MoT No. 8/2024 is the fourth amendment to Ministry of Trade Regulation No. 36 of 2023 (“MoT No. 36/2023”) issued in response to container congestion at Tanjung Priok and Tanjung Perak Ports. The accumulation of containers occurred because many commodities were restricted by MoT No. 36/2023 from entering Indonesia. The event featured two prominent speakers: Mr. Priyo Tri Atmojo, S.E., M.M., the Associate Trade Analyst from the Directorate of Import of the Indonesian Ministry of Trade, and Mr. Rahmat Sarjito, the Customs Analyst from the Import Sub-Directorate of the Directorate General of Customs and Excise under the Indonesian Ministry of Finance. In a 30-minute presentation, Mr. Priyo elaborated on the impact of MoT No.8/2023, as detailed below: - Relaxation for 11 commodities, namely electronics, traditional medicine and health supplements, cosmetics and household health supplies, footwear, apparel and accessories, bags, valves, lubricants (raw materials), textiles and textile products, finished textile products, and certain chemicals; - Relaxation for the importation of sample goods, goods for research and/or product development not for commercial purposes; and - Relaxation of the import of manufactured goods as complementary goods, goods for market testing purposes, and/or manufactured goods for after-sales services by importers with NIB API-P (companies with a production license). A temporary policy for the release of imported goods that have arrived at the destination port for the period of March 10 – May 17, 2024, was also promulgated. Following Mr. Priyo’s presentation, Mr. Rahmat elaborated on the technical processes involved in the clearance of imported goods. He explained the three stages of cargo clearance, namely pre-clearance, customs clearance, and post-clearance procedures. In general, the pre-clearance process is a stage where importers or exporters look for information and apply for the required licenses or permits. The second stage has many processes, such as customs declarations, checking payment, risk profile checking, channeling, and inspection. After the process is completed, the importers or exporters will get a customs clearance permit. He also emphasized their role in mitigating challenges posed by port congestion. Seventy representatives from companies in Germany and Indonesia attended the online roundtable. During the Q&A session, different questions were discussed between the participants and speakers, including the different import requirements needed from companies with API-U (Angka Pengenal Impor–Umum or Importer Identification Number–General) import license and companies with API-P (Angka Pengenal Impor–Produsen or Importer Identification Number–Producer) import license. EKONID extends its gratitude to Mr. Priyo Tri Atmojo, S.E., M.M., and Mr. Rahmat Sarjito for their valuable contributions to the event’s success. The organization also thanks all participants whose engagement enriched the discussion and made the event a fruitful learning experience.
The Indonesian water sector is as heterogeneous as the living conditions in the huge archipelago with its 280 million inhabitants and more than 6,000 populated islands. Indonesians' access to drinking water or wastewater disposal is mainly determined by whether they live in villages, small towns or large cities. More than half of all Indonesians already live in cities, and by 2035 this figure is expected to rise to two thirds, or in absolute numbers: 205 million people. This development is a major driver of the need for drinking water supply, wastewater disposal, and recycling. In many larger cities such as Jakarta, Makassar (Sulawesi), Jambi (Sumatra), or the new capital Nusantara, sewage and recycling systems are planned. This requires a great deal of tunnel drilling, water treatment technology, piping systems, pumps, valves and measurement technology. According to the statistics office Badan Pusat Statistik (BPS), 92% of all Indonesians currently have access to "improved drinking water". Almost 41% get this from plastic bottles. But only a few percent have access to a central sewage system. Such a system only exists in parts of a few large cities. Jakarta expands drinking water supply A special situation prevails in Jakarta. The metropolis of 10 million with a further 24 million people in the surrounding area is sinking because a large part of the population is supplied by pumped groundwater. This makes the city vulnerable to flooding. At the same time, the city administration has defused the danger in recent years by clearing waste from sewers and rivers, installing pumps and building dams. In the PIK2 development area, which is located directly on the sea, land prices are reaching record highs. The extraction of groundwater in Jakarta is regulated by licenses, but is done illegally in thousands of cases due to a lack of alternatives. Only two thirds of the population is connected to the piped water network. According to the plans of the Jakarta provincial government, all residents should have a drinking water connection by 2030. To this end, reservoirs in West Java and in the province of Banten, west of Jakarta, are currently being developed as sources and pipes are being built from there. Billions invested in Jakarta's wastewater treatment system There is also a severe undersupply in the wastewater sector. In the growing cities there is hardly any regulated wastewater disposal, let alone recycling. In villages, small towns and on the poorer outskirts of larger cities, the wastewater simply sinks into the ground, and there are septic tanks for feces. In developed urban areas, households