Indonesia regains upper-middle income rank on growth rebound

[Indos]

Indonesia regains upper-middle income rank on growth rebound​

PUBLISHED : 3 JUL 2023 AT 15:13
WRITER: REUTERS

Jakarta

A strong post-pandemic rebound has pushed Indonesia back into the upper-middle income band of countries, according to the World Bank, putting it back on track to pursue its high-income status goal.

Indonesia reclaimed the rank this year as gross national income per capita climbed to $4,580, based on the bank’s latest classifications. It’s an improvement from the previous reading of $4,140, which had kept it in the lower-middle income status for the second straight year in 2022.

“Indonesia continued its strong post pandemic recovery and real GDP increased 5.3%,” the World Bank noted. The nation’s 2022 gross domestic product expanded at its fastest pace in nine years.

Southeast Asia’s largest economy first gained the upper-middle income status in 2020, only to be downgraded the following year as it suffered one of the world’s worst coronavirus outbreaks. The nation’s gradual reopening last year saw consumption and employment beginning to recover, while a global commodities boom allowed exports to act as an additional pillar of growth.


The latest rankings should bolster Indonesia’s ambition to become a high-income country by 2045, the center piece of outgoing President Joko Widodo’s economic platform. Jokowi, as the leader is known, had pushed for social aid, inflation control, and the resumption of public activities to reinvigorate the domestic economy post the pandemic.

Maintaining growth

Jokowi told a cabinet meeting on Monday steps are needed to sustain economic growth — by keeping food prices in check and boosting private consumptions. He also told his ministers to help maintain political stability ahead of elections in 2024.

“The second half will not be easy and we must be aware of several things, such as unstable global environment and geopolitical tensions that may impact our economy and trade activities,” Jokowi said during a cabinet meeting.

The government seeks higher GDP target for 2024 with an estimate range topping 5.7%. It also wants to reduce its poverty rate to 6.5%-7.5% from 9.57% in September, with extreme poverty completely eradicated by next year.

Indonesia regains upper-middle income rank on growth rebound

A strong post-pandemic rebound has pushed Indonesia back into the upper-middle income band of countries, according to the World Bank, putting it back on track to pursue its high-income status goal.

www.bangkokpost.com

 

[Indos]

Inflation slips in Indonesia, but central bank expected to keep rates on hold

Inflation continues to moderate, but don't expect any changes to Bank Indonesia's policy anytime soon

think.ing.com

 

[Indos]

Indonesia's ban on bauxite exports comes into effect​

June 12, 2023

Indonesia is ramping up its strategy to capture more of its commodity value chain and the latest mineral to face restrictions is bauxite. Indonesia's ban on raw bauxite exports began over the weekend. It is part of an overall strategy by President Joko Widodo to encourage more downstream processing of metals within the country.

 

[Indos]

Green economy, security in focus as Indonesia, Australia leaders meet in Sydney​

Credit: REUTERS/EDGAR SU

By Kirsty Needham

SYDNEY, July 4 (Reuters) - A green economy, easing of business visas for Indonesians, and regional security will be discussed as Indonesian President Joko Widodo meets his Australian counterpart on Tuesday, Foreign Minister Penny Wong said.

Widodo met Australian Prime Minister Anthony Albanese at the harbourside Admiralty House in Sydney on Tuesday morning, before the pair were due to travel by boat to Taronga Zoo, part of a regional conservation programme for Sumatran Tigers, for annual leaders talks.

The economy will be a key topic, and Australia is set to announce visa changes to make business travel easier for visiting Indonesians, Wong told ABC radio on Tuesday.

Indonesia is Australia's 13th largest trading partner, and Australian investment in Indonesia totalled A$4.3 billion ($2.87 billion) in 2021, with coal the top export, government data shows.

Widodo, in his second and final term in office, wants to build an electric vehicle battery production industry in Indonesia, which has the world's largest nickel reserves.
The EV industry uses the metal extensively.

Widodo has said in interviews that he is seeking cooperation from Australia, a major supplier of key battery component lithium.

Widodo understands the importance of making the transition to a green economy, Wong said. The leaders would discuss how Australia and Indonesia could "collaborate together" on supply chains and getting to net zero emissions, she added.

Indonesia's Chamber of Commerce and Industry (KADIN) signed an "action plan" with the state of Western Australia on critical mineral supply chain and worker skills, Indonesia's Ministry of Economic Affairs said.

On AUKUS, Wong said Australia would be transparent as it discusses the plan to acquire nuclear-powered submarines in the next decade through the defence partnership with the U.S. and Britain.

Indonesia has previously expressed concerns about the ramifications of the trilateral AUKUS security pact.

