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Backgrounder

Tenggara Backgrounder is a weekly political and business briefing service combining insights and analysis by in-house experts and those from the Centre for Strategic and International Studies (CSIS) and Universitas Prasetiya Mulya, as well as background information from The Jakarta Post journalists. Tenggara Backgrounder provides you exclusive insights into what’s happening behind the scenes along with insider scoops that are not published in the media.

Edition

April 7, 2023

PDI-P, Ganjar smarting from U20 soccer fallout

The Indonesian Democratic Party of Struggle (PDI-P) led the campaign to reject Israel’s participation in the FIFA Under-20 soccer World Cup, which Indonesia would have hosted in May. Now that the soccer governing body has taken the venue out of Indonesia’s hands, the ruling party has become the target of angry netizens, a reaction which, if poorly handled, could undermine its chances in next year’s general elections.

Other Topics
  • Grand alliance in talks for presidential election
  • Finance Ministry graft case sees no end, House inquiry to come next
  • National Police, TNI undergo rotations ahead of elections
Govt rolls out VAT cut to boost demand for electric cars

The Indonesian government has rolled out a value-added tax (VAT) cut to boost demand for electric cars and buses. The tax incentive is introduced in Finance Ministerial Regulation (PMK) No. 38/2023. In enacting the VAT incentives, the government hopes that the initiative could help raise the Indonesian general public’s demand for electric vehicles (EVs), and therefore help support the development of the country’s domestic EV ecosystem.

Other Topics
  • Repeated fire accidents urge investigation into Pertamina facilities
  • Ex-taxman Rafael Alun charged with corruption as tax compliance slides
  • Ramadan effect to increase inflation rate in April after March easing
Edition

March 31, 2023

Indonesia played political football and lost, and now faces big penalty

Indonesia lost its right to host the soccer U-20 World Cup tournament less than two months before kick-off because of a domestic controversy about the participation of Israel, with which it is has no diplomatic ties.

Other Topics
  • KPU’s deteriorating credibility could impact voter turnout
  • Spy boss signals support for Prabowo
  • Jokowi’s iftar gathering directive bad PR
Inalum to focus on aluminum smelting after MIND ID spin-off

State-owned aluminum producer PT Indonesia Asahan Aluminium (Inalum) is now free from its duty in strategic planning as a mining holding company and can finally focus on its aluminum operations. The President has been eager to develop the downstreaming industry by rolling out ore export bans, with washed bauxite export ban slated to start in June 2023, but stalled aluminum smelter development has deterred the plan.

Other Topics
  • Bulog to import 2 million tonnes of rice for continuous market operations throughout 2023
  • Energy and Mineral Resources Ministry denies Criterium’s stake in Bulu Block
  • New job creation law provides certainty for businesses, displeases unions
Edition

March 24, 2023

Jokowi cautions Defense Ministry over imported arms

President Joko “Jokowi” Widodo has thrown the Defense Ministry in the limelight after calling out its reliance on imports for the modernization of Indonesia’s primary weapons system (alutsista). His remarks are not at all surprising, given how the President has persistently urged industries and government institutions to purchase domestic products over imported goods.

Other Topics
  • PDI-P contemplates Ganjar-Prabowo pairing
  • Agus Harimurti Yudhoyono: Like father unlike son
  • Justice denied in verdict of Kanjuruhan Stadium tragedy
Plate remains witness in BTS graft case despite brother’s allegations

The brother of Communications and Information Minister Johnny G. Plate, Gregorius Alex Plate (GAP), has returned the Rp 534 million (US$35,387) he allegedly received for the ministry’s 4G base transceiver station (BTS) projects under the Telecommunications and Information Accessibility Agency (BAKTI), but minister Plate’s involvement has yet to be proven so he remains a witness instead of a suspect.

Other Topics
  • Kemenkumham deputy minister's bribery revives mining takeover case
  • Workers’ unions fight two new regulations ahead of Ramadan
  • BI Governor Perry Warjiyo breaks down strategies for his second term
Edition

March 17, 2023

Islam-based parties favor closed-list electoral system

The minor Crescent Moon Party (PBB) has sided with the Indonesian Democratic Party of Struggle (PDI-P) in support of the reinstatement of the closed-list representation electoral system. Meanwhile, in an about-face, the Muslim-based United Development Party (PPP) has stated its preference of the old mechanism, which is said to disregard the one man one vote principle of a democratic election.

Other Topics
  • Golkar’s power struggle for vacant youth and sports minister seat
  • Sri Mulyani battles to defend integrity and ministry reputation
  • Judges under microscope for ordering election delay
Air Products exits RI’s coal downstream projects

After a tug-of-war in coal supply price negotiations for a coal-to-dimethyl ether (DME) conversion project with Indonesian state-owned enterprises (SOEs) Bukit Asam (PTBA) and Pertamina, United States chemical company Air Products & Chemical finally decided to leave all coal downstream projects, including the coal-to-ethanol gasification project with Kaltim Prima Coal (KPC) and Arutmin Indonesia.

Other Topics
  • Thrift products continue flooding Indonesia despite ban
  • SVB collapse impacts Indonesia despite limited direct exposure
  • Tech layoff trend continues in race to profitability
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