usually have so-called septic tanks for feces, which have to be emptied regularly. Wastewater flows into canals and rivers via underground drains. A huge project that will one day supply the entire metropolis is the so-called Jakarta Sewerage System (JSS). For this purpose, the city was divided into 14 areas. Five northern areas are to have their own sewage treatment plants by 2030, the other nine by 2050. The investment sum is stated to be US$5.2 billion. The main source of funding is to be the Jakarta province budget. Additional funds will come from the Japan International Cooperation Agency (JICA). But private financing is also planned. International organizations are also financing wastewater disposal. The Asian Development Bank (ADB) is currently providing a loan of $420 million for projects in Semarang (Central Java), Pontianak (West Kalimantan) and Mataram (Lombok). This will reach around 2.5 million people. Water pipes are in poor condition Even outside of Jakarta, the need for investment in the underdeveloped Indonesian water sector is enormous. Over the coming decades, it is likely to reach three-digit billion US dollars. In the previous development plan for 2020 to 2024 alone, the equivalent of $10 billion was earmarked for connecting 10 million households to drinking water pipes and $11 billion for access to wastewater disposal. The largest share of this was to be raised from state funds. Only a minority of households are connected to a water supply network, and this sometimes even applies to larger cities. They are supplied by one of the approximately 380 municipal water suppliers, the so-called PDAMs (Perusahan Daerah Air Minum). Their pipe networks are in poor condition; according to official statistics, 17% of the water volume is lost through leaks. The PDAMs supply households with domestic water from rivers, lakes or reservoirs. The water charges are often not enough to cover business operations. According to 2021 data, around 40% of all PDAMs are considered to be at least financially troubled. The involvement of private companies in the water sector is a sensitive issue. A widely-publicized ruling in 2018 limited their commercial influence in Jakarta. Nevertheless, partnerships, especially with foreign players, are essential for the progress of the sector. In parts of Jakarta, for example, the formerly French and now Singaporean PAM Lyonnaise Jaya (Palya) manages part of the water supply. Foreign water suppliers are also active in other Indonesian cities. These public-private partnerships are a common business model in Indonesia and are awarded through public tenders. The Build-Operate-Transfer (BOT) model is popular. The private company covers the construction costs and operates the plant for a defined period of time (usually between 15 and 30 years). The local water authorities pay an agreed price per cubic meter. For the most part, people simply pump their water from the ground, either using a pump in their own home or using a local pumping station that supplies surrounding households. If these have filters and other purification devices, drinking water is produced. The water is usually boiled. High consumption in agriculture Indonesia is a tropical archipelago that is hot all year round. The seasons are divided into rainy and dry seasons. In the rainy season, water is plentiful, leading to floods and landslides. It also rains occasionally in the dry season. However, longer dry periods can lead to water shortages in some regions. The Lesser Sunda Islands to the east are particularly affected by this. The weather phenomenon El Ninho intensifies dry periods. In some places, parts of the population then have to be supplied with water by tanker trucks. Many large rivers, particularly on the densely populated island of Java, are heavily polluted and are not suitable for drinking without complex treatment. Small-scale farming and extensive plantation farming also require large amounts of water. According to Bappenas' Ministry of Planning, agriculture as a whole is responsible for 80 percent of national water consumption. In the dry season, water can be pumped out of the ground close to the surface in many places. Elsewhere, the lack of availability limits the cultivation of crops. Almost half of the agricultural irrigation systems are in poor condition, according to Bappenas. Source: GTAI
Optimism Amidst Global Economic Recovery The DIHK survey reveals that nearly a third (31%) of German companies operating internationally expect an economic recovery at their locations this year, up from 22% in autumn 2023. Conversely, only 19% foresee an economic slowdown, a decrease from the previous 28%. This shift indicates growing confidence among businesses, with the balance of better and worse economic assessments rising from minus six points in the fall to a positive twelve points, the highest in two years. Persistent Business Risks Despite this optimistic outlook, companies continue to face numerous challenges. Low demand remains the predominant concern, cited by nearly half of the respondents. Additionally, uncertain economic policy conditions are increasingly seen as a risk, affecting 43% of companies, up from previous surveys. The shortage of skilled workers also remains a significant issue, identified by 39% of respondents. The DIHK's adjusted export forecast for 2024 reflects these mixed sentiments. Following a 1.8% decline in German exports in 2023, the forecast for this year is expected to break even, showing no significant growth but also no further decline. Business Sentiment and Investment Intentions Despite the ongoing challenges, the business