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Elon Musk may be bringing the laughs on “Saturday Night Live” this week, and Dogecoin investors will be laughing their way to the bank because of it.

Dogecoin recently hit an all-time high, reaching a value of $0.45 on Monday. This happened days before Tesla CEO Elon Musk will make his appearance on “Saturday Night Live,” according to Benzinga.

And many are expecting Musk to talk about Dogecoin on the show, which would drum up interest and queries about the cryptocurrency and raise its value.

Musk said on Twitter that “the DOGEFATHER” would “definitely” appear on “Saturday Night Live.” This is a direct reference to his nickname, which is a play on the “Godfather.”

Dogecoin rises in value due to Elon Musk
Musk has tweeted about Dogecoin in the past, which has made its value skyrocket among social media and investors, as I wrote for the Deseret News. Musk’s tweets have drawn a lot of attention to the cryptocurrency, which encourages more people to invest, which then ups its value.

But Carol Alexander, a finance professor at the University of Sussex Business School in England, told Yahoo! Finance that Dogecoin should try to return to its roots, which included people using the money to fund charitable donations.

“If he (Musk) wants Dogecoin to have any fundamental economic value, he needs to direct it back towards its benevolent grass roots,” she said, according to Yahoo! Finance.

At first blush, a merger between Gojek and Tokopedia appears sensible but a closer look suggests huge challenges, says lawyers Joel Shen and Gabriel Li.

One of Jakarta’s best kept secrets is that it hosts the largest Jazz festival in the Southern Hemisphere.

I recall, with fondness, attending Java Jazz in the late noughties, on my regular work commutes to Indonesia as a young solicitor. 

Back then, prized festival tickets were bought over-the-counter at tour agencies, who only accepted cash payments – foreign credit cards were regarded by counter staff with deep suspicion.

On my way to the festival, I would negotiate the city’s notorious traffic jams in a hired car I had booked through the hotel. 

At the festival grounds, the only lunch and dinner options were Indonesian street food offered by the hawkers that congregated outside – my favourite being the very tasty but less than healthy chicken noodles or “mie ayam” sold by an elderly hawker from a blue kaki lima (push cart).

Things have changed significantly in the last decade. Today, I buy my Java Jazz tickets online, via an e-commerce marketplace like Tokopedia or ticketing platform Go-Tix, and pay for my purchase using a digital wallet like Ovo. Advertisementhttps://1efc0b7d3f2bca1bc101ccfb51133f9f.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

I travel to the festival using a ride-hailing app like Grab or Gojek, both of which also offer online food delivery services that will convey comestibles to concert-goers from the farthest reaches of Greater Jakarta.

All this is made possible by the rise of digitally-enabled businesses. Indonesia’s digital economy, valued at just US$8 billion in 2015 had quintupled to US$44 billion in 2020. 

It is expected to triple again to US$124 billion by 2025 according  to the 2020 South-east Asia e-Conomy report by Google, Temasek and Bain & Co.

The meteoric growth of Indonesia’s digital economy has also given rise to its first crop of technology unicorns – household names such as Gojek, Tokopedia, Ovo, Traveloka and Bukalapak; founded by a generation of Indonesian technopreneurs who themselves are champions for the country’s digital transformation, and poster boys for the new economy.

GRAB-AND-GO

As these tech unicorns mature, they begin to assiduously pursue strategic partnerships, mergers and consolidations, in a bid to deliver lucrative exits for their founders and investors.

For most of 2020, speculation was rife as to whether a merger between aspiring super-app operators Grab and Gojek, regarded by many as the most intuitive match between Southeast Asia’s tech darlings and cleverly labelled the Grab-and-Go merger, would materialise.

Observers cited deal economics, regulatory challenges, strategic differences – whether Grab and Gojek should merge in Indonesia only or across all Southeast Asian markets – and egos in the boardroom as key impediments to the merger.

The potential antitrust ramifications of a Grab-and-Go merger prompted statements from regional competition watchdogs that they were keeping a close eye on merger discussions, and the fear of massive job losses that may result from a Grab-and-Go merger, also drove Indonesian motorcycle driver unions to threaten country-wide protests.

