Jokowi Opens G20 Bali, Rp 75t MoUs at B20, Climate Targets Accord, USTR Tai Urges Private Sector to Engage on IPEF
Nov 16, 2022
Jokowi Opens G20 Summit in Bali
President Joko Widodo officially opened the G20 Summit in Bali on Oct 15. In front of 17 world leaders, President Joko made three important points: to stop the war in Ukraine, to confront extraordinary challenges, and to enhance cooperation for economic recovery. The foreign ministers of Russia, Mexico, and Brazil attending in place of their leaders, as well as invited non-G20 country leaders were also physically in attendance.
President Joko stressed the need for world leaders to push for an imminent end to the war in Ukraine, with a potential G20 joint declaration condemning the eight-month invasion on the horizon. He also spoke of the need for the G20 to succeed in order to combat current global challenges following the pandemic and the war; namely the food, energy, and financial crises. He urged world leaders to make concerted efforts to mitigate these crises.
He also spoke of his hope that cooperation in G20 can be a catalyst for economic recovery. One of the cornerstones of this cooperation is the newly launched Pandemic Fund, an anticipatory fund for future pandemics. He urged all stakeholders to contribute to the fund –Indonesia has committed $50 million. So far, the fund has garnered $4 billion in commitments from governments and the private sector, and is projected to increase further.
B20: 18 MoUs Signed Worth Rp 75t, Musk Praise for Indonesia
A total of 18 memorandums of understanding (MoUs) worth over Rp 75 trillion were signed during the B20 Investment Forum in Bali. The event, as aligned with the B20 priority agenda, invited investors from beyond the G20, including Singapore and the United Arab Emirates. KADIN Chair Arsjad Rasjid emphasized the need for further investment in Indonesia to reinforce the domestic market amid the threat of a recession and the global crisis, which is anticipated to worsen in 2023.
Elon Musk, CEO of Tesla and owner of Twitter, also showed enthusiasm for Indonesia and noted it has natural resources which make it a desirable location for business. Musk, appearing virtually, also said he was considering locating launch sites for space rockets in various nations, potentially including Indonesia.
The B20 Summit also produced a communique and 25 policy recommendations. As Indonesia recovers from the pandemic, B20 Chair Shinta Kamdani said businesses have come up with innovative ways to recover. The communique covers three main topics: innovation for post-crisis economic growth, inclusion (empowering MSMEs with digital transformation), and collaboration between developed and developing countries.
In commemoration of Global Handwashing Day on Oct 12 and the 72nd Anniversary of the Indonesian Medical Association (IDI) on Oct 24, Reckitt, through its brand, Dettol, and IDI inaugurated a communal toilet facility in Cibodas Village, West Bandung Regency on Oct 23.
In line with Reckitt's mission to protect, heal, and nurture in the relentless pursuit of a cleaner and healthier world, this facility is expected to have a positive impact on the surrounding community by providing access to clean water, while also helping the city government to achieve open defecation free by 2023.
Reckitt and IDI also announced the extension of the cooperation period for the next three years as a commitment to continue their strategic collaborations, including delivering education and access to high-quality hygiene, health, and nutrition for the community.
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Indonesia and International Partners Secure Groundbreaking Climate Targets
In the midst of the G20 Summit in Bali, a meeting of the Partnership for Global Infrastructure and Investment (PGII) was held. PGII is an initiative from G7 countries to fund strategic infrastructure projects in developing countries. President Joko Widodo and several world leaders from developing countries attended the meeting and issued a joint statement together with the G7 countries, launching Indonesia's Just Energy Transition Partnership (JETP). JETP is intended to support developing countries in pursuing an ambitious and just power sector transition.
The PGII aims to provide a total of $600 billion in public and private financing over the next five years to developing countries. For the Indonesia JETP, the long-term partnership aims to organize an initial $20 billion in public and private financing. These commitments are followed by the enhancement of climate targets by the Indonesian government. Goals for the Indonesia JETP include capping power sector emissions from a baseline of 357 megatons of CO2 to 290 MT CO2, hasten the net zero target in the power sector to 2050 from 2060, and accelerate use of renewable energy so it comprises at least 34 percent of all power generation in the country by 2030. Indonesia will first work together with international partners to develop a comprehensive investment strategy within the next six months.
AmCham Indonesia joined a private sector discussion with United States Trade Representative Katherine Tai this week to talk about the Biden administration’s Indo-Pacific Economic Framework (IPEF) Initiatives to help spur growth in the region.
“This was a helpful discussion and we are keen for IPEF to succeed,” said AmCham Managing Director A Lin Neumann.
The US Chamber of Commerce put together the session, which was frank and friendly on the scope and challenges facing IPEF. At the table were a number of tech companies, consultancies and regional AmChams. The details of the discussion were on background.
While IPEF is not a trade agreement in the traditional sense and will not tackle market access issues, the hope is that provisions related to sustainability, governance, technology and other areas will encourage growth and investment in the region and bring the United States closer to its partners.
Indonesia is one of 12 countries to join IPEF talks on the four pillars of the agreement. Those pillars are:
IPEF was launched in Tokyo on May 23, 2022.
ExxonMobil Signs Agreement on Plastic Recycling Acceleration
ExxonMobil; Indomobil Prima Energi (IPE), a subsidiary of the Indonesian-based Indomobil Group; and Plastic Energy, a global leader in advanced recycling, signed a memorandum of understanding at the sidelines of the G20 Bali Summit to determine the potential for large-scale implementation of advanced plastic recycling technology in Indonesia.
The advanced recycling capacity is currently expected to reach 100,000 metric tons per year, with the first phase starting in 2025. The partnering companies will also evaluate opportunities to support improvements in plastic waste collection and sorting in the country.
Representatives at the signing were President of ExxonMobil Indonesia and President of Low Carbon Solutions for ExxonMobil Asia Pacific Irtiza Sayyed, President Director of IPE Gerry Kertowidjojo, alongside founder and CEO of Plastic Energy Carlos Monreal. The MoU signing was also witnessed by Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan, US Ambassador to Indonesia Sung Kim, Senior Vice President of Exxon Mobil Corporation Jack Williams, and Vice President of New Market Development at ExxonMobil Dave Andrew.
Indonesia saw a trade surplus of $5.67 billion in October, with exports growing 12.30 percent year-on-year (YoY), a 0.13 percent increase from the previous month, to $24.81 billion, according to Statistics Indonesia (BPS). A surplus of $1.28 billion was recorded in trade with the United States amid weakening in overall global trade and moderating commodity prices, especially palm oil, as well as nickel and natural gases.
The government projects Indonesia will record its biggest exports this year. However, demand for imports is continuously rising in preparation for year-end needs while exports saw positive growth, Bank Mandiri economist Faisal Rachman said.
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What is Your Company Doing on COVID-19?
Please let us know what measures your company may be taking in the form of donations and other assistance to help Indonesia during this time of confusion and concern. Contact [email protected] with your news. We would like to publicize the ways that our AmCham companies are pitching in.
Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.
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.