13 August 2018 edition
Singcham Weekly: Indonesian Economy Resilient to Global Trade War
Monday, 6 August 2018
Tax ratio is still below the WB standards
Finance Minister Sri Mulyani Indrawati said that Indonesia’s tax ratio or tax ratio, which is still 10.78% of gross domestic product (GDP) during 2017, embarrassed her. She said, when she was at the World Bank first, she made a standard tax ratio for countries around the world. At that time, the standard that was considered ideal by Sri Mulyani and her partners was 15%. She said, currently there are several things that are the main problems in taxation, namely organizational problems, human resources, revenue, data processing, and IT systems.
Two-year tender offer make it difficult for investors
The Financial Services Authority (OJK) revised the tender offer rules through the OJK (POJK) Regulation No.9 / POJK.4 / 2018 concerning Takeover of Public Companies or tender offers. But, analysts say that the regulation revision will make it difficult for investors to run it. Paramitra Alfa Sekuritas Senior Analyst William Siregar assessed that the new controllers will be troubled by the mandatory tender offer rules which are limited to two years. Given that market uncertainty in the future is still quite high with challenges and outlook that have an impact on volatility.
Digital platform firm Arkadia seeks to raise $4m in IPO
Digital media platform Arkadia Digital Media plans to raise up to Rp60bn ($4.14m) in an initial public offering in August, in an effort to expand business, increase working capital and improve its hardware system. Arkamedia has three subsidiaries, namely Integra Archipelago Media, Mata Media Nusantara and Arkadia Media Nusantara. The company operates online news portal Suara.com, football online portal Bolatimes.com, celebrity news portal MataMata.com and technology news platform HiTekno.com. The upcoming IPO will allow the company to expand its business by launching in the next two months lifestyle portal Dewiku.com, automotive portal MobiMoto.com, traveling news portal Guideku.com and health news portal HiMedik.com.
Climate change in Champagne has winemakers prepping for future
Global warming has mostly put chilly Champagne in a climatic sweet spot with average temperatures that ensure grapes ripen every year. But the winemakers in Damery, Cahmpagne’s epicenter in France says that the harvest is two weeks earlier than it was 20 years ago. Comité Champagne (CIVC) trade association first assessed the industry’s carbon footprint in 2002. Since then, the region’s growers have significantly cut emissions, taken to recycling all the water used in wineries, reduced pesticides by 50%, and begun using lighter – weight Cahmpagne bottles, the equivalent in emissions of removing 8,000 cars from the road each year.
US seeks $350m annual sanctions in trade dispute
The United States has asked the World Trade Organization to let it impose sanctions on Indonesia after winning a trade dispute that it said cost U.S. business up to $350m in 2017. The U.S. and New Zealand both won WTO rulings last year against Indonesian import restrictions on food, plants, animal products, including apples, grapes, potatoes, onions, flowers, juice, dried fruit, cattle, chicken, and beef.
Transjakarta sees surge in passengers after launch of expanded odd–even policy
City-owned bus operator Transjakarta has recorded a surge in passengers in the past week, following the implementation of the expanded odd – even traffic policy, which bars certain vehicles from entering major thoroughfares depending on the date. Transjakarta president director Budi Kaliwono said that passengers on Monday reached 616,744, almost 34,000 more when compared to previous Monday.
Telkom launches new satellite
State telecommunication company PT Telekomunikasi Indonesia (Telkom) witnessed its newest satellite, Satelit Merah Putih, launched into space from the Cape Canaveral Air Force Station in Florida, United States. The satellite is expected to reach its orbit at about 32,000kms. The new satellite will replace Telkom 1 satellite, which has been in operation since 1999.
New e-wallet can pay in 150 currencies
Whether it is withdrawing cash in another country, or shopping online or overseas, there is now a way for Singapore travellers to do so without any cross-border transaction fees or paying currency conversion fees typically charged by banks or moneychangers. YouTrip, a multi-currency mobile wallet, was launched and allows users to pay in more than 150 currencies, converted at wholesale exchange rates, without incurring any extra cost. The e-wallet is a collaboration among Singapore’s transport payment solutions provider EZ-Link, credit card giant Mastercard and HK-based financial technology (fintech) start-up You Technologies. It also marks EZ-Link’s first foray into fintech.
Philippines to cancel Landing’s $1.5bn casino project
Phillipines President Rodrigo Duterte will cancel Landing International Development Ltd’s %1.5bn integrated casino project in the capital. Presidential spokesman Harry Roque said the lease contract that Landing signed with a state – owned foundation in March has significantly put the government at a disadvantage because the rental payment was “unconscionable”. This is the second casino project under fire from Duterte’s govt.
