Indonesia News Gazette

Minister of Public Works and Public Housing (PUPR) Basuki Hadimuljono has revealed that the ministry’s 2022 budget allocation ceiling has been set at Rp100.59 trillion for continuing infrastructure development.

The program policy and the theme of Government’s Working Plan (RKP) for 2022 is economic recovery and structural reform with seven national priorities, and one of the priorities is to proceed with infrastructure development, especially on basic service infrastructure for the community, he informed.

“The PUPR Ministry’s 2022 budget cap in accordance with the Joint Letter of the Finance Minister and the National Development Planning Agency No. S-634/ MK.02/2021 and No. 516/M.PPM/ D.8/KU.01.01/ 07/ 2021 dated July 23, 2021, accumulated at Rp100.59 trillion,” he affirmed at the working meeting with Commission V of the House of Representatives here on Thursday.

He then provided details of the proposed priority plan per organization’s unit. He informed that the proposed budget allocation for the Directorate General of Water Resources is Rp41.23 trillion.

The proposed budget allocation for the Directorate General of Road Construction is Rp39.70 trillion and the Directorate General of Building Construction is Rp12.51 trillion, he said.

Meanwhile, the proposed budget allocation for the Directorate General of House Provisions is Rp5 trillion and the Directorate General of Construction Developer is Rp600 billion, the minister added.

A budget of Rp197.5 billion has been proposed for the Directorate General of Public Works and Housing Infrastructure Financing, Rp212.8 billion for the Regional Infrastructure Development Agency, and Rp400 billion for the Human Resources Development Agency, he informed.

Earlier, Finance Minister’s Fiscal Policy Agency head Febrio Kacaribu had revealed that the utilization of infrastructure budgets in the state budget draft for 2022 had been set at Rp384.8 trillion.

According to Kacaribu, next year’s infrastructure budget policy is to accelerate the completion of infrastructure projects delayed by the pandemic and establish strategic output to support economic recovery.

The 2022 infrastructure budget policy is also expected to empower the synchronization and integration of funding between ministerial and non-ministerial agencies, local governments, state-owned enterprises, Public Service Agency, and private sectors.

Source: Antara News

Indonesia’s efforts to cut carbon emissions are dependent on five primary sectors — forestry, energy as well as transportation, waste, farming, and industry, Finance Minister Sri Mulyani Indrawati has said.

“We have formulated policies that are capable of attracting a lot of investment to build those sectors, so that those five sectors can achieve their CO2 reduction target,” Indrawati said during an online discussion here on Thursday.

Each of the five sectors has a different carbon emission reduction target, she noted.

The forestry sector is targeting to reduce emissions by up to 17 percent, while the energy and transportation sector is trying to cut emissions by up to 11 percent, she informed.

The waste, farming, and industry sectors are targeting to reduce carbon emissions by 0.38 percent, 0.32 percent, and 0.1 percent, respectively, she said.

“(Efforts to fulfill) Indonesia’s commitment to reach Net Zero Emission by 2060 have to be done consistently,” Indrawati asserted.

Hence, large funding is required in addition to hard work and policies to reduce carbon emissions, she said.

One of the sectors that will require very large funding is energy and transportation due to the energy transition from non-renewable energy to renewable energy, she explained.

“All of this requires a very large investment cost and cannot be done solely through the state budget. It even cannot be done by Indonesia alone,” Indrawati pointed out.

The finance minister revealed that in order to tackle climate change, Indonesia would need Rp3.461 trillion, or equivalent to US$266 billion, until 2030.

“This means that our ministries/institutions’ spending has only covered around 21 percent of the fund required to achieve the Paris commitment or Net Zero Emission by 2060,” she remarked.

Source: Antara News

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan joined the virtual launch of the Proud of Indonesian Products Movement (Gernas BBI) and asked Sulawesi’s local governments to encourage tourist attractions to use the PeduliLindungi application. “I asked the governor to encourage all tourist destinations to use PeduliLindungi, so people infected by the Delta variant of COVID-19 do not travel. If they do, they can transmit the virus to anyone,” Pandjaitan said while attending the virtual launch of Gernas BBI, named, “Sulawesi’s Rainbow,” on Thursday.

Class A hospitals should be available in every five super-priority tourist destinations, so visitors can travel comfortably, he added.

During the event, the minister stressed the handling of COVID-19 is currently integrated, and all relevant data will be stored in the PeduliLindungi application.

“People who travel will have to register on PeduliLindungi. Firstly, the goal is to detect whether a person is already vaccinated or not. Secondly, it is whether this person tests positive for COVID-19 or not. The application can then simultaneously trace people affected by COVID-19 and so on,” he explained. The use of masks and hand washing should be a culture, as both are key to controlling the transmission of COVID-19, Pandjaitan affirmed.

“To be honest, after reading many scientific literature and various expert opinions in the country and abroad, we have not figured out when COVID-19 will end,” he remarked.