situation for German companies abroad has shown signs of stabilization. About 44% of companies report a good business situation, with another 45% describing it as satisfactory. The balance of positive versus negative business assessments has slightly improved, indicating a stable, if cautious, business environment. Investment plans, however, remain subdued. Only 32% of companies intend to increase investments over the next twelve months, while 16% plan to reduce them. This cautious approach reflects the ongoing uncertainties and high interest rates, despite falling inflation in many regions. Measures for Resilience The survey underscores the importance of diversification in supply chains to mitigate geopolitical risks. The DIHK's ideas paper, “Diversification of Supply Chains,” emphasizes the necessity for Germany to strengthen raw material partnerships. Critical dependencies on imports for raw materials and intermediate products expose the economy to vulnerabilities, as demonstrated by recent supply chain disruptions. Germany is advised to expand its domestic raw material extraction and deepen partnerships with countries like Indonesia, Australia, Brazil, Chile, and the DR Congo. Utilizing initiatives such as raw material monitoring by the German Mineral Resources Agency can help secure sustainable supply chains. Enhanced cooperation with European and global partners is also recommended to improve access, availability, and extraction conditions for essential resources. Indeed, in response to recent crises, companies have been diversifying their supply chains and exploring new markets. About 45% have opened new sales markets, and 47% have identified new suppliers for raw materials and intermediate products. This trend highlights a proactive approach to mitigating future disruptions. Additionally, 17% of companies have increased their stock levels, with another 19% planning to do so, ensuring they have reserves in case of future delays. The relocation of production facilities is also being considered, with 16% having already done so and 22% planning to move parts of their operations to more stable regions. About the World Business Outlook The WBO is based on a regular DIHK survey of the member companies of the German Chambers of Commerce Abroad, delegations and representative offices (s). In spring 2024, it collected feedback from 4,300 German companies, branches and subsidiaries worldwide as well as companies with close ties to Germany. The survey was conducted from March 25 to April 21, 2024. 38% of the responding companies come from the industry and construction sector, 42% from the service sector and a further 20% are trading companies. Smaller companies with fewer than 100 employees account for 53% of the responses. 25% of the companies employ 100 to 1,000 employees. Large companies with more than 1,000 employees account for 22% of respondents worldwide. 49% are subsidiaries/branches of German companies, 31% are local or (non-German) international companies without a branch in Germany and a further 20% are local or (non-German) international companies with a branch in Germany.
Present at the event were the Director of PDAM Tirta Prabawa Mukti along with their team, the Head of Economic Affairs Department, the Head of Regional Development Planning Agency (Bappeda), and members of the Supervisory Board. During the meeting, Wilo Pumps Indonesia, led by the Director of PT Wilo Pumps Indonesia, Mr. David Haliyanto, provided insights into the company's history, products, and proposed collaboration plans to support water infrastructure development initiatives in the region. Data from 2021 indicates that the drinking water service level provided by PERUMDA Tirta Prabawa Mukti has only reached 3.67%, serving 15,860 people out of a total population of 432,599. Additionally, 45,891 individuals, or 10.61% of the population, receive services from non-PDAM piped network systems (SPAM), while the majority of the remaining population relies on non-piped SPAM. Discussions during the meeting included an evaluation of a potential new water source at Cibodas in Cibanteng Village, which is expected to support service improvement efforts by PERUMDA. This source, with a capacity of 50 liters per second, is planned to serve the domestic and industrial needs of customers in the surrounding area, as part of efforts to provide better and broader water infrastructure in the region. This collaboration aims to accelerate the achievement of the drinking water service target of 86.83% by 2040, as outlined in the Pangandaran Drinking Water and Sanitation Master Plan (SPAM). Wilo Pumps Indonesia is committed to supporting the development targets of SPAM in Pangandaran through this strategic collaboration. The company hopes that this collaboration will bring about innovation and efficiency, contributing to the improvement of the quality of life for the people of Pangandaran. After a session of constructive discussions, the meeting concluded dwith a group photo session and a communal iftar event. About PT Wilo Pumps Indonesia: PT Wilo Pumps Indonesia is a subsidiary of the Wilo Group, one of the world's leading suppliers of premium pumps and pump systems for building services, water management, and industrial sectors. The Wilo Group currently employs over 8,400 people worldwide. With innovative solutions, smart products, and individualized services, we provide intelligent, efficient, and environmentally friendly services to keep water flowing. We have been digital pioneers in this industry with our products and solutions, processes, and business models. For more information, visit www.wilo.com/id/en.
