Jokowi discourages commodity price politicizationMonday, 05 Nov 2018
GENERAL NEWS AND HEADLINES
The Jakarta Post, Headline
As the search for the crashed Lion Air flight JT610 entered its seventh day, the National Search and Rescue Agency (Basarnas) announced that it had scheduled an additional three days of joint operations that would focus on retrieving the remaining victims as well as the still-missing cockpit voice recorder (CVR). Basarnas chief Marshal M. Syaugi said the decision was reached as many victims were still missing. Lion Air flight JT610 was carrying 189 people on board, and as of the afternoon of Sunday, Nov. 4, the rescue team had retrieved only 105 body bags. Moreover, the missing CVR — the second of the plane’s two black boxes — is also crucial to completing an accurate investigation as the device recorded communication between pilot and co-pilot within the cockpit, the pilot and airport control towers, as well as the pilot and his passengers in the cabin before the crash.
Lion Air’s safety standards need audit
The government decided to assess all Lion Air’s Boeing 737 MAX 8 aircraft after the airline’s plane of the same model crashed on Oct. 29, killing all passengers on board. Following the assessment, Transportation Minister Budi Karya Sumadi reportedly ordered the Air Transportation Directorate to strictly audit airline regulations on passenger safety, particularly Lion Air’s. The government’s assessment found that 8 out of Lion Air’s 11 Boeing 737 MAX 8 aircraft were good to go, while the government would further audit the remaining 3. The government’s audit involves airline standard operating procedures, crew qualifications and coordination with other stakeholders.
KPK to expand Taufik’s case
Kompas, p. 3
The Corruption Eradication Commission (KPK) is still reportedly investigating House deputy speaker Taufik Kurniawan over bribery allegations. The KPK is giving an opportunity for Taufik to reveal other figures involved in this case as, according to the antigraft body, it was unlikely that Taufik was the only person embroiled in the bribery. The KPK is reluctant to speculate on the people who were possibly involved in Taufik’s case, yet the possibility that the KPK will expand its investigation remains open, considering how Taufik himself was investigated by the KPK after his name was mentioned by another bribery convict.
Previously, Taufik was arrested and named as a suspect by the KPK for allegedly accepting a bribe of Rp 3.65 billion while he was in charge of overseeing the management of special allocation funds (DAK). Taufik assisted former Kebumen Regent M. Yahya Fuad to receive a large amount of DAK in exchange for a bribe.
Jokowi discourages commodity price politicization
Media Indonesia, Headline
During his impromptu visit to Pasar Anyar, Tangerang, President Joko “Jokowi” Widodo held a discussion with vendors about the market price of commodities. Jokowi explained that his visit was to check the price stability, from which he concluded that commodity prices not only remained stable, but even decreased for some products. The President further stated that commodity price fluctuations were common, and he hoped others would stop politicizing such fluctuations. According to Jokowi, politicizing the commodity prices would instead be a disadvantage to sellers as it would discourage people from buying products in the market.
Jokowi’s statement came after vice-presidential candidate Sandiaga Uno from the opposing camp visited Pasar Induk Brebes on Oct. 26, during which he promised the vendors that he would tackle the alleged price increase.
Firms laud govt for maintaining excise rate
The Jakarta Post, p. 1
The tobacco industry has responded positively to the government’s latest decision to maintain its existing excise rate for tobacco products in 2019, thereby canceling the previous plan for an increase next year. This is the first time the cigarette excise rate has remained unchanged after consecutive increases in the past few years that were part of efforts to curb the country’s tobacco consumption while also to enhance non-tax state revenue. According to the Indonesian Tobacco Society Alliance (AMTI), the decision was based on input from various stakeholders, current economic and job market conditions and also the tobacco industry’s current capacity. Meanwhile, the government provided no further explanation regarding the decision after Finance Minister Sri Mulyani Indrawati announced it on Nov. 2, during which she also announced that the government decided as well to temporarily delay its plan to simplify layers of the excise rate for tobacco products.