Indonesia is "keen to ensure nuclear material is not allowed to proliferate... We both want a peaceful and stable region," Wong said.

Widodo will travel to Papua New Guinea on Wednesday.

($1 = 1.4972 Australian dollars)
(Reporting by Kirsty Needham in Sydney and Fransiska Nangoy in Jakarta; Editing by Himani Sarkar)

https://www.nasdaq.com/articles/green-economy-security-in-focus-as-indonesia-australia-leaders-meet-in-sydney-0

 

[Indos]

Sri Mulyani Announces State Budget Surplus of Rp204.3 T, 5 Consecutive Months!​

NEWS - Arrijal Rachman, CNBC Indonesia
26 June 2023 09:16

Photo: Finance Minister Sri Mulyani during the June 2023 KITA State Budget press conference. (Youtube screenshot of Ministry of Finance Republic of Indonesia)

Jakarta, CNBC Indonesia - The Ministry of Finance (Kemenkeu) announced that the realization of the State Budget (APBN) until the end of May 2023 recorded a surplus of IDR 204.3 trillion or 0.97% of gross domestic product (GDP).


"The condition of the state budget until the end of May is still surplus for the total state budget of IDR 204.3 trillion, which means 0.97% of total GDP," said Finance Minister Sri Mulyani Indrawati in a press conference, Monday (26/6/2023)

The primary balance also reported a surplus of Rp390.5 trillion.

Photo: Finance Minister Sri Mulyani during the June 2023 KITA State Budget press conference. (Youtube screenshot of Ministry of Finance Republic of Indonesia)
Finance Minister Sri Mulyani during the June 2023 KITA State Budget press conference. (Youtube screenshot of Ministry of Finance Republic of Indonesia)

Sri Mulyani said that the surplus in this period was due to state revenue which grew 13% on an annual basis (year on year) to Rp 1,209.3 trillion (49.1%).

State expenditure also grew by 7.1% (yoy) to Rp1,005 trillion (32.8%)

Sri Mulyani Umumkan APBN Surplus Rp204,3 T, 5 Bulan Beruntun!

Realisasi Anggaran Pendapatan dan Belanja Negara (APBN) hingga akhir Mei 2023 tercatat surplus sebesar Rp204,3 triliun.

www.cnbcindonesia.com

 

[Indos]

https://twitter.com/x/status/1675225257509273600

https://twitter.com/x/status/1675768523493359616

 

[Indos]

Kadin, Western Australia Ink Action Plan on Critical Minerals​

Jayanty Nada Shofa
July 4, 2023 | 11:52 am

In this photo posted on President Joko Widodo s Twitter account, the president meets with Australian business leaders at Shangri-La Hotel in Sydney, Tuesday, July 4, 2023.

Jakarta. Indonesia’s business lobby group Kadin and the Western Australian government inked on Tuesday an action plan aimed at power investment cooperation on critical minerals as the Southeast Asian nation develops its electric vehicle (EV) ecosystem.

The signing took place during President Joko “Jokowi” Widodo’s Sydney trip. The action plan also followed an earlier memorandum of understanding (MoU) between the two signatories that aimed to explore partnerships in critical mineral supply chains.

“This [cooperation] is pivotal to Indonesia’s EV ecosystem,” Kadin chairman Arsjad Rasjid said in a recorded press statement.

“Hopefully, the agreement can help push Australian and Indonesian companies to work together on building a critical mineral industry that encompasses mining and processing. Lithium is a mainstay ingredient in battery production. We hope we can also build synergy on other critical minerals to create added value for both countries,” Arsjad said.

The agreement is also expected to pave the way for Australian businesses to invest in Indonesia’s mining sector and vice versa.

According to the Western Australian government, the 2023-2025 Plan of Action encompasses three pillars of cooperation, among others, the development of a resilient and sustainable supply chain. Under this action plan, the close neighbors will work on supporting strong environmental and social governance outcomes, while also growing a skilled workforce. Both sides will have high-level meetings to put this plan into action.

Western Australia accounts for half of the world’s lithium production. It is also a major exporter of nickel, cobalt, manganese, and rare earths. In 2021, all of the country’s lithium production came from Western Australia.

"We are committed to growing the state's participation in global battery and critical mineral supply chains, with a view to further developing our value-adding and manufacturing industries,” Western Australian Premier Roger Cook was quoted as saying on the government’s official website.

"Working with Indonesia, an important trading partner and our closest neighbor, to explore partnerships, share information, knowledge and strategies and facilitate business links will fuel our mutual economic growth and green ambitions," Cook said.

