Prabowo Plans World Tour
President Prabowo Subianto is taking his new show on the road, planning an extensive international tour from Nov. 8 to 24, his first since taking office.
Subianto will meet with Chinese President Xi Jinping in Beijing, before meeting US President Joe Biden in Washington DC. The president will then attend the APEC CEO Summit Nov. 14-15 in Lima, Peru.
Former President Joko Widodo was famously uncomfortable with foreign trips and summits, but Subianto has long been a globe trotter.
He will also visit Brazil for the Executive Business Forum and G20 Summit Nov. 18-19. The tour is rumored to include a visit to the UK and a meeting with King Charles and British Prime Minister Keir Starmer, along with high-level business executives.
Subianto also appointed his businessman brother, Hashim Djojohadikusumo, to be Special Envoy for Energy and Environment, as Head of Delegation for the 29th United Nations Climate Change Conference (COP29) to take place in Baku, Azerbaijan, Nov. 11-22, where he will be accompanied by key officials from the forestry, environment, and finance ministries.
Indonesia will highlight its strategy to reduce greenhouse gas emissions and it has also submitted its report to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC), environment minister Hanif Faisol Nurofiq told reporters on Oct. 29.
Other priorities include climate financing and international frameworks for carbon trading, under Article 6.2 of the Paris Agreement, following COP28's agreed funding of $83 billion.
Related Links:
- https://www.kompas.id/artikel/pekan-depan-presiden-prabowo-lawatan-dua-pekan-ke-luar-negeri-apa-saja-misinya
- https://en.tempo.co/read/1935509/from-us-to-china-president-prabowo-sets-to-embark-on-first-foreign-trips
- https://www.kompas.tv/internasional/549552/hashim-djojohadikusumo-ditunjuk-prabowo-pimpin-delegasi-indonesia-di-cop29-baku?page=all
- https://www.antaranews.com/berita/4429905/ri-siap-jajaki-potensi-kerja-sama-perdagangan-karbon-di-cop29?utm_source=antaranews&utm_medium=desktop&utm_campaign=related_news
- https://www.antaranews.com/berita/4429545/ri-usung-isu-capaian-penurunan-emisi-dan-perdagangan-karbon-di-cop29?utm_source=antaranews&utm_medium=desktop&utm_campaign=related_news
Indonesia Experiences Fifth Month of Deflation
Prices in Indonesia went down in September, the fifth consecutive month of deflation. The Consumer Price Index (CPI) decreased from 106.06 in August to 105.93 in September, according to Statistics Indonesia.
This brought Indonesia’s annual inflation rate to just 1.71 percent year-on-year in October.
“September 2024's deflation is more pronounced compared to August 2024 and marks the fifth deflationary period of the year,” said Acting Head of BPS Amalia Adininggar Widyasanti during a press conference at the BPS office on Oct 31.
Some economists anticipate that inflation may soon reverse its downward trend, as global energy prices and demand are anticipated to rise toward the end of the year.
Josua Pardede, Chief Economist at Bank Permata, projected the year would end at 2.33 percent inflation and a possible acceleration to 3.12 percent by the end of 2025 due to a potential increase in value-added tax (VAT) in January next year.
The current deflation is "a warning" because it signals consumers' purchasing power is weakening, said Eliza Mardian, a researcher at economic think tank Core Indonesia.
"If demand keeps weakening, businesses, even farmers, will reduce their production activities … they will carry out cost efficiency which will result in reducing business expansion and can also lead to lay-offs," Mardian told Australian ABC.
Related Links:
- https://jakartaglobe.id/business/fifth-deflation-this-year-indonesias-consumer-prices-fall-012-pct-in-september
- https://ekonomi.bisnis.com/read/20241101/9/1812421/tren-deflasi-beruntun-berakhir-indonesia-inflasi-008-pada-oktober-2024
- https://www.reuters.com/markets/asia/indonesias-oct-inflation-eases-171-2024-11-01/
- https://nasional.kontan.co.id/news/bps-terjadi-inflasi-pada-oktober-2024-sebesar-008
- https://www.abc.net.au/news/2024-10-28/indonesia-experiencing-deflation-in-five-consecutive-months/104510876
Young Indonesians Flocking to Crypto
Total cryptocurrency transactions in Indonesia have risen by 323.26 percent, from Rp 7.96 trillion in September 2023 to Rp 33.7 trillion ($2.1 billion) in September 2024, with more than 60 percent of users aged between 18 and 30 years, according to the Commodity Futures Trading Regulatory Agency (Bappebti).
Currently, there are 21.3 million crypto users, an 18.9 percent increase compared to September 2023. The dominance of younger people in Indonesian crypto investment is driven by their enthusiasm for digital technology such as blockchain as a viable investment option, said Kasan, Head of Bappebti.
Kasan emphasized the importance of the younger generation staying informed about developments in technology and finance, including understanding crypto, in order to make smart investment choices and avoid financial risks.
However, Indonesia’s overall financial literacy still needs improvement. The latest 2024 National Financial Literacy and Inclusion Survey (SNLIK) conducted by the Financial Services Authority (OJK) and Statistics Indonesia (BPS), reveals that Indonesia's financial literacy index stands at 65.43 percent. By age group, the highest financial literacy levels are found among those aged 26-35, 36-50, and 18-25, with indices of 74.82 percent, 71.72 percent, and 70.19 percent, respectively.
Related Links:
- https://katadata.co.id/finansial/keuangan/672305ed171d5/lebih-dari-60-investor-kripto-di-indonesia-berusia-di-bawah-30-tahun
- https://investor.id/market/378152/generasi-z-dan-milenial-dominasi-investasi-kripto-indonesia
- https://ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/OJK-dan-BPS-Umumkan-Hasil-Survei-Nasional-Literasi-dan-Inklusi-Keuangan-Tahun-2024.aspx
Prabowo Tells Ministers to Fix Energy Subsidies
President Prabowo Subianto said during a limited cabinet meeting on Oct. 31, that he plans to reform Indonesia’s approach to energy subsidies, aiming to provide direct subsidies to qualified recipients.
