Edition: 16 July 2018
Singcham — Trade war talks with the US Govt
Monday, 9 July 2018
Deal signed to develop airport in East Java’s Jember
Angkasa Pura II is set to develop Jember Notohadinegoro Airport in Jember, East Java. The company recently signed a MoU with the Jember city administration. The MoU covers an agreement to procure land in accordance with the airport’s master plan, infrastructure and accessibility development to support the project as well as the development of the air and land side of the area, among others. Currently, the airport has a 1,645m long and 30m wide runway that is only able to serve small turbo propeller planes, such as the ATR 72-600. With 2.6m people living in Jember and 7.5m in nearby areas, Notohadinegoro Airport had a lot of potential to develop new economic activities in the region, said Jember regent.
Trade war talk with the US Govt
Economic officials sacrificed their free time on Sunday to hold a meeting after Indonesia entered the radar of the United States government, which is seeking to reduce its trade deficits with its trade partners. Sunday’s meeting held in preparation for Monday’s Cabinet meeting concerning possible trade war. RI’s trade surplus with US was US$9.67bn in 2017. On Thursday, Sofjan Wanandi, said the US had warned the government about Indonesia’s trade surplus with the world’s largest economy.
At least 124 categories of Indonesian products under harmonized system codes, including wood and textiles, are under the US government’s review. In its statement, the USTR’s reasoning for its review was because Indonesia had implemented a wide array of trade barriers that had serious effects on US commerce. The barriers failed at least two criterion for a GSP beneficiary: the provision of equitable and reasonable access for US products and the reduction of barriers for trade and services. “The GSP covers at least 10% of our products. If it is removed, our products will become less competitive,” Trade Ministry Foreign Trade Director General, Oke Nurwan said.
Retained earnings and inheritance to be taxed
The government plans to include retained earnings and inheritance as an income tax object. Taxes will be levied on profits that continue to settle for years, are not invested, not shared, and are not used to increase capacity or expansion of business. Chairman of Apindo, Hariyadi Sukamdani did not agree with the government plan. He regrets this plan was issued in an inappropriate time because the global and domestic situation is not conducive. Such signals make business skeptics and not confident, he said.
Patimban project to roll out this month
The Patimban Port project in Subang, West Java will begin this month. Director General of Sea Transportation of the Ministry of Transportation Agus H. Purnomo said the project winning contractor is a consortium of five companies namely Penta Ocean, Toa, Rinkai, Wijaya Karya and Pembangunan Perumahan. The government is targeting the first phase of Patimban Port can start operation in 2019.
PGN to seeks funding for Pertagas’s acquisition
Pertagas’s 51% share purchase agreement by PGN has been signed at the end of last month. PGN needs to immediately provide funds to complete the acquisition. The company has a time limit of up to three months to seek funding. The total funds for Pertagas’s acquisition reached Rp16.6tr, PGN is planning to use its internal cash of Rp5tr and the remaining Rp 11.6 tr from bank loans.
Tuesday, 10 July 2018
Grab launches GrabPlatform ‘superapp’ for users in Singapore, Indonesia
Ride-hailing company Grab launched on Tuesday a new app concept that covered a wider range of services in addition to its transportation service. This updates are replace the old Grab app with a new lineup of services, including grocery delivery service GrabFresh that partners with fellow startup HappyFresh.
The updated app would help Grab maximize its resources spread across 225 cities in eight countries inhabited by 7.1m Grab drivers, delivery partners, agents and merchants. The new app concept is available immediately upon launch in Indonesia and Singapore. The company plans to launch the GrabPlatform at the end of the third quarter in four more countries where it already operates — Malaysia, Thailand, Vietnam and the Philippines, Grab products head Jerald Singh announced at Tuesday’s event.
Jakarta-Bandung high speed train project is still moving
Since last May, five companies have listed six lawsuits related to land acquisition of the Jakarta-Bandung Fast Train project at the Karawang District Court. The total value of the indemnification requested from the entire lawsuit reached Rp 2.029tr. Nevertheless, President Commissioner of Kereta Cepat Indonesia-China (KCIC) as well as Chairman of Pilar Sinergi BUMN Indonesia (PSBI) Sahala Lumban Gaol stated that the lawsuits did not disturb the development of the project.
Higher claims limit for Small Claims Tribunals
Consumers taking their disputes to the Small Claims Tribunals in Singapore will be able to file for claim amounts of up to S$20,000, and the types of claims heard by the tribunals will also be expanded to include hire-purchase agreements. The Small Claims Tribunals Act was amended after a debate in Parliament, with the changes slated to come into effect at a later date. Mr Edwin Tong, Senior Minister of State for Law, said that the higher claims limit from the S$10,000 now is to reflect inflation and the rising costs of living, and it will be comparable to those in other countries such as the United Kingdom and Australia.
Wednesday, 11 July 2018
Indonesian Govt to incentivize low-cost carriers to boost tourism
The government is drafting a regulation to provide incentives for low-cost carriers (LCCs) to boost tourism. The incentives include issuing permits to expand the operations of low-cost carriers. “Expanding their networks and operations to more regions across the country will help them be more flexible and fly anywhere in this country,” he added. The government was also negotiating with state-owned energy company Pertamina to decrease the price of aviation turbine fuel (avtur) to help reduce the operational costs of LCCs, Budi said.
Jokowi has decided on his running mate and will announce it “at the right time”
The secretary-general of the Indonesian Democratic Party of Struggle (PDI-P), Hasto Kristianto, said on Monday in a statement that the President had held a closed-door meeting with party chairwoman Megawati Soekarnoputri. The deadline for the registration of presidential candidate pairs for next year’s election is Aug. 10.
