Market News - 19-25 February 2017
“2017 Challenges and Prospects” - 24 February 2017
Although currently in a global economic slowdown, the Indonesia government continues to develop products of local natural resources. The Indonesian economy grew 5.02% until the end of 2016. Although in Indonesia itself, several commodities experienced an inflation of prices that effects the stability of daily needs. The coordinating Minister stressed the fact of the need of new markets and products identification so Indonesia would not depend entirely to the main export commodity.
“Early March: Minister of Energy and Minerals Promises to Lower Gas Prices in North Sumatra” - Kompas - 24 February 2017
North Sumatra Governor Erry Nuradi have declared that the Minister of Energy and Minerals has promised to lower industrial gas prices in early March. The prices will go from USD 12,2/MMbtu to USD 9,9/MMbtu. High industrial gas prices becomes one of the main obstacles for investment and makes North Sumatra industry unable to compete. Therefore, the lowering of prices is like a breath of fresh air. The Indonesian will evaluate every six months following the global gas price.
“Govt Signs Guarantee Agreement for Four Toll Road Projects” - Tempo - 23 February 2017
The government has signed a guarantee agreement worth Rp37.2 trillion for four toll road projects. The toll road projects consist of Jakarta–Cikampek II Elevated, Krian–Legundi–Bunder-Manyar, Cileunyi-Sumedang-Dawuan (Cisumdawu), and Serang-Panimbang. The scope of work of the Finance Ministry in the projects includes political risk caused by regulatory changes. The Coordinating Minister for Economic Affairs Darmin Nasution expects the infrastructure project to boost the economy.
“Indonesia Ups Efforts to Gain EU Recognition for Palm Oil” - The Jakarta Post - 23 February 2017
Indonesia is stepping up its efforts to gain recognition from the European Union for a palm oil product certification amid an intense anti-palm oil campaign in Europe on the back of sustainability concerns.The government has issued its own national sustainability standards for palm oil, called Indonesian Sustainable Palm Oil (ISPO), which certifies legal compliance. However, five years into its implementation, it has failed to gain access to premium EU markets.Indonesia aimed to repeat the success of SVLK, which was approved by all 28 EU members for complying with the EU’s Forest Law Enforcement Governance and Trade (FLEGT).
“Finance Ministry Teams Up with Local Government to Boost Tax Fund” - CNN Indonesia - 22 February 2017
The Ministry of Finance (MOF) will strengthen cooperation with local governments (local government) to boost tax revenue. It is believed to be part of the tax reform. Tax reform should be accompanied by two keys, namely access to information and cooperation. Therefore, local government cooperation in providing access to information becomes important. Such as profile information on the taxpayer, hotel, or restaurant tax.Not only that, the Ministry of Finance is also considering to levy income tax taxpayers Micro, Small and Medium Enterprises (SMEs) in conjunction with traditional regional market tax payments. The Indonesian government is expecting tax revenues up to 18.34 percent than last year.
“Chairman of Chamber of Commerce Indonesia: Arbitration Should Be the Last Option” - Metro TV News - 22 February 2017
Freeport McMoran will arbitrate if after 120 days, have not reached common ground on the issues that occur with the Indonesian governmentm as stated in their working contract. Dispute resolution through arbitration path takes quite a long time, and it would require considerable expense. Other than a one sided change in the Working contract, is the extension of the working contract until 20141 which has been delayed till now. As well as the regulation of export tax.
“Cayenne Peppers Price at IDR 130 in Pontianak” - Antara News - 21 February 2017
Cayenne prices in traditional markets in the city of Pontianak as in Pasar Flamboyan is still high at around Rp130 thousand per kilogram because of limited stock. Meanwhile vegetables prices are still normal and that after 2 weeks, prices of chicken have normalized once more. With other commodities stabiling as well, such as sugar and scalliots. Vendors are unsure when the cayenne pepepper prices will return to normal.