When employees of Indonesian zinc oxide producer Indo Lysaght went to pick up their export permits from the trade ministry last month they were shocked to be told by officials: “computer says no”.
Without the company’s prior knowledge, zinc oxide had been added to the list of mineral ores that were banned from being exported as of January 12 as part of a controversial plan to force mining companies to build smelters and refineries. Continue reading »
As emerging markets remain rattled by investor jitters, Raghuram Rajan, India’s central bank governor, has resurrected a gripe of old by attacking the US for its lack of concern about the global impact of its withdrawal of extraordinary monetary stimulus.
Mr Rajan, a former chief economist for the International Monetary Fund, told Bloomberg India TV that “international monetary co-operation has broken down.”
“Industrial countries have to play a part in restoring that [co-operation], and they can’t at this point wash their hands off and say, we’ll do what we need to and you do the adjustment.” Continue reading »
Indonesia’s powerful corruption commission has a new target. Having gone for members of the president’s inner circle, the country’s highest judge and dozens of parliamentarians, the Corruption Eradication Commission (KPK) now has the lucrative mining industry in its sights.
Adnan Pandu Praja, a deputy chairman of the KPK, told the Jakarta Foreign Correspondents Club on Wednesday that the agency was launching a crackdown on corrupt mining companies and some of the government officials, military officers and police who stand behind them. Continue reading »
A sliding rupiah, slowing economic growth and fast-rising costs are not exactly good news for Indonesian companies selling to the large consumer market, many of which have US dollar debts and US dollar costs.
But the squeeze could be a boon for Japanese, Korean and Western companies who have been looking to buy into Indonesia’s consumer goods sector – and the bankers who advise them. Continue reading »
While speculation about the US Federal Reserve’s plans to curb its quantitative easing programme drags on, Indonesia’s currency continues to “taper” of its own volition.
On Thursday, the dollar rose to over 12,000 rupiah for the first time since 2009. Confidence in Indonesia’s currency is weak because of the country’s large current account deficit and slowing economic growth, which is at a four-year low. Continue reading »
Amid the feverish speculation over whether Joko Widodo will run for president of Indonesia, it is right to ask what he has achieved in just over a year as the governor of Jakarta.
Walking through the anarchic streets of Jakarta, while avoiding open sewers and choking on the traffic fumes, it does not seem that much has changed. But as Widodo – who is universally known as Jokowi – told the FT in an interview, there is much to do after years of neglect. Continue reading »
While international investors spend their time trudging around the world in search of the next emerging market star, wealthy emerging market residents are often scouring the globe for safe havens for their cash.
It is a conundrum encapsulated by Steen Jakobsen, chief investment officer of Denmark’s Saxo Bank, who visits around 30 different countries a year to take the market pulse and talk to local investors at conferences. Continue reading »
The World Bank has followed the International Monetary Fund’s lead by slashing its economic growth forecasts for Indonesia and urging the country to carry out “deep reforms” if it is to avoid a prolonged slump.
Just three months since it last updated its predictions, the development lender cuts its GDP projection for this year from 5.9 per cent to 5.6 per cent and for next year from 6.2 per cent to 5.3 per cent. Continue reading »
After several months in the eye of the global emerging markets storm, Indonesia received some respite on Tuesday when it reported an unexpected trade surplus and a slowdown in the inflation rate.
Annual consumer price inflation fell to 8.4 per cent in September from 8.8 per cent (a four-year high) in August, while Indonesia reported a positive trade balance of $132m for August in contrast to July’s record $2.3bn deficit. Continue reading »
It took two years of vacillation before Indonesia’s cautious president, Susilo Bambang Yudhoyono, finally hiked government-administered fuel prices in June.
Now, just three months later, the prickly political issue of Indonesia’s ballooning fuel subsidy bill is back on the agenda after the slide in the value of the rupiah, the world’s worst-performing major currency since May, led to a spike in the price of petrol imports. Continue reading »
Six months ago when it was still seen by many as a “hot” market, Indonesia raised $3bn from an international bond issue at record low rates.
How times have changed. Now Indonesia’s cost of borrowing is nearly as high as that for Vietnam, which has been the sick man of southeast Asia for several years. Continue reading »
In short supply
Most foreign exchange traders have been shedding rupiah as the currency has slid in value against the US dollar over the last year because of fears about slowing growth and rising inflation.
But, despite the broad sell-off, some Indonesians are still willing to pay a premium to get their hands on their currency. Continue reading »
The surging popularity of the Japanese language and culture among young Indonesians, as reported in the FT, is good news for large Japanese companies such as Toyota, Sumitomo Mitsui Financial Group and Uniqlo, which are increasing their investments in southeast Asia’s largest economy.
It is also creating opportunities for small entrepreneurs like Vivian Wijaya, who runs Dr Vee Mangaka Club, a manga drawing school. Continue reading »
Many global trade disputes involve the US and other developed nations ticking off emerging market upstarts for their naughty, protectionist practices.
But Indonesia has hit out at American hypocrisy over its failure to adequately respond to a 2012 ruling that Washington had violated World Trade Organisation rules by banning the sale of (mostly Indonesia-made) clove cigarettes for health reasons while permitting the sale of (equally harmful, US-made) menthol cigarettes. Continue reading »