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DPR Vote on Job Creation Regulation in Lieu of Law Coming Soon
The House of Representatives (DPR) leadership has agreed to put the omnibus Job Creation Regulation in Lieu of Law (PERPU) to a vote to make it a fully-fledged law. However, the exact date of the vote has yet to be determined.
However, there is some public opposition to the regulation, as there was to the original law, with labor unions protesting in front of the DPR on March 13, and there are plans for more, both in Jakarta and around the country, said Said Iqbal, the fiery president of the Indonesian Trade Union Confederation.
Organized labor in Indonesia represents a small minority of workers.
There is also minority opposition within the DPR, with Democratic Party Chair Agus Harimutri Yudhoyono lambasting it as a rushed measure that hurts labor.
Business leaders including AmCham largely support the law as providing necessary reforms in the investment climate and promoting growth. The measure is expected to pass, given President Joko Widodo’s strength in the DPR.
Related links:
- https://www.kompas.id/baca/
polhuk/2023/03/14/persetujuan- perppu-cipta-kerja-diagendakan - https://bisnis.tempo.co/read/
1701935/hari-ini-puluhan-ribu- buruh-demo-besar-besaran- serentak-tolak-perpu-cipta- kerja-ada-4-tuntutan - https://nasional.tempo.co/
read/1702472/ahy-kritik-food- estate-dan-perpu-cipta-kerja- bikinan-jokowi
Multiple Entry Visa Valid at All Immigration Checkpoints
The Multiple Entry Visa (VKBP) will now be valid at all immigration checkpoints in Indonesia. The visa was launched in November 2022, but its use was limited to immigration checkpoints in the Riau Islands for entry from Singapore. Following the success of the test program, the scheme will now be implemented nationally through the Directorate General of Immigration Circular IMI-0072.GR.01.01/2023.
The visa costs Rp 3 million per person per year, and can be used for business, tourism, and a variety of other purposes. Requirements for the visa are:
- Valid national passport for at least 18 months
- Letter of guarantee from the guarantor, except for visits in the context of tourism
- Proof of having living expenses for themself and/or their family while in Indonesian territory in the form of a checking account, savings book, or deposit for the last three months belonging to a foreigner or guarantor of at least $2,000 or equivalent
- Return ticket or onward ticket to continue the journey to another country, except for the crew of the conveyance who will stop over to join the ship and continue the journey to another country
- A recent color photograph taken at least within the last three months with a white background.
Related link:
CLICK HERE FOR DG IMMIGRATION CIRCULAR IMI-0072.GR.01.01/2023
AmCham Cares: Habitat for Humanity Indonesia
Habitat for Humanity Indonesia's program to build houses for those living in poor conditions has helped a single mom achieve her dream to live safely in a decent house.
Tisha is a single parent of four children who works for the Family Welfare movement in Mauk, Tangerang. One of her duties is to record the number of families who need decent houses, with the irony being she and her children also lived in poor conditions with holes in the roof, fragile foundations and constant flooding.
Tisha also faces economic difficulties. Three of her four children are still in school, forcing her to work single-handedly to provide for them. Every day, she has to give Rp 10,000 to each child, so they can go to school and buy food, but some days she can only give them Rp 5,000.
Finally, she received a house from Habitat, and now she can prepare food for the family in her clean and decent kitchen.
There are 1,931 low-income families in Mauk who still need a decent house to live in.
Financial Services Industry to Drive Economic Growth: AmCham Mission
The digitalization of the financial services industry will be a critical driver of economic growth in Indonesia. This was the overwhelming conclusion of "Connecting Indonesia: Innovating Tech and Financial Services," the Financial Services and Information Technology Mission held by AmCham Indonesia and the US Chamber of Commerce March 13-14.
US Ambassador to Indonesia Sung Kim spoke of the importance of following up on the omnibus Financial Sector Law to clarify rules for regulators – "the devil is in the details" – and the importance of US businesses being able to provide input on its implementation, saying it is vital to "connect decision makers with our experts."
He also spoke of the importance of the Indo-Pacific Economic Framework (IPEF), which US President Joe Biden launched on May 23, 2022, as a 14-nation partnership. He praised the leadership role Indonesia is taking on IPEF as a “full and enthusiastic partner."
Day one was opened by John Goyer, Executive Director for Southeast Asia at the US Chamber, who spoke of the importance of the major reforms to the sector under the omnibus law, and how companies must now prepare for its implementing regulations.
The day also saw six panel discussions with stakeholders on: expert views, private sector views, the US government view, reforms and digitization, reforms in the financial sector and ICT and the future of e-commerce in Indonesia.
The panels concluded that while the industry and its digitalization could be a huge driver for Indonesia's economic growth, work must be done on implementing best practices, security of personal data, accessibility, education on the services offered, cross border trade and sustainability and harmonized regulations in all Asean countries.
