As Indonesia emerges from the covid-19 pandemic, business leaders have begun to position their companies and businesses to take advantage of the new opportunities.  In his opening address, Francois de Maricourt, President Director HSBC Indonesia said in recent months, the government of Indonesia has been making commendable progress in placing a higher focus and priority in attracting manufacturing investments. With the recently signed Regional Comprehensive Economic Partnership (RCEP), Indonesia will benefit from increased exports to other member countries given the region’s growing share of global GDP over time and the effect of deeper liberalization.

During his keynote speech, Iskandar Simorangkir, Deputy for Macroeconomic and Finance Coordination, Coordinating Ministry of Economic Affairs said the government will continue its commitment for structural reform in the long run, through the Omnibus Law on Job Creation. It is expected to improve the business and investment climate, making sure the continuity of business operations and reducing impact of Covid-19 such as job losses.

During the panel discussion, SD Darmono, Chairman of Jababeka Group emphasized the impact of Omnibus Law on Job Creation that will bring new foreign direct investment. But Indonesia needs to understand the motivation of each investor as investors from Japan have different needs from South Korean, Chinese or Taiwanese investors. In addition, investors today are also showing greater interest in ESG projects.

Kelvin Teo, CEO of Sembcorp Development said that Covid-19 has strengthened integration within Asian countries and with the newly RCEP agreement, can bring more investment, supply chain and manufacturing to the region. Particularly Indonesia, Vietnam and Myanmar could be preferred destinations for North Asian investors. Indonesia, he noted, as an opportunity to become a new manufacturing base for the region.

With the severe disruption to the global economy brought about by Covid-19 and the ongoing trade war between the US and China, the three distinguished panelists key provided insights on the outlook for 2021. Prof. Kishore Mahbubani, Distinguished Fellow, NUS (Singapore) noted that the ongoing economic and political standoff between the world’s two largest economies will continue to color the geopolitical landscape in 2021. China’s economy is already on the road to recovery and that bodes well for Southeast Asia. Gita Wirjawan, Founder Ancora Capital added that Indonesia, with its stable geopolitical outlook, the new Omnibus Law on Job Creation and the positive impact of RCEP, will enjoy more FDIs and economic growth in coming years.

Ali Setiawan, Head Of Global Markets PT Bank HSBC Indonesia added that the Indonesian government needs to stay proactive and consistent in terms of implementing policies and incentives to boost economic recovery in 2021. In fact, Indonesia was still among the most attractive markets in ASEAN in 2020, attracting strong foreign capital flows in the first half of the year.

Prof. David Autor, Ford Professor of Economics and associate department head of MIT’s Department of Economics highlighted how technology has over the past 200 years disrupted and created new jobs. From the industrial revolution to today’s IT revolution, human society has continued to progress and create new job opportunities.

The key, he noted, is not to worry about automation replacing human labor but to focus on improving skills in problem solving, creativity and adaptation and mastering their field. New jobs that we cannot imagine today will be created in the future. AI will not replace human creativity and judgment.

In his keynote address, Dr. Jerry Sambuaga, Vice Minister of Trade, RI said Indonesia can improve its position in the global supply chain through the recently signed Regional Comprehensive Economic Partnership (RCEP). RCEP is the second largest trade agreement for ASEAN countries after the WTO and will improve economic growth in the region.

During the panel discussion, Prof. Sarah Danzman, Asst Prof of International Studies, Hamilton Lugar School of International Studies, Indiana University, US said that international material trade is still facing challenges as the newly elected US president reformulates the country’s international trade policy. Vice Chairwomen KADIN Shinta Kamdani said the Indonesian government needs to implement its policies more actively, not just designing the policy well so that Indonesia can be competitive among its regional peers. Dr. Lili Yan Ing, Lead Advisor, Economic Research Institute for ASEAN and East Asia said the government should also focus on improving society’s quality of life, health and education.

Indonesia’s textile industry has played a pivotal role in the country’s industrial development over the past five decades. But over the past ten years, it has faced many challenges, both internal and external. In his keynote speech, Alma Karma, Director of Promotion Development, Indonesia Investment Coordination Board said during the first nine months of 2020, the agency attracted investment commitment up to Rp 616.6 trillion, or about 78% of 2020’s target of Rp 817.2 trillion.

Ravi Shankar, President Director Asia Pacific Fibers and Chairman of APSyFi said that currently Indonesia’s textile performance lags behind those of China and India, where the industry plays a bigger role in GDP. Indonesian textile exports reached US$12 billion and imports reached US$9.4 billion with contribution to GDP up to 3%. While exports have been muted in the last few years, imports have increased.  As such, the industry is in urgent need to be revitalized by improving import substitution policies, increasing export and optimizing the domestic market. In addition, integration and collaboration with the investment agency will increase textile exports upto US$30 billion.

Jemmy Kartiwa Sastraatmaja, Chairman of Indonesian Textiles Association said the textile industry needs to be revitalized through policies that can help reduce the cost of production so as to be more competitive. In the last five years, there has been no policy from the government to control the price of primary commodities particularly from countries that sell their goods at much lower prices.

Didik J. Rachbini, Senior Economist Institute for Development of Economics and Finance said Indonesia commodity exports only amounted to US$12.9 billion and were still below other Asia countries such as Vietnam, Bangladesh, India and Turkey. In 2020, exports are expected to decrease to between US$10 to US$11 billion. While other countries still target Indonesia to market their products, Indonesia needs to increase its capability in international marketing.

As the demand for sustainable finance products continues to grow, Indonesia should leverage on this trend, a panel of experts noted in the discussion.

During his keynote speech, Luky Alfirman, Director General of Budget Financing and Risk Management, Ministry of Finance said that there is currently no price incentive for sustainable finance product issuers. To reduce gas emissions up to 29% by 2030, Indonesia need least Rp3,461 trillion  (US$247 billion) ESG financing, while government so far only issued Rp370 trillion (US$26 billion) financing over the 2016-2019 state budget.

During panel discussion, Sean Henderson, Managing Director & Co Head of Debt Capital Markets Asia Pacific, HSBC said that the sustainable bond market has grown significantly from only US$16 billion in 2014 to US$ 110 billion in 2019. HSBC was glad to be part of the very first green bond Issuance by the Indonesian government and hopes to continue to contribute further to the government’s goals towards poverty reduction, improving education and lowering pollution.

Isabel Chatterton, Regional Industry Director, Infrastructure and Natural Resources, Asia and Pacific, International Finance Corporation (IFC) said IFC has so far issued US$10.4 billion green bonds in 20 currencies to finance 220 projects that is expected to reduce emission around 2.5 billion cubic gasoline. Mervyn Tang, Senior Director and Global Head of ESG Research, Fitch Ratings said APAC region still offers many areas for sustainable financing such as sustainable forestry. Hendro Utomo, Rating Director at Pefindo Rating Agency said not many Indonesian corporates have issued green bonds which points to future scope for growth.