Indonesia plans to make 30 percent biodiesel blend mandatory, studies B100
While the government expanded the mandatory use of a 20 percent biodiesel blend ( B20 ) in September, it plans to further boost domestic biodiesel consumption to absorb more crude palm oil (CPO) amid fluctuation in the global market price of the commodity.
Apart from improving the distribution of the B20 blend across to the country, the government is also carrying out research to increase the portion of biodiesel in the fuels rom 20 percent to 30 percent ( B30 ) or even to 100 percent ( B100 ).
State-owned oil and gas holding company Pertamina supply chain operations manager Gema Iriandus Pahalawan further explained that three more biodiesel refineries would be developed, likely in Plaju in South Sumatra, Dumai in Riau and Balikpapan in East Kalimantan, to produce more biodiesel.
Gema said the production of B30 biodiesel was expected to be implemented, while the government was still improving the B20 distribution, which had reached 97 percent in November and was planned to be completed in December.
Indonesia’s warung goes digital
Warung Tiga Putri is not your typical warung . Although it sells snacks, cigarettes and assorted knick-knacks like countless other ramshackle convenience stores across Indonesia’s towns and cities, the tiny bright-yellow kiosk does much more for it is one of Indonesia’s growing number of smart warung . No fewer than five CCTV cameras at the busy Jakarta kiosk collect data on customers, such as their approximate age and sex, which is later analysed to improve marketing, distribution and engagement.
The concept is the brainchild of Warung Pintar, a local tech start-up that has transformed more than 1,000 warung and counting in Jakarta and other Indonesian cities.
For the kiosk’s owner, Junaidi Salad, Warung Pintar has been a godsend. Before the company approached him about turning his 1.5-metre-wide kiosk into the first-ever smart warung , the 32-year-old was worried about being evicted from the roadside he had illegally occupied for several years. The tech start-up – whose co-founders used to work with Jakarta-based venture capitalist East Ventures – helped Salad gain legal status by moving the kiosk to the car park of one of its co-working spaces, where he doesn’t have to pay rent or for electricity.
Warung Pintar isn’t alone in its efforts. Wahyoo, another start-up, aims to modernise food kiosks known as warteg that are scattered in Indonesia’s big cities. Much like Warung Pintar, Wahyoo is streamlining supply chains: wartegowners can now order bottled water, beverages, eggs, cooking oil, sugar, flour, tea, and coffee through a Wahyoo app. The company now has over 2,000 wartegunder its name, up from 50 soon after it was founded in April last year.
“There are only a few warteg that are really clean, and that’s what deters people from eating in them. Despite that, warteg are always full,” said Wahyoo founder Peter Shearer. “We want to be the biggest digital warung operator in Indonesia. In the future we want to enable a point-of-sale system that will allow us to find out the bestsellers on the menu and identify consumers’ profiles.”
Read more: South China Morning Post
54 sectors now fully open to foreign capital, The Indonesian govt relaxes regulations to attract investors
The Indonesian government is going on a streak to weather down external shocks affecting the country’s economic performance.
After Bank Indonesia raised its seven-day repo rate by another 25 basis points to six percent on Thursday, the government announced on Friday that it had launched the 16th economic package aimed at relaxing regulations pertaining to investment.
The package comprises three main points, namely the expansion of the tax holiday, the adjustment to the negative investment list (DNI) and the provision of tax incentives for the mandatory saving of export earnings in Indonesian bank accounts.
Coordinating Economic Minister Darmin Nasution argued that the economic package should not be seen as “pro-foreigner” and should instead be perceived as a means to enhance productivity.
The government noted Rp 14.4 trillion (US$985.23 million) worth of foreign capital entering Indonesia through government debt papers between January and November.
Darmin said it was a sign of confidence from foreign investors toward Indonesia despite the external situation going against the country, such as monetary tightening in the United States, which prompted investors to pull their money out of emerging markets and move it to the US.
Below are the economic stimulus measures:
New tax holiday
The new tax holiday in the 16th economic package expands the categories, duration and amount it applies to. A revision to Finance Ministerial Regulation (PMK) No. 35/2018 on the tax holiday will be issued, along with a new PMK to regulate a special tax holiday for smaller investments in special economic zones (SEZs).