Indonesia and Australia are rich in minerals that are key to EV battery production.

The two countries are home to the world’s largest nickel reserves, which stand at 21 million metric tons respectively, according to the 2023 US Geological Survey report.

The report also shows that Australia’s lithium reserves stand at 6.2 million metric tons. Australia’s lithium production also grew from 55,300 metric tons in 2021 to 61,000 metric tons the following year.

Read More: Market Size for Indonesia's EV Ecosystem Predicted to Top $20b by 2030

Kadin, Western Australia Ink Action Plan on Critical Minerals

The agreement is expected to pave the way for Australian businesses to invest in Indonesia’s mining sector and vice versa.

jakartaglobe.id

 

[Indos]

Explanation on Indonesia-Australia critical mineral partnership and cooperation by Arsjad Rasjid, Indonesian Business Chamber (KADIN) Chairman.

 

[SoulSpokesman]

@Indos Bro

Congratulations to you and all other Indonesians.

Regards

 

[Indos]

Projection for this year (2023)

https://www.imf.org/external/datamapper/profile/IDN

 

[Indos]

Indonesia sees lower 2023 budget deficit at 2.28% of GDP​

JAKARTA, July 4 (Reuters) - Indonesia is forecasting a lower 2023 budget deficit of 2.28% of its gross domestic product compared to its initial target of 2.84%, as a result of higher than expected revenues, its finance minister has said.

Indonesia also projects state revenues in 2023 to reach 2,637.2 trillion rupiah ($175.58 billion) up 7.1% from the initial target, due to strong exports of commodities, Sri Mulyani Indrawati said in an Instagram post late on Monday. Indonesian law has a budget deficit ceiling of 3% of GDP.

($1 = 15,020 Rupiah)

(Reporting by Stefanno Sulaiman and Ananda Teresia; Editing by Martin Petty)

https://www.nasdaq.com/articles/indonesia-sees-lower-2023-budget-deficit-at-2.28-of-gdp

Commodity prices is actually cooling down from 2022 price, so I dont understand this Reuters keep saying if Indonesian gov revenue goes up then it must be due to its commodities export

 

[Indos]

Get Ready, Giant Gas Project in Papua is finally operated This Month​

NEWS - Firda Dwi Muliawati, CNBC Indonesia
04 July 2023 15:50

Jakarta, CNBC Indonesia - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said that the Train 3 construction project of the Tangguh Liquefied Natural Gas (LNG) Refinery in Bintuni Bay, West Papua will soon be completed and is expected to start production in July 2023.

As is known, the oil and gas project has regressed its on-stream time since 2021. The reason is because of the Covid-19 Pandemic.

Head of SKK Migas, Dwi Soetjipto said that his party hopes that in July 2023 the project will return to operation so that a gradual increase in production can be carried out which will later in August 2023 produce as at full capacity.

"Tangguh Train 3 is expected this July's to get its first drop. But later it is expected that there will continue to be an increase in production or ramping up. So that the overall on-stream will be around August 2023," explained Dwi when met at the Office of the Ministry of Energy and Mineral Resources (ESDM), Jakarta, quoted Tuesday (4/7/2023).

Meanwhile, with this setback, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) revealed that the giant British oil and gas company, BP, would be subject to a large nominal penalty.

SKK Migas Deputy of Finance and Commercialization Kurnia Chairi had said that the amount of penalty to be paid by BP Indonesia is estimated to reach US $ 700 million or equivalent to Rp 10.3 trillion (assuming an exchange rate of Rp 14,855 per US $).

"For penalties due to Tangguh's delay yesterday, our projection is around US $ 700 million, which must have a penalty," Kurnia said in a press conference in Jakarta, Tuesday (18/4/2023).

However, the amount can still be negotiated again, Kurnia said the amount is still suppressed by around US $ 300 million, so the penalty to be paid is US $ 400 million or equivalent to Rp 5.9 trillion.

"But later, efforts were made to renegotiate to rearrange the scheduling, so that this could be saved around $300 million," he explained.

In addition, Kurnia said it would renegotiate gas purchases with buyers who had been promised in contracts on the Tangguh Train 3 LNG project.

"That is, we do not accept the delay of US $ 700 million, but we continue to negotiate with the buyer," he said.

As is known, the Train 3 project of the Tangguh LNG Plant is part of the National Strategic Project (PSN) contained in Presidential Regulation No.109 of 2020 concerning the Third Amendment to Presidential Regulation No.3 of 2016 concerning the Acceleration of the Implementation of National Strategic Projects which is effective since November 20, 2020.