BUSINESS AND ECONOMIC NEWS AND HEADLINES
Declining palm oil price to burden conglomerates growth
Bisnis Indonesia, headlines
A number of conglomerates are facing slower growth amidst the declining palm oil price. Based on conglomerates’ financial report between January – September, Bisnis Indonesia found 15 business groups were affected by the declining prices. For instance, Astra Group, Salim Group, Rajawali Group and Sinarmas Group’s net profit plummeted. PT Astra Agro Lestari, PT Salim Ivomas, Rajawali Group’s PT Eagle High Plantations and Sinarmas Group’s PT SMART net profit between January to September fell by 77.64 percent, 18.22 percent, 100.36 percent and 98.4 percent, respectively.
IEU-CEPA may boost RI’s trade to Europe
Investor Daily, headline
With Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) starting next year, the Indonesian government expected non-oil and gas export to grow by 100 percent. The trade figure may surpass US$32 billion per year or double from last year. Trade Ministry data showed positive trend of Indonesia-EU trade, where in September trade value grew by 12 percent to US$23.5 billion year-on-year. Trade Ministry International Trade directorate general Oke Nurwan said the negotiation is entering final phase where product sustainability and environmental concern remain the core of discussion. Oke also explained that the government is seeking the best way to boost footwear and textile export, two biggest non-oil and gas exports to Europe.
Rupiah remains threatened
Rupiah appreciation to Rp 14,981 per dollar on Sunday might be temporarily as external negative sentiments remain stronger than the positive ones. Rating Agency Pemeringkat Efek Indonesia (Perfindo) economist Fikri Permana explained the appreciation happened because US dollar was weakening amidst declining oil price and US-China trade war. Nevertheless, Fikri believe that negative sentiments such as the US Federal Reserve interest rate raise in December and Indonesia’s current account deficit still the bigger boulders for rupiah to gain power.
Economists expect slower third quarter economic growth
Central Statistics Agency will release third quarter economic growth this afternoon. However, Kontan’s consensus on several economists predicted that average economic growth would decline to 5.14 percent from 5.2 percent in the second quarter. Bank Mandiri economist Andry Asmoro, for example, was expecting slower economy as export declines to around 6.5 percent from 7.7 percent in second quarter, while import remains steady at 14.9 percent. Separately, Samuel Aset Manajemen economist Lana Soelistianingsih said stagnating household consumption, declining net export and investment would result in decreasing growth.
Third Quarter Economic Growth Projection
- David Sumual (Bank Central Asia) – 5.06 percent
- Lana Soelistianingsih (Samuel Aset Manajemen) – 5.13 percent
- Andry Asmoro (Bank Mandiri) – 5.14 percent
- Bhima Yudhistira (Institute for Development of Economic and Finance) – 5.05 percent
- Josua Pardede (Bank Permata) – 5.14 percent
- Latif Adam (Indonesian Institute of Sciences) – 5.1-5.2 percent
- Eric Sugandi (Asian Development Bank Institute) – 5.2 percent
- Piter Abdullah (Center of Reform on Economics Indonesia) – 5.1 percent
- Febrio Kacaribu (University of Indonesia Institute for Economic and Social Research) – 5.1 percent
- Myrdal Gunarto (Maybank Indonesia) 5.21 percent
Chinese and Hong Kong investors eye Indonesian property sector
Investor Daily, p.1
Chinese and Hong Kong investors are becoming more involved in Indonesian property sector. At least seven investors have pledged around Rp 68 trillion via local subsidiaries to develop a number of projects. Investment Coordinating Board (BKPM) recorded that Chinese and Hong Kong investors have contributed US$ 2.34 billion in property sector or 20 percent of the total foreign investment in the sector by the first half of 2018. PT Leads Property Service Indonesia CEO Hendra Hartono and PT Astra Land Indonesia Marketing Communication Analyst Andhika Christianto said most of the investments are in apartment and vertical housing due to rising middle class and potential demographic boom in the next 10 years.
RI teams up with FAA and ICAO
Bisnis Indonesia, p.1
The government is inviting the US Federal Aviation Administration (FAA), International Civil Aviation Organization (ICAO) and the European Union flight authority to assist with intensive audit and evaluation of national flight safety and security, after Lion Air’s JT 610 tragedy on Nov. 29. Transportation Minister Budi Karya Sumadi said he had sent formal communiques to coordinate with the respective agencies. Evaluation report from JT 610 suggested that improper ramp check was alleged to cause the incident.