Indonesia Update: CNN: VP Pence to Visit Indonesia in April

Indonesia Update | March 16, 2017
Authors: Kim Yaeger, Artha Sirait, Ian Saccomanno and Steve Prawiromaruto
 
LOOKING AHEAD
 
 
  • Digital Economy Industry Mission, April 26-27: The ICT and Financial Services Committees will be leading a group of technology and financial services companies to Indonesia for an industry mission covering digital economy issues. The registration page may be found here. Please contact Matt Solomon at msolomon@usasean.org for more information. 
  • The US Embassy in Jakarta is providing an advocacy opportunity to get deals across the finish line. Please contact Andrew Billard, Commercial Attaché at the US Embassy in Jakarta at Andrew.Billard@trade.gov for further information regarding projects that could be submitted for review and potential support. General guidance being: (i) projects have been recently signed or realistically within sight of the finish line; (ii) strong US economic benefit is likely to be an important consideration and this may also be a good opportunity to push against trade barriers and/or unfair trade practices. 
 
THE COUNCIL'S TAKE
 
 

VP Pence to Visit Indonesia in April

According to CNN, as part of his Asia-Pacific tour in April, US Vice President Mike Pence will visit Indonesia, South Korea, Japan and Australia. The Vice President’s visit to Indonesia was confirmed by Indonesia’s Coordinating Minister for Political, Legal and Security Affairs, Wiranto after a recent meeting with US Ambassador to Indonesia, Joseph R. Donovan Jr., Coordinating Minister Wiranto confirmed that the two had discussed Pence’s upcoming visit and “the strategic problems that can be on the agenda in a proposed meeting with President Joko Widodo”. At the meeting, Coordinating Minister Wiranto also expressed his hope that the US and Indonesia will continue forging its enhanced partnership which was started under the Obama administration when President Joko Widodo visited the US in October 2015 to promote Indonesia as a country that is open for business to the American business and investor communities. 

OJK Board of Commissioners’ Selection Update

On March 13, the OJK Commissioner Selection Team submitted the names of 21 candidates to President Joko “Jokowi” Widodo. President Jokowi has until March 29 to pick 14 individuals to recommend to the House of Representatives for confirmation hearings, and the Supreme Court is expected to swear in the new OJK commissioners on July 20. All of the seven incumbent commissioners participated in the selection but only one made it to this phase, Commissioner for Capital Markets Supervision, Nurhaida. Under the 2011 OJK Law, the structure of OJK Board of Commissioners consists of seven selected commissioners and two ex officio commissioners appointed by the Ministry of Finance and the Board of Governors of Bank Indonesia. The Selection Team’s picks have been criticized for a lack of non-bank financial sector experts, to which the Selection Team noted that there were few applicants from such sectors in the first place. The official announcement listing out all of the candidates is available here (available in Bahasa Indonesia). 

Indonesia-Australia Comprehensive Economic Partnership Agreement to be Finalized by Year-End

Indonesia and Australia have agreed to finalize a free trade agreement by the end of 2017. The agreement, known as the Indonesia-Australia Comprehensive Economic Partnership Agreement has been in discussion for several years, with its initial discussion dating back to 2010 during President Susilo Bambang Yudhoyono’s administration. The commitment was reached during President Joko “Jokowi” Widodo’s meeting with Australian Prime Minister Malcolm Turnbull in Sydney on February 26.  Prime Minister Turnbull visited Indonesia to attend the first Indian Ocean Rim Association leaders’ summit, hosted by Indonesia of which both countries are members. The agreement is expected to address impediments to bilateral trade, both tariff and non-tariff barriers, and explore ways to improve access to each other’s services markets. Under this framework, Indonesia has pledged to lower its tariff on Australian sugar in response to Australia removing tariffs on Indonesian pesticides and herbicides. Indonesia has also agreed to grant longer term permits for Australian cattle farmers for their exports to Indonesia, in return Indonesia is asking Australia to remove barriers on Indonesian exports such as paper and palm oil. The agreement is expected to support overall trade facilitation and provide a pathway for future liberalization.

President Jokowi to issue New Regulation to Tackle Tax Evasion

On February 28, President Joko “Jokowi” Widodo stated that a regulation on taxpayers’ financial information transparency will be released soon, to be implemented by July this year. The regulation will be in the form of a government regulation in lieu of law (Peraturan Pemerintah Pengganti Undang-Undang - PERPU), an expedited government regulation equivalent to a law, with immediate though temporary effect, initiated by the president without prior approval by the House of Representatives, which is allowed in the event of a compelling emergency. Such regulation, however, must be approved by the House at its next session, otherwise it will lapse. President Jokowi stated that the urgency of the new regulation is to prevent taxpayers from hiding their assets in Indonesia and overseas. It would complement Indonesia’s involvement with the Automatic Exchange of Information (AEOI) policy along with 100 other countries, due to be implemented by 2018 in Indonesia. The AEOI initiative was created through discussions within the G20 and the Organization for Economic Co-operation and Development (OECD). The implementation of the AEOI is expected to incentivize taxpayers to voluntarily participate in Indonesia’s tax amnesty program that ends on March 31, 2017, rather than being forced to do so under AEOI. The law would have a significant impact on Indonesia’s financial industry, removing several taxpayer confidentiality elements therefore granting greater access for tax authorities. On March 3, OJK Chairman Muliaman Hadad stated that the OJK is currently preparing a circular to support President Jokowi’s PERPU in an effort to fight tax evasion, the circular will also include provisions on financial data disclosure of foreign customers. 

