Indonesia Update: OJK to Set up a New FinTech Center

Indonesia Update | November 22, 2017
Authors: Kim Yaeger, Artha Sirait, Ian Saccomanno and Gaofan Zhang
 
LOOKING AHEAD
 
 
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THE COUNCIL'S TAKE
 
 

OJK to Set up a New FinTech Center

In addition to Bank Indonesia’s (BI) FinTech Office which was launched in November 2016, the Indonesian Financial Services Authority (OJK) is planning to set up a separate FinTech Center to support the development of digital economy in Indonesia. BI is in charge to regulate FinTech companies engaged in payment services; meanwhile the OJK is the authorized entity to regulate FinTech companies offering services such as investment and insurance. BI’s FinTech Office aims to facilitate the development of innovation in the technology-based financial ecosystem in Indonesia while preparing the country to optimize the development of technology to develop. BI’s FinTech Office’s mandate it to improve the competitiveness of the financial industry and support BI policy formulation. OJK’s FinTech Office on the other hand, will aim to improve OJK supervision of the FinTech industry in Indonesia. OJK Chairman Wimboh emphasized that all FinTech companies must be licensed and supervised for the sake of transparency and consumer protection. As a result, FinTech companies may face more stringent supervision and regulations from the government in the coming years. Currently, there are 24 active peer-to-peer lending companies and 31 companies that are in process of applying for permits.

Indonesia asks the US to Cancel Countervailing Duty on Biodiesel

Minister of Trade Enggartiasto Lukita has requested the United States to reconsider its decision regarding the enforcement of a countervailing duty on Indonesian biodiesel products. Previously, on November 9, the U.S. Department of Commerce (USDOC) announced that it will be imposing anti-dumping duties ranging from 34.45 to 64.73 percent on palm oil-based biodiesel imports from Indonesia. However, whether the duties will actually be imposed depends on the result of the currently ongoing investigation conducted by the U.S. International Trade Commission (USITC). The duties will be imposed if the USITC determines that the U.S. is suffering losses from biodiesel imports, otherwise the duties will be withdrawn. USITC will announce its final investigative report on December 21.

The issue was triggered by concerns raised by American U.S. biodiesel producers that Indonesia is dumping its biodiesel into the U.S. at below-market value, a move made possible by the Indonesian government’s biodiesel subsidy programs. The U.S. producers claimed that these programs subsidized biodiesel exports as well as required the local producers to blend a mandatory amount of fatty acid methyl ester (derived from palm oil) to lower the costs. If the duties are imposed, the Indonesian exporters may look for and expand in other markets, such as China, India and its ASEAN peers. The Indonesian government itself has stated that the biodiesel produced under these programs is only sold in its domestic market. Minister Enggartiasto added that Indonesia will consider filing a complaint to U.S. courts and the WTO over the anti-dumping measures from the U.S.

In 2016, Indonesian biodiesel exports to the US reached USD255.56 million, which accounts for 89.19 percent of total Indonesian biodiesel exports. This year, however, exports have declined due to the U.S.’ anti-dumping measures.

 
IN THIS UPDATE
 
 
Regional Affairs
Malaysia to import chickens, ducks from Indonesia
Indonesia asks US to cancel countervailing duty on biodiesel

Economics
Financial Inclusion Rate to Reach 75 Percent by 2019

Energy
Govt Sets Two Locations for Gas-Based Petrochemical Industries
Lawmaker calls for review of 35,000 MW program

Food & Agriculture
Indonesia to Issue New Regulation to Protect Tuna From Overfishing
West Java key to achieving RI’s food self sufficiency targets

ICT
Government to integrate state lenders’ EDC services

Infrastructure
Transport Ministry Probes Snake Incident on Jakarta Commuter Train

Manufacturing
Confronting Indonesia's productivity challenge in manufacturing industry
 
ARTICLE CLIPS
 
 
Regional Affairs

Malaysia to import chickens, ducks from Indonesia The Jakarta Post 22nd Nov 2017
Malaysia plans to import chickens and ducks from Indonesia, following a visit by Indonesian delegates, Animal Farm Board secretary general Ade Zulkarnain told The Jakarta Post on Tuesday.

Indonesia asks US to cancel countervailing duty on biodiesel The Jakarta Post 20th Nov 2017
Indonesia has called on the United States to cancel its final decision on the enforcement of a countervailing duty on Indonesian biodiesel products, by imposing tariffs of between 34.45 to 64.73 percent.

Economics

Financial Inclusion Rate to Reach 75 Percent by 2019 Tempo 20th Nov 2017
The government is aiming for 75 percent financial inclusion rate by 2019. To achieve the target, the government needs to include 51.8 million more adults.

Energy

Govt Sets Two Locations for Gas-Based Petrochemical Industries Tempo 21st Nov 2017
The government has set the Bintuni Bay in West Papua and the Masela Block in Maluku as the locations for the development of gas-based petrochemical industries. Meanwhile, the price assumption set for gas contractors is still above US$5 per MMBtu.

Lawmaker calls for review of 35,000 MW program The Jakarta Post 20th Nov 2017
House of Representatives Deputy Speaker Fadli Zon has called on the government to reevaluate its 35,000 megawatts (MW) electricity program as state-owned PLN currently has unused electricity equivalent to 40 percent of its total production.

Food & Agriculture

Indonesia to Issue New Regulation to Protect Tuna From Overfishing Jakarta Globe 20th Nov 2017
The Indonesian government is planning to issue a new regulation to protect tuna from the dangers of overfishing, a senior official from the Maritime Affairs and Fisheries Ministry said on Monday (20/11).

West Java key to achieving RI’s food self sufficiency targets The Jakarta Post 20th Nov 2017
While serving as the largest source of food for Jakarta, West Java has played an important role as one of two Indonesian provinces, along with East Java, that have become the country’s biggest contributors of rice. “

ICT

Government to integrate state lenders’ EDC services The Jakarta Post 20th Nov 2017
The government plans to integrate the electronic data capture (EDC) services of three state-owned lenders – Bank Negara Indonesia (BNI), Bank Mandiri and Bank Rakyat Indonesia (BRI).

Infrastructure

Transport Ministry Probes Snake Incident on Jakarta Commuter Train Jakarta Globe 22nd Nov 2017
The Directorate General of Railways at the Ministry of Transportation has launched an investigation into the circumstances surrounding the discovery of a snake on a commuter train in Jakarta on Tuesday (21/11).

Manufacturing

Confronting Indonesia's productivity challenge in manufacturing industry The Jakarta Post 20th Nov 2017
Indonesia, along with most other Southeast Asian countries, has an opportunity to capture a bigger share of global manufacturing activity