AmCham Update
AmCham Update Vol. 4 #125
Halal World Forum on Standards, Decarbonization & Digitalization at APEC, New Visa for Indonesian Diaspora, QR Code Agreement with Singapore, Jakarta Minimum Wage Stalled
Nov 20, 2023

Agreements on Standards Reached at Halal World Forum

A number of agreements were reached when Indonesia’s Halal Product Assurance Agency (BPJPH) hosted the Halal 20 (H20) Halal World 2023 event in Jakarta on Nov 17-21, bringing together foreign halal certification bodies, foreign government representatives and the private sector. Indonesia hopes the international community can work together to establish a global halal standard and ensure it does not lead to technical challenges in international trade, Vice President Ma’ruf Amin said in his opening remarks.


Some 37 foreign halal institutions signed mutual recognition agreements (MRA) with BPJPH on the sidelines of the event. The two types of MRAs signed were those including provisions on mutual recognition and acceptance, which were signed by nine foreign halal institutions who have completed their assessment process; and those specifying provisions on the acceleration of the assessment process, signed by the remaining 28 institutions, BPJPH Head Aqil Irham said.

The nine foreign halal institutions who have completed their assessment process are: the Islamic Food and Nutrition Council of America (IFANCA), the Korea Muslim Federation (KMF), the Korean Halal Authority, the Taiwan Halal Integrity Development Association, the Central Islamic Council of Thailand, the Halal Certification Center of Chile (Chilehalal), Halal Conformity Services, the Federation of Islamic Associations of New Zealand (FIANZ), and the New Zealand Islamic Development Trust.

AmCham Indonesia views the MRA signing as a positive development, considering the deadline for mandatory halal certification for food and beverage products is next year. However, a lot of homework remains, including the acceleration of cooperation with Europe-based halal institutions, which have a prominent role in the global halal supply chain. AmCham looks forward to further progress on international cooperation on halal product assurance.

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Gov't Promotes Decarbonization, Digitalization at APEC Summit

Decarbonization, digitalization, artificial intelligence, robotization and their disruptive effects on the global economy were all on the agenda when Coordinating Minister for Economic Affairs Airlangga Hartarto met with CEOs from the US technology sector and academia at a luncheon event at Stanford University on the sidelines of the APEC Summit in San Francisco, on Nov 20. CEOs present included those from Apple, Twitter, Eventbrite, and Meta, as well as Stanford University leadership.

Airlangga urged those CEOs present, representing $7.3 trillion in market capitalization, to invest in Indonesia to become a low-carbon global digital hub, putting forward Indonesia and ASEAN’s potential market amounting to 480 million internet users, projected to reach a gross merchandise value (GMV) of $218 billion. He added the importance of Indonesia’s role in providing important minerals critical to clean energy.

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New Visa for Indonesian Diaspora

The Directorate General of Immigration has introduced a new visa for the Indonesian diaspora, which includes former Indonesian citizens, foreign individuals of Indonesian descent, and/or foreign individuals born in Indonesia. These applicants can obtain an extended stay permit valid for five to 10 years.

For the diaspora visa application, applicants must submit required documents, including a passport valid for at least 12 months; photo; written statement of commitment to buy Indonesian government bonds, shares, or mutual funds in Indonesian public companies or possess savings worth $35,000; and proof of their previous Indonesian citizenship and/or birth certificate.

This diaspora visa is part of the government's efforts to bolster the country's economy. It offers members of the Indonesian diaspora an extended stay, providing them with an opportunity to contribute to the nation that is their homeland, Immigration Director General Silmy Karim said.

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Indonesia-Singapore Debut Cross-Border QR

Indonesia and Singapore have launched a new cross-border payment system, enabling citizens of both countries to pay merchants by scanning QR codes, Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) said in a joint statement on Nov 17. Indonesia and Singapore employ the Quick Response Code Indonesia Standard (QRIS) and QR Network for Electronic Transfers Singapore (NETS), respectively.

The new cross-border payment system represents efforts by BI and MAS to drive regional integration and increase market access, particularly for micro and small-sized enterprises, said BI Governor Perry Warjiyo. Echoing those remarks, the system will promote cross-border e-commerce activities and tourism spending across Singapore and Malaysia, MAS Managing Director Ravi Menon said.

The two central banks are working on a framework to facilitate local currency settlement for cross-border transactions next year. After successful launches in Malaysia, Thailand and Singapore; South Korea and China are the next targets in 2024.

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Jakarta Gov't Yet to Decide 2024 Provincial Minimum Wage

The Jakarta Provincial Government has until tomorrow, Nov 21, to determine the capital's Provincial Minimum Wage (UMP) for 2024. A meeting on the issue was deadlocked on Nov 19 in discussions between the Indonesian Employers Association (APINDO), which wants a minimum wage of Rp 5,043,000; the Jakarta government (Rp 5,100,000), and unionized workers who are seeking a 15 percent increase to Rp 5,630,000.

However, across the archipelago, Minister of Manpower Ida Fauziyah said the UMP increase is expected, on average, to range between 3.32 percent and 4.46 percent, with the potential for a 10 percent increase in certain regions.

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Member Announcement: Bain & Company

The past 12 months have seen a reset in the Indonesian venture capital (VC) industry, with investors adjusting the pace, scale, and focus of capital deployment in the face of market uncertainty, says Bain & Company in a new Indonesia Venture Capital Report 2023 with AC Ventures.

Following a boom in 2021, which extended into the first half of 2022, capital deployment began to slow in the back half of 2022 as investors reacted to a deteriorating global macro environment driven by geopolitical tensions, rapidly rising interest rates and weaker consumer and business sentiment. Focus on deployment was further muted as capital allocators moved resources to portfolio support. This trend has continued in 2023, with data through August 2023 indicating the Indonesian capital market will experience a 70 percent to 80 percent decline in deal value this year versus 2022.

Investors have also adjusted their filters for appropriate investments (in line with public equities and VCs in other regions). Generally, investors have sought lower valuation multiples, stronger unit economics and the ability for companies to break even. This trend can be seen in the worsening conversion rate from seed funding to Series A and Series B funding. As a result, there is pressure on start-ups to pivot from a growth-at-all-costs mentality to a focus on capital efficiency and profitability.

Despite these challenges, Indonesia remains a bright spot in the regional VC landscape. Attractive market fundamentals helped overall VC deal value in Indonesia hold up reasonably well in 2022 (flat year-over-year) versus other markets globally (20 percent to 40 percent declines). Deal volumes also climbed around 20 percent year over year in 2022, as investors increased focus on early-stage opportunities.

A series of structural factors have helped support this relative resilience: macro fundamentals in the country remain stable and the country continues to have the most promising demographic tailwinds of any ASEAN economy; and the digital economy continues to expand, with consumer and SME adoption growing steadily.


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Now is the Time to Join AmCham!

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We urge you to send us press releases and other information that we can pass on to the broader AmCham community. If you have items of interest, please email material to [email protected]. Follow this link to information provided by the US Embassy

Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.

AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard.

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