 
IN THIS UPDATE
 
 
Regional Affairs
Plenty of room to expand Indonesia-US trade: US Embassy
Indonesia holds investment week in Singapore
US vice president to visit Indonesia
Indonesia declares more outermost islands
Philippines, Malaysia and Indonesia to patrol piracy-prone waters
Indonesia Lures Middle East Cash as Trump Worries Muslim Nations
IORA Summit to Produce 'Jakarta Concord'

National Affairs
Jokowi wants Indonesia in 40th place on doing business index
Jokowi to hold Cabinet meeting to discuss 2018 state budget
Jokowi targets 6.1 economic growth in 2018
OJK shortlist lacks nonbank financial candidates
President Jokowi installs 17 Indonesian ambassadors
OJK to set up investment alert task force
Government must discuss draft law on tobacco: Ministry
Central Bank, Foreign Affairs Ministry Agree on Collaboration to Draw Investment
Indonesia scrambles in tax amnesty final countdown

Customs
New ro-ro route expected to boost Indonesia, Philippines trade
Indonesia, Australia Eye Trade Deal Conclusion Within the Year

Defense & Security
Russia remains tight-lipped on Indonesia's weapons deal
Indonesia and Australia restore full military ties
Singapore-Indonesia relations should prioritise fighting rising radicalism and terrorism: Wiranto

Economics
Delayed projects to be pushed in first quarter to boost growth
Finance Ministry, Anti-Monopoly Agency Share Data to Fight Cartels
Indonesia inflation rate rises to 3.83% in Feb: stats bureau

Energy
Elia Massa Manik appointed Pertamina chief
Indonesia to merge two mining firms, initial step in forming holding group
Government to revoke permits of delinquent miners
North Kalimantan to be developed as smelting center
Indonesia offers Saudi Arabia chance to invest in three more oil refineries
Association: 26 Smelters Will Be Operational This Year
French Renewable Energy Group set up in Indonesia
Indonesia seeks exploration of two oil fields in Iran

Financial Services
Foreign Exchange Reserves Up by $3 Billion: Bank Indonesia
Indonesian, South Korean central banks renew local currency swap arrangement
Indonesia sells 6.1 trln rupiah of Islamic bonds, above target
Bank of Scotland’s local arm ceases operations in Indonesia
Regulation against bank secrecy to affect only foreign clients initially
Allianz Life Indonesia to abide by planned regulation limiting foreign ownership
Central bank to pass derivative regulations of crisis mitigation law
Selection team defends decision to cull financial authority incumbents
Jokowi to Release Perppu on AEOI

Food & Agriculture
Rice center to be established in Indramayu
Government to buy all paddy produced by farmers: Minister
Indonesia Dominates Global Retail Coffee Market
Business watchdog smells cartel in chili distribution
Indonesia to challenge tax avoidance among beef importers
Parliament committee says palm oil biofuels usage should end by 2020

ICT
Indonesia’s Dattabot, HukumOnline develop legal search engine
Uber agreed to, then scrapped, a non-compete deal with Indonesian unicorn Go-Jek
Govt speeds up development in Papua
Indian firms ride the Indonesian start-up wave
Government to issue regulation on online shops
Zalora CEO refutes reports that company is selling in Indonesia

Infrastructure
Financial authority pushes insurance firms to invest in infrastructure
Jokowi to lead Cabinet meeting to discuss strategic projects 
City council to form special committee to study altered MRT plans
Hyperloop firm eyes Indonesia for ultra-fast transport system
Trans-Papua road set to be completed next year
Government gives railway operator 50-year concession for LRT

Manufacturing
Indonesia tobacco bill would fire up output despite health fears
Presiden Jokowi receives Toyota Motor executives
Indonesia January Retail Sales Grow 6.3%
Indonesia's Manufacturing Industry Contracts in February: PMI Survey
 
 
ARTICLE CLIPS
 
 
Regional Affairs

Plenty of room to expand Indonesia-US trade: US Embassy The Jakarta Post 15th Mar 2017
Despite rising concerns that the United States will soon adopt protectionist economic policies, high-ranking US officials have said that there is still plenty of room to expand bilateral trade between Indonesia and the US.

