SingCham Weekly, Monday, 2nd December 2018 edition


Monday, 26 November 2018

WIKA has released 82% of the land for the fast train project

Waskita Karya has freed 82% of the land for a fast train project that connects Jakarta and Bandung. At the end of 2018, WIKA is targeting physical development to reach 5%. At present, the development progress has only reached 3.7%. The Jakarta – Bandung fast train will pass on 142.3 kilometers of land. PT China Indonesia Fast Train (KCIC) as the owner of the project has obtained a loan disbursement of US $ 810.4m obtained in April, August and October 2018 from the China Development Bank.

Palm oil prices plummeted, the government freed export levies

Indonesian Coordinating Minister for Economic Affairs Darmin Nasution stated that for the time being the government did not collect export fees for palm oil (CPO) and its derivatives. This is because the price has dropped from 530 dollars per ton to 420 dollars per ton. In fact, said Darmin, the price position of 530 dollars per ton lasted quite a long time. Darmin said that the decline in CPO prices globally was rapid in the past week. Therefore, the government is deemed necessary to take intervention.

The tariff for logistic shipping services will immediately rise

Indonesian Association of Express Shipping, Post and Logistics Services (Asperindo) companies will raise the tariff for logistics shipping services in the near future. This decision was taken following the increase in tariffs for Air Cargo (SMU) by several airlines. The association said the increase in high school rates ranged from 20 – 50%. The Association regretted the increase in high school because it was considered not to support the development of micro and small and medium enterprises.

50% of Go-Pay transactions are still in the Go-Jek ecosystem

Winny Triswandhani’s Go-Pay Head of Corporate Affairs said that 50% of Go-Pay transactions are still in the Go-Jek ecosystem. This is due to the expansion of Go-Jek which stretches in various regions. The Go-Jek application has been downloaded more than 108m times. Meanwhile, Go-Pay has collaborated with more than 200,000 merchants where 20,000 of them are small and medium enterprises.

First durian surplus in nine years

The fact that Indonesia has been a net importer of durian for nearly a decade could ignite a nationalism-fueled debate in this campaign season. Fortunately, Indonesians may just be spared such an unfruitful wrangle after recent government statistics showed that the country is now shipping more of the fruit abroad than it is bringing in, setting it on a course to see its first durian surplus in nine years.

Govt should simplify eligibility for support schemes

To relieve the stress of people in financial difficulty, the authorities have to reduce the time and mental effort needed to gain access to government support schemes, said Deputy Prime Minister Tharman Shanmugaratnam. The Government should simplify eligibility for support schemes, and has been doing so, he said at the launch of a book on how various parties worked together to help families in crisis. He added that agencies should do back-end coordination rather than expect an individual to navigate between agencies. For instance, Social Service Offices run by the Ministry of Social & Family Development have linked their systems up with hospitals so that individuals only need to go through a single round of financial assessment, instead of two.

Tuesday, 27 November 2018

Govt to disburse funds to cover healthcare agency

The Finance Ministry has promised to disburse more funds to cover the Health Care and Social Security Agency’s (BPJS Kesehatan) deficit because the revenue from premiums paid by clients was not enough to cover healthcare costs. The amount was reportedly about Rp5.6t (US$386m). Mardiasmo said the disbursement was based on an evaluation by the Development Finance Comptroller (BPKP) and would be taken from the reserve fund allocated in the 2018 state budget. In August, the BPKP announced that BPJS Kesehatan’s total deficit had reached Rp10.98t. In September, the Finance Ministry disbursed Rp4.9t to help cover it. BPJS Kesehatan administers the National Health Insurance (JKN) program, which has 195m members.

Prabowo:  Corruption is like ‘stage 4 cancer’

Comparing what he called “rampant and massive” corruption in his home country to “stage 4 cancer”, Indonesian presidential candidate Prabowo Subianto stressed the need for a fair election, clean government and rule-based system, when he spoke at The Economist’s “The World in 2019” gala dinner in Singapore. If elected, his first priority would be to assemble a team of the “best and brightest” people with integrity to carry out reforms to bring about a clean and non-corrupt government, he said. Pak Prabowo will contest next April against incumbent President Jokowi, in a rematch of the 2014 presidential election where he was narrowly defeated. Pak Prabowo, who is chairman of the nationalist Gerindra Party that forms the main opposition together with two Islamic parties, expressed despair over Indonesia’s state of democracy, pointing to the culture of cheating in elections.

