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November 6, 2020, 03.04 AM – The much-anticipated US presidential election result was quickly overshadowed in Indonesia as the country officially enters an economic recession.

While world leaders are waiting for official word on who will lead the world’s largest economy, Indonesian authorities have been on alert as boycotts against French products heat up nationally.

Indonesians are infuriated over French President Emmanuel Macron’s statement deemed blasphemous to the religion of Islam that has since sparked fury in many Muslim countries.

The Greater Jakarta Metropolitan Regional Police has stepped up security at a number of the capital city’s shopping centers and malls as a precautionary step should the situation worsen.

More important news about Indonesia on Thursday are highlighted below:


1. Indonesia Enters a Recession

Indonesia’s Central Statistics Agency (BPS) has announced that the country’s gross domestic product (GDP) in the third quarter of 2020 contracted 3.49 percent year on year officially putting Indonesia in a recession.

The economic contraction in the third quarter was less severe than in the previous quarter when Indonesia saw its GDP contract 5.32 percent.

Head of BPS Suhariyanto said that the Indonesian economy in the third quarter was valued at Rp 3,894 trillion ($270 billion) based on current prices, while GDP at constant prices of 2010 was at Rp 2,720.6 trillion ($189 billion).

Besides Indonesia, other countries that have suffered economic recession include the US, Singapore, South Korea, Australia, the EU, and Hong Kong.

The International Monetary Fund (IMF) projected the global economic growth to contract by up to 4.4 percent.


2. 9.77 Million Indonesian Workers Unemployed from Pandemic

The coronavirus pandemic has sent Indonesia's unemployment rate soaring with nearly 10 million workers jobless.

BPS data shows that in August 2020, an additional 2.67 million workers in Indonesia were furloughed raising the national unemployment figures to 9.77 unemployed citizens.

Suhariyanto said that the coronavirus pandemic led to more Indonesians without work. The Greater Jakarta Area saw the highest unemployment rate in Indonesia, followed by the provinces of Banten and West Java.

BPS data also revealed that there has been an uptick in the number of part-time workers nationally totaling 4.83 million workers in Indonesia.

On the other hand, the number of full-time workers has decreased to a national tally of 9.46 million individuals.

Other BPS statistics showed that Indonesia’s agriculture sector absorbed 29.76 percent of the labor market followed by trade at 19.23 percent, and the manufacturing sector at 13.61 percent.



3. Indonesia and Singapore Extend Bilateral Financial Arrangement

Endorsed by Indonesian President Joko Widodo and Singaporean Prime Minister Lee Hsien Loong last November 2018, the central banks of both countries have agreed to extend their $10 billion bilateral financial arrangement for another year.

Indonesia is represented by Bank Indonesia (BI) while its counterpart is represented by the Monetary Authority of Singapore (MAS).

The Bank Indonesia decision demonstrates the commitment between both countries to support their respective economies as the coronavirus pandemic rages on.

The Indonesia-Singapore bilateral financial arrangement comprises of two agreements: Local Currency Bilateral Swap Agreement (LCBSA) and Bilateral Repo Agreement (BRL).

The LCBSA will allow BI and MAS to exchange local currencies of up to Rp 100 trillion or $9.5 billion.

Whereas the BRL valued up to $3 billion allows both central banks to repurchase transactions by using G3 government bonds as collateral to purchase USD cash.


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