Indonesia Coronavirus Update #23    August 3, 2020

Cumulative number of reported cases: 113,134 (as of August 3)
Recoveries: 70,237
Rupiah to US$ 14,605
Jakarta Stock Exchange Index: 5117
Overview- Jakarta Returns as Epicenter
Jakarta is the new epicenter for the pandemic. Of the 52,000 new cases nationally in July, 9,975 were in Jakarta, slightly above East Java’s 9,953. 45 new clusters emerged recently, mostly in the city’s office buildings.  Hospitalizations have increased markedly but have not reached capacity. The capital city has been averaging 322 cases per day since July 1, more than double the daily average in June, which stood at 136 cases. Due to these worrisome trends, Governor Anies Baswedan issued another 14-day extension of the Large-Scale Social Restrictions which were to expire at the end of July.
Nationally, week-to-week active case growth, after declining 1% last week was unchanged (0%) this week. But, new case growth remains above 10%.
President Jokowi continues to demand better performance of his Cabinet and again spoke out publicly about the slow release of social spending funds (only 20% of budgeted amounts have been sent). Local business associations urged the reorganized COVID Task Force (led by state enterprises Minister Erick Thohir) to focus on direct grants and incentives for labor intensive industries and funds for regional administrations.
Domestic tourism reopened in Bali on July 31 and will reopen for foreign tourists on September 11. This date may also become the date for international business travelers to return to Indonesia as a whole.
  • Trade Restrictions:  In effort to stimulate more local manufacturing Indonesia’s government is planning to impose several measures to reduce imports in the short and medium term. The planned measures included imposing restrictions, raising tariffs, adding new trade remedies and implementing more technical barriers, according to Industry Minister Agus Gumiwang Kartasasmita.  Indonesia’s Ministry of Trade issued Reg 59/2020 in June 2020 that limits the number of industries allowed to import manufactured goods. The goal is 35% import substitution by 2022.
  • Health Industry Investment Eased: As part of a 2017 revision to the Negative List for Investment, foreign investment was opened for hospitals, clinics, and medical equipment. The government is removing regulatory hurdles to give foreign investors a larger stake in certain sub-sectors of the industry, such as raw material production for pharmaceuticals, and hospitals.
  • Deflation: Inflation in Indonesia has slowed down in July to the lowest level in more than two decades, as consumer demand has yet to recover despite the government’s decision to reopen the economy. The country’s consumer price index, the broadest measure for gauging the prices of goods and services in the country, rose 1.54 percent in July from the same month a year ago, data from the Central Statistics Agency (BPS), showed on Monday. That compared to 1.96 percent inflation in June.
State Intelligence: President Jokowi expanded the purview of BIN (State Intelligence Agency) to include “the state apparatus”. BIN”s other functions include traditional intelligence functions (foreign affairs, internal, counter intelligence, cyber security, communications and information, technological/signals, economic intelligence). This follows an earlier move by Jokowi to place BIN directly under his authority, rather than the Coordinating Minister for Politics, Law, and Security. Analysts point to last year’s knife attack on Wiranto, then the Security Coordinating Minister, as well as reports of increased infiltration of civil servants ranks by radical Islamist ideologies as reasons for the increased role of BIN.
Education Reform
A plan to utilize Indonesia’s two largest Muslim social organizations (Nahdlatul Ulama and Muhammadiyah) in a new mass teacher training program has gone awry. Nadiem Makarim, the young, tech savvy, Ivy league-educated Education Minister, also enlisted two of the country’s oldest private foundations, Sampoerna and Tanoto, started by ethnic Chinese companies with vast holdings in cigarettes and logging. Their appointment sparked a protest over the use of public funds. The program was to be a part of Makarim’s attempt to overall public education and student performance. Even though Makarim stood by the legality of using public funds with private foundations, he issued a rare public apology.  That may have assuaged matters with NU, but not Muhammadiyah, which withdrew from the program.   It remains to be seen how far President Jokowi will back stop him as the controversy exacerbates tensions over religion and ethnicity.
(sources: International and Indonesia news media, Bali Update (from, Reformasi Weekly)