The ministry’s undersecretary for macroeconomics and finance, Iskandar Simorangkir, said President Joko “Jokowi” Widodo had instructed his office and the Finance Ministry to issue the two regulations by next week.
Eighteen sectors were offered various tax holiday incentives, with the new sectors being the processing industry based on agriculture, plantations or forestry and the digital economy.
With the new regulation, investments worth between Rp 100 billion and Rp 500 billion can now benefit from a 50 percent income tax reduction for five years.
Investments worth between Rp 20 billion and Rp 100 billion in SEZs are also eligible for the same incentive, whereas investments over Rp 100 billion in SEZs can be fully exempted from income tax for between five and 20 years.
54 sectors now fully open to foreign capital
The new economic package revises the DNI by excluding 87 business sectors, thereby allowing them to benefit from partial or full investment from foreign investors.
Out of the 87 sectors, 54 are now fully open to foreign capital, such as offshore oil and gas drilling, clove and white cigarette production, certain categories of medical equipment production, dairy farming and fabric printing.
investment in the past few years, with the latest Coordinating Investment Board (BKPM) data showing a 1.4 percent quarterly decline of investment growth in the third quarter, following a 4.9 percent decline in the second quarter.
With the decline, the BKPM has revised down this year’s investment target to Rp 730 trillion from Rp 765 trillion.
The ministry’s special staffer, Edy Putra Irawady, reassured that the revision of the DNI would not suppress opportunities for domestic investors, particularly those from small and medium enterprises (SMEs).
He also emphasized that the removal of the sectors from the DNI was based on the discretion of each ministry responsible for them, hence it would be up to each ministry to explain the benefits of allowing foreign investment in the sectors.
Similar to the new tax holiday, Jokowi mandated the administration to issue a new regulation pertaining to the DNI adjustment approximately a week after the economic package was launched.
Incentives for export earnings (DHE)
The third incentive prepared in the 16th economic package is to provide final income tax cuts for exporters who deposit their earnings (DHE) in designated bank accounts in order to provide liquidity to the domestic financial system.
The regulation stipulates that export earnings from mining, plantation, forestry and fishery sectors be deposited with domestic lenders who are authorized to conduct foreign exchange transactions or in branches of foreign lenders in Indonesia.
The ministry’s special staffer on economic and political relations, law and security, Elen Setiadi, said a zero percent final income tax cut would be provided to exporters who deposit at least 90 percent of their earnings for more than six months, both in the form of US dollars or rupiah.
Various tax rates will also be applied to earnings deposited for less than six months, such as a 7.5 percent final income tax for US dollars and 5 percent final income tax for rupiah earnings deposited for three months.
The designated accounts will also be able to serve as the exporters’ escrow account, meaning that they will be able to withdraw money from their accounts to pay routine bills or dividends and keep the rest of the funds under Bank Indonesia’s supervision.
The incentives and sanctions will be regulated through a PMK and BI regulation, which will be established 30 days at the latest after the economic package was launched, and will be implemented by Jan. 1 next year.
This article has published at The Jakarta Post.com titled “Indonesia’s latest economic stimulus package: What you need to know”
Online ads in Singapore offering Indonesian maids for sale
Online ads in Singapore offering Indonesian maids for sale were Wednesday condemned as “unjust and demeaning”, in a rare flare-up of tensions between the neighbours over domestic helpers.
Singapore is home to almost 250,000 maids, mostly from poor parts of Indonesia or the Philippines, who head to the wealthy city-state to earn higher salaries than they can back home.
While Indonesia regularly protests about abuse and exploitation of helpers in Malaysia and parts of the Middle East, complaints about treatment of maids in tightly-regulated Singapore are less common.
However reports that Indonesian helpers were being offered for sale in the city-state on online marketplace Carousell quickly drew condemnation from rights groups.
The adverts under the user name “maid.recruitment” reportedly offered the services of several helpers from Indonesia, while some ads indicated maids had been “sold”.
(read more: The Jakarta Post)
Rupiah weakens slightly on Wednesday
The rupiah weakened slightly on Wednesday to Rp 14,863 per US dollar, from Rp 14, 835 on Monday, according to Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR).
Samuel Sekuritas Indonesia economist Ahmad Mikail said the weakening trend might continue should the dollar index remain at 95.