When news finally broke, just two weeks ago, that Grab-and-Go had abandoned their merger plans, the industry’s attention shifted to the parallel merger discussion between Indonesian powerhouses Gojek and Tokopedia (G&T).

PARTNERS MADE IN TECH HEAVEN

At first blush, a G&T merger appears to make a lot of sense. 

The merged entity would be worth an estimated US$18 billion, and create the most complete technology ecosystem in Indonesia, a super-app operating on a scale hitherto undreamt of, even by the ambitious Grab. 

Such an entity would be able to expand its market share and pursue profitability by offering complementary services within a single ecosystem. Visitors to Java Jazz may finally be able to have all their needs met on one platform.

G&T would have the critical mass necessary to quickly access public markets, and sustain the expensive subsidies that it has had to offer in its customer acquisition strategy, while its unlisted competitors continue to rely heavily on external funding.

The natural synergies between G&T would also allow the technology giants to cross-sell into each other’s respective pools of customers and increase user stickiness. 

Imagine Tokopedia’s e-commerce business working with Gojek’s last-mile delivery solutions, or Tokopedia’s “buy-now-pay-later” schemes integrated with the services of Go-Pay and Gojek affiliate Bank Jago. 

Finally, with the notable exception of digital payments, Gojek and Tokopedia operate in different verticals, which means that a G&T merger would be less objectionable from an antitrust standpoint, and attract less opposition from regulators, consumers and private hire drivers than would a Grab-and-Go merger.

CHALLENGES DO REMAIN

Upon closer scrutiny, however, the challenges of a G&T merger become apparent. G&T would run the risk of spreading themselves too thin across too many battle fronts, and would have to compete with well-funded rivals across almost all their key verticals.

G&T are also dyed-in-the-wool Indonesian companies, with either no ambition to expand beyond Indonesia, as is the case with Tokopedia, or an inconsistent overseas track record, as is the case with Gojek. 

In order for the merger to succeed, G&T would also have to develop and implement a cohesive regionalisation strategy, but may have difficulty convincing international investors that they would be able to successfully execute such a strategy.

Finally, notwithstanding the fact that Gojek and Tokopedia predominantly operate in different sectors, there is one important vertical in which they currently compete – digital payments. 

Gojek and Tokopedia respectively control Go-Pay and Ovo, two of Indonesia’s largest e-wallets. This sets the stage for what might possibly be the most exciting battle in the unfolding Grab-Gojek-Tokopedia love triangle.

SOMEONE TO WATCH OVO ME

Perhaps the single greatest impediment to a G&T merger is the Indonesian central bank‘s (Bank Indonesia) “single presence policy” that prohibits a party from owning a controlling interest in more than one licensed e-money issuer such as Ovo and Go-Pay.

This would mean that G&T would not be able to merge their respective digital payment units, without a specific waiver from Bank Indonesia (BI).

This is not to say that such a waiver would be beyond the reach of G&T. Gojek and Tokopedia are funded by influential backers, who have access to the highest levels of government in Indonesia – including Gojek founder Nadiem Makarim, who is the youngest Minister of Education in Indonesia’s history. 

It is therefore not inconceivable that BI might be persuaded to allow a merger between Ovo and Go-Pay, or at least permit a merged G&T to continue holding controlling interests in both payments companies, especially in the interest of creating a homegrown technology major.

What happens, however, if BI does not approve the merger? Some say that Tokopedia will sell its stake in Ovo. Should this happen, it is likely that Grab, whose financial unit recently raised US$300 million, and who will likely have a right of first refusal on the proposed sale, will make a bid for Tokopedia’s stake in the payments company.

Such a move will, at least in theory, allow Grab to further entrench itself in the lucrative payments space in Indonesia. 

This amid rumours of a possible merger between Ovo and Ant Group-backed e-wallet Dana, and barely three months after Grab invested in Indonesian state-owned e-wallet operator LinkAja. Such a move will also narrow the gap between Grab’s payments business and Gojek’s.

BETWEEN THE DEVIL AND THE DEEP BLUE SEA

In his 1946 standard The Best Man, the inimitable Nat King Cole sings of how a talented and eligible suitor lost the girl of his dreams when he was blindsided by a rival whom he considered inferior.

