Indonesia Says Apple's $100 Million Investment Proposal Inadequate

Indonesia rejected Apple's $100 million investment proposal to build an accessory and component plant, stating it was insufficient to lift the current ban on iPhone 16 sales in the country. Indonesia banned sales of Apple's iPhone 16 last month after it failed to meet requirements that smartphones sold domestically should comprise at least 40% locally-made parts. Reuters reports: "We have done an assessment and this (proposal) has not met principles of fairness," Industry Minister Agus Gumiwang Kartasasmita told a press conference, comparing the proposal to Apple's bigger investments in neighboring Vietnam and Thailand. Apple has no manufacturing facilities in Indonesia, but has since 2018 set up application-developer academies, which Jakarta considers a way for the company to meet local content requirement for the sale of older iPhone models. Agus said Apple had an outstanding investment commitment of $10 million it should have carried out before 2023. He also wanted Apple to commit to new investment until 2026.

Inadequate?

[drainbramage]

Inadequate sounds so harsh.
Indonesia then said "Our shake-downs will continue until investment improves!"

Re:

[dcooper_db9]

I suppose you could call it a shakedown, but it's not corruption. The law is not targeted at a single company and it isn't extracting a bribe. Indonesia has a long history of outsiders stripping its resources and leaving its population impoverished. This internal investment policy has been a part of Indonesia's economic development strategy since it achieved independence.

The wrong approach.

[kaatochacha]

Apple, instead of trying to appease nonsensical Indonesian Government agents, should simply declare "iPhones are forbidden to be sold in Indonesia".
Then let the black market allure of these forbidden devices fulfill demand. The governemntal agents will get there cut as well, since they're probably being bribed to allow the sales, or selling themselves.

Re:

[evil_aaronm]

Apple: For our revised proposal, I submit a hand holding up a middle finger. I drew it myself. Do you like it?

Re: The wrong approach.

[sectokia]

Thatâ(TM)s basically the intent of the rules. These rules are not new. Even back in 2015 there were only a few mobile phones you could get in indonesia. The real story here is apple seem to have been throwing money around at things - but not the actual parts/assembly to make out that they are effectively following the rule economically. They figured they could just buy a new amendment.

Buy America vs Buy American

[Rinnon]

This is just a friendly reminder to that the USA has no less than TWO suites of laws that foreign companies need to navigate if they want to sell stuff in America.

Build America, Buy America Act (BABAA) is the most expansive statute that require multiple U.S. federal agencies to apply content procurement preferences for goods, products, and materials made in the U.S.

Under BABAA, items purchased for use in a covered infrastructure project must meet the following requirements: (1) Iron and steel: All manufacturing processes, from the initial melting stage through the application of coatings, occurred in the U.S. (2) Manufactured products: All products are manufactured in the U.S., and the cost of its components that are mined, produced, or manufactured in the U.S. is greater than 55 percent of the total cost of all components. (3) Construction materials: All manufacturing processes occurred in the U.S.

55% to 100% “made in the U.S” requirements

The Buy American Act is a statute that creates a national preference for the U.S. federal government’s procurement of domestic construction materials.

For purchases over $10,000 USD for construction projects, infrastructure investments, and procurement of goods and services. Under FAR 25.003, for products that are not iron and steel products, a product qualifies as a domestic end product if the item is manufactured in the U.S. and more than 60 percent of the cost of all the component parts is also mined, produced, or manufactured in the U.S. The standard for domestic end products increased to 60 percent on October 25, 2022, further increases to 65 percent in calendar year 2024, and 75 percent in calendar year 2029

65% “made in the U.S” requirements

Protectionism for me, not for thee, eh?

Re:Buy America vs Buy American

[Registered Coward v2]

This is just a friendly reminder to that the USA has no less than TWO suites of laws that foreign companies need to navigate if they want to sell stuff in America.

Protectionism for me, not for thee, eh?

The acts you refer to are for Federal government procurement, and do not apply to private purchases; so your argument is a bit disingenuous. Does the US have protectionist policies, in place, certainly, often the form of tariffs.

Re:

[ceoyoyo]

Not to mention an ever growing suite of tariffs, a president-elect who promised to add across the board tariffs of between 20 to 60%, and a whole bunch of sanctions and import bans against, among other things, foreign smartphone manufacturers.

Re:

[Bradac_55]

What the hell does that have to do with Apple not wanting to follow some third world countries laws?
The US government has nothing to do with this issue this isn't even a good straw man argument it's rather childish in concept.

US should do the same

[Njovich]

The US should tell Apple to stop fucking around in chinese sweatshops and start manufacturing their devices in the US. They promised this during Trump's last term but I guess they thought they were done when they got their pal Biden elected. Look who is back suckers!

Because of tariffs (similar to this indonesian law in effect) soon chinese car manufacturers will produce big parts of a lot of cars in the US. Yet iPhones are still made by uyghurs in forced labor camps.

Re: US should do the same

[sectokia]

Donâ(TM)t worry, chinese labour has become too expensive for apple so they are moving to india and bangladesh.