Efforts have been made to ensure the nation's capability to produce its own medical devices and equipment. To that end, the Indonesian government has included the medical device industry as one of its priority industries in the 2015–2035 National Industrial Development Master Plan. Under this commitment, it is hoped that Indonesia's reliance on imported medical devices and pharmaceutical products would decrease to 75% by 2025, and that this could make the country more prepared for a worst-case scenario of another health crisis in the future. Accordingly, Indonesia has seen an emergence in medical device production companies. According to data from the Indonesian Association of Medical and Laboratory Equipment Companies (Gakeslab), in 2018–2019, Indonesia only had 200 companies. In 2022, that number had grown to 800 industries. At the time of this writing, the number of medical device companies in Indonesia had grown to 1,043. The government is aware however that the country still needs to work together with, and require investments from, foreign investors. Therefore, to further boost the nation’s capability in garnering investment in the sector, the government introduced a new Health Bill, of which the House of Representatives approved on July 11 of this year. How The New Health Act Affects The Medical Devices Sector Through the Health Act, or Law No. 17/2023, the government conducted a consequential reform that may affect the nation’s medical device industry in numerous ways. First: the act eases the path for the licensing of medical devices. Article 36 of Chapter 15 of Law No. 36/2009 on Health provides protection for the public through the obligation of having a distribution permit in the procurement of every medical device. However, there are criticisms that the licensing arrangements for medical devices in Indonesia are too complicated, which hinders ease of doing business and investing. In response, the new Health Act regulates the intended public protection through the obligation of having business permits for those who will produce or distribute pharmaceutical medical devices – effectively omitting the requirement of a distribution permit. Against this background, it is hoped that the new regulation would make it easier to distribute medical devices and drugs as the process would be streamlined through the government’s existing Online Single Submission (OSS) system, as alluded to in sub-article 5 of article 346 of the new Health Act. Second: the bill makes it possible for foreign doctors and health workers to work in Indonesia as long as they meet the requirements. This new policy is regulated in article 246 all the way through to article 257 of the new Health Act. While the new policy remains unpopular among local health workers – and is currently under threat of a legal challenge – concerns about the limited quantity as well as quality of Indonesian health workers continues to be pressing issue, especially within the past several years following the issuance of a universal health coverage law in 2014. Indonesian President Joko Widodo himself echoed the concern, saying that nearly two million Indonesian citizens choose to get medical treatment abroad in early 2023. Another evidence of health worker scarcity is the latest data from the World Health Organization (WHO) which states that the ratio of the number of doctors and patients, including general practitioners and specialists, in Indonesia stands at 0.46 per 1,000 – the third lowest in ASEAN. By allowing foreign doctors to work in Indonesia, it is hoped that the country would be able to meet the demand for quality health care domestically. Moreover, the presence of foreign doctors in Indonesia could further broaden the Indonesian health industry to new medical technologies and knowledge. Third: the act also eases business access for foreign investor looking to establish hospitals in Indonesia. Considering the fact that many Indonesians choose to go to other countries to seek health treatment, Mr. Widodo’s eagerness to have internationally renowned hospital operating domestically is understandable. Over the past few years, only two notable international hospital have been opened in Indonesia, namely the Bali International Hospital, which was built in collaboration with the US-based Mayo Clinic, and the Tzu Chi Hospital, which stands under the auspices of the Buddhist Tzu Chi Foundation. The addition of new international hospitals could further open the door for more international-quality medical technologies to be present in Indonesia, further enriching the domestic health industry. Recommendation for Investors With the wider investment opportunities offered by the new Health Law, it would be prudent to pay attention as to what medical device products are needed in Indonesia. Import of Indonesia’s medical instruments in thousands US$ (Source: Trademap) No. HS Code Commodity 2015 2016 2017 2018 2019 2020 2021 2022 1. 9018 Instruments and appliances used in medical, surgical, dental or veterinary 330,955 439,996 536,557 569,575 626,538 702,703 642,806 719,790 (770,982) 2. 7017 Laboratory, hygienic or pharmaceutical glassware 7,073 7,851.5 8,786.7 10,928 11,226 9,487 10,665 12,476 3. 3005 Wadding, gauze, bandages and the like, e.g. 15,274 20,271 22,785 23,692 27,323 39,234 37,147 42,725 4. 