Indonesia Coronavirus Update #18 June 29, 2020
Number of reported cases: 55,092 (as of June 29) 2805 Deaths 23,800 Recoveries
Rupiah to US$ 14,272
Jakarta Stock Exchange Index: 4902
Overview- Presidential Anger
The number of active COVID-19 cases continued to grow over the past week but at the same 15% rate as the previous week. New cases (1,061 on June 25) varied widely by region and were slightly lowered on a seven-day moving average than a week ago. This is hopefully more than a “pause” in an upward trend. Indonesia’s most populous province, West Java, experienced a decline in cases during June, demonstrating that it is possible to control the pandemic. Other provinces such as Papua, are running out of hospital beds. Jakarta, now allowing a relaxation of social distancing and stay-at-home orders, has seen an uptick.
President Jokowi uncharacteristically erupted in anger at a recent Cabinet meeting at the complacency he observes. Quoted by The Jakarta Post and Kompas.com, the animated and agitated President said: “The atmosphere in the last three months and the next three months should be one of crisis. We should not consider [this situation] to be normal. That is very dangerous. And I still see that many of you see this as normal.” Pointing to the allocated emergency budget for health services as an example, the President pointedly asked why only 1.5% of an allocated US$5.28 billion had been disbursed. “All the money that’s supposed to be for the people is stuck there,” President Widodo complained. Underlining that he is prepared to send cabinet ministers packing who fail to rise to the level of crisis managers, Joko Widodo said: “I will take any steps necessary, including extraordinary ones, for our 267 million people. [I might] disband agencies. [I might] reshuffle [the Cabinet]. I have considered many options.”
Travel- Exception to Ban Possible
In an online briefing by the Investment Coordinating Board (BKPM), the Director for Promotion, Dr. Iwan Darmawan, said his agency has had success interceding with Immigration to gain entry for foreign businessmen visiting in Indonesia in support of their foreign direct investment. This exception to Indonesia’s broad travel ban can be initiated by a written statement to the Chairman of BKPM. The BKPM representative office in NY can be the point of contact for US investors. Contact them via (646) 885-6600 or email@example.com.
Economy & Trade
- Indonesia’s Ministry of Finance issued Regulation No. 48/PMK.03/2020 (Reg 48/2020) in May 2020, which imposes a 10 percent value-added tax (VAT) on digital services on non-resident companies, starting July 1, 2020. Through this regulation, the government hopes to reap from the tax proceeds of the country’s multibillion-dollar digital economy. Intangible goods and services subject to VAT include e-books, apps, games, software, movies, and music, among others.
- According to the Chairperson of the Indonesian Chamber of Commerce (Kadin), Rosan Roeslani, the number of workers laid off as a result of COVID-19 has reached 6 million people. However, Minister of Manpower Ida Fauziyah said that that number is lower – about 3 million people in total.
- No direct BI bond purchases- The government has stated it will not sell sovereign debt papers with a zero coupon rate to Bank Indonesia (BI) as part of its efforts to close the widening state budget deficit despite pressure from lawmakers to do so.Finance Minister Sri Mulyani Indrawati said the government and the central bank were still discussing instruments that could be used to step up the country’s response to the pandemic, adding that this did not include zero-coupon bonds.
- Concerns have developed that liquidity at banks is razor thin. Sri Mulyani revealed that banks incorporated in the Association of State-Owned Banks (Himbara) had plans to expand credit until the end of the year after receiving government allocated funds. These banks include: Bank Rakyat Indonesia, Bank Negara Indonesia, Bank Mandiri, and Bank Tabungan Negara Indonesia.
(sources: International and Indonesia news media, Bali Update (from balidiscovery.com), Reformasi Weekly)