Bali to be reopened in June under a travel corridor

Bali to be reopened in June under a travel corridor

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Foreign tourists may be able to visit Bali again as soon as June under a travel corridor program to help revive the economy.

The travel corridor arrangement will be offered to countries that are deemed successful in their vaccination programs.

And to those able to contain the spread of the coronavirus, and could offer reciprocal benefits, Mr. Uno said in a statement.

Ubud, Sanur, and Nusa Dua are major holiday spots in Bali that are included in a pilot project to begin receiving foreign travelers in mid-June.

Of course, this under strict health protocols, said Mr. Uno.

As many as two million Bali residents will have to be vaccinated before the pilot project can start.

South-east Asia’s largest economy has started to ease restrictions to spur household spending after gross domestic product shrank last year for the first time in two decades due to the pandemic.

Covid-19 has so far infected more than 1.4 million Indonesians in the past year and killed almost 39,000 people in the country.

The government may allow a chartered flight to bring in overseas travelers under the pilot project, which will be closely monitored and evaluated every two weeks, said Mr. Uno.

Open Bali is not the only project

The Indonesian province closest to Singapore, the Riau Islands, including Batam and Bintan, is the area readiest to reopen to tourists from neighboring countries as coronavirus infections have declined and stabilized, Tourism and Creative Economy Minister Sandiaga Uno has said.

The plan is to start reopening tourist spots in Nongsa (Batam) and Lagoi (Bintan) on April 21, ahead of the country’s main tourist spot Bali, which is expected to reopen only in June or July, the minister said after a meeting with Batam officials on Saturday (March 20).

“Batam and Bintan are far more ready,” he said.

Reopening the Riau Islands would pave the way for Indonesia to have a possible “safe travel corridor” with Singapore, Mr Uno stressed.

Source: The Straits Times

Indonesia raises its budget for economic recovery

Indonesia raises its budget for economic recovery

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Indonesia has raised its budget for the National Economic Recovery program to Rp553.09 trillion (US$39.4 billion), increasing financial support for a country struggling to contain its coronavirus outbreak, a minister said on Tuesday.

“In plenary cabinet meetings and in other meetings, we’ve decided the size to be Rp553.09 trillion. It means the government sees that economic recovery in 2021 needs a similar support than in 2020,” Airlangga Hartarto, Indonesia’s chief economic minister, told a business forum.

The previously approved budget for the program in 2021 was Rp372.3 trillion, although authorities have said this may swell after President Joko “Jokowi” Widodo announced he wanted to run the mass vaccination campaign for free

In 2020, the government allocated Rp692.5 trillion for the program, which included the upgrading of hospitals and provision of medical equipment and services to fight the pandemic, but spent only about Rp579.78 trillion.

Indonesia is set to officially surpass one million coronavirus cases. The country’s figures for COVID-19 infections and deaths are some of the highest in Asia.

Airlangga unveiled plans to quadruple health spending to Rp104.7 trillion. The authorities have also increased the budget for social assistance from Rp110.2 trillion to Rp150.96 trillion.

At the same forum, Febrio Kacaribu, a finance ministry official, estimated the fiscal deficit for 2021 would be 5.7 percent of gross domestic product, unchanged from the ministry’s previous outlook.

Last year’s budget deficit was estimated at 6.1 percent of GDP, the widest in decades as Jakarta ramped up spending to help Southeast Asia’s largest economy weather the impact of the pandemic.

The economy suffered its first recession since 1998 last year. The government expects the economy to grow 5 percent this year, far better than a forecast contraction of 1.7 percent to 2.2 percent in 2020. Source: The Jakarta Post.

Source: The Jakarta Post.

China’s biggest nickel ore supplier is Indonesia

China’s biggest nickel ore supplier is Indonesia

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Indonesia remained China’s second-biggest nickel ore supplier in 2020, Chinese customs data showed on Wednesday, despite the Southeast Asian country’s ban on exports of the material.

Arrivals from Indonesia into China totaled 3.4 million tons last year, the General Administration of Customs reported. That was down 85.8 percent from 2019 but still second only to the Philippines at 31.98 million tons, and ahead of New Caledonia in third.

Indonesian shipments were 1.98 million tons in January and February combined, likely the last cargoes to depart Indonesia before the ban came into force on Jan. 1, 2020, although some may have been delayed by coronavirus curbs.

The data then shows a trickle of Indonesian imports in every subsequent month of last year, including 78,245 tons for December.

Data from Indonesia, which enacted the ban to force more domestic ore processing, shows zero nickel ore exports to China from January to November.