9402 Medical, surgical, dental or veterinary furniture, e.g., tables, beds, chairs 30,459 43,809 48,158 42,780 51,082 57,352 35,101 36,663 Total 383,761 511,927.5 616,286 646,975 716,169 808,776 725,719 811,654 Indonesia’s imports of medical instruments in four categories have had a growing trend since 2015. Indonesia’s biggest source countries for HS 9018’s commodities in 2022 were China with US$177,415,003, followed by the United States with $104,098,000, and Germany with $87,579,000. As for Indonesian imports of HS Code 7017 in 2022, China also topped rank as Indonesia’s largest source with $3,398,000, followed by Vietnam with $1,467,000, and Germany with $1,429,000. For wadding, gauze, and bandages in 2022, China also remains the dominant player with $21,798,000, followed by Germany with $5,073,000, and the United States with $2,521,000. The rising demand for health services and the increasing priority for health among its citizens are the main contributors for the growing percentage of imports. Indonesia’s health sector has seen significant development in terms of per capita spending and priority for the health index. The World Health Organization (WHO) has recorded the archipelago’s consistent rise in per capita health spending for two decades, from 34 dollars in 2005 to 133 dollars in 2020. As for priority for the health index, Indonesia has also been posting a stable rise – from 4.2% in 2005 to 10.1% in 2020. Additionally, Business Monitor International (BMI), a subsidiary of US-based Fitch Solutions consultancy firm, projected that Indonesia's per capita healthcare spending would increase to $269 by 2027, with, the priority health index projected to see a similar upward trend. Amidst the rise in health per capita spending and health priorities – and considering the limitations of the Indonesia's medical device industry to meet domestic demand – Investors could greatly benefit from the entering market. From the data above, it is known that instruments and appliances used in medical, hygienic glassware, wadding, gauze, bandages, and the like, as well as medical, surgical, dental or veterinary furniture, remain dependent on imports. Thus, the production and distribution of these products might be an appropriate choice for investors to invest in. To discuss this issue and more, the German-Indonesian Chamber of Commerce and Industry (ÌÇÐÄ Indonesia/EKONID), will host a market exploration for German companies in the field of production technology and components for medical technology. To be held from February 19 to 22, 2024, the event is organized in cooperation with eclareon GmbH, an implementer of the German government’s energy export initiative, and the German Federal Ministry for Economic Affairs and Climate Action (BMWK), with the aim of introducing relevant decision-makers and potential business partners from both Germany and Indonesia in both a conference and B2B meeting sessions. For more information or to sign up for the business delegation, click here
This is reflected by the current administration’s continued support towards enhancing maritime economy. Since he first began his term in 2014, President Joko Widodo declared the maritime sector a priority pillar to the vision of Making Indonesia a “Global Maritime Fulcrum”, a force between the Indian and Pacific Oceans that is strong on maritime culture, resources, infrastructure, diplomacy and defence. One of the key programs in this vision is the establishment of “Sea Tolls”, which aims to improve maritime transport routes, particular in the eastern part of the country, by building new ports and modernizing and expanding existing ports. Since its inception, the expansion of the Sea Toll has shown continuous positive development. As of 2022, Indonesia has established 33 Sea Toll routes, and this number is expected to increase to 39 by the conclusion of 2023. Apart from PT Pelni, two state-owned enterprises, namely PT ASDP and PT Djakarta Lloyd, play integral roles in program management. Specifically, PT Pelni oversees 11 routes, PT ASDP manages 5 routes, PT Djakarta Lloyd is responsible for 4 routes, and 19 other routes are operated by private entities.12 For detailed information on route developments, the list can be accessed on the Indonesian government's website. (http://geraimaritime.kemendag.go.id/trayek). Year 2015 2016 2017 2018 2019 2020 2021 2022 No. Of Sea Toll Routes 3 6 13 18 20 26 32 33 Shipload realization of goods (TEUs) 99 4,259 5,339 4,671 3,593 8,858 12,872 N/A Source: Rizalty, 2022; PT Pelayaran Nasional Indonesia 2021; Data compiled by ÌÇÐÄ Indonesia According to the Ministry of Trade, the implementation of the sea toll in 2022 successfully narrowed the price gap for essential goods, resulting in an average decrease of 12.18%, notably benefiting regions such as Papua, Maluku, and East Nusa Tenggara. To further bolster the reduction of price disparities, the government is currently in the process of revising regulations that dictate the eligibility of goods for sea toll transport. Furthermore, the number of ports in Indonesia will continue to grow as the Ministry of Transportation, as mandated by the 2017 National Port Master Plan, has set 1,321 new port development location plans until 2023. Digitalization in the Maritime Sector Another accelerating factor to Indonesia’s maritime growth is the rapid digitalization of the sector. PT Pelabuhan Persero or Pelindo, which is the state-owned operator of Indonesia’s ports, have released and implemented a number of applications and systems to improve port service productivity. These include the Phinnisi, a Vessel Management System used to expedite vessel service activities; PTOS-M, which aids terminal operators in handling various cargo types; and Palapa Terminal Operating System (TOS), which handles operational activities at multipurpose and ro-ro container terminals. Also of note is Inaportnet, which functions as an integrated online operating system, and was launched as part of the Indonesia National Single Window system. The launch of Inaportnet