For example, Indonesia is allowing Australian exporters to use an electronic certificate of origin in order to claim free trade agreement benefits for its exported products, according to Sally Deane, senior trade commissioner of the Australian Trade and Investment Commission (Austrade).

The move is seen as a positive step for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which enters into force on July 5.

“Australia and Indonesia were already making progress in this space [regulatory reform], but with COVID-19 we have seen some acceleration of these trends,” Deane said in a virtual discussion on Tuesday.

Before the pandemic, Indonesia used electronic quarantine certificates for the trade of agricultural products with Australia, the Netherlands and New Zealand, according to the Indonesian Agriculture Quarantine Agency.

Deane said that moving forward, both governments should further utilize digital channels to allow Indonesian and Australian business communities to participate in virtual business matching or product showcases at a time when international travel is restricted.

“I think we can look at ways of using digital channels to bring our two business communities together,” Deane added.

Under the CEPA agreement, Indonesian exports to Australia will get zero tariffs. Likewise, most of Australia’s exports, including live male cattle, frozen beef, dairy products and sugar, may enter Indonesia without any duties.

The Indonesian Trade Ministry expects the export of some Indonesian products to Australia, such as automotive products, timber, textiles, electronics and communication tools, to increase despite recording a US$3.2 billion trade deficit last year.

Digitalization has also taken place on the investment front. The Investment Coordinating Board (BKPM) currently provides an online one-stop service platform, the Online Single Submission (OSS), to process business permit applications. The OSS was created to simplify the administrative process of starting a business in the country.

BKPM head Bahlil Lahadalia also announced his plan to develop a web-based OSS application that can be managed not only by his office but also by regional administrations.

In a hearing with the House of Representative on Tuesday, he proposed a budget of Rp 150 billion ($10.6 million) for software development and hardware distribution to provinces, cities and agencies across the country.

“Right now, there are various applications to process permits, especially at the regional level,” Tina Talisa, the agency’s spokeswoman, told The Jakarta Post via text message on Wednesday. “Hence, we see the need to use a single application and integrate the app for the government and regional administrations.”

Tina said the application was “one of the agency’s strategies to recover investment in 2021,” as the pandemic forced the agency to revise down this year’s investment target.

Total investment realization in the first quarter grew 8 percent year-on-year to Rp 210.7 trillion. However, Indonesia booked an annual decline of 9.2 percent in foreign direct investment (FDI) in the same period, propelled by the coronavirus pandemic, which brought the global economy to a temporary halt.

Red tape and unfavorable labor laws for businesses have weighed down Indonesia’s appeal to foreign investors. The country’s ranking in the World Bank’s ease of doing business index has stagnated at 73^rd of 190 for the past two years.

The incoming partnership may prompt Indonesia to further improve its investment climate, particularly in education, tourism and construction, according to Pingkan Audrine, a researcher at the Center for Indonesian Public Policies think tank, quoting data from the Trade Ministry.

Popular

To my horror, it’s just a movie!

RI, Australia strengthen partnership on taxing crypto assets

Pentagon chief congratulates Prabowo on being elected President