This Week's Headlines (2 - 8 Jul 2022)

08 Jul 2022


  Coordinating Minister Luhut Pandjaitan: Booster vaccine as
 mobility requirement to be re-reimplemented


  Coordinating Minister for Maritime Affairs and Investment and the country’s PPKM (lockdown)
  Coordinator for Java and Bali said that booster vaccines would be a requirement for public
  mobility and that the policy would be implemented in two weeks at the latest. 


  The decision refers to the results of a limited cabinet meeting led by President Joko Widodo
  and will further be enforced under a new COVID-19 Task Force Regulation and its
  subsequent derivatives. 


  “The government will re-implement incentive and disincentive policy by changing and applying
  booster vaccination as a requirement for the people’s mobility in public areas,” Mr. Pandjaitan
  said, as quoted by Antara. 


  “Furthermore, the government will also be re-applying booster vaccination as a requirement for
  air, land and sea travel, which would see implementation in two weeks at maximum,” he added. 


  Data from various sources found a significant increase of daily cases of COVID-19 in several
  countries, including France, Italy and Germany. Neighboring country Singapore has also
  seen a significant rise. 


  Nevertheless, Indonesia was still ranked lowest in terms of daily cases per population when
  compared to neighboring countries. The decision to implement booster vaccinations as a
  requirement for mobility was based on the country’s low booster vaccination rate. 


  Based on data from PeduliLindungi - the Indonesian government health survellance app –
  out of the average number of people entering malls of 1.9 million per day, only 24.6% have
  taken their booster shots. 


  Amidst the increasing number of cases, the low rate of booster shots was considered a
  genuine concern as the amount of antibodies circulating in public would continue to


  “To drive people to take their booster shots, the requirement for travel and to enter public
  spaces such as malls and offices would be replaced by booster vaccination,” Mr. Pandjaitan


  “Vaccination centers such as airports, train stations, terminals and shopping centers would
  also be reactivated to help the public gain access to vaccination,” he added. 


  The Deputy Chief of COVID-19 Handling and National Economic Recovery Committee
  added that the government have ordered the army, the police and the regional
  governments to reinvigorate vaccination and tracing efforts. 


  This is done to prevent another outbreak and to mitigate future risks. 


  “The government is still and will continue to enforce the lockdown rules in Java and Bali for
  an indeterminate amount of time. Everything will follow the periodical evaluation results
  that is being led by the President directly,” he said. 


  Luhut reminded everyone of the public’s role, which continues to be the key element of
  handling the pandemic in Indonesia. 


  “For that reason, from the bottom of my heart, I beg those of you who have not have had
  your booster shots to come to a vaccination center and get vaccinated. It’s for the good of
  all in facing this pandemic and in ensuring our economic recovery,” he said. 


  Source: Kontan 



  Forex Reserves Moves Up in June, but Further Rupiah
 Depreciation Expected


  Bank Indonesia, the country's central bank, reported an increase in the country's foreign
  exchange reserves to $136.4 billion at the end of last month, up xx percent from $135.6
  billion a month earlier.  


  "The increase of official reserve assets position in June 2022 was influenced, amongst others,
  by the Government's global bond issuance as well as tax and services receipts," 
  Erwin Haryono, Bank Indonesia's head of communication department, said in
  a statement on Thursday.  


  Erwin said that the reserves were enough to cover 6.6 months of imports or 6.4 months if the
  need for servicing the government's external debt was also taken into account. According
  to the international norm, a country should maintain enough reserves to cover at least
  three months of its imports.  


  "Bank Indonesia considers the official reserve assets position ample to support the external
  resilience and maintain macroeconomic and financial system stability," Erwin said.  


  "Moving forward, Bank Indonesia views that the official reserve assets remain adequate,
  supported by the stability and solid domestic economic outlook, in line with the policy
  responses to stimulate economic recovery," Erwin said.  


  Investors and traders closely monitor the foreign exchange reserves position to gauge
  Indonesia's resilience to stand the external shock, especially one that causes money
  to flow out of the country. 


  The government issued the so-called Samurai Bonds, denominated in Japanese yen, 
  on June 2, amounting to 81 billion Japanese yen. It was the eighth Samurai Bonds
  issuance since 2015 and aimed at plugging the 2022 state budget deficit to handle
  the Covid-19 pandemic and restore the national economy. 


  Indonesia also experiences spillover effects from the uneasiness among foreign investors
  about a growing risk of global inflation and recession. It makes some of them sell their
  Indonesian bonds and stock holding.  


  Since May, foreign investors have sold a total of Rp 68 trillion in their Indonesian stocks
  and bonds hiding, data from the Indonesia Stock Exchange and the Ministry of Finance 


  Rupiah has also depreciated by more than 5 percent since then. The currency was traded 
  at 14,985 per US dollar on Thursday, slightly strengthening from 14,999 a day ago,
  Bank Indonesia data showed.  


  Further Depreciation Expected 


  Bhima Yudisthira, an economist at Jakarta-based think tank Center of Economic and Law
  Studies (Celios), said the rupiah could depreciate further his year when the subsequent
  US benchmark interest rate increase occurs, raising the risk for a global recession.  