Explanations about the nickel ore data

China’s customs administration and an Indonesian mining ministry official did not provide an explanation but some analysts believe the answer may lie in the material being exported as iron ore but imported into China as nickel ore.

These shipments typically consist of ore that has around 1 percent nickel content and over 50 percent iron, so are iron ore as far as the Indonesian government is concerned, CRU analyst Ellie Wang said.

Some stainless steel firms in China then declare it as nickel ore at customs, she adds. “They can mix the ore with some other grade, then produce low-grade nickel pig iron,” which is used to make stainless steel, Wang said.

BMO analyst Colin Hamilton concurred such an arrangement is “certainly a potential workaround” given high iron ore prices.

“We always used to add some reported nickel ore to full-year iron ore import numbers – particularly from the Philippines but it’s entirely possible from Indonesia as well,” he added.

In 2020, China’s imports of nickel pig iron from Indonesia, which can still be exported, rose 100.9 percent year-on-year to 2.73 million tons.

Source: The Jakarta Post

China to increase imports of Indonesian products

China to increase imports of Indonesian products

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China would import more Indonesian products and increase investment in Southeast Asia’s largest economy, a top Chinese diplomat said, as Jakarta urged Beijing to remove barriers to make trade between the two countries more balanced.

“We look forward to expanding imports from Indonesia and the Chinese investments in Indonesia so that we could bring about a healthier and balanced growth of trade between our two countries,” visiting State Councilor Wang Yi said in a joint statement with the Indonesian Foreign Minister Retno Marsudi.

China and Indonesia relations

China is Indonesia’s biggest trade partner and an important source of investment, but the large trade deficit with China has often been a source of concern in Indonesia.

The deficit shrunk considerably between January to November 2020, falling to US$7 billion from US$15.4 billion in the same period in 2019, as Indonesia’s demand for imported products plunged amid a coronavirus epidemic and its first recession in 22 years.

Indonesian minister Retno urged China to remove trade barriers for the country’s top products, such as palm oil, fisheries, fruits, and bird’s nest, as a way to address the trade imbalance.

“Efforts should be made to pursue an improving and more balanced trade,” she said.

Ms. Retno said Indonesia also agreed to a Chinese study over the Lambakan dam project in East Kalimantan. The dam is one of Indonesia’s main projects to control floods and is worth around US$400 million, according to local media reports.

Mr. Wang did not mention the dam but said China and Indonesia should have synergy with their respective infrastructure programs – the Belt and Road Initiative and the Global Maritime Fulcrum program.

Mr. Wang also said he supported Indonesia’s plan to become a regional hub for the production of vaccines.

Indonesia on Wednesday began a campaign of mass Covid-19 immunization with a vaccine supplied by China’s Sinovac.

Source: The Business Times

RCEP to promote ties between Indonesia and China

RCEP to promote ties between Indonesia and China

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The Regional Comprehensive Economic Partnership (RCEP) is expected to play a large role in promoting economic and trade relations between Indonesia and China, Indonesian experts said.

“We’ve just fallen into recession and if RCEP is successful in improving economic relations, Indonesia will perhaps be able to climb out of recession through cooperation with China and other bigger economies,” Indonesian economic expert Nadhila Ichsan said.

According to Statistics Indonesia (BPS), the state’s economic growth experienced a 3.49 percent contraction in the third quarter of 2020, which brought the country’s economy to a recession for two consecutive quarters. In quarter two, Indonesia’s economy grew at a rate of -5.32 percent.

Although the country’s economy continued to contract, there was a significant rebound in exports, especially those to China. The data of BPS showed Indonesia’s largest non-oil and gas exports in October 2020 were to China.

Indonesian Finance Minister Sri Mulyani Indrawati at a press conference said, “The worst is over” and “All components of economic growth, both from the expenditure side and the production side, have increased.”

Murpin Josua Sembiring, an economic scholar, opined that the benefits from RCEP include creating opportunities for the Indonesian industry to take advantage of regional value chains, increasing high-quality telecommunication services, and triggering Indonesian investors to invest in the RCEP area.

RCEP will also greatly give benefits to financial service providers, create opportunities to increase economic capacity and the ability of small and medium-sized enterprises, boost intellectual property, expand digital trade in the region, and extend market access for Indonesian export products, he added.

The RCEP

Fifteen Asia-Pacific nations signed the RCEP, a mega free trade deal, on Sunday as they concluded an annual summit of Southeast Asian leaders and their regional partners, held virtually this year due to the pandemic. 

