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It has been a while since we last covered Indonesia’s logistics sector, and so it is time for a new analysis on this topic. This is particularly relevant because the World Bank recently released a new Logistics Performance Index report (July 2023).
It has been a while since we last covered Indonesia’s new capital city in our monthly reports (the last time was in December 2021 to be exactly). And therefore, it might be a good idea to see what has happened over the past nine months or so in relation to the development of this giant construction project.
On 22 July 2022 a new regulation came into effect, titled Coordinating Minister for Economic Affairs Regulation No. 9 of Year 2022 on the Amendment of Coordinating Minister for Economic Affairs Regulation No. 7 of Year 2021 on the Amendment of the List of National Strategic Projects (henceforth: Regulation 9/2022).
On Monday (08.11.2021) Indonesia Investments released its October 2021 report. This report discusses a range of subjects - related to political developments, the economy and social matters - that were influential in Indonesia in the month of October 2021.
On 8 June 2021 Indonesian Minister of State-Owned Enterprises Erick Thohir told Commission VI of the House of Representatives (DPR) that he proposes to raise the budget for capital injections into state-owned enterprises (SOEs) in 2022. The main reason is that the SOE Ministry wants to inject (additional) capital into 12 SOEs.
In November 2020 the Patimban seaport is expected to open in Subang (West Java). Although it is only the soft launch of the project’s first phase, it is no small matter as this port is set to be developed into Indonesia’s biggest port by 2027.
On Monday (05/10/2020) Indonesia Investments released the September 2020 edition of its monthly report. In this edition, titled 'Infrastructure in Focus', we focus on infrastructure development in Indonesia. For example we discuss how the lack of infrastructure development undermines economic and social development.
On Sunday 14 July 2019 Indonesian President Joko Widodo unveiled his vision for Indonesia in the 2019-2024 period, which will be his second – and final - term as president of Southeast Asia’s largest economy (with the inauguration of his new cabinet scheduled for late-October 2019).
In line with our forecast, Indonesia’s economic growth continued to accelerate in 2018. Based on data from Statistics Indonesia (Badan Pusat Statistik, or BPS), which were released in early February 2019, the country’s gross domestic product (GDP) expanded 5.17 percent year-on-year (y/y) in full-year 2018, up from a growth rate of 5.07 percent in the preceding year.
The construction of three national strategic projects - worth a combined IDR 70 trillion (approx. USD $5 billion) - is targeted to be completed before the end of 2019. These three projects are: (1) the first phase of Jakarta's mass rapid transit (IDR 16 trillion), (2) the New Yogyakarta International airport (IDR 10.8 trillion), and (3) the Patimban seaport in Subang, West Java (IDR 43.2 trillion).
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It has been more than a week since the Indonesian government raised its subsidized fuel prices (Pertalite, Pertamax, and automotive diesel fuel) by an average of slightly over 26 percent. One of the most interesting things is to see whether this decision leads to overall growing prices in Indonesian society. After all, fuel is crucial for the movement of goods and services, and has a significant impact on logistics costs.
When writing this introduction, the 2021 United Nations Climate Change Conference (also known as COP26) had just started in Glasgow (Scotland). Indonesian President Joko Widodo is among the delegates who is slated to speech about the importance of preventing – and adapting to – climate change, and to seek ways to obtain climate financing as Indonesia is unable to finance the huge and costly energy transition by itself.
On 30 September 2021 Indonesia’s House of Representatives (Dewan Perwakilan Rakyat, DPR) approved the 2022 State Budget (Anggaran Pendapatan dan Belanja Negara, APBN) that had previously been proposed by the cabinet. And with 14.2 percent of total government spending being reserved for infrastructure development in the 2022 State Budget, the Indonesian government confirms that it remains committed to much-needed infrastructure development.
Sovereign wealth funds (SWFs) have existed for many decades around the world. By establishing a SWF – and inject capital into the SWF – governments can strengthen their national economies and generate wealth for future generations. In fact, a SWF is essentially a state-owned investment fund typically funded using excess capital.
As regards Indonesia’s investment and business environment, there were a couple of interesting developments in February 2021. These were developments that – in our opinion – help to strengthen the economy of Indonesia in a fundamental way, albeit it will take a few years (as well as the assistance of other reforms) to fully enjoy the fruits of this labor.
On 28 August 2020 Indonesian President Joko Widodo officially opened Yogyakarta International Airport (YIA), a brand new airport that is located in Kulon Progo in the Special Region of Yogyakarta; a region known as one of Indonesia’s main tourism centers. Many in fact call Yogyakarta the ‘heart and soul of Indonesia’.
Those who have visited Indonesia should be well aware of the lack of infrastructure development across the country. Those who have been in urban centers (such as the capital city of Jakarta, Bandung or Surabaya) must have had the experience of being stuck in traffic as the number of road users (mostly cars and motorcycles) outpaces available road surface.
Across the world, concern over the COVID-19 pandemic grew in September 2020 as the number of new COVID-19 cases continued to rise rapidly. Worldwide, at the end of September 2020, some 34 million people have been infected with the virus, while more than one million people have died after contracting the virus.
One characteristic of the Indonesian economy is that the state-owned enterprises (SOEs) play an important role in this USD $1.0 trillion economy. They not only play an important role because some of them rank among Indonesia’s biggest companies (in terms of profit, sales and assets), thereby generating plenty of money for the government (in the form of tax revenue or dividend) while at the same time creating jobs for millions of Indonesians.
On 25 September 2019, only a few days before Indonesia’s House of Representatives (in Indonesian: Dewan Perwakilan Rakyat, or DPR) finished its 2014-2019 term, it approved the 2020 State Budget bill (UU APBN 2020).
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