According to Tutuka, the Train 3 project of the Tangguh LNG Plant will produce at least 60 cargoes of LNG (per year). The 60% of LNG production from Train 3 is intended for the needs of state owned electricity company, PT PLN (Persero). "The rest are for abroad and exported. It already has a list of buyers," he said.

For information, the Tangguh Train 3 LNG Plant project operated by the British oil and gas company, BP, is estimated to produce gas of 700 million standard cubic feet per day (MMSCFD) and 3,000 barrels of oil per day (bpd).

Gas production from Train 3 Tangguh is equivalent to LNG production of 3.8 million tons per annum (mtpa).

This project was developed based on POD II approval with an investment value of up to US $ 8.9 billion or equivalent to Rp 133.5 trillion (assuming an exchange rate of Rp 15,000 per US $).

In SKK Migas' records, the development of the Tangguh Train 3 LNG Plant began in 2016 and experienced many challenges, mainly due to Covid-19.

Plan of Development (Plan of Developmentt / POD) II Tangguh Train 3 was approved by the government on November 29, 2012, then on January 27, 2014 approved by AFE Front End-Engineering Design (FEED) LNG.

While the final investment decision (/FID) occurred on July 1, 2016, and finally began construction (EPC kick off) on August 25, 2016.

Initially, the Train 3 project of the Tangguh LNG Plant is set to start its operation at the end of 2021. However, due to the Covid-19 pandemic, the project was delayed.

BP currently operates two trains with a capacity of 3.8 mtpa each (in Papua, Indonesia). If Train 3 is operational, the total LNG produced will reach 11.4 million tons per year (mtpa).

Siap-siap, Proyek Gas Raksasa di Papua Nyembur Bulan Ini

SKK Migas menyatakan proyek kilang tangguh Train 3 di Teluk Bintuni, Papua akan beroperasi Juli 2023 ini

www.cnbcindonesia.com

 

[Indos]

Pertamina expects to sign deal for Masela block development in July
​

The Oyong oil and gas rig in the Sampang Block is seen, located in the Madura Strait, off the coast of East Java. Medco took over the block from Ophir Energy in 2019 after Medco acquired Ophir.(SKK Migas/SKK Migas)



Divya Karyza (The Jakarta Post)
PREMIUM
Jakarta ● Tue, July 4, 2023


State-owned oil and gas giant Pertamina is expected to sign an agreement to take over Shell’s 35 percent participating interest in the Masela block this month, the Upstream Oil and Gas Special Regulatory Task Force (SKK Migas) said on Monday.

Fadjar Djoko Santoso, Pertamina’s vice president of corporate communication, said the final agreement was being discussed and should be finalized soon. “The process is ongoing. We will announce the agreement after everything is wrapped up,” he told The Jakarta Post on Monday when asked about the possibility of signing the concluding takeover agreement in July.

https://www.thejakartapost.com/business/2023/07/04/pertamina-expects-to-sign-deal-for-masela-block-development-in-july.ht

--------------------------------------

Abadi LNG Project​

Abadi is a long-delayed integrated LNG project in eastern Indonesia. Also known as the Masela LNG project, it involves the Abadi gas field development in the Masela block in Arafura Sea as well as a 9.5 million tonnes per annum (Mtpa) onshore LNG terminal.

Japanese oil and gas company INPEX, which developed the similarly integrated Ichthys LNG project in Australia holds a 65% interest and is the operator of the project. The remaining 35% stake is held by Shell.

The Abadi gas field and LNG development project is estimated to cost approximately £11.6bn ($15bn).

Although it was originally proposed to be developed as a floating LNG project, the development plan was revised to include an onshore LNG plant in 2019.

Discovery and appraisal details​

INPEX discovered the Abadi gas field by drilling the Abadi-1 exploration well in 2000. The offshore field was subsequently appraised by nine appraisal wells to confirm reservoir productivity.

The first two appraisal wells, namely Abadi-2 and Abadi-3 were drilled by Energy Searcher and Ocean General drillships in 2002, while the next four appraisal wells were drilled by the Ocean General rig during 2007 and 2008.

Three more appraisal wells were drilled to expand the volume of recoverable reserves during 2013 and 2014.

Geology and gas reserves​

The Abadi field is estimated to contain more than 12 trillion cubic feet of proven natural gas reserves.

Situated at depths ranging between 3,700m and 3,900m, the reservoir of the offshore gas field comprises sandstone, siltstone, and mudstones of the Middle Jurassic Plover Formation.

Marine survey works for the revised project were commissioned in March 2020, while a final investment decision (FID) is expected after the completion of environmental and engineering studies by 2022.

