November 3, 2015 edition
President Jokowi's announcement that Indonesia will join the US-led 12-nation Trans Pacific Partnership (TPP) free trade zone is causing quite a stir. The previous administration's efforts to join the ASEAN Economic Community (AEC), which opens up trade, investment and people flow among ASEAN member states, attracted considerable stiff resistance. This time the stakes are higher, as it puts the country even further on a market-opening path. The issue is that in joining the TPP, as with the AEC, requires significant support from key political, government and business stakeholders to be effective and show results.
This support is critical when changes need to be done by member countries to fulfill TPP's tough terms and when the results will only be felt over a period of time. Not properly addressing these fears and doubts could undermine the initiative and, in a worst case scenario, could even reverse the gradual opening of Indonesia's economic doors.
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More Economy articles in other editions
October 27, 2015 edition
Last Monday, the market sighed with relief when the latest economic data on China came to light. For the third quarter this year, the Chinese Bureau of Statistics announced an economic growth rate of 6.9 percent, slightly above analysts' prediction of 6.7 percent. The Chinese government also claimed that the 2015 growth target of 7 percent was not beyond reach.
Regrettably, this optimism didn't last long. In fact, many analysts have come to doubt China's numbers. Since this August's 1.9 percent yuan devaluation, they believed that China's weakening economy was actually worse than the official data suggested. On top of this, market anxiety was growing, after renowned investment bank Goldman Sachs declared that shockwaves from the third global crisis were upon us.
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October 20, 2015 edition
In his October 2014 inaugural speech, President Joko Widodo said, "In order to build Indonesia into a great nation, prosperous and peaceful, we need the spirit and courage to face the waves." His words were intended to jumpstart a shift in the country's political and economic agenda. The follow-through on that vision has focused on building ports and developing Indonesia's fishing industries. But what of the wealth of vegetation from the sea?
Seaweed, once dehydrated and pulverized, appears in many forms in modern life: in facial cream, as meat tenderizer, in the laboratory as agar-growing media, in medical capsules, in paper, in plywood and even as lubricant on oil drilling platforms. Furthermore, the entry price to this seaweed bonanza is not high. With just a pile of seaweed cuttings, some recycled plastic bottles and a fishing line, anyone along Indonesia's nearly 55,000-kilometer-long coastline can enter the business.
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October 13, 2015 edition
MULADNO Bashar hurriedly summoned his staff to discuss a new plan: He needed to travel to India, he told them, to find new cattle suppliers.
The sense of urgency came from having watched President Joko Widodo complain, live on TV, about the soaring price of beef. "The president seemed upset. How was it that cattle imports had been reduced and now the price of beef was rising? Wouldn't it be possible to source beef elsewhere and get lower prices?" Muladno told Tempo when contacted last Thursday.
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October 6, 2015 edition
Tamim is not sure how he is going to make it. The farmer from Bulak Lor village in the Indramayu Regency, West Java is desperately low on cash after his harvest failed.
This year's dry season has been especially severe. In Tamim's case, with his rice plants less than a month old, the water table in the river unexpectedly dropped, leaving farmers short of water. "I have run out of money, and can never recover from that. Now, it's hard to scrape enough money to buy food. Who knows what'll happen the next planting season?" said the 42-year-old last Tuesday.
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September 29, 2015 edition
Global financial markets have a tendency to adopt one main issue as a guidepost. Two weeks ago, people were worried whether the US Federal Reserve will raise interest rates. Now, the topic has shifted across the ocean to the Chinese economy.
Before the market's guidepost changed, the delay of the Fed's interest hike actually troubled Indonesia. The Fed, however, is still signaling that US interest rates could rise in the near future. So, in the end, leaving the decision hanging only perpetuates speculation and uncertainty. Both the government and Bank Indonesia are obviously facing more difficulty in setting the appropriate direction for macroeconomic or monetary policy, as they have to speculate on what the impact of the Fed's decision would be like.
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September 22, 2015 edition