Everyone needs a boost (Aug 20-27)
Indonesia prepares booster shot roll-out
Hello Coconauts,
Have you had your two doses of the COVID-19 vaccine yet? Great. Because now you may want to consider getting the third.
Indonesia is gearing up for a booster shot roll-out amid its ongoing mass vaccination program. There will be a crucial difference in the distribution of the booster shot where money is concerned, and already we’ve had quite a scandal involving government officials allegedly jumping the queue.
All in all, par for the course in Indonesia’s COVID-19 handling. Read on for more on that topic, and more on business and the economy, in this free edition of Indonesia Intelligencer.
Stay safe, stay informed, and we’ll see you next week!
Business and the economy
OJK’s new rules
The Financial Services Authority (OJK) this week published new rules on investment and banking, which may both boost and hamper Indonesia’s digital economy growth.
The authority’s new regulation on commercial banking streamlines licensing procedures for establishing new banks, including digital banks. OJK requires a minimum capital IDR10 trillion (US$693 million) for establishing an entirely new digital bank and IDR1 trillion (US$69.3 million) for establishing a new digital bank as part of a banking group.
OJK also published new rules for venture capital firms, including imposing a IDR50 billion (US$3.4 million) minimum capital requirement. This has triggered concerns that investors may hold back from putting money into the country’s burgeoning digital economy.
However, venture capital firms unable to meet the requirement may merge with other firms to avoid having their permits revoked by OJK.
Biggest slice of ASEAN pie
The Indonesian government has set a target that the country's digital economic growth may account for around 40 per cent of the digital economy market in ASEAN by 2025.
In 2021, it is estimated that the value of e-commerce transactions will reach IDR354.3 trillion (US$24.6 billion), an increase of 33.11 per cent compared to 2020, which stood at IDR266.2 trillion. The transaction volume is likely to reach 1.35 billion, a year-on-year surge of 38.17 percent.
The value of e-commerce trade in ASEAN is expected to hit US$200 billion by 2025.
Indika slowly ditching coal
Integrated energy company PT Indika Energy says it’s boosting its renewable energy operations, aiming to reach a 1:1 ratio between energy from coal and non-coal sources by 2025.
By the end of 2020, Indika sourced 75 percent of its energy production from coal, citing fluctuating commodity prices as detrimental to the company’s green energy drive.
Blibli buys into IPO hype
Blibli, an e-commerce platform backed by tobacco conglomerate Djarum Group, has reportedly picked advisers for a potential initial public offering in Jakarta as early as next year. The company is said to be working with Credit Suisse Group AG and Morgan Stanley to explore a possible first-time share sale.
Blibli’s rival Bukalapak this month raised US$1.5 billion in the country’s biggest-ever IPO. Other tech startup giants expected to enter the local bourse this year include GoTo — a merged entity between superapp Gojek and online marketplace Tokopedia — and travel app Traveloka.
Subway coming our way
American fast food chain Subway announced that it is returning to Indonesia before the end of this year, though some in the country couldn’t help but meet the news with skepticism due to a very elaborate and well-crafted prank last year.
Subway has signed an agreement with the food and beverage subsidiary of lifestyle retailer Mitra Adiperkasa, and is expected to open its stores in the Greater Jakarta Area to begin with.
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The sudden end of a convenient partnership between investment platform Stockbit and Indonesian conglomerate Sinar Mas Group earlier this month has left users inconvenienced. But there’s a larger factor at play here, and it starts with retail investors.
From the Widjaja to Hartono dynasties, wealthy scions are giving Indonesia a tech boost (South China Morning Post)
Michael is also part of a group of wealthy Indonesian scions that have in the past decade dabbled in the country’s vibrant tech sector by investing in home-grown giants and start-ups, be it in the form of money, resources, know-how, or access.
Across the archipelago
Give us a boost
The government is aiming to meet its target of giving two doses of the COVID-19 vaccine to some 180 million people by early 2022, after which it will immediately roll out booster shots to the general public.
Indonesians will have a variety of vaccines to choose from, and a booster shot is expected to cost between US$7 to US$8 each. Unlike the COVID-19 mass vaccination program, booster shots won’t be fully subsidized by the government, though a subsidy for low income citizens is being planned.
Current regulations mandate that only health workers are eligible for the booster shot, so a political scandal is afoot when top officials were overheard telling President Joko Widodo that they have or are already planning on getting theirs.
Out of nearly 1.5 million health workers in the country, around 450,000 have received their booster shots.
The more vax the merrier
Indonesia’s Food and Drugs Monitoring Agency (BPOM) has issued an emergency use authorization (EUA) for Russia’s Sputnik-V vaccine, which is joining vaccines from pharmaceutical firms Sinopharm, Cansino, and Anhui Zhifei Longcom available in the Gotong Royong private vaccination scheme.
Meanwhile, the Health Ministry says it is expecting a donation of the single-dose Johnson & Johnson vaccine, which may arrive next month. BPOM is in the process of reviewing the jab for an EUA, and it’s not clear if it will be rolled out as part of the Gotong Royong scheme or the government’s mass vaccination program.
Leveling down
With COVID-19 cases plateauing, the government downgraded the Enforcement of Restrictions on Public Activities (PPKM) level in Jakarta and most of Java from 4 — the highest — to 3, meaning even more concessions on activities in the commercial, retail, education, and food and beverage sectors.
The provinces of Bali and Yogyakarta are still in level 4. The protocol is set for weekly review and adjustment on the islands of Java and Bali, and bi-weekly outside of the two islands. In Java and Bali, the current phase ends on Aug. 30.
The integrated health and mobility tracking app PeduliLindungi, which can hold users’ vaccination data and COVID-19 testing history, is increasingly being used to filter out people who don’t meet requirements to conduct public activities, such as traveling domestically.
This is how corruption thrives
Former Social Affairs Minister Juliari Batubara has been sentenced to 12 years in prison for embezzling funds from the government’s COVID-19 relief program. The sentence was heavily criticized as being too lenient as those who steal from disaster aid can get the death penalty under Indonesian law.
The former cabinet minister was accused of skimming IDR10,000 (US$0.69) from each COVID-19 aid package, which contained basic foods and staple goods. Juliari personally received IDR32.48 billion (US$2.25 million) in the scheme and had spent some IDR15 billion (US$1.05 million) of the money.
Juliari was the fourth cabinet minister under President Jokowi’s administration to be arrested for graft.
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Indonesia can’t keep up with its COVID-19 cases (Foreign Policy)
Although Indonesia’s new daily cases have dropped significantly in recent weeks, the delta variant is still spreading beyond Java, the most populous island, to remote parts of the archipelago with limited health care infrastructure.
Mural controversies expose the poor health of Indonesian democracy (Indonesia at Melbourne)
Obviously, twisting the mural cases into violations of local bylaws is a convenient excuse to justify unlawful police actions after the fact, especially when the murals seem to have only become a problem after they went viral on social media.
Isabella was left perplexed when her appointment for a free dose of the Chinese-made Sinovac vaccine was suddenly cancelled last week. The Argentine national, who has been living in Indonesia for 15 years, was told there was now a charge for foreigners looking to get vaccinated.
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