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<strong>Jakarta.</strong> Indonesia posted a wider than expected trade deficit in December, bringing the gap for 2018 to the largest ever, the Central Statistics Agency, or BPS, said on Tuesday.
December's trade deficit was $1.10 billion, in a third consecutive month where the gap was wider than market expectations. A Reuters poll had expected a deficit of $930 million.
Southeast Asia's largest economy had a deficit of $8.57 billion in 2018, the widest ever, a stark contrast to its $11.84 billion surplus in 2017, BPS chief Suhariyanto said.
Last year was challenging because exports had slowed at a time when imports surged due to a recovering domestic economy, said Josua Pardede, an economist at Bank Permata in Jakarta.
This year would probably be equally challenging, he said.
"Global economic growth is stagnating. Growth in our major trading partners such as China, the United States, Japan and Europe is slowing. If we can't find new destinations for our products, export growth could slow further," Josua said, noting that falling oil prices could cool down imports.
Economists also warned that the trade data could mean Indonesia's current-account deficit in the final quarter of 2018 was also wider than expected.
Bank Indonesia Governor Perry Warjiyo previously said the current-account gap in the fourth quarter was expected at more than 3 percent of gross domestic product, though the full-year gap was seen at about 3 percent.
The authorities issued a slew of measures to control imports last year, including mandating wider use of biodiesel, raising import tax and delaying big, import-heavy infrastructure projects.
The central bank also raised interest rates six times by a total of 175 basis points last year to try to bring the current-account gap down, and Perry said the deficit in 2019 was expected at 2.5 percent.
Fakhrul Fulvian, Trimegah Sekuritas economist, said December trade data proved that Indonesia may need to slow its GDP expansion further to "bring back the balance" and improve the current-account deficit.
In December, exports dropped 4.62 percent to $14.18 billion on a yearly basis, a second month of contraction, compared with the poll estimate of 1.81 percent increase, largely because of a slump in shipments of mining products.
Exports to China, Indonesia's largest trading partner, also fell in December mostly because of a decline in coal and steel sales.
Meanwhile, December imports were worth $15.28 billion, 1.16 percent up from a year ago, but slower than the forecast of 6.6 percent.
<strong>Jakarta.</strong> The Ministry of Finance said on Monday that it will impose new rules requiring e-commerce sellers to share data with the authorities, while also stressing that they must pay taxes.
Surging smartphone use and a rising middle-class income in Indonesia, home to 260 million people, has made its e-commerce industry a battleground for foreign investors.
Global consultancy McKinsey projects spending in the Indonesian e-commerce market to rise to as much as $65 billion by 2022, from $8 billion last year, similar to the growth trajectory experienced in China between 2010 and 2015, and the government is trying to squeeze more from a market that traditional retailers have alleged avoids taxes.
From April, all operators of online marketplaces will have to detail each seller's turnover and report this to the authorities, the ministry's tax spokesman Hestu Yoga Saksama said.
The rules would apply to all online marketplace operators in Southeast Asia's largest economy, including Lazada and Tokopedia, which are both backed by Chinese e-commerce giant Alibaba, and Bukalapak, which counts China's Ant Financial among its investors.
The Directorate General of Taxes said an online seller that makes at least Rp 4.8 billion ($340,000) in turnover must charge value-added tax to customers and pay this to the authorities.
A seller must also pay income tax of 0.5 percent of turnover if it is a small or medium business, or a 25 percent corporate tax of profit if it is big enterprise, bringing the sector in line with requirements for conventional retailers.
There were no new taxes being applied, but the rules were put in place to clarify what taxes each player in a marketplace is obliged to pay and to "create an equal treatment with conventional businesses," the tax office said.
The Indonesian E-Commerce Association (idEA) criticized the new rules, saying online sellers would instead choose to sell their products through social media, CNBC Indonesia reported.
Tokopedia and Bukalapak both said they are still studying the possible impacts caused by the rules.
<strong>Jakarta. </strong>Urban developer Lippo Cikarang announced on Saturday that it has handed over 408 apartment units in Pasadena Suites, the third tower at Meikarta CBD Orange County in West Java.
The company said the apartment units on 36 levels of the tower that were handed over reflects the company's commitment to its customers.
Lippo Cikarang has so far handed over 863 apartment units in Irvine Suites and Westwood Suites located in the Meikarta CBD since Sept. 1, 2018.
"The handover of Pasadena Suites reflects the commitment and responsibility of the company to customers to deliver a quick development and on schedule," Lippo Cikarang president director Simon Subiyanto said in a statement.
Pasadena Suites is the newest of six towers already under development in Meikarta CBD. There are also Burbank Suites, Glendale Park and Newport Park.
[caption id="attachment_780258" align="aligncenter" width="1280"]<img class="wp-image-780258 size-full" src="https://img.beritasatu.com/cache/jakartaglobe/909x605-0/2019/01/Meikarta-CBD-2.jpeg" alt="Customers speaking to sales representatives of Meikarta after the Pasadena Suites handover ceremony on Saturday. (Photo courtesy of Lippo Cikarang)" width="1280" height="853" /> Customers speaking to sales representatives of Meikarta after the Pasadena Suites handover ceremony on Saturday. (Photo courtesy of Lippo Cikarang)[/caption]
Burbank Tower was topped off in December 2017, while Glendale Park and Newport Park will be topped off at the end of this month.
