AmCham Update Vol. 4 #122

APEC Summit, AmCham Education Committee Tackles AI, Minimum Wage Increase, PLN Readies EV Charging Stations in New Capital

Nov 13, 2023

Indo-Pacific Trade on APEC Summit Agenda

The 14-nation Asia-Pacific Economic Cooperation (APEC) forum summit on Nov 11-17 is a crucial deadline for the completion of various Indo-Pacific trade deals, former US trade negotiator Wendy Cutler said ahead of the summit's opening. The administration of US President Joe Biden aims to showcase the progress of its key Asian economic initiative as country leaders gather in San Francisco for the summit.

The summit is also expected to host a meeting between President Biden and Chinese President Xi Jinping on Nov 15, only their second face-to-face meeting during the Biden presidency, with expected topics for discussion including the Israel-Hamas war, Taiwan and the Russian invasion of Ukraine.

Indonesia’s delegation will be led by President Joko Widodo, who will also visit Washington, DC before attending the summit. Most of the government’s key economic ministers will attend the gathering.

APEC 2023 San Francisco will address a number of trade topics, including supply chain resilience; the digital economy; connectivity; micro, small, and medium-sized enterprises (MSMEs); climate change; food safety; the environment; and sustainability. Representatives from 14 nations will finalize sections of the Indo-Pacific Economic Framework (IPEF) for Prosperity during the week's discussions. Expected announcements encompass cooperation to accelerate the transition to clean energy and combatting corruption and tax evasion.

Only one of the four IPEF pillars, focusing on strengthening supply chains, has a completed text with deals concluded in May. Two other pillars are anticipated to reach substantial conclusions this week, while the trade pillar has hit more difficulties and needs more time for consideration.

The IPEF negotiations have been seen by many critics as too slow, with only one of the four pillars complete after months of talks. The US side last month dropped its insistence on rules to protect free cross-border data flows and to prohibit national requirements for data localization and reviews of software source code, a move that disappointed many free trade advocates.

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AmCham Education and Workforce Development Committee Discusses Education and AI

The AmCham Indonesia Education and Workforce Development Committee held a meeting on Nov 10, discussing the intersection of education and artificial intelligence (AI). The meeting featured speakers including Director of Government Affairs at Microsoft Indonesia and Brunei Darussalam Ajar Edi, Elementary Learning Innovation and Technology Coach at Jakarta Intercultural School (JIS) Mindy Slaughter, and Coding & Design Teacher and Middle School Technology Coach at JIS Michelle Matias.

The session discussed the role of human decision-making, underlining the irreplaceable requirement for human pilots even as AI supports our activities. The speakers also acknowledged existing challenges in using AI such as data privacy, inherent bias in AI systems, and academic integrity, along with emphasizing the need for the government to regulate technologies like AI especially concerning data privacy. It was emphasized technical expertise alone is insufficient, with soft skills development crucial to ensure AI is used effectively and responsibly.

Closing off the meeting was a lively Q&A session, which highlighted the importance of the ethical use of AI, especially in an era of advancing technology.

We would like to thank our speakers for their time and participation. For further inquiries and details about the committee please contact Pat Puspitasari at [email protected].

AmCham Cares: FedEx

In the middle of 2023, FedEx Express (FedEx), a subsidiary of FedEx Corp. (NYSE: FDX) and one of the world’s largest express transportation companies, began collaborating with a non-profit to provide training to seaweed farmers on sustainability and global trade. This year-long FedEx Cares program will benefit more than 1,500 communities of seaweed farmers.

To help expand business possibilities for the seaweed farmers in Sabu Raijua Regency, East Nusa Tenggara, FedEx volunteers are providing training on the basics of digital marketing, cross border e-commerce and proper export processes for seaweed products.

This is the second collaboration between FedEx and Yayasan Konservasi Alam Nusantara (YKAN), a scientific-based non-profit organization whose mission is to protect land and water areas as a life support system through effective natural resource management, promoting a non-confrontational approach, and building a network of partnerships with all stakeholders for a sustainable Indonesia.

The Sabu Raijua regency, comprising three islands on the Savu seas, depends largely on seaweed cultivation to sustain its livelihood. One of the major challenges faced by the community is continuous seaweed cultivation while conserving marine resources. The program aims to improve the environment by advocating a sustainable approach to seaweed farming.

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Gov’t to Increase Regional Minimum Wage

The government is to raise the provincial minimum wage (UMP) to boost people's purchasing power and improve goods and services consumption. The decision will be carried out through Government Regulation 51/2023, effective as of Nov 10, and was taken considering the inflation rate, economic growth, and a specific index determined by the Regional Wage Council, Minister of Manpower Ida Fauziyah said.

However, despite these changes, unionized workers are demanding a minimum 15 percent wage increase in 2024, expressing disagreement with the new regulation and its formulation, President of the Indonesian Trade Unions Confederation Said Iqbal said.

Employers must ensure both provincial and regional minimum wages will increase next year, Chairwoman of the Indonesian Employers Association (APINDO) Shinta Kamdani said. The regulation must be well respected and the minimum wage implementation must be driven by the common urge to advance national economic growth.

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PLN Readies EV Charging Stations in New Capital

State electricity company PLN has announced plans to construct five fast-charging electric vehicle (EV) mobile stations in the new capital city Nusantara (IKN) in the Core Government Cluster, which includes the Presidential Palace, Ceremony Plaza, a glamping area, and construction workers’ residences, PLN President Director Darmawan Prasodjo said.

PLN had two charging stations in IKN as of September this year, and has plans to build an additional 19 there by 2024. Darmawan also emphasized PLN’s openness to collaboration with investors to build the new capital’s electric vehicle infrastructure.

So far at least nine charging stations have been constructed across East and North Kalimantan, with the number expected to reach 31 by next year. Charging stations in neighboring cities Balikpapan and Samarinda are also being constructed.

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Japan and Indonesia Sign Agreement on MRT

Japan and Indonesia signed the minutes of discussion (MoD) of the Appraisal Mission on the Jakarta MRT East-West Line Phase 1, on Nov 11. The MoD was signed by the Ministry of Transport’s Director General of Railways Risal Wasal, National Development Planning Agency (Bappenas) Director of Bilateral Funding Kurniawan Ariadi, Jakarta Province Secretary Joko Agus Setino, MRT Jakarta President Director Tuhiyat, and Japan International Cooperation Agency (JICA) Chief of Representative Office in Indonesia Yasui Takehiro.

The signing ceremony was attended by Minister of Transportation Budi Karya Sumadi, Acting Governor of Jakarta Heru Budi Hartono, and the Japanese Embassy in Indonesia Deputy Chief of Mission Nagai Katsuro. The East-West corridor designated as MRT Cikarang-Balaraja will span 84.1 kilometers from Balaraja, Tangerang, to Cikarang, Bekasi.

The transport ministry is set to finalize the MRT project’s administrative processes so the scheduled construction date in 2024 will proceed as planned, Director General Wasal said. He added that aside from soft loans from Japanese investors, the project needs more creative financing schemes to fulfill certain requirements not yet met.

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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.

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