Indonesia to tap tourism, biodiesel to tackle current account deficit: Jokowi

• President Joko Widodo has pledged to tackle Indonesia’s widening current account deficit, which is seen to reach about USD25bn in 2018, by chasing tourism dollars and increasing the use of local biodiesel to help reduce overall fuel imports, a statement posted on the Cabinet secretary website revealed. The president also stressed that there is tremendous uncertainty for the world economy outlining the risks of trying to tackle the current account deficit.
• Besides a net cash outflow and a dumping of bonds and stocks, a current account deficit is also affected by trade deficits, when the country’s import of goods and services exceed exports.
• Indonesia is the world’s largest palm oil producer and has recently issued a regulation to expand the use of 20% palm oil-based – blended biodiesel (B20) – to all sectors. This will take effect on 1 Sep 18.
• The government has also said it will raise the required biodiesel content to 30% (B30) in 2019 in the transportation sector, a year earlier than initially planned.
• Such a move could save the state coffers as much as USD11bn in oil imports, Mr Joko was cited as saying in the statement.
• The statement also underlined Indonesia’s increased focus on developing the tourism sector, with the government optimistic of achieving 2018’s target of attracting 17 million foreign visitors, up from 14 million in 2017.
• As part of an infrastructure push, President Joko wants to build 10 new Balis, and attract more affluent travellers from China, which is on track to become the biggest tourist market for Indonesia.
• Recent drives in upgrading smaller airports located close to tourist attractions, including one near Lake Toba, have helped Indonesia to be well-positioned to achieve its ambitious target to get 17 million foreign visitors in 2018 and 20 million in 2019.

External Link: https://www.straitstimes.com/asia/se-asia/indonesia-to-tackle-current-account-deficit-with-tourism-and-biodiesel-jokowi