Indonesian president sacks trade minister after
 palm oil export uproar 

  Indonesian President Joko Widodo announced a cabinet reshuffle on Wednesday, sacking
  the trade minister and announcing a replacement following controversy over a series of policy
  reversals on palm oil exports. 

  Zulkifli Hasan, chairman of the National Mandate Party (PAN) and a former forestry minister,
  was sworn in as the country's new trade minister, among other changes. 

  The previous incumbent Muhammad Lutfi oversaw a flip-flop on policies to contain a surge in
  domestic cooking oil prices, which included a ban on palm oil shipments from the world's
  biggest exporter. 

  The three-week export ban sent shockwaves through global markets and led to a series of
  arrests for alleged corruption before it was lifted on May 23. 

  The president, popularly known as Jokowi, said Zulkifli's "long track record" and "field experience"
  gave him confidence he would resolve the issues. 

  The new minister pledged after his appointment to "rapidly resolve issues on the availability and
  affordability of cooking oil in particular". 

  However, his appointment drew mixed reactions from analysts. 

  Bhima Yudhistira, director of the Center of Economic and Law Studies (CELIOS), said he
  was disappointed that the president was accommodating the needs of his coalition rather than
  improving the performance of his government. 

  "If Jokowi wants to leave his legacy, the most important thing is to appoint a minister of trade
  with a professional background, and there are a lot of options. Why choose a chairman
  of a political party?" 

  The Traditional Market Traders Association (IKAPPI) congratulated the new minister, saying
  there were complicated issues he needed to address. 

  "We want to say welcome to the jungle. This wilderness needs to be tidied up and we hope
  that (the minister) will side with traditional market traders, support SMEs and strengthen
  domestic trade," the group said in a statement. 

  Jokowi also announced changes to the agrarian and spatial planning ministry, appointing former
  armed forces chief, Hadi Tjahjanto, who he said will be tasked with resolving land disputes,
  particularly in relation to the proposed new capital of Nusantara in East Kalimantan. 

  The president also inaugurated three deputy ministers, to the ministries of manpower, spatial
  planning and home affairs. 

  Source: Reuters 

  Health Ministry predicts BA.4 and BA.5 Omicron
 to peak at 25,000 cases

  BA.4 and BA.5 infection predicted to peak at a lower rate compared to Delta and Omicron 

  COVID-19 infection in Indonesia is rising following the detection of the BA.4 and BA.5
  subvariant of the coronavirus. Health Minister Budi Gunadi Sadikin predicts that the peak infection
  rate of the Omicron subvariant would not be as high as previous outbreaks. 

  “We believe that there will be an increase of up to a maximum of 25,000 per day,” Budi said
  during a press conference in Bogor Presidential Palace, West Java, on Thursday,
  June 16, 2022, as quoted by Antara. 

  Budi said the prediction was based on infection rates in other countries. In South Africa, the
  peak infection rate of the BA.4 and BA.5 subvariant was a third of the highest infection rate during
  the Delta and Omicron outbreak. 

  In comparison, the peak infection rate of Omicron in Indonesia reached 64,718 cases, while
  the peak infection rate of the Delta variant reached 54,417 cases. 

  Budi said this peak would occur one month after the detection of the first case. Therefore, the
  highest infection rate of the subvariants is expected to happen in the third week or fourth week
  of July 2022. “After which it will drop down again,” he added. 

  The former Director of Bank Mandiri said the death rate of the BA.4 and BA.5 subvariants
  was much lower – about 1 in every 12 – of the Omicron variant. Budi said the increase in
  COVID-19 cases were already predicted by the Government. 

  The main cause of the increase in infection rate was the increase in public activity during
  Eid Al-Fitr Islamic Holiday of 2022. 

  Budi asked the public to immediately get their third or booster vaccination jabs. Furthermore,
  the prevailing health protocols, such as wearing masks during indoor activity, must continue
  to be observed. 
 
  Source: Katadata

  Fed Interest Rate hike may affect Indonesia’s
 trade: Ministry of Finance  

  The Fed has raised its benchmark interest by 75 basis points. Indonesian Ministry of Finance
  said the change may affect Indonesia’s trade balance 

  The Ministry of Trade said the global wave of inflationary pressure and the rate hike by the
  Fed is part of global risks that could affect Indonesia’s export and import. 

  Head of the Fiscal Policy Department at the Ministry of Finance Febrio Nathan Kacaribu, said
  Indonesia’s trade balance had been able to continue posting surpluses month after month,
  with the latest being a US$2.9 billion surplus as of the end of May 2022. It was the
  25th monthly trade surpluses that Indonesia had managed to achieve, despite being
  nominally lower than the previous month. 

  “The government will continue to monitor and take precautions against any potential global
  risks that could affect the country’s trade balance, particularly in regards to the latest development
  of the inflation dynamic in the US and the more aggressive response from the Fed,” Febrio told
  Bisnis Indonesia on Thursday, June 16, 2022. 

  He said the country’s trade balance remains challenged by the dynamics of global economics,
  which has continued to be rocked the COVID-19 pandemic as well as the war between Russia
  and Ukraine – a condition that has been further exacerbated by the Fed’s policy. 

  The Fed raise its interest rate by 0.75% on Wednesday, June 15, 2022, local time – the highest
  increase since 1994 – to control inflation. 

  The rate hike puts the Fed’s benchmark interest rate at 1.5%. The Fed is expected to continue to
  increase its benchmark interest rate up to 3.4% by the end of this year. 

  For Indonesia, Febrio said the policy dynamic in China was also in need of highlight. He
  expressed hope that the relaxation on mobility restrictions to China could restore the flow of
  exports, though he also recognizes that a full recovery of trade activities in
  China would require time. 

  “With all these factors in play, the Indonesian government is optimistic that our trade
  activities would continue to strengthen the external balance position and further empower our
  national economy,” he said. 

  Indonesia exports grew 27%  for a total of US$21.51 billion year-on-year in May 2022. 

  As a whole, in May 2022, exports of oil and gas grew 35.9% (year-to-date/YtD), while non-oil
  and gas exports grew 36.4% (YtD). On the production side, the mining sector saw the most
  growth of 114.2% (YoY), while agriculture and manufacturing grew 20.32% and 7.78% respectively. 

  The increase in global commodity prices has had an effect on Indonesia’s exports, particularly
  on energy, mineral and metal commodities. Imports grew 30.74% (YoY) in May 2022, which is a
  5.81% decline compared to the previous month. 

  Febrio said the decline in month-of-month exports were due to disruptions in the
  global supply chain, specifically in regards to the strict lockdown policy in China. 

  Source: Bisnis