The Sustainable Madani Foundation presents a summary of several important events related to the political economic conditions on (April 12, 2021 – April 19, 2021), as follows:

1. Merger of Ministries and New Ministries and Cabinet Reshuffle Issues

The government has abolished the Ministry of Research and Technology (Kemenristek) and merged it with the Ministry of Education and Culture (Kemendikbud) to form the Ministry of Education, Culture, Research, and Technology (Kemendikbud-Ristek). The merger was approved by the House of Representatives (DPR) in a plenary session held on Friday (April 9, 2021). Simultaneously, the government also established the Ministry of Investment, which is closely tied to the Job Creation Law.

Due to changes in the ministerial structure, several ministers are rumored to be subject to reshuffle. These include Minister of Cooperatives and Small and Medium Enterprises Teten Masduki, Minister of Manpower Ida Fauziyah, Minister of Villages, Development of Disadvantaged Regions, and Transmigration Abdul Halim Iskandar, Minister of Education and Culture Nadiem Makarim, and Minister of Research and Technology Bambang Brodjonegoro.

2. New Coalition of Islamic Parties

Prosperous Justice Party (PKS) President Ahmad Syaikhu and United Development Party (PPP) Chairman Suharso Monoarfa held a meeting on Wednesday (April 14, 2021). The meeting was an initial exploration of forming a central axis coalition of Islamic parties in 2024. However, the National Mandate Party (PAN) rejected the idea. According to PAN Chairman Zulkifli Hasan, the idea was counterproductive to efforts to reconcile all elements of society, which were deeply divided during the 2019 Presidential Election.

According to Indonesian Institute of Sciences (LIPI) political expert Prof. Siti Zuhro, this coalition could become a new political force and transform Indonesia's political landscape, provided the political elites of these parties share a common perspective in uniting Islamic political parties. On the other hand, according to Indo Barometer Executive Director M. Qodari, this coalition will face challenges in unifying views on a single platform due to the differing characteristics of its grassroots supporters.

3. CPO Prices Skyrocket

CPO prices rose sharply this week and are predicted to remain high until June. Data from Refinitiv shows that the July contract for CPO on the Malaysian derivatives exchange surged 4.56% to 3,716 ringgit per ton this week.

According to Trade Minister M. Lutfi, the high price of CPO until June is due to disruptions in the global soybean harvest, which has led to low vegetable oil production, thus increasing demand for palm oil. Another reason for the increase in CPO prices, according to GAPKI Executive Director Mukti Sardjono, is increased biodiesel production, particularly due to commitments to use biodiesel by several countries, including Indonesia, the United States, Brazil, and Germany. Oil World estimates that global biodiesel production in 2021 will reach 47.5 million tons, 2.2 million tons higher than in 2020 and 1.5 million tons higher than in 2019.

4. US-China Agree to Cooperate to Combat Climate Change

The United States and China agreed to cooperate on climate change after their envoys, Xie Zhenhua and John Kerry, held a two-day meeting in Shanghai on April 15-16, 2021. Both countries expressed confidence in implementing the Paris Agreement. The agreement underscored the need for short-term climate change mitigation measures. Furthermore, the United States and China will hold a Climate Change Summit on April 22-23, 2021. This agreement emerged following geopolitical tensions between the United States and China over the South China Sea, human rights issues, and trade issues.

5. Indonesia Ready to Play a Role in the COP 26 Climate Change Summit

The Indonesian government has expressed its readiness to co-chair alongside the United Kingdom, which is serving as president of the COP26 ( Conference of the Parties to the 26th Climate Change Summit). Coordinating Minister for Economic Affairs Airlangga Hartarto made the announcement while addressing the Forest , Agriculture, and Commodity Trade (FACT) Dialogue, attended by 26 countries, on Thursday (April 15, 2021).

According to Airlangga, the desire to lead the climate change dialogue process is one of Indonesia's commitments to actively participate globally in stopping the negative impacts of climate change. He said that Indonesia has taken concrete steps as the first country to implement the Voluntary Partnership Agreement (VPA) on Forest Law Enforcement, Governance and Trade (FLEGT) with the European Union and the United Kingdom. Furthermore, in 2020, according to Airlangga, Indonesia also succeeded in reducing land fires by 91.84 percent compared to the previous year. Therefore, common information, knowledge, and perceptions are needed from all countries to prevent discriminatory actions against efforts to realize sustainable production and trade.