While only mentioned in passing, this achievement, in truth, was a massive undertaking, requiring data and rules synchronization from five different sets of systems across the three ministries; namely AKSARA (Bappenas), NAWASIS (Bappenas), SIPSN (Ministry of Environment and Forestry or MoEF), SIINSAN (MoEF), and SIPD (Ministry of Home Affairs). The result is a Waste Code Catalogue, a national reference for standardized data formats that incorporated a regional reference code guided by relevant regulations, created two years after the initiative began in 2021. A technical guideline was further achieved in mid 2023. Though the data structure within the information systems of the pertinent ministries must still be adjusted to provide a streamlined reporting system, the catalogue would enable the country to make future waste management decisions with reliable data and information. The initiative itself is part of a project dubbed the Emission Reduction in Cities through Improved Waste Management, or ERiC-DKTI. The four-year long project was done in collaboration with the German government and had also resulted in six policy recommendation analysis reports, three regional regulations on waste management fee adjustments, guidance on waste sorting for more than 558 households, as well a digital calculator for waste management fee calculation. This is all to say that Indonesia is another step closer towards having a proper waste management system. Formalizing waste collector in synergy with EPR One major obstacle in the country’s waste management sector is financing. While countries such as China and the Germany have set rules and infrastructure for waste management, Indonesia does not have yet a proper standard to even set up waste handling fees, resulting in lack of funds to build proper waste management infrastructure such as incinerators, or even garbage compactors. In that regard, the establishment of the Waste Code Catalogue and digital calculator for waste management fee calculation could go a long way in resolving the issue. Already the nation is seeing several cities and regencies adjusting their waste handling fees to properly tackle their mounting waste problem. The Mandung landfill in Jembrana, Bali, for example, has raised its waste handling fee from just Rp 50,000 (roughly US$3) per truck delivery to Rp 150,000. The city of Medan also nearly tripled its waste handling fee this year, having last increased waste handling fee in 2006. One way in which cities and regencies could channel the money from the increased waste handling fee is by formalizing the work of waste collectors. Dominated by informal workers, waste collectors – known locally as pemulung – play a significant role in supplying recyclable plastics to the country’s waste management sector, contributing over 80% of the plastic and paper used by recycling companies. Additionally, the nation has paved the way for the implementation of Extended Producer Responsibility (EPR), enshrined under Indonesia Waste Management Act of 2008, which has been further laid out for implementation via Government Regulation No. 97/2017 (also known as Jakstranas) and Minister of Environment and Forestry Regulation No. 75/2019. These regulations set the path for industries, particularly the consumer goods, retail, as well as hotels and restaurants sectors, to actively participate in the streamlining of the waste management process from production to consumption to recycle and reuse. A collaborative effort According to Bappenas, by establishing a strong recycling industry, Indonesia can expect to create 1,000 new companies, absorb 3 million laborers, contribute up to Rp 200 trillion rupiah in Gross Domestic Product by 2030, while reducing waste by 50 percent and greenhouse gas emissions by 29 to 41 percent. The Waste Code Catalogue is one major step towards achieving that goal, but there is still a lot more to be done. The implementation of EPR in Indonesia is still in its nascent form, with only major companies, such as Unilever, Coca-Cola, and Nestle, investing proportionately in meeting their EPR targets. A largely still-missing piece is public participation, wherein domestic and household wastes tend to be more difficult to recycle due to their level of impurities and the negative effects it causes to the mechanical properties of products such as tensile strength, tear strength, and durability. It’s relevant to note that community managed waste banks play a sizeable role in the effort to have households sort their trash prior to collecting. According to the SIPSN databank, as of April 2024, there are 25,685 waste bank units spread across the archipelago, a significant increase from only over 7,500 in 2018. As waste banks sit right in the middle between households and waste collectors, the government could do more to incentivize partnership between corporations and waste banks to improve the overall waste management capacity – aside from directly promoting the formalization of waste collectors. Overall, the pieces are in place for Indonesia to vastly improve its waste management, with both the private and public sector posed to benefit. All it takes is for all parties to actively participate in the existing frameworks and to continue pushing forward for a brighter, greener future. German companies have very good opportunities, as the development of efficient collection systems is important. A good indicator of Indonesia's further efforts will be the waste management system that is yet to be set up for the new capital Nusantara. A modern green city is being built east of Kalimantan (Borneo), which will take over Jakarta's capital from August 2024. The contract for the construction of the first plant has already been awarded. The target is a recycling rate of 60%. The remaining 40% is to be used to generate electricity. To discuss this issue and more, the German-Indonesian Chamber of Commerce and Industry ( Indonesien/EKONID) in cooperation with VDMA, will host a business initiation for German companies in the field of waste management and recycling from November 4 to 8, 2024, 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