This Week's Headlines (17 - 23 Jun 2023)

23 Jun 2023

Energy Transition
This Week's Headlines

Image source: CNA/Danang Wisanggeni 



  Businesses eye expansion as govt ends COVID-19 emergency 


  Indonesian businesses have lauded the government’s decision to end the national COVID-19
  state of emergency, saying the move will expedite the economic recovery from the pandemic, but
  some experts predict little change, noting that most of the economically significant restrictions
  were relaxed months ago. 


  Indonesian Chamber of Commerce and Industry (Kadin) chairman Arsjad Rasjid told The Jakarta
  Post on Thursday that the decision would encourage many businesses to expand further, which
  would boost the economy as a whole. 


  The tourism, accommodation and food and beverage industries stood to benefit the most from the
  decision, Arsjad said, noting that foreign and domestic tourists were now able to travel freely in the 


  “[COVID-19’s new endemic status] is an opportunity for the business sector to optimize the
  Indonesian economy, increase competitiveness and scale up [micro, small and medium
  enterprises (MSMEs)]. This will make the country the right destination for global investors,”
  Arsjad said. 


  Shinta Widjaja Kamdani, the newly appointed chair of the Indonesian Employers Association
  (Apindo), said on Thursday that the decision would stimulate mobility and lead to increased
  domestic consumption.  


  It would benefit the financial sector as well, she added, as investors would view the policy change


  President Joko “Jokowi” Widodo’s declaration of the end of the country’s COVID-19 emergency
  status on Wednesday came after Indonesia had eased many of its pandemic-related restrictions
  in the preceding months, following a decline in COVID-19 cases and increased vaccine coverage. 


  Over the last three years, the government has walked a tightrope between containing COVID-19
  and keeping the economy running, often making significant policy changes with little notice and
  in short succession, causing confusion among businesses and the general public. 


  “Public policy during the pandemic was poor and Indonesia was hit by the deadly Delta wave,"
  Institute for Development of Economics and Finance (INDEF) researcher Nailul Huda told the
  Post on Thursday. 


  "Poor communication made the public increasingly negative about the government's handling of
  COVID-19," he continued. 


  Businesses have urged the government to ensure it handles COVID-19 properly in the long run,
  noting that the recent announcement does not mean the virus has been eradicated. 


  Apindo’s Shinta said the country should maintain health protocols and continue with its
  vaccination drive. 


  Despite the general optimism, some experts say the recent government announcement will not
  provide a significant boost to the economy, as Indonesia relaxed many of the most economically
  trying restrictions months ago. 


  With macroeconomic conditions gradually improving and investment on target for 2023 even
  before the pandemic emergency status was lifted, analysts have suggested businesses may not
  need any more fiscal or monetary stimulus to keep the economic recovery on track. 


  Indef’s Nailul said the government should phase out pandemic-era incentives for businesses.
  "Business incentives are […] a loss of our tax revenue, so it could be a burden for our state
  budget,” he continued, noting that the government was no longer enjoying a commodity windfall
  to fund its stimulus. 


  David Sumual, chief economist at private lender BCA told the Post on Thursday that instead of
  increasing economic recovery stimulus funds, the government should ensure state funds were
  spent fully as intended, which could provide a boost for the economy as well. 


  He said he hoped the government could realize its investment target of Rp 1.4 quadrillion this
  year, in preparation for next year’s Rp 1.6 quadrillion target. 


  Source: The Jakarta Post 




  Copper miner Amman Mineral raised $715 million in Indonesia's biggest
  IPO this year – sources


  Indonesian copper miner Amman Mineral Internasional raised 10.73 trillion rupiah
  ($715.81 million) in the country’s biggest initial public offering (IPO) this year, according to a
  source with direct knowledge of the matter. 


  The Jakarta-headquartered company sold 6.33 billion shares at a price of 1,695 rupiah each, the
  source said, declining to be named as the matter is private. 


  Amman Mineral’s IPO prospectus launched last month showed IPO price was to be offered at a
  range of 1,650 rupiah to 1,775 rupiah during book building. 


