Indonesia Investments Report - February 2021 Edition: Smoothing the Investment Journey
Update COVID-19 in Indonesia: 1,368,069 confirmed infections, 37,026 deaths (5 March 2021)
6 March 2021 (closed)
USD/IDR (14,146) -6.00 -0.04%
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Jakarta Composite Index (6,258.75) -32.05 -0.51%
Di bawah ada daftar dengan kolom dan profil perusahaan yang subyeknya berkaitan.
Berita Hari Ini Governance
For Muslims the holy fasting month (Ramadan) and subsequent Eid al-Fitr (Idul Fitri or Lebaran) festivities – the traditional week-long national holiday when Muslims celebrate the end of the Ramadan month – are very special and joyful times.
It is assumed by many that the Indonesian government does not make efficient use of the annual state budgets. This is also the reason why Indonesian President Joko Widodo stated recently that one of his key ambitions for the next five years is to make more efficient use of the state budget (“each rupiah of the state budget needs to be used productively”).
In late April 2019 it was rather suddenly announced that President Joko Widodo wants to move the capital city away from Jakarta (in fact, he even wants to move the capital away from Java Island).
The Indonesian government launched the One Map Policy Geoportal (KSP Geoportal). This policy involves a more detailed map of land use, hence aiming at resolving overlapping claims - as well as preventing the emergence of new cases - across the country, including in forest areas. The map was launched by Indonesian President Joko Widodo on Tuesday (11/12).
Although in local media Indonesian property developer Lippo Cikarang is aggressively advertising its ambitious Meikarta project to the consumer, there is uncertainty whether the developer indeed collected all necessary permits required to construct the new township. Meikarta is marketed as a 500-hectare property development project with 100 hectares of open green space, 250,000 units of prime residential property, and 1,500,000 m2 of prime commercial space.
Not the lack of (soft and hard) infrastructure development in Indonesia, or the lack of quality human resources, nor corruption or protectionism but the difficulty to obtain the necessary permits from the local governments are the biggest obstacle to investment and business in Indonesia according to a survey that was conducted by the Regional Autonomy Watch (KPPOD) in the 32 regional capital cities across the Archipelago.
A survey from Saiful Mujani Research and Consulting (SMRC) shows that Indonesians' confidence in the performance of President Joko Widodo's government has risen. The survey signals that some 67 percent of the Indonesian population are satisfied with the government's performance, significantly higher compared to 42 percent in 2015. Reform-minded Widodo, often called Jokowi, has been in office since October 2014. However, he has to guide the nation amid global and domestic challenges (sluggish economic growth, low commodity prices and monetary policy changes of key central banks that trigger capital inflows/outflows).
R. Sukhyar, Director of Mineral and Coal at the Indonesian Energy and Mineral Resources Ministry said that 184 mining business licenses (Indonesian: Izin Usaha Pertambangan, or IUP), needed for exploration and mining activities, have been revoked this June because of overlapping mining areas and illegal administration. The revoked permits concerned mining areas in Jambi (99 revoked licenses), South Sumatra (83), and South Sulawesi (2). This case is another illustration of weak governance in Southeast Asia’s largest economy.
Today, most Indonesian newspapers opened with negative headlines concerning the country's political arena. In Indonesian politics, scandals - whether connected to corruption or other issues - are frequently reported and seriously undermine people's (both domestic and foreign) confidence in the nation's governance. In today's newspapers, three cases were center of attention and illustrate the problems within Indonesia's political elite.
Artikel Terbaru Governance
Better late than never! On 10 April 2020 large-scale social restrictions were imposed in the capital city of Jakarta through Jakarta Gubernatorial Regulation No. 33/2020, and Jakarta Gubernatorial Decree No. 380/2020. The regulation and decree, which both aim at curtailing the further spread of the coronavirus (COVID-19) in Jakarta, were imposed around five weeks after the very first COVID-19 case was confirmed in Indonesia (namely in Depok, a city located within the Jakarta metropolitan area).
It was a solid year for the Indonesian economy. The macroeconomic fundamentals of the nation have strengthened due to the hard work of the Indonesian government under the leadership of President Joko Widodo. However, there is no room for complacency as there remain major bottlenecks, while legislative and presidential elections - in which voters can approve or disapprove Widodo's performance - are scheduled for 2019.
The Indonesian government is still studying the possibility of building a new capital city in Indonesia, thus replacing Jakarta that has become overcrowded with approximately 10 million official residents (the real figure may be much higher as many unregistered Indonesians live in the capital). Moreover, every morning there is a huge inflow of people (originating from the satellite cities around Jakarta) who are heading to their office or place of work. This causes great pressure on the city's fragile infrastructure.
Indonesia has always been hesitant to join free-trade deals with other nations on fears that domestic industries cannot compete with foreign counterparts, which could lead to an influx of cheaper, yet higher-quality foreign products. During his visit to the White House, Indonesian President Joko Widodo said Indonesia intends to join the Trans-Pacific Partnership (TPP) trade deal. Back home, this statement led to concern. What are the negative consequences for Indonesia when joining this deal?
One of the weak points of Indonesia, one that seriously hurts the country’s investment climate as well as foreign confidence, is regulatory uncertainty. In 2009 the government of Indonesia introduced Law No. 4/2009 on Mineral and Coal Mining (New Mining Law) which caused a shock in Indonesia’s natural resources sector as it includes several new policies that make investors think twice before investing in Indonesia as the consequences of these new policies are far-reaching. However, a possible new amendment to the law causes new concern.
When campaigning, presidential candidates will always promise a bright future in order to gain votes. It is particularly easy for a new presidential candidate to promise golden mountains as opposed to the incumbent president who needs to be more cautious making promises as people can point to the (failed) results of his promises during the presidential term. The 2014 Indonesian presidential election was particularly interesting as we saw two new presidential candidates and, thus, the ‘inflation of promises’.
Indonesian Minister of Energy and Mineral Resources Jero Wacik regrets to see Newmont Nusa Tenggara, one of Indonesia largest copper miners, file for international arbitration due to Indonesia’s export ban stipulated by Law 4/2009 on Mineral and Coal Mining (Minerba). This new law includes the ban on exports of ore concentrates from Southeast Asia’s largest economy. Instead, Indonesian miners are required to process the minerals domestically first. The ban was implemented on 12 January 2014.
Improving the quality of basic education remains a central challenge in Indonesia. Without a good quality basic education, children will fail to acquire the skills they need to lead full and productive lives. Indonesia will then be challenged to build the human resources necessary to sustain strong economic growth. On 25 November 2013, the World Bank released a new report which explores how the quality of local governance affects service delivery and assesses the capacity of local governments to manage education services effectively.
In my previous column, I outlined the emergence of a new and promising class of Indonesian consumers that is most likely to bring a positive effect on the country's economic growth in the years ahead. I also pointed out that the level of prosperity of a population is an influential factor towards the state (and future) of democracy in a country: the wealthier a population becomes in terms of per capita GDP, the longer the life expectancy of its democracy will be.
