Below is a list with tagged columns and company profiles.

Today's Headlines Government Policy

  • Indonesia May Review its Ban on the Export of Unprocessed Minerals

    Indonesia May Review its Ban the Export of Unprocessed Minerals

    Indonesia's state news agency Antara reported that the government may review its Mining Law No.4/2009 which stipulates a ban on the export of raw minerals. This controversial new law, through which the government aims to raise more value-added revenues, caused a shockwave across Indonesia's mining sector because a significant amount of mineral exports constitute unprocessed ones. The law, which is set to be implemented on 12 January 2014, implies that minerals need to be processed domestically first before exports are allowed.

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  • Indonesia's New Fiscal Policies to Curb Imports and Support Exports

    Indonesia's New Fiscal Policies to Curb Imports and Support Exports

    On Monday (09/12), the government of Indonesia outlined the long-awaited extension of its economic policy package that was released in August 2013. This extension involves new fiscal policies, aimed at reducing imports and supporting exports, that will be implemented at the start of 2014. An improving global economy in combination with the government's August package and yesterday's extension package is expected to reduce Indonesia's wide current account deficit to a sustainable level of below 3 percent of gross domestic product (GDP).

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  • Export Ban on Unprocessed Minerals Temporarily Pressures Trade Balance

    Although the ban on the export of unprocessed minerals, which is set to start on 12 January 2014, is expected to result in a direct revenue loss of USD $4 billion in 2014 due to a decline in mineral exports, Deputy Finance Minister Bambang Brodjonegoro believes that from 2016 onward a trade surplus can be recorded in Indonesia's minerals sector. In 2014, Indonesia's minerals sector may show a USD $10 billion trade deficit. But exports of processed minerals may grow from USD $4.9 billion in 2013 to USD $9 billion in 2015.

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  • Indonesia Investments' Newsletter of 8 December 2013 Released

    Indonesia Investments' Newsletter 8 December 2013 Released

    Today (08/12), the latest edition of our newsletter was published. Our newsletter contains the most important economic, political and social news stories from Indonesia that were reported on in the last seven days. This is of especial importance for those that engage in business in Indonesia or those that are interested to invest in Southeast Asia's largest economy as it will provide a thorough update about Indonesia's macroeconomy. Occasionally, our newsletter also contain event announcements.

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  • New Government Policy Increases Indonesia's Biodiesel Consumption

    Indonesia's biodiesel consumption has risen considerably during the last three months after the Indonesian government raised the mandatory amount of palm oil (fatty acid methyl ester) blended in biodiesel from 7.5 percent to 10 percent. For power plants that use biodiesel the amount has been increased to 20 percent. Biodiesel consumption in Southeast Asia's largest economy jumped from 57,871 kiloliters in August 2013 to 101,857 kiloliters in September and to 116,281 kiloliters in October.

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  • New Economic Policy Package Will Be Released at the End of October

    The government of Indonesia will release a second economic policy package at the end of October. This new package, which aims to provide attractive tax incentives to investors, is in addition to the package that was released in August 2013 when sharp rupiah depreciation and a rapidly falling stock index occurred as panic emerged after the Federal Reserve hinted at an end to its quantitative easing program. In combination with a widening current account deficit and high inflation, it resulted in large capital outflows from Indonesia.

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  • Indonesian Government Preparing Additional Policy Approach Package

    The government of Indonesia is busy preparing an extra package of policy responses aimed at stabilizing Indonesia's financial markets. Previously, the government had released a sort of 'rescue package' in late August after the rupiah depreciated sharply and the country's stock indices plunged. Panic had emerged due to the looming end of the Federal Reserve's quantitative easing program. Coupled with internal issues, it resulted in robust capital outflows from Indonesia. The new package will be released in October.

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  • DBS Group: Indonesia's Economic Growth Expected to Reach 5.8% in 2013

    Singapore-based DBS Group, a leading financial services group in Asia, expects Indonesia's gross domestic product (GDP) growth to reach 5.8 percent in 2013, while it forecasts growth of 6.0 percent in 2014. This year, Indonesia has to cope with ups and downs due to several domestic and foreign factors. According to the institution, two issues stand out as being significantly influential this year. These are the government's decision to increase prices of subsidized fuels in late June and the country's sharply depreciating rupiah.

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  • Indonesia Economic Quarterly World Bank Report: Adjusting to Pressures

    On 2 July 2013, the World Bank released its July edition of the Indonesia Economic Quarterly. The report, titled Adjusting to Pressures, touches on the key developments over the past three months in Indonesia’s economy and places these in a longer term and global context. It regularly updates the outlook for the country’s economy and social welfare, and provides a more in-depth examination of selected economic and policy topics, as well as analyses of medium term development challenges.

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  • Indonesia's Fuel Subsidy Policy: New Fuel Prices Effective from Saturday

    Both Industry minister M.S. Hidayat and Economic minister Hatta Rajasa confirmed that on Friday (21/06) the government will announce the increase in price of subsidized fuel after it had already been approved by the House of Representatives (DPR) last Monday (17/06). Immediately after the announcement, the price of fuel is set to be raised. It has been reported that the government's announcement will be revealed at midnight, implying that the price hike is effective starting from Saturday.

