Economy and Business

S&P Revises Sovereign Rating

Standard and Poor’s (S&P) revised the outlook to Stable from Negative and affirms the Sovereign Credit Rating of the Republic of Indonesia at BBB (Investment Grade) as announced on April 27th, 2022. S&P states that the revised rating outlook to stable has been supported by Indonesia’s improved external position, gradual progress toward fiscal consolidation, and the continuing improvement in Indonesia’s economic recovery for the next two years. Meanwhile, the affirmation on Indonesia’s rating at BBB reflects the economy’s solid growth prospect and historically prudent policy.

KADIN Delegation/Luhut Pandjaitan Meet Elon Musk

Indonesia’s Coordinating Minister for the Economic Affairs Luhut Binsar Pandjaitan continued his multi-year courtship of Tesla, meeting Elon Musk in Austin, Texas, on April 26 to discuss the possibility for the American electric car giant to take part in the nickel and electric battery industry in Indonesia. In the meeting, Luhut and Musk were joined by several prominent Indonesian businessmen, including Anindya Bakrie, the advisory council chairman of the Indonesia Chamber of Trade and Industry (Kadin). Anindya is a scion of the Bakrie conglomerate with interests spanning from mining and media to electric buses. Also present at the meeting, was Luhut’s nephew Pandu Sjahrir, a director at coal miner Toba Bara Sejahtera and president commissioner of internet company Sea Group Indonesia. The Indonesian Ambassador for the United States, Rosan Roeslani, accompanied the Indonesian delegation to the meeting.

Palm Oil Exports Could Resume by Month End

Indonesia should be able to tackle its cooking oil shortage in the next few weeks and lift an export ban on palm oil and its refined products in May, an industry body said on Thursday, a day after a last-minute policy U-turn sparked more alarm for markets. The world’s top palm oil producer expanded an export ban on raw materials for cooking oil to include shipments of crude palm oil and most of its refined products just hours before it took effect at midnight Wednesday, in an attempt to secure domestic supply and bring down soaring prices. Sahat Sinaga, senior official at the Indonesian Palm Oil Board, said that decision had shocked the industry, but that he was confident the supply issue could be resolved not long after the Muslim festival of Idul Fitri in early May.

Revoking Unused Mining Permits

(ANTARA) – Investment Minister and head of the land use and investment management task force, Bahlil Lahadalia, has sought an extension of the deadline for completing the revocation of 2,078 unproductive mining business permits (IUPs) to May 2022. Earlier, President Joko Widodo (Jokowi) targeted the revocation to be completed around March to April 2022. However, as of April 24, 2022, the task force has only revoked 1,118 IUPs, which cover an area of 2.7 million hectares. “However, since we have to be careful and check the permits properly, the revocation will take until next month (May 2022). Next month, it must be completed,” the task force head emphasized at a press conference here on Monday. Most of the permits have been revoked since the IUPs granted to business actors are not used properly. In addition to the IUPs, the task force also revoked forest area utilization permits. Out of the 192 permits recommended by the Environment and Forestry Ministry to be nullified, 15 have been revoked, with a total area of 482 thousand hectares. The 15 permits comprise three Forest Land Acquisition Permits (PKH) and 12 Forest Utilization Business Permits (PBPH). “The permits have been issued, but the areas are not managed,” Lahadalia informed.

Manufacturing Improves

The mood of the local manufacturing industry has improved slightly over the past month to rise above most other ASEAN countries, a report released on Thursday shows. Indonesia’s manufacturing purchasing managers’ index (PMI) booked a monthly increase of 0.6 to 51.9 in April, while Thailand’s rose 0.1 to the same level, according to a report published by HIS Markit, a subsidiary of financial information firm S&P Global. The two countries rank third among ASEAN states according to the latest manufacturing PMI. The report also shows that Indonesia’s rate of improvement was the fastest since January, which it attributes to increased economic activities as a result of relaxed COVID-19 restrictions. The report is based on a survey of manufacturing purchasing managers who were asked whether business conditions had improved or worsened over the past month in a number of indicators, including customer orders, supply deliveries and employment levels. Singapore and the Philippines top the list, with the former booking an astounding 3.1-point month-to-month (mtm) increase in its manufacturing PMI to 58.1, while the latter increased 1.1 points to 54.1. (Jakarta Post)