Motorcycle Stunts & Shifting Support | Indonesia Intelligencer (Aug 18-24)
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Business
Rupiah worst in Asia
Following Wednesday’s Eid holiday, the rupiah closed at IDR14,638 per US dollar, down 0.44% from Tuesday. The rupiah performed worse in during this period than any other Asian currencies, which all suffered from the ongoing US-China trade war.
Things worsened for the Indonesian currency this morning, opening at IDR14,652 to the US dollar.
Bonds, foreign bonds: The Indonesian government is seeing an opportunity to widen domestic ownership of sovereign bonds amid foreign reluctance to invest in emerging markets. The Finance Ministry says it’s seeking to bring down foreign-owned bonds from 38% to 20% in the next five years in order to shield its assets from external shocks.
More rupiah debt, more manageable: The government said that 60% of its IDR4,253 trillion debt is in rupiah, which should shield the debt from ballooning due to strengthening foreign currencies. Finance Minister Sri Mulyani said that the debts of previous administrations were predominantly in US dollars, making it more susceptible to external factors.
Palm oil push: The finance minister also said this week that Indonesia should be more aggressive in identifying new markets to export its palm oil, as opportunities in current markets are being hurt by negative campaigns against the commodity and the ongoing trade war. She specifically identified African and Latin American countries as new potential trade partners.
Solid cement: Indonesian cement producers PT Semen Indonesia recorded an 11.4% year-on-year growth for sales in July, offloading 2.5 million tons domestically. The company did see a 12.8% decrease in exports compared to July last year, but exports have been steadily increasing since January.
Borrowing in hard times: Online credit lender Akulaku says the weakening rupiah, has hardly affected their business, and in fact they have been seeing an increase in loan applications this year. The company says it has had 15 million credit loan applications since July 2016.
Go-Jek seeing green: Indonesian startup unicorn Go-Jek founder Nadiem Makarim says the ride-hailing company is close to achieving profitability in all of its business segments except for its flagship service, transportation. Go-Jek expects to be fully profitable within the next few years
Recommended reads
Indonesia is right to put stability before economic growth (Nikkei Asian Review): Despite predictable anxieties over the rupiah, Indonesia's fundamentals remain in good shape. Foreign exchange reserves are ample, while external debt and the current-account deficit are broadly comfortable. Banks are well capitalized, the public finances are in good health, and inflation is firmly within target.
How falling rupee has turned Indonesia, Turkey into tourist hotspots for Indians (The Times of India): India, like Indonesia, has seen its currency fall recently. This has led to a shift in vacationing preferences for Indians, as it now makes more economic sense for many to go on pocket-friendly holidays in countries with falling currencies as well.
Rapid development of fintech industry in Indonesia (Indonesia Investments):
So far this year, credit disbursement through P2P lending in Indonesia has soared 204.7 percent compared to the IDR 2.56 trillion (approx. USD $175 million) that was disbursed in full-year 2017.
Politics
Jokowi-Ma’ruf start race in pole position
The first major survey following the surprising announcements by both President Joko Widodo and Gerindra chairman Prabowo Subianto’s regarding their choice of running mates in the 2019 presidential election were released this week and the Indonesian Survey Circle (LSI) poll puts the head-to-head at 52.2% for President Jokowi and his running mate, Indonesian Ulema Council (MUI) leader Ma’ruf Amin, and 29.5% for Prabowo and his running mate, former Jakarta vice governor and businessman Sandiaga Uno, with 18.3% undecided.
As predicted, Jokowi’s support among Muslim voters seems to have been strengthened by his pick of the MUI leader, but LSI’s poll also indicated that the incumbent has lost a significant number of non-Muslim voters as well, with the difference in support between the two tickets far smaller in that and other minority voter categories.
Who’s courting FPI now: In another sign that the ruling coalition is seeking the conservative Islamic vote, officials from Jokowi’s PDI-P party said they were open to receiving an endorsement from hardline Islamic Defenders Front (FPI) leader Rizieq Shihab, (who is still a fugitive in Saudi Arabia), with Jokowi’s running mate Ma’ruf acting as the bridge between the president and the firebrand cleric.
Millennials & emak-emak: Meanwhile, Sandiaga Uno said this week that his campaign platform with Prabowo will focus on two main areas of the economy, employment and staple commodities. He also said they would attempt to attract a large swathe of untapped voters, including non-Muslims, by targeting millennials and housewives.
Booming on the high seas: Indonesia flexed its muscle over its maritime territory once again this week, sinking 124 illegal and mostly foreign fishing vessels, including 86 flagged Vietnamese, 20 Malaysian and 14 from the Philippines. It seems to be a ramp up of a successful anti-poaching campaign by Fisheries Minister Susi Pudjiastuti that has seen the country’s fish stocks rise but has also been a cause of ire with neighboring countries.
Recommended reads
A Secular Backlash Against Islamism Is Brewing in Indonesia (Ozy)
The shift in favor of secular politics comes after Widodo’s controversial use of economic nationalism as a rallying call against Islamism. Indonesia has nationalized oil and gas firms and taken majority ownership of a gold and copper mine previously run by American firm Freeport-McMoRan. Jokowi pulled out those credentials as recently as Aug. 10 during a public appearance. But the pushback against Islamists is also a sign, experts say, of a broad revulsion at the extreme forms of terror that some radical groups have adopted.
