Latest Indonesia Investment Report Released – Introduction October 2021
In addition, the livelihoods of several million Indonesians depend – directly or indirectly – on industries or sectors considered to have a negative influence on the Earth’s environment or climate (such as energy , transport and agriculture). A key question is whether a meaningful transition to a greener economy can occur without jeopardizing the incomes and lives of the tens of millions of Indonesians who live near the national poverty line. After all, many of these people are low-skilled and uneducated. Thus, it is not clear whether they can easily adapt to a new working environment which may require different (perhaps even higher) skills, and is most likely an environment which requires more capital to provide. a service.
For example, if fossil fuel motorcycles are to be replaced with their electric counterparts, it requires a larger investment for a (potential) Gojek driver, as electric vehicles are simply much more expensive. In addition, if the electricity (needed to charge the battery of the electric vehicle) is to be produced using renewable energy sources, the electricity tariffs will also be significantly higher because, for now, the Fossil energy sources are cheaper and more reliable than renewable energy sources.
This is where there is a dilemma for emerging economies like Indonesia, and where there are conflicting views or interests between developed countries and emerging countries. In a country like Indonesia, there are 27.5 million officially poor people because they live below the national poverty line, while about 50 million Indonesians are at risk of falling below this threshold in the event of sudden economic shock. Many of these (vulnerable) people are employed in agriculture, for example in oil palm plantations. Thus, on the one hand, they are involved in activities directly related to deforestation, forest fires and habitat loss for certain species, but, on the other hand, these activities allow these people to live ( and perhaps to finance the education of their children). And so, it basically boils down to a choice that has to be made between saving people or saving the environment. Hopefully there is a middle ground: optimize production (in an ecologically sustainable way) on less land.
In developed countries, where poverty is a much smaller problem, this dilemma does not seem to exist. This explains why the West can really push for environmental sustainability. It also explains why you are unlikely to come across a mediocre environmentalist. After all, the poor simply have bigger concerns in mind. It is only when basic necessities are sufficiently met (especially food and shelter) that people (can) be concerned about the welfare of the environment and animals. It is this difference between developed and emerging economies that explains why – and we have said this before – we fully agree with President Widodo when he urged the developed world to play a leading role in the environmental sustainability, for example by investing in renewable energy projects in emerging countries. country (Widodo said at the Virtual Leaders’ Summit on Climate Change hosted by the United States in April 2021).
It would be unfair for the West to push for huge changes in developing countries – changes that come at a huge price, like the energy transition – and push those countries to finance the changes themselves, without really knowing to what extent. these changes will be effective. and without carefully calculating the possible negative effects of these changes. Basically, we still see Western imperialism in this climate issue. Fossil-fuel-based industrialization, which began about two centuries ago, is partly responsible for the impressive well-being of the Western world (although wealth is generally unevenly distributed), allowing it to become developed countries to full fledged. However, this process of industrialization, which began much later in emerging markets (and is in fact, in part, driven by Western capitalism), can now be interrupted in these developing countries because history proves that ‘extreme state intervention in an economy can lead to extreme markets. distortions, implying that social and economic development is also disrupted.
In recent decades, unlimited money printing (quantitative easing) in the United States and the European Union is another example of heavy monetary intervention. It does indeed aim to encourage inflation, credit growth and overall economic growth, but we are now gradually starting to see the negative side effects of this monetary policy, such as high inflation and asset bubbles. Even the Indonesian Minister of Finance, Sri Mulyani Indrawati, recently declared that stagflation (that is, slow economic growth but high inflation) is a threat to the world today. And so, a growing number of investors now seem to be focusing on investing in “whatever the government can’t print,” such as gold, stocks, real estate, and even bitcoin (instead of fiat currency and government bonds, because “anything that can be printed by governments quickly loses value).