Targeted for commissioning in 2027, the Abadi LNG project is expected to produce 150 million cubic feet (Mcf) of pipeline gas for domestic supply and 35,000 barrels of condensate a day, apart from producing 9.5 million tonnes (Mt) of LNG a year.

Gas supply from the Abadi LNG project​

INPEX signed a memorandum of understanding (MOU) with state-owned PT Perusahaan Listrik Negara (PLN) and PT Pupuk Indonesia for the long-term domestic LNG and pipeline natural gas supply from the Abadi LNG project in February 2020.

Abadi LNG Project, Masela Block, Maluku Province, Indonesia

Abadi is an integrated LNG project involving the Abadi offshore gas field development along with a 9.5Mtpa onshore LNG terminal in eastern Indonesia.

www.nsenergybusiness.com

 

[Indos]

Indonesian state miner completes 20% stake buy in Vale unit for $375 million​

By Reuters Staff

OCTOBER 8, 2020
UPDATED 3 YEARS AGO

JAKARTA (Reuters) - Indonesia’s state miner Mining Industry Indonesia (MIND ID), formerly known as PT Inalum, completed its purchase of a 20% stake in nickel miner PT Vale Indonesia, the country’s state- owned enterprises ministry said on Thursday.

MIND ID bought the 20% stake at 2,780 rupiah per share, totaling to 5.52 trillion rupiah ($375.77 million), the ministry said in a statement.

Brazil's Vale Group controls 44.34% of PT Vale Indonesia INCO.JK, while Japan's Sumimoto Metal Mining Co. Ltd holds 15.93% of shares, the ministry said.

MIND ID bought 14.9% stake from Vale Canada Ltd, the Canadian subsidiary of Vale Group, and 5.1% from Sumimoto, according to the statement.

“With this transaction, we add more state ownership in the mining sector,” state-owned enterprises minister Erick Thohir said.

“This is also a great step to strengthen the value chain in Indonesian and the development of the battery industry for electric cars.”

The Indonesian government is keen to build a holistic onshore electric vehicle (EV) industry, covering everything from the production of nickel chemicals needed for batteries, through to producing those batteries and eventually building vehicles domestically.

Mining Industry Indonesia changed its name from PT Inalum in August to distinguish its holding company function from its smelting operational business.

https://www.reuters.com/article/vale-indonesia-divestiture/indonesian-state-miner-completes-20-stake-buy-in-vale-unit-for-375-million-idINKBN2

 

[Indos]

MIND ID Wants to Become Vale's Controlling Shareholder, Here's Why​

Achmad Dwi Afriyadi - detikFinance
Thursday, 06 Jul 2023 12:19 WIB

Mineral Industri Indonesia (Persero) or MIND ID is committed to becoming the controlling shareholder of PT Vale Indonesia Tbk (INCO). The company ensures INCO's business policies and strategies are in line with the national interest.

Head of MIND ID Institutional Relations Division Selly Adriatika said that this commitment is also one of MIND ID's efforts to increase the added value of INCO's nickel production by developing the downstream nickel industry in Indonesia.

"We remain committed so that the majority of INCO's shares become part of the consolidation in Indonesia. We believe that by becoming the controlling shareholder of INCO, we can make a greater contribution to the development of the mining and mineral industry in Indonesia, especially in the nickel sector," Selly said in a written statement, Thursday (6/7/2023).


MIND ID continues to support the policies to be set by the government regarding INCO. The Company believes that the decision taken will prioritize the interests of the nation and still maintain Indonesia's sovereignty in mining management in the country.

MIND ID will continue to negotiate with the government and relevant parties to reach mutually beneficial agreements and comply with applicable regulations.

As for 2019, MIND ID has owned 20% of INCO's shares after acquiring shares from Vale Canada Limited and Sumitomo Metal Mining Co Ltd in order to fulfill INCO's divestment obligations. However, MIND ID has a greater desire to take control of INCO.

Previously, President Joko Widodo (Jokowi) stated that he would soon decide the fate of PT Vale Indonesia's share divestment plan. He stressed that the national interest must come first.

"Yes, soon we will decide, God willing, this month we will decide. The point is that national interests must come first," Jokowi said on Monday (3/7/).

Despite emphasizing the importance of national interests, Jokowi admitted that his party did not want investors to lose money. He hopes that in this decision, neither side will be harmed.

"Win-win, both must run well and most importantly industrialization, downstream really must run," he said.

MIND ID Mau Jadi Pemegang Saham Pengendali Vale, Ini Alasannya

PT Mineral Industri Indonesia (Persero) atau MIND ID berkomitmen untuk menjadi pemegang saham pengendali PT Vale Indonesia Tbk (INCO).

finance.detik.com