Jokowi reaps $13b in investment deals from East Asian Tour 

  President Joko “Jokowi” Widodo is bringing home at least US$13 billion in investment pledges
  and business deals after making the last stop of his three-day East Asian tour in Seoul on
  Thursday to meet with his new South Korean counterpart, Yoon Suk Yeol.  

  Previously, Jokowi visited Beijing and Tokyo in search of greater market access for Indonesian
  products and new sources of investment, as well as to facilitate cooperation between
  state-owned enterprises and exchange views on regional and global security concerns.  

  In his opening remarks at the start of his meeting with Yoon, Jokowi said he was eager to
  intensify economic cooperation with South Korea, which he said would be realized through the
  Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA). The deal was
  signed in 2020 and aims to strengthen the two countries’ ties in industrial, infrastructure,
  employment and trade matters. 

  Jokowi noted that South Korea’s previous investments had granted Indonesia “rapid growth
  and good prospects, particularly in [...] the steel industry, petrochemicals, batteries, electric
  vehicles, the power cable industry, telecommunications, garments and renewable energy”.  

  He also announced that South Korea would assist in the Nusantara capital city project.  

  Meanwhile, Yoon said Seoul had “built a foundation” of cooperation with ASEAN, noting that the
  association’s centrality and its Outlook on the Indo-Pacific were essential to the “peace and
  prosperity” of the region. Indonesia will lead ASEAN in 2023.  

  “Concrete cooperation will be made on supply chain matters and economic security. Indonesia
  is rich in strategic minerals such as nickel, which is an important material for the
  high-technology industry of South Korea,” Yoon said regarding bilateral economic cooperation
  initiatives.  

  More intense cooperative efforts, he said, would also be made to realize the goals of the United
  States-initiated Indo-Pacific Economic Framework (IPEF).  

  Before meeting Yoon, Jokowi met with ten business leaders from South Korea, where he
  witnessed the signing of a memorandum of understanding (MoU) between Krakatau Steel and
  South Korea’s Posco worth US$3.5 billion to expand the production of automotive steel for
  electric vehicles. The project is slated to begin in 2023 and also aims to facilitate the
  development of the new capital city project.  

  Posco is a private South Korean steel-making company that has invested $3.7 billion in
  Indonesia’s steel industry since 2010. Under the latest deal, the two companies committed to
  increasing the production capacity of Krakatau Posco to 10 million tons per year from the current
  3 million tons. 

  State-owned electricity company PLN also secured the assistance of the South Korean LS
  Corporation to set up underwater electricity cables.  

  Investment Minister Bahlil Lahadalia said the ministry would facilitate the licensing process and
  provide incentives in line with existing regulations, while President Jokowi said he was willing to
  come the investors’ aid should any of them face challenges in the future.  

  Great expectations  

  Jokowi’s three-day trip to China, Japan and South Korea brought Indonesia billions of dollars
  in investment pledges, with the most conservative estimate standing at $13 billion.  

  China’s intent to increase crude palm oil (CPO) imports by 1 million tons is worth $1.5 billion,
  according to an estimate by Statistics Indonesia (BPS), while investments announced by
  several Japanese companies, including automotive powerhouses Toyota and Mitsubishi,
  totaled some $5.2 billion. Thursday’s meeting with South Korea resulted in $6.37 billion for
  electric vehicles and the development of the capital city project.  

  The volume of pledged investment was a mark in Jokowi’s favor, said Lina Alexandra, head of
  the international relations department at the Jakarta-based Centre for Strategic and
  International Studies (CSIS), but true success lay in the effective realization of
  those investments.  

  And not all investments were created equal, she noted. The more concrete and focused an
  investment promise was, the more Indonesia was likely to benefit. For example, Japan’s
  commitment to assist in the completion of two Jakarta MRT corridors left less room for doubt
  than some other, broader pledges.  

  “We need to be critical of these verbal commitments, which are simple to make [...]. The
  measure of success is in future realization. How far will these investments go?” she said.  

  Balancing act  

  Overall, Jokowi had been “successful” in fortifying diplomatic relations with the three countries
  he visited on his East Asian tour, said Lina, noting that COVID-19 restrictions might have been
  hindering progress previously. There was no substitute for a face-to-face meetings, she said.  

  While the China visit had taken the spotlight, each of the three countries had a unique role in
  balancing Indonesia’s position on the international stage, Lina said. While Indonesia had been
  perceived as leaning more toward Beijing, its renewed relationship with Japan – especially in
  the upcoming Garuda Shield military exercises – had a neutralizing effect.  

  South Korea, meanwhile, offered significant economic opportunity for Indonesia, she said,
  evinced by its booming multinational corporations.  

  “There was a perception that Jokowi tended to be hyper-focused on domestic affairs. But
  [this trip] proves he is exploring a new avenue and interests at the international level.” 

  Source: The Jakarta Post 

  Toyota plans $1.8 bln Indonesia investment to build electric vehicles

  Japanese carmaker Toyota Motor Corp plans to invest 27.1 trillion rupiah ($1.80 billion) in
  Indonesia in the next five years to produce electric vehicles (EVs), Indonesia's economics
  ministry said on Wednesday. 

  The Southeast Asian country aims to become a global hub for producing and exporting EVs
  through processing its rich supplies of nickel laterite ore for use in lithium batteries. 

  A string of other global companies have already announced big investments in this area
  including South Korea's Hyundai Motor Group and LG Energy Solutions, a unit of LG Group. 

  Indonesia's chief economics minister Airlangga Hartarto said in a statement Toyota had invested
  14 trillion rupiah in the country since 2019. 

  "I believe demand for EVs whether its four-wheels or two-wheels will keep increasing in
  Indonesia and ASEAN," Airlangga said after meeting Toyota's Vice Chairman Shigeru Hayakawa
  a day earlier in Tokyo. 

  Indonesia, which has a population of 270 million, aims to sell only electric cars and motorcycles
  by 2050 to replace vehicles powered by combustion engines, a minister has said, as the
  country seeks to reduce its carbon emissions. 

  The nation has also set a target of having 13 million electric motorcycles - including converted
  ones - and 2.2 million electric cars on its roads by 2030. 

  Toyota plans to produce various types of hybrid EVs in its pipeline over the next four years,
  according to the ministry's statement. 

  "We hope with this additional investment, Indonesia's government understands our seriousness
  to invest in EVs," Toyota's Hayawaka was quoting as saying in the statement. 

  Toyota declined to give details of the investment discussed in the meeting. 

  On Tuesday, Indonesia also announced that Mitsubishi Motors Corp planned to invest about 10
  trillion rupiah in Indonesia between 2022 and 2025 to produce hybrid and battery EVs.  

  The investment commitments by the Japanese car makers come as Indonesian President Joko
  Widodo visits Japan this week to promote economic ties. 

  Source: Reuters 

  Inflation to reach 3.5-4.5% this year, Finance Ministry predicts 

  The Finance Ministry has forecast that Indonesia's inflation rate will be in the range of 3.5-4.5
  percent year on year this year, well above the target of 3 percent set in the 2022 state budget.  

 
  The higher-than-targeted inflation rate will be triggered by the soaring prices of global
  commodities, particularly energy and food, Chief of the Fiscal Policy Board of the Finance
  Ministry Febrio Kacaribu explained at an online press conference on the state budget on
  Wednesday. 

 
  "The 2022 inflation rate is forecast to reach 3.5-4.5 percent, higher than the early projection in
  the state budget. The (global commodity price) hike will have the potential to raise domestic
  commodity prices,” he said. 

  The government will remain alert to the latest price developments and stabilize food prices so
  that they do not have a direct impact on consumers, he added. 

  In the midst of global uncertainty, the government will use the state budget as an instrument to
  protect the people's purchasing power and maintain the momentum of national economic
  recovery, he said. 

  "The state budget serves as a shock absorber. We want to maintain the people's purchasing
  power as well as the momentum of economic recovery. In this context, (the effort) to maintain
  the people's purchasing power is reflected by the relatively controllable inflation rate compared
  to that in other countries," he added. 

  Earlier, Statistics Indonesia (BPS) said inflation reached 0.61 percent in June 2022, bringing the
  calendar year inflation to 3.19 percent. 

  The June 2022 inflation was recorded at 4.35 percent year on year, up from 3.55 percent a
  month earlier. It was also the highest inflation recorded since June 2017. 

  Source: Antara