ALETHEIA ASIA

INTERVIEWS

JERRY SAMBUAGA
DEPUTY MINISTER OF TRADE
REPUBLIC OF INDONESIA

Dr Jerry Sambuaga is the Deputy Minister of Dr Jerry Sambuaga also holds senior leader-
Trade of the Republic of Indonesia. He was ship positions in Golkar Party, the second
appointed by President Joko Widodo to the largest political party as represented in
Cabinet on 25 October 2019. parliament for the 2019 to 2024 term.

Prior to his appointment, Dr Jerry Sambuaga In September 2022, the Aletheia Asia team
served as a Member of Parliament of had the privilege to speak to Dr Jerry
Commission I (Foreign Affairs, Defence, Intelli- Sambuaga at the Ministry of Trade office
gence, Communication and Informatics), re- about the impact of the Covid-19 pandemic,
presenting the North Sulawesi constituency. the crypto industry in Indonesia, and the
challenges and opportunities facing the
He was previously a lecturer in Politics, Ministry of Trade.
International Relations and Government at
Universitas Pelita Harapan, Universitas Sam
Ratulangi, London School of Public Relations,
Universitas Pertamina, Universitas Para-
madina, and Universitas Indonesia.
 01 Coping with the Post-Pandemic
Situation
Obviously, the Covid-19 pandemic affected
global trade activities. The limited move-
ment of human capital significantly re-
duced the demand in most sectors, leading
to an overall decrease in global demand.
On the supply side, the pandemic pushed
producers to reduce their production sca-
le. Supply chains were interrupted, leading
to a reduction in overall production. The
global economy weakened due to the pro-
longed and multiplier effect of the pan-
demic.
Nonetheless, Indonesia’s government po-
licies to manage the pandemic and nation-
al economic recovery have been effective.
Several leading economic indicators, such
as GDP, unemployment rate and balance
of trade, have improved alongside an over-
all decrease in the number of Covid-19
cases in Indonesia. Within a year, Indo-
nesia’s economic situation recovered to
pre-pandemic levels, signalling the streng-
th of Indonesia’s economic fundamentals.
In 2021, Indonesia’s trade balance record-
ed a surplus of USD 35.34 billion – the
highest in 15 years. The surplus came from
Indonesia’s total exports, which grew 41.88
percent to USD 231.54 billion compared to
a year earlier. Meanwhile, Indonesia’s total
imports grew 38.59 percent to USD 196.19
billion. From January to July 2022, Indo-
nesia’s trade balance recorded a surplus of
USD 29.17 billion.
Indonesia's economy is expected to
expand by 5.0% in 2022 and 5.2% in 2023
as domestic demand continues to recover. 1
Indonesia's trade performance has re-
bounded strongly after a significant drop
in 2020.
1
Asian Development Bank, July 2022
This was certainly not a surprise
considering that our exports were held
back significantly in 2021. The Ministry of
Trade projected a positive and strong
growth for Indonesia's exports and we re-
main on track for economic growth, ac-
cording to the Ministry of Trade's Strategic
Planning for 2020 to 2024.
"In 2021, Indonesia’s trade
balance recorded a surplus of
USD 35.34 billion - the highest in
15 years."
02 Benefits of Free Trade
Agreements
One of the trade indicators to measure the
benefit of Free Trade Agreements (FTAs)
between Indonesia and our FTA partners is
the utilisation of the Certificate of Origin
(COO) or Surat Keterangan Asal (SKA) in
Indonesia. The COO is an export-import
document that an exporter or a seller
issues. It acts as a statement from the
exporter that the goods originate from a
specific country and is permitted to enter
the destination country. It serves as proof
of the goods’ origin and guarantees the
goods’ authenticity. Some countries offer
import duty relief or exemptions on goods
that have a COO.
According to Indonesia’s export data, the
utilisation of the COO has increased every
year. In 2020, out of Indonesia’s total ex-
ports, 45 percent of COOs utilised were iss-
ued to Indonesia’s FTA partners. In 2021,
76.9 percent of COOs utilised were to Indo-
nesia’s FTA partners. Through FTAs, Indo-
nesia benefitted from eliminating tariffs
and reducing non-tariff measures with its
FTA partners.
02
 03 Indonesia’s Increasing Economic
Growth
Indonesia’s economic growth has been
very encouraging, particularly when com-
pared to countries such as South Korea,
China, United States, Germany and France.
These five countries experienced negative
economic growth at an average rate of 2 to
4 percent in the first half of 2022.
While Indonesia’s economy has performed
well in the last two years, Indonesia did
experience an economic decline in the se-
cond quarter of 2020 due to the pandemic.
Nonetheless, Indonesia’s economy has co-
ntinued to grow and reached 5.4 percent
year-on-year in the second quarter of
2022, with a total GDP value of IDR 2.92
trillion (approximately USD 196 million).
Indonesia’s economic indicators have
shown positive trends, such as a trade sur-
plus, increase in retail sales and an
improved Purchasing Manager Index (PMI).
Indonesia’s trade surplus soared to USD
4.22 billion in July 2022 compared to USD
2.6 billion in July 2021, exceeding market
expectations with a USD 3.93 billion sur-
plus. Retail sales in Indonesia grew by 4.1
percent year-on-year in June 2022, com-
pared to 2.9 percent growth in May 2022.
2
The S&P Global Indonesia Manufacturing
