AmCham Update Vol. 5 #45

Economic Growth Up to 5.11%, Indonesia and Brazil Discuss Economic Cooperation, AI Center Stage at AmCham Joint Committees Meeting, AI Evaluation to Come This Year

May 08, 2024

5.11% Economic Growth in Q1

Indonesia experienced robust economic growth of 5.11 percent year-on-year (YoY) in the first quarter of 2024; an increase from 5.04 percent in the final quarter of 2023, and a rise YoY from 5.04 percent in Q1 2023. Growth was mainly propelled by buoyant household spending, the Lebaran festivities and the 2024 General Elections, according to Statistics Indonesia (BPS).

BPS Acting Head Amalia Adininggar Widyasanti emphasized significant growth recorded in sectors including manufacturing, trade, agriculture, construction and mining. She also said growth remained resilient across all regions, with Java as major source of growth, accounting for 57.7 percent, followed by Sumatra at 21.85 percent.

Papua had the highest growth rate at 9.35 percent YoY, while the Bangka Belitung Islands experienced the lowest growth at 0.02 percent YoY.

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Indonesia and Brazil Discuss Economic Cooperation on OECD Sidelines

Coordinating Minister for Economic Affairs Airlangga Hartarto met with Brazil's Foreign Minister Mauro Vieira on the sidelines of Organization for Economic Co-operation and Development (OECD) Ministerial Meeting on May 4 in Paris, France.

The two countries expressed mutual interest in cooperating in the digital economy, technology and innovations sectors, as Indonesia extended its support to Brazil for its G20 presidency this year, which Indonesia previously held. Vieira reciprocated in kind, conveying Brazil’s full support for Indonesia’s OECD ascension bid.

Deputy Trade Minister Jerry Sambuaga highlighted Indonesia’s ASEAN Chairmanship last year, and emphasized the development of the ASEAN Digital Economy Framework Agreement (DEFA) to promote digitalization and interoperability within the region. He also reaffirmed Indonesia's commitment to maintaining regulation-based trade and investment, ensuring fair competition and fostering inclusive and resilient global partnerships.

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AI Center Stage at AmCham Joint Committees Meeting

The ASEAN Digital Economic Framework Agreement (ASEAN DEFA) and artificial intelligence (AI) took center stage at a joint meeting of the AmCham Indonesia ICT and Financial Industry committees on May 7. Key speakers included Head of Digital Economy Division at ASEAN Secretariat Sivaram Superamanian and Head of ASEAN Government Affairs at Microsoft Maciej Surowiec.

The session began with Sivaram sharing information on DEFA prioritized areas, updates on the negotiations progress and prospects for cross-sectoral collaboration. Maciej then discussed international experiences in AI regulatory framework development, the impact on accelerating innovation and the importance of responsible AI governance.

The meeting concluded with an engaging Q&A session covering ASEAN’s approach to digital infrastructure inclusion, industry opportunities and risks from AI implementation, regulatory fragmentation issues and strategic engagement with stakeholders.

Indonesia’s RAM AI Evaluation to Come This Year

The United Nations Educational, Scientific and Cultural Organization (UNESCO) is conducting an evaluation of Indonesia's preparedness for AI governance. The results of this assessment, utilizing the Readiness Assessment Methodology on Artificial Intelligence (RAM AI), are anticipated to be released by mid-2024, said Vice Minister of Communications and Information Technology (Kominfo) Nezar Patria.

RAM AI frameworks cover technology, community and legal readiness indicators, and typically span around three to four months. Nezar said Indonesia began the assessment in March, with results anticipated for release by the end of June or early July.

Nezar also emphasized the importance of this initiative for Indonesia to integrate into the global AI governance ecosystem. He further expressed Indonesia's commitment to facilitating interactive dialogue among nations regarding RAM AI.

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Indonesia Prepares to Host 10th World Water Forum

Indonesia is set to host the 10th World Water Forum (WWF), which will discuss vital topics such as water conservation, clean water and sanitation, food and energy security, and mitigation of natural disasters, and is set to convene on May 18-25 in Bali.

The forum's primary objective is to foster discussion among policymakers aimed at establishing efficient and sustainable water management regulations and best practices. It will also provide investment opportunities in Indonesia’s water infrastructure sector, and address key issues such as water availability, funding, and procurement technologies. Indonesia is committed to ensuring that the WWF produces tangible outputs that can be implemented by countries at the project implementation level.

Ministry of Public Works and Housing Secretary General Mohammad Zainal Fatah reaffirmed the government’s offer of water projects worth Rp 154 trillion or $9.6 billion at the forum, which are currently being catalogued by the Ministry of National Planning/National Planning Development Agency (PPN/Bappenas).

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ERIA Survey on Carbon Pricing

The Economic Research Institute for ASEAN and East Asia (ERIA) is conducting a regional study on carbon pricing, revenue recycling, and competitiveness in the ASEAN and East Asia regions. ERIA invites you to participate in a regional survey on Willingness to Pay for a Carbon Price. Your insights are valuable in quantifying the willingness to pay for carbon.

The information collected will be used solely for academic research, and no personal information will be disclosed. ERIA sincerely appreciates your kind assistance and cooperation.

If you are interested in participating in the survey, please go to WTP Survey on a Carbon Price or scan the QR code in the attached flyer.

Get to Know Our Members: Danone Indonesia

Danone is one of the largest food and beverages (F&B) companies in the world, with a mission to provide health to as many people as possible. Danone operates in 130 countries with more than 100,000 employees.

In Indonesia, its business focuses on public health at every stage of life through two business categories: Danone Waters which produces bottled drinking water and non-carbonated beverages with brands of AQUA, Mizone and VIT; and Danone Specialized Nutrition with its products such as SGM Eksplor, SGM Bunda, Lactamil, Bebelac, Nutrilon Royal, medical nutrition and Fortifit. Danone Indonesia has 26 factories with more than 15,000 employees who deliver our vision of One Planet One Health for Indonesia's progress.

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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. Paul L Goddard is the Managing Editor.

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