Indonesian President Joko Widodo announced yesterday evening (17/11) that prices of subsidized fuels will be raised by over 30 percent starting from midnight in an effort to reduce state expenses on non-productive matters. Low-octane gasoline (premium) will now cost IDR 8,500 (USD $0.70) per liter, while diesel now costs IDR 7,500 (USD $0.62) per liter. This sudden announcement immediately led to long queues at local gas stations as people still had three hours to enjoy cheaper fuel rates.

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Tensions within Indonesian parliament may have eased after the two opposing coalitions signed a limited power-sharing pact on Monday (17/11) after weeks of negotiations. This pact is expected to reinforce investor confidence in Indonesian politics amid improved political certainty. Previously, parliament was divided into two rival coalitions: the Awesome Indonesia Coalition (Koalisi Indonesia Hebat), which backs Indonesian President Joko Widodo, and the Red-White Coalition (Koalisi Merah-Putih), which is led by Prabowo Subianto.

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After weeks of uncertainty, Indonesian President Joko Widodo announced on Monday (17/11) that prices of subsidized fuels (gasoline and diesel) are to be raised by IDR 2,000 (USD $0.16) per liter starting from midnight. Gasoline (premium) is to be raised from IDR 6,500 to IDR 8,500 per liter, while diesel will be raised from IDR 5,500 to IDR 7,500 per liter. Earlier it was speculated that an IDR 3,000 per liter price hike would be announced. However, as global oil prices have declined sharply, this was considered an unnecessary burden for the people.

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After speculation started to rise that Indonesia would perhaps not raise prices of subsidized fuels (gasoline and diesel) in November as recent declining global oil prices have managed to somewhat relieve the government’s budget deficit, Indonesian Finance Minister Bambang Brodjonegoro said over the weekend that the Indonesian government is still eager to raise these prices within a couple of weeks. However, he added that the price hike will be less than IDR 3,000 (USD $0.25) per liter.

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The ceramic industry in Indonesia is expected to grow about ten percent in 2015 amid the country’s +5 percentage point GDP growth. Economic expansion translates to increased purchasing power of Indonesian consumers and the ceramic industry is one of the industries that will benefit from this. Moreover, as Indonesian President Joko Widodo targets +7 percent GDP by the end of his term, new infrastructure and property projects are to rise as well. As such, domestic ceramic demand will increase accordingly.

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Today is Hari Pahlawan (Heroes’ Day) in Indonesia. On this day, which is always celebrated on 10 November, Indonesia commemorates those people (posthumously) that have made a significant contribution to the country. Currently, the list of Indonesian heroes numbers 163 people (only 12 of which are women), and most of whom were involved in the battle against colonialism. Each year, the Indonesian president can add names to this list. This year, Indonesian President Joko Widodo added four names.

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Statistics Indonesia announced on Wednesday (05/11) that economic growth in Indonesia reached 5.01 percent year-on-year (y/y) in the third quarter of 2014. This result was slightly below analysts’ forecasts and implies that the slowing trend of economic expansion in Southeast Asia’s largest economy continues. Since 2011, gross domestic product (GDP) growth has been declining amid global and domestic developments. The 5.01 percentage point GDP growth in Q3-2014 was the slowest quarterly growth pace in five years.

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Jusuf Kalla, Vice President of Indonesia, confirmed that subsidized fuel prices will be raised this month. Although Kalla declined to announce the specific amount, analysts expect a sharp increase of between IDR 2,000 and 3,000 (roughly USD $0.21) per liter - a price hike of almost 50 percent - to prices of both gasoline and diesel. Currently, the price of premium gasoline is IDR 6,500 (USD $0.54) per liter and diesel IDR 5,500 (USD $0.46). Economists have long requested for higher subsidized fuel prices in Indonesia as these distort the economy.

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The administration of Indonesian President Joko Widodo (popularly known as Jokowi) will not give priority status to the Sunda Strait Bridge project. As such, the new government’s stance is in direct contrast to the previous administration’s stance toward the ambitious infrastructure project. The Sunda Strait Bridge, a planned road and railway connection between the two (westernmost) Indonesian islands of Sumatra and Java, was placed high on the agenda of the government led by Susilo Bambang Yudhoyono.

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On 2 November 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as GDP growth in the third quarter of 2014, an October inflation update, developments in coal mining, Internet connectivity, Soechi Lines’ IPO, Joko Widodo’s new cabinet, and more.

