Subscribers copy, not for distribution

Thursday, Jan. 30th, 2020

g

GENERAL NEWS AND HEADLINES

Evacuations of President Joko “Jokowi” Widodo has ordered Indonesian citizens in government officials to step up efforts to rescue Wuhan impeded Indonesian citizens in Wuhan, Hubei province, where the coronavirus broke out, but their evacuation is unlikely as the Chinese government has locked down 15 cities, including Wuhan.

“Regarding the evacuation of our citizens in Wuhan and in the other quarantined cities, of course we are looking for ways to save our citizens. But, once again, these cities are currently on lockdown,” Jokowi said.

(Republika, headline; Despite the lockdown, Jokowi said the government was Kompas, headline) maintaining communication with all Indonesian citizens in the isolated cities. The President said the Indonesian mission in China was monitoring the conditions of Indonesian citizens and had prepared their logistical needs.

The Foreign Ministry said evacuation plans were being finalized. “So, when the evacuations [are approved], we can do it quickly and efficiently,” acting spokesman for the ministry, Teuku Faizasyah, said.

City bows to pressure The Jakarta administration has decided to halt a National Monument (Monas) revitalization project in Central Jakarta after the public criticized it for cutting down hundreds of trees.

“We agree with the City Council that the project must be stopped temporarily with all its consequences, until a letter of approval from the steering committee is given,” city secretary Saefullah told reporters after a coordination meeting with the council on Tuesday.

The suspension of the Monas revitalization project on Wednesday was based on a recommendation by the City Council, which argued that halting the project was a “natural thing” because, aside from not having a permit, the project had cut down 20 trees.

Subscribers copy, not for distribution

The project kicked off on Nov. 12, 2918 without consent from the Merdeka Area Development Steering Committee, helmed by State Secretary Pratikno. The committee is in charge of making decisions over changes to the capital’s landmark. (The Jakarta Post, p. 2) “The [Jakarta] governor as the steering secretary must coordinate with the central government. Monas is a national icon. It is not owned by the city alone but by the entire nation and there needs to be good coordination,” Jakarta Council speaker Prasetyo Edi Marsudi said.

Vulnerable provinces The National Police have conducted a survey to gauge identified ahead of the vulnerability index (IPK) of provinces that will host regional elections regional elections in September. Police data as of October 2019 found Central Sulawesi was the most vulnerable province, with a score of 55.72, followed by North Sulawesi (38.09), South Kalimantan (37.12) and Riau Islands (34.58).

In terms of cities, Tomohon in North Sulawesi ranks first (38.09), followed by Bitung (37.12) and South Tangerang (Media , p. 4) (34.58). As of regencies, Nabire tops the list with 80.37, followed by North Central Timor (79.85), Keerom (78.52) and West Manggarai (75.57). These IPK levels were discussed at the National Police’s executive meeting on Wednesday. National Police chief Gen. Idham Azis stated that the National Police would place an emphasis on security during the 2020 simultaneous regional elections in September.

Activists want Antigraft activists have slammed Law and Human Rights Yasonna to be held Minister Yasonna Laoly for removing Immigration accountable for false Director General Ronny F. Sompie from his post after the information latter issued false information regarding the whereabouts of Harun Masiku, an Indonesian Democratic Party of Struggle (PDI-P) politician who has been named a bribery suspect. Harun is still at large and has been declared a fugitive by the Corruption Eradication Commission (KPK).

The activists claim Ronny was a scapegoat and that Yasonna should be held accountable. “It’s not fair if he [Yasonna] puts the blame on the immigration director general alone for failing to provide accurate information regarding Harun. Yasonna should also be held accountable for the controversy because immigration is under his supervision,” Kurnia Ramadhana of antigraft watchdog Indonesia Corruption Watch (ICW) said.

Subscribers copy, not for distribution

“We can only hope the President will also dismiss him (The Jakarta Post, p. 2) from his post as a minister,” Kurnia added, referring to Yasonna who is also a PDI-P politician.

KPU to strengthen The General Elections Commission (KPU) needs a voter data system stronger system to improve the quality of single voter data. This refers to registered voters with complete and valid data. The KPU updates the data on a regular basis to ensure citizens’ constitutional rights.

Member of the Election Organization Ethics Council (DKPP) Ida Budhiati said the system should be separated from population data, due to differences in their characteristics. “The two data sets [voters and (Kompas, p. 2) population] have different characteristics. So, if a problem arises with voter data, the KPU will be entirely responsible for it,” said Ida.

According to Ida, flaws on voter lists during the regional elections in 2018, such as in Papua, stemmed from the failure to consolidate data on potential voters (DP4) with the final voter list (DPT).

BUSINESS AND ECONOMICS NEWS AND HEADLINES

Govt delays submission The government has promised to submit two omnibus of omnibus law to bills on job creation and taxation to the House of House Representatives within the first 100 days of the Jokowi- Ma’ruf Amin Cabinet, but as of Jan. 29, the House has not received the bills.

Coordinating Economic Affairs Minister Airlangga Hartarto and Law and Human Rights Minister Yasona Laoly met with House Speaker Puan Maharani, for consultation and not to submit the bills.

Puan told journalists after the meeting that the House had not received the bills because the government was still revising and discussing the content of the bills. Airlangga confirmed Puan’s statement and said the job creation omnibus bill specifically needed further discussion.

Based on the job creation omnibus bill’s discussion points that Kontan received, the most contentious issue was minimum wage amid backlash from labor unions.

Subscribers copy, not for distribution

President Joko “Jokowi” Widodo initially promised to submit the bills to the House by the end of last year, and then the President made another promise to submit them within 100 days since his Onward Cabinet was sworn in. And on Wednesday, presidential spokesman Fajrul Rachman said the bills would be submitted by the (Kontan, headlines; end of January. Koran Tempo, headlines page) Meanwhile, Airlangga said, as quoted by Koran Tempo, that the government had finished discussion on the two omnibus bills. Therefore, he and Yasona met with Puan to discuss further steps when the bills are already with the House. But, Airlangga confirmed that he and Yasona had not yet submitted the bills to the House.

Rp 527 trillion A total of Rp 527 trillion in approved investment projects investment projects had not started as of end of last year due to various stalled: BKPM hurdles at the local level, mostly licensing issues, according to Investment Coordinating Board (BKPM) chairman Bahlil Lahadalia.

Initially, the total number of stalled projects were worth Rp 708 trillion, but BKPM managed to help resolve various problems for projects worth Rp 189 trillion to kick off their operation. This year, Bahlil said, the BKPM would continue to help solve problems at the local level for the other projects worth Rp 527 trillion to start their operation so that the BKPM could reach its target this year of Rp 886 trillion worth of realized investments.

“[The problems are] contravening regulations, thugs and the arrogance of officials at the regency and municipality levels. There are many problems at the local level,” Bahlil said, adding that stalled investment projects included those in the electricity, petrochemical, automotive and mining sectors.

The BKMP has helped resolve land-related issues surrounding a Rp 61.2 trillion chemical project in Cilegon belonging to PT Lotte Chemical Indonesia. The project finally kicked off in January following an agreement signed by three parties: PT Krakatau Steel, PT KIEC and PT Lotte Chemical Indonesia.

A Rp 38 trillion Tanjung Jati Baru electricity project is another example, the project started after it got a recommendation from the State-Owned Enterprises Ministry. A Rp 39 trillion mining project by Vale Indonesia also started after it got a recommendation from the

Subscribers copy, not for distribution

South Sulawesi provincial government. Also, a Rp 21 (Investor Daily, trillion automotive project belonging to Hyundai will start headlines) soon following the government’s approval to provide a tax holiday for the project.

Jiwasraya will pay out State-Owned Enterprises Minister Erick Thohir said maturing policy claims problem-ridden state-owned insurer Asuransi Jiwasraya starting March: would start paying out maturing policy claims in March, Minister using the company’s internal cash flow. He assured that he and Jiwasraya management had conducted an in- depth analysis of the company’s ability to start the claim payment.

“We will make payment starting in March. If we can do it earlier, we will do so,” Erick said during a meeting with House of Representatives Commission VI. The commission demanded that Erick make a commitment regarding when Jiwasraya would paying maturing claims.

Erick said the maturing policy claims that Jiwasraya had to pay totaled Rp 16 trillion. Years of mismanagement and corruption led to the insurer’s failure to pay its customers (Republika, p. 1) a total of Rp 12.4 trillion in policies that had matured as of last December.

The Attorney General’s Office (AGO) has arrested five people and named them suspects in the Jiwasraya mega corruption case. They are three former top executives of Jiwasraya and two market players who invested Jiwasraya’s fund in underperforming stocks, including in their own companies.

Erick also promised that he would ensure that Jiwasraya would not repeat its mistake. “What’s important in the future is that we need to have safety in investment. We are not only running after higher returns but we have to get certainty [of getting the money back],” Erick said.

Indonesia alert to The government believes the spreading coronavirus in economic risks of China will add to downside risks and uncertainties in the coronavirus domestic economy as Indonesia’s largest trading partner braces for a blow to its economic growth.

Chinese New Year, which took place in January, should have given momentum to China’s economy, Finance Minister Sri Mulyani Indrawati has told lawmakers. “The outbreak has resulted in the country failing to realize its economic potential."

Subscribers copy, not for distribution

Each percentage-point decline in China’s growth rate results in a 0.3 percent drop in Indonesia’s, the World Bank has said. China’s economic growth hit a 29-year low in 2019 at 6.1 percent while Indonesia’s latest data showed 5.02 percent annual economic growth in the third quarter of last year, the slowest in more than two years.

“For now, the biggest battle is to keep investors’ trust in the country's economy amid uncertainties and lower confidence,” Sri Mulyani said. “We must first prepare policy instruments to mitigate the risks and maintain (The Jakarta Post, p. 1) economic stability."

The Jakarta Composite Index, the benchmark stock price gauge on the Indonesia Stock Exchange, dropped three consecutive trading days from Friday to Tuesday as world shares and oil prices dropped over concerns about the coronavirus’ impact on the global economy. Safe haven assets like the Japanese yen and gold rose.

As of Tuesday morning, the 2019 novel coronavirus (2019- nCoV) has killed about 132 people in mainland China and has infected more than 6,000 worldwide since it was first identified in Wuhan on Dec. 31, 2019.

Imports of fish Amid the outbreak of the coronavirus, Indonesia’s import products from China of fish products from China increased by 15.2 percent to increase 1.97 tons in January from 1.71 tons in December. The imported fish products included fresh fish, frozen fish and raw materials for fish feeds.

Indonesian Fish Canning Association chairman Ady Surya said the fish canning industry in Indonesia had imported most of its fish from China, especially sardines and mackerel. Indonesia’s fish canning industry imports a total of 325,000 tons of sardines and mackerel per annum, 20 percent of which is from China. (Kompas, headline of the economic and The Maritime Affairs and Fisheries Ministry’s marketing business page) director, Machmud Sutedja, said the government would supress mackerel imports from China by increasing production by local fishermen.

Hari Maryadi, secretary of the fish quarantine office at the ministry, said the government had no plan to limit fish imports from China yet as there were no reports that the fish could carry coronavirus. The coronavirus, which bears similarities to the Severe Acute Respiratory Syndrome (SARS), has killed 132 people in China and infected over 6,000 in four continents.

Subscribers copy, not for distribution

Disclaimer: Tenggara Strategics always aims to use reliable sources in providing our best analysis to our clients, and is not responsible for any errors, inaccuracies and/or viewpoints in the original source material upon which we have based our analysis. The analysis contained in this document is intended exclusively for our clients who have subscribed to this service, and is not for public consumption or dissemination.

Nothing contained herein shall to any extent substitute for the independent investigations and the sound technical and business judgment of the reader. In no event will Tenggara Strategics, including its employees, be liable for any decisions made or actions taken in reference to the information contained in these documents, or for any incidental, consequential, indirect, special or exemplary damages, including damages from loss of profits or opportunities, even if advised of the possibility of such damages.