Glembert
KN. The U.S. government, through the Millennium Challenge Corporation (MCC), announced a grant of $649 million to the Indonesian government to improve public welfare and develop the economy in several underdeveloped regions, commonly referred to as 3T (disadvantaged, frontier, and outermost). The grant, totaling $649 million, includes $49 million from the Indonesian government and $600 million from the MCC. This funding aims to develop infrastructure and the MSME sector in regions including the Riau Islands, Riau, South Sumatra, North Sulawesi, and Bali. MCC CEO Alice Albright, during an event at @america said the funds are distributed along with mentoring to provide advice and other technical assistance. It will start being implemented on September 5.
Coordinating Economic Minister Airlangga Hartarto met with Deputy Minister International Department Central Committee of Chinese Communist Party (CPC) HE Mme Sun Haiyan to discuss opportunities for economic cooperation between the Indonesian and Chinese governments. Airlangga said China will reopen market access for palm oil from Indonesia. In addition, the Chinese government will also open access to fishery and agricultural products from Indonesia. The Chinese government will also promise investment in the green industry, electric vehicles and batteries, infrastructure, digital sector, and logistics.
Indonesia’s Marine and Fisheries Ministry is exploring opportunities for cooperation in fish farming, particularly for tuna, with the Department of Agriculture and Rural Affairs of Guangdong Province, China. The cooperation was discussed during a meeting between Marine and Fisheries Minister Sakti Wahyu Trenggono and Director General of the Department of Agriculture and Rural Affairs of Guangdong Liu Zonghui in Jakarta. Trenggono noted that Indonesian waters, especially in Zone 3, including the Arafura Sea and the eastern Timor Sea, are rich in tuna and skipjack tuna.
Google and Microsoft have chosen to invest billions of dollars in neighboring Malaysia. In the 2024 Economic Update, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said this happened because Indonesia has not been aggressive in pursuing investment from world technology giants. However, Indonesia has great potential to attract investment from technology giants, supported by the potential supply of clean energy sources, which has currently reached 2 gigawatts.
Maritime Affairs and Investment Coordinating Minister Luhut Binsar Pandjaitan formed a new task force to address investment issues in the upstream oil and gas sector. The task force will also review outdated regulations. Luhut noted that the slow investment process is partly due to current rules not reflecting the shift to deep-sea oil and gas exploration. Speaking at the International and Indonesia CCS Forum 2024 in Central Jakarta, Luhut mentioned discussions with the Ministry of Finance about providing incentives to investors in this sector.
The ongoing competition between the United States and China shows no signs of ending soon. The United States is working to reduce its reliance on strategic minerals from China, while China strengthens its dominance in this market. Deputy Foreign Affairs Minister Pahala Nugraha Mansury noted that this rivalry could disrupt global supply chains, particularly in the EV sector. However, Indonesia, with its rich reserves of critical minerals like coal and nickel, is well-positioned to benefit. State-owned mining holding Mind ID manages 14 out of 22 strategic critical minerals in Indonesia, making the country a key player in determining future prices and trends in the strategic mineral sector, including industries like electric vehicles.
Deputy Foreign Minister Pahala Nugraha Mansury emphasized the importance of enhancing cooperation on energy transition and investment with Arab countries in the Persian Gulf during a meeting with Gulf Cooperation Council (GCC) Secretary General Jasem Mohamed A.A. Albudaiwi. He also proposed holding a “Political and Security Dialogue” between the two sides next year. On the Palestinian issue, Mansury urged the GCC to push for an end to Israeli violence against Palestinians, an immediate and sustainable ceasefire, and unhindered delivery of humanitarian aid.
State-owned oil and gas company PT Pertamina is reportedly purchasing crude oil from Russia due to its lower price compared to the international market rate. President-elect and Defense Minister Prabowo Subianto’s visit to Russia was reportedly part of the Indonesian government’s plan to negotiate the purchase of crude oil. According to KONTAN sources, Indonesia will buy crude oil from Russia indirectly, first through trans-shipment to China and then to Indonesia.
Center of Economic and Law Studies (Celios) Executive Director Bhima Yudhistira Adhinegara reminded the government to exercise caution when purchasing oil from Russia because Indonesia may face sanctions, including embargoes, from the West. Similarly, Komaidi Notonegoro, an energy observer from the Reforminer Institute, noted that the primary concern regarding this plan is its potential impact on Indonesia’s diplomatic relations with the United States and the European Union. “By buying oil from Russia, Indonesia is perceived as supporting Russia’s invasion of Ukraine,” he said.
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