PMI rose from 50.2 in June 2022 to 51.3 in
July 2022 – the highest point since April
2022 – boosted by a further recovery in ec-
onomic conditions.
04 Economic Growth in Southeast Asia
and the World
As a member of the Association for
Southeast Asian Nations (ASEAN), Indo-
nesia established ASEAN +1 Free Trade
Agreements to extend trade cooperation
to regional partners.
2
Trading Economics, September 2022
Indonesia, as part of ASEAN, also
established mega-regionalism through the
Regional Comprehensive Economic Part-
nership Agreement (RCEP). Indonesia is
one of the ten ASEAN countries that has
agreed to liberalise trade with five ASEAN
Dialogue Partners – China, Japan, Korea,
Australia and New Zealand.
The RCEP will represent almost half of the
global population, 31 percent of global for-
eign direct investment (FDI) and 30 percent
of global GDP. The total investment and
accumulation of GDP in the world will
increase intra- and inter-trade perform-
ance through the RCEP. In turn, it will
boost the economic indicators of RCEP
member countries. Through the RCEP,
member countries will cooperate not sole-
ly in terms of trade, but also in other areas
such as digital trade and the development
of small and medium-enterprises.
05
Bilateral Trade Relations with
Singapore
The Ministry of Trade supports and faci-
litates businesses’ trade relations with
other countries. Chicken meat is one of
Indonesia’s export products. In July 2022,
Indonesia exported chicken products to
Singapore for the first time after obtaining
approval from the Singapore Food Agency.
This marks the beginning of our efforts to
boost Indonesia’s exports to our neigh-
bouring country, particularly in the food
sector, and we are proud of this achieve-
ment.
Through Indonesia’s Trade Attaché in
Singapore, we will continue to explore and
promote other food and fresh products to
Singapore in compliance with local food
standards and regulations. We seek to con-
tinue being good neighbours and trade
partners.
03
 06 Views on Growing Anti-Globalism
Sentiments
The world has faced a lot of turbulence in
recent years, from the Covid-19 pandemic
in late 2019 followed by the global energy
crisis, which was worsened by the Russia-
Ukraine war. This caused disruptions in
many aspects, including affecting the
global supply chain, rising prices of energy
and basic commodities and high logistic
costs. Almost all countries, ranging from
poorer countries to superpowers such as
the United States, are experiencing an eco-
nomic downturn. In response, each coun-
try will strive to safeguard its resources to
protect the needs of its people. This, un-
fortunately, may lead to the distrust of glo-
balisation and its benefits.
From our point of view, globalisation is a
necessity but there should be certain
conditions in place. Each country needs to
consider the balance between boosting its
economy through exports-and guaran-
teeing the availability of resources for do-
mestic needs. This is particularly important
when set against the backdrop of global
uncertainty due to the energy crisis and
the threat of inflation and economic re-
cession. Furthermore, international trade
should be sustainable and profitable for
everyone. Each country should understand
that their domestic policies will inevitably
have an impact on other countries. For
that reason, there needs to be a common
consensus to ensure that all countries can
benefit from global trade policies, esp-
ecially developing countries.
07 Growing Crypto Market in
Indonesia
In Indonesia, crypto assets are considered
investment tools and classified as com-
modities that can be traded on the
Commodity Futures Exchange.
3
Commodity Futures Trading Authority, July 2022
Crypto assets are prohibited as a payment
instrument. There are various benefits to
boosting the crypto industry, such as
increasing domestic investment and
preventing capital outflows. The regulation
of crypto assets will provide protection for
consumers and create business certainty.
It will also increase state tax revenue,
improve the assessment of the Mutual
Evaluation Review by Financial Action Task
Force, prevent money laundering and
terrorism financing, and create new jobs
especially in the Information Technology
sector.
"The total value of crypto asset
transactions increased more than
tenfold from IDR 64.9 trillion in 2020 to
IDR 859.4 trillion in 2021."
From 2020 to 2021, there has been an
exponential growth in crypto assets’ total
value. The total value of crypto asset tran-
sactions increased more than tenfold from
IDR 64.9 trillion (approximately USD 4.36
billion) in 2020 to IDR 859.4 trillion (appro-
ximately USD 57.74 billion) in 2021. The
total number of registered cryptocurrency
traders increased from 3.61 million in Jan-
uary 2021 to 14.1 million in May 2022.
From January to May 2022, crypto assets
Tether, Bitcoin and Ethereum were the top
three traded crypto assets in Indonesia
from January to May 2022. Tether’s tran-
saction value was at IDR 42.35 trillion
(approximately USD 2.84 billion) during
3
this time period. PT Aset Digital Berkat, PT
Indodax Nasional Indonesia and PT Pintu
Kemana Saja were the top three crypto as-
set traders from January to May 2022, with
PT Aset Digital Berkat recording a total
transaction value of IDR 93.9 trillion
(approximately USD 6.31 billion).
04
 Indonesia Crypto Market Insight: Customer Demographics