Fossil fuels consumption at the PLN power plant remains 5%

Sofyan Basir, Managing Director of the National Electricity Company (PLN) stated that the use of fossil fuels for electricity generation needs has continued to decline since 2014. This is in line with the target of reducing fossil fuel use by 0.4% by 2025. Currently, PLN only uses 5% fossil fuels. PLN also targets 23% of the use of plants with renewable energy by 2025.

10,000 tons of waste litters Pari Island

Up to 10 cubic meters of waste weighing 10,000 tons, mostly comprising plastic and driftwood, was found littering the beaches on Pari Island in Thousand Islands regency. The island is located in the north of DKI Jakarta. According to the environment agency, the waste is carried from the river that flows from Jakarta. The agency said that during the rainy season, up to 40,000 tons of garbage could be found in the regency’s waters, comprising 17,000 tons of domestic waste, 1,600 tons of waste from tourists and 21,000 tons of waste originating from the mainland.

The Indonesian government is optimistic that plastic excise can be applied in 2019

Director General of Customs and Excise Heru Pambudi plans to impose excise on plastic bags that are not environmentally friendly. This policy will take the form of a Government Regulation (PP). So far, the government claims to get positive support from parliament. In addition to plastic excise issues, the government hopes public awareness to use reusable bags.

Wednesday, 28 November 2018

Lion Air crash investigate report

A malfunctioning sensor at the centre of the investigation into the Oct 29 crash of a Lion Air jetliner into the Java Sea wasn’t repaired before the fatal flight even though it had failed on the plane’s previous trip, according to a preliminary investigative report. A mechanic worked on other sensors and equipment during a night shift before the early morning departure, but not on the so-called angle-of-attack vane, according to Indonesia’s National Transportation Safety Committee. The report doesn’t offer a cause for the accident but provides the most detailed look so far into the chaotic minutes before the crash and into the steps that were taken to address malfunctions that occurred on the plane the previous night. On both flights, pilots reported that they had difficulty figuring out basic information such as speed and altitude.

Unicorn startup Traveloka’s CTO has stepped down

Derianto Kusuma, one of the founders and acting chief technology officer (CTO) of Traveloka announced his resignation. CTO of Indonesian traveling and ticket booking platform Traveloka has resigned. Traveloka has emerged as one of the unicorns in Indonesia’s startup scene with more than US$1b in valuation. Deri’s role in Traveloka’s growth and success is indispensable. Deri built and enlarged the company’s system and created not only a sustainable technology capability but also organization capability.

Govt inevitably become more pro-business

Pressure from the business world forced the government to back off from its decision to open up more of the Indonesian economy to foreigners, which it had highlighted earlier as part of its latest economic reform package. How is that possible, one may rightfully ask. In one sense, it is a reflection of the lobbying strength of the business world, as represented by the Indonesian Chamber of Commerce and Industry and the Indonesian Employers Association.  In another, it shows how the business world is well, if not thoroughly, represented both in the executive and the legislative branches of government. Government in a democratic Indonesia has inevitably become more pro-business. Successive administrations in post-Soeharto Indonesia have all been pro-business. It is more a question of how close they are to the business world.

Indonesia to dominate SEA digital economy by 2025

Indonesia’s digital economy is poised to become the largest in SE Asia as its market value triples to US$100b by 2025 from $27b in 2018, promising more jobs and more consumer choices for an emerging tech-savvy generation. The annual “e-Conomy SE Asia” study, conducted by American tech giant Google and Singaporean holding company Temasek, says the growth will be spurred by four key digital services, namely e-commerce, with a contribution of 53%, online travel (25%), ride-hailing services (14%) and online media (8%). A proliferation of digital services, particularly in e-commerce, diversifies product and service choices available for Indonesia’s 150m smartphone users — the largest number in the region — especially for users located in more remote areas. Similarly, homegrown e-commerce platforms Tokopedia and Bukalapak have launched advertisements highlighting their expansive logistics networks that can bring everything from electric guitars to rice cookers to even the remotest kampung home.

