Record Cases, RCEP Signed, Vaccine Chatter, Omnibus Input
Nov 17, 2020 | AmCham Indonesia
Asia-Pacific Leaders Sign World’s Largest Trade Agreement
Fifteen Asia-Pacific countries have formed the world’s largest trading bloc through the signing of the Regional Comprehensive Economic Partnership (RCEP) at the 37th Association of Southeast Asian Nations (ASEAN) Summit. RCEP involves 10 ASEAN member countries plus China, Japan, South Korea, Australia and New Zealand. Together, they make up nearly a third of the world's population and account for 29 percent of global GDP.
Indonesian President Joko Widodo was one of the signatories at the virtual summit, noting that the deal reflects the strength of Indonesia’s commitment to multilateralism.
RCEP is expected to eliminate various import tariffs over the next 20 years, and includes provisions for intellectual property, telecommunications, financial services, e-commerce and professional services. It also allows for manufactured parts from each member country to be treated equally without facing tariffs, which is likely to give companies in RCEP countries an incentive to seek suppliers within the trading area.
The government has set up an official portal space – https://uu-ciptakerja.go.id – for the public and all stakeholders to provide input and aspirations for the Omnibus Job Creation Law. There are 16 draft Government Regulations (RPP) under the “Draft RPP” tab and one Presidential Regulation (RPerpres) draft under the “Draft RPerpres” tab. All drafts can be downloaded. Each has a dedicated comment section where individuals can submit input, attach a file in PDF format and view comments or interact with commenters.
The portal also has an “infographics” page providing visual presentations of information regarding the Omnibus Law, such as introductory slides for select RPPs as well as posters correcting hoaxes and providing facts. The graphics also explain benefits and depict potential opportunities. The “information” page also provides a poster that provides the public with phone numbers, emails and an office address where they can submit their questions, input, and suggestions.
Closing a Busy Year with AmCham’s ICT Committee
To close off an eventful year in the digital and technology sector, AmCham Indonesia held its year-end IT and Teleconnectivity (ICT) Committee meeting this morning, Nov 16, on Zoom. Led by committee Chair Inge Halim from IBM, the well-attended meeting recapped advocacy activities conducted during the year, provided updates and discussed ongoing issues, and looked into issues to work on in 2021.
Data featured front and center during the meeting, due to many impending regulations on data-related activities, including cross-border data transfer, data placement and private sector data submission to the government. Attendees showed particular interest in government data initiatives, such as government institutions’ data interoperability, Satu Data Indonesia or “One Nation Data,” a government initiative to provide a one-stop public data source, and digital sector data collection by the Indonesia Bureau of Statistics (BPS). Other issues discussed included local content for electronic products and the implications on company global supply chains, digital taxation and the GSP extension.
The meeting concluded with a discussion of sectoral issues to advocate next year. In addition to existing work, suggested issues to be monitored include the Palapa Ring Project, the government’s National Artificial Intelligence Roadmap and an additional implementing regulation for Public (Government) Electronic System Operators.
We look forward to a productive 2021!
Could Pfizer’s Vaccine Be Used in Indonesia?
Despite prioritizing COVID-19 vaccine development programs with China’s Sinovac and Sinopharm, the Indonesian government has not ruled out collaborating with Pfizer. The American multinational pharmaceutical company – and AmCham member – recently announced it has successfully developed a 90 percent effective COVID-19 vaccine.
Presidential Chief of Staff Moeldoko said that distributing Pfizer’s vaccine under Indonesian climate conditions would be challenging, given that it needs to be stored at a temperature of minus 70 degrees Celsius or lower. The government is considering the technical requirements of distributing the vaccine.
New reported positive COVID-19 cases rose to a record 5,444 on Nov 13, likely due to the long holiday weekend at the end of October, with many people traveling. News about a COVID-19 vaccine may also have caused the public to become complacent, resulting in neglect of health protocols.
Based on Ministry of Health data, the highest increase in positive cases came from Jakarta with 1,255 new cases and Central Java with 1,222. The number of positive cases is expected to continue to increase if health protocols are not enforced. The occupancy rate for COVID-19 patients in the ICU rooms of Jakarta hospitals has increased by 68 percent. As a result, COVID-19 task force head Doni Monardo said that if the increase continues during the next week, it will propose that the government shorten or eliminate year-end holidays.
President Joko Widodo has said Polymerase Chain Reaction (PCR) testing for COVID-19 should be continuously improved so the government can receive accurate data on the number of cases and can reach out to help more people.
As a social entrepreneur who upholds the values of solidarity and mutual cooperation, Kideco Jaya Agung, a member of Indika Energy Group, in collaboration with Genomic Solidaritas Indonesia (GSI Lab) and BenihBaik.com is supporting the government by providing free PCR testing for people who have difficulty accessing the tests through the #SwabAndSaveIndonesia program.
Government Regulation Bill on Business Licensing in Regions
The Deputy for Coordination of Macroeconomics and Finance at the Coordinating Ministry for Economic Affairs, Iskandar Simorangkir, confirmed on Nov 11 that the government had completed a regulation on ease of business licensing. The regulation aims to create fast, easy, transparent, simple, affordable and professional implementation of business licensing in the regions as mandated in the Omnibus Job Creation Law. The improvements include basic requirements for business licensing, sector business licensing, ease of investment requirements and risk-based business licensing.
Risk-based business licensing is carried out to encourage ease of doing business in the regions and to simplify requirements, processes, duration and costs. Business players considered low- or medium-risk are given more leniency to get permits.
To make sure the regions comply, the bill enforces Norms, Standards, Procedures and Criteria (Norma, Standar, Prosedur, dan Kriteria/NPSK) set by the central government; regional governments that do not follow these standards and procedures will be given an administrative sanction.
Iskandar said the implementing regulation is to ensure businesses can conduct their activities without complex permit application processes.
Draft Regulation Completed for Indonesian Sovereign Wealth Fund
The draft regulations (RPP) for an Indonesian sovereign wealth fund or investment management institution (LPI) have been completed, with the fund to be named the Nusantara Investment Authority. It will function as a savings fund held by the state to manage and invest excess income.
Formed under the Omnibus Job Creation Law, the fund will have an initial capital injection of Rp 75 trillion ($5.33 billion) and aims to begin trading in the first quarter of 2021, according to the Director General of State Assets, Isa Rachmatarwata. A Presidential Perpres related to the LPI is expected soon, with President Joko Widodo to form a five-person supervisory board including the Minister of Finance and Minister for State-Owned Enterprises, who will in turn appoint a board of directors. It will be directly responsible to the President.
The initial capital will be sourced from state capital participation, state equity and other sources in the form of cash, state-owned goods, shares and receivables. The government will also inject at least Rp 15 trillion into the fund, with capital fulfillment up to the allocated Rp 75 trillion to be carried out in stages until 2021.
The RPP also regulates the ability of the LPI to place funds in financial instruments, manage assets, and collaborate with third parties in joint ventures. Collaboration with third parties can be carried out by giving or receiving management power in joint ventures and other forms of cooperation. Some 10 percent of LPI profits must be used for mandatory reserves, while the maximum government profit is 30 percent. If accumulated losses reach 50 percent of initial capital, the government can assist with the required capital.
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