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Latest Columns Government Policy

  • Food & Beverage Industry Indonesia: Gov't Policies Undermine Profitability

    Food & Beverage Industry Indonesia: Gov't Policies Undermine Profitability

    Turnover in Indonesia's food and beverage industry is expected to grow 8.5 percent year-on-year (y/y) to IDR 1,400 trillion (approx. USD $105.2 billion) in 2017, while direct investment in this industry is expected to remain flat at around IDR 63 trillion (approx. USD $4.7 billion) with especially investors from Japan and South Korea eager to invest. Considering Indonesia's huge population (numbering more than 255 million) and their recovering purchasing power (after the five-year economic slowdown ended in 2016, while commodity prices have improved) the food and beverage industry is an attractive one for investors.

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  • Analysis Performance & Accomplishments Indonesia Under Jokowi

    Analysis Performance & Accomplishments Indonesia Under Jokowi

    After two years in office, the time is ripe now to take a look at the performance and accomplishments of the government under the leadership of Joko Widodo, often called Jokowi. Indonesia's seventh president was a bit unlucky. In the first year of his rule, commodity prices were at multi-year lows (curbing Indonesia's foreign exchange earnings) amid sluggish global economic growth, while capital outflows from Indonesia occurred on the back of monetary tightening in the USA, sending the rupiah to a 17-year low in September 2015.

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  • Indonesia's Monetary & Fiscal Policies Require More Harmony

    Indonesia's Monetary & Fiscal Policies Require More Harmony

    At its latest monthly policy meeting the central bank of Indonesia (Bank Indonesia) left its interest rate regime unchanged with the benchmark BI rate at 6.50 percent (this month the bank is set to adopt the seven-day reverse repurchase rate - reverse repo - as the new benchmark rate). Bank Indonesia's decision to leave interest rates unchanged was a surprise move given that the nation's inflation is low, the rupiah is strengthening, but overall economic growth has remained sluggish. This context would actually justify a moderate interest rate cut of 25 basis points.

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  • Economic Packages Indonesia: Key to Success Lies in Regions

    Economic Policy Packages Indonesia: Key to Success Lies in Regions

    Infrastructure development and deregulation are the two main recipes used by the Indonesian government - under the leadership of Joko Widodo - to attract investment. By making it easier and cheaper to obtain permits and by providing better infrastructure (implying investors need to invest less in additional infrastructure facilities while logistic costs ease) Indonesia's investment climate improves. As such, the ease of doing business in Indonesia will improve accordingly. However, good coordination and cooperation between the central and regional governments is required.

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  • Analysis of Indonesia's Current Account Deficit: the Structural Oil Problem

    Analysis of Indonesia's Current Account Deficit: the Structural Oil Problem

    Fitch Ratings, one of the three major global credit rating agencies, estimates that Indonesia's current account deficit will reach USD $27.4 billion, equivalent to 3.1 percent of the country's gross domestic product (GDP) in 2014. As such, Fitch Ratings' forecast is more pessimistic than forecasts presented by both Indonesia's central bank (Bank Indonesia) and government. Both these institutions expect to curb the current account deficit below the three percent of GDP mark (a sustainable level). Global investors continue to carefully monitor the deficit.

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  • Third Economic Policy Package Being Prepared by Indonesian Government

    Third Economic Policy Package Being Prepared by Indonesian Government

    Indonesian Economic Minister Hatta Rajasa said that the government is currently engaged in preparing a third economic policy package that aims to reduce the country's current account deficit. In August and December 2013, the government had already implemented two policy reform packages as Indonesia's wide current account deficit and high inflation in combination with the looming end of the Federal Reserve's quantitative easing program led to large capital outflows, thus resulting in sharp rupiah depreciation.

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  • Indonesia's Mining Export Ban Impacts on Current Account Deficit in 2014

    Indonesia's ban on the export of unprocessed minerals, which is scheduled to take effect on 12 January 2014, is expected to lead to a temporary slowdown of Indonesia's total exports and thus will put more pressure on the country's current account deficit. Despite two consecutive months with trade surpluses (October and November 2013), Indonesia's wide current account deficit is still a concern to investors as well as the government although the deficit has shown an easing trend in recent quarters.

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  • Indonesia Might Delay Implementation of Mineral Export Ban by 3 Years

    Indonesia Might Delay Implementation of Mineral Export Ban by 3 Years

    After having reported yesterday (26/12) that Indonesia's ban on the export of unprocessed minerals, stipulated in Mining Law No.4/2009 (which is set to become in force from 12 January 2014), may be delayed, more and more signs are pointing towards a postponement of this law. Minister of Energy and Mineral Resources, Jero Wacik, said that the government is considering to delay the implementation of the law by two or three years as the ban will cause increased unemployment and the cease of mining operations.

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  • Government May Stop Indonesia's Crude Palm Oil (CPO) Exports to Europe

    Government May Stop Indonesia's Crude Palm Oil (CPO) Exports to Europe

    The Indonesian government is considering to stop exports of crude palm oil (CPO) to Europe from 2014 onwards as domestic CPO demand in Southeast Asia's largest economy is rising, brought on by the country's biofuel industry which is expected to grow 70 percent next year to 5 million tons. To curtail oil imports, the government stimulates the production of crude palm oil-based biofuel by raising the mandatory content of fatty acid methyl ester (which is made from palm oil) in biodiesel products from 7.5 percent to 10 percent.

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  • Indonesia's Benchmark Stock Index Up on US and China Economic Data

    Asia's stock indices were up after various US economic data (including non-farm payrolls and consumer confidence) were better than expected, including Indonesia's benchmark stock index (also known as the Jakarta Composite index or IHSG). The index climbed 0.80 percent to 4,214.34 points on Monday (09/12). Supported by foreign net buying, almost all sectoral indices of the IHSG were up. The economic policy package that was released by the Ministry of Economy this afternoon also provided support for the index and the rupiah.

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