2 million cases and counting (June 18-25)
A horrifying milestone
Hello Coconauts!
Welcome to another free edition of the Indonesia Intelligencer. Do enjoy perusing this fountain of knowledge on all things Indonesia, and please subscribe if you like what you see.
This week, we’re going to highlight Indonesia reaching the undesired milestone of 2 million COVID-19 cases, and all the grim records that were shattered in the past few days. As per usual, however, we’ll begin this edition of the newsletter with the latest updates on the business world and the economy.
Stay safe, stay informed, and we’ll see you next week!
Business and the economy
Can’t afford lockdown
Despite the alarming COVID-19 surge, the government has refused to enforce a full lockdown in Indonesia, instead sticking with its unwavering strategy to enforce partial restrictions under the Micro PPKM protocol. Crucially, under the protocol, businesses are still allowed to operate albeit on a limited scale.
President Joko Widodo justified Micro PPKM by saying that the government can’t afford to fund a full lockdown and that doing so would kill the country’s economy.
A government official said a lockdown would hinder Indonesia’s focus on boosting consumer spending and its aid for small businesses, which are necessary for economic recovery.
Are we recovering?
In short, yes. According to latest predictions, Indonesia is set to book a growth of 2 to 4 percent in Q2 2021, which would officially take the country out of its pandemic-triggered recession.
That projection is well short of the government’s target of 7 percent growth for the quarter, as the COVID-19 surge has considerably affected consumer spending and dashed the most optimistic projections for economic performance.
The World Trade Organization previously said Indonesia is on track for a 4.4 percent economic expansion in 2021 (see last week’s newsletter), though it downgraded the country’s worst-case outlook to 2.1-3.1 percent growth for the year.
Sus oil
The EU will not impose an import ban on Indonesian palm oil, a delegation from the Czech Republic said during a visit to Jakarta this week, and that the bloc will assist Indonesia’s push for sustainable palm oil.
Indonesia and the EU had been in loggerheads over the bloc’s plan to impose an import ban on Indonesian palm oil due to environmental concerns. The EU seems to be set on ending what Indonesia has called a “discriminatory” policy should the archipelago nation be committed to producing sustainable palm oil.
Powering up EV production
Indonesia’s Investments Minister Bahlil Lahadalia said Indonesia’s first EV cell production plant, a collaboration between the Indonesia Battery Corporation (IBC) and a consortium led by South Korea’s LG, is set for groundbreaking in July 2021. The plant is expected to begin producing EV batteries by late 2023.
The batteries produced at the plant will be fitted to EVs produced by South Korean auto manufacturer Hyundai. The plant, located in West Java, will cost US$1.2 billion and create 1,000 local jobs.
Indonesia is also expected to see an uptick in EV adoption while the country goes on its quest to become an EV cell production powerhouse in the coming years. The growth of the industry may save Indonesia up to US$2 billion in fossil fuel imports per year.
Garuda’s path still unclear
Debt-ridden flag carrier Garuda Indonesia suffered a net loss of US$2 billion in 2020, its CEO said in a parliamentary hearing this week, as the airline continues to explore options, including debt restructuring, to escape bankruptcy. The loss is its biggest since 2005.
The revelation comes on the heels of the Indonesia Stock Exchange’s decision to halt training shares in Garuda until further notice after the company defaulted on coupon payments on its US$500 million Islamic bond.
Amid the options being explored, it’s unlikely that Garuda will accept a government bailout, which would weigh heavily on the state budget amid the COVID-19 crisis.
O Canada
Indonesia is exploring a new export market in Canada, with the two countries opening negotiations over a Comprehensive Economic Partnership Agreement (ICA-CEPA) to spur bilateral trade and investment.
This would be Indonesia’s second CEPA with a country from the Americas, having ratified an agreement with Chile in 2019.
Finger lickin’ bad
KFC, Indonesia’s most popular fast food chain, announced that it recorded a loss of IDR377.18 billion (US$26.1 million) in 2020 due to dwindling demand and restrictions on public activities during the pandemic. In 2019, the colonel booked a profit of IDR241.54 billion (US$16.7 million).
