Economy: The Indonesian government is committed to carrying out structural reforms through the Omnibus Law of Job Creation, according to the Deputy Minister of Finance. It is expected that the Job Creation Law can create employment, facilitate the opening of new jobs, streamline regulations, and help eradicate corruption. “This is important to support the economic recovery process due to the pandemic,” said the Deputy Minister. He added the Job Creation Law provided a new economic landscape, simplification of business licensing, ease of doing business, Special Economic Zones (KEK), central government investment and national strategic programs, convenience for MSMEs, support for research and innovation, land control, government administration, and law enforcement.
At the same time, to help promote recovery, the government established a Sovereign Wealth Fund (SWF), namely the Indonesia Investment Authority (INA), which attracts global investors to Indonesia. There are many projects in Indonesia that are very profitable and very prospective in the eyes of many global investors. The government wants investors to come to Indonesia with participation through equity rather than just providing debts. INA is a breakthrough in meeting the needs for development financing and increasing investment with three main targets: optimizing the investment value of the central government, increasing Foreign Direct Investment, and encouraging the improvement of the investment climate.
Industry: The Indonesian Ministry of Industry encourages manufacturing industry to adopt technological transformation to guide sustainable development through the concept of green industry. The concept calls for the efficient use of resources, recycling of materials, application of environmentally friendly and sustainable processes, and utilization of waste as an alternative energy source. “Since 2010, the Industry Ministry has bestowed green industry awards upon industries in the country,” said Industry Minister Agus Gumiwang Kartasasmita.
The implementation of an efficient energy program in the industrial sector is equal to Rp3.5 trillion and the efficient use of water is equal to Rp229 billion in savings. This suggests that the application of the concept has a positive impact on the economy. The recycling industry has developed in Indonesia for quite a long time, and covers recycling of plastic, lubricant, paper, textile, and metal. It has contributed to creating a circular economy and helping reduce waste, the minister pointed out. “Nearly 913 thousand tons of plastic waste are processed every year into a variety of value-added products, with economic potential reaching more than Rp10 trillion per year and potential export of derivative products from recycling process reaching US$141.9 million. The minister said about 600 large-scale industries and 700 small-scale industries across Indonesia are engaged in the recycling of plastic waste, with combined investment of Rp7.15 trillion and production capacity of 2.3 million tons per year.
Trade: The country is one short step away from having its first trade agreement with European countries after legislators approved a Bill over a deal between Indonesia and the European Free Trade Association (EFTA). The House of Representatives approved on Friday the draft for the Comprehensive Economic Partnership Agreement (IE-CEPA) between Indonesia and the EFTA, which comprises Iceland, Liechtenstein, Norway and Switzerland. The legislation is now pending a signature from President Joko “Jokowi” Widodo that would immediately make the IE-CEPA come into effect.
Trade Minister said that the agreement would open Indonesia to new markets and investors, boost small and medium enterprises’ (SMEs) participation in global value chains and increase overall exports. Indonesia would also push for the Indonesia Sustainable Palm Oil (ISPO) certification to be accepted by Switzerland, as stated in the IE-CEPA framework. After seven years of negotiations, the agreement was signed in December 2018. However, since then, only Iceland and Norway have ratified the agreement. Indonesia exported goods valued at US$15.27bil (RM63bil) in February, up 8.56% year-on-year, according to Statistics Indonesia. Trade between Indonesia and EFTA countries was valued at US$3.3b billion last year, a 92.6% increase over the previous year. The EFTA countries together ranked 15th among Indonesia’s export destinations.