Facebook apologizes after Lombok earthquake balloons blunder
Facebook apologized after user posting about a deadly earthquake in Indonesia on the social media platform saw their messages decorated with images of balloons and confetti. A 6.9 magnitude quake struck the tourist island of Lombok on Sunday, killing at least 347 people and leaving thousands homeless. Many Indonesian wrote messages on Facebook using the word “selamat” – which can mean ‘safe’ but also ‘ congratulations’ – triggering celebratory animations.
B20’s obligation will have a major impact on investors with smaller capitalization
The Indonesian government requires all diesel-powered vehicles to use diesel fuel mixed with 20% biodiesel (B20). This policy is effective as of September 1, 2018. LBP Institute founder Lucky Bayu Purnomo also said that the policy would benefit the issuers of the palm oil plantation sector. According to Lucky, those who feel the most benefit from this policy are investors who have small capitalization such as PT Gozco Plantations (GZCO) and PT Eagle High Plantations (BWPT). As for PT Astra Agro Lestari (AALI) and PT London Sumatra Indonesia (LSIP), the impact is very small.
Indonesian economy resilient to global trade war
Indonesia’s second-quarter economic growth exceeded expectations, reflecting the country’s macroeconomic stability and resilience against a global trade war and rising US interest rates, multinational investment bank Morgan Stanley said. The Indonesian economy expanded 5.27% in the second quarter from the same period last year. It was the fastest pace since 2013 and higher than the Finance Ministry’s 5.16% growth estimate.
Morgan Stanley said SE Asia’s largest economy saw strong domestic and external demand and that it is well on its way to expand by 5.3% this year and 5.4% in 2019. Sustained export momentum to support capacity utilization, which should, in turn, increase capital expenditure and employment opportunities. Compared with other ASEAN economies, Indonesia’s growth outlook is less exposed to rising trade. Indonesia would also see increased household spending as the government is expected to raise spending on social assistance and infrastructure ahead of next year’s legislative and presidential elections.
Toilets in Beijing to get new scrutiny
Beijing has issued the first guidance in the nation requiring that toilets in the restaurant industry receive daily inspections. Restaurants should disinfect their toilets at least once a day, and check the restroom every 15 minutes during peak hours. It is an important move for the capital to improve the quality of restrooms in restaurants in regards to upcoming Beijing 2022 Winter Olympics.
Prabowo picks Sandiaga Uno as running mate for 2019 election
The Gerindra party, PAN and PKS decided to pair Gerindra leader Prabowo Subianto with Jakarta Deputy Governor Sandiaga Uno. Prabowo said Sandiaga is the best choice and he has made sacrifice by resigning from his position as a deputy governor of Jakarta. Prior to his decision, anti-Ahok Islamist groups gave recommendation for Prabowo to pick celebrity preacher Abdul Somad as his running mate.
Jokowi picks nonpolitical party figure for vice presidential candidate
President Joko “Jokowi” Widodo announced his running mate for Indonesian 2019 election. He picks nonpolitical party figure Ma’ruf Amin. Ma’ruf has been a lawmaker, councilor, presidential advisory council member, supreme leader of Nahdlatul Ulama central board, and chairman of the MUI (Indonesian Ulema Council). As MUI chairman, Ma’ruf supported controversial regulations, including the Pornography Law and the joint ministeriala decree banning the activities of minority group Ahmadiyah.
In 2017, Ma’ruf was a key expert witness in a highly publicized blasphemy trial that sent Jakarta governor Basuki “Ahok” Tjahaja Purnama to prison for two years.
Thousands foreign tourists evacuated from Lombok
Thousands of foreign tourists have been evacuated from the Gili Islands in North Lombok district, West Nusa Tenggara, on Tuesday as the government prioritizes efforts to get visitors out of harm’s way following the magnitude-7 earthquake that devastated the region on Sunday evening. The earthquake caused panic on the popular tourist islands of Gili Trawangan, Gili Air and Gili Meno, especially after the National Meteorology, Climatology and Geophysics Agency (BMKG) issued a brief tsunami warning. Camera footage from the islands shows damaged hotels and cafés, with most visitors having had to spend the night outside over fears that numerous aftershocks may cause more buildings to collapse. Boats provided by the National Police, Indonesian Military and Ministry of Transportation started arriving at the islands on Monday to evacuate the tourists.
Ministers are not paid enough
Cut ministerial pay and the government will end up recruiting “very, very mediocre people” as office-holders, said ESM Goh Chok Tong in a dialogue with SE District residents. “I am telling you the ministers are not paid enough, and down the road, we are going to get a problem with getting people to join the government, because civil servants now earn more than ministers,” said Goh. Goh was responding to a suggestion by Braddell Heights resident that ministerial salaries be cut to fund pensions for elderly people.