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At the inauguration of the People's Conscience Party (Hanura)'s new central leadership board on Wednesday (22/02), Indonesian President Joko Widodo said "Indonesian democracy has recently gone over the top". He referred to the various controversial cases and demonstrations that have emerged in recent months involving hate speech related to race, religion, ethnicity and class.

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Indonesian President Joko Widodo said market participants should reduce their focus on the US dollar as benchmark for Indonesia's rupiah currency. Instead of the US dollar, it is better to use China's renminbi, the European Union's euro, or Japan's yen as a benchmark for the rupiah as these rates better reflect the fundamentals of Southeast Asia's largest economy. The rupiah has come under pressure against the US dollar after Donald Trump's victory in the 2016 US presidential election.

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Dutch Prime Minister Mark Rutte addressed Indonesian Parliament on Wednesday (23/11) in Jakarta. In his speech he praised Indonesia for rapid economic development that has been booked over the past decade and also touched on the sensitive subject of the colonial period. Rutte acknowledged that the Netherlands waited too long before apologizing (in 2005) for excessive violence that occurred shortly after the Second World War when the Dutch tried to reconquer their former colony.

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Based on a survey conducted by Saiful Mujani Research and Consulting (SMRC), the majority of the Indonesian population is satisfied with the performance of Indonesian President Joko Widodo and Vice President Jusuf Kalla. The survey covered people's perceptions of the current state of the nation's economy, politics, law enforcement and security. Sirojudin Abbas, Director of SMRC, said 69 percent of respondents indicated that they are very satisfied with existing conditions, the strongest level ever recorded under the current government.

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After two years in office, the time is ripe now to take a look at the performance and accomplishments of the government under the leadership of Joko Widodo, often called Jokowi. Indonesia's seventh president was a bit unlucky. In the first year of his rule, commodity prices were at multi-year lows (curbing Indonesia's foreign exchange earnings) amid sluggish global economic growth, while capital outflows from Indonesia occurred on the back of monetary tightening in the USA, sending the rupiah to a 17-year low in September 2015.

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On Friday (14/10) Indonesian President Joko Widodo appointed Ignasius Jonan as Indonesia's new Energy and Mineral Resources Minister. Jonan is the nation's former Transportation Minister who was replaced by Budi Karya Sumadi in a cabinet reshuffle in late July 2016. Meanwhile, the position of Energy and Mineral Resources Minister had been empty (although for the time being filled by Coordinating Minister for Maritime Affairs Luhut Pandjaitan) after the dismissal of Arcandra Tahar in mid-August 2016.

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At the G20 summit in Hangzhou (China) Indonesian President Joko Widodo urged the leaders of the 20 strongest economies, in particular leaders of the advanced economies, to curb protectionist measures (tariff and non-tariff barriers) as these measures entail negative consequences for emerging markets. Trade could be the engine of international economic growth. Protectionism, however, undermines the flow of trade and therefore blocks accelerated economic growth. Widodo made this statement on Monday (05/09) at the third session of the G20 summit in Hangzhou's International Expo Center.

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Without giving too much insight into the details and regulations, Indonesian President Joko Widodo launched the tax amnesty program on Friday (01/07) during a speech in front of hundreds of businessmen and officials at Indonesia's tax office headquarters in Jakarta. The tax amnesty program - approved by the House of Representatives in late June - is a strategy to boost state tax income by (temporarily) granting amnesty as well as offering attractive incentives to (former) tax evaders. In return, the tax dodgers have to declare and (if wanted) repatriate their offshore assets into Indonesia.

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After Japan was disappointed by not being awarded the contract to build a high-speed railway between Indonesia's capital city of Jakarta and Bandung (West Java), the Indonesian government now plans to offer the revitalization of the northern Java railway to Japan. Another project that is expected to be offered to Japan is the Patimban seaport project in Subang (West Java). Indonesian President Joko Widodo is currently in Japan for a two-day visit to attend the Group of Seven summit on invitation of Japanese Prime Minister Shinzo Abe.

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Indonesian President Joko Widodo has signed a controversial decree that introduces tougher penalties for child sex offenders in Indonesia. By replacing a 2002 law, Indonesia now introduces various new consequences for those who have been found guilty of sex offenses against children. The new penalties comprise the death penalty, chemical castration, life-long prison sentences, electronic monitoring (after release from prison), and the publicly announcement of the identity of the child molester.

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