Panelists included representatives from the International Monetary Fund, the World Bank, HSBC, the Mandiri Institute, Chubb, the US Embassy, USAID, House of Representatives Commission XI, and the trade and finance ministries.
Day two saw of the mission saw delegates hit the road for meetings at the Finance and ICT ministries, the Financial Services Authority (OJK), the Deposit Insurance Corporation (LPS) and Bank Indonesia.
The day was punctuated by an insightful Indonesian political update “power lunch” at the Mandarin Oriental hotel with Douglas Ramage, Chairman of AmCham's Board of Governors, who was in conversation with AmCham Managing Director A Lin Neumann.
“This mission shows the strength of AmCham as a chamber that delivers access to government for our members and partners,” said Neumann. “Advocacy begins with relationships and we feel this was a successful two days.”
Omnibus Health Bill Open for Public Input
The details of the omnibus Health Bill are still under discussion and will be open for public input. The Ministry of Health has made an input points list for the omnibus bill and has held several offline and online public events to socialize it to the public. The ministry will discuss the input and coordinate with other related ministries/bodies, such as the Coordinating Ministry of Human Development and Culture and the National Agency of Drug and Food Control (BPOM).
The government says the omnibus bill can be a tool to support reforms in the healthcare sector. Some stakeholders are questioning the bill, especially in terms of provisions on financing schemes for low-income people, the optimization of surveillance roles, healthcare facilities self-assessment, and the fulfillment of first-level health facility standards and advanced referral health.
AmCham is hopeful the bill will further open the health sector to growth and foreign investment.
Related links:
- https://insight.kontan.co.id/
news/substansi-ruu-kesehatan- tunggu-masukkan-publik - https://sehatnegeriku.kemkes.
go.id/baca/rilis-media/ 20230313/2642568/laman-khusus- untuk-tampung-aspirasi-publik- dalam-ruu-kesehatan/ - https://insight.kontan.co.id/
news/masukan-ombudsman-bagi- ruu-kesehatan
SVB Collapse Will Not Impact Indonesia
The collapse of Silicon Valley Bank (SVB) and the crypto-focused Signature Bank on March 10 has spread anxiety in the financial industry, but should not have much of an impact on Indonesia. SVB’s rapid downfall was the second-largest bank failure in US history after the Lehman Brothers in 2008, which triggered a massive financial crisis.
Experts say the collapse will not have serious consequences for Indonesia except on sentiment among investors. The Indonesian government said SVB was not a systemic bank to Indonesia, so the effects would be significantly less severe than those of the 2008 financial crisis, but the Financial System Stability Committee (KSSK) and financial authorities must remain vigilant due to unpredictable and short-term consequences.
Research and Consulting Manager at Infovesta Utama, Nicodimus Kristiantoro, said the collapse has alarmed investors and made them pay closer attention to the US Federal Reserve's fluctuating interest rates. CEO of Advisor.id, Praska Putrantyo, also said this will not affect Indonesia significantly as the real sector, such as manufacturing and services, is still in a good shape.
Related links:
- https://www.cnbcindonesia.com/
research/20230314073826-128- 421381/svb-jadi-tumbal-perang- the-fed-melawan-inflasi - https://www.thejakartapost.
com/business/2023/03/14/svb- collapse-poses-little-threat- to-indonesia-says-government. html - https://investasi.kontan.co.
id/news/menilik-potensi- krisis-svb-ke-pasar-modal- indonesia
Tax Revenue Maintained in February
The Ministry of Finance collected Rp 279.98 trillion in February or 16.3 percent of this year’s tax revenue target, a 40.4 percent increase on the same period last year. The revenue consists of non-oil and gas income tax, value added and luxury good sales tax, land and building tax, and oil and gas income tax. The Ministry also recorded a state budget surplus of Rp 131.8 trillion.
The Ministry will monitor tax revenue growth as there will be a downward trend in commodity prices. However, Minister of Finance Sri Mulyani Indrawati expressed her optimism as the Tax Harmonization law has been implemented.
Related links:
- https://investor.id/
macroeconomy/324517/februari- 2023-penerimaan-pajak-melesat- 404 - https://www.cnbcindonesia.com/
news/20230315064120-4-421709/ bye-covid-pajak-hiburan-hotel- di-daerah-melesat-tajam/amp - https://katadata.co.id/
yuliawati/finansial/ 6410524044691/penerimaan- pajak-meningkat-40-apbn- surplus-rp-131-t-di-februari- 2023
Now is the Time to Join AmCham!
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We offer a full slate of meetings, events, and information for our community. But we can only do this through the support of our members. If you are not yet an AmCham member, please join now.
AmCham Indonesia is open to all companies with an interest in US business relations and we have many non-American members.
We are a community and we welcome you!
Reach us at [email protected] or click below!
Stay well
We urge you to send us press releases and other information that we can pass on to the broader AmCham community. If you have items of interest, please email material to [email protected]. Follow this link to information provided by the US Embassy
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
