Gov't Ban on Social Media Sales of Goods, AmCham Meets New ICT Minister, Elections Impact on US Ties, New Visas for Sports, Music & Arts, Sri Mulyani's Corruption Warning
Sep 15, 2023
Gov't to Ban Goods for Sale on Social Media
The government is planning to ban the use of social media platforms to sell goods, citing concerns about alleged predatory pricing that may threaten micro, small and medium-sized enterprises (MSMEs) in Indonesia, Deputy Minister of Trade Jerry Sambuaga said. The Ministry of Communications and Information Technology echoed Jerry’s remarks, saying it will consider recommendations from the trade ministry and take appropriate action.
Social media and social commerce cannot be combined under the revision of Minister of Trade Regulation 50/2020, which explicitly separates the two. The revision also prohibits foreign merchants from selling any goods valued below $100 to Indonesian customers directly via online marketplaces. Under the revision, digital platforms are also forbidden from becoming producers and/or producing their own goods.
The move allegedly is driven by fears that TikTok’s new e-commerce arm will hurt Indonesian SMEs. This would just disadvantage Indonesian merchants and consumers and discourage innovation, TikTok Indonesia Spokesperson Anggini Setiawan said.
There are around 125 million Indonesian TikTok users. Over two billion small businesses use the online TikTok Shop feature globally, according to TikTok. Businesses also say that placing a $100 minimum will hinder consumer access to many affordable products and potentially violate obligations Indonesia has accepted as part of its international trade agreements, which could see retaliatory measures from Indonesia’s trading partners.
As the revision is in the harmonization process at the Ministry of Law and Human Rights, AmCham Indonesia encourages the government to slow down and make a thorough analysis to ensure the regulation will support the growth of the digital economy in Indonesia. Opening up intensive public consultation with a wider range of stakeholders is imperative to gather more comprehensive input.
AmCham Indonesia’s Platinum members met the newly appointed Minister of Communications and Information Technology (Kominfo) Budi Arie Setiadi at his office on Sept 12.
The meeting was moderated by AmCham Chairman Douglas Ramage. Members raised a number of issues, including cross-border data exchange, digital infrastructure development, artificial intelligence (AI), and the Personal Data Protection (PDP) Law.
Minister Budi also outlined his priority plans leading up to the 2024 general elections, such as ensuring a peaceful election process by eliminating ethnicity-religion-race-and-inter-group (SARA) issues, fake news, and hoaxes; the new capital city Nusantara (IKN); developing digital talent; the digital infrastructure master plan; and an AI code of conduct.
He also welcomed input and discussion from the private sector. AmCham Indonesia will continue to engage the Ministry going forward.
AmCham Cares: Kraft Heinz Indonesia
The Kraft Heinz Indonesia Food Service Institute, in collaboration with the Helping Hands Foundation (YHH), has launched a culinary business training program for disabled students. The program, #IandYouareEmpower, is committed to inclusivity and to empower disabled people to achieve their dreams of becoming professional culinary entrepreneurs.
The program is the first of its kind in Indonesia and was held on July 26-27 at the Kraft Heinz Indonesia Innovation Center. It involved six special needs schools (SLB) from the Jakarta area and was attended by 30 participants, including students and supervising teachers. The program covered basic culinary skills and motivation and inspiration sessions with practitioners and leaders from Kraft Heinz Indonesia.
The mission of the Kraft Heinz Food Service, as a trusted partner for chefs and culinary businesses in Indonesia, is to encourage the growth of the culinary industry here. For the last two years, the Institute has run a similar training program through the webinar series Develop Your Culinary Business to more than 150,000 culinary entrepreneurs in Indonesia, and now is expanding the scope of the training.
Kraft Heinz believes everyone has the same opportunity to become a great culinary entrepreneur. Given its size and reach, Kraft Heinz Food Service wants to play an active role in evolving the culinary industry through inclusivity.
The Directorate General of Immigration has issued the sports visa and the music and art visa, which can now be applied for via https://evisa.imigrasi.go.id/, said Director General of Immigration Silmy Karim on Sept 14.
The two new visas are intended for foreigners participating in commercial sporting activities, as well as artists holding concerts and exhibitions in Indonesia. The move is in response to the growing number of international events being held in the country.
Visa application requirements have also been simplified. The new rules eliminate the need for labor permits, Police Record Certificates (SKCK), or certificates indicating at least five years of work experience. Silmy said this simplification will create opportunities for Indonesia to host more international-scale sports and music events, which would attract more foreign tourists.
Will Indonesia’s Election Usher in Closer US Ties?
By Shannon Hayden, US Chamber of Commerce
On Feb 14 next year, Indonesia will hold presidential elections. This looms as a consequential vote not just for Indonesians but for the United States. After all, Indonesia is a major player in the critical Indo-Pacific region. It’s the world’s fourth most populous country, third largest democracy, sixteenth largest economy, and largest Muslim-majority nation.
Leading candidate and current defense minister Prabowo Subianto visited the United States in August, finalizing agreements to purchase fighter jets and helicopters, meeting with US Secretary of Defense Lloyd Austin and other officials, and advocating for closer ties between the two countries. This trip was an opportunity to advocate for his domestic priorities through increased US-Indonesia engagement. This includes job creation and economic opportunities via cooperation in food security, international education exchange, technological innovation, and more.
Prabowo is one of three major candidates for Indonesia’s presidency and is campaigning to succeed current president Joko Widodo. His opponents include Central Java governor Ganjar Pranowo and former Jakarta governor Anies Baswedan.
In the lead up to next February’s election, the U.S. Chamber of Commerce and AmCham Indonesia will examine the state of play and candidate platforms in-depth at the Oct 24 annual US-Indonesia Investment Summit in Jakarta. Five months out, there is still time for election dynamics to change. A candidate could drop out and join one of the two remaining candidate’s tickets as vice president. Scandals could emerge. Jokowi could make a surprise endorsement. But for the moment, Prabowo seems to have achieved what he set out to do with his US visit and returns home still the front-runner.
Minister of Finance Sri Mulyani Indrawati warned of corruption practices in export-import services, which often occur to avoid duties. She was speaking at the National Seminar on Corruption Prevention on Sept 14.
If regulations on related tariffs such as import tax, import and export duties are considered burdensome and encourage corruption, the government will conduct a close review, as corruption needs to be handled comprehensively both at the practical and regulatory levels, she said.
Indonesia's corruption perception index (IPK) was 34 points on a scale of 0-100 in 2022, a 4 points decrease from the previous year. The manipulation of export and import data by businesses is one of the main issues highlighted in the index.
In response, the Indonesian National Police (Polri) has reiterated its commitment to support corruption eradication efforts, said Polri Head General Listyo Sigit Prabowo.
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.