Singcham Weekly 6 Mar: Economic Growth Target for 2024
Monday, 6 March 2023
Economic growth target for 2024
Indonesia’s economic growth target for 2024 will be 5.3–5.7%, according to the National Development Planning Minister and National Development Planning Agency. The target has been set on the baseline of 2019 and economic growth realisation in 2022, which stood at 5.31%. Meanwhile, the government has also set other development targets: it will aim to reduce the poverty rate to 6.5–7.5% by 2024. Indonesia’s political stability can serve as a magnet for foreign investment.
Indonesia anticipates China’s WTO motion against Bauxite export ban
The government is preparing itself to face a possible lawsuit by China in the World Trade Organization regarding the ban on the export of unprocessed bauxite ores that will take place in June 2023, a Trade Ministry official has said. China is very likely to file the lawsuit as 90% of Indonesian bauxite ore export went to the country. In the last five years, the value of Indonesian bauxite ore export has increased by nearly tenfold to reflect the rapidly growing global demand for the commodity. The Indonesian government, on the other hand, sees it as an opportunity to earn more by giving added value to bauxite rather than selling unprocessed ores. Based on Bank Indonesia data, bauxite export value jumped from $66m in 2017 to $628m in 2021. A lawsuit by China will further add to Indonesia’s legal battle at the WTO after the country was sued by other countries regarding the export of nickel ores and CPOl.
Aviation industry rebound after Covid
New airlines have emerged to capitalize on the rebound of the domestic and regional aviation industry as it recovers from the Covid-19 pandemic. Without any “historical baggage”, they can be more flexible in their operations than established carriers but must address the issue of brand awareness. Raindo United Services announced that it would launch scheduled cargo services in July.
Election delay may be bad news for investment
A delay in the 2024 election would only lead to problems, including investors’ distrust and disruption to the new capital megaproject, according to an Indonesian think-tank following the Central Jakarta District Court’s controversial ruling. The court on issued a ruling that ordered the General Election Commission (KPU) to postpone the 2024 election. An election postponement, however, could spark political instability. And this would be bad news for Indonesia, a country that has been trying to woo investors left and right. Indonesia has set a goal to attract Rp1,400tr ($91.3m) in investment this year. In 2022, the SE Asian country attracted an investment of Rp1,207.2tr, topping the year’s target of Rp 1,200tr. The government reported that Indonesia would need Rp 466tr to build its dream new capital in East Kalimantan. 80% of the funding will come from the private sector.
Higher investment requirements for PR applicants
Singapore will raise the minimum investment required for individuals to obtain permanent residence. Investors are required to put at least $10m into a new or existing business, or at least $25m that invests in local companies, up from the previous requirement of $2.5m. The global investor programme was launched in 2004. Between 2020-22, only about 60 qualified investors were granted PR each year. Under the new rules, those looking to gain PR by opening a family office would have to establish a single family office managing assets of at least $200m. They must also channel at least $50m locally, such as in companies listed on the Singapore stock exchange or via private equity injections into Singapore-based companies.
BMW Special lease program for SCCI members
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Indonesia, Malaysia break ground on $2.6bn hydropower plant in N. Kalimantan
A consortium of Indonesian and Malaysian companies broke ground on a $2.6bn hydropower plant in Malinau regency, North Kalimantan. The Mentarang Induk Hydroelectric Power Plant will power the planned Kalimantan Industrial Park Indonesia (KIPI) in Bulungan. Kayan Hydropower Nusantara — a joint venture between Indonesia’s Kayan Patria Pratama (KPP) Group and Malaysia’s Sarawak Energy Berhad — is building the plant, which is slated to operate in 2030 or seven years from now. KIPI, which Jokowi claimed would become the world’s largest green industrial park, would also see the production of batteries for electric vehicles (EV), as well as petrochemicals. According to Jokowi, the government is giving its utmost support for this project, as it would pave the way for Indonesia’s transition towards a green economy.
Structured planning in train procurement
Industry Minister Agus Gumiwang Kartasasmita accentuated that planning for train procurement should be more structured and systematic so as to enable the domestic train industry to cater to the needs. The minister then outlined three areas of focus to strike a balance between the public transportation needs and the domestic industry. The three aspects are utilization of the domestic industry, more job opportunities if the government opts to add new features to the old system, and maintaining means of public transportation, he explained. According to Kartasasmita, the government still considers the option to import trains as an addition to the existing means of public transportation, although it is not a priority.