succeeded in expediting the process of ships entering and leaving ports, as well as in hastening loading and unloading activities. From 2016 to the present, 109 ports in Indonesia have integrated Inaportnet, and there is a goal to have an additional 151 ports adopt it by 2023. This aims to reach the target of having 260 ports implementing Inaportnet by the end of this year. A significant achievement from these developments is Indonesia securing the 9th position globally for the best port performance in 2022, claiming the top spot in Southeast Asia, according to data released by the United Nations Conference on Trade and Development (UNCTAD). Furthermore, in the same dataset, Indonesia surpassed the global average for container ship arrivals, with a rate of 24.9% compared to the worldwide average of 20.1%. Towards a Greener Maritime Sector A potential segment within the Indonesian maritime sector relates to energy transition and the combat against climate change. As per a mandate issued by the International Maritime Organization – of which Indonesia is a member – on January 1, 2020, ships should begin using fuel with a maximum concentration of 0.50% mass percent concentration in order to cut greenhouse gas emissions. The country has issued regulations to comply with the mandate, though it has not provided a clear roadmap for the shipping industry. Nevertheless, a number of companies have taken action, such as PT Pertamina International Shipping – a subsidiary of the state-owned oil company PT Pertamina – implementing the use of low-sulphur marine oil on its 750 vessels by 2021. Additionally, Indonesia has also initiated a program aimed at enhancing the environmental sustainability of its ports to mitigate carbon emissions and safeguard the marine ecosystem. The green port initiatives are designed to promote the widespread adoption of clean energy and bolster environmental conservation efforts. Considering the factors above, Indonesia's shipbuilding sector continues to offer potential for investors. To capitalize on this opportunity, it is essential to efficiently harness Indonesia's requirement for shipbuilding components, which are currently imported, and provide products that align with the needs of the domestic industry. In this regard, the German-Indonesian Chamber of Commerce and Industry (ÌÇÐÄ Indonesia/EKONID), will host a German delegation that focuses on the shipbuilding and offshore industry. To be held from February 26 to March 1, 2024, the event is organized on behalf of the Federal Ministry for Economic Affairs and Climate Protection, targeting primarily small and medium-sized German companies (SMEs). Particular opportunities for German companies have been identified in the following areas: high technology (e.g. special shipbuilding), exploration applications, climate-efficient propulsion, digitalization applications for shipping companies and ports, exhaust gas purification systems in accordance with IMO regulations. For more information or to sign up for the business delegation, click here (https://indonesien.ahk.de/veranstaltungen/details/geschaeftsanbahnung-indonesien-schiffbau-und-offshore-industrie).
EKONID Presented two special speakers for the event: Mr. Arif Wahyudi, Partnership Analyst of the PDP Governance Team from the Indonesian Ministry of Communication and Informatics, and Mrs. Helena Sitorus, S.H. LL. M from MHMS Advocates. Mrs. Nurul Khasbullah, Executive of Legal and Investment Consultation Services at EKONID, hosted and moderated the event. During his 30-minute presentation, Mr. Wahyudi stated that all parties, including companies, would have a 2-year transitional period to adjust to the PDP Law as of the time of the law’s issuance, during which they should reassess their company policies to comply with the PDP Law. During this transition period, the Ministry of Communication and Informatics, especially the PDP team, would actively conduct activities such as socialization, monitoring, and assessment regarding what different stakeholders need to do, as well as identify gaps and other preparations. Furthermore, different basic principles of the PDP Law were also introduced. In general, the PDP Law is similar to the General Data Protection Regulation (GDPR) issued by the European Union in 2016. “The government has adapted the basic principle of personal data protection to the needs and circumstances in Indonesia. Moreover, the core focus of the PDP Law is not to apply the sanctions, but to encourage all parties to comply with it,” explained Mr. Wahyudi. In her presentation, Mrs. Helena Sitorus explained the strategy of implementing the PDP Law by differentiating between Controllers and Processor of Personal Data. Mrs. Sitorus said companies should determine carefully whether they want to be the Personal Data Controller or Processor because the controller and processor have different obligations and responsibilities. It was also suggested that companies have a data agreement to specify the data processing activities that fall outside the scope of the data controller's instructions. Other topics discussed at the roundtable include how to transfer cross-border data, the types of sanctions that may be incurred by companies who fail to comply with the PDP Law, as well as the various strategies companies could employ in designing a Personal Data Protection Program. We hope that, through this online roundtable, EKONID has helped industry players in complying with the Indonesian Personal Data Protection Law in the scope of their organization and business. We extend our gratitude to Mr. Arif Wahyudi, Mrs. Helena Sitorus, S.H., LL.M and all the participants who helped make the event a success.
