Update COVID-19 in Indonesia: 64,958 confirmed infections, 3,241 deaths (6 July 2020)
6 July 2020 (closed)
USD/IDR (14,566) +50.00 +0.34%
EUR/IDR (16,379) +36.63 +0.22%
Jakarta Composite Index (4,988.87) +15.07 +0.30%
Two international events are estimated to have a significant impact on the Indonesian economy in 2018. Firstly, the 2018 Asian Games, to be held from 18 August to 2 September 2018 in - and around - the Indonesian cities of Jakarta and Palembang. Secondly, the 2018 annual meetings of the International Monetary Fund (IMF) and World Bank Group, to be held in Nusa Dua, Bali, on 12-14 October 2018. Both events will trigger foreign exchange earnings and give rise to a boost in economic activity.
According to a calculation of Indonesia's National Development Planning Agency (Bappenas), the two events will result in the rotation of IDR 52 trillion (approx. USD $3.7 billion) worth of money in the local economy, the majority being funds that are spend on the preparations for the Asian Games, such as infrastructure development (the aforementioned figure of IDR 52 trillion does not include future indirect money streams brought about by the multiplier effect).
Bambang Brodjonegoro, Head of Bappenas, said a total of IDR 34 trillion (approx. USD $2.4 billion) will be spent on infrastructure development surrounding the 2018 Asian Games. Projects include the Palembang light rail transit (LRT), which is to connect Sultan Mahmud Badaruddin II International Airport and Jakabaring stadium complex, and the renovation of the Gelora Bung Karno stadium in Jakarta. The Palembang LRT is estimated to cost IDR 9.4 trillion (approx. USD $676 million).
Meanwhile, participants of the Asian Games and those foreign visitors who come to Indonesia to witness the games are estimated to spend up to IDR 3.4 trillion (approx. USD $245 million) on matters such as accomodations, transportation, as well as food and drinks. Hence, Indonesia's foreign exchange earnings will get a boost on the back of these games.
In total, the 2018 Asian Games is estimated to (directly) cause the rotation of IDR 45.1 trillion (approx. USD $3.2 billion) in the local economy. Besides the economic benefits, Brodjonegoro also sees several non-economic benefits as a result of the games, such as enhanced social cohesion and the opportunity for local human resources to improve their skills as they can gain experience from an international event. The Asian Games also raises the profile of Indonesia on the international stage.
2018 Annual Meetings of the IMF and World Bank Group
Meanwhile, the IMF/World Bank meeting is expected to inject IDR 6.9 trillion (approx. USD $0.5 billion) into the local economy, mostly on the island of Bali. Ricky Putra, Chairman of the Bali Hotel Association (BHA), said around 15,000 guests - from 189 countries - will visit the event. Thus, it forms a great opportunity for the hotel industry on the island. Nearly 5,000 rooms have already been booked, mostly in the island's four and five star hotels. The hotel occupancy rate is expected to be near-100 percent (if not 100 percent) during the event.
Besides the hotel industry, other tourism-related industries are bound to benefit as well from the heavy traffic on Bali during - and around - the IMF-World Bank meeting. For example, restaurants, bars, souvenir shops, and transportation services. On average, a foreign visitor in Indonesia spends USD $100 per day.