As the new president of Indonesia, Joko Widodo, begins his term in office, his government is making an effort to create jobs in the country’s automotive industry. He has signed a decree that sets out the government’s support for the development of an electric vehicle industry in the Southeast Asia’s largest economy.
Covid-19 epidemic in Indonesia
Covid-19 is a novel coronavirus that causes respiratory illnesses in people. It is a contagious disease that is transmitted through airborne droplets. It is very serious and can result in death. The WHO recently declared the outbreak a public health emergency.
Indonesia is home to 270 million people. At least 70 percent of the population is at risk of contracting the virus. Most of the cases of COVID-19 in Indonesia have taken place in Jakarta and Greater Jakarta, which includes Tangerang, Depok, Bekasi, and Bogor.
While the Indonesian government has enacted partial mobility restrictions in Jakarta, they have not been enforced nationwide. Despite this, President Joko Widodo fears the restriction will destroy the country’s economy.
President Joko Widodo signs decree laying out government support to build an electric vehicle industry in Southeast Asia’s largest economy
President Joko Widodo (Jokowi) recently signed a regulation that sets a framework for electric vehicle (EV) production in Indonesia. It contains 37 articles and aims to create a legal basis for EV production in the country. The regulation is intended to facilitate the development of the Indonesian automotive industry, with the aim of becoming an EV manufacturing center in Asia.
A number of companies are already involved in EV production in Indonesia, including Hyundai Motor Group, Toyota Motor Corp, and Mitsubishi Motors Corporation. However, manufacturers are waiting for the final regulation.
In addition to creating a legal framework, the President’s decree also creates a number of tax incentives for automakers. For instance, the regulations will allow manufacturers to enjoy lower import tariffs and luxury taxes.
Subsidy bill has ballooned to highest since 2014
It’s no secret that the Indonesian government has been under the gun when it comes to lowering the country’s sky-high energy subsidies. While President Joko Widodo has been trying to rebalance the country’s budget, the energy subsidies have been ballooning to new heights. So far, the state has spent more than half its 207 trillion rupiah subsidy budget for the year.
According to the PT Bank Central Asia chief economist, the energy crisis has been a “wild card” for the country’s economy. This is not to say the state hasn’t done its share, but it hasn’t been universal.
In addition to the subsidies themselves, the government is also on the lookout for the best way to tame the pricey fuel. Several major cities have experienced small protests against the fuel price hike, and the opposition Labour Party has organised an elaborate protest.
Infections likely four times higher than the official daily numbers
A new report from the Indonesian health ministry claims that the country’s latest infection count has reached an all time high of 568, a tenfold increase from the previous week. Although the country has a well developed vaccination program and a relatively robust medical infrastructure, the infectious disease has proven to be a thorn in the flesh for the country’s poorer citizens. The government has rolled out a slew of new policies to ward off the disease, including a spate of new vaccines and increased use of the most sanitary and secure hospitals in the country. In fact, a number of hospitals have run out of life saving oxygen in recent months.
Adaro’s strategy to diversify into aluminum and battery making for electric vehicles
The Adaro Minerals Indonesia, Tbk unit of Adaro Energy, which debuted on January 3, is on track to deliver twofold returns from its stock in the first three months of its existence. Shares have rallied from 100 rupiah to 2,990 rupiah, beating the market index.
The unit has a market cap of about _ billion. It aims to establish a commercial production date by the first quarter of 2025. In its initial stage, the company hopes to produce 500,000 tonnes of aluminum per annum.
The EV ecosystem will demand six types of minerals, and the demand for lithium, cobalt, copper, nickel, and rare earth elements is likely to increase. However, soaring prices for these minerals pose the biggest obstacle to EV sales.