From November 27 to December 1, 2023, EKONID will be hosting a delegation of state and institutional representatives from North Rhine-Westphalia (NRW), Germany, with the aim of introducing Indonesia’s economic potential to relevant stakeholders from the most populous state in Germany, particularly in the fields of energy and labor. To be conducted in Indonesia’s capital city of Jakarta in the island of Java, as well as in the city of Palu and Morowali Regency in Central Sulawesi province, the visit is expected to provide renewed perspectives for the delegates in regard to the aforementioned sectors. “Our visit here to Indonesia is already starting in a very interesting way. We got good information today concerning electromobility, and on the mining sector especially... we will promote the interest concerning Indonesia to our companies and we would try to find a critical mass of companies that can visit Indonesia as a follow up to our visit this week,” said Dr. Tobias Traupel, Head of Division European, Legal, and Foreign Trade at the NRW ministry of economic affairs. Along with Mr. Traupel, the delegation consists of officials from The Ministry of Economic Affairs, Industry, and Energy of NRW, as well as officials from the Ministry of Labor, Health and Social Affairs of NRW. Also participating are representatives from Baden-Württemberg International GmbH, the Battery Research Factory Münster, and the Rheinisch-Westfälische Technische Hochschule Aachen, to name a few. As of the time of reporting, EKONID has finished conducting a country briefing for the participating delegates in Hotel Pullman Jakarta, as well as a roundtable discussion session with local representatives from the Indonesian government and various associations active in the field of energy transition. EKONID also hosted the delegation’s visit to the Indonesian Migrant Workers Protection Agency, or BP2MI, where they gained even more insights on Indonesia’s labor situation. The topics of labor and energy would be followed up on the second day with trips to Politeknik Manufaktur Astra, or ASTRAtech, a polytechnic school located in Cikarang in Bekasi, West Java, as well as a visit to the office of PT Indonesia Pomalaa Industry Park. For the following days of the week, the delegation will be visiting several locations in Central Sulawesi to gain even more firsthand knowledge on the economic situation in the area. These include scheduled stopovers at the residence of the Regent of Morowali, the Indonesia Morowali Industry Park, and the Morowali Metal Industry Polytechnic school. Mr. Septian Hario Seto, Deputy Coordinating Minister of Investment and Mining at the Coordinating Ministry of Maritime Affairs and Investment, who was among the speakers for the event at EKONID’s office on Monday, said he appreciated the visit as well as the opportunity to share his perspective on Indonesia’s energy transition efforts, particularly in regard to Indonesia’s ban of raw nickel exports. “This is important because we don’t want any misunderstanding regarding our ‘downstreaming’ policy. As I’ve explained, the export ban is only for raw nickel ores. Beyond that, you can export freely.... This is also a way to prevent one country or a single party from dominating the nickel supply chain,” Mr. Seto said.