The current total annual salary of an entry level Minister is benchmarked to 60% of the median income of the top 1,000 earners who are Singapore Citizens. In 2007, ministerial salaries were increased by some 60%. Singapore ministers are currently the highest paid in the world. The PM’s salary of S$2.2m is 5.5x higher than the US President’s and 11.1x above the UK PM’s.
Housewife fined $46k after maids spotted working on scaffolding outside house
A housewife, whose maids were spotted last year perched on a two-storey scaffold while working on the facade of her Cluny Park house, was fined $46,000. Singaporean Willow Phua Brest, 46, pleaded guilty to four counts of failing to provide safe working conditions for her two Indonesian helpers, Ms Karsinah, 39, and Ms Dati, 43. She also admitted that she had unlawfully asked Ms Karsinah to perform tasks as a scaffolder and maintenance worker, the court heard.
Spoof ivory store launch draws mixed reaction
A wildlife charity’s attempt to use a fake online ivory shop here to raise awareness about the illicit global trade has stirred controversy, drawing both praise and condemnation from netizens. The World Wide Fund for Nature-Singapore (WWF) unveiled that it was behind the launch of Ivory Lane, a fictitious outfit which purportedly sold vintage ivory jewellery items through an online store and social media accounts. The stunt, WWF-Singapore said, was aimed at at highlighting local laws which continue to facilitate the illicit global trade for ivory. The charity added that the campaign “sparked a heated debate on wildlife trade, national legislation and enforcement in Singapore”, garnering 65,000 reactions on social media.
Google Indonesia seek 10m SME partners by 2020
Google is eyeing 10m small and medium enterprises (SMEs) in Indonesia to avail themselves of its business services by 2020. The company had begun to offer training courses in 2015 and currently served 1m SMEs customers. In addition, SMEs could use Google to market their products in other countries so that they could expand their exports.
Strong aftershock jolts Indonesia’s Lombok as death toll jumps to 319
A magnitude 6.2 aftershock rocked Indonesia’s Lombok on Thursday (Aug 9), sparking fresh panic on the tropical tourist island as the official death toll from a powerful earthquake four days earlier jumped to 319. “Our latest update is that 319 people died,” said Indonesia’s chief security minister Wiranto, adding that rescue efforts were ongoing and complicated by aftershocks. The number forced from their homes in the disaster has soared to 270,000, national disaster agency spokesman Sutopo Purwo Nugroho said, with around 1,000 people severely injured.
Garuda Indonesia finalized a US$300m loan
Garuda Indonesia (GIAA) is looking for a new scheme to fund its expansion needs. The airline company will seek longer-term loans to replace short-term funding. This year, GIAA prepares capital expenditure or capital expenditure (capex) of US $ 250m to US $ 300m for routine maintenance. Until the first half of this year, GIAA has realized 60% of capex. To boost profits, GIAA will increase aircraft utilization and continue to renegotiate its aircraft, maintain product quality and on time performance.
Golden Gate Ventures launches US$10m crypto fund
Singapore-based venture capital firm Golden Gate Ventures said it will launch a US$10m fund to invest in cryptocurrency and block chain technology startups. The fund, called LuneX Ventures, will invest in early-stage companies globally such as cryptocurrency exchanges and security providers. The fund is among a cluster of similar ventures that invest in the cryptocurrency space, backed by wealthy individuals and financial firms that have emerged over the past year. Such firms have partially replaced the retail investor base, which drove bitcoin’s skyrocket rise in 2017.The price of the world’s biggest and best-known virtual currency has more than halved from a high of near US$20,000 late last year.
Drones to detect defects on HDB blocks
It’s a bright, sunny day and you’re just stretching out to open your windows to let the warm rays into the house when you see a drone staring right back at you. Some residents, living in one of four Housing and Development Board (HDB) blocks in Jurong East, could have experienced that recently. That is because the HDB had embarked on a small-scale, week-long trial late in July to see if drones are able to complement building inspection efforts, particularly for hard to reach places or those that may pose more risk.
Back to black: Japan economy rebounds after first dip in 2 years
Japan bounced back to growth following its first contraction in two years, official figures showed, but fears of US trade wars clouded the outlook for the world’s third-largest economy. The economy grew 0.5% quarter-on-quarter in the April-June period, compared with a 0.2% decline in January-March, according to data from the Cabinet Office. The data represented a quick turnaround after a series of eight consecutive quarters of growth ended in January-March, interrupting a winning streak not seen since the heady days of Japan’s “miracle” boom of the 1980s.