Ahok may return to politics

The popular former Jakarta governor Ahok has not ruled out making a political comeback after serving his prison sentence for blasphemy in January, about three months before the April legislative and presidential elections, according to his former deputy governor and close ally Djarot Saiful Hidayat. The Indonesian Democratic Party of Struggle (PDI-P) politician claimed that Ahok had told him he might return to politics and join Djarot’s party.

Third mass food-poisoning case this month

In the third case of mass food poisoning this month, 131 people – including kindergarten pupils and teachers – fell ill on Monday after consuming food from a caterer while attending a learning camp in Singapore. Tthe National Environment Agency (NEA), Ministry of Health (MOH) and Agri-Food and Veterinary Authority (AVA) said they are investigating an outbreak of gastroenteritis – inflammation of the stomach and intestines which causes vomiting and diarrhoea.

HK catches up with Singapore on prosperity index

Hong Kong has closed the gap on Singapore with HK’ers enjoying greater levels of personal freedom, safety and security this year than before, according to a global index. The city’s overall ranking jumped two places to 22nd out of 149 economies, according to a prosperity index compiled by British-based independent charity organisation Legatum Institute. The index has ranked Norway, New Zealand and Finland as the world’s top three prosperous economies for the past two years. While Singapore ranked 98th for personal freedom, it placed 21st in overall prosperity.

Thursday, 29 November 2018

Govt wants to generate 1 GW of rooftop solar power in 3 years

The Indonesian Energy and Mineral Resources Ministry said that they are expecting rooftop photovoltaic solar panels to produce 1 gigawatt (GW) of electricity nationwide within three years. “All PLN customers — households, manufacturers and commerce — could install rooftop solar panels. The final goal is energy conservation,” said Rida Mulyana, the director of renewable energy at the ministry.

Minister seeks to justify easing of foreign ownership restrictions amid business outcry

The government’s announcement last week of a plan to relax restrictions on foreign direct investment in several sectors of the Indonesian economy drew fire from the business community over concerns that it will threaten micro, small and medium enterprises and give foreigners too much control over some of the nation’s vital industries. Hariyadi Sukamdani, chairman of the Indonesian Employers Association (Apindo) – an influential business lobby – said the government had done little to inform its members about the plan and that the organization was not asked for any input. “Overall, it is also not really urgent” to revise the negative investment list for foreigners, said the businessman, who also leads the Sahid Group, a local hospitality chain. He added that tax incentives are more likely to lure foreign investors. Coordinating Economic Affairs Minister Darmin Nasution announced a plan last week to revise the country’s so-called negative investment list as part of the current administration’s 16th economic policy package.

Industry highlight regional regulations prohibiting the display of tobacco products

Cigarette entrepreneurs highlight regional regulations in Bogor and Depok regarding the prohibition of advertising or display of tobacco products. In Bogor, this regulation has been in effect since 2017. While in Depok, the prohibition on displaying cigarette products in retail stores takes effect from October 2018. The Indonesian cigarette manufacturers association (Gaprindo) states, this regional regulation violates government regulation No. 109/2012 that cigarettes are legal products that can be sold, promoted and advertised.

Exports of 56.7m US dollars per year, the Government is targeting hajj pilgrims

The Ministry of Commerce is aiming for cooperation with food and beverage producers, as well as supplying hotel equipment. The meeting was held to target the export potential of goods needed by Indonesian hajj pilgrims. According to the Ministry of Trade, the export value could reach 56.7m US dollars per year or 4.11% of the total value of Indonesia’s exports to Saudi in 2017. This figure is based on the number of regular Indonesian pilgrims in 2018 which reached 204,000 people.

Trump says ‘long way to go’ on tariffs and China
.S. President Trump said on Thursday said there was “a long way to go” on tariffs with China and urged companies to build products in the United States to avoid them. Trump, who planned to meet with Chinese President Xi Jinping on Saturday on the sidelines of the G20 summit in Argentina, said in a Twitter post that tariffs on China were bringing money into the United States and “there is a long way to go.”

