Ex-CEO of Indonesian aquaculture unicorn detained in fraud probe
ISMI DAMAYANTI
JAKARTA -- The former CEO of Indonesian aquaculture technology startup eFishery and two of his close associates have been detained by police on suspicion of financial misconduct.
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The Diplomat
5 hours ago
- The Diplomat
Indonesia's Human Trafficking Crisis Demands a Community-led Response
Indonesia is currently grappling with a human trafficking emergency. The tragic death of Soleh, a young Indonesian man coerced into working for an online gambling syndicate in Cambodia, has alerted the public to the extent of the problem. First, a video of him lying unconscious during a phone call with his mother went viral. His grieving parents then shared their story on a widely viewed YouTube podcast, drawing renewed attention to the alarming surge in trafficking cases involving Indonesian citizens. Soleh is among a growing number of Indonesians, many lured by promises of lucrative overseas jobs, who have fallen into the hands of transnational criminal syndicates operating out of cyber scam and online gambling hubs in Myanmar, Cambodia, Laos, and the Philippines. In March, a joint operation between Indonesian and Thai authorities, with limited cooperation from Myanmar authorities, rescued more than 550 Indonesians from a 'cyber slavery' compound in Myanmar's notorious Myawaddy region. Perhaps what is more alarming is how these trafficking networks are evolving. Where once victims were mostly rural villagers with little education or international experience, today's traffickers are increasingly preying on Indonesia's urban middle class: educated young people who are desperate to escape economic precarity. Many victims are professionals, college graduates or even former public servants. Soleh was a trained pastry chef who had worked at a star-rated hotel in Jakarta. Another victim, Robiin, was a former local legislator from Indramayu, West Java. These cases are both part of an emerging trend that official prevention programs have failed to address. One factor behind this shift is arguably the growing disillusionment among Indonesian youth. Facing stagnant wages and a soaring cost of living, many feel there is little hope for financial or personal advancement at home. This anxiety is reflected in the popular hashtag #KaburAjaDulu ('just escape for now'), which encapsulates the sentiment that any opportunity abroad, no matter how vague or risky, is better than staying. The region's visa-free travel policies have only made this easier. In this environment, traffickers find fertile ground to exploit dreams of a better life. And yet, when things go wrong – as they often do – victims are finding it harder to turn to the state for help. More often than not, it is family, friends, and social media that become the first line of defense. In one case, a young Indonesian woman trapped in Myanmar was able to escape after secretly recording videos of her captivity and sending them to a friend. In desperation, that friend then uploaded the footage online. The resulting outcry helped trigger a rescue effort. Others, such as a group of victims in the Philippines, avoided contacting the Indonesian embassy altogether. Instead, they paid their way out and arranged their own return home, leaving authorities with no details, no oversight, and no chance to act. This avoidance of formal channels stems from real fears. Many victims worry that seeking help from authorities will lead to punishment, not protection – particularly when they lack proper work documentation or have been forced into illegal activities like online fraud. Many worry that authorities will see them as perpetrators rather than victims. Structural barriers add to this fear. Victims often lack the documents required to file complaints. They may not know how to access assistance, or they may be trapped in remote areas with no safe path to government offices. Efforts to report trafficking are further complicated in places like Myanmar and Cambodia, where syndicates often operate with the knowledge – or even the support – of local authorities or militia groups. In such contexts, speaking out can be life-threatening. This is where community-based protection becomes critical. Traffickers frequently recruit through people social ties – friends, neighbors, even relatives – who use trust and familiarity to manipulate potential victims. Countering this requires local knowledge, awareness, and resilience. Indonesia's legal framework inherently recognizes this. Articles 60 and 61 of the 2007 Law on the Eradication of Trafficking in Persons call for community involvement in identifying, reporting, and responding to trafficking. Crucially, they require the government to equip local communities with the tools and access needed to act. These provisions were further reinforced by Article 7 of the 2023 Presidential Regulation No. 19 and the 2024 Ministerial Regulation No. 2, which lay the foundation to community participation in anti-trafficking efforts. From 2015 to 2019, the government's response has included the establishment of Community Watch (CW) programs under the Anti-Trafficking Task Force. These have been rolled out in 320 villages across 31 provinces, training over 1,600 'agents of change': village heads, teachers, religious leaders, youth organizations, and others. Typically facilitated by local NGOs, these agents are selected, trained, and tasked with spreading awareness and supporting victims in their communities. However, these initiatives remain voluntary, patchy, and underfunded. Most CW agents receive little recognition or support beyond a mayoral decree. Participation also varies across regions, and the government has yet to provide robust data on the effectiveness of these programs. Meanwhile, there is a glaring gap in support for male victims, despite men and boys becoming increasingly represented among trafficking survivors. If Indonesia is serious about tackling human trafficking, it must move beyond ad-hoc responses. Community involvement needs to be placed at the center of national policy, provided with the necessary resources, and integrated them into the broader protection ecosystem.