The protection of the oceans and their sustainable use in developing countries is becoming the focus of international donors. German companies can help solve the problems. Building fishing ports in Indonesia, improving waste disposal in Ghana or promoting sustainable tourism in Cape Verde - donor countries finance a wide range of ocean-related projects in developing and emerging countries. The goal: to use the economic potential of the sea for local people and protect the oceans. What is the blue economy? The blue economy or ocean economy includes all economic activities of ocean-based industries as well as all natural assets and ecosystem services that the sea provides. This includes very diverse industries such as shipping, fishing, fish processing, offshore wind power, marine biotechnology and tourism. This also includes areas related to ocean protection, such as waste and wastewater management. The sea plays an important role, particularly in the economies of developing and emerging countries. It creates sources of income locally and secures the livelihoods of many people. Coastal tourism and fishing are among the most economically relevant sectors for many countries. Donors are investing in a sustainable blue economy With the United Nations' (UN) Sustainable Development Goal 14, "Life Below Water", the international community has committed itself to protecting the oceans. Donor institutions and countries have also recognized the potential of the oceans for the economic development of many countries and want to promote the sustainable use of marine resources. The latest figures from the OECD show a significant decline in official development assistance (ODA) for the maritime economy: in 2021, international donors spent 2.6 billion US dollars (US$) - in the previous year it was 3.5 billion US$. But recent developments at the international level suggest that the issue is becoming more of a focus for international donors. A series of international conferences focused on ocean conservation took place in 2022 and 2023. The international community has adopted agreements to protect maritime ecosystems, preserve marine biodiversity and limit harmful fishing subsidies . At the Our Ocean conference in Panama in March 2023, states and private actors also pledged US$ 22 billion for the oceans. Donors are increasingly taking into account not only the economic potential of the sea for the local population, but also sustainability aspects. Its investments and activities are focused on three sectors: 1. Maritime transport 2. Marine protection 3. fishing Bilateral donors are important financiers of the blue economy Bilateral donor countries account for the lion's share of ODA for the maritime economy. In 2021, they contributed US$2 billion - more than 75 percent of global marine development cooperation. Japan, Germany and France are traditionally important bilateral donors to the blue economy. The French Development Agency ( AFD ) supports, among other things, the fishing sector in Indonesia with almost 99 million euros. The Indonesian government wants to use the money to modernize four fishing ports in order to increase efficiency and sustainability. For Germany, the KfW Development Bank plays a central role in promoting the blue economy in developing countries. For example, KfW supports Tunisia with coastal protection . The financed measures aim to prevent salinization of soil and water resources as well as coastal erosion through appropriate infrastructure. The Norwegian Development Agency ( Norad ) also has an extensive marine portfolio with a focus on fisheries and aquaculture . Multilateral development banks are also investing in the marine economy and marine conservation. This is the case with the European Bank for Reconstruction and Development ( EBRD ) with a 70 million euro project to decarbonize the maritime sector in Turkey. Business opportunities for German companies in the maritime industry The sustainable blue economy offers business potential for German companies. When planning and implementing marine-related projects, donor organizations often put the required construction, delivery and consulting services out to international tender. This could be the construction of port facilities or the delivery of goods such as fishing equipment. Consulting services, for example on sustainable fishing or economic development in coastal regions, are also in demand. The fight against plastic is central to healthy oceans and offers contract opportunities Combating marine pollution is of great importance for the health of the oceans. The cause of the pollution is the often lack of environmentally friendly wastewater and waste disposal in many countries. Plastics make up the majority of waste that ends up in the ocean. Donors therefore also finance many projects in the area of waste management and circular economy on land, with the aim of reducing marine pollution, particularly from plastic waste. Order opportunities may arise, especially for German companies that are leaders in environmental technologies such as recycling. Original Article here: GTAI
Organized by EKONID, the inauguration of the larger office at Altira Business Park, Blocks A01-A07 3rd Floor, Sunter Jaya, marks a significant milestone in the Wilo’s Indonesia commitment to drive innovation, enhance customer satisfaction, and foster sustainable growth in the industry. "We are pleased to announce the inauguration of our expanded new office at Altira Business Park," said David Haliyanto, Managing Director at Wilo Indonesia. "This inauguration reflects our dedication to providing the best products and services to our customers in Indonesia. We remain committed to leveraging our expertise and advanced technology to address the continuously evolving needs in this industry and contribute to sustainable development." Wilo SE, a European public company (Societas Europaea), has a long history since the establishment of the Louis Opländer copper and brass factory in Dortmund in 1872. Over 150 years, Wilo has cemented its position as a leading supplier of pumps, systems, and premium pump system solutions. Since its establishment in 2008, Wilo Indonesia has grown to become a significant player in the pump industry. In addition to the headquarters in Jakarta, Wilo Indonesia also has several strategically placed representative offices located in Palembang, Surabaya, Balikpapan, and Makassar. Alongside the new office inauguration, Wilo also announced its plans to expand its operation in Indonesia with a new assembly plant that would be built in Cikarang, Bekasi, just west of Jakarta. Targeted to be completed next year, the 2 million euro (roughly Rp 33.5 billion) plant is expected to further bolster Wilo’s position in the Indonesian water pump and pump system solutions provider market. Wilo Group Director Sales Area Southeast Asia Mrs. Eva Kerstholt, who also attended the inauguration, said: “I’m looking forward to our investment in the new assembly plant here in Indonesia because it shows the commitment of the group to Southeast Asia. Indonesia, in particular, is the biggest market for us. It’s our biggest company in the whole of Southeast Asia with 50% of our regional sales volume.” Deputy Mayor of North Jakarta Mr. Juaini Yusuf, in representing the local government, appreciated Wilo’s commitment to providing water pump solutions to Jakarta, saying that the city “acknowledges Wilo’s excellent product and attention to the public and the environment, specifically in flood handling and mitigation.” “We hope that with the new office, we can have more collaboration and contribute to the development needs of Jakarta,” he added.