Several foreign investors, including the Mitsubishi Corporation and Sanko Soflan of Japan, have partnered with Lippo Cikarang on the project, which is valued at more than Rp 278 trillion ($19.7 billion). The residential development is supported by various facilities, including an office center, campus, five-star hotel, Siloam Hospital, international convention center, retail center and entertainment district.
Meikarta will be serviced by massive infrastructure developments initiated by the government, including the Cawang-East Bekasi line of the Greater Jakarta Light Rail Transit system, which has reached 47 percent completion; the Jakarta-Bandung high-speed rail, which according to government estimates, will be completed by March 2021; and the new Jakarta-Cikampek elevated toll road, scheduled to be operational this year.
Meikarta CBD Orange County is a megaproject in the eastern corridor of Jakarta. Cikarang and Bekasi are home to several large manufacturers, such as Astra, Honda, Suzuki, Mitsubishi, Isuzu, Panasonic, Toshiba, Hankook and Samsung.
<em>The Jakarta Globe is affiliated with the Lippo Group.</em>
<strong>Jakarta.</strong> Agus Martowardojo, a former Bank Indonesia governor, was appointed as president commissioner of Tokopedia, the country's largest e-commerce company, last week.
Agus became part of a well-established tradition in Indonesia that involves retired government officials taking up positions in the private sector – a practice that is so widespread in Japan that it has its own term: <em>amakudari</em>, or descent from heaven.
It is common for former ministers or army generals to join conglomerates or establish their own new companies in the hope that their extensive networks and regulatory or political experience would be benefit their business ventures.
And this is exactly what Tokopedia seems to expect from the former central banker as the company enters a new growth phase to develop its e-commerce ecosystem into an infrastructure-as-a-service, a sophisticated type of cloud-computing service.
"Agus's presence will strengthen the company's performance as it enters its 10th year," William Tanuwijaya, chief executive and co-founder of Tokopedia, said in a statement on Thursday last week.
Few people can boast of a better track record than Agus. He led state-owned lender Bank Mandiri from 2005 until 2010, reducing bad loans at Indonesia's largest lender by assets in and guiding the financial institution to emerge from the 2008 global financial crisis relatively unscathed.
Agus next became minister of finance in the administration of then-President Susilo Bambang Yudhoyono, replacing Sri Mulyani Indrawati, who left for the World Bank. In his three years as finance minister, Agus continued his predecessor's reforms and no-nonsense approach to vested interests.
As a central banker, Agus embarked on Indonesia's longest series of interest cuts in decades, to reinvigorate growth in a country suffering from a global commodity slump. He was seen as "a figure who upholds transparency," a quality that saw him receive the award for <a href="https://jakartaglobe.id/business/agus-martowardojo-receives-east-pacific-central-bank-governor-of-the-year-award/" target="_blank" rel="noopener">Best Central Bank Governor in Asia Pacific</a> from GlobalMarkets newspaper in 2017.
"I am pleased to be able to join Tokopedia and contribute my experiences to support the company's aspirations in promoting the development of an inclusive economy," Agus said in the statement, adding that if the e-commerce company consistently empowers people through technology, the Indonesian economy would continue to grow to become even more powerful and balanced.
Tokopedia is regarded as one of nine unicorn startups that secured the biggest funding in Southeast Asia, along with compatriots Go-Jek, Bukalapak and Traveloka. Tokopedia raised $1 billion from several investors, including Japan's SoftBank, according to a Bloomberg report last year.
This saw the e-commerce company become one of the country's most valuable unicorns at $7 billion, according to a joint report by Google and Temasek on the Southeast Asian internet economy.
<h4>Examples of Amakudari in Indonesia</h4>
Post-retirement employment of senior bureaucrats in private and public companies, or nongovernmental organizations is not only a Japanese phenomenon. Many private and publicly listed companies in Indonesia do the same.
Go-Jek recruited former Bank Indonesia deputy governor Ronald Waas as a member of the ride-hailing firm's board of commissioners, along with Kusumaningtuti S. Soetiono, a former member of the Financial Services Authority (OJK).
Go-Jek's main competitor, Grab, meanwhile appointed former National Police chief, Badrodin Haiti, as president commissioner in Indonesia. He later resigned after his appointment as president commissioner of state-owned builder Waskita Karya.
Ignatius Untung, chairman of the Indonesian E-Commerce Association (idEA), explained that there are several reasons startup companies recruit experienced professionals or former officials.
The first is that companies wish to take advantage of their experience in managing large organizations.
The second reason is that the involvement of former high-profile officials can provide a company with the necessary clout, which makes it easier to deal with regulators and investors.
"As long as top management is still held by young people who understand the nature of the digital business, these should not be any conflict," Untung said, as quoted by Bisnis.com.
