Prabowo Victory Confirmed By Constitutional Court, KPU
The Constitutional Court has affirmed Prabowo Subianto's victory in the Presidential Election, dismissing legal challenges from presidential candidates Anies Baswedan and Ganjar Pranowo. Following a five-to-three ruling, the justices concluded there was insufficient evidence to support claims of state interference in Prabowo's electoral success.
Following the court's decision, the General Elections Commission (KPU) officially confirmed the election results, paving the way for President-elect Prabowo and Vice President-elect Gibran Rakabuming Raka to assume office in October.
Court Chief Justice Suhartoyo acknowledged lingering legal uncertainties regarding the monitoring of neutrality during the presidential campaign, and urged lawmakers to enact stronger legislation to address allegations of "state partisanship" in future elections.
University of Indonesia law professor Titi Anggraini emphasized the importance of ensuring fairness and transparency in future elections. She highlighted the court's commitment to addressing legal ambiguities related to presidential neutrality, covert campaigning, and social aid regulations, hinting at potential further scrutiny of the electoral process.
The two defeated candidates conceded defeat and extended congratulations to President-elect Prabowo, vowing to facilitate a peaceful transition of power.
Related Links:
- https://www.thejakartapost.com/indonesia/2024/04/23/court-rulings-seal-prabowo-win.html
- https://jakartaglobe.id/news/prabowo-relieved-as-constitutional-court-confirms-presidential-win
- https://www.thejakartapost.com/indonesia/2024/04/24/kpu-formally-declares-prabowo-next-president.html
New Bridging Visa for Foreigners
The government has introduced a new transitional residence permit or bridging visa, which allows foreigners to remain in Indonesia for 60 days while applying for their new residence permits, without having to leave the country. The provision is regulated in Ministry of Law and Human Rights Regulation 11/2024, ratified on April 1.
The new visa scheme is only valid for foreigners residing within Indonesia, and those who obtain their bridging visas after their previous residence permit expired will not be subject to overstay status. Under the new rule, foreigners must apply for the transitional residence permit and pay the immigration service fee no later than three days before their previous residence permit expires.
Director General of Immigration Silmy Karim said the bridging visa aimed to provide legal certainty and ease of service for foreigners, and that it will not be applicable for those who have departed Indonesia.
Related Links:
- https://jakartaglobe.id/special-updates/indonesia-implements-bridging-visa-for-foreigners
- https://news.detik.com/berita/d-7305918/imigrasi-terapkan-bridging-visa-jadi-jembatan-wna-perbarui-izin-tinggal
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Trade Surplus Rise in March Due to Fall in Imports
Indonesia recorded a $4.47 billion trade surplus in March, an increase from $0.83 billion the previous month, mainly due to a decrease in imports. There was a 2.60 percent month-to-month decrease in total imports in March, driven by a 5.34 percent decline in non-oil and gas imports, Statistic Indonesia (BPS) reported.
The import decline is a result of restrictions outlined in Minister of Trade Regulation (Permendag) 36/2023, which significantly impacted imports of consumer goods, raw materials, and capital goods, Executive Director of the Center of Reform on Economics (CORE) Mohammad Faisal said. While falling consumer goods imports could benefit domestic industries, restrictions on raw materials harm industry players which heavily rely on imports.
Looking ahead, Trimegah Securities economist Fakhrul Fulvian anticipates hawkish guidance from Bank Indonesia at its upcoming policy meeting to support the rupiah, which remains vulnerable due to a strong US dollar and continued tensions in the Middle East.
Related Links:
- https://www.reuters.com/markets/asia/indonesia-posts-larger-than-expected-trade-surplus-march-imports-shrink-2024-04-22/
- https://www.antaranews.com/berita/4069704/bi-surplus-neraca-perdagangan-topang-ketahanan-eksternal?utm_source=antaranews&utm_medium=desktop&utm_campaign=top_news
- https://ekonomi.bisnis.com/read/20240422/12/1759526/impor-nonmigas-merosot-534-imbas-permendag-32024-ini-kata-ekonom
Tax Ratio Targeted at 11-12% of GDP
A target tax ratio of 11.2 percent-12 percent of GDP by 2025 has been set by the Ministry of National Development/National Planning Development Agency (PPN/Bappenas), surpassing the 2023 realization of 10.32 percent and the 2024 State Budget of 10.12 percent, according to the initial Government Work Plan (RKP) 2025.
The tax ratio will be increased in conjunction with the implementation of the new core tax administration system, although the initial RKP was still in its early stages, said Bappenas Deputy for Economic Affairs Amalia Adininggar Widyasanti. In 2022, Indonesia successfully bolstered state revenue by Rp 60.76 trillion after increasing the Value Added Tax (VAT) rate from 10 percent to 11 percent.
Center of Economic and Law Studies (CELIOS) Executive Director Bhima Yudhistira emphasized the importance of setting realistic targets for next year's tax ratio, and noted that achieving a higher ratio necessitates precise tax instruments to avoid potential disruptions to consumption and domestic business performance. For instance, implementing 12 percent VAT could hinder household consumption growth and retail sectors, including home sales.
He added that a slowdown in export performance due to geopolitical tensions, high-interest rates, and the risk of currency depreciation must be considered by the government before setting tax ratios to prevent overshooting.
Related Links:
- https://nasional.kontan.co.id/news/tax-ratio-ditargetkan-capai-112-12-pada-2025-ekonom-perlu-lebih-realistis
- https://ekonomi.bisnis.com/read/20240312/259/1748454/siap-siap-tarif-ppn-12-berlaku-per-1-januari-2025
- https://news.ddtc.co.id/bappenas-wacana-badan-penerimaan-negara-di-rkp-2025-belum-final-1802149
Sri Mulyani Explores Carbon Trade with EU
Climate mitigation collaboration opportunities between Indonesia and the European Union (EU) were a focal point of discussion during a meeting between Minister of Finance Sri Mulyani Indrawati and EU Commissioner for Climate Action Wopke Hoekstra in Washington, DC on April 21.
The dialogue delved into potential avenues for partnerships in advancing the energy transition agenda, including exploring carbon trading possibilities. Indonesia, as a significant potential global carbon credit supplier, boasts an estimated emission reduction of 1.3 gigatons CO2e valued at $190 billion. Sri Mulyani said she aims to secure EU support to accelerate a fair and affordable energy transition.
She also expressed appreciation for the EU's financial support for the Indonesia Just Energy Transition Partnership (JETP) program. Under this initiative, priority projects such as the construction of renewable energy infrastructure, have been prepared.
Related Links:
- https://katadata.co.id/ekonomi-hijau/ekonomi-sirkular/662706324a597/sri-mulyani-jajaki-peluang-perdagangan-karbon-dengan-uni-eropa?page=2
- https://lestari.kompas.com/read/2024/04/23/130000686/sri-mulyani-bahas-peluang-dagang-karbon-dengan-eropa
Get to Know Our Members: Citibank
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Citibank, NA, Indonesia (Citi Indonesia) is a full branch of Citibank, NA, a wholly owned subsidiary of Citigroup, Inc, which is based in New York, US. Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in nearly 160 countries and jurisdictions.
In Indonesia, Citi was established in 1968 and is one of the country’s largest foreign banks. Citi operates nine branches in six major cities in Indonesia and has a corporate distribution network of 776 locations in 38 provinces.
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