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Today's Headlines ASEAN Economic Community

  • Indonesian Textile Manufacturers Request Legal Certainty ASEAN Community

    Indonesian Textile Manufacturers Request Legal Certainty ASEAN Community

    Textile companies urge the government to provide more legal certainty in relation to the continuously rising flow of imported textile products. The rising flow is the result of the implementation of the ASEAN Economic Community (AEC) at the start of 2016. The AEC has created a single market and production base within ASEAN member countries, implying that goods - including textiles and textile products - can flow freely within the region. However, Indonesian textile players say that many textiles that are imported from other ASEAN countries (and thus are free from import tax) actually originate from non-ASEAN countries.

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  • Indonesian Banks Reject Lower Net Interest Margin Plan

    Indonesian Banks Reject Lower Net Interest Margin Plan

    Indonesian banks support the country's financial authorities' intention to cut lending rates to single digit margins (in a bid to boost credit growth and economic activity). However, these banks argue that lower interest rates should be the result of enhanced efficiency at banks, not by the Financial Services Authority (OJK)'s plan to cut banks' net interest margin (NIM). Earlier this year, the OJK - the government agency that regulates and supervises Indonesia's financial services sector - announced its plan to push state-owned banks' NIM down to the range of 3 to 4 percent.

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  • Indonesia Investments' Newsletter of 24 January 2016 Released

    Indonesia Investments' Newsletter of 24 January 2016 Released

    On 24 January 2016, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website over the last seven days. Most of the topics involve economic matters such as foreign direct investment as well as updates on various industries such as coal mining, palm oil, geothermal power, oil & gas, cement, ceramics, 4G technology, and more.

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  • Indonesia & ASEAN Economic Community: Free Flow of Skilled Labor

    Indonesia & ASEAN Economic Community: Free Flow of Skilled Labor

    With the implementation of the ASEAN Economic Community (AEC) per 1 January 2016 - i.e. the community that is designed to allow the free flow of goods, services, investment, and skilled labor as well as the freer flow of capital among its ten member countries - there has been concern among part of the Indonesian population whether there could occur a massive inflow of foreign workers into Indonesia hence giving rise to more competition on the domestic labor market. This column zooms in on the free flow of labor under the AEC.

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  • Indonesia & ASEAN Economic Community (AEC) - Introduction

    Indonesia & ASEAN Economic Community (AEC) - Introduction

    Per 1 January 2016 the ASEAN Economic Community (AEC) came into effect. This community implies stronger cooperation and integration among the ten member countries in Southeast Asia. According to its blue print the AEC involves the launch of a single market and production base among its member nations, hence allowing the free flow of goods, services, investment, and skilled labor as well as the freer flow of capital. Indonesia is one of the member countries.

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  • Indonesian Language Proficiency Requirement for Foreign Workers Scrapped

    Indonesian Language Proficiency Requirement for Foreign Workers Scrapped

    Several weeks ago it had already been reported that Indonesian President Joko Widodo requested Manpower and Transmigration Minister Hanif Dhakiri to revise a draft regulation (made in 2013) that forces expats to pass a mandatory Indonesian language proficiency test in order to be eligible to obtain a work permit. According to Widodo this regulation jeopardizes the attractiveness of Indonesia’s investment climate.

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  • No Indonesian Language Proficiency Test for Foreign Workers in Indonesia

    No Indonesian Language Proficiency Test for Foreign Workers in Indonesia

    Indonesian President Joko Widodo wants to drop the regulation that states a foreign worker needs to learn Indonesian. Today (21/08), Cabinet Secretary Pramono Anung said President Widodo (often called Jokowi) requested Hanif Dhakiri, Indonesian Minister of Manpower and Transmigration, to revise this regulation (that was issued in 2013). According to Jokowi the language proficiency requirement would make Indonesia’s investment climate less competitive and could therefore hamper much-needed investment.

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  • Human Capital Report 2015: Indonesia Lags Behind Regional Peers

    Human Capital Report 2015: Indonesia Lags Behind Regional Peers

    According to the Human Capital Report 2015, released by the World Economic Forum (WEF), Indonesia only ranks 69th out of 124 countries in terms of human capital development, signalling the importance of enhancing the education system of Indonesia. Alarmingly, Indonesia ranks well below most of its regional peers, for example Singapore (24th), the Philippines (46th), Malaysia (52nd), Thailand (57th) and Vietnam (59th). A low ranking means that a country fails to develop and deploy its human capital potential.

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  • 24th World Economic Forum: Indonesia Wants More Foreign Investment

    24th World Economic Forum: Indonesia Wants More Foreign Investment

    On the sidelines of the 24th World Economic Forum (WEF) on East Asia, Indonesia’s Chief Economic Minister Sofyan Djalil said that - despite global challenges - the government maintains its economic growth target of 5.7 percent (y/y) in 2015. However, he added that it will require great effort to achieve this target. One key strategy to achieve the target is to attract foreign investment through several policies including tax incentives and by easing the country’s bureaucratic hurdles for investment permits.