Indonesia holds investment week in Singapore The Jakarta Post 14th Mar 2017
The government is holding an event to attract foreign investors called “Indonesia Investment Week Singapore Chapter 2017,” which started on Monday and will end on Wednesday. It is the first Indonesian Investment Week organized outside Indonesia.

US vice president to visit Indonesia The Jakarta Post 13th Mar 2017
Indonesia and the United States are preparing for a visit by US Vice President Mike Pence to Indonesia, believed to be scheduled for next month. US Ambassador to Indonesia Joseph R. Donovan paid a visit to Coordinating Political, Legal and Security Affairs Minister Wiranto at his office in Jakarta on Monday to discuss what Wiranto deemed as “strategic issues” that might be on the discussion table for Pence and President Joko “Jokowi” Widodo.

Indonesia declares more outermost islands The Jakarta Post 12th Mar 2017
In an effort to protect the country's border areas against foreign territorial claims, the government has declared 111 outer islands, which include some previously not stated as border areas. Maritime Affairs and Fisheries Minister Susi Pudjiastuti welcomed Presidential Decree No. 6/2017 on outermost islands, the new regulation signed by President Joko "Jokowi" Widodo, which revises a 2005 decree that only named 92 islands.   The newly mentioned islands include Bintan and Berakit in the province of Riau Islands and Nusa Penida in Bali.  “The enactment of these [111] islands is to prevent issues of occupation or claims of possession by other nations,” said Susi on Saturday, as quoted by tribunnews.com.

Philippines, Malaysia and Indonesia to patrol piracy-prone waters AsiaOne 9th Mar 2017
The Philippines, Malaysia and Indonesia will launch joint patrols in piracy-plagued waters, Manila's defence secretary said Thursday, after a wave of attacks that saw Islamic militants kidnapping and murdering foreigners.

Indonesia Lures Middle East Cash as Trump Worries Muslim Nations Bloomberg 8th Mar 2017
As one of Asia’s fastest-growing economies and the most populous Muslim nation in the world, Indonesia is billing itself as a natural home for Middle Eastern investment at a time when the U.S. is turning inward. With a landmark visit by Saudi Arabia’s King Salman bin Abdulaziz to Southeast Asia winding down this week, Indonesia has won pledges of $1 billion in development finance and signed agreements to cut trade barriers. That’s on top of a $6 billion oil refinery deal between Saudi Aramco and Indonesia’s PT Pertamina signed in December.

IORA Summit to Produce 'Jakarta Concord' Jakarta Globe 6th Mar 2017
The Indian Ocean Rim Association, or IORA, summit will produce an agreement dubbed the "Jakarta Concord" to maintain peaceful and stable relations among member states, a Foreign Ministry official said on Sunday (05/03).

National Affairs

Jokowi wants Indonesia in 40th place on doing business index The Jakarta Post 15th Mar 2017
President Joko "Jokowi" Widodo has reaffirmed his desire for Indonesia to jump to 40th place on the World Bank's Ease of Doing Business (EODB) index in 2018 from its current 91st position. "While we reached 91st place last year, our target is to reach 40th. We have to analyze everything in detail whether it's our licensing or regulations that remain problematic," he said during the opening of a Cabinet meeting on Wednesday.

Jokowi to hold Cabinet meeting to discuss 2018 state budget The Jakarta Post 15th Mar 2017
President Joko “Jokowi” Widodo is set to hold a plenary Cabinet meeting on Wednesday afternoon to discuss fiscal capacity and indicative ceiling of the 2018 state budget.

Jokowi targets 6.1 economic growth in 2018 The Jakarta Post 15th Mar 2017
President Joko "Jokowi" Widodo has instructed his Cabinet to reach 5.4 to 6.1 percent economic growth in 2018. "With the global economy healing, we must be brave enough to raise our economic growth target between 5.4 and 6.1 percent," he said during the opening of a Cabinet meeting on Wednesday.

OJK shortlist lacks nonbank financial candidates The Jakarta Post 14th Mar 2017
After weeks of screening, a government-appointed committee announced on Monday a shortlist of candidates for the Financial Services Authority (OJK) board of commissioners. The nine-member selection committee, sanctioned by President Joko “Jokowi” Widodo and chaired by Finance Minister Sri Mulyani Indrawati, announced that 21 candidates, mostly government bureaucrats, had made it to the shortlist.

President Jokowi installs 17 Indonesian ambassadors Antara News 14th Mar 2017
President Joko Widodo (Jokowi) installed 17 new Indonesian ambassadors at the State Palace, here, Monday. Among those present at the inauguration ceremony were First Lady Iriana, Vice President M. Jusuf Kalla, Foreign Affairs Minister Retno L.P. Marsudi, Trade Minister Enggartiasto Lukita, Public Works and Public Housing Minister Basuki Hadimuljono, Defense Minister Ryamizard Ryacudu, and Coordinating Minister for Political, Legal, and Security Affairs Wiranto.