  Bloomberg first reported on the IPO fund raised on Monday. Amman Mineral did not immediately
  respond to request for comment on Monday. 


  At $714 million, Amman Mineral IPO would also be the biggest in Southeast Asia this year,
  according to Refinitiv data, surpassing the listing of Indonesian nickel producer Trimegah Bangun
  Persada, known as Harita Nickel, that raised 10 trillion rupiah in April. 


  Indonesia’s IPO market is one of the world’s hottest this year. First-time share sales have raised
  $1.64 billion as of June, second only to China in the Asia-Pacific region excluding Japan and
  ahead of traditional powerhouse Hong Kong, according to Refinitiv data. 


  Amman Mineral planned to use the IPO proceeds to pay off some debt and fund several projects,
  including completing a copper smelter it is building in Sumbawa island, it said in its prospectus in
  May. Shares are due to debut on the local stock exchange on July 5. 


  Source: Reuters 




  Indonesia to conduct study on Bandung-Surabaya high-speed rail link:
 Coordinating Minister


  The soft launch of the Jakarta-Bandung high-speed rail link is scheduled for August later this year
  to coincide with Indonesia’s Independence Day. 


  Indonesia wants to conduct a preliminary study on a Bandung-Surabaya high-speed rail link
  connecting the country’s most populous island Java from west to east, Coordinating Minister for
  Maritime and Investments Luhut Pandjaitan said on Thursday (Jun 22). 


  Mr Pandjaitan made the remarks after trying out the Jakarta-Bandung high-speed train during a
  trial run - part of China’s Belt and Road Initiative (BRI) landmark project in Indonesia. 


  "We want to report to the president about preliminary studies for one (high-speed train) from
  Bandung to Surabaya. 


  “Of course, with our current experience, there will definitely be a lot of savings that we can
  make,” Mr Pandjaitan said.  


  Mr Pandjaitan and Minister of Transportation Budi Karya Sumadi rode on the high-speed train
  from Bandung to Jakarta as it was tested for the first time at its projected speed of 350kmh during
  commuter travel.  


  “This was the first time, and God willing, it will go up to Surabaya,” Mr Sumadi said.  


  “Extraordinarily, (the train travelled at) 350kmh, and it was stable. It could run without us needing
  to hold on (for support).” 


  He also revealed that the high-speed train managed to hit a speed of 385kmh. 


  The project consists of 11 electric passenger trains and one inspection train. 


  They are fully built by CRRC Qingdao Sifang, a state-owned China Railway Rolling Stock


  Each train has eight carriages and can carry up to 600 passengers at any one time.  


  It has a VIP class for 18 passengers, a first-class carriage that can carry 28 passengers, second-
  class carriages for 555 passengers and a dining carriage.  


  It is projected that 30,000 passengers will be carried daily once the trains are operational. 




  Mr Sumadi said that all of the trains will be tested until the end of July so that they will be ready
  for a soft launch slated to be attended by President Joko Widodo in August. 


  During the soft launch, selected members of the public would be invited to try out the new high-
  speed trains for free.  

  It is hoped that the trains will be fully operational by October.  


  The high-speed rail project will be the fastest in Southeast Asia and is Indonesia’s first fast-train
  rail link.  


  The 142-kilometre rail line will connect Jakarta with West Java’s capital Bandung through four
  stations in about 40 minutes.  


  On a regular train, the same journey currently takes about three hours. 

  Funded by China Development Bank, the high-speed railway project began in 2015 and was
  initially targeted to be completed in 2019.  


  It was awarded to China after a competitive bid against Japan.  


  The project faced several delays due to problems such as land acquisition and COVID-19 health
  and movement restriction orders.   


  When the trains arrived in Indonesia in September last year, it was the first time high-speed trains
  made in China were exported to another country.  


  At that time, PT KCIC, the consortium of Indonesian and Chinese state companies building the
  railway, targeted construction to be ready by June. 


  But as of Thursday, works were still ongoing, including at Jakarta’s Halim station, where
  construction was about 65 per cent ready.  


  The project is also facing financial issues. In February, the government agreed on a budget
  overrun of US$1.2 billion. 


  Source: CNA