Corona Virus Update #52    Februry 22, 2021

Cumulative number of reported cases: 1,223,930 (as of February 22)

Recovered: 1,096,944
Deaths: 34,691
Fatality Rate: 2.69%


Rupiah to US$14,098
Jakarta Stock Exchange Index: 6255

Overview- Hospitals Breathe Easier

The seven-day moving average of newly confirmed COVID-19 cases fell 12% week-on-week. Across Java and Bali, the bed occupancy rate is also falling.

On February 17 Indonesia began Phase II of its vaccination program, adding a wider range of front-line workers and the elderly to the primary health care workers of Phase I.

Indonesian health authorities have started to administer coronavirus vaccines produced by state-run pharmaceutical company Bio Farma since the second round of mass vaccination began last week (02/17).

Indonesia also announced that another local vaccine is under development with a US biomedical startup, Aivita. The Diponegoro University and a local company PT Rama Pharma are the partners.

Under an arrangement worked out with the Chamber of Commerce of Indonesia (KADIN) Indonesia is also now allowing companies to purchase vaccinations for their workers to help speed their distribution.


Indonesia has extended the public activity restrictions (PPKM) in parts of Java and Bali through March 8 due to continued high levels of COVID-19 activity in those areas. The government allows 50% of employees in nonessential industries to work in an office, though there are tighter curbs in areas with higher COVID-19 activity. Shopping centers and food establishments can operate through 9 PM. Schools must remain closed and use distance learning. Authorities may adjust the restrictions or enact the measures in additional cities or regencies to accommodate local conditions.

Weather: Heavy rains over the weekend have caused major flooding in parts of Jakarta, interrupting travel and vaccine delivery, and causing power outages. The flooding forced thousands of Jakartans to take to shelters and it is not expected to recede soon as the weather agency has forecast that the extreme weather conditions are expected to continue for the next several days.

Economic- Record Low rates

  • 0 Down: On February 19 Indonesia’s central bank cut its benchmark interest rate to a record low, 3.5, the lowest rate since 2016. With a low inflation environment, Bank Indonesia is going all out to stimulate demand. To spur household consumption, which accounts for more than half of the country’s economy, BI also relaxed the down payment requirement for car and motorcycle loans and mortgages. Starting next month, it will be be possible to purchase a new motorcycle, car, or house without having a down payment.
  • Poverty Rates Up: According to the latest data from Statistics Indonesia (BPS), the pandemic has pushed 2.76 million more Indonesians into poverty, bringing the country’s poverty rate to the highest level since March 2017. Amid soaring job losses and business closures last year, the number of citizens living below the poverty line reached 27.55 million in September 2020, up significantly from 24.79 million a year earlier. As a result, the poverty rate climbed to 10.19 % from 9.22% over the same period. The government’s social support programs have helped keep another several million people above the poverty line.
  • Negative Investment List Replaced: According to Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto, the negative investment list has been replaced by a “priority list”, which offers incentives such as tax allowances or tax breaks on investments in some industries. Those businesses include coal gasification, geothermal exploration, and smelting of ores such as nickel and copper. Tax holidays will also be offered on investments in vaccine-making industry and some other pharmaceutical sectors, as well as in the production of electric vehicles (EVs) and some EV parts. The government is also easing rules for investment in alcoholic beverages, land transportation, ship vessel traffic information systems and flight navigation, among other sectors.
  • Omnibus “Job Creation” Law Regulations: Indonesia issued 51 implementing regulations – with changes that include lower taxes on bond earnings and new permit requirements for plantations. Some of the key changes include;

·    Non-resident taxpayers are now subject to a 10% tax rate on earnings from debt securities, instead of 20%, or another level aligned with treaties to avoid double taxation.

·    Business permits are simplified, with those deemed as low-risk only needing an identity number to operate, while high-risk ones must get a full license. The rule refers to risk as possible impact to health, safety and the environment.

·    Companies don’t need to apply for a new permit when hiring foreign workers already holding a valid visa from another company, as long as the employee works as a director, commissioner, or in roles linked to vocational training, digital economy or oil and gas.

  • Sovereign Wealth Fund CEO: Indonesia has named Ridha Wirakusumah as the chief executive officer of its new wealth fund, which is set out attract equity investments in local infrastructrure projects. Wirakusumah was formerly the CEO of PT Bank Permata and has held positions at KKR & Co., General Electric Co., as well as American International Group Inc.

US-Indonesia Relations

On February 16 , new US Secretary of State Anthony Blinken reached out to his counterpart in Indonesia, Foreign Affairs Minister Retno Marsudi. According to Blinken’s spokesperson Ned Price:

“Secretary of State Antony J. Blinken spoke today with Indonesian Foreign Minister Retno Marsudi. Secretary Blinken affirmed the growing significance of the U.S.-Indonesia Strategic Partnership to the prosperity and security of both nations and pledged to further strengthen the broad range of our bilateral ties. They discussed the opportunities for increased trade and investment between the United States and Indonesia. Secretary Blinken agreed on the key role of ASEAN-centrality in the Indo-Pacific, and underscored the importance of protecting and preserving a free and open South China Sea. The two leaders expressed deep concern over the coup in Burma. Secretary Blinken also thanked Minister Retno for her important work to bring peace to Afghanistan, applauded her leadership as a positive role model for women and girls, and noted that as the world’s largest Muslim-majority country, Indonesia has unique insights that it can offer Afghans in their pursuit of a political settlement.”

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