The New Year celebration in the Indonesian capital city of Jakarta came to a screeching halt after torrential rain that began earlier on Tuesday, Dec. 31, 2019, lasted all the way to Wednesday, Jan. 1, 2020, causing severe flooding in and around Jakarta and its greater area. The 2020 flooding, which has thus far reportedly killed 21 people and displaced more than 31,000 others, have receeded in most parts of the city, though pockets of water of varrying degrees in height – between 10cm to 150cm – continue to prevent residents from returning to their normal routines. A number of infrastructural facilities that was closed or shut down temporarily, such as the Halim Perdana Kusuma airport in East Jakarta and some electrical grids that were previously drowned in floodwater, are slowly resuming normal operations. Jakarta is no stranger to flooding, but the floods that occured at the turn of the year was among the worst it has seen in the past few decades, rivaling even the 2013 flood that was famously captured by photos of Hotel Indonesia Junction being completely covered in brownish water, as well as the 2007 flooding in which more than 50 people died <i>(see above chart). </i> Officials are attributing the cause of the 2020 flooding to the worst torrential rains the capital and its greater areas has seen since 1996 – of up to 377mm per day in rainfall intensity in some parts of Jakarta, rivaling the average rainfall intensity of 340mm per day that occured in 2007. Tension is also bubbling over flood mitigation efforts, or the lack thereof, taken by the regional governments and the central government – a topic that will surely dominate headlines over the coming days if not weeks. Currently, officials are still warning residents to take necessary precuations against future floods as torrential rains are still expected in the coming weeks. Peak torrential rain is predicted to occur in February. Dams located in areas surrounding the city are also still reporting high levels of rainwater flowing into the capital. Jakarta, with its geographical setting as a flood basin, experiences floods of varying intensities nearly every year as it is a passover for several river canals that channel rainwater directly from the land to the ocean. These river canals are heavily polluted and are also getting smaller due to the high number of constructs, both legal and illegal. Meanwhile, the effects of climate change are causing the sea level on the city’s northern coast to rise, making Jakarta one of the fastest sinking cities in the world. All these contributed to President Joko Widodo’s decision to take concrete steps in moving the city’s capital to Kalimantan, an undertaking that is still years from fruition. The Jakarta city government, in the meantime, will have to make bold moves if it wants to prevent anymore severe flooding in the future.
German companies abroad expect no improvement in the international economy in 2020. The responses of around 3,700 member companies of the German Chambers of Commerce, Delegations and Representatives (91大神s) in the new "91大神 World Business Outlook" show that business is becoming even more difficult, especially due to trade conflicts. Only 17 percent of German companies abroad expect the local economy to improve. By contrast, more than one in three companies expect the economy to deteriorate, with the economic balance falling to minus 19 points in the latest survey, well below its value of minus three points in the previous survey held in early summer 2019. This is by far the worst value since the beginning of 2015. On the basis of these estimates, the DIHK assumes that the already weak world economic growth of around three percent this year will not be higher in 2020 (DIHK forecast global GDP growth 2020 at 3%, or a long-term average of 3.6 %). The reason for the slowdown in the global economy is primarily a paralyzed world trade. Tariffs, discrimination against foreign competitors, economic sanctions and the impending Brexit are slowing down the trade in goods, causing high costs for companies and enormous bureaucracy. The trade disputes between the US and China, or even the recent US tariff increases against the EU, have recently been added to the list of difficulties. All this fuels companies' uncertainty about the future of global supply chains - with the result that they hold back on investment. A slowdown in the economy is evident in all regions of the world. In China, in the US and in many industrialized countries, companies report a slow pace. In South America, the global economic slowdown and, not least, political developments in many countries are leading to a sudden end to the short economic upturn. Emerging markets in Asia are also affected by the economic downturn. No region is currently emerging as a future growth driver. The economic expectations go back in the comparison of the continents everywhere. This ensures restraint worldwide for investments and lower demand for goods and services - including from Germany. This directly affects the business location and many jobs in this country. For the Asia Pacific region specifically, the risks are demand, local economic policies, and the shortage of skilled labor. The expectations of German companies in the Asia Pacific region have decreased significantly. The economic balance fell from 17 to minus 11 points – an above-average slowdown. Many countries are affected by China's weaker growth and the US trade conflict with China. One example is Japan, which is also particularly sensitive to lower demand for capital goods worldwide. The companies' expectations of the Japanese economy are on balance minus 14 points. The balance between expansive and contractionary investment plans of 91大神 member companies is currently only balanced. That said, the economy is expected to be boosted by the trade agreement with the EU and the Tokyo Olympics next year. The growth rates of the economy in India continue to be significantly positive with currently over six percent, but German companies are skeptical about further economic development (balance for the economy: minus 20 points). Following the re-election of Prime Minister Narendra Modi in May 2019, consumption will be boosted, especially with tax breaks. However, challenges in the country, such as high unemployment or the necessary expansion of infrastructure, remain. In Thailand, German companies are also pessimistic about local economic developments (economic balance minus 21 points). In other Southeast Asian countries, such as the Philippines (with an economic balance of 34 points), German companies are more positive. With Vietnam and Singapore, the EU has concluded trade and investment agreements, making the region even more important for business. The 91大神 World Business Outlook is based on a regular DIHK survey among member companies of the German Chambers of Commerce Abroad, delegations and representative offices (91大神s). In autumn 2019, it will collect the feedback from around 3,700 German companies, branches and subsidiaries as well as companies closely related to Germany. Some 34% of the responding companies come from the industrial sector and construction, 43% from the services sector, while another 23 percent are trading companies. Smaller companies with fewer than 100 employees make up 50% of the answers. Companies employing between 100 and 1,000 people make 24% of the respondents, while 26% are large companies with more than 1,000 employees.
