Cornavirus Update #39 November 23, 2020
Cumulative number of reported cases: 502,110 (as of November 23)
Rupiah to US$14,164
Jakarta Stock Exchange Index: 5652
Overview-Continued Acceleration/Testing Above 40,000
Benchmark: Since the start of the pandemic Indonesia has officially recorded over half million cases (502,111) with 84% recoveries (422,386)
Daily PCR testing levels rose above 40,000 for only the second time since the beginning of the pandemic. The positivity rate of 11% matched the previous week. Cumulative cases detected nationally rose 6% week-on-week. This rate is higher than the two previous weeks. Active cases rose 6% week-on-week; the first rise since early October. These same trends describe Jakarta; new cases breached 1,000 on November 18, the first time in a month. In West Java, cases plateaued; Central Java spiked upward; and the 4 largest provinces outside Java also plateaued. The rise in testing levels is a positive development but officials acknowledged that labs have installed capacity to do 80,000 tests a day. Too many members of the public may be sheltering at homes with symptoms and don’t want to be tested.
The Jakarta administration announced on Sunday (11/22) that it would extend the transitional period of the large-scale social restrictions (PSBB) for another two weeks until Dec. 6 amid a recent surge of new COVID-19 cases and following a number mass gatherings that led to accusations of widespread violations of health protocols.
Indonesia aimed to vaccinate 107 million people by the end of next year. It has secured commitments to source vaccines from China’s Sinovac Biotech, China National Pharmaceutical Group (Sinopharm), and CanSino Biotech. However, they have yet to announce the result of their stage III clinical trials.
Despite discussions of partnerships, Indonesia is unlikely to procure Covid-19 vaccines produced by Pfizer, as its vaccine requires a refrigeration temperature far beyond the archipelago’s logistical capability, according to a top executive at a state-owned pharmaceutical company.
Travel- Senior Ministers to DC
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan met with US President Donald Trump on Tuesday (11/17). Pictured below, Luhut was accompanied by recently installed Indonesian Ambassador to the United States Muhammad Lutfi, while White House advisers Jared Kushner and Ivanka Trump were seen alongside Donald Trump and International Development Finance Corporation (IDFC) CEO Adam Boehler. (The meeting was not in the President’s schedule and there was no customary White House read-out. The Indonesian government and media reported the event.)
In separate events, Luhut met with US Vice President Mike Pence, who, according to the Indonesian government, offered “joint cooperation in vaccine production between American and Indonesian companies,” and with US national security adviser Robert O’ Brien to discuss a “strategic partnership” in defense and technology.
Indonesia and the United States signed on Wednesday (11/18) a US$750 million agreement to finance trade and infrastructure projects as the countries seek to strengthen economic relations. The memorandum of understanding (MoU) for the deal was signed in Washington DC by Indonesian Ambassador to the US Muhammad Lutfi and Export-Import Bank of the United States (EXIM) President Kimberly Reed. The signing was witnessed by Indonesia’s Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan, who is visiting the US this week, along with Deputy Foreign Minister Mahendra Siregar, among others.
- Current Account in the Black– Indonesia’s current account balance in the third quarter swung to a surplus for the first time in nine years, thanks to rising exports as domestic demand for imports remains weak. The gap was $1 billion in the July-September period, or 0.36% of gross domestic product, according to a Bank Indonesia statement on Friday (11/20). It is the widest surplus since the first quarter of 2011. For the full year, the central bank expects the current account deficit to be below 1.5% of GDP.
- BI Rate Cut- Bank Indonesia, Indonesia’s central bank, has cut its benchmark interest rate in a surprise move to accelerate economic recovery amid growing confidence that the worst hit from the Covid-19 pandemic has passed. The central bank lowered its seven-day reverse repo rate by 25 basis points to 3.75 percent, the lowest since Bank Indonesia introduced the new benchmark in 2016.
- Sovereign Wealth Fund– Indonesia said Monday (11/23) its planned multibillion dollar sovereign wealth fund will receive a $2 billion investment from the U.S.’s new development bank. Adam Boehler, the head of United States International Development Finance Corporation (DFC) signed a letter of interest during a visit to Washington by Indonesia’s Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan last week. (Boehler was Jared Kushner’s college roommate).
- APEC and TPP– Both President Jokowi and President Trump joined (virtually) this year’s Asia Pacific Economic Cooperation (APEC) annual meeting. Jokowi’s remarks focused on creating unity to fight COVID-19 and the new opportunities for investment afforded by Indonesia’s Omnibus Law. President Trump highlighted US leadership in COVID vaccines, its commitment to economic recovery as well as peace and prosperity in the Indo-Pacific region. President Xi Jinping said China was considering joining TPP, a comprehsive trade pact. US membership in TPP died during the 2016 Presidential campaign when neither candidate supported it. President-elect Biden has said little about TPP but some scholars believe he will eventually push to reopen negotiations for the US to join it. President Jokowi told President in Obama in 2014 that Indonesia eventually hoped join but has not yet occurred. Instead, Indonesia recently joined a smaller economic agreement RCEP that allows it to protect local industries and restrict trade in ways that TPP would not.