The government is targeting 200 million Indonesians to be vaccinated by the end of 2021, although it is not easy and requires the cooperation of all parties, he noted, stating, “I asked Manado’s people and governor to help sort it out together.”

“We will also manage Gernas BBI, as it would mean nothing if the vaccination campaign and the PeduliLindungi app are not maintained. They are both very connected,” he said.

Source: Antara News

Bank loans grew 0.5 percent year on year (yoy) in July 2021 driven by consumption and MSME (micro, small, and medium enterprises) loans, the Financial Services Authority (OJK) has informed.

Banking credit in July was driven by consumption loans, which grew 2.40 percent (yoy) and MSME loans, which rose 1.93 percent (yoy), OJK deputy commissioner for public relations and logistics, Anto Prabowo, said in a statement issued in Jakarta on Thursday.

“Credit to export-oriented commodity sectors has begun to increase and is expected to continue to grow in the future in line with rising prices and demand in the United States and China,” Prabowo disclosed.

In the January-July period this year, banks disbursed loans amounting to Rp1,439 trillion, according to the OKJ. However, during the same period, there were repayments and payments of credit installments, including from several large debtors, which reached Rp1,332 trillion, it added.

In terms of funding, banking third party funds (DPK) still recorded double-digit growth of 10.43 percent (yoy), Prabowo said. In terms of interest rates, the transmission of Bank Indonesia’s policy of lowering interest rates has been continued by lowering lending rates to a fairly competitive level, he added.

Meanwhile, the banking industry’s liquidity is still considered by OJK to be at an adequate level, he informed.

“The ratio of liquid assets/non-core deposits and liquid assets/DPK as of July 2021 was monitored at the level of 149.32 percent and 32.51 percent, respectively, above the threshold of 50 percent and 10 percent, respectively,” he said.

In terms of financing quality, OJK recorded a gross non-performing loan (NPL) ratio in July 2021 of 3.35 percent, and a net NPL ratio of 1.09 percent, he revealed.

“OJK continuously conducts assessments of the financial services sector and the economy to maintain the momentum of accelerating national economic recovery and continue to strengthen synergies with stakeholders in order to maintain financial system stability,” he said. Meanwhile, during an online discussion on Thursday, senior deputy governor of Bank Indonesia (BI), Destry Damayanti, drew attention to at least four strategies that can drive banking credit growth in 2021.

“We earlier estimated credit growth to lie between six to eight percent this year, but we lowered it down to four to six percent. However, the application of four strategies can accelerate growth,” Damayanti said.

The senior deputy governor had noted that the first strategy entails sustained improvement in the global economy that can lift global commodity prices, so that Indonesia, as a commodity-based country, will also be able to enjoy rising prices and boost credit.

Under the second strategy, a relatively high capital capacity, with a secured level of risk, including the resilience of bank liquidity, can encourage banks to continue to channel credit, according to Damayanti.

The third strategy involves expediting corporatization and economic and finance digitalization for supporting economic recovery, especially for MSMEs, the pillars of the country’s economy, she said.

The fourth strategy entails an effective cross-sectoral policy mix, she added.

With that, the BI, Financial Services Authority (OJK), Finance Ministry, and Deposit Insurance Agency (LPS) can continue to increase synergy and coordination in the national economic recovery agenda as well as boost banking intermediation, she remarked.

Source: Antara News

As many as 1.5 billion workers will be affected by climate change, based on a study by the United Nations Framework Convention on Climate Change (UNFCCC), Minister of Finance Sri Mulyani Indrawati has said.

“Therefore, the world needs to make a transition towards a sustainable economy,” she remarked during an online discussion originating from Jakarta on Thursday.

However, every country cannot face climate change alone, so collaboration is needed, she stressed.

One such global collaboration to fight climate change has taken the form of the Sustainable Development Goals (SDGs), under which all countries have committed to contributing to reducing carbon emissions, she pointed out.

In addition, the world is also collaborating through the signing of the Paris Agreement on net-zero emissions, she added.

“Countries jointly convey their respective side’s commitments to reduce carbon emissions and this is called Nationally Determined Contributions (NDC),” she explained.

According to the minister, in the NDC each country has a different starting level and a different CO2 contribution.

As a result, the responsibility for reducing carbon emissions is different for different countries, she said.

Under the Paris Agreement, Indonesia has committed to reducing CO2 by 29 percent through its own efforts and 41 percent with international assistance, especially from countries that have better access to technology and finance, she pointed out.

Indonesia will need an investment of Rp3,779 trillion, instead of Rp3,461 trillion projected earlier, to address climate change and reduce carbon dioxide emissions by 2030, the Finance Minister had said earlier.

“It is an extraordinary high number and that’s only for needs in Indonesia,” she said during an online discussion.

Thus, Indonesia will need an investment of US$365 billion, with the government’s contribution pegged at 26 percent, she noted.

“This is an extraordinary number. But, if we want to reduce carbon dioxide even higher by up to 41 percent, then the investment requirement will reach US$479 billion,” she remarked.