Returning to the topic of climate change, it is interesting to note that the Indonesian newspaper Investor Daily (which is part of Lippo Group’s Berita Satu Media Holdings) published an article a few weeks ago in which it claimed it would focus more on covering issues related to climate change with the aim of raising awareness of environmental sustainability in Indonesia. Although we strongly agree that Indonesians (and the world at large) should treat Mother Earth with more respect (for example, garbage or air pollution are major issues in Indonesia), we also champion factual journalism (and factual science). So we hope that a newspaper like Investor Daily will not concern itself with climate activism, but will keep an eye on the conduct of factual (research) journalism.
In the West, there is a growing problem that, for ideological reasons, traditional media institutions, and even universities, can no longer discuss an issue like climate change in a factual manner. For example, to what extent humanity is behind global warming remains unclear (so far there is no evidence; only hypotheses). And, to what extent human action can prevent climate change is not clear (this is impossible to calculate if we do not know the answer to the previous question). And considering that climate change is – at least in part – a natural phenomenon (the earth’s climate changing or fluctuating since the birth of this planet), one can even wonder how dangerous it is to try to limit climate change. . These are questions that must be studied and should be discussed openly without censorship or ideological bias. Clearly, Indonesia Investments is very supportive of preserving the environment and encouraging environmentally friendly practices. But seeing the political and corporate elite of the West forcing massive change without allowing open discourse (which in effect signals that there is a lack of evidence, and therefore discourse should be avoided), while gender non-Westerner to pretend something that raises eyebrows and makes us wonder if this is the best approach to achieving a cleaner, greener environment in the future. On a positive note; given the history of the “oil wars” in the 20e and early 21st century, moving away from oil (and towards renewable energy sources) could encourage world peace as it seems unlikely that countries will engage in wars for the sun and the wind.
Nonetheless, it is with some trepidation that we see Investor Daily seemingly focusing on activism rather than investigative journalism when it comes to the climate issue. It is also a risky development in the context of democracy. Indeed, completely impartial journalism seems impossible. But, fully biased media is something that must be avoided in order to preserve democracy. While we can understand that the media would want to follow the ideology of the ruling political, corporate and media (Western) elites (three strongly interwoven areas in the world today) in order to protect their own interests and position, it would be preferable that media institutions remain concerned about their crucial role in democratic societies, namely to be (impartial) sources of information while also acting as a watchdog (including scrutiny of government actions and policies) .
Indeed, humanity must begin to treat Mother Earth with the respect it deserves. And considering that humanity is completely dominant on this planet, having destroyed huge amounts of nature to make way for villages, towns, roads, agriculture and industries, while causing enormous pollution (especially carbon emissions or greenhouse gases that can trap heat) it is undoubtedly that people have a huge (negative) impact on nature and the environment, perhaps even to the extent that people play a direct role in global warming. However, our point here is that when transparent and factual discourse is not allowed in the media or academia, it opens the door to injustice and wrong directions.
In the rest of this October 2021 edition of our monthly report, we’re going to step away from climate change. As usual, we will present an update on the COVID-19 situation in Indonesia as well as an assessment of the Indonesian economy in the third quarter of 2021 based on various macroeconomic indicators.
Another interesting article concerns the growing popularity of cryptocurrency (Bitcoin in particular being a famous crypto asset) in Indonesia. Indonesian financial regulators do not, so far, allow cryptocurrency payments, but they do make it easier to invest or trade in crypto. As a result, the number of Indonesian crypto investors has skyrocketed over the past year.
In this edition, we also take a look at infrastructure development in Indonesia, focusing on the Jakarta-Bandung bullet train project. As is known, the lack of development of adequate infrastructure is a major bottleneck in the Indonesian economy (and society). It is therefore important to monitor the country’s progress in terms of infrastructure development. But – as usual – the high-speed Jakarta-Bandung project ran into problems, causing a big delay and a lot more costs.
Richard van der Schaar
Take a look inside the report here!
The October 2021 report can be ordered by sending an email to [email protected] or a message to +62.882.9875.1125 (including WhatsApp).
Price of this report (electronic):
USD 10, –
€ 10, –