Recommended read
But just as it signals a return to growth this quarter, a worsening Covid-19 outbreak could halt the rebound in consumer spending and investment. This time, more central bank easing or aggressive state spending could exacerbate fund outflows from Indonesia as the Fed prepares to consider an end to its own pandemic-era support.
Across the archipelago
2 million cases
Indonesia surpassed the 2 million cases mark on Monday. It took 330 days for Indonesia to reach 1 million cases, and just 147 days for the next million.
The second major wave battering the country does not look to be dissipating anytime soon, with the daily count record broken three times this week: 14,536 on June 21, 15,308 on June 23, and 20,574 on June 24.
The positive rate from testing has been alarmingly high. On June 24, the overall rate (including from rapid antigen tests) was 22.73 percent. The positive rate among PCR tests was 44.37 percent, meaning nearly one in two people who was tested using the gold standard method were infected.
The number of active cases shot up to 171,542 as of June 24. On June 17, there were 125,303 active cases in the country.
In a boost to the country’s mass vaccination program, Indonesia is set to begin receiving 50 million doses of the Pfizer vaccine in August. Indonesia has fully inoculated 4.6 percent of its population, and aims to cover 70 percent of the population by early 2022.
Rest well, vaccinated heroes
With hospitals overwhelmed with patients, especially throughout the island of Java, concerns continue to mount over whether the vaccine can provide adequate protection for doctors and health workers.
According to the Indonesia Medical Association (IDI), 61 doctors died from COVID-19 from February to May 2021, 10 of whom had received the two required Sinovac vaccine doses. The rest had only received one dose or were ineligible for jabs due to underlying health conditions.
In June, the association said at least 20 doctors have died — vaccination statuses so far unknown — as the country grapples with a post-Eid holiday surge and the emergence of the more transmissible Delta variant. Since the start of the pandemic, 376 doctors have died from COVID-19.
“Extremely high risk”
Hong Kong has indefinitely banned all passenger flights from Indonesia to prevent imported cases from a country it has categorized as “extremely high risk.” India, Nepal, Pakistan, and the Philippines make up the rest of the category.
The ban came after four passengers on board a Garuda flight from Jakarta to Hong Kong tested positive upon arrival on June 20. The passengers tested negative before departure in Indonesia.
Four years for Rizieq
Firebrand cleric Rizieq Shihab has been sentenced to four years in prison for causing public unrest by spreading misinformation related to his faked negative COVID-19 test result. This is Rizieq’s third conviction since returning to Indonesia in November 2020 after spending three years in Saudi Arabia escaping charges related to pornography back home.
Rizieq was previously sentenced to eight months in prison for flaunting health protocols by holding a massive wedding for his daughter, and fined IDR20 million (US$1,383) in lieu of five months in prison for holding a mass gathering in Puncak, West Java.
Recommended read
Alms for terror: Indonesian extremists finance jihad with charity (AFP)
Generous Indonesians donating their spare change to the poor and needy are unwittingly helping finance deadly terror attacks and jihadist training camps, in a scam that has netted big money for extremist groups.
Former radical Khairul Ghazali once spent his days visiting restaurants, convenience stores and supermarkets to drop off charity boxes, wearing an official-looking uniform to avoid suspicion.
Top Coconuts Jakarta stories this week
Indonesians angered over ‘unfair’ portrayal in K-drama ‘Racket Boys’
Indonesia exceeded 2 million cases today. Here are some worrying and promising numbers
Curtains drawn: Cinemas, tourist attractions close as Jakarta tightens Micro PPKM
Indonesia shortens Christmas break because that’s the sensible thing to do right now
Hong Kong bans all passenger flights from ‘extremely high risk’ Indonesia
Top Coconuts Bali stories this week
Queues at Bali’s Ngurah Rai Airport depict Indonesians’ thirst for travel
Bali’s best: Mandapa and The Legian chosen among Tripadvisor’s top hotels in Asia
People working from Bali (not via the gov’t initiative) are driving up COVID numbers
No fakes: Travelers must now present test results contained in QR code upon entering Bali