December 2017 More articles available at: www.kemlu.go.id/chicago News from

Indonesia is More Prosperous and Committed to Sustainable Message from the Editorial Development Board

As the year 2017 draws to end, the Editorial Board wishes you a Happy Holidays and Happy New Year 2018. 2017 has been a remarkable year for Indonesia.

This edition highlights Indonesia’s Indonesia has been heavily involved being for all at all ages. To this end, posture in achieving sustainable de- in the development of the Sustain- the government is allocating 5% of velopment goals by maintaining sus- able Development Goals (SDGs) national expenditure towards health tainable economic growth and mo- since their early conception in 2012. system and the government is aim- mentum. The SDGs were formally adopted as ing to rapidly expand access to pri- a global agenda in 2015 and they mary health care services and health The economy is on the right track as comprise of 17 goals and 169 tar- insurance coverage through the dis- signified by the investment grade BBB gets that cover issues including pov- tribution of Indonesia’s smart cards. rating upgrade by Fitch Ratings. erty, public health, the environment, Equally important is the country’s dec- ade long achievement in eradicating education, infrastructure investment, Another important goal of SDG is to poverty, which results in the growth of and justice. They emphasize inclu- seek to ensure inclusive and equita- middle-class. sive and sustainable growth as a ble quality education and promote

priority. Each government is asked lifelong learning opportunities for all. Indonesia’s economic development to adapt the agenda at the national Baseline data highlights that in 2014, aligns with the Sus- level by incorporating the SDGs into 97.2% of children aged between 3 tainable Development Goals and re- national policies and setting national and 5 years participated in pre- mains committed to the sustainability targets as appropriate. school education, 99.7% of children of the environment. completed primary school, and Indonesia’s engagement in the Post- 98.5% of children completed junior 2015 Development Agenda strength- high school. The literacy rate was In this issue ened the alignment between its na- 99.7% and 28.8% of students contin- Indonesia is More Prosperous and Com- tional development planning proc- ued on to university. mitted to Sustainable Development 1 esses and the global agenda. The government is prioritizing investing Lastly, SDG’s goal to build resilient Fitch Upgrades Indonesia to ‘BBB’, Out- in infrastructure and spending on infrastructure, promote inclusive and look Stable…2 education, health, and food security sustainable industrialization and fos- as its top priorities. ter innovation resonate with the gov- Good Report on Citizen Protection in 2017 …3 One of the most important SDG’s ernment’s priority. 132 millions of goal is to end poverty in all its forms Indonesians have access to internet, 2018 Economic Outlook: It’s time to invest everywhere. Baseline data highlights almost half of them are heavy users no need to wait any longer… 5-6 that poverty has declined consis- with daily internet access of more Tourism Map of Indonesia 6-7 tently over time in Indonesia, from than 3 hours a day. Indonesia’s digi- 16.0% in 2005 to 10.12% in 2017. tal economy is supported by the 10 National Events in 2018...8 Unemployment rate has declined growth of middle class, which from 10.3% in 2006 to 5.5% in 2017. amounts to 66,31% of Indonesia’s Another SDG goal is to seek to en- population of 262 million people. sure healthy lives and promote well-

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Fitch Upgrades Indonesia to 'BBB'; Outlook Stable Good Report on Citizen Protection in 2017

