AmCham Update Vol. 5 #11

BI Anticipating Future Fed Benchmark Rate Cut, Gov’t Mulls Incentives for High-Speed Internet Providers, Internet Penetration Hits 79.5%, Mahfud MD Resigns From Cabinet

Feb 02, 2024

BI Anticipating Future Fed Benchmark Rate Cut

The US Federal Reserve has maintained its benchmark interest rate between 5.25 percent to 5.5 percent for now, according to a Federal Open Markets Committee press release published on Jan 31. Interest rates are unlikely to increase and the Fed is considering cutting them, Fed Chairman Jerome Powell said. He added that the economy remains unpredictable and that the Fed would proceed cautiously.

Bank Indonesia (BI) expects the rupiah to strengthen against the US dollar, aligning with its anticipation of a potential reduction in the Fed's benchmark interest rate. Despite recent fluctuations, there is confidence in the rupiah's appreciation, however, the Jan 31 trading rate of Rp 15,775 per dollar represents a 5 percent depreciation compared to the same date last year.

The government anticipates this potential reduction in the second semester, expressing optimism that the rupiah will ease as a result, BI Governor Perry Warjiyo said. He added that BI is implementing pro-market monetary policies, collaborating with money market institutions to enhance the financial market, and reinforcing pro-stability monetary measures while monitoring opportunities in the second semester.

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Gov’t Mulls Incentives for High-Speed Internet Providers

The Ministry of Technology and Information (Kominfo) is preparing an incentive scheme to boost high-speed public internet services with a minimum speed of 100 megabytes per second (Mbps). These incentives will be formalized in a ministerial regulation, according to the Director General of Public Information and Communication Usman Kansong, with the goal of improving the quality of Indonesia’s data speed, which is ranked 97th globally and 9th out of 11 Southeast Asian countries, Dinsights reports.

Kominfo has received proposals from provider companies regarding the incentives. The Association of Indonesian Internet Service Providers (APJII) has recommended supporting internet service providers operating in non-commercial areas, such as reductions in regulatory costs and allocating additional unlicensed frequencies for deploying infrastructure in remote regions.

However, challenges in advancing high-speed internet development lie both in motivating operators to invest and persuading consumers to pay higher costs. A 2023 APJII survey reported only 66.27 percent of 13 million home internet users are willing to spend only Rp 100,000 - Rp 300,000 monthly, while the starting tariff for high-speed internet is at least Rp 400,000 per month. Overcoming this low market interest is vital for successful fast internet development.

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Indonesia’s Internet Penetration Hits 79.5%

Indonesia’s internet penetration rate so far this year has increased to 79.5 percent from 78.1 percent in 2023 according to the Indonesian Internet Service Providers Association (APJII).

The rise reflects how the accessibility and utilization of digital technology in Indonesia has grown, in part due to the strong collaboration between government and private sector in expanding internet access throughout the country, said APJII Chairman Muhammad Arif.

Users come mostly from the younger generation, he added, with survey results showing millennials (aged 28-47) have a 93.17 percent penetration rate, while Generation Z (aged 12-27) has a penetration rate of 87.02 percent. The penetration rate gender gap has also narrowed, with men contributing 50.7 percent and women 49.1 percent to internet usage from Indonesia's 277.5 million population.

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Mahfud MD Resigns From Cabinet

Coordinating Minister of Political, Legal, and Security Affairs Mahfud MD handed his resignation letter to President Joko Widodo on Feb 1 after serving for 4.5 years in the position. He is waiting for the establishment of Presidential Decree (Keppres) which will officially mark his departure. The meeting between Mahfud and President Widodo to discuss his resignation was reportedly amicable.

Mahfud, who is standing in the upcoming Presidential Election as Ganjar Pranowo's vice president running mate, said he will now focus on the election and prevent any possible abuse of power.

Of the other candidates, Prabowo Subianto remains in the government as Minister of Defense, while Anies Baswedan's running mate Muhaimin Iskandar also remains as Deputy Speaker of the House of Representatives (DPR).

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Policy Update 2024: Leading the Implementing Regulations and Investment in Healthcare

The Ministry of Investment/Indonesia Investment Coordinating Board (BKPM), S. ASEAN International Advocacy and Consultancy (SAIAC), and the Ministry of Health will host a policy dialogue themed Leading the Implementing Regulations and Investment in Healthcare on Feb 5.

The forum will discuss updates on the implementing regulations of the Health Law 17/2023 and address questions from industry sectors on the development of the implementing regulations. Despite the upcoming election, the government would like to hear industry’s feedback to ensure regulatory reforms continue to progress.

CLICK HERE TO REGISTER!

Member Announcement: OCS

OCS, a leading facilities services and facilities management provider with a global presence spanning the UK, Ireland, Australia, New Zealand, Singapore, India, Indonesia, the Philippines, Malaysia, Cambodia, Bangladesh, United Arab Emirates, Saudi Arabia, and Thailand, has announced a transformative rebranding effort aimed at unifying its global team under a new identity and reaffirmed mission.

With over 120,000 colleagues and a strong commitment to making a positive impact, OCS has unveiled a new and unifying global brand alongside a reaffirmed mission that centers around its core TRUE Values and making people and places the best they can be.

“Our vision is clear, and our mission is simple. We believe that everyone should have the best conditions and opportunities to thrive,” said Yohanes Jeffry Johary, Managing Director of OCS Indonesia. “Our rebranding reflects our commitment to delivering facilities services and facilities management that enable colleagues, customers, and communities to achieve the best experiences, productivity, practices, resilience, and outcomes.”

OCS has taken practical steps to align its operations with its mission as part of the rebranding process. The initiative also includes the launch of a new global website as a dynamic platform to communicate its message, intent, and aspiration to do meaningful work which positively impacts communities worldwide, leaving lasting change and impact. OCS aims to engage with colleagues, customers, and partners through the website, fostering a shared purpose and commitment to its mission.

In Indonesia, the rebranding features the introduction of new uniforms and the unveiling of the new global website. These efforts are part of a broader global campaign, including success stories and the implementation of a new salesforce system. As a part of the launch, OCS Indonesia also distributed eco-friendly tumblers, promoting the company's commitment to environmental, social, and governance (ESG) principles.

OCS Indonesia emphasizes its dedication to sustainability in the local context, with the focus firmly on elevating service quality and experiences.

Critical Minerals Business Forum: Business Opportunities in Malaysia

The American Chamber of Commerce (AmCham) in Malaysia is hosting a pivotal business forum to better understand and navigate the complexities of critical minerals – the materials and resources vital to the digitally driven economy.

The forum, which will be held on Monday, Feb 5, 2024, brings together experts, industry leaders, and policymakers to look at opportunities and provide frameworks to develop and grow the Malaysian critical minerals industry, while providing adequate guidelines to safeguard our environment and foster long-term strategic growth.

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