Overview- Omicron Arrives
Indonesia is reporting three confirmed cases of Omicron after genome-sequencing of 5 recent arrivals. The individuals with the Omicron variant, now quarantined at a government facility, had returned from South Africa and United Kingdom. The third case is a worker at the facility. “Authorities were able to flag the five suspected cases and the first confirmed case using a specific type polymerase chain reaction (PCR) test that can detect the S-gene target failure (SGTF), which is one of the identifiers of the Omicron mutations”. (Jakarta Post)
Despite Omicron’s entry, overall case detections continue to drop on a seven-day moving average. Daily fatalities are hovering around 10.
South Africa’s experience suggests that Indonesia could experience a large new wave of infections and re-infections, with serious cases only a tiny fraction, based on both countries having a relatively young population.
An unknown at this point is how much protection Sinovac- administered to 80% of Indonesians- provides against Omicron.
Travel- New Country-Specific Bans
The Indonesian government has added more countries to its entry ban list after the first case of the Omicron variant of Covid-19 was detected in Jakarta. People from the United Kingdom, Denmark, and Norway are now barred from crossing Indonesia’s borders.
“Currently there are 11 countries on the no-entry list. Based on the development of Omicron, the government has added the UK, Norway, and Denmark, and removed Hong Kong from the list,” said Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan.
In addition to the 3 European nations, Indonesia prohibits foreign nationals who in the last 14 days have traveled to South Africa, Botswana, Namibia, Zimbabwe, Lesotho, Mozambique, Eswatini, Malawi, Angola, Zambia. Luhut said the government would conduct monitoring every week. It is possible that the list will grow, and more nations could be included, depending on how situations concerning the Omicron variant develop.
Meanwhile, Indonesian nationals returning from the listed countries are mandated to undergo 14 days of quarantine.
President Joko Widodo urged the public to refrain from international travel.
Updated Travel Restrictions for Airplane Passengers Traveling within Indonesia during PPKM
These restrictions apply to flights between airports on the island of Java, flights from/or to airports on the island of Java, and flights from/or to airports on the island of Bali.
· The documents below are required and to be presented (digital copies available using PeduliLindungi App for Indonesian citizens) during check-in at airports:
· Vaccine certificate/card, minimum of first dose.
· Certificate or letter of negative RT-PCR results whose samples were taken within a maximum period of 2×24 hours before the departure.
· Indonesia Health Alert Card (e-HAC) for all passengers (Indonesians and non-Indonesians)
Indonesia Travel Restriction Details can be found here.
- Trade Surplus At a High: Amidst a global recovery, Indonesia saw the balance of its exports and imports rise to a record high in November as global demand remained strong and domestic demand picked up amid the gradual economic recovery. According to data published by BPS-Statistics Indonesia, Indonesia maintained a large USD3.51 billion trade surplus in November 2021 despite retreating from USD5.74 billion one month earlier. Therefore, Indonesia has maintained a positive trade balance since May 2020. Overall, Indonesia’s trade balance for the period from January-November 2021 recorded a USD34.32 billion surplus, up considerably from USD19.52 billion in the same period of 2020.·
- World Bank Predicts 5.2% Growth in 2022: The World Bank has estimated that Indonesia’s economy will grow by 3.7 percent in 2021 and by 5.2 percent in 2022, if there would be no other severe waves of the Coronavirus (Covid-19) pandemic and the country’s vaccination rate continues to be high. The World Bank sees Indonesia’s economy continue to recover with various sources of growth. However, inflation was expected to increase in the next few months and may reach 2.2 percent in 2022. adding that Indonesia can be different from the global trend in which inflation would soar to a high level. However, downside risks to the outlook remain high amid uncertainty about the pandemic, global financial conditions, and the scarring effects of the crisis. There is still a lot of uncertainty and risks of the long-term impact of Covid-19 for Indonesia, such as an increase in unemployment, a decrease in investment, and a decline in potential growth.·
- Tensions Grow Over Jakarta Wage Hikes: Tensions between businesses and workers are high two days after Jakarta Governor Anies Baswedan announced a higher regional minimum wage than previously set, with neither side looking keen to yield. The announced revision would see Jakarta’s 2022 minimum wage rise 5.1 percent to Rp 4,641,854 (US$323), a far greater increase than the previously decided 0.85 percent raise to Rp 4,453,935. Workers have lauded the move and have vowed to do whatever they can to ensure the decision will stand. Businesses, represented by the Indonesian Employers Association (Apindo) and the Indonesian Chamber of Commerce and Industry (Kadin), have said they will push for the decision to be revoked, arguing that the revised minimum wage hike violates a 2021 government regulation on wages based on the 2020 Job Creation Law. (Jakarta Post)
- Tax Issues To Be Pushed by Indonesia at G20: Indonesia is seeking to rally the Group of 20 nations to reach agreements on four intractable global taxation issues, hoping to clinch certain deals before the country’s G20 presidency ends in December of next year. Indonesia will raise the issues of the taxation of multinational companies’ profits, a 15 percent global minimum corporate tax, environmental taxation and gender-conscious taxation over the course of its one-year presidency of the body, which started on Dec. 1. Booster Commercially Available: The Health Minister Budi Sadikin announced private pharmacies can legally import vaccines next month to be used as booster shots. Since the government’s booster target is people over 65 and the most impoverished, due to budget constraints, the commercially available booster shots will be expensive options for many Indonesians.
- Tobacco Excise Tax Hiked in 2022: Although the National Planning Agency recommended a 25% in excise taxes for tobacco products as a way to curb smoking, what was finalized are average increases of only 12%. The labor-intensive hand rolled products called kreteks are boosted only 4-5% (accounting for 20% of the market) and machine rolled 12-14% (80% market share).
- New Law on Regional Funding: Finance Ministry officials hailed Parliament’s passage of a new law that will reform how transfers occur from the central government to the regions. The law includes numerous variables to account for the differences between regions and changes the basis for local taxation, adding a new one on electricity. Funding formulas will reward regions with sound fiscal management.
Foreign Affairs- Slow Progress on Trade Deals
The government has urged lawmakers to swiftly pass three trade agreements, arguing that prolonging their ratification would lose the country’s momentum in trade policies and economic recovery. The Regional Comprehensive Economic Partnership (RCEP) for Asia-Pacific countries, the Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA) and the ASEAN Trade in Services Agreement (ATISA) are the three backlogged deals awaiting lawmakers’ approval. Trade Minister M. Lutfi said on Monday that the RCEP was the most urgent among the three, since it would take effect on Jan. 1, with the 12 partnering countries expected to have ratified the deal before the year-end. Meanwhile, Indonesia was the only member yet to ratify the deal, despite signing it in November 2020 and its role in initiating and chairing the negotiations.(sources: International and Indonesia news media, Bali Update (from balidiscovery.com), Reformasi Weekly, US Embassy website)