“Voters are certainly aware, and smarter than many people give them credit for,” says Charlotte Setijadi, visiting fellow at ISEAS-Yusof Ishak Institute in Singapore.
Widodo's VP choice signals Indonesia's rising religious intolerance (Asia Nikkei Review)
Amin will serve as a "very strong shield" against religious attacks from the opposition camp, but the mixing of religion and politics will grow stronger in Indonesia, said Peter Mumford, an analyst with Eurasia Group, a U.S. research company.
Given his age, Amin is unlikely to run in any presidential election after the 2019 race, but his role as future kingmaker is not to be underestimated.
Politics Trumps Human Rights in Indonesia (New Naratif): Between Jokowi and Ma’ruf Amin, and Prabowo Subianto and Sandiaga Uno, human rights is likely to be left by the wayside in the 2019 Indonesian presidential election.
What Maneuvering Around the 2019 Elections Says About Indonesian Democracy (Council on Foreign Relations)
But in picking the cleric, admittedly a move that could help Jokowi hold onto key blocks of religious and nationalist voters, Jokowi sets the stage for his own vice president to further inflame sentiments against minorities. Jokowi further suggests that his commitment to the liberal portion of liberal democracy—respect for the rule of law, equal protections, and the country’s secular foundations—is weak.
Other News and Notable Features
Good start for Asian Games: Despite concerns about preparedness (especially in co-host city Jakarta), the 2018 Asian Games got off to a smooth start, with rave reviews for the opening ceremony on Saturday, particularly President Joko Widodo’s motorcycle “stunt” (though even that was the subject of some manufactured political controversy). However, controversies over the air quality in Jakarta and a prostitution scandal involving Japanese basketball players have cast some clouds over the competition.
No respite for Lombok: A 6.9 earthquake hit the Lombok on Sunday, the latest in a series of strong tremors and aftershocks, including powerful quakes on July 29 and Aug 5. The latest quake is believed to have killed at least 13 people. Aid agencies and officials are still rushing to get relief to the hundreds of thousands left homeless by the multiple disasters.
Blasphemy verdict blasted: The Medan District Court on Tuesday found a 44-year-old woman named Meiliana guilty of blasphemy and sentenced her to 18 months in prison for allegedly complaining about the volume of her local mosque’s speaker. Netizens have rallied to denounce the verdict and the country’s controversial blasphemy law while several senior Islamic and government officials have also criticized the decision. Meiliana’s lawyers said they would appeal the verdict.
Kindergarten ‘jihadi’ parade: A cultural parade in Probolinggo, East Java, made national headlines after a video from the event showing kindergarten students marching down the street while wearing face veils and holding prop guns went viral. Despite public outcry, the local police were quick to rule out any possibility that the kids were being indoctrinated with radical and terrorist ideologies, instead choosing to investigate the person who originally uploaded the video for possible hate speech, while Education Minister Muhajir Effendy immediately absolved the school of any deliberate wrongdoing and instead gave them IDR25 million (US$1,700) in assistance funds. The kindergarten’s principal was relieved of her duties over the controversy, only to be transferred to a position at the local board of education.
Vaccines non-halal but allowed: After slowing down a nationwide measles-rubella immunization drive for weeks over concerns about the MR vaccine’s halal status, the Indonesian Ulema Council (MUI) released a fatwa this week declaring the vaccine was not halal but saying that it was permissible for Muslims to use it due to medical urgency.
Haze on the horizon: In what could be an early warning sign of a major re-intensification of the annual haze problem, schools in Pontianak, West Kalimantan, were forced to close this week due to heavy levels of air pollution caused by raging wildfires in the region. The National Disaster Mitigation Agency (BNPB) said that the number of hotspots in the area had decreased this week and that emergency forces had been deployed to fight the fires, likely the result of slash-and-burn land clearing, but only time will tell if the government has done enough to prevent a repeat of 2015’s haze disaster.
Recommended reads
Why more Chinese Indonesians are learning Mandarin, and nurturing their children’s sense of belonging to Chinese culture (South China Morning Post) Their culture was repressed for decades under Suharto’s anti-Chinese policy, but nowadays Chinese Indonesians are learning Mandarin and educating their children in the language. While most identify as Indonesian, China’s rise makes them proud
Crackdown looms as Indonesia exorcises gay ‘demons’ (The Australia)
Denny, a 39-year-old Indonesian gay man, says he underwent conversion therapy in 2015 after a cleric, called in to cleanse his apparently haunted flat, convinced him he could make him heterosexual and end the lifelong bullying he had suffered.
“I used to be very religious growing up, thinking religion would help me suppress my sexual orientation, so I agreed to the ruqyah (exorcism),” he said.
Covered in a burial shroud, he was told to lie still as the cleric doused him in water, recited prayers and tapped him on the chest and back for hours to expel the female jinn he claimed had possessed him.
“I never told anyone about it because it was such a weird and embarrassing experience for me,” he says. “And the weirdest thing is, I am still gay and my room was still haunted, so I decided to move.”
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