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  • Sea Toll Road of Indonesia will Reduce Country's Logistics Costs Sharply

    The sea toll road, a maritime program initiated by Indonesian President Joko Widodo, may reduce the country’s logistics costs by 10 to 15 percent, said Secretary of the Expert Team of the National Logistics System, Nofrisel. Currently, between 18 and 22 percent of companies’ production costs in Indonesia are absorbed by logistics costs, particularly due to expensive transportation costs, hence seriously reducing competitiveness of Indonesian companies. In peer regional countries this figure is below ten percent.

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Latest Columns ASEAN Economic Community

  • Corn Production & Consumption in Indonesia: Aiming for Self-Sufficiency

    Corn Production & Consumption in Indonesia: Aiming for Self-Sufficiency

    Corn is among the four strategic commodities that receive special attention in the blueprint of the ASEAN Economic Community (AEC). The AEC’s food blueprint aims to enhance food security & sovereignty of corn, rice, soybeans and cassava in the ASEAN region. Indonesia is currently the region’s largest corn producer. However, Indonesian corn consumption continues to outpace domestic corn production, resulting in a deficit. This column provides an overview of Indonesia’s corn sector in the context of the AEC.

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  • Aviation Industry Indonesia: ASEAN Open Skies, Challenges & Opportunities

    Aviation Industry Indonesia: ASEAN Open Skies, Challenges & Opportunities

    In line with the implementation of the ASEAN Economic Community (AEC) by the end of the year, the ASEAN Open Skies policy (also known as the ASEAN Single Aviation Market) should become fully effective later this year. The ASEAN Open Skies policy, a key component of the AEC, involves the multilateral agreement of all ten ASEAN countries to unite their skies into a single aviation market (hence liberalizing rules and regulations to a large degree) in a bid to boost the region’s economic growth.

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  • Manufacturing in Indonesia: Key to Boost Export Performance

    Manufacturing in Indonesia: Key to Boost Export Performance

    One of the key strategies to improve the economic fundamentals of Indonesia is to restructure and strengthen the country’s exports. This restructuring involves the transformation of Indonesian exports from being dominated by (raw) commodities to manufactured exports by developing downstream industries in Southeast Asia’s largest economy, including import substitution industrialization in order to curb the country’s demand for imported products amid Indonesians’ rising purchasing power.

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  • Indonesia & Malaysia Support Banking Integration in ASEAN Region

    Bank Indonesia (the central bank of Indonesia) and the Financial Services Authority (OJK) signed an agreement (the ASEAN Banking Integration Framework, abbreviated ABIF) with Malaysia’s central bank to support banking integration in the ASEAN region. The website of Bank Indonesia states that ABIF “provides an operating framework for ASEAN member states to implement principles and the integration process in the banking sector to support the ASEAN Economic Community (AEC) [which is to be implemented later this year]”.

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  • World Bank: East Asian Economies Expected to Grow Stably in 2014

    World Bank: East Asian Economies Expected to Grow at Stable Pace in 2014

    According to the latest East Asia Pacific Economic Update - the World Bank’s comprehensive review of the region’s economies which was released today (07/04) - developing countries in the East Asia Pacific region will see stable economic growth this year, bolstered by a recovery in high-income economies and the market’s modest response so far to the Federal Reserve’s tapering of its quantitative easing. Developing East Asia will grow by 7.1 percent this year, largely unchanged from 2013.

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  • Tourism in Indonesia: Terrorism, Infrastructure and Asean Common Visa

    Tourism in Indonesia: Terrorism, Infrastructure and Asean Common Visa

    Tourism in Indonesia has posted impressive growth rates in recent years. This development is due to the fact that Indonesia has plenty of beautiful sites and cultural traditions to offer to foreign (and domestic) tourists, improved airline accessibility to Indonesia, and enhanced focus on promotional campaigns in foreign countries. Lastly, and not unimportantly, there have been no violent terrorist attacks in recent years. In the 2000s, a vicious terrorist attack always resulted in a temporary drop in foreign tourist arrivals.

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  • MP3EI Update Indonesia: Total Investments Reach USD $51.6B in 2014

    MP3EI Update Indonesia: Total Investments Reach USD $51.6B in 2014

    Total realized investments in the context of the government's Masterplan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) will reach IDR 628.9 trillion (USD $51.6 billion) in 2014. The MP3EI was unveiled by the Indonesian government in May 2011 to accelerate its ambitious goal of becoming one of the world's largest economies by 2025. This masterplan particularly focuses on (much-needed) infrastructure development by cooperating with the private sector (for example through public-private partnerships).

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  • Indonesia Opens New Kuala Namu International Airport in North Sumatra

    Kuala Namu International Airport Sumatra Indonesia Investments

    The public and private sector in Indonesia is well aware that the lack of quality and quantity of Indonesia's infrastructure is one of the matters that hamper the economic development of the country. For that reason, the central government implemented the Masterplan to Accelerate and Expand Economic Development (MP3EI) in Indonesia, which foresees large investments in the country's infrastructure. Although results are not satisfying yet, the government is proud to have opened a new airport in North Sumatra.

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