The Mainichi
13 hours ago
- The Mainichi
What to know about Trump's newest and most sweeping tariffs
BANGKOK (AP) -- President Donald Trump on Thursday imposed once unthinkably high U.S. taxes on imports from dozens of countries, part of his campaign to turn one of the world's most open economies into a fortress bristling with barriers to trade. The taxes -- tariffs -- that took effect at midnight apply to products from 66 countries, the European Union, Taiwan and the Falkland Islands. Trump believes the tariffs will protect U.S. industry from foreign competition, encourage companies to build factories and hire workers in the United States and raise revenue to pay for the massive tax cuts he signed into law July 4. "Growth is going to be unprecedented," Trump said Wednesday. But mainstream economists and policy analysts warn that tariffs are paid by importers in the United States who will try to pass along the cost through higher prices to their customers, businesses and consumers alike; make the economy less efficient and innovative by shielding domestic companies from foreign competition; and threaten U.S. relationships with longstanding allies and trading partners. Indeed, the economic damage is already starting show. Here's what to know: Hefty tariffs have taken effect -- but many could have been higher The levies that took effect Thursday are a revised version of what Trump called " reciprocal tariffs " announced on April 2. Those earlier threats included import taxes of up to 50% on goods from countries that have a trade surplus with the United States, along with 10% "baseline'' taxes on almost everyone else. The move triggered sell-offs in financial markets, and Trump backtracked to give countries a chance to negotiate. Some of them did, caving in to Trump's demands to accept high tariffs to ward off even higher ones. The United Kingdom agreed to 10% tariffs and the European Union, South Korea and Japan accepted U.S. tariffs of 15%. Those are well above the low single-digit rates they paid last year, but down from the 30% Trump had ordered for the EU and the 25% he ordered for Japan in April. Thailand, Pakistan, South Korea, Vietnam, Indonesia and the Philippines cut deals with Trump, settling for rates of around 20%. Indonesia views its 19% tariff deal as a leg up against exporters in other countries that will have to pay slightly more, said Fithra Faisal Hastiadi, a spokesperson in the Indonesian president's office. "We were competing against Vietnam, India, Bangladesh, Sri Lanka and China ... and they are all subject to higher reciprocal tariffs," Hastiadi said. "We believe we will stay competitive." Trump dictated terms to countries that didn't reach a deal For countries that didn't or couldn't reach a deal, Trump dictated terms himself, plastering tariffs ranging from 10% on the Falkland Islands to 41% on Syria. Countries in Africa and Asia are mostly facing lower rates than the ones Trump decreed in April. Tiny Lesotho in southern Africa, for instance, ended up with a 15% tariff instead of the 50% Trump originally announced. India also has no broad trade agreement with Trump. On Wednesday, Trump he signed an executive order placing an extra 25% tariff for its purchases of Russian oil, bringing combined U.S. tariffs to 50%. India has stood firm, saying it began importing oil from Russia because traditional supplies were diverted to Europe after the outbreak of the Ukraine conflict. Impoverished Laos and war-torn Myanmar face 40% rates. Trump whacked Brazil with a 50% import tax largely because he's unhappy with its treatment of former Brazilian President Jair Bolsonaro. South Africa said the steep 30% rate Trump has ordered on the exporter of precious gems and metals has put 30,000 jobs at risk and left the country scrambling to find new markets outside the United States. Even wealthy Switzerland is under the gun. Swiss officials were visiting Washington this week to try to stave off a whopping 39% tariff on U.S. imports of its chocolate, watches and other products. Overall, the average U.S. tariff rate has risen from around 2.5% before Trump returned to the White House to 18.6% -- the highest since 1933 -- the Budget Lab at Yale University reported Thursday. Canada and Mexico have their own arrangements as China talks continue Goods that comply with the 2020 United States-Mexico-Canada Agreement that Trump negotiated during his first term are excluded from the tariffs. So, even though U.S. neighbor and ally Canada was hit by a 35% tariff after it defied Trump -- a staunch supporter of Israeli Prime Minister Benjamin Netanyahu -- by saying it would recognize a Palestinian state, most of its exports to the U.S. remain duty free. Canada's central bank says 100% of energy exports and 95% of other exports are compliant with the agreement since regional rules mean Canadian and Mexico companies can claim preferential treatment. The slice of Mexican exports not covered by the USMCA is subject to a 25% tariff, down from an earlier rate of 30%, during a 90-day negotiating period that began last week. Meanwhile, Trump has yet to announce whether he will extend an Aug. 12 deadline for reaching a trade agreement with China that would forestall earlier threats of tariffs of up to 245%. Treasury Secretary Scott Bessent said the president is deciding about another 90-day delay to allow time to work out details of an agreement setting tariffs on most products at 50%, including extra import duties related to illicit trade in fentanyl. Higher import taxes on small parcels from China have hurt smaller factories and layoffs have accelerated, leaving some 200 million workers reliant on "flexible work" -- the gig economy -- for their livelihoods, the government estimates. Still, China has shown that it has leverage to resist Trump's threats: It can withhold exports of rare earth minerals that companies need for everything from wind turbines to electric vehicle batteries. Considerable uncertainty remains Details of the deals reached in a frenzy of negotiations leading up to Trump's August deadline have not been published -- and are already subject to disagreement. Japanese Prime Minister Shigeru Ishiba, for instance, told reporters that Japan is asking the U.S. government to immediately correct tariffs that are not consistent with their agreement. "The uncertainty about whether Trump was bluffing with his tariff threats and simply using those threats as a negotiating tool has been resolved," said Eswar Prasad, professor of trade policy and economics at Cornell University. "But the uncertainty about the tariffs themselves, including the rates and what countries and products will be covered, is still unresolved in any durable way and remains subject to Trump's whims. "Even the deals that have ostensibly been negotiated lack clarity about their details and are far from settled.'' Trump also is threatening new tariffs -- including levies of 200% or more on pharmaceuticals and 100% on computer chips. Trump's trade agenda also is under attack in court, adding to the uncertainty. A specialized trade court in New York ruled in May that Trump overstepped his authority in imposing April 2 tariffs and earlier ones on Canada, China and Mexico. An appeals court, which allowed the government to continue collecting tariffs while the case moves through the judicial system, now has the case, which is expected to eventually go to the Supreme Court. In a hearing last week, the judges sounded skeptical about the Trump administration's authority to declare a national emergency to justify the tariffs.