  "For example, Citigroup's projection regarding the global recession risk is now at 50 percent
  in the next 18 months. At the same time, BI still holds its benchmark interest rate when
  inflation increases by 4.35 percent yearly. So, the outflow of foreign funds will remain 
  high," Bhima told the Globe's sister, Investor Daily.  


  Bhima asked the government to prepare for the worst scenario. Domestic inflation could
  soon follow, and income from commodity exports supporting the trade surplus could
  reverse direction, which would hurt consumers, he said.   

  Source: The Jakarta Globe 


  Indonesia urges G20 to help end war in Ukraine 


  Indonesia urged the G20 on Friday to help end the war in Ukraine, as foreign ministers from
  the group met for a summit that has put some of the staunchest critics of Russia's invasion
  in the same room as Moscow's top diplomat.  


  The buildup to the gathering on the Indonesian island of Bali has been dominated by the war
  and its impact on the global economy, with top officials from Western countries and Japan
  stressing it would not be "business as usual" at the forum.  


  Shouts of "When will you stop the war" and "Why don't you stop the war" were heard as
  Russian Foreign Minister Sergei Lavrov shook hands with his Indonesian counterpart
  Retno LP Marsudi at the start of the meeting. 


  Underlining tensions in the buildup, Retno said earlier G7 counterparts had informed her they
  could not join Thursday's welcome dinner where Lavrov was present.  


  "It is our responsibility to end the war sooner than later and settle our differences at the
  negotiating table, not at the battlefield," she said on Friday at the opening of talks,
  quoted by Reuters. 


  Invoking Indonesia's religious diversity as a example of how divergent beliefs can co-exist
  harmoniously, Retno urged the G20 to "find a way forward" to address the challenges
  rippling across the globe. She said the repercussions of the war, including rising
  energy and food prices, would hit low-income countries the hardest.  


  A senior official for the Indonesian foreign ministry told Reuters no communique was
  expected from Friday's meeting.  


  "With Russia’s presence and participation, certainly I doubt there would be consensus
  on Ukraine, for example," a senior US State Department official said ahead of
  the summit.  


  For Lavrov, the G-20 gathering is the first opportunity to attend a multilateral event involving
  foreign ministers of the Group of Seven industrialized countries since the war in Ukraine
  began in late February and deepened rifts between Western countries and Russia,
  as well as China.  


  In a move reflecting the ill-feeling toward Russia, a customary group photo of the ministers
  was not taken, according to sources knowledgeable about the matter, Kyodo news reported.  


  In contrast with the G-20 finance chiefs' meeting in April in Washington and some other major
  international conferences, the G-7 delegates have no intention of leaving the room while
  Lavrov speaks, according to US and Japanese government officials.  


  Russia's invasion has cast a cloud over Indonesia's presidency of the Group of 20 largest
  economies this year, with speculation of boycotts from some members and a walkout in
  April at a finance ministers' meeting in Washington.  


  Retno said late on Thursday it was important for the host to "create an atmosphere that's
  comfortable for everybody", noting it was the first time since the February 24invasion of
  Ukraine that all major players were sitting in the same room.   


  Lavrov was seated between representatives from Saudi Arabia and Mexico at Friday's


  Meanwhile, the EU will prevent Russia using a G20 meeting in Bali as a "propaganda forum"
  for its disinformation on the impacts of its war in Ukraine, a spokeswoman said Thursday.  


  Energy and food crises exacerbated by Russia's invasion "feature prominently on the agenda
  of the G20" meeting of foreign ministers, to be attended by EU foreign policy chief Josep
  Borrell, his spokeswoman Nabila Massrali said.  


  Russian President Vladimir "Putin's appalling war of aggression against Ukraine excludes
  any business as usual, and will be clearly addressed," she said.  


  "We refute Russian disinformation and its attempt to use the G20 as a propaganda forum."  


  Borrell has no meeting scheduled with Russian Foreign Minister Sergei Lavrov during the
  two-day gathering in Bali.  


  While the EU, the United States and Western partners have snubbed Russian delegations
  in other international meetings since the invasion of Ukraine, the G20 was seen as an
  outreach opportunity to other countries that might be swayed by Moscow's narrative.  


  But Massrali said that "Russia's high level political participation at the G20 meeting may
  pose a threat to the G20's credibility, efficiency and relevance".  


  She added: "We are committed to ensuring the success of the G20 forum ministerial in Bali,
  but we will not allow Moscow to abuse G20 as its own propaganda platform."  


  Indonesia, the G20's host country, has invited Putin to a follow-up summit in Bali in November 
  despite Western efforts to freeze him out.  


  But in an effort to balance that event it has also invited Ukrainian President Volodymyr


  Massrali said there was no question of the EU boycotting the G20, calling it "too important
  also for the developing countries and for the emerging economies".  


  "We need to ensure that multilateralism can work in times of crisis," she said, quoted by AFP. 

  Source: The Jakarta Post