Minister to Make it Easier for Foreign Investors
Minister of Investment Bahlil Lahadalia has said he would make it simpler for investments coming into the country, including for the development of smart cities. He said President Joko Widodo has tasked his Ministry to generate over Rp 1,400 trillion in investment, which is expected to push Indonesia’s economic growth above 5 percent.
Bahlil also highlighted his efforts to ease the investment process, along with his eagerness to assist potential investors. He guaranteed convenient licensing, starting from the management of mining licenses (IUP), environmental impact assessments (AMDAL), location permissions, all integrated according to the omnibus Job Creation Law, through the online single submission (OSS) system.
Transactions Reach $173m Under Export Earnings Regulation
Bank Indonesia (BI) saw transactions worth $173 million under the newly released Foreign Currency Term Deposits regulation for export earnings (DHE) as of March 16. Director of BI's Monetary Management Department Ramdan Denny Prakoso said the total was obtained from nine exporters in the mining and plantation sectors.
There have been concerns over the implementation of DHE, specifically on how it will impact business operations, with companies worried it will interfere with cash flexibility and liquidity. AmCham Indonesia has previously discussed the issue with the Ministry of Finance and sent a letter to the Coordinating Ministry for Economic Affairs.
AmCham Cares: ExxonMobil
ExxonMobil Cepu Limited (EMCL), the Upstream Oil and Gas Regulatory Task Force (SKK Migas), local governments and communities often conduct tree planting projects to support the government’s commitment to tackling global climate change.
To support this commitment, EMCL and the local community planted 20,800 mangroves in Bojonegoro, Tuban, and Lamongan.
Green projects like these help to conserve the marine ecosystem while mitigating the impact of beach erosion near EMCL's operating areas in East Java.
Indonesia Commits to Inclusive Growth in Indo-Pacific
In an effort to further regional trade, Indonesia hosted the second negotiating round of the Indo-Pacific Economic Framework (IPEF) on March 13-19 in Bali. There are high hopes IPEF will create inclusive growth that distributes income more evenly, reaching underserved groups. Indonesia will work to ensure no communities or economies are left out, Coordinating Minister for Economic Affairs Airlangga Hartarto said.
During the Indo-Pacific Chamber of Commerce and Industry Business Forum event on March 18, the Coordinating Minister said Indonesia is committed to achieving inclusive and sustainable growth, including through IPEF. He also emphasized the importance of proactivity from IPEF member states to make this new framework work.
AmCham Indonesia Managing Director A Lin Neumann was also in attendance and gave closing remarks at the forum, highlighting the importance of private sector engagement in IPEF. He said changes in the government’s attitude in Indonesia have meant industry voices are being heard and some major reforms have brought more confidence for investors.
Gov't Ready to Import Rice
Indonesia plans to import 500,000 tonnes of rice to accommodate the decreasing supply of the government rice reserves (CBP). The government has discussed the decision with the State Logistics Agency (Bulog), whose current supply is only a quarter of the required minimum reserves, Minister of Trade Zulkifli Hasan said.
Since the beginning of the year, rice prices have increased continuously, despite past imports. The average national price of premium-quality rice has increased by 9 percent year-on-year.
To allow for higher production costs, the government has also increased the rice price ceiling (HET). As President Joko Widodo requested, the National Food Agency (NFA) will issue a new regulation to stipulate the new HET, NFA chairman Arief Prasetyo Adi said.
Indonesia-Australia to Cooperate on Carbon-Capture Storage
The Minstry of Energy and Mineral Resources is working with the Australian government to create Carbon Capture Utilization and Storage (CCS/CCUS) initiatives, as a part of the two countries’ comprehensive partnership in numerous work streams, including CCUS, energy, and infrastructural resources.
The ministry has listed 16 CCS/CCUS projects in Indonesia that are in the study stages, with the goal of completion before 2030, one being Tangguh CCUS project in West Papua.
Indonesia is still in the early phases of CCS/CCUS development, as well as developing regulatory environments for the industry. The Ministry of Law and Human Rights is coordinating the draft regulation, which is anticipated to be finished this year.
ExxonMobil and Chevron, both prominent AmCham members, have been involved in CCS/CCUS projects with Pertamina, with the former developing a regional CCS hub for domestic and international C02, and the latter conducting a joint study agreement to examine the feasibility of CCS/CCUS in East Kalimantan.
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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