OJK to set up investment alert task force Antara News 8th Mar 2017
The Financial Service Authority (OJK) plans to set up an investment alert task force at a district/municipal level across Indonesia, a spokesman said. "The task force will be set up to anticipate bogus investment and curb fictitious credit scams involving financing institutions," chief of the capital market section of the OJK office in West Java Tjandra Nyatakusuma said on the sidelines of a seminar on financial education and consumer protection here on Tuesday.

Government must discuss draft law on tobacco: Ministry Antara News 6th Mar 2017
The government should deliberate the bill on tobacco proposed under the initiative of the House of Representatives, a senior official of the Ministry of Industry stated. "The draft law is now still in the deliberation process among ministries and government institutions. The bill has pros and cons, but the government should continue to conduct deliberations on it," Willem Petru Riwu, the director for beverage industry, tobacco products, and danger of preservatives affairs of the Ministry of Industry, remarked here on Monday.

Central Bank, Foreign Affairs Ministry Agree on Collaboration to Draw Investment Jakarta Globe 6th Mar 2017
Bank Indonesia, the central bank, and the Foreign Affairs Ministry have agreed on a deal to exchange information and improve manpower to attract more investment into the country. Bank Indonesia Governor Agus Martowardojo and Foreign Affairs Minister Retno Marsudi signed the memorandum of understanding for the agreement in Jakarta on Friday (03/03). A similar agreement had been signed back in 2008.

Indonesia scrambles in tax amnesty final countdown The Jakarta Post 6th Mar 2017
With less than a month remaining before the end of the tax amnesty, the government may need to accept the reality that it will miss its target for the flagship program amid slowing public participation. The tax amnesty, which will end on March 31, has entered its third and final stage with an ambitious goal of reaching the targeted Rp 165 trillion (US$12.38 billion) in penalty payments. 

Customs

New ro-ro route expected to boost Indonesia, Philippines trade The Jakarta Post 15th Mar 2017
The opening of the Davao-General Santos-Bitung route for roll-on/roll-off (ro-ro) vessels is expected to boost trade between Indonesia and the Philippines in the long run. The route is set to be launched on April 30 by Indonesian President Joko “Jokowi” Widodo and Philippine President Rodrigo Duterte during the 2017 ASEAN Summit in the Davao City, the Philippines. It is one of the priorities within the ASEAN RO-RO Network initiative, which is projected to improve connectivity in sea channels among Southeast Asian countries as it will reduce shipping time by over 50 percent.

Indonesia, Australia Eye Trade Deal Conclusion Within the Year International Centre for Trade and Sustainable Development 2nd Mar 2017
Indonesia and Australia are aiming to conclude negotiations for a comprehensive bilateral trade deal before year’s end, according to Indonesian President Joko Widodo and Australian Prime Minister Malcolm Turnbull, who met in Sydney this weekend for talks on trade and other issues.

Defense & Security

Russia remains tight-lipped on Indonesia's weapons deal The Jakarta Post 27th Feb 2017
Almost one year since President Joko "Jokowi" Widodo's state visit to Russia, Moscow is still keeping Indonesia's planned weapons purchase under wraps. Russian Ambassador to Indonesia Mikhail Galuzin refused to venture into any details on the planned purchase, only noting on the readiness for dialogue and consultation on each item of Indonesia's interest. "Russia is ready for the broadest possible cooperation with our Indonesian friends in the areas of military and technical activities," Galuzin said during a briefing in Jakarta on Monday.

Indonesia and Australia restore full military ties Al Jazeera 26th Feb 2017
Indonesia and Australia have restored full military relations, weeks after Jakarta suspended cooperation because of "insulting" teaching material found at an Australian army centre. Australian Prime Minister Malcolm Turnbull made the announcement on Sunday alongside Indonesian President Joko Widodo, who arrived in Australia on Saturday for his first visit as president.

Singapore-Indonesia relations should prioritise fighting rising radicalism and terrorism: Wiranto The Straits Times 6th Mar 2017
Indonesia's coordinating political, legal and security affairs minister Wiranto said that rising radicalism and terrorism are problems that Indonesia and Singapore should prioritise and work together to fight. Former armed forces general Mr Wiranto made the statement after meeting Deputy Prime Minister Teo Chee Hean in Jakarta, ahead of the opening of the Indian Ocean Rim Association (IORA) Business Summit in Jakarta on Monday (March 6), where leaders and senior officials from the 21 member countries are meeting. Mr Wiranto praised the good relations enjoyed by Singapore and Indonesia that are focused on mutual benefits. "Our relations must be marked with how we jointly fight terrorism and radicalism that are growing," Mr Wiranto said in a statement, pointing out that Indonesia and Singapore have common enemies and common conditions.

