State Dept Travel Advisory, Office Covid Cases on the Rise, Investment Stable but Blah, S&P’s Indonesia Outlook
Apr 26, 2021 | AmCham Indonesia
Indonesia Included in Negative US Travel Advice
The US State Department has classified Indonesia as Level 4: Do Not Travel in its travel advisory list due to the Covid-19 situation in the country as well as for terrorism and natural disasters. Some 150 countries are classified as Level 4, with the State Department saying it does not reflect the US government’s judgment of health conditions in countries, but rather reflects the adjustments made to the Travel Advisory system to rely more on epidemiological assessments. The travel advisory is not binding and does not prohibit US nationals from traveling.
US Embassy Travel Alert: Indonesian Travel Restrictions May 6-17
The Indonesian government has announced it will restrict domestic travel May 6-17 to reduce the spread of Covid-19, based on Covid-19 Task Force Circular Letter 13/2021 released on April 7, 2021. The regulation limits travel to specific reasons and mandates the use of an entry/exit permit (Surat Izin Keluar Masuk or SIKM) for such travel. Travelers will face delays, cancellations, and more government checkpoints. Those intending to head to Indonesia May 6-17 should contact their airline and travel provider for further details and updates.
The number of Covid-19 cases from office clusters in Jakarta has more than doubled in the past week, with most in offices where people have received the Covid-19 vaccination, the Jakarta government said. From April 12-18, 425 cases in 177 offices were detected, an increase from 157 in 78 offices the previous week. Those who have been vaccinated can still contract and transmit Covid-19 to others, so the government advises offices to continue to abide by health protocols such as wearing a mask, physical distancing, washing hands, avoiding crowds, and reducing mobility.
Bank of America has increased its Environmental Business Initiative target to $1 trillion by 2030, a significant rise from the $300 billion targets set in 2019. This commitment will anchor a broader $1.5 trillion sustainable finance goal through both environmental transition and social inclusive development, spanning business activities across the globe.
“The private sector is well-positioned to ensure that the capital needed – at the scale it is needed – can drive the transition to a low-carbon, sustainable economy,” said Bank of America’s vice chairman Anne Finucane. “We will meet our commitment by working with clients to provide lending, capital raising, advisory and investment services, and to develop financial solutions and drive innovation to ensure the transition to a sustainable economy.”
Bank of America’s broader $1.5 trillion sustainable finance target is consistent with the United Nations Sustainable Development Goals (UN SDGs) and will spur transformative change nationally and around the world. Beyond the $1 trillion climate-related finance, the balance of the sustainable finance goal is focused on social inclusive development, scaling capital to advance community development, affordable housing, healthcare, and education, in addition to racial and gender equality.
First Quarter Investment Stabilizing but Below Targets: BKPM
Investment realization in the first quarter of 2021 hit Rp 219.7 trillion, according to Indonesia Investment Coordinating Board (BKPM) chief Bahlil Lahadalia, growing 2.3 percent on a quarter-to-quarter basis, and 4.3 percent year-on-year, while also absorbing 311,793 people in the workforce. However, the number is still far below the targets set by the National Development Planning Agency (Bappenas) and President Joko Widodo of Rp 856 trillion and Rp 900 trillion, respectively. Bahlil said foreign investment is beginning to stabilize, at Rp 111.7 trillion in the first quarter, and domestic investment of Rp 108 trillion.
Standard and Poor's (S&P) maintained Indonesia’s outlook as “Negative” with a BBB rating on April 22. S&P had previously downgraded Indonesia’s outlook from “Stable” to “Negative” on April 17, 2020.
S&P expects Indonesia’s economic growth will accelerate in 2022 due to more Covid-19 vaccinations and the normalization of economic activities. The Omnibus Job Creation Law is also expected to attract foreign investment to support long-term economic growth.
Indonesia was rated BBB and “Stable” by Fitch Ratings and Ba2 and “Stable” by Moody’s. Minister of Finance Sri Mulyani Indrawati said the ratings showcased how Indonesia has maintained its economic performance despite the ongoing pandemic.
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AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor