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Indonesia has benefited from the US-China trade war, minister says

The ongoing trade war between the U.S. and China has opened up new opportunities for Indonesia, the Southeast Asian nation’s minister of industry said Tuesday.

Indonesia is the largest economy in Southeast Asia, the region tipped by many to be one of the beneficiaries of a tariff fight that has threatened global growth. Experts have said the conflict between the world’s two largest economies would push companies to speed up plans to move parts of their supply chains from China to countries such as Vietnam, Thailand and Indonesia.

And Indonesia has seen that shift happening, Minister Airlangga Hartarto told CNBC’s Nancy Hungerford at the World Economic Forum in Davos, Switzerland.

The official said a number of companies that produce textiles and footwear have explored the opportunity to move from China to Indonesia. The Southeast Asian country has also been exporting more steel to the U.S., he added. That’s despite U.S. President Donald Trump imposing additional tariffs on steel and aluminum imports in March last year.

Indonesia exports of iron and steel to the U.S. jumped 87.7 percent year-over-year in the January through November period of 2018, according to data from the country’s trade ministry. During the same period, total exports to the U.S. grew 3 percent, the data showed.

Those opportunities aside, Airlangga said the trade war could end up hurting the global economy and that’s not good for all countries.

“I think the new norm of slow growth is not good for everybody … It’s not good enough for Indonesia to create jobs for the people,” the minister said.

Supermetalbja Minyak
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Ancaman Penutupan Pemerintahan AS Dongkrak Harga Minyak

Harga minyak mentah dunia menanjak pada perdagangan Selasa (11/12), waktu Amerika Serikat (AS). Namun, kenaikan harga minyak terbatas oleh kinerja pasar saham yang negatif akibat kekhawatiran terhadap kemungkinan berhentinya operasional pemerintahan AS.

Dilansir dari Reuters, Rabu (12/12), harga minyak mentah berjangka Brent naik US$0,23 atau 0,4 persen menjadi US$60,2 per barel. Penguatan juga terjadi pada harga minyak mentah berjangka AS West Texas Intermediate (WTI) sebesar US$0,65 atau 1,3 persen menjadi US$51,65 per barel.

Pasar saham AS tertekan setelah Presiden AS Donald Trump mengancam untuk ‘menutup’ pemerintahan AS demi pendanaan pembangunan tembok perbatasan AS-Meksiko. “Sepertinya prospek berhentinya operasional pemerintahan AS tidak bagus untuk kinerja aset manapun. Pasar modal bereaksi pertama yang menyeret harga minyak bersamanya,” ujar Partner Again Capital Management John Kilduff di New York.

Di awal sesi perdagangan, harga minyak sebenarnya mendapatkan dorongan setelah National Oil Company (NOC) Libya mengumumkan kondisi kahar pada ekspor minyak dari lapangan minyak terbesarnya El Sharara. Pekan lalu, lapangan tersebut direbut oleh kelompok militan.

Pada Senin lalu, NOC menyatakan berhentinya operasional lapangan minyak El Sharara akan menghilangkan produksi sebesar 315 ribu barel per hari (bph) dan tambahan produksi yang hilang dari lapangan minyak El Feel sebesar 73 ribu bph.

Di sisi lain, harga minyak tertekan juga tertekan pemangkasan produksi Rusia yang lebih lambat dari ekspektasi. Pemangkasan tersebut merupakan bagian dari kesepakatan bersama Organisasi Negara Pengekspor Minyak (OPEC) untuk memangkas produksi sebesar 1,2 juta bph.

Pada Selasa kemarin, Rusia menyatakan hanya berencana untuk memangkas produksi sebesar 50 ribu hingga 60 ribu bph pada Januari 2019. Namun, secara bertahap, jumlah itu akan dinaikkan hingga mencapai 220 ribu bph.

“Harga minyak mentah berjangka relatif tidak berubah dari sebelum kesepakatan OPEC mengingat pasar masih khawatir terhadap indikasi lambatnya pengurangan produksi yang dilakukan Rusia bulan depan,” ujar Presiden Ritterbusch and Associates Jim Ritterbusch di Chicago dalam catatannya.

Para analis lain mencermati pengurangan produksi yang dilakukan oleh OPEC dan sekutunya, termasuk Rusia, kemungkinan tidak terlalu besar untuk mengembalikan keseimbangan pasar. Khususnya, setelah pemerintah AS memproyeksikan Negeri Paman Sam bakal mengakhiri tahun ini sebagai negara produsen minyak terbesar baru di dunia.

Badan Administrasi Informasi Energi AS (EIA) memprediksi produksi minyak mentah AS bakal terkerek 10,9 juta bph pada tahun ini dan 12,1 juta bph pada 2019.