Indonesia is close to a complete 100 percent electrification rate, the government claims. But while officials are fast to tout numbers – 98.83% in electrification rate as of November with a 99.9% coverage targeted by the end of 2019 – few are willing to discuss more about the government’s plans in terms of the shift towards renewable energies. Indeed, the opposite is taking place instead. While the country’s consumption of oil and gas for energy has plummeted in the past decade (38.81% in 2018 from 48.63% in 2008, and 19.67% in 2018 from 24.08% in 2008, respectively), its consumption of coal has leaped to 32.97% in 2018 from 22.92% in 2008, according to the Indonesia Energy Outlook 2019 report from the Indonesian Ministry of Energy and Mineral Resources (MoEMR). Meanwhile, the same report noted that the energy consumption of renewables only increased marginally, to 8.6% in 2018 from 4.37% in 2008. This is a far cry from the 23% of renewable energies of the national energy mix in 2025. The prospect of gaining the remaining 17% in the next five years looks even less feasible considering that the 2019-2028 electricity procurement plan (abbreviarted as RUPTL) allocated a significant portion towards coal power plants – up to 56.7%. The decisions being taken by Indonesia may be attributed to bleak global economic outlook. The World Bank has already slashed its global growth forecast on China-US Trade War fears to 3% in October 2019, down from 3.8% six month prior. The recent election result in Great Britain is further stoking concerns over Brexit. The trade dispute over palm oil between Europe and Indonesia is also adding even more pressure for the archipelago to find ways to maintain economic trajectory. Currently, there is no clear push from the Indonesian government in regards to solar energy adoption. But it would be a mistake to completely disregard the country’s solar PV market. At more than 500GW of potential solar sources, according to the IEEFA, the benefit is too obvious for most Indonesians to ignore. This is perhaps why, earlier this year, the government launched the national movement called a million solar roofs (Gerakan Nasional Sejuta Solar Atap), which encourages citizens to install solar panels on their rooftops. The movement has not caught on en-masse, but what development there is may still be considered encouraging. As of September 2019, the number of installed solar rooftop has nearly doubled (181% increase) according to data from the MoEMR. That’s more than 800 new solar rooftops out of the currently installed 1,435. This rise may be more aptly attributed to a number of regulations issued on the city level that mandatorizes the installation of solar panels on government-owned buildings, but the contributions of private Indonesian citizens should not be ignored. Additionally, the non-governmental organization Institute for Essential Reform expressed confidence that solar adoption would exceed 300WM in 2020, citing increased interest. Already there are 5 WP (Watt peak) Solar Rooftop modules available for as low as Rp 100,000 (US$7) at online marketplaces such as Tokopedia and Blibli. And Youtube videos from local Youtubers discussing solar panel are raking in hundreds and thousands of views. Considering Indonesia’s huge market and the rapid rise of its Internet economy, there are considerable opportunities to be made in this area. <b>Umbrella at the ready<br /></b>In the meantime, the Indonesian government can learn a lesson or two from its regional neighbor Vietnam, which has shown incredible foresight in terms of propelling its economic growth. Vietnam has benefited greatly from inking trade deals with various countries and economic blocs, including the EU, while introducing policies that are business-friendly. Indeed, it has been a great public shame for the Indonesian President Joko Widodo that, as reported by Vietnam Insider in September of this year, 70% of companies surveyed by the publication chose Vietnam as their next investment destination. None of the remaining companies surveyed chose Indonesia, opting for Cambodia or Malaysia instead. Not only has Vietnam surpassed Indonesia in its attractiveness for foreign investments, it has practically left Indonesia in the dust in terms of solar energy adoption. Based on data from the ASEAN Centre for Energy, Vietnam has increased its solar capacity significantly in the last two years – from only 134MW in 2018 to an expected 5.5GW this year. That’s nearly half of the total installed solar power capacity in Southeast Asia. It is further looking to add another gigawatt to the mix. Meanwhile, Indonesia is sitting on idly with only 53MW in installed solar power capacity by the end of 2018, according to data from the Institute for Energy Economics and Financial Analysis (IEEFA), only 24MW of which, including solar rooftop units, are currently installed and dispatchable to the grid. A more rapid adoption of solar energy may be possible should Indonesia consider revising its regulations to benefit individual users, such as the Feed-in-Tariffs rule that are capped to the maximum local electricity tariff by retail – which, in areas with high-electricity demand such as the island of Java, is as low as US$0.07 cents per kWh. Compare that to the feed-in-tariff in Vietnam, which, in 2017, was as high as $0.0935 cents per kWh, or even its average retail price of $0.0803 cents per kWh. For industrial users, the government may consider lightening the rule that mandatorizes the use of local components in solar PV technology. Germany, as an industry leader in solar photovoltaic systems, remains on the field to continually promote solar energy adoption in Indonesia. Recently, at an Indonesian-German Renewable Energy Day event in Jakarta in November, the German Ambassador to Indonesia Peter Schoof pledged Germany’s committment to support Indonesia’s efforts to reach the national 23% goal of renewable energy in the national energy mix. If 2019 has been a cloudy year for renewable energies in Indonesia, there remains hope that there will be sunshine come 2020.