Concerns have long been raised that wealthier consumers buy subsidized fuel unfairly, thus defeating the idea of the subsidies helping the poor.
“We are in the process of refining the data to identify the right recipients. Thus, there will be no more mistargeted subsidies, as the subsidy [will go] directly to individuals,” said Hasan Nasbi, the presidential spokesman.
Several ministers attended the meeting, including Coordinating Minister for Economic Affairs Airlangga Hartarto, Minister of Finance Sri Mulyani Indrawati, and Minister of Industry Agus Gumiwang Kartasasmita, alongside Pertamina CEO Nicke Widyawati and PLN President Director Darmawan Prasodjo.
Subianto has given a two-week deadline to complete the new scheme, assigning Statistics Indonesia (BPS) to lead the data preparation with support from other ministries.
The President appointed Minister of Energy and Mineral Resources Bahlil Lahadalia as head of the task force overseeing the proposed reform.
Related links:
- https://www.thejakartapost.com/business/2024/10/31/prabowo-instructs-ministers-to-prepare-reform-of-energy-subsidy-scheme.html
- https://www.cnbcindonesia.com/news/20241031155743-4-584619/prabowo-tunjuk-bahlil-jadi-ketua-tim-kebijakan-subsidi-energi
- https://nasional.kompas.com/read/2024/10/31/17344691/bahlil-ditunjuk-jadi-ketua-tim-penggodok-kebijakan-subsidi-energi-tepat
Financial Industry Committee Meeting
Current trends and challenges within Indonesia’s financial sector were the focus of discussion during AmCham Indonesia’s Financial Industry Committee meeting on Oct. 29. The meeting was led by co-chairs Riko Tasmaya, Managing Director and Head of Wholesale Banking at HSBC Indonesia, and Wilson Siahaan, Director of Public Policy at Mastercard Indonesia.
Various topics were discussed, including the implementing regulations of the Personal Data Protection (PDP) Law, potential revisions to Government Regulation 71/2019, progress on the ASEAN Digital Economy Framework Agreement (DEFA), implementation of the domestic credit card and national payment gateway (NPG), along with Bank Indonesia’s 2025-2030 Roadmap.
Committee members also explored potential avenues for engagement and collaboration with the new administration and identified areas for next year’s committee efforts. The session wrapped up with a lively discussion among participants.
Ministries to form Tourism Task Force to Boost Visits
The ministries of state-owned enterprises (SOE), transportation and tourism will establish a joint task force to boost Indonesia’s tourism industry, particularly addressing the issue of high domestic airfares.
“We have been lagging behind other Southeast Asian countries [in tourism] for too long, so it’s important that we support the Tourism Ministry to succeed in implementing the President’s program,” said SOE Minister Erick Thohir.
In addition, the government will focus on five Super Priority Destinations to attract international tourists, said Minister of Tourism Widiyanti Putri Wardhana. The destinations include Borobudur in Central Java, Likupang in North Sulawesi, Mandalika in West Nusa Tenggara, Lake Toba in North Sumatra, and Labuan Bajo in East Nusa Tenggara.
"Indeed, in the previous government there were 10 priority destinations, but they were reduced to 5 super priorities to make the development more focused, more concentrated and more effective," said Widiyanti.
The Tourism Ministry aims to attract 14 million foreign tourists by the end of 2024. As of August, the number stood at 9 million, a 20.38 percent increase compared to the same period in 2023,
Related Links:
- https://jakartaglobe.id/lifestyle/new-tourism-minister-targets-highquality-tourists-by-promoting-five-super-priority-destinations
- https://www.cnbcindonesia.com/lifestyle/20241031142514-33-584585/menteri-pariwisata-fokus-lima-destinasi-wisata-super-prioritas
- https://www.liputan6.com/bisnis/read/5767326/menteri-pariwisata-mau-tambah-5-destinasi-super-prioritas?page=2
- https://www.thejakartapost.com/business/2024/11/01/govt-forms-task-force-to-stimulate-tourism-bring-down-airfares.html
Member Announcement | YCAB
In a groundbreaking move blending finance with social responsibility, YCAB and Juara Capital Indonesia launched the Juara Empowerment Balanced Fund (JEBF), a mutual fund product that marries financial growth with a mission to give back.
JEBF believes investment isn’t just about financial returns; it’s also about creating real social impact. This fund allows investors – individuals, corporations, and institutions alike – to grow their wealth while directly supporting YCAB’s social initiatives.
With JEBF, part of each investment is automatically allocated as a donation to fuel programs empowering underprivileged youth through education and supporting ultra-micro businesses led by entrepreneurial mothers. Simply by investing in JEBF, investors contribute to YCAB’s community programs.
JEBF has a special “social fund” feature that allows 1 percent to 5 percent of managed funds to be withdrawn and directed to YCAB. JEBF focuses on two core missions: empowering women and supporting children’s education.
Get to Know Our Members | Organon
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Organon is a global healthcare company formed through a spinoff from Merck (known as MSD outside of the US and Canada) with a mission to deliver impactful medicines and solutions for better health. Organon builds on its strong foundation of more than 60 medicines and other products across a range of areas including reproductive health, heart disease, dermatology, allergies and asthma.
Organon brings these important therapies to the world with an international footprint that serves more than 140 markets. The company believes the diversity of the business provides a sustainable engine of growth so it can continue to invest in and advance new medicines and treatments that are urgently needed.
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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Lydia Ruddy and written by the AmCham Staff.