<em>Writing by Kathleen Adelaide Setiawan</em>
<strong>Jakarta</strong>. The government is preparing to launch regulations fixing the rates drivers and riders for ride-hailing services such as Grab and Go-Jek receive, two officials said this week, creating potential obstacles for the companies' expansion.
The regulations would meet drivers' demands for more oversight and higher rates but there are concerns that the rising costs to the companies could stifle their development as they battle to dominate the ride-hailing market in Southeast Asia's biggest economy.
Singapore-based Grab and homegrown Go-Jek have been locked in price wars in Indonesia, part of a wider fight to bring banking, e-commerce, ride-hailing, food-delivery and other services to every corner of Southeast Asia.
However, since 2018, motorcycle taxi drivers working for Grab and Go-Jek in Jakarta have held protest rallies calling for higher fares and better conditions.
The Ministry of Transportation plans to implement minimum and maximum tariffs for car and motorbike ride-hailing that will be "higher than Go-Jek and Grab's current rates" and impose limits on promotional price cuts, said Budi Setyadi, director general of land transportation at the ministry.
"This is for the safety and protection of drivers," he said.
Ahmad Yani, public transportation director at the ministry, said dependency on incentive-driven payments and low fixed rates per kilometer created a safety risk as it led to drivers overworking.
He said Grab paid Rp 1,200 (8 US cents) per kilometer with a focus on bonuses, while Go-Jek's rate was Rp 1,400 per kilometer.
The officials said fixed fare ranges for motorbikes were still being finalized but would be implemented from March.
Fixed rates for ride-hailing cars will start in June and be set at between Rp 3,500 and Rp 6,000 per kilometer on the islands of Java, Sumatra and Bali.
The drivers were pushing for increases to a standard fare of Rp 3,000 to Rp 4,000 per kilometer.
The firms told Reuters they welcomed the new rules, though they had not seen details of the motorbike regulations.
"Grab believes the government will develop the best regulatory framework and hopes that all stakeholders will be included in the process," said Tri Sukma Anreianno, the company's head of public affairs .
A Go-Jek spokesman said: "We support the government's spirit to encourage our driver partners ... and hope the regulation will have a positive impact on the sustainability of drivers' income ... and fair business competition."
However, both transportation officials said the companies are worried about the pending regulation since they have spent heavily on driver subsidies to slash their customer rates and build their businesses.
"Grab and Go-Jek have told me they would prefer there was no regulation," Ahmad said. "Due to the competition between them ... they are scared what could happen if they don't keep up with each other."
The Supreme Court blocked a previous attempt in 2017 by the transportation ministry to fix ride-hailing rates after drivers sued, saying the rules favored the taxi firms.
Both ministry officials said the new regulations met anti-competition standards and followed extensive discussions with driver syndicates.
Grab and Go-Jek drivers welcomed the prospect of standard fares.
"I have been working for Grab since 2015. Before, I could earn Rp 300,000 to Rp 400,000 per day. Now, I can only get Rp 150,000," said Hermansyah, a Grab motorcycle driver partner.
Another driver, who had worked for both companies, said neither provided much protection, leading drivers to bear operational costs. He asked not to be identified since he had a role in organizing protests.
The fixed rates will be a challenge to a business model that has depended on cheap passenger prices for growth and could undermine innovation.
"Cheap fares has been the firms' main way to attract customers," said Yayat Suprityatna, urban and transportation observer at Trisakti University in Jakarta.
<strong>Jakarta.</strong> Indonesia aims to nearly double its retail bond sales volume this year from 2018 levels, hoping to attract more millennial investors through online sales and reduce its dependence on foreign funds, an official at the Ministry of Finance said on Thursday.
The government plans to sell retail debt papers worth as much as Rp 80 trillion ($5.7 billion) in 10 planned issuances this year, Loto Srinaita Ginting, director of government securities at the ministry, told reporters during the first day of sale of savings bonds.
The government raised Rp 46 trillion from five retail bond issuances last year.
High foreign bond ownership has made Southeast Asia's largest economy vulnerable to sudden capital outflows, sometimes triggered by global events outside the country's control.
Sell-offs in Indonesian bond and equity markets last year due to rising US interest rates, the US-China trade war, and its own ballooning current-account deficit, sent the rupiah to its lowest since the 1998 Asian financial crisis.
Foreign investors currently hold around 37 percent of Indonesia's high-yielding sovereign bonds, while local individual investors own less than 5 percent, according to finance ministry data.
This year, the government will be flexible in its budget financing strategy, given changes in market predictions on the number of times the US Federal Reserve could possibly hike interest rates, Loto said.
The government could reduce the volume of dollar-denominated bond issues if market pressure increases again and might shift to more retail bond sales or multilateral loans, she said.
"So in this time of uncertainty, bond issuance strategy becomes more flexible," Loto said.
The government plans to sell bonds worth a total of Rp 825 trillion this year, including short-term treasury bills and buybacks, to fund an estimated fiscal deficit of 1.84 percent of gross domestic product.