SIA paper serviceware trial sparks criticism
Singapore Airlines said that it will consider feedback from customers before it comes to a decision on the use of paper serviceware on its medium- and long-haul flights. SIA announced a trial of the serviceware in economy class and premium economy class, saying that the new containers could “retain heat and moisture better than the current casserole dish” and would also allow the airline to serve “soupy and gravy-rich main courses” on its longer routes. The new serviceware is made of Forest Stewardship Council-certified paper, and will replace the disposable plastic casserole dish,” referring to paper that is deemed more sustainable by the international non-profit organisation that promotes responsible management of the world’s forests. This is to reduce the amount of single-use plastics on board the aircraft… there are no cost savings by switching to the new serviceware from the casserole dish.
Sembcorp Industries secures 18-year power purchase agreement with Micron
Sembcorp Power, the wholly-owned subsidiary of Sembcorp Industries has secured a power purchase agreement with Micron Technology’s wholly-owned subsidiary, Micron Semiconductor Asia Operations Pte Ltd. The 18-year agreement will see Sembcorp supplying Micron with up to 450MW of power. The agreement will be accretive to Sembcorp’s earnings for the FY2023 ending Dec 31. The power plant will be operational by 2026. This will be Sembcorp’s fourth combined cycle power plant in Singapore. The details of the development of the plant will be revealed when the turnkey contract is awarded by the 1HFY2023.
Jokowi commits to supporting 2024 election on time
Deputy V of the Presidential Staff Office (KSP) Jaleswari Pramodhawardhani explained that President Jokowi remained committed to the constitution as a basis for holding the 2024 general elections. The statement was made in response to the Central Jakarta District Court’s ruling that asked the General Elections Commission (KPU) to postpone the elections. President always reiterated his support for the implementation of the elections according to schedule and constitution. Jaleswari also asked the public to stay calm, maintain a safe atmosphere, and not get provoked by information or movements that worsen the situation.
Supermarkets to charge for disposable bags
The move for most supermarkets to charge shoppers at least 5 cents for each disposable carrier bag. About 400 supermarket outlets – or two-thirds of all outlets here – will be applying the charge for disposable shopping bags of all materials. These outlets are by operators with an annual turnover of more than $100m: NTUC FairPrice, Cold Storage, Giant, Sheng Siong and Prime. The charge will not apply to non-carrier bags such as flat-top plastic bags for fresh produce, meat or seafood. The move to make the bag charge compulsory at large supermarkets is part of several proposed amendments to the Resource Sustainability. Similar schemes have already been implemented in Indonesia, Hong Kong, Taiwan, Britain, and have led to a drop in plastic bags used by 60-90%.
Lee Hsien Yang, wife Lee Suet Fern under police investigation
Mr Lee Hsien Yang and his wife, lawyer Lee Suet Fern, are being investigated by the police for potential offences of giving false evidence in judicial proceedings over Singapore’s founding PM Lee’s will. The couple declined to attend the interview and have left Singapore. Mr Lee HY and his sister, Dr Lee Wei Ling, on social media challenged Mr Lee HL over their family home at Oxley Road after the death of their father. In 2020, Mrs Lee was suspended from legal practice for misconduct in handling Mr Lee KY’s will. Mr Lee HY declared that he is considering running for the Elected Presidency, but may not meet the Election Committee’s criteria of “integrity, character and reputation”. He accused the government authorities of persecuting his family after it emerged that he and his wife were under official investigation. Lee HY’s son, Shengwu Li, an assistant professor of economics at Harvard, tweeted that for his parents to return for questioning in Singapore could put them at risk.
Kalimantan Industrial Park to produce EV batteries
Indonesia is building the world’s largest green industrial park in Bulungan, N Kalimantan, which will eventually produce batteries for electric vehicles, President Jokowi claimed. Operations in the 13,000km Kalimantan Industrial Park will be powered by green and renewable energy. This includes hydropower from Mentarang and Kayan rivers in N Kalimantan, although the transition to green energy will take time. Green energy, coupled with the “green products” that the park will make grants KIPI a competitive power. And this would also make KIPI attractive to investors, particularly those related to green products. Jokowi told reporters that he would continue to keep an eye on the progress, so the project remains on schedule.
Ultra-wideband and multi-antenna accelerate all bands to 5G
At the Mobile World Congress Barcelona 2023, Huawei said that it will continue to innovate and help operators evolve all bands to 5G for maximized spectral efficiency as they strive to deliver more high-definition and immersive digital experiences to consumers and accelerate the digital transformation of various industries. Huawei said it will continue to innovate ultra-wideband, multi-antenna, green, and simplified solutions. To help operators maximize spectral efficiency to build high-quality 5G networks that feature optimal performance, minimal energy consumption, premium experiences, and high adaptability. Global leading operators shared their practices in evolving all bands to 5G based on ultra-wideband and multi-antenna.
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