Day: November 23, 2022

Vice President Ma’ruf Amin has said that the government has taken a number of strategic steps to deal with the recent wave of employment terminations (PHK) in Indonesia, including those carried out by start-up companies.

“Several industries, including start-up companies, have laid off their employees because of the recession. The government has prepared various anticipatory programs,” Amin informed in Pontianak, West Kalimantan, on Wednesday.

Recently, a number of start-up companies in Indonesia, including Shopee, Grab, Gojek Tokopedia (GoTo), and Ruangguru, laid off employees.

GoTo confirmed it will let go of 1,300 employees or 12 percent of its total employees due to the macroeconomic slowdown. Meanwhile, educational startup Ruangguru laid off hundreds of employees due to the impact of the global economic slowdown.

“The government plans to create a labor-intensive program to accommodate the laid-off workforce. The big programs will be divided into small areas to help the people. For example, the laid-off workforce can participate in making bricks or roof tiles in the community, also including building roads and buildings as well,” Amin said.

The labor-intensive programs are expected to accommodate workers, although not in the digital technology sector, he added.

“Another step is to conduct vocational skills education that leads to entrepreneurship,” he disclosed.

Moreover, the government has also prepared community land clearing through social forestry to help people gain access to land.

“To help those who do not have a job. Besides, the government is pursuing investments, as has been done in various places, such as in special economic zones; we will bring those investors who can absorb a large workforce,” he informed.

According to Amin, quite a number of efforts are being made by the government to tackle unemployment.

“Besides, of course, to maintain daily life, (other measures have been taken) namely the provision of social assistance and community economic empowerment, which is annually budgeted by the government. That is part of tackling various workers who have been laid off or who do not have jobs,” he said.

Meanwhile, vice presidential spokesperson Masduki Baidlowi said that lay-offs in the digital industry, including start-ups, even at the unicorn and decacorn levels, are the result of business dynamics.

“That is not stopping digital transformation in Indonesia. We must remain optimistic. Unicorns and decacorns are currently building a runway, with various promos and subsidies for consumers and from discounts to free shipping; the aim is to enlarge the market base,” he explained.

Baidlowi said that the process of burning their large capital has led to the companies living off negative cash flows or depending on investor capital.

“The influence of the global economy forces companies to make efficiencies and also to maintain their runways. Lay-off is one of the alternatives. Of course, not all unicorns and decacorns do the same strategy, some grow positively, some are even ready to go public. It means that our digital transformation is still on track,” he added.

Apart from GoTo and Ruangguru, Shopee also announced its decision to lay off employees in Indonesia in mid-September, however, it did not disclose the number of job terminations.

Other technology start-ups that announced lay-offs in Indonesia include Koinworks, which shed 8 percent or 70 of its employees, Binar Academy, which laid off 20 percent of its employees, Xendit (Indonesian-Philippine company) 5 percent of its employees, Zenius 20 percent or 200 employees, LinkAja 33 percent or 200 employees, and SiCepat 0.6 percent or 366 employees.

Source: Antara News

One of the revisions to the Oil and Gas Law aims to boost national investment through improvements in fiscal terms and ease of doing business, among others, Energy and Mineral Resources Minister Arifin Tasrif has said.

“(It is hoping to boost investment) By making improvements to the fiscal terminal, assumption and disposal, ease of doing business, and contract certainty,” he informed during the “2022 International Convention III of the Upstream Oil and Gas Industry” in Nusa Dua, Bali, on Wednesday.

The government is making breakthroughs in the form of contract flexibility, fiscal and non-fiscal incentives, online submission permits, and regulatory adjustments for unconventional investment—all in order to encourage more upstream investment in the country, he noted.

The relaxations have been provided considering that the upstream oil and gas industry is currently troubled, especially in terms of exploration costs, production, and increased access to resources, he informed. The oil and gas industry is also facing critical challenges due to the need for a clean energy transition and carbon reduction.

These developments have forced the financial sector to stop providing financing for new oil and gas projects and direct funds toward renewable energy development, which has resulted in an investment deficit, the minister explained.

In response, the business sector has diversified its operations by investing in non-core sectors, including the development of renewable energy, electricity, and batteries, despite the continued growth in demand for oil and gas, especially in developing countries such as India and Asian and African countries, due to significant urbanization and industrialization.

The government has set its oil production target for 2030 at one million barrels per day and gas production target at 12 billion standard cubic feet per day to meet domestic needs.

Indonesia has large upstream oil and gas potential with 68 potential unexplored basins and proven oil reserves of 2.4 billion bbl (blue barrels) and proven gas reserves estimated at 43 trillion cubic feet.

Meanwhile, the House of Representatives (DPR) has confirmed that discussions on the revision of the Oil and Gas Law will be completed and the revised law will be finalized in 2023.

Chairman of Commission VII of the DPR, Sugeng Suparwoto, confirmed that the Oil and Gas Draft Law will be completed in 2023 as the legislature has already prepared an academic text.

“Regarding the specificity, thus the need for Oil and Gas Law to be immediately up,” Suparwoto said.

Head of the special task force for upstream oil and gas business activities (SKK Migas), Dwi Soetjipto, said that the Oil and Gas Law would provide legal certainty to investors.

“Of course, you need (a legal basis). So, the (foundation) is in the Oil and Gas Law. What’s expected later if there is a (foundation) is that investors will get clearer (picture),” he added.

Source: Antara News

Chairman of the board of commissioners of the Financial Services Authority (OJK), Mahendra Siregar, has asked players in the financial services sector, including banking, to be proactive in dealing with the current global crisis.

“Proactive and collaborative leadership is needed from CEOs and leaders of banks and financial services companies,” he remarked at the “Top 100 CEOs and the Next Leader Forum 2022” in Jakarta on Wednesday.

Siregar said that players in the financial services sector must also participate in formulating and implementing policy strategies issued by the OJK as part of their company’s business strategy.

This is because the key to the effectiveness of the policies in the financial services sector, which have been set by the OJK for dealing with crisis situations, is the full support of stakeholders, especially those in the financial services sector.

He assured that the OJK will always be at the forefront in tackling crises, including through coordination with the Ministry of Finance, Bank Indonesia (BI), and the Deposit Insurance Corporation (LPS) at the Financial System Stability Committee (KSSK) forum.

To face the challenges, complete, precise, and measurable ammunition must be prepared, including an effective policy framework and pre-emptive policy tools, he said.

This step can be carried out through the implementation of assessments for financial service institutions and other industries or sectors.

Therefore, Siregar emphasized that CEOs and bank leaders must be proactive in implementing OJK policies at their companies. In addition, CEOs must demonstrate an effective leadership spirit by continuously prioritizing the principles of integrity, professionalism, and transparency, he added.

This aspect is needed considering that the foundation of financial sector services is built on the trust and confidence of investors.

Thus, as captains determining and navigating the direction of the ship, CEOs and bank leaders have a very important role in maintaining the continuity of a company’s business.

“In facing the dimensional crisis at the global level, effective and solution (-oriented) leadership is something that leaders cannot negotiate,” Siregar said.

Source: Antara News