Jokowi Hails G20, Renewable Energy, Nickel Producer Bloc Proposed, Jokowi and Xi Watch High-speed Train Test, BI Raises Benchmark Interest Rate?
Nov 18, 2022
Jokowi Hails G20 Success
President Joko Widodo has hailed the success of the G20 Summit in Bali and expressed the "highest gratitude" to world leaders for agreeing on the Joint Declaration, released on Nov 16, to work together on combating global issues going forward.
Issues addressed in the declaration were the impact of the Russian-Ukrainian War and the need for further meetings to stop it, a commitment of $1.5 billion for the Pandemic Fund from 24 countries, and further aid for developing countries.
The declaration committed G20 to accelerating the globalization of trade; investing in low- and middle-income and developing countries; and implementing macroeconomic policies to foster food and energy security; protect macroeconomic and financial stability; and support market stability, especially related to managing export and import price stability.
President Joko also said Indonesia would be ready to host the 2036 Olympics in its new capital city, Nusantara, emphasizing the importance of sports for not only health, but also world unity. The success of the next Olympics and Paralympics, he said, would uphold political neutrality and the autonomy of the sports organizations around the world.
Indonesia reaffirmed its commitment to enhancing renewable energy during the G20 summit. President Joko Widodo said Indonesia had the potential for 434 thousand megawatts (MW) of renewable energy; including hydropower, geothermal, solar, and wind. He said 30,000 hectares (ha) of land had been prepared in North Kalimantan for a green industrial sector which is sought after by investors. Minister of Investment Bahlil Lahadalia also said that as Indonesia is now concentrating on the downstream business, including renewable energy, the extractive industry is no longer a priority.
As part of this commitment, state electricity company PLN signed a deal with Amazon on Nov 15 to develop new renewable energy with a capacity of 210 megawatts (MW) in four solar power plant (PLTS) projects in the Java-Madura Bali network, Bali, and around Java island. Amazon will purchase new renewable energy (EBT) based electricity from the power plants to support its operating activities there. This will help Indonesia get closer to reaching net zero emissions by 2060.
However, Indonesia’s reliance on coals and fossil fuels continues. For many years, its plentiful coal supply served as the most affordable source of electricity for the nation. Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said solving the climate issue cannot yet take precedence over the need for development and economic growth.
Danone-AQUA, Kole Project, and a number of hotels in Labuan Bajo, West Flores, have signed a joint commitment on the management of waste directly from the source through the LakoSama (joint waste management) program. The program was initiated by the Kole Project, a waste management company consisting of local youths in Labuan Bajo and Danone-AQUA’s partner in developing the circular economy. The LakoSama program is based on educational collaboration and the collection of sorted waste straight from the source.
Taking place at the Waterfront, Labuan Bajo Marina Area, this was carried out as part of the IFG Labuan Bajo Marathon Public Festival on Oct 27-29. Hotels and restaurants involved in the signing were Kole Project’s partners in sorted waste transportation: The Jayakarta Komodo Flores Suite, Wela Bajo Hotel, Sudamala Komodo Resort, Puri Sari Beach Resort, Escape Bajo, Mai Cenggo Restaurant, Kopi Mane Inspiration, and the Indonesian Hotel and Restaurant Association (PHRI) of West Manggarai.
Since 2019, Kole Project has sent approximately 80 tons of recycled waste to the processing plants of Danone-AQUA’s partners to be turned into raw materials. It has also involved around 50 people, including those with disabilities, who benefit from the circular economy.
“Danone-AQUA is committed to supporting the realization of the circular economy at five Super-Priority Tourist Destinations, including Labuan Bajo, through the #BijakBerplastik campaign, which is manifested through the LakoSama movement,” Danone-AQUA Packaging Circularity Senior Manager Jeffri Ricardo said during the signing.
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Indonesia has proposed the establishment of a bloc of nickel producers with Canada, copying the Organization of the Petroleum Exporting Countries (OPEC), said Minister of Investment Bahlil Lahadalia. This proposal was made during a G20 sideline meeting between Bahlil and Canada’s trade minister Mary Ng, and targets creating a platform where all nickel-producing countries can profit through fair and streamlined policies.
Indonesia is one of the world's major nickel producers, and plans to establish the country as an electric-vehicle hub. It has attracted investment from multinational companies in nickel-battery factories, including China’s Tsingshan Holding Group. Canada is also a major producer of the mineral, according to United States Geological Survey data.
Jokowi and Xi Jinping Watch High-speed Train Trial Run
President Jokowi and President Xi Jinping watched the trial run of the Jakarta-Bandung high-speed train line online in Bali, prior to the G20 Summit. The construction of the project is one of the main projects of the Global Maritime Fulcrum and the Belt and Road Initiative. President Joko has previously said the high-speed train line will be integrated with other seaports and airports, making it an integral part of international connectivity.
Construction is 80 percent complete, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said, and is expected to be operational by the middle of next year. President Xi is expected to attend the inauguration when the project is finished.
President Joko Widodo praised the Partnership for Global Infrastructure and Investment (PGII) at a PGII side event at the G20 Summit in Bali on Nov 15. Launched by G7 countries last year, PGII aims to mobilize $600 billion in public and private financing over the next five years to developing countries. Indonesia recently committed $20 billion through the launch of the Just Energy Transition Partnership (JETP) as part of the PGII.
President Joko emphasized three important points on PGII implementation. First, support has to be country-driven, to match domestic needs and increase ownership. Second, it has to be based on the collaboration paradigm – all stakeholders from the public and private sectors have to be involved in the initiative. Third, as developing countries are among the most vulnerable to climate change, support from PGII has to be focused on sustainable development and green and energy transition.
Moving forward, the PGII will extend its reach to other developing countries and Indonesia will have to work on concrete plans to ensure the implementation of JETP.
Bank Indonesia has increased its benchmark interest rate, the Seven-Day Reverse Repo Rate, by 50 basis points to 5.25 percent. The increase was not a surprise – a CNBC survey of 14 institutions had shown eight predict a 50 bps increase and six predict a 25 bps increase. BI has increased its benchmark rate by a whopping 125 bps in the past three months – 25 bps in August, 50 bps in September, and 50 bps in October.
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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.