Tenggara Backgrounder April 5

A tailored approach for defense budget needed

Overview - One of the interesting issues highlighted during the fourth presidential debate was Indonesia’s defense budget, or lack thereof. The two presidential candidates presented contrasting ideas: One argued that it should be increased, while the other argued that the current budget was sufficient. Defense, however, is a peculiar matter and each country must tailor its respective defense measures according to its own security needs. Nevertheless, the ideas proposed by the candidates still lack a thorough grasp of Indonesia’s unique needs and objectives.

High absenteeism Jokowi's worst nightmare
Overview - Incumbent President Joko “Jokowi” Widodo looks set to win his reelection bid, at least that’s what most opinion polls say with less than two weeks to go. Of 10 surveys by reputable institutions, all but one say he is leading by double digits over challenger Prabowo Subianto. Jokowi looks unbeatable. What could possibly go wrong? Apparently, Jokowi’s campaign team has been concerned about the possibility of a high level of absenteeism as the one thing that could ruin his chances.

Poor policy design and tax regulation cancellation
Overview - The government abruptly cancelled the implementation of Finance Ministerial Regulation No. 210/2018 on e-commerce taxation after it was slated to kick off on April 1, rising questions over the soundness of the design of this policy. We suspect the cancellation was because of poor regulation design, in which it neglects the fact that social media platforms remain the most used platforms for e-commerce transaction instead of online marketplace.

Financial woes shackle Krakatau Steel
Overview -  State-owned steel producer Krakatau Steel has been leading local steel producers in their two-front fights against the low-quality steel produced domestically and cheap steel imports, dumped mainly from China. As the fights are escalating, Krakatau Steel now faces its own internal problem, mounting debt.