Prabowo Subianto’s Nephew Appointed New Deputy Minister of Finance, Along with Two Others

President Joko “Jokowi” Widodo on Thursday, July 18, 2024, installed three deputy Cabinet ministers − Thomas Djiwandono, Sudaryono and Yuliot Tanjung − only three months before the end of his second term of presidency. 

Two of the vacant posts are delegated to close relative and confidante of Defense Minister and President-elect Prabowo Subianto, while the third is entrusted to a career employee. 

Thomas Djiwandono, the nephew of Prabowo Subianto, was installed as Deputy Minister of Finance. Born in Jakarta on May 7, 1972, he is the first child of Soedradjad Djiwandono and Biantiningsih Miderawati. Biantiningsih is the older sister of Prabowo, while Soedradjad Djiwandono was Governor of the Indonesian Central Bank (BI) Bank Indonesia during the Soeharto presidency. 

Thomas earned a bachelor degree in history from Haverford Colloge, Pennsylvania, the United States. He got his master’s degree in International Relations and International Economics at Johns Hopkins University School of Advanced International Studies, Washington, the U.S. 

He began his professional career as a financial analyst at Whetlock NatWest Securities, Hong Kong, before he joined the Arsari Group of businesses, owned by his uncle Hashim Djojohadikusumo, in 2006 until today. 

Thomas has been active in the Prabowo-led Gerindra Party as Chief Treasurer. He was also a legislative candidate of Gerindra for West Kalimantan Province. 

A second post was delegated to Sudaryono, a Gerindra Party politician currently serving as Chairman of the party’s Central Java chapter. He was installed as Deputy Minister of Agriculture. 

Born in Grobogan, Central Java, on January 23, 1985, Sudaryono is the only child of Yahyo, a farmer, and Suwarni, a housewife. He attended the Indonesian Army-run Taruna Nusantara High School, Magelang, graduating in 2003. He then joined the National Defense Academy of Japan and graduated in 2009. 

Sudaryono earned an MBA degree from the Swiss German University, Tangerang, in 2018 and his doctoral degree from the Bogor Agricultural University (IPB) in 2023. 

His professional career began in 2014 as Corporate Secretary at Nusantara Energy before he was named CEO of Garuda TV in 2018. 

Since 2021, Sudaryono has been serving as Chairman of the Association of Indonesian Market Traders (APPSI) and Chairman of the Board of Trustees of the Indonesian Fighting Traders (Papera). Apart from providing advocacy to traders regarding market issues, he also provides solutions for traders who are entangled in capital debt to loan sharks, through APPSI and Papera. 

Sudaryono’s political career began as personal assistant to Gerindra Party Chairman Prabowo Subianto. In 2020, he served as Deputy Secretary General of Gerindra Party before being elected chairman of its Central Java Chapter. 

The third post − Deputy Minister of Investment/Deputy Head of the Investment Coordinating Board − was entrusted to career employee Yuliot Tanjung. 

Born in Padang Panjang, West Sumatra, on October 7, 1963, Yuliot earned a bachelor’s degree in Livestock Production from State Andalas University in West Sumatra and an MBA degree from Jakarta-based PPM School of Management. 

Yuliot’s career at the Ministry of Investment/BKPM began in 1988. He later served as Head of the BKPM Representative Office in Taiwan, Head of Planning and Information Bureau, Director of Domestic Promotion, Director of Implementation Control, and Director of Deregulation. 

Prior to his appointment as Deputy Minister of Investment, Yuliot held the functional position of Principal Expert Investment Manager at the Ministry of Investment/ BKPM. 

“Previously, Yuliot served as Deputy for Investment Implementation Control from September 2023 to June 2024.” Spokesperson for the Minister of Investment/Head of BKPM, Tina Talisa, said. 

During his time as Deputy, Yuliot focused on achieving investment realization and facilitating the resolution of investment problems faced by companies. Earlier, Yuliot served as Deputy for Investment Climate Development from October 2020 until September 2023. 

Source: Indonesia Business Post 

BI sees Fed rate cut only in November, projects own cut in Q4

Bank Indonesia (BI) expects the United States’ central bank to start reducing its key interest rates in November and sees its own BI Rate also coming down in the fourth quarter. 

Bank Indonesia (BI) expects the United States’ Federal Reserve to start reducing its benchmark interest rates in November and projects a cut of its own BI Rate also in the fourth quarter.  

Following the central bank’s monthly policy meeting in Jakarta, BI Governor Perry Warjiyo revealed on Wednesday that the monetary policy authority had revised its estimate for a federal funds rate (FFR) cut to November from its initial prediction of December.  