46-50 50-55
3% 3%
40-45
Female 6%
21% 18-24
32%
36-40
20%

Male
79% 31-35
16%
25-30
30%

Crypto Asset Customers: By Gender Crypto Asset Customers: By Age Group

Nusa Tenggara Barat Sulawesi Others

1% Kalimantan 4% 6%
Sumatera Unemployment
6%
17% 5%
Bali Private Sector Employee
3% 28%

Entrepreneur
23%

PNS & BUMN

Professional 14%
6%
Jawa
69% Student/College Student
18%

Crypto Asset Customers: By Region Crypto Asset Customers: By Profession Group

08 Safeguard Measures for Crypto Asset Trading

To be allowed to be traded in Indonesia, all crypto assets must either be based on

distributed ledger technology; classified as a utility- or backed-asset; or have passed an
assessment conducted by the Commodity Futures Trading Regulatory Agency. An
assessment of the crypto asset’s economic benefits and risks of money laundering and
terrorism financing will be conducted before it receives approval.

05
The Ministry of Trade has created a trading mechanism for crypto assets and established
several institutions in the Crypto Asset Trading Ecosystem. This includes the Crypto Asset
Bourse – a supervisory agency to receive reports on physical transactions of crypto assets,
the Clearing House – a settlement and guarantee institution for crypto assets transactions, a
Depository to store crypto assets, the Crypto Asset Trader to organise the sales and
purchases within crypto asset transactions, a Depositing Bank for customer funds to be
deposited, and the Crypto Assets Committee which provides input to the Commodity Futures
Trading Authority.

We are excited by these developments. As the industry develops, we will continue to find a
balance between supporting the industry and having adequate regulatory oversight. Going
forward, Indonesia hopes to sell and trade crypto assets under the classification of basic
commodities and investment products. We hope to work with other countries in the region,
including Singapore, to establish a mutual relationship for crypto asset trading with fewer
barriers in this era of digitalisation.

Key Contact
Felicia Chia
felicia@aletheiaasia.com
Singapore

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