Fitch Ratings has upgraded Indonesia's Long-Term For- 37 places in two years. The reforms also seem to be eign- and Local-Currency Issuer Default Ratings (IDR) contributing to stronger external finances, with foreign to 'BBB', from 'BBB-'. The Outlook is Stable. direct investment (FDI) picking up in recent quarters to such an extent that Fitch expects net FDI to cover the Indonesia's resilience to external shocks has steadily current account deficit over the next few years. strengthened in the past few years, as macroeconomic policies have consistently been geared towards main- GDP growth remains strong against peers, as illustrated taining stability. A more flexible exchange-rate policy by average 5.1% growth over the previous five years. since mid-2013 has helped foreign reserve buffers swell Fitch expects GDP growth to rise to 5.4% in 2018 and to USD126 billion as at November 2017, reaching seven 5.5% in 2019, from 5.1% in 2017. Indonesia is benefiting months of current account payments, compared with the from the global pick-up in trade and stabilizing commod- 'BBB' median of six months. Moreover, monetary policy ity prices. Investment is also set to gain further momen- has been sufficiently disciplined to limit bouts of volatile tum on higher public infrastructure spending, lower bor- capital outflows during challenging periods. Prudential rowing costs and structural reform implementation. measures on macro economics have helped curb a sharp rise in corporate external debt, while financial Country Ceiling affirmed at 'BBB' deepening has coincided with improved market stability. Issue ratings on long-term senior unsecured foreign- The focus on macro stability is also evident in credible currency bonds upgraded to 'BBB' from 'BBB-' On December 19, 2017, the Ministry of Foreign Affairs of As has been done in previous years, in 2017 the Govern- budget assumptions in the previous few years. Issue ratings on long-term senior unsecured local- the Republic of Indonesia presented the Hassan Wirajuda ment of Indonesia strived for financial remedy of the mi- currency bonds upgraded to 'BBB' from 'BBB-' Award 2017 for 17 organizations and individuals that grant workers. The financial remedy included the payment The government's concerted structural reform drive is Issue ratings on short-term senior unsecured local- served as partners of the Ministry in protecting Indone- of unpaid wages, back pay, work insurance, return tickets improving a still-challenging business environment. Im- currency bonds upgraded to 'F2' from 'F3' sians overseas. The Ministry also awarded Slank, an Indo- and diya (death compensation). The sum of financial rem- plementation of measures to reduce business proce- Issue ratings on Perusahaan Penerbit SBSN Indonesia nesian legendary rock band, as the Ambassador of Citizen edy in 2017 reached USD 8,837,000. dural and permit requirements have sharply improved III global certificates (sukuk) upgraded to 'BBB' from Protection, to raise more public awareness on citizen pro- Indonesia's position in the World Bank's Ease of Doing 'BBB-' To further protect the migrant workers, the Government of tection. Business ranking to 72nd out of 190 countries; a rise of Source: Fitch Ratings Press Release Indonesia worked together with various local partners on Hassan Wirajuda Award (HWA) is an award given by the empowerment through education. One of these partners is Ministry to honor organizations and individuals for their the Sabah Bridge, who received the Hassan Wirajuda contribution to citizen protection. The name of the Award Award 2017 in the category non-governmental organiza- was taken from H.E. DR. Hassan Wirajuda, the Minister tion partner for its endless efforts in providing education for Foreign Affairs of the Republic of Indonesia 2001 – for the children of Indonesian migrant workers in Sabah, 2009, who initiated the mainstreaming of citizen protection Malaysia. issues. The award itself was first started in 2015. The citizen protection also reached the area of Northern The year of 2017 was another busy year on citizen protec- America and the Caribbean. The Government of Indonesia tion for Indonesia. Yet, the Government managed to wrap evacuated 7 Indonesian workers from Tortola Island of the year with some great achievements. British Virgin Islands that had been hit by Hurricane Irma. During the hurricane season of Harvey, Irma and Maria, The year started with cases of piracy conducted by the the Embassy and Consulates of Indonesia in the US terror group Abu Sayyaf in the Southern Philippines closely monitored the catastrophic effects to ensure the oceans. By September 2017, the Government of Indone- safety of the Indonesians living in the affected areas. sia successfully liberated 2 Indonesian crewmen out of 7 members who were held as hostages. The success was a Citizen Protection is one of the priorities of Nawa Cita, the result of total diplomacy emphasizing on the safety of the Nine Agendas of President Joko Widodo. It is also one of hostages, in which every hostage should return home un- the pillars of the foreign policies of Indonesia. harmed and in good health. “Citizen Protection is not a work that can be performed by The issue of migrant workers still dominated the citizen one party. All elements in the community should work to- protection issues in 2017, with number of cases related to gether to provide protection for Indonesian citizens migrant workers issues reaching up to 80% of the total abroad.” As stated by H.E. , the Minister of number of citizen protection cases handled by the Govern- Foreign Affairs of the Republic of Indonesia, in her speech ment. In 2017, it was estimated that 33% of the Indone- at the Hassan Wirajuda Award 2017 presentation. “We sian migrant workers were elementary school graduated, look forward to strengthen the cooperation with our part- while 97% of them worked as domestic workers in Malay- ners in 2018,” she added. sia, China or the Middle East. Their background placed Source: them in situations vulnerable to workplace and human rights violations https://www.kemlu.go.id Photo source : http://en.mirajnews.com/2017/12/fitch-upgrades-indonesia-to-bbb-outlook-