The Regional Comprehensive Economic Partnership is the world’s biggest trade agreement. It will progressively lower tariffs across many areas in the coming years.

Coins stacking increase with rising arrow on white background.

Foreign Debt in Indonesia rose up in August

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Indonesia’s foreign debt rose by the end of August as the government borrowed funds from multilateral organizations to cover the country’s fiscal deficit, while businesses borrowed funds for investment, Bank Indonesia (BI) announced last Thursday.

Indonesia’s external debt, which includes government and private-sector borrowings, was recorded at US$413.4 billion in August, up 5.7 percent year-on-year (YoY), central bank data showed.

What drive the rise in foreign debt?

The government’s foreign debt rose 3.4 percent YoY to $200.1 billion in August, according to the central bank. Meanwhile, overall public-sector debt, which aside from that of the government also includes that of the central bank, amounted to $203 billion.

The rise in the government’s foreign debt was “driven by the partial withdrawal of loan commitment from multilateral organizations to support Indonesia’s COVID-19 pandemic handling and the national economic recovery program,” BI said in a statement.

The government has earmarked Rp 695.2 trillion ($47.25 billion) to finance pandemic handling and support the economy, which is expected to widen the budget deficit to 6.34 percent of GDP. Several multilateral organizations, such as the World Bank, the Asian Development Bank, and the Asian Infrastructure Investment Bank, have committed to providing loans for the country.

Meanwhile, private-sector foreign debt, which includes borrowings by state-owned enterprises, grew at a faster rate than government debt at 7.9 percent in September to $210.4 billion.

“Most of the external debt was used to finance corporate investment activities,” the central bank said, adding that 77.5 percent of the debt came from four sectors, namely mining, manufacturing, financial services, and insurance, as well as electricity and gas procurement.

The central bank deemed the overall external debt level to be healthy, with the foreign-debt-to-GDP ratio recorded at 38.5 percent at the end of September, up from 38.2 percent in the previous month. Long-term loans account for 89 percent of the current outstanding debt.

The central business district skyline is seen at dusk on Monday in Jakarta, Indonesia

Patimban port to start the first phase operation by November

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Indonesia aims to complete the first phase of the Patimban port on the northern coast of Java island by November, a senior minister said on Tuesday.

The 43.2 trillion rupiahs ($2.92 billion) Patimban port in the town of Subang in West Java is among the government’s priority projects in order to relieve pressure on Jakarta’s congested Tanjung Priok port.

Coordinating Minister of Economic Affairs Airlangga Hartarto said the president had called for the port to be launched in November. It is set to host a first shipment of cars after the launch, Hartarto told a streamed news conference.

Over 80% of the work on building docks and land reclamation has been completed, while construction of breakwaters and sea walls had reached almost 56%, he said.

A consortium of Japanese and Indonesian companies is building the first phase and the project is partly funded by the Japan International Cooperation Agency (JICA).

The Patimban port will improve the country’s infrastructure

The president told a cabinet meeting broadcast live that the port would improve infrastructure near the Karawang and Purwakarta industrial parks, “therefore improving the competitiveness of our export products, especially in the automotive sector.”

West Java Governor Ridwan Kamil said the port could also support his plan to establish a new metropolitan city and create five million jobs in the next 15 years.

Patimban port is one of the government’s national strategic projects, funded by an official development assistance (ODA) loan from the Japanese government amounting to Rp 14.2 trillion (US$968.5 million) for the first development phase.

The port is expected to be Indonesia’s primary export port and to ease the burden on Tanjung Priok Port and traffic congestion in Jakarta from the transport of cargo. It is also projected to support the future Rebana Special Economic Zones (SEZ) in Cirebon, Patimban, and Kertajati in West Java, along with Kertajati International Airport.

In the first development phase, Patimban Port is planned to serve 3.75 million twenty-foot equivalent units (TEUs) and accommodate 600,000 complete built-up (CBU) vehicles. Meanwhile, in the second phase, Patimban’s capacity will increase to 5.5 million TEUs and it is expected to reach its final capacity of 7.5 million TEUs in phase 3.

Oil palm biofuel biodiesel in tubes.

Palm oil: the biofuel of the future?

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Biodiesel based on palm oil stands out among others. It has a high cetane number and high oxidation stability, which makes the product stable for more than six months.

Among the major issues and current problems facing the world are the high levels of pollution in large cities and the increase in acid rain, both derived from the indiscriminate and poorly planned use of fossil fuels for over a hundred years. Today, world oil reserves are scarce and its price is increasing.

