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December, 2017 | Vol. 7 No. 12
INTERNATIONAL
INFRASTRUCTURE
UNESCO Calls Indonesia Superpower in Culture
TOURISM
Government Gets Chinese Loan of Rp2.2 T for Building Cisumdawu Toll Road
Page A4
To Support 10 New Balis, Tourism Ministry Holds Strengthening Network of Morotai Tourism Page A7
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setkab.go.id
Indonesia central bank plans new rules to improve loans, liquidity Indonesia’s central bank is planning to issue new rules as it seeks to improve credit distributions by banks and improve their liquidity management, Governor Agus Martowardojo said during its annual bankers dinner on Tuesday. The changes are aimed at boosting Indonesia’s growth to well above 5 percent through the banking sector, where lending growth has remained sluggish this year despite a number of easings. Bank Indonesia (BI) plans to expand the implementation of reserve requirement for Islamic banks, as well as reserve requirements for foreign currency denominated deposits, Martowardojo said. It will be expanded from currently conventional banks and rupiah denominated deposits. The central bank aims to “adjust the ratio and extend the fulfillment period” of the reserve requirements, Martowardojo added. BI, earlier this year, as relaxed its reserve requirement rules. Current rules says conventional banks must keep a minimum 5 percent of their total rupiah deposits at BI everyday and maintain at least a 6.5 percent average of total deposits in the period of two weeks. Banks would get an interest of 2.5 percent from BI. Previously, banks have to maintain 6.5 percent reserves daily. Meanwhile, it also plans to implement a new measure called “macroprudential intermediation ratio” to gauge wider financing distributions by banks, which could include purchase of corporate debts. “We will go through this improvement in stages and in a measured way,” Martowardojo said, adding that the changes will start to be rolled out next year. BI’s target of 10-12 percent loan growth in 2018 has taken into account of this inclusion. The central bank estimates 8 percent loan growth in 2017. The central bank has cut the key interest rate by 200 basis points since the start of 2016 to boost economic growth, which has been hit by commodity downturn. (KITCO/TPP)
Quote Of The Month
“It is the first time in 20 years we got such an investment grade from S&P, Moodys, and Fitch” President Joko Widodo
Jokowi Speaks of Indonesian Economic Achievement in 3 Years In Front Of Asian CEOs President Joko Widodo (Jokowi) on Wednesday (12/6) attended the Bloomberg The Year Ahead at the Ritz Carlton Mega Kuningan, South Jakarta. On this occasion, Jokowi was asked to give a speech. The event was attended by CEOs from across Asia to discuss the trends, issues and challenges that will be faced in 2018. They also talked about the economic prospects, trade prospects, digital in the future and the investment opportunities in the upcoming years. Head of BKPM Thomas Lembong, Coordinating Minister for Economic Affairs Darmin
Nasution, and Cabinet Secretary Pramono Anung were also present on the occasion. In his speech, Jokowi spoke about the achievement of his administration in three years governing. “The third year is always better than the first year,” said Jokowi. He told how he struggled in the first year of his tenure in dealing with the weakening
world economy after the drop of the commodity prices. However, a couple of years later, the economy has been reversed to a better condition where the Indonesian economy has managed to reach above 5% from previously below it. “The economy managed to grow well to above 5% after previously only 4.7 in the third quarter of 2015,” said Jokowi.
The achievement was followed by the international rating agencies raising the investment grade of Indonesia to the best in the last 20 years. “It is the first time in 20 years we got such an investment grade from S&P, Moodys, and Fitch,” said Jokowi. The ranking of ease of doing business in Indonesia also managed to rise to the level 72. This rank kept hiking
higher and higher each year. Jokowi said he believed the Indonesian economy in the future will move to a much better direction. “When you get married, keep in mind that in the first year if you feel bad, do not panic. Just stay and in the third year it will be much better,” said Jokowi welcomed by applauding from the audience. (MDK/ TPP)
Top 10 Countries with Biggest Investment to Indonesia in 2017 katadata.co.id
Singapore is still the largest investor in Indonesia until the third quarter despite falling 14 percent. The data from the Investment Coordinating Board (BKPM) show that the foreign direct investment (FDI) from Singapore from January to September 2017 fell to US$6.12 billion (Rp82.6 trillion) from the same period previous year which reached US$7.13 billion. The value covers 25 percent of the total foreign investment in Indonesia and is the largest compared to the other countries. In the second rank is Japan with the investment value during January-September this year reaching US$4 billion. This figure is also lower 11 percent
from the same period previous year of US$4.5 billion. Meanwhile in third place is China with an investment of US$2.73 billion and in the fourth position is United States with a value of US$1.54 billion, increasing 72 percent and 257 percent respectively from the previous year. In general, the value of foreign investment in Indonesia in the first nine months of this year has increased 69.84 percent to US$23.9 billion from the same period previous year which only reached US$14.1 billion. As the domestic consumption weakened, the flow of foreign investments was able to support the economic growth to reach above 5 percent. (KTD/TPP)