President: Expedite Trade Negotiations

KOMPAS/WAWAN H PRABOWO

President Joko Widodo and Vice President Ma\'ruf Amin presides over a meeting to deliver programs and activities in the economic field at the Presidential Office, Presidential Palace complex, Jakarta, Wednesday (30/10/2019). At the first limited meeting with the ministers in the Indonesia Onward Cabinet, the President reminded attendees about challenges in the global economy, the importance of increasing exports and substitution of imported goods, and regulatory issues that hinder investment.

JAKARTA, KOMPAS - President Joko “Jokowi” Widodo has instructed ministers to expedite the ongoing negotiations on free trade agreements with the country’s main trade partners so that they can be signed by the end of 2020.

The three agreements are the Comprehensive Economic Partnership Agreement (CEPA) with the European Union, the Regional Comprehensive Economic Partnership (RCEP) between 10 ASEAN countries and six partner countries, and free trade agreements with countries on the African continent.

We must continue the negotiation process, without stopping.

The President’s instruction was delivered at the opening of a limited Cabinet meeting on the economy at the Presidential Office, Jakarta, on Wednesday.

The limited meeting was attended by Vice President Ma\'ruf Amin as well as 20 ministers and six deputy ministers of the Indonesia Onward Cabinet. "I have specifically talked to the trade minister and the vice trade minister, the foreign affairs minister and the vice foreign affairs minister that we must continue the negotiation process, without stopping," the President said in his address at the meeting.

KOMPAS/ALIF ICHWAN

An interactive dialogue with the theme "Improving Competitiveness with Productive Regulations for Increasing National Exports" is held at the state-owned port management company IPC Tanjung Priok building, Jakarta, Wednesday (30/10/2019). The dialogue featured a number of speakers, including general chairman of the Association of Indonesian Export Companies (GPEI) Benny Soetrisno, secretary-general of the Indonesian Furniture and Handicraft Industry Association (HIMKI) Abdul Sobur, Jakarta International Container Terminal (JICT) President Director Gunta Prabawa, Director General of IPC Tanjung Priok Suparjo Kasadi, Head of Customs and Excise Services Division Indra Adiwijaya, Director of P2C of the Director General of Information of the Trade Ministry Tuti Prahastuti,

The government, according to the President, has concluded the Comprehensive Economic Partnership Agreement with Australia. Similar achievements should also be made with trade agreements with other countries. "By the end of 2020, they must be concluded. There should permanent negotiation teams so they cannot be changed easily. The negotiations and their implementation must closely be monitored,” he said.

I always say back and forth, the key is to increase exports and substitute imported goods, and increase investment.

The President’s instruction to expedite the negotiations of free trade agreements is needed to ensure the country is able to expand its export destinations.

"The global economy during the past five years and this year, as estimated by international institutions, will lead to more difficult situations next year. In fact, many say the global economy is heading to a recession. Therefore, we must anticipate everything. I always say back and forth, the key is to increase exports and substitute imported goods, and increase investment," said the President.

The International Monetary Fund (IMF) projects global economic growth of 3 percent in 2019 and 3.2 percent in 2020. The World Bank estimates the global economy will grow 2.6 percent in 2019 and 2.7 percent in 2020

KOMPAS/PRIYOMBODO

An officer explains to customers about the online single submission (OSS) service at the One-Stop Integrated Service (PTSP) outlet of the Investment Coordinating Board (BKPM) in Jakarta, Wednesday (11/9/2019).

Priority

In response to Kompas\' question after the limited Cabinet meeting, Trade Minister Agus Suparmanto said that one of the ministry’s priorities would be to finalize a number of free trade agreements with a number of partner countries. "In accordance with the direction of the President, I also specifically assigned the vice trade minister to finalize the pending agreements," Agus said.

Deputy Trade Minister Jerry Sambuaga said the negotiations of the free trade agreements involved several stakeholders. Therefore, one of the most important things is to promote coordination among related agencies, including the Foreign Ministry

We have discussed more technically and in detail the things that are the subject of discussion so that issues that have not been concluded can be resolved quickly.

The agreement with the EU, according to Jerry, is one of the top priorities because the EU is a large market. "I have communicated with the European Union ambassador to Indonesia. We have discussed more technically and in detail the things that are the subject of discussion so that issues that have not been concluded can be resolved quickly, "Jerry said.

Based on data from Statistics Indonesia (BPS), Indonesia\'s non-oil and gas exports to the EU from January to September 2019 totaled US$10.67 billion, a 17.5 percent decline year-on-year. The amount accounts for 9.3 percent of Indonesia\'s total non-oil and gas exports during the period.

KOMPAS/PRIYOMBODO

The second expansion phase for the Cilacap steam power plant is trialed on 16 Sept. 2019 in Karangkandri village, Kesugihan district, Cilacap regency, Central Java. The second phase of the power plant’s expansion, which has an installed capacity of 1,000 megawatts, is expected to start commercial operations to supply the Java-Bali electricity network in October, faster than August 2020 as initially scheduled.

To attract investment to Indonesia, the rector of Atma Jaya University, Jakarta, Agustinus Prasetyantoko said there were a number of things that needed to be addressed, including regulations, labor laws and licensing. "If you want to be objective, foreign investors do not want to enter Indonesia, even though there is improvement in infrastructure facilities, because there are other problems related to institutions that have not been resolved," he said.

Researcher at the Institute for Development of Economics and Finance (Indef), Andry Satrio, said that foreign investment would not only to tap into the domestic market, but also the export market.

In addition, Indonesia still needs investment in the downstream industry to help create added value by processing natural resources, as well as investment into sectors that can absorb a large workforce.