He said the dollar was still in a strong position amid the trade war between the United States and China. “China plans to report the US to the WTO [World Trade Organization] for the US’ plan to increase import tariffs on $200 billion worth of Chinese products,” he added as reported by kontan.co.id
(read more: The Jakarta Post)
Networking event: Singapore Fintech Festival | Tuesday, September 4th, 2018
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Indonesia should find new markets for palm oil: Minister
Finance Minister Sri Mulyani has said that Indonesia should be aggressive in looking for new palm oil markets because of various problems in the traditional markets, such as negative campaigns against the commodity and the impact of the ongoing trade war.
“We should not act defensively or just wait and see,” said Sri Mulyani when speaking in a seminar on palm oil organized by the Indonesian Oil Palm Estate Fund (BPDP-KS) in Jakarta on Monday as reported by kompas.com.
“When I worked for the World Bank, I visited many countries in Africa and Latin America. They already had initiatives to develop palm oil. Many companies in Asia, particularly Malaysia, wanted to enter the palm oil business [there].”
She expressed confidence that the export potential of palm oil remained high amid current challenges, particularly in nontraditional markets.
As the largest palm oil producing country, Indonesia produced 37.8 million tons of CPO in 2017, with exports valued at US$21.25 billion, according to the Agriculture Ministry.
(read more: The Jakarta Post)
Indonesia promises haze-free Asian Games
The government is determined to carry out all necessary measures to prevent forest and land fires from spreading on the island of Sumatra, as the Asia Games are set to kick off on Aug. 18 in Jakarta and Palembang, South Sumatra, at the peak of the dry season.
Coordinating Political, Legal and Security Affairs Minister Wiranto held a meeting on Tuesday with relevant officials, discussing anticipatory measures to address the potential increase in hot spots.
“Learning from our experience […] and with solid coordination [among stakeholders] as well as proper procedures in both prevention and mitigation, all regions are prepared to mitigate potential forest fires,” Wiranto said on Tuesday.
The Meteorology, Climatology and Geophysics Agency (BMKG) detected 169 hot spots in Sumatra Island on Tuesday with 47 hot spots in South Sumatra alone. Riau recorded an increase in hot spots to 90 from 65 in the previous day while there were 11 hot spots in Jambi and 55 hot spots in Bangka Belitung province.
The Environment and Forestry Ministry’s director general of climate change, Ruandha Agung Sugadirman, said a coordinated team comprising relevant officials, including police and Indonesian Military (TNI) personnel, routinely carried out patrols in areas prone to forest fires.
Sixteen helicopters have been on standby across South Sumatra and can be deployed for water bombing at any time when forest fires are detected. Another 10 helicopters are also on standby in Riau, Ruandha said.
The government has also used 51 tons of salt to intensify cloud-seeding operations to help stimulate rainfall since May, he said, adding that rain had fallen in the province from Monday evening to Tuesday morning.
(read more: The Jakarta Post)
Trade spat may burden tire manufacturers
With no end in sight to trade tensions between the United States and China, domestic tire producers may bear the brunt of the spat as a revision to a ministerial regulation has made it easier for tire products to enter the Indonesian market, Fitch ratings agency has said in a statement.
Trade Ministry Regulation No. 6/2018 effectively authorizes imported products, in this case tire products, to be checked outside of customs, as part of the government’s broader effort to debottleneck lines of goods checked in customs areas in a bid to improve efficiency.
“The revised regulation has simplified the procedure for tire imports, and gives incentives to overseas manufacturers to sell more products to Indonesia,” Fitch said in a statement. “The situation is crippled further by the imposed tariffs on China’s exports to the US, including tire-related products, which may force Chinese manufacturers to divert trade to new markets, including Indonesia.”
However, the agency said the recovery of automotive sales in the first half would likely offset the short-term negative impact for local tire manufacturers as both car and motorcycle sales recorded doubledigit growth in the first half.
Trade Ministry data show that tire imports increased to US$158 million in the first half of the year, a 90 percent year-on-year (yoy) increase from the $83 million earned over the same period last year.
“Imported tires would flood the local market if the trade war continues in the long-term, which we believe may further undermine the business profile of local manufacturers that are already in an oversupplied market environment,” Fitch said.
(source: The Jakarta Post)