“As for the FFR, which we initially thought would only start coming down in December, based on the latest data we have there is a greater probability of [the cut] getting brought forward to November,” Perry said during the press briefing.  

That projection is misaligned with overall market expectations. According to the CME FedWatch tool, interest rate traders see a 93-percent chance of a 25-basis-point cut in September. Until then, the Fed is deemed likely to keep its FFR target range steady at 5.25 to 5.5 percent.  

Fed Chairman Jerome Powell signaled on Monday that the Fed need not wait for US inflation to come down to 2 percent before undertaking its first cut in the current cycle. 

Powell said the three latest inflation readings over the second quarter of this year “add somewhat to confidence” that the pace of inflation is returning to the Fed’s target, Reuters reported on Monday. 

Speaking in front of the US Congress last week, Powell said the US economy was “no longer overheating”, since the labor market was looking like it was “back in balance”. 

Market participants interpreted Powell’s remarks as strengthening the case for interest rate cuts in September.  

However, BI’s Perry suggested the market typically exhibited a bias toward "sooner" rather than later interest rate cuts. 

“We do not yet dare say that [the FFR cut] will be pushed forward to September, even though the market is saying it’s September. Our latest estimates point to a probability of the FFR going down in November,” Perry said.  

Nevertheless, an earlier cut would entail the probability of the rupiah strengthening “or at least becoming more stable” against the US dollar, the governor said.  

On top of inflation readings, BI pays attention to the rupiah’s exchange rate in its monetary policymaking because of the risk of currency devaluation contributing to imported inflation.  

In the briefing, Perry announced that BI was keeping the benchmark interest rate at 6.25 percent, where it has been since April.Perry revealed his expectation that BI would undertake its own cut in the fourth quarter.  

The possible magnitude of such a move was “data-dependent”, he said, referring to US Treasury yields, the FFR and the rupiah’s exchange rate.  

Bank Permata chief economist Josua Pardede wrote in an analysis released on Wednesday that the private lender expected BI to maintain its benchmark interest rate at the current level until the end of 2024 and that a cut might only emerge in the first quarter of next year. 

He argued that BI would only get an opportunity to cut its rate once the Fed reduced the FFR.  

“We believe that the Fed will adopt a patient and data-driven approach, taking into account broader aspects of the US economy, including the implications of domestic political dynamics amid this year's election,” said Josua, who predicts just one FFR cut this year.  

Similarly, Bank Danamon economist Hosianna Evalita Situmorang said in an analysis released on Wednesday that BI would only start its cutting cycle in the first quarter of 2025. 

“While there is room for BI to consider lowering interest rates, the central bank will proceed with caution due to global conditions,” reads Hosianna’s analysis.  

The US election had pushed short-term Treasury yields higher, she explained. That could place Indonesia’s bonds at a disadvantage, since investors might flock to the dollar and weaken the rupiah’s exchange value in the process.  

“BI's strategy in the short term is directed at strengthening the effectiveness of stabilizing the rupiah exchange rate and attracting foreign capital inflows,” Hosianna said.  

Perry said the yield of two-year US Treasury notes was now higher than the 10-year Treasury yield, and the two would only begin to converge in the fourth quarter. 

Source: The Jakarta Post 

OJK Plans Mandatory Insurance for All Motor Vehicles by January 2025

The Financial Services Authority (OJK) has mandated that all motor vehicles, including motorcycles and cars, must carry third-party liability (TPL) insurance. 

Ogi Prastomiyono, OJK's Executive Director of Insurance, Guarantee, and Pension Funds Supervision, noted that while vehicle insurance is currently voluntary, the Financial Sector Development and Strengthening Act (PPSK) could soon make it mandatory for all car and motorcycle owners. 

"Government regulations to enforce mandatory insurance are expected to align with the PPSK Act within 2 years, by January 2025, requiring all vehicles to have TPL," Prastomiyono said on Thursday. 

He emphasized that mandatory TPL insurance is already a standard in various other countries, particularly within ASEAN. 

TPL insurance is seen as essential for motor vehicles due to its communal benefits. It helps mitigate losses in traffic accidents involving multiple parties. 

TPL insurance covers the policyholder against legal liabilities arising from accidents where their vehicle causes injury or damage to another person's property. This can include medical expenses, repair costs, or legal fees if the policyholder is sued. 

However, Prastomiyono highlighted challenges in implementing TPL insurance, especially concerning operational mechanisms. Establishing a system to track insurance coverage for each vehicle requires coordination with the police responsible for vehicle registrations and insurance companies. 

"Premium rates will be influenced by the number of participants. More participants in mandatory insurance will lower premiums for each individual," he explained. 

Source: Jakarta Globe