January 5, 2016 edition

Happy 2016. We all need a moment of prayer when facing tough challenges. Indonesia, especially, a country whose economic health depends very much on commodity prices, continues to remain soft.
One key factor determining our economy's 2016 destiny is China. When its economy grows, there is hope that commodity prices will move in sync. In turn, the trickle effects from rising commodity exports should help lift Indonesia up.

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More Economy articles in other editions

December 29, 2015 edition

A few hours after President Joko Widodo stated his support for app-based transportation services on Friday two weeks ago, Cabinet Secretary Pramono Anung immediately distributed meeting invitations to several stakeholders. One of those invited was Agus Pambagio, a member of the Transportation Sector Balanced Public Policy Committee at the Ministry of Transportation. "I was asked to attend a focus group discussion about online motorcycle taxi services at his office," said Agus on Tuesday last week.
The meeting was held on the fourth floor of the Cabinet Secretariat building and attended by representatives from the transportation ministry, the coordinating ministry for the economy, the coordinating ministry for maritime affairs, the National Development Planning Agency (Bappenas) and the Organization of Land Transportation Owners (Organda). Go-Jek CEO Nadiem Makarim was also present to represent app-based transportation executives.

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December 22, 2015 edition

STATEMENT sheets were distributed on Monday last week to Bank Indonesia employees on secondment to the Financial Services Authority (OJK). On the sheets were instructions to select between two available options: stay on with the OJK, or return to Bank Indonesia.
The statements have to be completed and duly signed on duty stamps with the knowledge of department heads no later than Tuesday this week. These documents will later be submitted to the head of the OJK's organization and human resources department in sealed envelopes. "There will be a quick count. The final outcome will be known on December 31," said Darmansyah, the OJK's human resources director, on Tuesday last week.

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December 15, 2015 edition

It was almost noon and Sunandar had barely moved in his chair. The Trend Tour & Travel reservation clerk in Yogyakarta only occasionally twiddled on his computer and received phone calls. "At the beginning of December, there were hardly any tour orders. Things will pick up nearing Christmas and New Year," he said two weeks ago.
Sunandar, who has worked at the travel agency for three years, has become somewhat familiar with the business' patterns. Outside public holidays or school holidays, there are very few bookings, especially by domestic tourists. "This entire day there have only been 25 orders. Two from foreign tourists, from Amsterdam," he said. Usually, the travel agency on Jalan Kusumanegara in Yogyakarta draws up to 100 orders per day.

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December 8, 2015 edition

When Finance Minister Bambang Brodjonegoro received a formal resignation request from Taxation Director-General Sigit Priadi Pramudito, he did not have much time to think it over. Early the next day, he had to leave for Japan.
It was not the first time Sigit threatened to resign. Last week, Sigit told Tempo he had asked to be let go on multiple occasions.

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December 1, 2015 edition

Pressure on Bank Indonesia (BI) to cut the rupiah interest rate and breathe some life into the lackluster economy is mounting. This is not just coming from businesses and consumers but also from the government, most notably from Economic Coordinating Minister Darmin Nasution and, more recently, Vice President Jusuf Kalla. Their request has some merit, with annualized October inflation declining to 6.25 percent and moving closer to BI's 4-5 percent year-end target. A lower interest rate, it is argued, would boost consumption and serve as an effective growth driver along with state spending.
But the central bank also carries the responsibility of maintaining a stable rupiah. Understandably, it worries about the currency weakening further should it cut rupiah interest rates. Thus, it must take into consideration the US Federal Reserve (the Fed)'s plan to raise the US interest rate before year's end. Most expect Bank Indonesia to cautiously wait and assess market reaction before deciding what to do with rupiah interest rates. Should the market remain calm with minimal foreign funds exiting and limited rupiah exchange rate volatility, then it could start lowering the interest rate. If funds rush out and hurt the rupiah significantly, depending on the extent of the volatility, it could maintain or even raise interest rates to prevent more funds from moving out.

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November 24, 2015 edition

At the Raja Tempirai oil block in the Penukal Abab Lematang Ilir regency of South Sumatra, there is little to suggest anything is amiss. The names of the two block operators, Pertamina Hulu Energi Raja Tempirai (PHE Raja Tempirai) and Golden Spike Energy Indonesia, still hang at the entrance, and 100 or so employees mill about, going about the daily business of running the plant.
"In truth, these employees still haven't been paid," Lapangan Arifson, Pertamina's Raja Tempirai field manager told Tempo.

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