AmCham Update
AmCham Update Vol. 4 #54
Green Light For Golden Visa, Exemptions For Mineral Export Ban, New International Film Co-Production Fund, Carbon Exchange Pilot to Start in Sept, 20-Year Ban on Sea Sand Exports Scrapped
May 31, 2023

Gov't Readying Golden Visa

It's full steam ahead for Indonesia’s "golden visa" to attract special foreign talent, after President Joko Widodo chaired a ministerial coordination meeting to discuss the policy on May 29. The golden visa will be launched soon and attract high quality foreign talent, Minister of Tourism and Creative Economy Sandiaga Uno said after the meeting.

The golden visa for foreign nationals is intended for professional special talent, investors and industry players, who will benefit Indonesia’s future economic development, Sandiaga said. The government hopes the visa can also push global talent to invest in Indonesia, leading to increased investment and employment opportunities.

The legal umbrella and derivative regulation for the golden visa are being processed by the Ministry of Law and Human Rights (HAM).

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AmCham Cares: YCAB Foundation

In 2020, 20.9 percent of families in Indonesia did not receive a formal education, so to address this issue, the YCAB Foundation and YCAB Ventures are providing scholarship opportunities for the children of YCAB Venture’s clients to pursue their education.

The program includes four types of scholarships, including batik courses and coding. It not only provides financial assistance for education, but also intensive training and guidance for selected students. Students will have the opportunity to develop their potential and talent, so they can obtain decent jobs in the future.

“After my father passed away, I had to help with household expenses. My mother worked as a motorcycle taxi driver, and a small-scale trader, and was a client of YCAB Ventures. I was grateful to receive a scholarship from YCAB Group, which allowed me to study management at Semarang University. I’m now a staff admin at Multindo Semarang and earning minimum wage. I am thankful for the opportunity to lighten my family’s financial burden,” said Ivandito Kusuma Aji, a YCAB scholarship recipient.

Since 2019, the scholarship program has helped 24 students, with nine graduates now employed, demonstrating the program’s value. The program aims to reduce Indonesia’s poverty rate and provide equal education opportunities for all levels of society. It provides financial aid, as well as training and guidance, to selected students to develop their talent and potential to secure decent jobs and improve their quality of life.


Raw Mineral Exports to Stop June 10, 5 Firms Given Exemptions

The government has given five companies permit exemptions from the mineral export ban coming into effect on June 10, with the waivers lasting until mid-2024. The exemptions have been granted based on the development of the five companies' smelter refining facilities, said Minister of Energy and Mineral Resources Arifin Tasrif.

Freeport Indonesia, Amman Mineral Nusa Tenggara, Sebuku Iron Lateritic Ores, Kapuas Prima Citra, and Kobar Lamandau Mineral were granted the exemptions after showing progress of more than 50 percent development of their refining smelters by January this year. However, the permits could be revoked if their smelter construction does not continue to show significant progress.

The controversial raw mineral export ban is part of the government's policy to promote the downstream mineral industry. But it also has the potential to trigger retaliation from Indonesia’s trading partners, and the government must think about the policy more thoroughly, said Hasran, an economist at the Center for Indonesian Policy Studies (CIPS).

Some investors have said banning all raw mineral exports is counter-productive due to an oversupply of international smelting capacity, which risks making some local smelters potentially unprofitable.

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Nadiem Launches Fund for International Film Co-Production

Indonesia’s Minister of Education, Culture, Research and Technology Nadiem Makarim, took the occasion of visiting the recently concluded Cannes Film Festival to say the country would launch a $13 million annual fund to spur international interest in its film industry. 

It will be a 1:1 matching grant scheme from the Ministry and is designed to promote international cooperation between filmmakers, according to an article in Variety. Nadiem told Variety the fund will work with international co-production projects with Indonesia on story development and research, production, post-production or internal promotion and distribution incentives.

“We expect this endowment fund to keep hopefully doubling every year, so we’ve allocated around close to $13 million. The interest from that [endowment fund] on an annual basis is about $13 million. So we plan to exponentially increase this over time. And it’s basically designed for grants in the cultural space,” Makarim told Variety.

The point of the project is to give local filmmakers access to more international co-production opportunities.

“Right now we are laser focused on increasing competencies and capabilities and exposure to world class cinema for our Indonesian filmmakers and producers and script writers. That’s really the goal,” said Nadiem.

Film production in Indonesia has been tightly controlled and restricted in the past, and as a result the domestic industry has lagged behind other countries. Given the current more open investment climate, that could now finally be changing.

“We do realize that there have been challenges in the past, but we are working to improve that. We want to be, we should theoretically be the destination in Southeast Asia for film productions, because we have probably the largest variety of locations and sets,” Nadiem said.

Nadiem, the founder of GoJek, was at Cannes to meet international filmmakers and forge cooperation with the local industry.

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Carbon Exchange Pilot to Start in Sept: OJK

The Financial Services Authority (OJK) aims to launch a pilot scheme for a carbon exchange market in September, with the draft rules being discussed in the House of Representatives (DPR) ahead of regulations being released in June or July, said OJK Executive Analyst of Directorate of Capital and Sharia Market Development Agustyatun Muji Rahayu.

It is unclear whether the carbon exchange market will be handled by the Indonesian Stock Exchange, or other entities, but its implementation will be supported by the Ministry of Energy and Mineral Resources, and the Ministry of Environment and Forestry. More details will be revealed when the regulation is released. Other government officials have privately confirmed the move but few details were offered.

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20-Year Ban on Sea Sand Exports Scrapped

Indonesia’s 20-year ban on sea sand exports has been finally lifted after President Joko Widodo issued Government Regulation (GR) 26/2023 on the Management of Sea Sedimentation Products.

The updated policy could help land expansion projects in neighboring Singapore, which was once a large buyer of Indonesian sea sand. The ban had been a sore point between the two countries, and Jakarta was accused of using it to pressure the Singaporean government in negotiations on an extradition treaty and border delineation back in 2007.

The purpose of the regulation is to ensure sand mining meets environmental standards and is only exported once domestic demand has been met, said Ministry of Maritime Affairs and Fisheries Spokesperson Wahyu Muryadi.

However, the regulation has been met with concern from environmentalists due to the potential negative impact on marine habitats.

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Gov’t Submits 2024 Budget Bill to DPR

Minister of Finance Sri Mulyani Indrawati has submitted the 2024 State Budget Draft to be discussed by the House of Representatives (DPR). State revenue is targeted at Rp 2,719.1 trillion to Rp 2,865.3 trillion, consisting of tax and non-tax revenue, while the government’s expenditure for central and regional government spending is Rp 3,215 trillion. Sri Mulyani did not specify expenditures allocated for the 2024 general election. 

The State Budget will be finalized and delivered to President Joko Widodo on Aug 16, after DPR discussions. Previously, Sri Mulyani said the government will focus on priority programs in drawing up the State Budget, as it will be the last year of President Widodo’s term in office.

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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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