Pretty much as predicted, iron and steel (HS 72) was the best performing sector for Indonesia’s external trade in 2020. While export jumped by 47% to US$10.85 billion, import collapsed 34% to US$6.86 billion, resulting in trade surplus of nearly US$4 billion last year. In December alone, trade surplus in HS 72 reached US$478 million, thanks to higher average price of metals. 

Indonesia booked a record trade surplus of US$21.74 billion last year against deficit of US$3.59 billion in 2019. This, however, was attributable to 17.3% drop in import, while export declined by 2.6%. Still, this was not bad at all given downfall of global economy due to the coronavirus pandemic. 

Happy New Year! The new year is expected to be an exciting one in the context of electric vehicle (EV) ecosystem and market in Indonesia. As one of the largest automotive market in the region, the country has by far attracted more full battery (BEV) offerings last year. Hyundai, one of the world’s leaders in BEV, launched two models in Indonesian market late last year: Kona EV and Ioniq.

Minister of industry Agus Kartasasmita claims of securing US$2 billion investment commitment from Toyota Motor Corp to build manufacturing facilities for hybrid, plug-in, and full battery electric vehicles (BEV) in Indonesia in three years time. Hyundai, meanwhile, is expected to implement its US$1.55 billion investment in car manufacturing, including EVs, as well.

The pandemic is a wake up call for the country’s pharmaceutical and medical equipment industry. Huge import of drugs and equipments during the pandemic has strengthened the government’s local content policy, which could lead to more investments in the sector next year onwards.

The pandemic hurts investments in general, but not for data center to support the fast growing tech economy in the country. Data from industrial estates selling plots of land to global tech giants pointed to interesting development in the data center industry.

Other than toll roads, the administration of president Joko ‘Jokowi’ Widodo has built major bridges and flyover all over the country in the past few years. Musi VI Bridge in Palembang, South Sumatra province is set to open this week, one year after the Musi IV Bridge was inaugurated.

Domestic plastic production is set to increase further next year onwards with commercial operation of new factories by local and multinational companies, including those investing in plastic recycling facilities. 

Despite the pandemic, the government has completed construction of three dams this year to make a total of 18 in the period of 2015-2020. We anticipate construction completion of eight other dams next year, including two in West Java designed to reduce flooding in the greater Jakarta area.