The Diplomat
a day ago
- The Diplomat
Indonesia's Recent Banking Boom, Explained
Indonesian banks have been on a tear over the last several years, posting record profits while their balance sheets grew rapidly. According to the financial services regulator, at the end of 2024, commercial banks in Indonesia held assets totaling $779 billion (assuming a rate of 16,000 rupiah to the dollar). This breakneck growth has led to robust earnings, with the sector posting combined after-tax profits of $16 billion last year and $15 billion in 2023. So why is this happening, and will it last? First, we need to go back a couple of years and look at what caused the boom. Somewhat counterintuitively, the pandemic ended up being very good for the bottom line of big commercial banks. With the world on lockdown, people took money they normally would have spent on other things and simply put it in the bank. Customer deposits in the Indonesian banking system increased 36 percent from 2019 to 2022. Normally, banks take customer deposits and make loans, but they weren't really able to do that during the pandemic because the economy was in a state of suspended animation. Governments, on the other hand, including the Indonesian government, were spending money as they began running large deficits and issuing debt to fund stimulus packages while the world was on lockdown. A lot of these bonds were absorbed by the banking system. In 2019, Indonesian banks held around $45 billion worth of bonds on their balance sheets. By 2022, that figure had more than doubled to $97 billion. Also in 2022, after two years of this wait-and-see approach, banks got back to lending at scale, with loans growing around 10 percent each year from 2022 to 2024. In essence, the pandemic pushed a lot of money into the banking system, which banks used to buy bonds (which in Indonesia have fairly attractive yields) when lending opportunities became scarce. As the economy recovered, these banks began unwinding some of their bond positions and sped up the pace of loan issuance. It was this period, from 2022 to 2024, when the big banks started posting huge profits as interest rates went up. Indonesia's commercial banking system is dominated by four major players. Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia are majority-owned by the state. In 2024, they had combined assets of $347 billion, and after-tax income of over $9 billion. Together, they paid investors over $5.7 billion in dividends last year, with BRI alone paying out around $3 billion. The fourth major player, Bank Central Asia, does not have state ownership but had a great year, reporting an after-tax profit of $3.4 billion. One interesting thing is that while overall lending in the commercial banking system grew 10 percent in 2024, deposits only grew 4.5 percent. The pandemic days, when people were putting money into accounts faster than banks could lend it out, are over, and we should probably expect deposits to rise at a more modest rate in the near term. How will this affect Indonesia's booming commercial banks? From a systemic point of view, the banking sector seems to be on a pretty sound footing. While the pace of deposits and perhaps lending may be slowing, reserves held by banks to cover non-performing loans have been decreasing. That means, for the time being, it does not appear that borrowers are defaulting en masse. The overall loan to deposit ratio in the commercial banking sector was also around 89 percent in 2024, lower than it was in 2019, which is a fairly conservative ratio. It tells us the system is not highly leveraged and can likely withstand some stress in the event of an unexpected external shock like, say, a trade war. It also means there is room for more loan growth, as long as consumers and businesses are in need of financing. While the system may be on solid footing, we will have to wait and see if the big banks continue booking massive profits or if that was the result of unique circumstances forced upon the sector during and immediately after the pandemic. If consumer purchasing power is really being squeezed and business and investor sentiment is turning negative, as has been reported by various outlets, it will start to show up in the earnings of the big banks sooner or later, as there will be less demand for credit and default rates will begin ticking up. And this is something we should keep a close eye on in the coming years, because Indonesia's growing phalanx of state-run investment funds is increasingly turning to state-owned banks, which have been very reliable cashflow generators in recent years, to help fund their activities. The size of Mandiri's dividend is no longer just of interest to shareholders, but is a key piece of data that will help us better understand how Indonesia's new state-run investment funds are being structured and operated.