Economics

Delayed projects to be pushed in first quarter to boost growth The Jakarta Post 15th Mar 2017
In an effort to maintain economic growth, the government plans to accelerate spending in the first quarter of this year, including pushing forward a number of projects whose developments have been delayed since 2016. Finance Minister Sri Mulyani Indrawati said financing from the state budget would be disbursed as soon as possible for ministries and institutions with delayed projects to ensure they would continue developments in the first quarter. “We’re trying to serve ministries and institutions to continue their spending, which was delayed in 2016, so that they can execute it in the first quarter,” she said after a Finance Ministry gathering with stakeholders on Tuesday evening.

Finance Ministry, Anti-Monopoly Agency Share Data to Fight Cartels Jakarta Globe 8th Mar 2017
Indonesia's Finance Ministry and anti-monopoly agency will be sharing data on taxpayers and businesses in an effort to fight cartels and improve tax collection, a senior official said. Finance Minister Sri Mulyani Indrawati and the head of the Business Competition Supervisory Commission (KPPU) Syarkawi Rauf signed a memorandum of understanding on behalf of both institutions on Thursday (02/03), which cemented data and information exchanges between the tax office, customs and the KPPU that started a week ago.

Indonesia inflation rate rises to 3.83% in Feb: stats bureau The Business Times 1st Mar 2017
Indonesia's annual inflation rate increased in February, mainly due to higher prices for processed and raw foods as well as healthcare, the statistics bureau said on Wednesday. February's annual headline rate was 3.83 per cent, the bureau said, compared with January's 3.49 per cent and the 3.90 per cent predicted in a Reuters poll.

Energy

Elia Massa Manik appointed Pertamina chief The Jakarta Post 16th Mar 2017
State-Owned Enterprises Minister Rini Soemarno has officially appointed Elia Massa Manik the new president director of oil and gas giant Pertamina. Elia was previously the president director of PT Perkebunan Nusantara (PTPN) III, the holding company of 14 state-owned agriculture firms.

Indonesia to merge two mining firms, initial step in forming holding group The Jakarta Post 8th Mar 2017
The government will merge PT Alumunium Development Corporation (Aldevco) into state-owned aluminum producer PT Indonesia Asahan Aluminium (Inalum) as part of the preparation for the latter to be a leader of the holding company in the mining sector.

Government to revoke permits of delinquent miners The Jakarta Post 8th Mar 2017
The government warns that it will revoke operating permits of mining and coal companies with arrears in non-tax revenue (PNBP) payment as the amount remains large. The Energy and Mineral Resources Ministry is ready to report the disobedient firms to the Corruption Eradication Commission (KPK), which coordinates with the ministry to supervise companies with mining licenses that have problems of arrears to the state.

North Kalimantan to be developed as smelting center Antara News 8th Mar 2017
The Indonesian province of North Kalimantan will be developed into a smelting center, Industry Minister Airlangga Hartarto stated here on Wednesday. "Mines may be in Papua, Maluku, or other eastern Indonesian regions, but the smelters will be built in North Kalimantan that enjoys a strategic location in terms of sea routes to other continents, such as Australia, Asia, Africa, and (North and South) America," he remarked after attending the North Kalimantan Investment Forum 2017.

Indonesia offers Saudi Arabia chance to invest in three more oil refineries The Jakarta Post 7th Mar 2017
Indonesia has offered Saudi Arabia the opportunity to invest in three more oil refineries — in Dumai, Riau; Balongan, West Java; and Bontang, East Kalimantan. Previously, state-owned energy company Pertamina and Saudi Aramco signed an agreement to establish a joint venture to develop an oil refinery in Cilacap, Central Java. “From the agreement, we will see investment worth US$6 billion [Rp 80.2 trillion],” Achmad Sigit Dwiwahjono, the Industry Ministry’s chemical industry and textiles director general, said in Jakarta as reported by tribunnews.com on Tuesday.

Association: 26 Smelters Will Be Operational This Year Tempo 6th Mar 2017
Chairman of the Indonesian Nickel Miner Association (APNI) Ladjiman Damanik stated that there will be 26 fully operational nickel smelter by the end of this year. "Those are the ones that are in progress, it will be operational by the end of this year," Ladjiman stated on Monday, March 6, 2017. Ladjiman explained that there are currently six fully operational smelters that with a cumulative annual production capacity of 300 to 400 thousand tons. By the end of the year, all of the new smelters are predicted to have a total annual production capacity of 1 million ton.

French Renewable Energy Group set up in Indonesia The Jakarta Post 28th Feb 2017
French delegates established on Tuesday a new business group representing French companies that aim to tap into the huge potential in Indonesia’s renewable energy sector. The new group, named the French Renewable Energy Group (FREG), comprises companies that already operate or have interests in investing locally and a branch of France’s largest renewable energy organization, Syndicate for Renewable Energy (SER). French Minister of Foreign Affairs Jean-Marc Ayrault acknowledged Indonesia’s ongoing efforts to increase the use of renewable energy sources to make up 23 percent of all domestic energy needs by 2025, saying that France was willing to share its expertise with its counterparts.

