AmCham Update
AmCham Update Vol. 4 #4
Musk Cautious on Tesla Deal Report, Commodity Balance Concerns, AmCham Education Committee Kicks-off 2023, New Export Earnings Rule
Jan 13, 2023


Tesla Nears Deal to Build Factory in Indonesia… or Does it?

Tesla is nearing a preliminary deal to build production facilities in Indonesia with a capacity of one million units, Bloomberg News reported, citing unnamed sources; Tesla chief Elon Musk has urged caution over the reports. Tesla has already signed contracts worth around $5 billion to buy battery materials from nickel processing companies in Indonesia. President Joko Widodo met Musk last year in the US and has urged Tesla to make both batteries and cars in the country.

Indonesia officials have previously said Tesla would set up a major hub in the country, only to have the speculation denied.

However, Musk Tweeted that articles citing "unnamed sources" are frequently false. Deals with him are often fraught, as demonstrated by his drawn-out purchase of Twitter. The unnamed sources also said that although the deal is close, it has not been inked yet, and the plans might still be scrapped altogether.

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Concerns over Commodity Balance System

Experts and business leaders have raised concerns over the implementation of the Commodity Balance system, a national database to track supply and demand in commodities as a basis for issuing import and export permits.

The system was initially implemented to increase trade effectiveness, but has resulted in new challenges in terms of process, transparency and data accuracy, as there is a lack of understanding on global supply chain complexities, Associate Researcher at the Center for Indonesian Policy Studies (CIPS) Krisna Gupta said.

The government previously planned to include 19 commodities in the system in the second phase of implementation starting this year. However, there have been delays and other issues in regard to the approval and determination of import and export permits, which have caused uncertainties for the private sector.

In a briefing earlier this week, representatives of the Coordinating Ministry for Economic Affairs said the government is coordinating across line ministries to seek temporary measures to resolve the issues and allow business actors to process their permits in the new system.

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AmCham Cares: Pfizer

Pfizer Indonesia in collaboration with Rise Against Hunger, an international relief organization, held a social activity on Dec 15, 2022 in Yogyakarta, to support the fight against malnutrition in the country.

More than 200 Pfizer Indonesia employees took part in preparing over 50,000 nutritional food packages, which were distributed to underprivileged families in Girisekar, Girikarto and Giriwungu villages in Yogyakarta. Indonesia has seen a rise in the prevalence of undernourishment with 17.7 million people suffering during 2019-2021, according to the Food and Agriculture Organization (FAO). Malnutrition can lead to stunting, poor brain development and chronic health conditions.

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Let Us Know Your Recent Social Responsibility Initiatives!

We have received positive responses for this program and would like to continue featuring your CSR stories and best practices. It is wonderful to learn the great things that our members are doing for the community.

Contact [email protected]with your CSR stories.


Education Committee Kicks-Off 2023

   

AmCham Indonesia held its 2023 Education and Workforce Development Committee kick-off meeting in person on Jan 12, focusing on how company partnerships can support learning and have a meaningful impact on the education sector.

The meeting began with a 2022 committee activities review, followed by opening remarks from committee Co-Chairs – Head of School at Jakarta Intercultural School Maya Nelson, and Vice President of Business Development and Investment at Mitakarya Group Andrew Winoto.

The meeting continued with a lively discussion session, where participants shared their ideas and views on emerging issues related to the education sector, such as ways to catch up with the learning loss due to Covid-19, changes in the employment landscape, and company programs to support talent development.

AmCham Indonesia see this as the starting point for further committee initiatives in 2023. For inquiries about the committee, please contact Pat Puspitasari at [email protected].

   


Gov’t Eyes New Rules on Export Earnings

President Joko Widodo plans to revise provisions relating to Export Proceeds (DHE) in Government Regulation 1/2019 to boost foreign exchange reserves in response to positive export growth. Major changes to be deliberated are the inclusion of additional sectors, such as manufacturing, along with the duration that export earnings may remain in the country.

Coordinating Minister for Economy Affairs Airlangga Hartarto said Bank Indonesia (BI) had asked for the change. In order for Indonesia to compete with other countries like Singapore, which is a preferred location for exporters to store their dollars, the government and BI are now putting plans in place to enhance Indonesia's dollar ecosystem. Minister of Finance Sri Mulyani Indrawati said the specifics were still being discussed.

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Retail Sales Down Despite Adequate Consumer Confidence

Bank Indonesia (BI) has projected meager retail sales growth in December 2022, despite an increase in consumer confidence, as people began prioritizing primary needs over other spending.

Even with the 6.3 percent increase in retail sales over the previous month, at a projected 0.04 percent year-on-year growth, it marks the lowest growth of the year. Retail sales in December did see some improvement, mainly in clothing and recreational goods, with growth of 10.4 percent and 4.9 percent, respectively. However, corrections in household appliance sales, automotive fuel and motor vehicles suppressed growth, declining at 14.4 percent, 10.7 percent, and 9.6 percent, respectively.

The Consumer Confidence Index (CCI) rose by 0.8 points to 119.9 in December, marking an increase after falling in previous months. The rise was mainly due to an optimistic outlook on the current economic conditions subindex, which rose by 2.1 points to 112.4. The CCI in 2022 improved due to the low-base effect of 2021 due to the pandemic and success in controlling inflation within a 5 percent range, said Askar Muhammad, economist from the Institute for Demographic and Poverty Studies (IDEAS). In 2023, Askar expects the CCI to continue improving along with economic growth, including growth in retail sales.

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National Food Agency to Issue Regulation on Rice Purchase Price

The National Food Agency (BPN) is drafting a regulation on the calculation of the Government Purchase Price (HPP) for dry-harvested rice, expected to be released this month. Although the exact price increase has not yet been determined, it is certain it will rise in line with the increase in farmers’ output. The increase aims to strengthen the government’s food reserves and absorb more rice from farmers.

The National Food Agency is working to improve the synergy between national-owned enterprises, regional-owned enterprises, and mills, in addition to altering the Government Purchase Price to enhance absorption during the primary harvest season in March to April this year.

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Now is the Time to Join AmCham!

Now is the Time to Join AmCham!

We offer a full slate of meetings, events, and information for our community   online. 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!

  JOIN AMCHAM


 

AmCham Office and Events

AmCham Office and Events

The AmCham Office is transitioning back to the office. We are still maximizing online meetings, using the Zoom platform, but starting to have in-person meetings. You will be notified of the meetings as they are scheduled.

 

 

 


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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 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 is the Managing Editor.

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