This Week's Headlines (29 Aug - 1 Sep 2023)

01 Sep 2023

2024 Elections
Food & Beverages
This Week's Headlines

Survey shows Indonesian presidential candidates neck-and-neck


Indonesia's upcoming presidential election will be a close contest between two popular candidates, the country's defence minister and a governor of one of its most populous provinces, an opinion survey showed on Wednesday. 


Defence Minister Prabowo Subianto and Central Java Governor Ganjar Pranowo have dominated opinion polls in the run up to the Feb. 14, 2024 election, while former Jakarta Governor Anies Baswedan trails in third place. The candidates are expected to formally register between October and November. 


A Lembaga Survei Indonesia (LSI) poll found that 37% of 1,220 respondents polled in early August would vote for Ganjar, a 1.3-point advantage over Prabowo. About a fifth would vote for Anies, the poll showed. 


But in a two-way runoff, Prabowo would win 47.3% support versus Ganjar's 42.2%, the poll found. 


The margin of error was 2.9%. 


With roughly six months to go before the election, more than 30% of respondents said they could still change their choice, meaning the race remains "dynamic," said LSI's Djayadi Hanan. 


Analysts are closely watching which candidate will receive the backing of President Joko Widodo, who, as the first leader to hail from outside the country's political and military elite, has built great cachet with voters during his 10 years in office. 


A recent poll by Indikator Politik Indonesia put Jokowi's approval rating above 80%. 


As a member of the ruling Democratic Party of Struggle (PDI-P), Jokowi, as the president is known, has said he backs the party's candidate, Ganjar. 


But in recent months, he has also hinted at support for Prabowo, an ex-special forces general whom he defeated in the last two presidential elections in 2014 and 2019. 


Tensions between Jokowi and the PDI-P chief Megawati Sukarnoputri, and his more frequent public appearances with Prabowo have led analysts to suggest the incumbent is still mulling over who to ultimately back. 


Source: Reuters  



Indonesia's inflation falls to 3 percent, among lowest in the world


Indonesia's inflation was among the lowest worldwide, while the Consumer Price Index (CPI) inflation fell more quickly and has returned to its target of 3 percent with a margin of 1 percent, the central bank governor said. 


"Indonesia's inflation fell from 5.51 percent at the end of 2022 to 3.08 percent in July 2023 year-on-year, one of the lowest in the world," said Bank Indonesia Governor Perry Warjiyo. 


During the 2023 National Coordination Meeting (Rakornas) for Inflation Control in Jakarta on Thursday, he noted that the decline in inflation occurred in all groups, including core inflation, volatile food prices, and prices regulated by the government. 


All regions also recorded a decline in inflation and were within the national inflation target, Warjiyo said. 


He noted that this achievement was the result of close synergy in controlling inflation between the central and regional governments and the consistency of BI policies in central and regional inflation control teams, including the National Food Inflation Control Movement (GNPIP) in various regions. 


BI estimates that inflation in 2023 will remain under control within the target of 3 percent with a margin of 1 percent, and it is even likely to be around 3 percent at the end of 2023. 


However, he reminded that the inflation still needs to be reduced to the target of 2.5 percent with a margin of 1 percent, in 2024. 


"We believe low inflation is a very important factor for Indonesia's economic growth and the welfare of the Indonesian people," Warjiyo affirmed. 


He highlighted that the BI continues to strengthen its policy mix in maintaining stability and supporting economic growth by coordinating with the government. Monetary policy is also consistently directed towards pro-stability to control inflation and stability of the rupiah exchange rate. 


He said that loose and pro-growth macroprudential policies are carried out through large liquidity incentives reaching Rp158 trillion (around US$10,4 billion) for banks to channel credit and financing to priority sectors, including downstream agriculture, and micro, small, and medium enterprises (MSMEs) in the food sector. 


The acceleration of digitalization of the payment system is also pro-growth, including expanding QRIS, distributing social assistance, and electrifying the regional financial transactions, he remarked. 


QRIS (Quick Response Code Indonesian Standard) is a national standard for QR code-based payments in Indonesia. 


BI also mobilizes all of its 46 representative offices in regions across Indonesia to coordinate with local governments in controlling inflation through low-cost markets, food commodity security, cooperation between regions, smooth distribution, coordination and communication, and data digitization. 


"Strengthening the GNPIP is carried out according to the characteristics of each region in Indonesia to be right on target," the governor revealed. 


The central bank also estimates that inflation in 2024 will be controlled within the target range that will decrease to 2.5 percent with a margin of 1 percent. 


Warjiyo noted that the effort to achieve the inflation reduction target should be accompanied by strengthening policy synergies between the central and regional governments and BI, especially to mitigate short-term disturbances, such as the impact of El Nino, supply availability, and affordability. 


It must also address structural issues of inflation control, including productivity, distribution efficiency, data integration, and the strengthening of institutions and human resources, he stated. 


Source: Antara News 



PepsiCo starts work on $200m snack manufacturing plant


Food and beverage (F&B) maker PepsiCo is set to build a snack factory in Cikarang, West Java, with an investment of US$200mil. 


PepsiCo Indonesia, the local subsidiary of US-based PepsiCo, has committed itself to investing in the snack factory over a 10-year period and is expected to commence production in 2025. 


According to a statement published by the company, the plant is designed with an environmental focus by utilizing 100% renewable electricity and including a complete water recycling system. 


The company said it will adopt a “net water positive approach” to water usage. 


PepsiCo Indonesia chief executive officer Asif Mobin announced that the groundwork for building the manufacturing plant will commence this month. 


“In Indonesia, our expansion signifies more than growth. 


“The policies set forth by the Indonesian government resonate with our strategy, emphasizing a shared vision for sustainable development,” Asif was quoted as saying. 


PepsiCo first made its entry into the country back in 1973 by selling its carbonated drinks. 


The latest investment marked its re-entry to the country’s market after PepsiCo’s affiliate Fritolay Netherlands Holding and Indofood CBP, a subsidiary of Indonesia’s F&B giant Indofood Group, ended a 30-year joint venture in 2021 without providing any reason, when Indofood bought PepsiCo’s minority stake. 


The firm also discontinued its carbonated drinks after its expiration of the contract with PT Anugerah Indofood Barokah Makmur, the entity holding the license for Pepsi’s production, sale and distribution in the country during that period. 


Asif noted that the firm’s recent investment would support the downstream expansion of the F&B industry. 


He added that the manufacturing plant would attract local talent, process domestically-sourced raw materials and aid local farmers in adopting sustainable agricultural practices. 


Investment Coordinating Board chairman Bahlil Lahadalia hailed PepsiCo’s investment as a substantial and enduring commitment to the country’s advancement. 


During the announcement event, he welcomed the company’s decision to establish a manufacturing plant in Indonesia, emphasizing the nation’s status as the largest country in South-East Asia with economic growth surpassing that of advanced economies, such as the United States, Japan and European countries. 


Bahlil praised the firm’s commitment to enhancing downstream initiatives within the country and expressed confidence that PepsiCo could cater to local market demand and potentially expand toward export markets. 


“We hope this investment brings knowledge and technology transfer to the people of Indonesia and benefits the community while building partnerships with local entrepreneurs,” he said. 


Source: The Jakarta Post