Tackling climate change requires policies and frameworks involving collaboration between the government, the private sector, and the global community to meet the cost needs of the handling, according to the former managing director of the World Bank.

The Indonesian government is mulling several solutions and policies to tackle climate change, including policies on carbon pricing, carbon markets, and carbon taxes, Indrawati informed.

A budget tagging scheme has been introduced in the state budget (APBN) to encourage transparency and establish a climate change budget, she said.

The government has also diversified Indonesia’s financial instruments for climate change, she added. This has been an achievement for Indonesia and has brought it global attention, she remarked.

Source: Antara News

Finance Minister Sri Mulyani Indrawati has said that Indonesia will need Rp3,461 trillion, or equivalent to US$266 billion, by 2030 to tackle climate change.

“This means that mitigation spending in our ministries/agencies has only met 21 percent of the funding needs to achieve the Paris commitment or Net Zero Emission for 2060,” the minister said at an online discussion here on Thursday.

She argued that the State Budget (APBN) cannot meet climate change commitments, so its financing requires funds from the private sector, both domestic and global.

Therefore, the government will continue to formulate policies to attract more investment to develop important sectors that determine climate change, including forestry, energy and transportation, waste, agriculture, and industry, so that they can still meet the CO2 reduction target, Indrawati said.

The minister emphasized that reforms through the Omnibus Law, which have changed the investment climate in the country, would have many positive impacts for Indonesia and allow it to attract investment and technology for sustainable development. “Whether it’s a green project or various other projects, both for mitigation and adaptation, these steps are expected to be able to fulfill Indonesia’s commitments in a credible manner,” said Indrawati.

In addition, she explained that various fiscal instruments such as tax holidays, tax allowances, and Value Added Tax (VAT) facilities related to green projects are still being provided.

Meanwhile, in the State Revenue and Expenditure Budget (APBN), there was a budget tagging of 4.1 percent for climate change every year from 2016 to 2020, she said.

Several local governments have since 2019 also begun to allocate funds from Regional Budgets (APBD) to assist Indonesia’s commitment to addressing climate change, she added.

Source: Antara News

Reducing the financial burden on the unprivileged community and boosting people’s income have become a part of the Manpower Ministry’s strategy for alleviating poverty, Manpower Minister Ida Fauziyah has said.

The ministry’s poverty reduction efforts include the beginner self-employment (TKM) program, which is targeting 100 thousand people, and the advanced TKM program for 1,800 participants, she informed in a written statement received here on Thursday.

The efforts also include the Productive Migrant Villages Program, which is targeting to help 150 villages build productive independent businesses, she said. The program envisages the active role of the village government.

“It will not only help rural communities who want to work abroad, but can also provide information services on productive businesses through the role of the village government,” the minister stated while attending a virtual Plenary Meeting of the National Team for the Acceleration of Poverty Reduction, led by Vice President Ma’ruf Amin, on Wednesday.

Furthermore, she informed that currently, poverty tends to be higher in rural areas, however, the unemployment rate is higher in urban areas.

This shows that there are workers in rural areas whose incomes have not been able to meet their needs, she noted. “Moreover, it indicates that they work in the informal agricultural sector,” Fauziyah added.

She also revealed that the unemployment and poverty rates in urban areas are higher in the 15-19 age group at 23.75 percent in 2021.

Meanwhile, according to the level of education, the highest urban unemployment is experienced at the vocational high school level of 10.3 percent, she said.

“We need to anticipate the poverty level in urban areas affected by educated youth unemployment,” the minister added.

She informed that the ministry will strive to increase people’s income by improving their skills; providing labor market services for 2.2 million people; and building employment social welfare networks through vocational training targeting 119,729 participants.

Source: Antara News

The number of Indonesians who have been fully vaccinated against COVID-19 has reached 33,357,249, with 262,744 additional people receiving the second or final dose on Thursday, the Health Ministry has reported.

Based on data received from the ministry, the number of people who have received the first vaccine dose increased by 415,601 on Thursday, taking the total tally to 59,426,934.

The government is targeting to fully vaccinate 208,265,720 Indonesians to achieve herd immunity against the deadly virus.

So far, 1,517,893 health workers against the 1,468,764 health workers targeted by the vaccination program have received both vaccine doses.

Meanwhile, 502,719 health workers have taken the third or booster shot.

In the older adults category, of the 21,553,118 people targeted by the government, so far, 3,658,276 people have received both doses of the vaccine.

Of the 17,327,167 public service officers targeted by the government, 18,131,469 have been fully vaccinated.

Meanwhile, among the vulnerable people and the general public, of the 141,211,181 targeted recipients, 8,182,296 have received two doses of the COVID-19 vaccine.

In the 12–17 age group, 1,442,731 of the 26,705,490 targeted recipients have been fully vaccinated against COVID-19.

Data from the Ministry of Health has shown that Indonesia added 16,899 COVID-19 cases, 30,099 recoveries, and 889 deaths on Thursday (August 26, 2021).

Source: Antara News