Indonesia seeks exploration of two oil fields in Iran The Jakarta Post 27th Feb 2017
State-owned energy company Pertamina will submit proposals to the Iranian government for the exploration of two oil fields in the country, a press statement says.The statement, issued by the Office of the Coordinating Economic Minister, says the proposals will be submitted during a visit of Coordinating Economic Minister Darmin Nasution to the country from Feb. 26 to 27. “The oil fields are located in Ab Teymour and Mansouri, Bangestan province, the eastern part of Iran,” said a press statement on Monday.

Financial Services

Foreign Exchange Reserves Up by $3 Billion: Bank Indonesia Jakarta Globe 9th Mar 2017
Indonesia's foreign exchange reserves increased by $3 billion in February on the back of incoming tax revenue, income from oil and gas exports, overseas loan withdrawal and proceeds from foreign-denominated Bank Indonesia securities that exceeded foreign debt payments. The reserves increased to $119.9 billion at the end of February, up from $116.9 billion a month earlier.

Indonesian, South Korean central banks renew local currency swap arrangement The Business Times 7th Mar 2017
The central banks of Indonesia and South Korea on Monday renewed a bilateral local currency swap arrangement to promote trade and financial cooperation between the two countries, Bank Indonesia (BI) said.

Indonesia sells 6.1 trln rupiah of Islamic bonds, above target NASDAQ 7th Mar 2017
Indonesia's finance ministry sold 6.1 trillion rupiah ($457.17 million) of Islamic bonds at an auction, above the indicative target of 6 trillion rupiah, its financing and risk management office said on Tuesday. The weighted average yield for Islamic T-bills maturing in September 2017 was 5.58656 percent.

Bank of Scotland’s local arm ceases operations in Indonesia The Jakarta Post 6th Mar 2017
The local arm of the Royal Bank of Scotland NV (RBS NV) has officially ended its business in Indonesia. The Financial Services Authority (OJK) issued a decree on Feb. 28 concerning the operation license revocation of RBS NV’s branch office in Indonesia. The revocation was carried out based on a request submitted by the lender's headquarters in the Netherlands, dated Nov. 1.

Regulation against bank secrecy to affect only foreign clients initially The Jakarta Post 3rd Mar 2017
A government regulation in lieu of law (Perppu) aimed at reducing bank secrecy as part of a global initiative to fight tax evasion will only apply to foreign customers in the first stage of its implementation. A Perppu is equal to a law and can only be issued in urgent cases. In this case, the Perppu is part of the government’s efforts to comply with the Automatic Exchange of Information (AEOI), a global initiative that defines new standards for fighting international tax evasion.

Allianz Life Indonesia to abide by planned regulation limiting foreign ownership The Jakarta Post 3rd Mar 2017
Life insurer Allianz Life Indonesia will comply with regulations stating that foreign ownership of insurance companies should be no more than 80 percent. Allianz group currently owns 99.7 percent of the company’s shares.

Central bank to pass derivative regulations of crisis mitigation law The Jakarta Post 2nd Mar 2017
Bank Indonesia is set to issue two new regulations this month on short-term liquidity credits as the derivative rules of the Financial System Crisis Prevention and Mitigation (PPKSK) Law passed last year. The new rules would detail requirements for banks, both conventional and sharia ones, to be eligible to obtain short-term credits, Bank Indonesia deputy governor Perry Warjiyo said Thursday. "We are finalizing the legal draft of the rules. Hopefully, Bank Indonesia's regulations can be launched in March," Perry said at the Asia Pacific Economic Cooperation (APEC) Financial Regulators Training Initiative regional seminar on crisis management held by the central bank.

Jokowi to Release Perppu on AEOI Tempo 28th Feb 2017
President Joko "Jokowi" Widodo confirmed that a government regulation in lieu of law (Perppu) on taxpayer’s financial information transparency will be released soon. The new bill is aimed at preventing taxpayers hiding their assets in Indonesia and overseas. "This is to welcome the Automatic Exchange of Information (AEOI). The regulation will be issued in July 2017," President Jokowi said during the dissemination of the tax amnesty policy in Jakarta on Tuesday, February 28, 2017.

Food & Agriculture

Rice center to be established in Indramayu The Jakarta Post 13th Mar 2017
State-owned fertilizer company PT Pupuk Indonesia plans to develop a rice center to provide farmers with skill and knowledge as well as facilities to improve the quality of their rice in Indramayu, West Java. “Indramayu, one of the main rice producers in the country, is the ideal location to develop the rice center,” PT Pupuk Indonesia president director Aas Asikin said as reported by tribunnews.com on Monday. State-owned Enterprises Minister Rini Soemarno visited Mundu village in Indramayu regency last Friday to attend a presentation on the establishment of the center, which will be managed by PT Pupuk Indonesia Pangan (PIP), a subsidiary of PT Pupuk Indonesia.

