Economic-

·     BI Holds Rate: Bank Indonesia’s Board of Governors agreed on January 20th to hold the BI 7-Day Reverse Repo Rate at 3.50%, while also maintaining the Deposit Facility (DF) rates at 2.75% and Lending Facility (LF) rates at 4.25%.

·     Green Finance Rules: Chairman of Indonesia’s Financial Services Authority(OJK), Wimboh Santoso, announced this week that Indonesia will formulate a set of business classifications based on environmental sustainability tied to financing incentives. “The Green Taxonomy, which will be launched by the President, will serve as a guide for policy-making, including incentives and disincentives, from various ministries and institutions including the OJK,” he said during a launch ceremony, referring to President Joko “Jokowi” Widodo. The taxonomy adds to a list of Indonesia’s new green initiatives, such as a carbon tax under the Harmonized Tax Law, a carbon pricing scheme under Presidential Regulation No. 98/2021 and tax cuts on electric cars.

·     House Passes Bill On New Capital: President Jokowi’s plan to move Indonesia’s capital to a region in East Kalimantan achieved a milestone when the House passed a bill setting up the legal authority to manage the 20-year process. The newly passed bill stipulates the establishment of a ministerial-level authority that will be in charge of the preparation, construction and relocation process from Jakarta to Nusantara. The authority will also be responsible for governing the new capital. The President will directly appoint the head of the authority after consultation with the House. The bill empowers to the President to appoint the head of the authority at least two months after it was signed into law.

·     B20 Launch Meeting:  The Indonesia chair of the B20 Summit (the business component to the G20), Shinta Kamdani announced a “Virtual Inception Meeting” for September 27, 6-10am EST. The event features addresses by President Jokowi, Economics Coordinating Minister Airlangga Hartarto, former British Prime Minister Tony Blair, Microsoft CEO Brad Smith, former NYC Mayor Michael Bloomberg, and World Economic Forum Founder, Klaus Schwab.  Click Here to view the agenda. Click here to register.

·     Growth Crypto Assets: The Trade Ministry says the domestic crypto assets market could triple to around Rp 2.5 quadrillion (US$180 billion) in transactional value this year as more Indonesians become aware of digital assets. Deputy Trade Minister Jerry Sambuaga said crypto transactions would double or triple this year from a total value of Rp 859 trillion in 2021, when it increased 14-fold from Rp 60 trillion in 2020. “But I am sure transactions will grow further this year, seeing that people are becoming more aware of blockchain, crypto assets and non-fungible tokens [NFTs],” he told reporters on Friday at an event hosted by homegrown crypto exchange Tokocrypto. The use of crypto-currencies is outlawed in Indonesia.

·     Positive Economic Indicators: The latest economic indicators released in December 2021 point to a faster recovery process. Overall, the national economy is projected to grow in the 3.2-4.0% range in 2021, before accelerating to 4.7-5.5% in 2022 on the back of stronger private consumption and investment as the Government maintains an expansive fiscal posture and export performance remains solid, despite the ever-present risk of increasing Covid-19 cases that continues to demand vigilance. The growth projections are supported by increasing public mobility given the faster vaccination program rollout, broader reopening of economic sectors and ongoing policy stimuli. The major economic sectors, namely the manufacturing industry, trade, construction, and agriculture, continue to gain momentum

Foreign/Security Affairs

Bali Bomber Sentenced: The East Jakarta District Court sentenced an Al-Qaeda-linked Islamist militant to 15 years in prison on Wednesday for his role in the 2002 bombings that killed more than 200 people on the resort island of Bali. The blasts, which came just over a year after the 9/11 attacks on the United States, ripped through two bars packed with foreign tourists, and remain the deadliest militant assault in Indonesia’s history. Zulkarnaen, a high-ranking member of the Jemaah Islamiyah (JI) militant group, was arrested in December 2020 after spending nearly 18 years at large. He was on trial for the Bali bombings, as well as several other attacks carried out by the special unit under his command. (Jakarta Post)

New Global Health Agency: Comparing the need for a new agency to replace the WHO to the economic circumstances that led to the formation of the IMF, Indonesia’s President, Joko Widodo, said: “The Indonesian [G20] presidency will fight to strengthen the world’s health resilience architecture, which will be run by a global agency,” he said in a speech to the World Economic Forum’s online meeting. “(Its) task is to mobilize world health resources, including for financing health emergencies, purchasing vaccines, medicines and medical devices.” The President said the World Health Organization had showed limited capacity to deal with the Covid-19 pandemic.

Social Affairs

Undernourishment: Indonesia may have seen a rise in the prevalence of undernourishment, while the rate of stunting among children under 5 years of age remains “very high” amid the COVID-19 pandemic, the Food and Agriculture Organization (FAO) has reported. According to FAO estimates, the three-year moving average on the national prevalence of undernourishment, a core indicator of hunger, rose to 6.5 percent in 2020 from 6.4 percent a year earlier. That equates to around 17.6 million people. (Jakarta Post)

 Mayo Clinic and MIT-Erroneous Connections

Indonesian media reports that the Mayo Clinic and MIT were establishing campuses on Bali have turned out to be erroneous.  MIT spokesperson, Sarah McDonnell, confirmed in an email that MIT was not involved in setting up a tech university in Bali in conjunction with a Chinese university. Similarly, Mayo confirmed that they are advising on an international flagship hospital project on Bali but it would not be a Mayo Clinic

(sources: International and Indonesia news media, Bali Update (from balidiscovery.com), Reformasi Weekly, US Embassy website)