By the same token, keen observers of the evolving romance between Grab, Gojek and Tokopedia over the years might have been surprised when Tokopedia, the erstwhile undisputed king of the Indonesian e-commerce sector, was recently dethroned by Sea, a quiet game developer whose market capitalisation on Nasdaq quintupled to US$140 billion during the pandemic.

To add insult to injury, Sea’s digital payments arm ShopeePay has risen through the ranks to become one of the leading e-wallet operators in Indonesia today.

For all the talk of the drama of a Grab-and-Go breakup, or a G&T merger, the enemy isn’t Grab, Gojek, or Tokopedia – the enemy is Sea. A G&T merger, if done right, would build a compelling narrative: Two household names joining forces to form Indonesiaʼs first Big Tech company.

Will G&T prove to be a worthy adversary against the mighty Sea? It remains to be seen. Sea has a large war chest, having raised more than US$6 billion last year, and the distinct advantage of a profitable gaming business.

G&T on the other hand, operate in notoriously unprofitable verticals and have yet to articulate a growth strategy beyond Indonesia. But never  underestimate Indonesian businesses which have demonstrated, time and again, their tremendous tenacity, adaptability, and capacity for innovation.

WHAT HAPPENS NEXT

Recent reports are that G&T might be close to finalising the terms of their merger, and that the ink may be drying on the merger agreements by the end of the month, subject only to approval by BI and competition regulators.

This will be followed by a complex integration process and the long road to an IPO.

Where will G&T list? The smart money is that they will pursue a dual-listing on Nasdaq and the Indonesian Stock Exchange, driven by tax considerations, and a desire to capitalise on nationalistic sentiments of patriotic retail investors at home.

An international listing will also demonstrate that Southeast Asia is not a one-hit wonder, and pave the way for other exits across the region.

JAKARTA — Indonesia’s economy contracted in 2020 for the first time in more than two decades as COVID-19 crippled business activity across the archipelago.

The gross domestic product of Southeast Asia’s largest economy plunged 2.07% from a year earlier, according to data released Friday — a marked downturn from 2019 when Indonesia recorded growth of 5.02%.

The median forecast of 17 economists polled by Reuters was for a 2% annual contraction, while Finance Minister Sri Mulyani Indrawati had previously forecast the economy would shrink between 1.7% and 2.2%.

Indonesia’s last annual contraction was in 1998, when GDP fell 13.1% amid the Asia Financial Crisis, according to data from the Organization for Economic Cooperation and Development.

While the numbers show Indonesia fared far better than neighboring Philippines, which recorded an annual contraction of 9.5%, 2020 proved to be one of the toughest years Indonesia has endured in its history.

Indonesia never imposed a full-scale lockdown, but looser restrictions on social activities were implemented across the archipelago throughout last year, hampering businesses as well as ordinary families. Biannual unemployment numbers released last year showed that the country’s open unemployment rate in August stood at 7.07%, the highest since 2011. Between February and August, 2.67 million people lost their jobs, data showed.

Household consumption, which makes up over half of Indonesia’s GDP, dropped 2.63% year-on-year, after growth of 5.04% last year.

Meanwhile, fourth-quarter GDP shrank 2.19% year-on-year, from a contraction of 3.49% in the previous three month period. The archipelago has now endured three consecutive quarters of negative growth.

The government accelerated spending in the fourth quarter to boost consumption, but was only able to distribute 83.4% of its 695.2 trillion rupiah ($49.5 billion) stimulus package by the end of last year.

The finance minister said Wednesday that it will expand its COVID-19 recovery budget for this year to 619 trillion rupiah. The government had initially set a budget of 372.3 trillion rupiah, but lifted that to 553.09 trillion rupiah in late January.

The country is also hinging its hopes on its vaccination program for a speedy recovery, prioritizing those in the working age group, in the hope that they can kick-start economic activity faster.

The government said the improvement in the fourth quarter means the country’s economy is headed for recovery.

“Indonesia’s economic performance continues to show a direction of recovery and is already on the right track,” the country’s finance ministry said in a statement. “Going forward, the direction of this recovery will be pushed more quickly, especially with the start of the vaccination in a measured and well-planned manner.”

Airlangga Hartarto, the country’s chief economic minister, said at a press briefing on Friday that he expects GDP growth to return to positive territory in the three months ending in March, with a growth rate between 1.6% and 2.1%. For 2021, he expects GDP to grow between 4.5% and 5.5%.

