Page 12 - indonesia19

INSIGHTS
The Indonesian government would like to provide every convenience
to investors with an aim to boost growth in human resources capacity.
Under the new regulations to encourage this, Indonesia has gone
beyond Thailand, Malaysia and Singapore in delivering tax deductions
for companies providing skills training
Tax Breaks & Deductions
Indonesia rolled out corporate tax breaks up to the tune of 200-300% for
industries that invested in vocational education, research and development.
Tax deductions of up to 200% are given to companies that conduct
certain skills training such as on-the-job training, apprenticeships, or
learning activities. Meanwhile, the tax deduction up to 300% is applied
to research and development company to encourage innovation and the
use of new technology.
The Indonesian government would like to provide every convenience to
investors with an aim to boost growth in human resources capacity. Under
the new regulations to encourage this, Indonesia has gone beyondThailand,
Malaysia and Singapore in delivering tax deductions.
Indonesia is one step ahead due to “super deductible tax”; it also provides
import duty exemption and value added tax (VAT) for the equipment and
machinery that used for training purposes.
Indonesia and China Economic Corridor
Investment Coordinating Board (BKPM) Chairman Thomas Lembong
served as speaker in the thematic forum dubbed as ‘Economic and Trade
Cooperation Zone Promotion’ that was also part of agenda in the 2nd
Belt & Road Forum for International Cooperation (BRFIC) in Beijing, on
April 25th-27th 2019.
Thomas Lembong revealed facets of the development and contribution
of ASEAN for the global economy, as well as the partnership between
Indonesia and China which focuses on three main regions: North
Sumatra, North Kalimantan and North Sulawesi, which is also known
as the ‘Economy Corridor’. Along the way,‘Economy Corridor’ became
3+1 and included Bali.
G20 world leaders wrapped up their meeting two days ago. President @
jokowi gathered with his G20 fellow leaders in Osaka, Japan, who jointly
reaffirmed their support for the necessary economic reforms.
Pertamina and Aramco US$2 Billion JV
During the 2-day event, President Jokowi had a meeting with the Crown
Prince of Saudi Arabia, Mohammad bin Salman (MBS). In the course of the
meeting, the two leaders talked about the ongoing economic partnership
between Indonesia’s Pertamina and Saudi’s Aramco. Pertamina and
Aramco have been working on a joint venture contract to develop the
upgrade on Cilacap Refinery worth over $2 billion.
In the past five years, Saudi Arabia has recorded an impressive $43
million investment in Indonesia. Indonesia and Saudi Arabia have a great
long-standing economic relations. In the meeting, President Jokowi stated
that Indonesia will strongly support Saudi’s economic revolution towards
achieving Saudi’s Vision 2030.
Elections Finally Behind the President
Recently, the Constitutional Court made a ruling over a challenge on the
presidential election result filed by losing pair Prabowo Subianto-Sandiaga
Uno.The Constitutional Court has decided that it stood with the General
Elections Commission (KPU) result.This means another term for the
incumbent President Jokowi.This also means lifting up political uncertainty
that has weighed on the economy. In his first term, Jokowi focused on
improving infrastructure and cutting red tape to ease doing business.
Infrastructure is still in his main agenda for the second term, particularly
on urban and digital projects to boost economic growth. Furthermore,
President Jokowi is paying intensive attention to education and training to
1 0 Opportunity Indonesia 2019
ready Indonesia for Industry 4.0. Focus will also be placed on productivity
improvements to increase Indonesia’s competitiveness among other
emerging markets.
Food Industry
Rendang,‘kampung’ fried rice, steamed fish cake with peanut sauce or
‘siomay’, these are just a few of many Indonesian signature dishes that have
been widely known all over the world.With 260 million mouths to feed,
Indonesia’s food industry has grown by leaps and bounds. It contributed over
40% to the national GDP in the creative economy sector. Last year, food
industries recorded an impressive investment of US$3.5 billion.With the
exponential growth in the country’s middle-class populace and a growing
number of food startups, investments in food industries are most likely to
double going forward.
‘Steel City’ Open for Investments
Last March, BKPM held a Cilegon Business Council inTangerang with BKPM
Chairman and Indonesian Minister of Industry as the key panelists. CIlegon,
known as the “steel city” as it is the home of Indonesia’s largest steel
company, PT Krakatau Steel, used the event to invite even more investors
to establish factories in the city. In this event, Minister of Industry stated
that his ministry has signed a corporation agreement with 14 associations in
petrochemical industries with aims to establish a vocational school to train
workers as well as an R&D in petrochemical industries in Cilegon. Cilegon
received a huge FDI last year totaling at 760 M USD.The largest contribution
in the investment came from chemical and pharmaceutical industries. Last
year, Lotte Chemical kicked off the construction of its new ethylene project
in Cilegon with 52,5T IDR investment and was expected to add 1,500 jobs
in the city.
The President has the country’s media industry backing him up in developing
a digital economy. He was awarded the Press Fressdom Medal by Indonesia’s
Press Council on National Press Day in Feb 2019. (Photo: Antara Foto /
Zabur Kariri/hp)
Young Talents of Yogyakarta
President Jokowi spent Eid holidays with his family in the Special Region
ofYogyakarta. He visited Beringharjo market in the city, famous for selling
Yogyakarta’s signature merchandises such as batik, Javanese herbs, etc.
Yogyakarta is known for its craft-based industries with a pool of investment
potentials in tourism, vocational education, and creative industries
particularly in apps and game development. France’s game developer,
Gameloft, choseYogyakarta as one of its bases in Asia as they saw great
opportunities in the region with its many young talents and conducive
investment climate.Yogyakarta is projected to be the ‘SiliconValley’ of
Indonesia with 17 animation studios, tens of game development studios
and over 25 vocational schools. Its rapid growth in creative industries
contributed 7.6% to the national GDP.