that have mild stimulating and wellness properties similar to coffee in low dosage, and in slightly higher amounts provide pain relief. Kratom is a naturally growing plant that grows in or near tropical rainforests.