Friday, 30 November 2018

Foreign capital in sovereign debt papers hits year high

The Finance Ministry recorded that the foreign capital invested in the government’s debt papers (SBN) broke this year’s record on Nov. 28, hitting Rp 899.19tr (US$62.95bn), surpassing the previous record of Rp 880.2tr on Jan. 23. Bank Indonesia (BI) monetary management department head Nanang Hendarsah said that global investors had started to show trust in the Indonesian economy following the strengthening of the rupiah against the US dollar. Maybank Indonesia economist Myrdal Gunarto added that yields from asset investment in Indonesia were in line with the increase of the BI’s reference rate.

French firm Thales to invest over S$31m in digital factory

Over the next five years, French defence electronics firm Thales will be investing more than 20m euros (S$31.2m) in its inaugural digital factory in Singapore — the first in Asia outside of its two such facilities in France and Canada. The factory will drive innovation and digital solutions for the company and its customers in the aerospace, space, ground transportation, defence and security domains.

New ultralight material offers many uses for plastic waste

Researchers in Singapore are seeking a patent for a new sound-proof and heat-resistant material made from recycled plastic bottles they say could help reduce plastic waste dumped in oceans and clogging landfills. The National University of Singapore team said it had found a way to convert bottles made from polyethylene terephthalate (PET) into aerogels that have many potential uses – from insulation and fire safety to cleaning up oil spills.

Gojek launches beta app for ‘thousands’ of users in Singapore

Ending months of anticipation, Indonesian ride-hailing firm Gojek made a cautious entry into the Singapore market with the launch of its beta, or prototype, mobile application. Its ride-hailing service will be made available to commuters in batches and will first cover more than half of Singapore, including the Central Business District, Jurong East, Changi, Punggol, Ang Mo Kio, and Sentosa. Users have to start and end their journeys within the areas covered. Gojek’s service is expected to be expanded to all Singapore users early next year, and coverage will eventually be islandwide. It will be enlarged progressively through the beta phase, which will last several weeks.

Boeing Eyes Lion Air Crash Software Upgrade

Boeing is weighing plans to launch a software upgrade for its 737 MAX in six to eight weeks that would help address a scenario faced by the crew of the doomed Lion Air flight JT-610 during last month’s deadly crash. Crash investigators are focusing on the possibility that a new anti-stall system that repeatedly pushed the Lion Air jetliner’s nose down was being fed by erroneous data from a faulty sensor left in place after a previous hazardous flight. Boeing has said cockpit procedures that were applied on the previous flight are already in place to tackle such a problem, and that its 737 series remains safe to fly. But regulators in the US have said Boeing is also examining a possible software fix, after coming under fire for not outlining recent changes to the automated system in the manual for the 737 MAX, the latest version of its best-selling passenger jet.

Low-cost carriers: Cheap does not mean unsafe

Low-cost carrier Citilink Indonesia has stressed there is no correlation between the ticket prices of airlines and flight safety. Citilink new distribution channel senior manager Husnul Mulia said any airline wanted to assure there would be no accident during the operation. “The target is always zero accidents,” Husnul said, stressing that the safety standards of all airlines were the same. Husnul’s statement comes after the National Transportation Safety Committee (KNKT) stated that the aircraft used for Lion Air flight JT610, which crashed into the Java Sea on Oct. 29, had been unfit to fly. the committee corrected that statement in response to protest from Lion Air management, saying the aircraft had, in fact, been airworthy.

Marriott’s reservation database breached, compromising data of up to 500m guests

Marriott International revealed on Friday (Nov 30) that its Starwood guest reservation database was breached, potentially exposing information on about 500m guests. The company said its investigation showed that an unauthorised party had copied and encrypted information, and that there had been unauthorised access to the Starwood network since 2014. The database contained guest information relating to reservations at Starwood properties, which include W Hotels, St Regis, Sheraton Hotels and Resorts, as well as Westin Hotels and Resorts. For more than 300m of those guests, the information includes some combination of name, mailing address, phone number, email address, passport number, Starwood Preferred Guest account information, date of birth, gender among other personal details, Marriott said.