Indonesia's Policies, Thailand's Trade Surplus, and Batang SEZ Collaboration

In this episode, Michelle examines key economic developments impacting Southeast Asia. She begins with an introduction and an overview of the latest headlines, setting the stage for a deep dive into Indonesia's economic policies and President Prabowo's outlook on future growth. The discussion shifts to Thailand's export growth, highlighting recent updates on trade surplus and their implications for the regional economy. Michelle also explores the collaboration between Indonesia and China in developing the Batang Industrial Special Economic Zone. The episode wraps up with a summary and a request for listeners to follow the podcast for continued insights into Southeast Asia's economic dynamics.

Episode Transcript

(00:00):
Welcome back to the Southeast Asia MarketsDaily Brief.

(00:03):
I'm your host, AI Michelle.
Here are our top stories today...
First, President Prabowo expresses confidencein Indonesia’s economic resilience amid global
turbulence.
Second, Thai February exports jump 14 percentyear over year, beating forecasts.

(00:23):
Third, Indonesia inaugurates the largeststate-owned special economic zone in Batang.

Let's dive into our first story (00:30):
President Prabowo Subianto has expressed optimism
regarding Indonesia's economic resiliencedespite the global economic challenges.
This confidence was shared during a pressstatement following the inauguration of the
Batang Industropolis, a new special economiczone located in Batang regency, Central Java

(00:52):
province.
President Prabowo highlighted Indonesia'srobust and stable economic fundamentals,
stating, "I think we will see better andstronger economic fundamentals.
Even though there are economic turbulences hereand there, we have robust fundamentals." This
assertion comes at a time when global marketsare experiencing significant fluctuations,

(01:14):
underscoring the importance of economicstability in the region.
In addition to discussing economic resilience,President Prabowo detailed the government's
proactive measures to maintain price stabilityfor basic necessities, particularly in
anticipation of Eid al-Fitr and the annualmudik, or homecoming.
To facilitate this, the government has takensteps to lower fares for various transportation

(01:39):
modes, including airlines, trains, and tollroads, aiming to enhance public comfort during
the mudik trip.
Furthermore, President Prabowo emphasized thegovernment's commitment to improving national
economic efficiency by simplifying bureaucracyand eliminating cumbersome regulations.
"We are striving to simplify bureaucracy andscrap complicated regulations.

(02:03):
We aim for our economy to be efficient,efficient, efficient.
Through efficiency, we will be able to compete,enhance our competitiveness, and we will
quickly progress towards becoming a prosperousnation," he stated.
In summary, President Prabowo's statementsreflect a strategic focus on strengthening
Indonesia's economic fundamentals, ensuringprice stability, and enhancing national

(02:27):
competitiveness.
These efforts are crucial as Indonesianavigates the complexities of the global
economic landscape, positioning itself forsustainable growth and prosperity.
Now, let's turn our attention to Thailand,where February saw a significant jump in
exports, rising 14 percent year over year.

(02:49):
This marks the eighth consecutive month ofexport growth for Thailand, as reported by the
commerce ministry.
This impressive increase surpassedexpectations, with a Reuters poll predicting a
more modest rise of 9.7 percent.
January's exports had already shown a strongperformance with a 13.6 percent increase.

(03:13):
Commerce Minister Pichai Naripthaphan expressedsatisfaction with the performance, stating that
exports could potentially grow by an annualrate of 10 percent in the first quarter.
He emphasized that trade and investment areflowing in, and free trade negotiations are
expected to further boost exports.
This optimism is reflected in the ministry'sforecast, which anticipates a rise of 2 to 3

(03:38):
percent in exports for the year.
However, there is potential for this figure toexceed 3 percent, particularly as agricultural
products are expected to return to positivegrowth in the next quarter.
Despite this growth, Thailand is facingchallenges related to its trade surplus with
the United States, which stood at 35.4 billiondollars last year.

(04:01):
The Thai government is actively working toaddress this by importing more from the United
States to balance bilateral trade.
Permanent Secretary Vuttikrai Leewiraphanmentioned that Thailand has been in discussions
with the private sector and is eager to engagewith United States officials to negotiate trade
and investment matters, including securityissues, in a comprehensive package.

(04:25):
Minister Pichai has expressed hopes thatThailand will avoid facing tariffs from the
United States, amid concerns that the tradesurplus could become a contentious issue.
In February, exports to the United States,Thailand's largest market, rose 18.3 percent
from a year earlier, while shipments to Chinaincreased by an impressive 22.4 percent.

(04:47):
However, there was a notable decline in riceexport volumes, which dropped by 33.1 percent
annually in February.
This decline is attributed to India'sresumption of rice exports, which has affected
Thailand's position as the world'ssecond-largest rice exporter.
Looking at the broader picture, imports inFebruary rose by 4 percent from a year earlier,

(05:10):
which was lower than the forecasted 4.8 percentincrease.
This resulted in a trade surplus of 2 billiondollars for the month, significantly higher
than the anticipated 0.7 billion dollars.
This surplus highlights Thailand's strongexport performance despite global
uncertainties, positioning the country as a keyplayer in Southeast Asia's economic landscape.

(05:34):
Now let's delve deeper into our final story fortoday.
Indonesia has just inaugurated its largeststate-owned special economic zone, the Batang
Industrial Special Economic Zone, located inBatang Regency, Central Java province.
This landmark development is a significantstride in Indonesia's industrialization

(05:56):
efforts, covering a sprawling 4,300-hectarearea.
The Batang Integrated Industrial Area is a keycomponent of the "Two Countries, Twin Parks"
initiative between Indonesia and China.
During the launch ceremony, President PrabowoSubianto expressed his vision of transforming
this zone into Indonesia's own version ofShenzhen, a modern industrial estate capable of

(06:21):
attracting major investments and generatingemployment opportunities.
President Prabowo emphasized the importance oflearning from successful models in neighboring
countries to achieve prosperity for allIndonesians.
He stated, "We must have the courage to pursuewhat our neighboring countries have achieved.

(06:41):
We should not hesitate to learn from successfulmodels, as our ultimate goal is to bring
prosperity to all Indonesians."
Joining President Prabowo at the inaugurationwas Indonesian Coordinating Minister for
Economic Affairs Airlangga Hartarto, whoexpressed confidence that the collaboration
between Indonesia and China will furtherstrengthen strategic industrial sectors and

(07:02):
attract greater investment to the region.
On the international front, Chinese Ambassadorto Indonesia Wang Lutong praised the Batang
Integrated Industrial Area as a significantmilestone in the "Two Countries, Twin Parks"
initiative.
He underscored its role in deepening bilateraleconomic cooperation and expressed confidence

(07:24):
that this area, backed by strong Chineseparticipation, would serve as a model for
future bilateral cooperation.
The inauguration of the Batang SEZ represents apivotal moment in Indonesia's economic
landscape, reflecting the country's commitmentto enhancing its industrial capabilities and
fostering international partnerships.

(07:46):
By aligning with global economic trends andleveraging foreign investments, Indonesia is
positioning itself as a competitive player inthe Southeast Asian market.
Alright, that's a wrap for this episode.
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(08:08):
Thanks again for listening, and hope to catchyou next time.