Hari ini, Institut Perminyakan Amerika (API) bakal merilis data persediaan minyak AS. Berdasarkan jajak pendapat Reuters, para analis memperkirakan persediaan minyak mentah merosot tiga juta barel pekan lalu.

Jokowi - Game of Thrones
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‘Winter is coming’: Indonesia’s President Jokowi urges unity as he sounds warning for global economy

NUSA DUA – Drawing from popular television series Game Of Thrones, Indonesia’s President Joko Widodo warned that “winter is coming” when he urged countries to unite and cooperate, rather than compete, to address mounting issues from climate change to technology disruption.
Speaking on the International Monetary Fund-World Bank annual meetings plenary in Bali on Friday (Oct 12), Mr Joko said the world is seeing an imbalance of economic growth: The United States, the world’s largest economy, is enjoying robust expansion, while many others across the globe are struggling with various woes stemming from escalating trade tensions, industrial shocks due to technology disruption and market pressure.
Comparing the current state of global landscape, marked by heated rivalry among some economic powers, with the blockbuster TV series where several “great families” and “great houses” compete to claim the Iron Throne, Mr Joko warned that “the evil winter is coming” and it can bring massive destruction to the world.
“With the threat from evil winter, they finally realise it’s not important who will occupy the Iron Throne. The most important thing is the mutual power to defeat the evil winter so that global disaster won’t happen, so that the world doesn’t turn into a wrecked barren land that causes suffering to all of us,” Mr Joko said.
“I want to assure that we are entering the final session of global economic expansion that is full of rivalry and competition, and that can turn into something which is more critical than the global financial crisis 10 years ago.”
He added: “We depend on you all, the monetary and fiscal policymakers to keep the commitment of global cooperation.”
Mr Joko pointed out some pressing concerns that also require strong cooperation from countries to tackle: Climate change and a polluted food chain because of marine debris.
To curb the impact of climate change, for instance, the world may need to increase an annual investment in renewable energy by around 400 per cent globally, to save the planet and many lives, he said.
“Therefore, we need to ask if now is the right time to embrace rivalry and competition,” he said.
“Are we too busy competing against each other and fighting with each other that we fail to realise the big threat shadowing all of us, that there’s threat facing both rich and poor countries, large and small nations alike?”
He called on finance ministers and central bank governors to “cushion the blows from trade wars, technical disruption and market turmoil”.
“I do hope you will do your part to encourage leaders to address the situation appropriately. Monetary and fiscal policies that can shoulder trade wars, technology disruption and market uncertainties are necessary,” he said.
He then drew raucous laughter with a further reference to the fantasy show’s “Mother of Dragons” character – in a nod to IMF chief Christine Lagarde, who smiled broadly at the comment.
Ms Lagarde, who also spoke at the same event, acknowledged the global imbalances caused by trade, which despite having created prosperity, also caused a backlash, as too many people have been left out.
To cope with the changing economic landscape, she proposed a “new multilateralism”, an international cooperation which is “more inclusive, more people-centred and more result-oriented”.
Ms Lagarde cited an agenda to achieve Sustainable Development Goals as an example of where strong cooperation matters, as low-income countries need an extra US$520 billion (S$715 billion) each year for investment in vital sectors, such as health, education, water and infrastructure, by 2030.
“This partnership is integral to the new multilateralism – not least because tensions arising from exclusion and climate change do not respect national borders. In that sense, solidarity is self interest,” she said.
Kurs-Dollar-Melemah-Lagi-Rupiah-Makin-Kuat
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Be ready – financial crisis is near?

THE financial crisis affecting developing countries arrived in full-scale fashion in our region last week when the Indonesian economy experienced shocks reminiscent of the Asian crisis 20 years ago.
With the crisis coming so close to home, it is time to contemplate what may unfold in the near future and list measures to respond to each scenario, so that we are not taken by surprise.
The agreement reached with Singa­pore to postpone construction of the Kuala Lumpur-Singapore high-speed rail (HSR) project until end-May 2020 (with Malaysia paying S$15mil [RM45.1mil] in cost) was an achievement. It allows us a gap of two years before having to meet the mega project’s large expenses.
The next couple of years will be crucial, as the country will be in the midst of managing the “perfect storm” of servicing the trillion-ringgit government debt and preventing the government deficit from ballooning, while facing the challenges of the emerging global financial crisis.
In this tight situation, every billion ringgit counts; indeed every single ringgit counts.
As more discoveries are made of missing money, whether due to the 1MDB scandal or unpaid tax refunds, there is increasing pressure to save money and cut costs to avoid wider deficits.
So the HSR’s two-year deferment helps a lot. It may be like kicking the can down the street, but hopefully, the situation will improve by the end of the two years to allow the can to be picked up, especially if during the period, ways are found to cut the overall cost of the project.
Other projects too have to be scrutinised. Besides the East Coast Rail Link and Trans Sabah gas pipeline projects, there are many other projects whose costs have to be examined, and whose implementation can be postponed or cancelled.
Besides the scourge of overpricing and kickbacks, there is the over-riding concern that a financial crisis has to be averted.
Indonesia’s Energy Minister last week announced that energy projects worth US$25bil (RM103.64bil) and representing half of President Joko Widodo’s grand electricity programme, would be postponed or restructured. This is to save US$8bil (RM33.1bil) to US$10bil (rm41.45bil) on imports for the projects.
Indonesia is also raising tariffs to 10% on over 1,000 goods in a move to reduce the import bill.
These are some measures the country is forced to take as its economy enters full crisis mode. It could even face a meltdown of the 1998-99 scale. The rupiah fell to almost 15,000 per US dollar, the lowest point since the 1998 crisis.
Indonesia is vulnerable to a financial crisis due to its dual deficits (in the current account and government budget), large external debt and high foreign ownership of equity and government bonds.
Indonesia is caught in a vicious cycle, which is typical when financially liberalised countries follow orthodox fire-fighting policies. When the markets perceive that the external reserves could be insufficient to pay for imports, service debts and absorb potential capital outflows, the currency depreciates.
The perception sparks a self-fulfilling prophecy. The fall in currency makes it more difficult for the government and companies to service foreign loans, and also prompts investors to pull out their money.
In such a situation, the government raises the interest rate to incentivise investors to retain their money in the country. Indonesian interest rates have risen by 1.25 percentage points since May.
However, the side effect is that homebuyers and companies find it more difficult to service their mortgage and business loans. Credit slows down, and so does the economy. This in turn causes the currency to drop further, prompting more rounds of interest rate increases, which lead to loan defaults and bankruptcies.
The economy goes into recession, leading to more capital outflows, including by local people. The currency drops again, recession deepens, and the cycle continues.
Indonesia is still at the start of this cycle. Hopefully it will find the policy tools, including unorthodox ones that work, to avoid a long stay in the spiral. But Indonesia is by no means alone. Argentina and Turkey are deep in their crises, and more and more countries are suffering the contagion effect, including South Africa, India, Iran and the Philippines.
Following the 2008-09 global financial crisis that especially hit the United States and Europe, many hundreds of billions of dollars rushed to emerging markets, including Malaysia, in search of higher yields. The liquidity was created by quantitative easing (government pumping money into the banking system) and low interest rates in the US and Europe.
Now the funds are leaving the emerging economies and returning to the US. This is due to the US policy reversing to quantitative tightening, the rise in its interest rates, and fears of an emerging market crisis and a worsening trade war.
Developing countries vulnerable to currency decline, a pull-out of funds and a crisis are those with significant current account deficits, government budget deficits and debts; low foreign reserves; large external debt; and high foreign ownership of local bonds and equities.
Malaysia is so far safe but it is wise not to be complacent. It is not easy to escape contagion once it spreads.
A few warning signs have appeared, such as a narrowing of the current account surplus and significant portfolio investment outflows (both in the second quarter), and a weakening of the ringgit, besides the larger than previously reported government debt and the need to prevent the budget deficit from increasing.
The old Scout motto, “Be Prepared”, comes in handy at times like this. It is good to prepare now for any eventuality, so as to avoid being caught by surprise.
China Luncurkan Penyelidikan Impor Baja dari Indonesia
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China Luncurkan Penyelidikan Impor Baja dari Indonesia

BEIJING – Kementerian Perdagangan China menyatakan bahwa mereka telah meluncurkan penyelidikan anti-dumping terhadap impor billet baja tahan karat dan lembaran baja tahan karat panas dan pelat dari Uni Eropa (UE), Jepang, Korea Selatan dan Indonesia.

Seperti dilansir Reuters Senin (23/7/2018), langkah ini menyusul pengaduan oleh Shanxi Taigang Stainless Steel (000825.SZ), dengan dukungan dari empat pabrik lainnya termasuk divisi baja stainless Baosteel. Shanxi Taigang tercatat menyumbang 25-35% produksi baja tahan karat China.

China mengimpor 703.000 ton produk tersebut pada tahun 2017, naik hampir 200% dari tahun sebelumnya. Tercatat, 98% kenaikan impor tersebut berasal dari daerah yang ditargetkan oleh penyelidikan.

Dalam dokumen yang dirilis Kementerian Perdagangan China, keluhan yang diajukan Shanxi Taigang menyatakan bahwa peningkatan luar biasa dalam impor tersebut telah menyebabkan kerusakan nyata di pasar China.