These reasons have led to the search for fuels derived from renewable natural sources and with low environmental impact, among which those obtained using chemically transformed vegetable oils (methyl esters) as raw materials.

This makes palm oil and its derivatives an alternative as fuel and represents an opportunity for the country’s palm oil sector. It will make it possible to increase the internal consumption of it in each country and give it greater added value.

Studies and experiences from around the world show that as palm oil is a vegetable oil it is renewable and constitutes a favorable alternative to be used as fuel. Vegetable oils contain large amounts of carbon, which is one of the most important components of fuel.

Palm oil advances as a biofuel

Indonesia, which is the world’s largest exporter of this product, plans to finish research into biodiesel containing 40% palm oil by November

The country will implement the mandatory use of biodiesel containing 40% palm oil, known as B40, in July 2021 as it seeks to increase domestic use while slashing regular diesel imports.

The country previously scheduled a road test in April for B40, but that was delayed because of the coronavirus outbreak. The pandemic has also forced the research department to modify its testing methods.

They currently mandate biodiesel containing 30% of palm oil’s fatty acid methyl ester (FAME), the highest palm-based mix for biodiesel in the world.

Indonesia is testing two different formulations for the B40 fuel, one containing 40% of FAME, and the other containing a mix of 30% of FAME and 10% of a purer form of FAME, which has improved the quality needed in the fuel.

The fuels are tested on engines of passenger cars running for 1,000 hours.

The call for the Virtual Trade Mission to Indonesia and Singapore is announce

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In the framework of the Enterprise Europe Network, they announce the third call of the Multisectoral Virtual Trade Mission to Indonesia and Singapore.

The Ministry of Innovation, Industry, Transport and Commerce and the Cantabria Chamber of Commerce announced the third call for the 2020 International Promotion Action Plan.

Within the framework of this call, a Virtual Agenda Service – Multisectoral Virtual Trade Mission to Indonesia and Singapore is included.

This call, which takes place within the framework of the Enterprise Europe Network, has as final objective the realization of multisectoral virtual agendas and meetings with potential clients or importers from Indonesia and Singapore.

This activity will count with the collaboration of the Economic and Commercial Offices of Spain that will be in charge of the individual agendas in which the participating companies will work.

The meetings will be virtual and will be adapted to the profile and needs of the participating countries.

Each company will have the opportunity to meet virtually with potential clients and organizations from other countries, these established prior to a participation form in the meeting where they determine their profile and interests.

About Enterprise Europe Network

  • Enterprise Europe Network helps companies to innovate and grow internationally.
  • It is the world’s largest support network for small and medium-sized enterprises (SMEs) with international ambitions.
  • The network is active in more than 60 countries worldwide.
  • It brings together 3,000 experts from more than 600 member organizations, all recognized for their excellence in business support.

Singapore in Context

Singapore is a city-state with a total population of 5.6 million inhabitants.

It has legal certainty similar to that of any developed western country and has positioned itself in recent years as a hub for business, commercial and technological operations throughout the Asia Pacific.

With a per capita income of more than 60,000 US dollars, the economy has been growing positively since the last crisis (2010) at an average of 3.5%.

However, recent recorded a downturn attributed to the Covid-19 pandemic.

Singapore leads foreign investment in Indonesia

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Singapore remains as the main foreign investor in Indonesia despite the economic impact generated by the spread of Covid-19 in the city-state.

According to the Indonesia Investment Coordinating Board, Singapore maintained its investments in the archipelago country during the first six months of the current year.

Singaporean investors injected $4.7 billion in more than 6,500 projects, representing 34% of foreign investment in Indonesia.

Likewise, Bahlil Lahadalia, Chairman of the Indonesia Investment Coordinating Board point out that China and Hong Kong were behind Singapore.

China ranked second with an investment of $2.4 billion in 1,311 projects, while Hong Kong follows with an investment of $1.8 billion in 1,200 projects.

According to experts on the subject, Singapore leads investments in Indonesia considering it a potential market, due to this it prioritizes its investments there.

According to data from the Indonesia Investment Coordinating Board, in the first half of 2020, foreign capital decreased eight percent compared to the same period in 2019, while domestic investment increased 13.2 percent.

Covid-19 impact in Singapore

Singapore entered a technical recession, confirming the collapse of its economic activity in the second quarter of the year, the most affected by the pandemic.

The data published by the Ministry of Trade and Industry shows a contraction of 41.2% in the indicated period.

The ministry attributed the decline in the economy to low external demand in the context of the global economic crisis caused by Covid-19.