The World Bank projects Indonesia will record 4.4% growth this year, but said it is contingent on the gradual easing of mobility restrictions and the wide availability of an effective and safe vaccine.

Sung Eun Jung, an economist at Oxford Economics, said in a memo that the company remains cautious about Indonesia’s economic fortunes this year.

“The retightening of mobility restrictions in Java and Bali islands in January will lead to a further weakening of recovery momentum in private consumption,” she said.

The economist added that stronger growth in the U.S. and China “present a more favorable” external condition, but “temporary renewed shutdowns to contain the virus may still occur around the world, adding uncertainty to the exports outlook.”

Oxford Economics forecasts Indonesia’s GDP to grow 4.7% in 2021.

South East Asia’s biggest economy saw growth fall 3.49% in the third quarter of the year, compared to the same period in 2019.

Following a fall of 5.32% in the second quarter of 2020, this has pushed Indonesia into a recession.

The last time this happened was during the 1998 Asian financial crisis.

Authorities in Indonesia have predicted that 3.5m people could lose their jobs due to the coronavirus downturn.

Indonesia has the highest infection rate in the region.

Tourist trap

While agriculture is a major component of its economy, Indonesia relies heavily on tourist dollars.

Millions of foreigners fly to Bali each year in search of deserted beaches, terraced rice fields and sprawling Hindu temples.

But their numbers have dropped sharply since Indonesia closed its borders to non-residents, like other countries battling with the pandemic.

The 3.49% fall in economic growth during July to September is slightly worse than the 3% that economists had predicted.

The capital city Jakarta went into a second semi-lockdown for four weeks starting in mid-September with rising cases straining its health system.

“All in all, Indonesia’s economy is past its weakest point, but with the domestic outbreak not under control yet, economic activity is likely to remain under pressure,” wrote ANZ bank.

Government officials have pledged to accelerate spending to counter the pandemic’s impact and push Indonesia’s gross domestic product (GDP) back into growth.

Jakarta – Kemenangan Joe Biden atas Donald Trump dalam pemilihan presiden Amerika Serikat (AS) akan memberi dampak ke ekonomi global termasuk Indonesia. Bagi Indonesia, kemenangan Biden akan menurunkan tensi perang dagang antara AS dan China yang mendorong nilai komoditas dan stabilitas pasar keuangan global.

Kondisi itu akan menguntungkan Indonesia dari sisi ekspor dan nila tukar.

“Kemenangan Joe Biden diharapkan dapat membawa sentimen positif bagi perekonomian Indonesia dengan perubahan kebijakan ekonomi yang akan diambil Amerika Serikat dalam empat tahun ke depan yang berbeda dari pemerintahan saat ini,” kata Managing Partner Grant Thornton Indonesia, Johanna Gani dalam keterangannya.

Meski begitu, turunnya tensi perang dagang dapat mengurangi rencana investor di China yang akan memindahkan pabriknya ke negara lain. Sehingga, bukan tidak mungkin muncul risiko terhambatnya arus aliran investasi langsung (FDI).

“Ketidakpastian ekonomi akibat perang dagang dan pandemi sepanjang tahun 2020 diharapkan dapat segera pulih dan hubungan dagang Indonesia-Amerika Serikat tetap akan stabil dan bergerak lebih positif,” katanya.

Dalam keterangan tersebut dijelaskan, kemenangan Biden akan berdampak terhadap perubahan peta perekonomian dunia di mana perang dagang menjadi sorotan. Perang dagang ini secara tidak langsung menekan kinerja ekspor dan impor dunia, termasuk perekonomian Indonesia.

Dalam hal ini, Biden sendiri diproyeksikan beberapa pengamat akan mengurangi tensi hubungan dagang dengan China. Dari sisi ekonomi, Joe Biden, dalam manifesto kebijakan ekonominya akan melakukan kebijakan baru seperti menaikkan berbagai macam pajak termasuk pajak korporasi yang diprediksi akan naik sebesar 15%.

Terkait belanja negara, Biden berjanji akan memberikan stimulus fiskal yang jauh lebih besar yakni sekitar US$ 2,5 triliun selama periode 2021-2024.