Political expert Syamsuddin Haris of the Indonesian Institute of Sciences (LIPI) said Jokowi would face a conundrum if he picked a running mate from political parties, given their competing interests. Nonpartisan figures thought to potentially be Jokowi’s running mate include: former Constitutional Court chief justice Mahfud MD, 61; and West Nusa Tenggara (NTB) Governor Zainul Majdi, widely known as Tuan Guru Bajang (TGB).
Three lawsuits to proceed against Bandung-Jakarta train project
Five companies have filed lawsuits against the Bandung-Jakarta high-speed train project with the Karawang District Court in West Java, demanding a total compensation of Rp 2.02tr (US$141m) for their properties affected by the project, of which three will proceed to court. Gajah Tunggal, Karawang Cipta Persada, Perusahaan Industri Ceres, Batuah Bauntung Karawang Primaland and Pertiwi Lestari had filed separate lawsuits against the project.
Earlier, KCIC director Chandra Dwiputra said that the land acquisition for the $5.9bn project, funded mainly by a loan from the China Development Bank (CDB), had reached 73% completion, with 60% of the acquired land handed over to the developer. CDB was reportedly to disburse US$1.1bn this month in the second phase of construction. The first disbursement of $170m took place in May.
No plan to bring back Soybean import tax
Indonesia’s trade minister said the country is scrapping plans to bring back an import tax on soybeans, ahead of a meeting to persuade US officials to keep the Southeast Asian nation on a list of countries that receive preferential trade terms. Indonesia, which buys most of its soybeans from the United States to churn out foods such as tofu and local dish tempe, removed the import tax in 2013 to quell rising food inflation. But the agriculture ministry had been quoted by media in the past few years as requesting a re-imposition of the tax to help boost prices of the commodity for local farmers.
Thursday, 12 July 2018
Indonesia controls 51% of Freeport shares
State-owned mining holding company Inalum now owns a 51% from the previous figure of 9.36 share of gold and copper miner Freeport Indonesia after years of “tough” negotiations, President Joko “Jokowi” Widodo announced on Thursday.
Previously, US mining giant Freeport McMoRan Inc. (FCX), a parent company of Freeport Indonesia, owned 90.64% of Freeport Indonesia’s shares. Jokowi said the completion of Freeport’s divestment was a breakthrough for Indonesia, because the country could now enjoy more taxes, royalty and dividends from the company
Bankers see Go-Jek as new competitor: Survey
Most Indonesian bankers see Go-Jek as an “emerging competitor” to conventional banks in the payment sector, according to a survey conducted by PricewaterhouseCoopers (PwC) Indonesia. “A majority of Indonesian bankers, around 72%, consider Go-Jek to be one of the emerging competitors with its Go-Pay and other services,” the survey revealed. Meanwhile, around 62% of Indonesian bankers also believe Alibaba with its Alipay and other services could also emerge as a serious banking competitor in the near future. It also discovered that 66% of respondents said they had developed a digital strategy as part of their corporate strategy, and around 56% indicated they had set a more than 5% revenue target from digital initiatives.
Singapore, South Korea to expand cooperation in areas of trade, investment and the environment
SINGAPORE: Singapore and South Korea have agreed to expand cooperation in areas like trade, investment and the environment, as Prime Minister Lee Hsien Loong and South Korean President Moon Jae-in witnessed the exchange of six Memoranda of Understanding (MOUs).
Mr Moon noted that Singapore is South Korea’s second largest trade partner among ASEAN countries. In 2017, South Korea was Singapore’s ninth largest trading partner, with bilateral trade in goods amounting to S$45.4bn, according to information from the Ministry of Trade and Industry.
Friday, 13 July 2018
House approves Rp2.57t budget for Industry 4.0
The Trade Industry is getting an additional Rp 2.57tr (US$178m) after the House Commission VI overseeing industry affairs agreed to financially support the development of Industry 4.0. The funds will be used to help adjust five industry segments — textile, garment, automotive, electronics and chemical — to face the so-called fourth industrial revolution triggered by the growing digital economy, Industry Minister Airlangga Hartarto said as reported by tempo.co on Wednesday. This brings the ministry’s total budget to Rp 5.3tr. The Trade Ministry has prepared several programs that would be funded by the additional budget, including the development of 100 food and beverage companies and improving the competitiveness of their food products.
Twitter CEO Jack Dorsey lost 200,000 followers in fake-user purge
Twitter’s Inc top executive didn’t slide by unscathed in social media site’s crackdown on fake followers. Jack Dorsey, chief executive officer and co-founder, said in a tweet that he lost 200,000 followers, bringing his total down to 4m, after Twitter made good on its pledge to remove suspicious accounts.
Singapore economy expands at slower pace of 3.8% in Q2; below expectations
Singapore’s economy expanded 3.8% year-on-year in the second quarter of 2018, lower than economist expectations of 4.1% growth, according to Ministry of Trade and Industry (MTI) advance estimates out on Friday (July 13). This was also down from the 4.3% expansion in the first three months of the year. Manufacturing growth remained the key driver, but slowed to 8.6%, down from 9.7% in the previous quarter. All clusters in the sector expanded in the second quarter, with the electronics and biomedical manufacturing clusters contributing the most to the sector’s growth.
GIC’s real return was 3.7%
Singapore’s sovereign wealth fund manager saw lower returns for the third year in a row. The Government of Singapore Investment Corporation (GIC) posted an annualised real rate of return of 3.4% over a 20-year period that ended March 31 this year, which also marked its lowest return since 2009. The real return from the last financial year was at 3.7%, and 4% in the one before that.