Government to buy all paddy produced by farmers: Minister The Jakarta Post 9th Mar 2017
Agriculture Minister Andi Amran Sulaiman has stressed that the government would buy all unhusked rice produced by farmers from all over the country to ensure that paddy prices would not fall lower than the government price floor (HPP) of Rp 3,700 (28 US cents) per kilogram.

Indonesia Dominates Global Retail Coffee Market Tempo 6th Mar 2017
Indonesia increases its dominance over the global retail coffee market with an average sales growth of 19.6 percent each year throughout the last five years, followed by India (15.1 percent average growth) and Vietnam (14.9 percent average growth in second and third position, respectively.

Business watchdog smells cartel in chili distribution The Jakarta Post 6th Mar 2017
The Business Competition Supervisory Commission (KPPU) is investigating suspected cartel practices in chili distribution, blamed for uncontrollable prices of the commodity, KPPU chair Syarkawi Rauff has said.

Indonesia to challenge tax avoidance among beef importers The Jakarta Post 3rd Mar 2017
The government has launched a comprehensive investigation into tax avoidance committed by beef importers. A deal signed on Thursday by Finance Minister Sri Mulyani Indrawati and Business Competition Supervisory Commission (KPPU) chairman Syarkawi Rauf will enable directorates general under the ministry to work together with the KPPU on joint investigations and the exchange of data.

Parliament committee says palm oil biofuels usage should end by 2020 EURACTIV.com 10th Mar 2017
MEPs adopted a report on Thursday (9 March) urging the European Commission to phase out the use of palm oil as a component of biodiesel by 2020 “at the latest”. In November, the European Commission presented its draft proposal to review the Renewable Energy Directive (RED) for the post-2020 period as part of a Clean Energy Package (See background). “The cultivation of palm oil over the last 20 years has been the cause of 20% of all deforestation,” the EU lawmakers pointed out, adding that in 2014, 46% of all palm oil imported into Europe was used as fuel for transport representing a 34% increase compared to 2010. The report on Palm oil and deforestation of rainforests explains that the demand for palm oil will double by 2050, causing a severe environmental impact on countries like Indonesia, Malaysia, and other Asian countries, as well as in Africa and Latin America.

ICT

Indonesia’s Dattabot, HukumOnline develop legal search engine Digital News Asia 8th Mar 2017
JAKARTA-based data analytics company Dattabot, previously Mediatrac, joins forces with legal media and reference company HukumOnline to develop what they say is Indonesia’s first smart search engine called HukumOnline Advanced Search. The search engine was launched recently in Jakarta and aims to aid legal professionals as well as the general public in looking for particular regulations or rules; a process that can take hours.

Uber agreed to, then scrapped, a non-compete deal with Indonesian unicorn Go-Jek TechCrunch 7th Mar 2017
Uber may have a reputation for steamrolling its competitors, but it can be conciliatory at times. In 2015, a year before its retreat from China via the sale of its Chinese business to rival Didi, the U.S. company agreed to a non-compete deal with Go-Jek, a fast-growing on-demand service from Indonesia that’s valued at over $1 billion, TechCrunch has learned.

Govt speeds up development in Papua Antara News 6th Mar 2017
The government of Indonesia will continue to speed up the development in Papua and West Papua provinces, according to Communication and Informatics Minister Rudiantara. The minister noted that access to the Internet in Papua and West Papua is around 300 kilobytes/second, much slower than that in Jakarta with 7 gigabytes/second.

Indian firms ride the Indonesian start-up wave The Jakarta Post 2nd Mar 2017
Driven by a saturated local market, some Indians are now looking at Indonesia as an attractive destination to fulfil their start-up dreams. Due to similar demographics and a rising middle income crowd, all the tech and product innovations happening in countries like India have become equally relevant for the Indonesian market. The proximity to Singapore and growing familiarity with the English language have made it easier for Indians to operate here. More than 20 Indian start-ups have expanded operations in Indonesia in the last three years. All of them have one thing in common: Indonesia’s big internet using mobile phone market. The number of internet users in Indonesia, which has a population of over 250 million people, is projected to grow from 93 million in 2015 to 123 million in 2018, making Indonesia one of the biggest online markets worldwide.

Government to issue regulation on online shops The Jakarta Post 28th Feb 2017
The government is considering issuing a regulation to support the “Safe Harbor Policy” that was introduced in December last year to give legal protection to online shops against the sale of illegal goods by their merchants. Communication and Information Minister Rudiantara said implementation of the Safe Harbor Policy was based on guidelines stipulated in a ministry circular. “The circular is part of the process before the policy can be fully implemented.  We will later issue a ministerial regulation as the basis of the Safe Harbor Policy,” he said at a press conference in Jakarta. The Communication and Information Ministry issued a circular to state the responsibility of e-commerce players, such online shops and their merchants, regarding the legality of goods or services sold.

