AmCham Update
AmCham Update Vol. 4 #53
New Legal Reform Team, PLN Seeks $700m for Solar Power, Capital City on Track Despite Contractor Concerns, Biden/Republicans Reach 'Compromise' on Debt Ceiling, Child Immunization Boost
May 29, 2023

Gov't Forms Legal Reform Acceleration Team

The forming of the Legal Reform Acceleration Team to fix the complex issues of Indonesia’s laws has been confirmed by Coordinating Minister for Political, Legal and Security Affairs Mahfud MD, through Decree 63/2023.

The team is a result of President Joko Widodo's instructions to Mahfud to formulate legal and judicial reforms. It will be responsible for creating academic papers and draft legal policy recommendations for the next government, determining and evaluating priority strategies, and coordinating with ministries and agencies.

Investors have long complained that legal reform should be a priority for Indonesia because of lax law enforcement, corruption and a confusing tangle of sometimes contradictory laws and regulations.

The team consists of a director, chairman, deputy chairman, secretary, and working groups. The director position is filled ex officio by Mahfud, while the chairman is the Deputy for Coordination of Law and Human Rights. The deputy chairman position is filled by former Corruption Eradication Commission (KPK) leader Laode M Syarif, while the team secretary will be ex officio Secretary for the Deputy for Coordination of Law and Human Rights.

The priority agenda includes: judicial and law enforcement reform, agrarian and natural resources, corruption prevention and eradication, and legislation sector reform. Each priority agenda has its own corresponding working group.

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PLN Seeks $700m Investment for Solar Power Push

In a move to reduce carbon emissions, state electricity company PLN is seeking $700 million investment to install a 200-megawatt (MW) solar panel project which will replace diesel power generators. PLN previously planned to install 4.68 gigawatt (GW) of solar panels between 2021 and 2030.

The 200 MW solar panel project is the first phase of a long-term plan to replace 1 GW of diesel power plants with solar power, Director of Transmission and System Planning at PLN Evy Haryadi said.

Several nations have pledged to provide public and private financing to support Indonesia’s transition to cleaner energy under the Just Energy Transition Partnership (JETP). The JETP fund allocation aims to be finalized by August, said Head of Indonesia’s JETP Secretariat Edo Mahendra. PLN’s plan to transition to solar power will be a pilot program in JETP, he said.

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Waskita Karya Capital City Projects On Track, Despite Contractor Woes

Development of the new capital city Nusantara (IKN) by state-owned Waskita Karya (Persero) is still on track, despite the company facing financial problems, said Ministry of Public Works and Housing (PUPR) Spokesperson Endra S Atmawidjaja. Waskita Karya’s financial condition will not interfere with its Nusantara work as the budget is already secured and has been included in the government’s Budget Implementation Statement (DIPA).

The construction company’s financial situation is in the spotlight, as its corporate debt has increased while operating revenues have declined.

Six IKN projects are being carried out by Waskita Karya, with a total investment of Rp 4.16 trillion, and are expected to be completed by Q1 2024: the Lingkar Sepaku Logistics Road Segment 4, IKN Toll Road Segment 5A, Presidential Secretariat and Supporting Buildings, Coordinating Ministry 3, Coordinating Ministry 4, and Water Waste Treatment Plant (IPAL) 123.

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White House/Republicans Reach Tentative Debt Ceiling Agreement

US President Joe Biden and Republican Congressional leaders reached a tentative agreement over the debt ceiling crisis on the evening of May 27. Details on what Biden called a "compromise" agreement have yet to be publicly released, but media reports say it would raise the debt ceiling for two years and keep several federal programs, including non-defense spending, flat for the same period. 

The text of the bill will be voted on by the US Congress on May 31, only days before the June 5 deadline set by Treasury Secretary Janet Yellen, and then will have to be approved by the House of Representatives.

The US government risks economic and financial catastrophe if the Republican majority House fails to pass the bill to raise the $31.4 trillion debt ceiling, as it would result in the US defaulting on its debts.

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Gov't Boosts Child Immunization

The government is stepping up efforts to raise the childhood immunization rate, particularly in rural areas, given recent disease outbreaks. As of April, only 4.02 percent of Indonesian children had received basic immunizations, far behind the Ministry of Health's target of 33 percent in the first quarter. Maluku, North Sumatra, Papua, Yogyakarta, and Aceh are the provinces with the lowest vaccination rates. 

The government has made numerous attempts to address the low vaccination rate, including conducting a two-phase catch-up vaccination campaign through the National Child Vaccination Month (BIAN), door-to-door and school vaccinations, and childhood vaccination data integration through the My Healthy Indonesia (ASIK) app.

The Ministry of Health is also providing additional immunizations for polio, diphtheria, and measles. Polio immunization will be carried out in the provinces of West Java, Aceh, North Sumatra, West Sumatra, and Riau; while additional immunization for diphtheria will be in Garut district, and for measles in Central Papua, said Ministry of Health Spokesperson Dr Mohammad Syahril.

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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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