AmCham Indonesia and the US Chamber of Commerce hosted a high-profile meeting with Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan, Vice Minister of Foreign Affairs Mahendra Siregar, and Indonesian Ambassador to the US Muhammad Lutfi on Nov 9. The virtual meeting was held to gain further understanding of the policies for attracting pharmaceutical and medical device investment in Indonesia after the Omnibus Job Creation Law passed. The meeting was attended by some of the biggest US pharmaceutical and medical device players.
Luhut did a quick update on Indonesia's COVID-19 numbers and the mortality rate, which he notes are coming down. He also said the Omnibus Law will strengthen the economy by easing the business climate for investors.
He also spoke about Special Economic Zones, especially the Batang Bonded Zone, which is slated to have a designated cluster for active pharmaceutical ingredients (API) as a way to move Indonesia into the global pharmaceutical industry supply chain.
Mahendra encouraged US businesses to consult the draft implementing regulations of the Omnibus Job Creation Law as that process moves forward. Ambassador Lutfi added that the pharmaceutical industry is one of the most challenging sectors to engage with, and he appreciates AmCham’s support.
AmCham is eager to play a role in building partnerships and trust between the private sector and the Indonesian government through this kind of engagement. Indonesia is making strides on reform and its massive market remains vital and attractive for US business.
Economy in ‘Survival Period’ Until 2022: Chatib
Former finance minister Chatib Basri believes it may take until 2022 for the Indonesian economy to recover from the COVID-19 pandemic. He said economic recovery will remain sluggish until a vaccine is found and distributed widely. With the time frame for the production and distribution of a viable vaccine estimated to take up to a year, he said domestic and foreign investment will decline in the intervening “survival period.”
During this period, he said the government must prevent the economy from collapsing and maintain the purchasing power of the people, with weak economic growth not a major cause for concern. He also believes private investment will expand again by 2022 if the curtailing of the pandemic is paired with investment reforms, such as accelerated improvements in licensing and bureaucracy at the regional level.
AmCham Food & Ag Committee Discusses Job Creation Law, Halal and US Election
AmCham’s Food and Agriculture Committee virtually convened to discuss the latest industry developments on Nov 10. The meeting was hosted by the Committee Chairs Triyono Prijosoesilo from Coca-Cola and Nani Hidayani from Reckitt Benckiser, and was well attended by AmCham members and industry stakeholders.
After briefly touching on the US elections, the discussion turned to the recent decision by the United States to fully extend Indonesia’s position on the Generalized System of Preferences (GSP). Indonesia has secured an extension, with the impact of the decision on the industry firmly on the mind of attendees.
The Halal certification policy was also an area of vigorous discussion, both in relation to Indonesia's GSP extension and within the context of the changes in the Halal Law through the new Omnibus Job Creation Law. The implementation of industrial waste management and recycling benchmarks in line with national goals to reduce waste also featured highly on the agenda. Attendees were also updated on new BPOM regulations which may affect specific industry sectors.
Finally, all members were reminded of AmCham’s upcoming virtual US-Indonesia Investment Summit. The summit, which will be held on Dec 8-10, will focus on partnerships to facilitate post-pandemic economic recovery, with keynote speakers coming from both government and business.
AmCham Cares: Museum Macan
Museum Macan, an AmCham Premier member, has launched the MACAN Home Kit, a home workshop series made by a variety of Indonesian artists. The first edition involves Citra Sasmita, a young painter from Bali, who invites everyone to learn how to channel their emotions and use them as a starting point to create a painting.
For every purchase of the MACAN Citra Sasmita Home Kit, you can join “Aktifitas Bersama Citra” (activities with Citra) on Nov 21 and Dec 13, at a special price. There will be a minimum of 10 people per session.
The launch is part of Museum Macan’s third anniversary “MACAN Tiga Tahun”. It also plans to launch “Ruang Seni Anak” (children’s art room) online & offline and offers special prices for products by shopping through its Instagram account @shopatmacan_id.
