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Why did Minister Prabowo reject Apple's Rp 1.5 T proposal?

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Minister Prabowo rejects Apple's Rp 1.5 T proposal

Prabowo's Minister reject Apple's proposal - The Ministry of Industry (MoI) has just taken a surprising step by rejecting Apple's investment proposal worth US$100 million or around Rp 1.5 trillion. This move has drawn widespread attention because it has a direct impact on the official launch of the iPhone 16 series in Indonesia. However, what is the reason behind this decision?

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Here is an extended version of the article to over 1000 words with a focus on key phrases "Minister Prabowo rejects Apple proposal":


Why did Minister Prabowo reject Apple's Rp 1.5 T proposal?

Decision Minister Prabowo rejects Apple's proposal to invest US$100 million (around Rp 1.5 trillion) is a big deal in Indonesia's tech and economic world. This proposal, which covers Apple's investment over the next three years, is considered not to fulfill the principle of fairness in investment. As a result, the official launch of the iPhone 16 series in Indonesia was disrupted. So, what exactly is the reason behind this move, and how will it impact Apple users in the country?


Apple and Investment in Indonesia: What Went Wrong?

Since its initial entry into the Indonesian market, Apple has chosen not to set up production facilities in the country. Instead, the tech giant utilized an innovation-based investment scheme to fulfill its requirements. Domestic Component Level (TKDN). This scheme allows Apple to continue selling their products in Indonesia without building a factory, on the condition that they contribute in other forms, such as local app development.

However, in their latest investment proposal for the period 2024-2026, Apple is again relying on the same innovation scheme. Minister Prabowo rejects Apple's proposal because it considers that this approach does not reflect the principle of fairness compared to other technology companies' investments in Indonesia.


Four Reasons Minister Prabowo Rejected Apple's Proposal

Industry Minister Agus Gumiwang Kartasasmita, under the direction of Minister Prabowo, explained the four main reasons why Apple's proposal was rejected.

  1. Investment Comparison in Other Countries
    Apple is considered to have not made a balanced contribution in Indonesia when compared to other countries. For example, in countries like China and India, Apple has built local production facilities. However, in Indonesia, Apple's investment is limited to application development and technology education, without any effort to build factories or production centers.
  2. Competition with Other Brands
    Other brands such as Samsung and Oppo have invested heavily in Indonesia, including building factories and creating local jobs. This makes Apple's contribution look less significant in supporting the national economy.
  3. Value-Added Creation and State Revenue
    One important benchmark in foreign investment is the creation of added value for the local economy. Apple is not considered to have made a big enough impact in this regard, either through state revenues or contributions to supporting industries.
  4. Job Creation
    Minister Prabowo believes that Apple's investment so far has not had a big impact on job creation in Indonesia. This is a major concern for the government, considering that Indonesia has a large potential workforce.

Also Read: The Government's Next Homework After Apple's Investment for iPhone 16

What's Apple's Next Choice?

The rejection of this proposal puts Apple in a difficult position. The company must choose between meeting the government's demands to build a factory in Indonesia or losing access to one of Southeast Asia's largest smartphone markets.

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For Apple, building a local production facility does require a large investment. However, this move can provide many long-term benefits, such as:

  • Reduce reliance on innovation investment schemes.
  • Strengthen relations with the Indonesian government.
  • Enhance brand image as a company that supports local economic growth.

Remaining outstanding investment commitments

In addition to rejecting the new proposal, the Ministry of Industry also insists that Apple immediately pay off the remaining investment commitments until 2023. This is an important concern before the new proposal for the 2024-2026 period can be discussed further. - Minister Prabowo rejects Apple's proposal

This new proposal is related to Apple's obligation to fulfill the Domestic Component Level (TKDN) as a condition of selling their products in Indonesia. Minister Agus emphasized that Apple must immediately set up local production facilities so as not to continue to rely on investment innovation schemes.


Revision of TKDN Regulation: Maintaining Fairness in Investment

As a precautionary measure, the Ministry of Industry is revising the Minister of Industry Regulation No.29 Year 2017 related to the calculation of TKDN for mobile phone, handheld computer, and tablet devices. This revision is expected to create a fairer foundation for all industry players, including Apple.

Also Read: Apple Builds Factory in Batam: Big Opportunity for Indonesia


Impact on iPhone 16 Launch in Indonesia

With the rejection of this proposal, the launch of the iPhone 16 series in Indonesia is still a big question mark. Without TKDN certification, Apple cannot market its new products in the country. This is certainly detrimental to loyal iPhone users who have been waiting for the product officially.

Views of Apple Users in Indonesia

Decision Minister Prabowo rejects Apple's proposal received mixed responses from Apple users in Indonesia. Some supported the move, believing that a large company like Apple should make a greater contribution to the local economy.

However, there are also those who feel disappointed that this rejection has slowed down the launch of the iPhone 16 in Indonesia. Many users hope that Apple and the government can come to a mutually beneficial agreement.


Minister Prabowo rejects Apple's Rp 1.5 T proposal

The Ministry of Industry's decision to reject Apple's Rp 1.5 trillion proposal highlights the importance of fair and impactful investment in Indonesia. Although tough, this move could be a turning point for Apple to increase their contribution in the country.

Minister Prabowo rejects Apple's proposal - For Apple users in Indonesia, let's wait for the next step. Will Apple fulfill these demands or choose another path? Let us know your thoughts in the comments section!

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Fahryzal Prasetyo

A cool guy who likes to write, sometimes he likes to be a video editor. As an SEO Content Writer at Candra Apple Solution, he enjoys sharing articles about Apple Device news and breakdowns.

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