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2018 Economic Outlook: It’s time to invest, no need to wait any longer Investment in infrastructure development projects is national government report. Trust level to the Indone- also highly lucrative. Currently, the government is accel- sian government has amounted to 80 percent, increas- erating 245 priority infrastructure development projects ing by 28 percent compared to 2007, when the trust The trends in 2017 have demonstrated positive eco- Indonesia’, while implementing numerous infrastructure across Indonesia, which needs an investment amount- level amounted to 52 percent. nomic indicators. development projects. The advancement of digital ing to more than 4 thousand trillion rupiah covering five Meanwhile, according to the World Economic Forum’s economy, supported by the thriving emerging middle- main sectors: energy, electricity, toll roads, railways and For instance, in the third quarter of 2017, the communi- Global Competitiveness Index 2017-2018, in 2017 Indo- class socioeconomic bracket, will spur Indonesia’s eco- special economic zones. cation and information services sector has grown year- nesia has ranked 36 from 137 surveyed countries in nomic growth further. on-year by 9.80 percent, while other types of services The fundamental strength of Indonesia’s economy is terms of global competitiveness. The Edelman Trust have risen by 8.71 percent. Meanwhile, the transporta- According to data provided by GSMA Mobile Connec- supported by consumption made by private companies, Barometer 2017 has also stated that Indonesia is a tion and logistics sector has grown by 8.25 percent, tivity Index, in 2016 there were 132.7 million internet investment expenditures as well as a continuing in- country with a high trust level for both its government while the business-supporting services sector has users in Indonesia. From aggregate number, 106 mil- crease of export volume. The recovery of the global and the press. grown by 8.07 percent. Value-added tax (VAT) revenue lion are active social media platform users and 92 mil- economy as well as commodity prices, along with nu- A report issued by the United Nations Conference on has grown by 12.1 percent; while VAT Refund for Tour- lion are active Smartphone users. This has laid an ex- merous domestic infrastructure development projects, Trade and Development (UNCTAD) called the Global ists has grown by 10.46 percent, with the arrival of for- cellent foundation for Indonesia to enjoy a sustainable will support next year’s growth momentum, making it Investment Prospects Assessment 2016-2018, has eign tourists having increased by 25 percent. digital economy growth. the perfect time to invest in Indonesia. ranked Indonesia in the ninth position in its list of the Indonesia’s export value from January to September Referring to data provided by the Indonesian E- Positive outlook for 2018 most attractive global foreign direct investment loca- 2017 has shown a year-on-year increase to US$123.36 commerce Association, around 9 percent of the coun- tions Next year, Indonesia’s economic growth would still billion, growing by 17.36 percent. Keeping the figures in try’s population, comprising 24.74 million people, was mainly be driven by domestic consumption and invest- All the macroeconomic indicators, along with the inter- mind, we should be looking at an optimistic year of making online transactions in 2016, with a total transac- ments. Until the third quarter of 2017, investment in In- national recognition, send an important and positive 2018. tion worth of US$5.6 billion. donesia has amounted to Rp 513.2 trillion, constituting message that Indonesia’s economy will continue to Indonesia’s Investment Coordinating Board’s (BPKM) Going back to tourism sectors, Indonesia offers many 75.6 percent of the government’s target of attracting Rp soar; thereby, there is no reason for you to postpone Chairman Thomas Lembong said that with Standard & investment opportunities worth considering. The gov- 678.8 trillion of investment. Since 2012, the investment investing in Indonesia. Poor’s upgrading Indonesia into investment grade, all ernment is currently grooming 10 new travel destina- realization value has also continued to increase. relevant stakeholders must work in accelerating eco- tions to match the popularity of Bali among foreign tour- In terms of regulations and bureaucracy, Indonesia is nomic growth to increase investment volume, seizing ists. The new travel destinations are: the Toba Lake in Article taken from now becoming friendlier than ever toward investors. the opportunity offered by Indonesia’s current stable North Sumatra, Tanjung Kelayang in Bangka Belitung, The World Bank has upgraded Indonesia’s standing in macroeconomic conditions with inflation being ade- Borobudur temple in Yogyakarta, Wakatobi in South- http://www3.bkpm.go.id/images/uploads/whyinvest_file/ its 2018 ease of doing business report by 19 points quately controlled and political conditions properly man- east Sulawesi, Morotai in North Maluku, Tanjung Le- J a - compared to last year, which ranks the country at the aged. Therefore, 2018 will be the perfect moment for sung in Banten, Pulau Seribu in Jakarta, Bromo in East karta_Post_Economic_Outlook_2018_ENG_FIN_Websi 72nd position. Furthermore, the Gallup World Poll has investors to invest in Indonesia. Java, Mandalika in West Nusa Tenggara and Labuan te.pdf also ranked Indonesia first for its trust and confidence in Bajo in East Nusa Tenggara. According to BKPM, out of all of Indonesia’s business sectors, the tourism and digital economy sectors re- Investment opportunities are also wide open in various main the most promising. The government has been special economic zones such as: Lhokseumawe in proactive in supporting both sectors through a number Aceh, Sei Mangkei in North Sumatra, Tanjung Api-Api of policies, such as: expanding visa-free travel to Indo- in South Sumatra, Tanjung Lesung in Banten, Morotai nesia to 170 countries, the national campaign to pro- in North Maluku and Sorong in West Papua. mote various new travel destinations as ‘the new Bali of

Photo source : https://www.kiplinger.com/article/investing/T030-C007-S001-now-is-the-wrong-time-to-buy-an-s-p- Photo source : http://invest-islands.com/2018-economic-outlook/ 500-index-fund.html

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