Zalora CEO refutes reports that company is selling in Indonesia Yahoo 27th Feb 2017
On Friday, Asia’s tech media — including e27 — cited a TechCrunch report that said Zalora was in acquisition talks with Indonesian retail giant MAP Group, following Zalora Philippines’ recent investment from Ayala Group.The report indicated that the fashion e-commerce platform is retreating from the Indonesian market, as it has done with its Vietnam and Thailand operations.

Infrastructure

Financial authority pushes insurance firms to invest in infrastructure The Jakarta Post 16th Mar 2017
The Financial Services Authority (OJK) is pushing insurance companies to invest in infrastructure projects being handled by several state-owned construction companies (SOEs). "We have invited both insurers and construction SOEs. The latter have presented their projects to the insurers. Then they can make a consortium and invest directly or buy bonds," OJK commissioner for the non-banking financial industry Firdaus Djaelani said during a seminar in Jakarta on Thursday.

Jokowi to lead Cabinet meeting to discuss strategic projects  The Jakarta Post 9th Mar 2017
President Joko “Jokowi” Widodo is set to lead a limited Cabinet meeting on Thursday at the Presidential office to discuss national strategic projects and priority programs in Central Sulawesi and East Kalimantan as the government commitment to accelerating infrastructure development to boost economy. 

City council to form special committee to study altered MRT plans The Jakarta Post 9th Mar 2017
The City Council is to soon form a special committee to study the altered development plans for the second phase of the MRT system that will make Ancol Timur instead of Kampung Bandan the northern terminus of the extension of the line from the Hotel Indonesia traffic circle. City Council deputy speaker Triwisaksana said Tuesday the special committee was expected to be formed next week.

Hyperloop firm eyes Indonesia for ultra-fast transport system CNBC 8th Mar 2017
Hyperloop Transportation Technologies (HTT), one of the companies developing the futuristic transport service dreamed up by billionaire Elon Musk, said it was exploring Indonesia as a potential site to put one of its tracks. The so-called "feasibility study" contract is worth $2.5 million and will look into whether a hyperloop system would work initially in the capital Jakarta, and then connecting Java and Sumatra.

Trans-Papua road set to be completed next year The Jakarta Post 7th Mar 2017
The development of the 4,300-kilometer trans-Papua road project in Papua and West Papua provinces on Indonesia’s easternmost island is expected to be completed next year, Public Works and Public Housing Minister Basuki Hadimuljono has said. “The construction has seen significant progress,” Basuki said in Jakarta, as reported by tempo.co on Tuesday. He said 3,850 km of the total 4,300-km road had been constructed, while the remaining section would be developed this year and next year.

Government gives railway operator 50-year concession for LRT The Jakarta Post 7th Mar 2017
The government has decided to give state railway operator Kereta Api Indonesia (KAI) a 50-year concession for the light rail transit (LRT) system in the new financing scheme, the company’s finance director has said.

Manufacturing

Indonesia tobacco bill would fire up output despite health fears Mail Online 15th Mar 2017
By Eveline Danubrata and Agustinus Beo Da Costa JAKARTA, March 15 (Reuters) - Indonesia's parliament has proposed a draft law that could lead to a sharp increase in tobacco output in a country that is already a top producer with one of the heaviest rates of smoking in the world. Indonesia's tobacco industry employs millions of workers and contributes almost 10 percent to government revenues through taxes, but has faced a backlash from the health ministry and anti-smoking organizations. Health Minister Nila Moeloek said her ministry "definitely" opposes the tobacco bill as it has the responsibility to "safeguard the health of the people". The bill, which covers production, distribution and excise taxes, has to be approved by President Joko Widodo.

Presiden Jokowi receives Toyota Motor executives Antara News 14th Mar 2017
President Joko Widodo (Jokowi) received Toyota Motor Corporation executives led by the company's president, Akio Toyoda, at Merdeka State Palace here on Monday. "In 2015, Jokowi visited Toyota in Japan, and today we have presented a report on the several commitments of Toyota in Indonesia," PT Toyota Motor Manufacturing Indonesias (TMMIN) deputy president director Warih Andang Tjahjono said after the meeting.

Indonesia January Retail Sales Grow 6.3% Jakarta Globe 9th Mar 2017
Indonesia's retail sales in January grew 6.3 percent from a year earlier, a much slower pace than in December, a survey by Bank Indonesia (BI) showed on Thursday (09/03). The central bank said decreased buying of food and non-food items weakened the growth rate in January.

Indonesia's Manufacturing Industry Contracts in February: PMI Survey Jakarta Globe 6th Mar 2017
Indonesia's manufacturing industry contracted in February amid a decline in new orders from abroad which led businesses to lower output, scale down production and cut back on employment, the Nikkei Indonesia Manufacturing purchasing managers' index survey revealed.