Pfizer COVID-19 Vaccine 90% Effective
A COVID-19 vaccine candidate produced by US pharmaceutical company Pfizer – an AmCham member company – in conjunction with German company BioNTech, has been proven to be 90 percent effective in an interim report on its late stage trials. The two companies say they will seek emergency use permits from the US Food and Drug Administration (FDA) by December, with 50 million doses of the vaccine ready to be administered to 25 million people and another 1.3 billion doses to be produced in 2021.
While the results have been celebrated around the world, microbiologist and head of the respected Jakarta-based Eijkman Institute for Molecular Biology, Amin Soebandrio, has urged caution, noting that the final report has not been completed, with clinical trials of the vaccine to officially end in December 2022. Amin said an effectiveness rate of 90 percent has far exceeded expectations, with an effectiveness rate of 50 percent considered acceptable in the context of a pandemic. While the government has shown interest in procuring the vaccine, Amin has urged it to wait for the decision of the FDA before purchasing.
The Ministry of Manpower is completing four government regulations mandated by the Omnibus Job Creation Law. One sets a limit for a work contract, or Temporary Work Agreement (PKWT), to a maximum of five years. Previously, the limit was three years – a contract could last for two years and be extended once for one year before an employee had to be made permanent.
The change was welcomed by theYorrys Raweyai Confederation of All Indonesian Workers Unions, which previously expressed concern the Law did not mention any time limit for temporary workers.
Secretary-General of the Ministry of Manpower Anwar Sanusi said the bills on foreign workers, manpower implementation, wages, and job loss security will be published in advance on the Omnibus Job Creation Law website so the public can give feedback and input.
Indonesia’s Audit Board has found 13,567 problems worth Rp 8.97 trillion ($639,97 billion) in the management of state finances based on audits in the first semester of 2020. Some 6,702 problems worth Rp 8.28 trillion were cases of non-compliance. The numbers are taken from the financial statements of multiple government financial and monetary institutions.
The Ministry of Finance’s Director General of Treasury Andin Hadiyanto said that since the audits do not focus on corruption, his team will continue to look for corruption, other fraud, and the risk of overspending by ministries or institutions that received Unqualified Opinions. An Unqualified Opinion is given to institutions with financial statements that have no material errors and were prepared according to the applicable accounting principles in Indonesia.
Support Independent Journalism: Subscribe to The Jakarta Post
In these difficult times, our hometown English language newspaper, The Jakarta Post, is more important than ever. Given the difficulties of physical circulation and the economic slump, the Post needs to boost its online subscribers – a goal we heartily support at AmCham Indonesia. Quality English language news is vital for our businesses, our home offices and the flow of information out of Indonesia. It is for this reason, that we are urging all of our members and readers to subscribe to JP! Information is what will help get us through this crisis. Below is information about how to sign up.
We Still Need Your Support to Shelter the Front Line
AmCham Indonesia and Habitat for Humanity have joined forces in an initiative called Sheltering Those Who Care for Us, a program to provide temporary quarters in hotels for Indonesian medical workers during the COVID-19 pandemic. Our program has helped not only medical workers in Jakarta, but also Tangerang and Surabaya; we are now planning to expand to Sulawesi.
With the COVID-19 pandemic still spreading, medical workers are working a lot harder than before. In these difficult times, they often cannot go back home for fear of infecting family members or being rejected by their local communities. As a result, they are forced to sleep in hospitals without a proper bed, also increasing the possibility of getting infected.
By donating, we will increase the overall capability of Indonesia to treat COVID-19. Habitat will match individual hospitals with hotels on an as-needed basis.
We are continuing with a full slate of meetings, events and information offered to our community online. But we can only do this through the support of our members. If you are not yet an AmCham member, please join now!
AmCham Indonesia is open to all companies with an interest in US business relations and we have many non-American members. We are a community and we welcome you!
The AmCham Office is on work from home status and all face-to-face meetings and events have been postponed. We are having a number of meetings online using the Zoom platform. You will be notified of virtual meetings as they are scheduled.
What is Your Company Doing on COVID-19?
Please let us know what measures your company may be taking in the form of donations and other assistance to help Indonesia during this time of confusion and concern. Contact [email protected] with your news. We would like to publicize the ways that our AmCham companies are pitching in.
Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.
COVID Update is AmCham’s regular newsletter on developments related to the pandemic crisis in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor