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Indonesia Economy Forum

Indos said:
Batang industrial estate, a new industrial estate with has 4000 hectare land in Central Java is currently under development. Construction work for infrastructure facility is being built by PT Waskita Karya, one of state owned construction companies.

Current progress and some design of the industrial estate

Click to expand...

Batang Industrial park development progress as in 3 December

 
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Indonesia to build $116.5m vehicle test site to capture ASEAN market
​
Norman Harsono

The Jakarta Post

Jakarta / Fri, December 11, 2020 / 04:17 pm


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The design of the Transportation Ministry's proving ground in Bekasi, West Java. (Courtesy of Transportation Ministry and PT PII/-)


The Transportation Ministry aims to finish building a Rp 1.64 trillion (US$116.5 million), international standard motor vehicle "proving ground" within the next four years to help Indonesian automakers capture the Southeast Asian market.

Transportation Minister Budi Karya Sumadi showed a project road map whereby the proving ground – a racetrack-like site to be built in Bekasi, West Java – was slated to begin development in 2022 and be finished by 2024.

The proving ground will test Indonesia-made motorcycles, three-wheelers, cars, buses and trucks in accordance with the international benchmark United Nations Regulation (UNR) on vehicles, to make them more compliant with other markets' standards, particularly the ASEAN market. “[Indonesia] produces a lot [of cars], we use a lot of cars but we don’t export as much,” said the minister during a Jakpost Spotlight webinar titled Improving vehicle safety in Indonesia through proving ground, held on Thursday.

Read also: Jokowi signs electric vehicle regulation

Indonesian automakers exported 180,903 completely built up (CBU) vehicles this year as of October, which represented a third of total vehicle production as of that month, according to Association of Indonesian Automotive Manufacturers (Gaikindo) data. However, Gaikindo aims to push exports up to 1 million units and domestic sales to 2 million units by 2025 against the backdrop of a cooling Indonesian auto market as big cities, including Jakarta, choke up with private vehicles.

For the government, raising vehicle exports is a means of strengthening Indonesia’s trade surplus, which hit $17.07 billion from January to October this year, according to Statistics Indonesia (BPS). The surplus supports the rupiah exchange rate and boosts the country’s economic recovery.

Indonesia's main competitor for the Southeast Asian auto market is Thailand, but Vietnam, the region’s rising economic star, recently signaled plans to go global after Vietnamese automaker VinFast acquired a proving ground in Australia, which Gaikindo expects will tighten regional competition going forward.

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The design of the Transportation Ministry's proving ground in Bekasi, West Java. (Courtesy of Transportation Ministry and PT PII/-)


The ministry’s land transportation director general, Budi Setiyadi, explained that the planned proving ground would add 19 new testing facilities to the ministry’s existing vehicle testing site (BPLJSKB) in Bekasi. The new facilities will test, among other aspects, vehicle emissions, noise levels, crash safety and mirror view in accordance with the UNR, a standard universally recognized by Southeast Asian countries through the ASEAN Mutual Recognition Arrangements (MRA).

“At the least there will be trust from other countries over products made in Indonesia,” said Budi. He added that “there are other [proving grounds] in ASEAN but ours will be the biggest” at 90 hectares. The second biggest in the region will be that in Thailand, according to ministry data.

Read also: Gaikindo expects car sales to remain low next year

He added that the proving ground would also feature facilities to test electric vehicles. The government issued last year a presidential regulation on developing a domestic EV industry. The proving ground is one of five multi-billion rupiah government-to-business cooperation (KPBU) projects forwarded by the Transportation Ministry in 2018.

The five serve as pilots in cutting state budget (APBN) spending on big transport infrastructure projects. The Finance Ministry, through state-owned lender PT Penjaminan Infrastruktur Indonesia (PT PII), is helping the Transportation Ministry secure funding for the test site.

PT PII president director Muhammad Wahid Sutopo said during the discussion that his company was awaiting the ministries’ nod to finalize a "final business case" document that would be presented to interested investors. The project was valued at Rp 1.64 trillion when announced in 2018 but Wahid said the new capital expenditure was estimated at Rp 2.09 trillion and foreign investors’ ownership would be capped at 49 percent as per existing regulations.

The government, through an availability payment scheme, planned to pay for and take over the proving ground after a 15-year period from when operations begin. Transportation Minister Budi Karya Sumadi speaks as a keynote speaker in a Jakpost Spotlight webinar held on Dec, 10.

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Other speakers and panelists in the webinar included Transportation Ministry land transportation director general Budi Setiyadi, Industry Ministry metal, machinery, transportation, equipment and electronics (ILMATE) director general Taufiek Bawazier, PT Penjaminan Infrastruktur Indonesia (PT PII) president director Muhammad Wahid Sutopo, Association of Indonesian Automotive Manufacturers (Gaikindo) chairman Yohannes Nangoi, Organization of Land Transportation Owners (Organda) secretary-general Ateng Aryono, Association of Indonesian Carrosserie Companies (Askarindo) chairman Sommy Lumadjeng, Gadjah Mada University (UGM) academic Muh Arif Wibisono and Indonesian Transportation Society (MTI) chairman Agus Taufik Mulyono. (JP/Wienda Parwitasari)

He hinted that interested investors hailed from countries “that are the principle holders of auto producers in Indonesia.” According to Gaikindo data from October, the Indonesian market is over 80 percent dominated by Japanese brands.

Industry Ministry metals, machinery, transport equipment and electronics industry (ILMATE) director general Taufiek Bawazier emphasized the proving ground’s ability to test higher safety standards for Indonesian-made vehicles. “It’s like a miniature of the hurdles in the real world,” he said in the webinar.

“This is very important to test because our aim is improving safety.” For Indonesian automakers, the proving ground promises to save “billions of rupiah” from testing Indonesian-made vehicles or vehicle components, such as large truck engines, as far away as Germany, said Gaikindo chairman Yohannes Nangoi. “Every year, over 400 models need to be tested,” he said during the webinar, describing how automakers also often had to bring government officials with them, abroad, to witness such tests first hand.

www.thejakartapost.com

Indonesia to build $116.5m vehicle test site to capture ASEAN market

The proving ground will test Indonesia-made motorcycles, three-wheelers, cars, buses and trucks in accordance with the international benchmark United Nations Regulation (UNR) on vehicles.
www.thejakartapost.com www.thejakartapost.com
 
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UNCTADstat - General Profile: Indonesia

Overview of key economic statistics. The statistical themes covered are: International trade, economic trends, foreign direct investment, external financial resources, population and labor force, information economy and maritime transport.
unctadstat.unctad.org
 
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1.2 million vaccine from Sinovac, China, has arrived in Jakarta and will undergo some Halal certification and examining process from Indonesian food authorities. If there is no hurdles, vaccination will be started in January 21. Only low income group get government subsidy for the vaccination program that is expected to cover at least 107 million people. Another 1.6 million vaccines will also arrive as part of the first phase vaccination program for targeted vulnerable group like medical doctors and some civil servant dealing in public service.

Indonesia state owned pharmacy company, Biofarma, is also expected to produce the vaccine from Sinovac as part of the deal.

 
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Exciting news! I can see how Elon and Tesla are interested to invest in EV batteries production and supply chain here, but SpaceX...? now that's something new! Due to strict ITAR regulation, I don't really see how SpaceX can do space launches on any other country other than the US... but perhaps what Jokowi meant is for assistance in developing/building our spaceport (which is planned in Biak)...? Considering Elon just built a spaceport / launch facilities in a remote site in Boca Chica Texas...

jakartaglobe.id

Elon Musk to Look Into Potential Tesla, SpaceX Investments in Indonesia

Elon Musk will send a team to Indonesia next month to look into details about the investment opportunities.
jakartaglobe.id jakartaglobe.id

Elon Musk to Look Into Potential Tesla, SpaceX Investments in Indonesia
BY :JAKARTA GLOBE
DECEMBER 13, 2020
Jakarta. American inventor and technology mogul Elon Musk has agreed to explore investment opportunities in the electric car battery and space launch station in Indonesia following a talk with President Joko "Jokowi" Widodo and the Coordinating Ministry for Maritime Affairs and investment Luhut Binsar Pandjaitan over the telephone on Friday.
Musk, the founder and chief executive officer of electric car company Tesla and aerospace company SpaceX, said over the telephone that he would send a team to Indonesia next month to look into details about the investment opportunities.
The discussion between Musk, Jokowi, and Luhut followed up on Luhut's visit to the United States last month. At that time, Luhut had to cancel a scheduled meeting with Musk as the latter contracted Covid-19.

"The discussion touch base on the investment opportunities for the electric car company, Tesla, in Indonesia," the Coordinating Ministry for Maritime Affairs and Investment said in a statement on Saturday.
"The two parties discussed the electric car industry and the main component for electric batteries," the ministry said.
Jokowi has been adamant about leveraging Indonesia's nickel reserve — the largest in the world — to launch an integrated supply chain for electric car batteries and the electric car industry in the country. Nickel was the main component for making a high-performance lithium-ion battery.
In a tweet last July, Musk said he saw nickel production as the biggest obstacle for a high volume battery production for electric cars. He also identified several countries that were on course to become key suppliers of the metal.

"Nickel is the biggest challenge for high-volume, long-range batteries! Australia and Canada are doing pretty well. US nickel production is objectively very lame. Indonesia is great!" Elon tweeted.

Jokowi's Electric Car Ambition
Jokowi was serious with electric car ambition, setting a target to have at least one in five cars to be an electric one by 2025.
And, the plan has been taking shape in the past twelve months. China's Contemporary Amperex Technology (CATL), one of the world's largest car battery manufacturers, is preparing to build a $5.1 billion battery plant in Indonesia.
The state-owned mining holding company Indonesia Asahan Aluminium (Inalum), state utility company Perusahaan Listrik Negara and state energy company Pertamina are working to establish Indonesia Battery Holding, a holding company that would involve in battery investment, production, and distribution across the country.
Japan's automotive giant Toyota had pledged a $2 billion investment to develop 10 types of electric vehicles in Indonesia to transform the Southeast Asian largest economy into a critical global hub for electric vehicle exports over the next five years.
Besides Toyota, South Korea’s Hyundai Motor has also committed about $1.55 billion in investment for an electric car manufacturing plant. The company's West Java plant will start production next year.
Space Launch Stations
Apart from investment offers to Tesla, Jokowi also asked Musk to look into the possibility of setting up a space launch station in Indonesia.
Musk's SpaceX reported a successful flight test for its Starship heavy rocket on Wednesday. The rocket managed to reach 12.5-kilometer altitude before decelerating to the Boca Chica launch station in South Texas and was destroyed upon landing. The company said it managed to collect all the flight data needed to develop further the rocket for carrying a human-crewed expedition to Mars by 2027.
"President Joko Widodo invites [Musk] to look into Indonesia as a launching pad for SpaceX," the ministry said.
SpaceX has prior experience working with Indonesia. In 2018, the company launched Telkom Indonesia's Merah Putih satellite into orbit, using its Falcon 9 rocket from Cape Canaveral Air Force Station in Florida.
Indonesia has several space launch stations plan in the pipeline. The National Aeronautics and Space Agency (Lapan) announced last year that it moved forward to build a spaceport in Biak, Papua. Lapan and the Russian Federal Space Agency (RKA) first worked on the Biak station plan in 2006 to develop it as a commercial launch site.
Biak sits almost exactly on the equator, which helped any rocket launched from the site to gain greater initial velocity, allowing it to carry heavier payloads.
Lapan also identified Morotai, an island 920 kilometers northwest of Biak, as an ideal spaceport location. The island has seven runways to support the spaceport logistics. Morotai is also sparsely populated and relatively far from other islands, so the risk of civilian death in space rocket crash incident is low.
 
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Snapshot to understand some potential economy in Asia based on Westerners anaysist

 
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Indonesia’s GDP could shrink 2% in Q4: Airlangga ​

Adrian Wail Akhlas

The Jakarta Post
Jakarta / Tue, December 15, 2020 / 01:30 pm


1608015748109.png

The construction of the Cawang-Dukuh LRT in Dukuh Atas, Central Jakarta, carries on despite the COVID-19 pandemic on Aug. 13. (JP/Seto Wardhana)

Indonesia’s gross domestic product (GDP) is expected to shrink by 2 percent at worst or grow by 0.6 percent at best in the fourth quarter of this year, Coordinating Economic Minister Airlangga Hartarto said on Monday. Southeast Asia’s largest economy plunged into recession this year for the first time in two decades as the economy shrank 5.32 percent and 3.49 percent in the second and third quarters, respectively, as a result of the COVID-19 pandemic.

The government has projected that the economy will shrink 0.6 to 1.7 percent annually in 2020. “If the country can maintain recovery momentum, then we are sure that the economy will get better in the fourth quarter,” Airlangga said in prerecorded remarks during a discussion held by media outlet Bisnis Indonesia. “We are seeing a surge in domestic demand and consumer confidence.”

Read also: ADB downgrades Indonesia’s economic prospects as slowdown persists

Although the country is in a recession, the economy grew by 5.05 percent quarter-on-quarter in the July-September period as large-scale social restrictions (PSBB) were lifted, providing a boost to economic activity despite soaring infections.

The government, Airlangga went on, would continue to balance the economic recovery with pandemic containment efforts, adding that the government’s efforts to procure vaccines would support public confidence in the economy. Indonesia has spent Rp 637.3 billion (US$45 million) to procure a partially tested COVID-19 vaccine from China as the government prepares for mass vaccination program. The country received its first vaccine shipment on Dec. 6.

The vaccine’s efficacy has yet to be determined. The government expects to receive another 1.8 million doses in early January 2021 and to receive shipments of raw materials this month to produce a further 15 million doses. As of Dec. 2, the government had spent 63.3 percent of the Rp 695.2 trillion stimulus budget on the COVID-19 response and economic recovery program. The remaining funds are expected to be spent this month. Speaking during the same discussion,

Finance Minister Sri Mulyani Indrawati warned the public about increased social interactions during the year-end holiday. She previously said that recent long weekend holidays had prompted spikes in infections weeks later but had provided lower-than-expected boosts to the economy.

“Indonesia should watch out for rising activity during the year-end holiday,” she said on Monday. “This must be closely watched so that we do not have to pull the brakes because of rising virus cases.”

Read also: Year-end holidays won’t spur consumption if COVID-19 uncontrolled: Economists

Indonesia added nearly 100,000 virus cases in less than three weeks, the most in Southeast Asia, and had recorded more than 623,000 cumulative infections as of Monday, with at least 18,000 fatalities, according to official data. On Dec. 10, the Asian Development Bank (ADB) downgraded its projections for Indonesia’s economy this year, following a continued slowdown in economic activity because of the continuing coronavirus outbreak.

It now expects the economy to contract by 2.2 percent this year before growing 4.5 percent in 2021. The ADB previously forecast that the country’s economy would shrink 1 percent this year and grow 5.3 percent in 2021, according to an outlook published in September.

www.thejakartapost.com

Indonesia’s GDP could shrink 2% in Q4: Airlangga

Indonesia plunged into recession this year for the first time in two decades as the economy shrank 5.32 percent and 3.49 percent in the second and third quarters, respectively.
www.thejakartapost.com www.thejakartapost.com
 
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Despite possible negative growth for fourth quarter, Indonesia stock market remains bullish due to optimism of long term possible positive effect of Omnibus Law for the economy, the controversial law has passed parliament abouth a month ago and the law has also been signed by President.

Stock market has reach around 90 % of its pre-covid level after plunge for 56 % during the first months of pandemic infection in Indonesia. The combination of vaccination program and Omnibus Law are two main factors that create such optimism. Previously, analyst believe that it will take about 2-3 years before the stock market can reach 6000 points which alhamdullilah has already been passed since two days ago.

katadata.co.id

Amunisi IHSG di Bursa Saham Menembus dan Bertahan di Level 6.000 - Bursa Katadata.co.id

IHSG sebelumnya diprediksi membutuhkan waktu dua hingga tiga tahun untuk kembali ke level 6.000. Akibat dampak pandemi Covid-19, IHSG sempat terpuruk ke 3.900 pada Maret lalu.
katadata.co.id katadata.co.id
 
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Indonesia books highest export value in 2 years in November as global trade recovers ​

Dzulfiqar Fathur Rahman

The Jakarta Post
PREMIUM
Jakarta / Tue, December 15, 2020 / 07:55 pm



Indonesia booked in November its highest export value since October 2018 as commodity prices picked up and key trading partners started recovering from the coronavirus pandemic. The export value in November reached US$15.28 billion, marking an increase of 9.54 percent year-on-year (yoy), Statistics Indonesia (BPS) announced on Tuesday.

This means the country booked its first annual increase in export value since June. “These figures show that export growth in November was very satisfying, as it has increased both on a month-to-month and year-on-year basis,” BPS head Suhariyanto said in a virtual presser on Tuesday.

www.thejakartapost.com

Indonesia books highest export value in 2 years in November as global trade recovers

The export value in November reached US$15.28 billion, marking an increase of 9.54 percent year-on-year (yoy), Statistics Indonesia (BPS) announced on Tuesday.
www.thejakartapost.com www.thejakartapost.com

Trade Balance: Surplus 2.6 billion USD

Alhamdulillah

:yay::yay::yay:
 
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Adhi Karya seeks 20% contract growth in 2021 ​

Riska Rahman

The Jakarta Post Jakarta / Wed, December 16, 2020 / 02:31 pm

(one of Adhi project, Greater Jakarta LRT project)


State-owned construction company PT Adhi Karya is seeking an increase in the value of its new contracts next year amid economic recovery expectations and a higher government infrastructure budget for 2021. President director Entus Asnawi said on Tuesday that the company was aiming for 20 percent growth in its new contract value next year.

“We are optimistic we can grow because we expect the COVID-19 vaccines to be widely available, while the government will continue with the national economic recovery program next year,” he said during an online press briefing.

By November, the company had booked Rp 18.6 trillion (US$1.32 billion) in new contracts, about 67 percent of its 2020 target. Shares of the company, traded on the Indonesia Stock Exchange (IDX) under the code ADHI, were up 1.17 percent at 12:17 p.m. Jakarta time on Wednesday as the exchange’s main gauge, the Jakarta Composite Index (JCI), was up 1.47 percent.


ADHI’s share price has increased 10.21 percent this year. Entus hoped the higher infrastructure budget for next year would support the company’s efforts to win new projects. The government has earmarked Rp 414 trillion for construction and infrastructure projects in the 2021 state budget. The figure is 47.2 percent higher than this year’s allocation of Rp 281.1 trillion.

The additional funds are intended for the completion of infrastructure projects that have stalled because of the COVID-19 pandemic, in support of the nation’s economic recovery. Adhi Karya expects to carry over some of this year’s contracts into next year following disruptions caused by the coronavirus outbreak. “We expect the carry over contracts from this year worth around Rp 30 trillion,” Adhi Karya finance director Agung Darmawan told The Jakarta Post via text message on Tuesday. He declined to go into detail about the company’s top- and bottom-line projections for 2021. As for this year, the company would try to maintain a positive bottom line despite the challenges of the pandemic.

Read also: Private sector infrastructure funding needs boost as SOEs overleveraged: World Bank

As of September, the company’s revenue had declined 5.41 percent year-on-year (yoy) to Rp 8.46 trillion as income from construction services, which accounts for 75 percent of the firm’s top line, fell 10.71 percent yoy. As a result, the company’s net profit nosedived by 95.62 percent yoy to Rp 15.38 billion in the first nine months of the year. Next year, the company plans to raise its capital expenditure (capex) allocation from the Rp 1.4 trillion set aside for this year.

“Our capex guidance for 2021 is around Rp 2 trillion to Rp 3 trillion,” Agung said, without detailing the funding source or what the funds would be used for. During Tuesday’s briefing, Entus reiterated the company’s plan to take its property development subsidiary, PT Adhi Commuter Properti (ACP), public. He did not specify the timing, as the company was still waiting for the government to set the operation date for the LRT, which is being developed by ACP.

It was also looking for the right opportunity and favorable market conditions to take the subsidiary public. Adhi Karya has been planning to take ACP and its building construction subsidiary, Adhi Persada Gedung (APG), public since 2019. “However, we’ve decided to push the plan back to find the right time to do it, since market conditions have not been so favorable,” said Entus. MNC Sekuritas equity trading head Frankie Wijoyo told the Post that he was confident that Adhi Karya could achieve its new contract growth target next year.

He expected an improvement in the economic situation stemming from widely administered COVID-19 vaccines. The passage of the Job Creation Law in October would also further boost the infrastructure sector, he added. Read also: 26 companies in talks for $700 million Lombok airport overhaul “The law may attract foreign investors to participate in various strategic national projects, which will help construction companies, especially state-owned ones, achieve larger new contracts next year,” he wrote in a text message on Tuesday.

Ratings agency Fitch Ratings echoed the sentiment, saying that it believed state-owned contractors were well-positioned to win new orders and restore operating and financial performance gradually after the pandemic.

This was because of their market-leading positions, strong operating records and a government preference for domestic sourcing, Fitch wrote in a research note on Nov. 15. However, the higher infrastructure budget would not result directly in improvement in construction companies’ credit profiles and liquidity. “The contractors have limited headroom, and their recovery from elevated leverage, tighter liquidity and higher financing risks following the pandemic will require at least 12 to 24 months,” Fitch wrote in the note.

www.thejakartapost.com

Adhi Karya seeks 20% contract growth in 2021

By November, the construction firm had booked Rp 18.6 trillion (US$1.32 billion) in new contracts, about 67 percent of its 2020 target.
www.thejakartapost.com www.thejakartapost.com
 
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Technology News
October 13, 2020 4:59 PM
Updated 2 months ago

Indonesia to create firm to build up electric vehicle battery industry​

By Reuters Staff


JAKARTA (Reuters) - A group of Indonesian state-owned companies will form a venture to make batteries to power electric vehicles, the Mining Industry Indonesia (MIND ID) chief executive said on Tuesday.

Indonesia, the world’s biggest producer of nickel ore, a key component of EV batteries, wants to build an integrated EV industry that will eventually include building the vehicles.

The new venture, called Indonesia Battery Holding, would be formed by state miners MIND ID and Aneka Tambang (ANTAM), state utility Perusahan Listrik Negara (PLN) and state oil company Pertamina, MIND ID Chief Executive Orias Petrus Moedak said.

“We are preparing a concrete cooperation plan, so that the nickel utilisation project can start immediately, to produce batteries,” he told a webinar.

The company would help build an industry that aimed to cover everything from producing chemicals and minerals for batteries to making the units themselves, as well as recycling old batteries, Orias said.

The company would create a partnership with Chinese and Korean firms on two projects valued at $12 billion, Orias said, without giving further details.

Orias said state miner ANTAM would also work on related EV battery projects including high-pressure acid leaching (HPAL) and rotary kiln electric furnace (RKEF) smelter projects valued $2 billion to $3 billion. He did not give details.

Reporting by Bernadette Christina Munthe; Writing by Fathin Ungku; Editing by Edmund Blair

www.reuters.com

Indonesia to create firm to build up electric vehicle battery industry

A group of Indonesian state-owned companies will form a venture to make batteries to power electric vehicles, the Mining Industry Indonesia (MIND ID) chief executive said on Tuesday.
www.reuters.com www.reuters.com
 
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Indonesia to redirect stimulus funds toward mass vaccination ​

Adrian Wail Akhlas
The Jakarta Post Jakarta / Thu, December 17, 2020 / 03:35 pm

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An engineer shows a COVID-19 candidate vaccine being tested at a Sinovac Biotech quality control laboratory in Beijing on April 29. (AFP/Nicolas Asfouri )


The government is planning to reallocate some of this year’s remaining stimulus funds to pay for mass vaccination in 2021. By Dec. 14, the government had spent 70 percent – or Rp 481.6 trillion (US$34.12 billion) – of the nation’s Rp 695.2 trillion stimulus package in an effort to strengthen the healthcare system and tend to the economy as it reeled from the coronavirus outbreak.

Read also: Indonesia to spend less than expected of COVID-19 budget by year-end

“We think that it may not be possible to spend 100 percent of the budget this year,” Budi Gunadi Sadikin, the head of the economic recovery task force, told reporters during a virtual press conference on Wednesday. “We have already had discussions that the remaining funds will be used for the national vaccination program.”

President Joko “Jokowi” Widodo announced on Wednesday that the government would provide free vaccines to all Indonesians in 2021 and asked Cabinet members to prioritize the vaccination effort next year.

“I have instructed the finance minister to prioritize and reallocate the state budget to make [vaccines] available for free so that there will be no reason that people cannot get a vaccine,” the President said during a streamed briefing, noting that he had volunteered to be the first person to receive the shot to build confidence in the inoculation.

The government is hoping to secure 246.6 million vaccine doses. It has been in negotiations with Pfizer, AstraZeneca and global vaccine program COVAX, in addition to China’s Sinovac Biotech. It has ordered about 143 million doses from Sinovac in various forms, from ready-to-administer doses to vaccine bulk, out of which individual doses of the vaccine are drawn. However, the Sinovac vaccine’s efficacy remains unknown, pending further results.

Read also: Jokowi announces ‘free’ COVID-19 vaccines for all

Budi said the government would shift its focus to spending stimulus funds on corporate financing at the end of the year, including by providing Rp 15 trillion to the country’s sovereign wealth fund and Rp 44 trillion to state-owned enterprises (SOEs).

“Corporate financing is our top priority as the stimulus for social protection programs and aid for micro, small and medium enterprises have nearly achieved their targets,” he said. The government has spent 94.1 percent of its Rp 230.6 trillion budget for social aid programs. It has also spent 91.7 percent of the Rp 115.8 trillion budget to support micro, small and medium enterprises (MSMEs) and has spent 78.7 percent of the Rp 70.7 trillion designated for the support of regional administrations.

However, the government has spent only 39.5 percent of its Rp 120.6 trillion budget for tax incentives and 48.5 percent of its Rp 96.1 trillion budget for health care. It has only spent Rp 8.15 trillion of the Rp 61.2 trillion earmarked for corporate financing, which includes state capital injections and loans to state-owned enterprises (SOEs). Read also: Distribute 2021 social aid ‘as soon as possible’, says Jokowi

The plan to redirect stimulus funds toward a free vaccination program was appropriate, said Bank Permata economist Josua Pardede, adding that the government had to build confidence in the vaccine by providing evidence regarding its efficacy. “The effectiveness of the stimulus programs has been limited,” he said on Wednesday, noting that the outbreak had remained unchecked and predicting that the economy would contract by 1 to 2 percent in the fourth quarter.

“The main task now is how to boost people’s confidence in taking the vaccine,” he told The Jakarta Post. “If herd immunity can be reached through the vaccination program, then economic activity will recover more strongly and the government’s stimulus will be more effective.”

www.thejakartapost.com

Indonesia to redirect stimulus funds toward mass vaccination

“We think that it may not be possible to spend 100 percent of the budget this year,” the head of the government’s economic recovery task force said.
www.thejakartapost.com www.thejakartapost.com
 
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