Mandalika MotoGP Sustainability Is Not Dependent On Costs, But To Indonesian Government's Policy

JAKARTA - The MotoGP Mandalika event has just ended. The Mandalika Circuit in Lombok is again quiet, after being filled with the roar of the roar of motorbikes throughout March 18-20. One of the most prestigious sports competitions in the world was successfully held by Indonesia, although there are still shortcomings here and there. Will the Mandalika MotoGP last according to a 10-year contract?

Mandalika managed to dispel many doubts. Regarding the quality of human resources, implementation, circuit quality, all of them have proven to be well exceeded. Even rain and lightning did not stop the Mandalika MotoGP from being held. We have a rain charmer that is proven to be effective.

After 25 years of vacuum from world-class automotive sports competitions, Indonesia has re-emerged. Of course, this is something that should be appreciated, considering that there are so many sacrifices that must be made to bring premium-class motorcycle racing to Indonesia.

As the largest country in Southeast Asia, the 16th largest economy in the world, the 4th largest population in the world, Indonesia needs to have a showroom. Through this showroom, the international community sees Indonesia's strengths.

Indonesia must be able to establish itself as a global player in all sectors. Politics, diplomacy, defense, economy, culture, and of course sports. Organizing the 2018 Asian Games is the right step to introduce Indonesia in the eyes of Asia, having last hosted it in 1962.

In order to achieve wider coverage, a more global event is needed. Two of Indonesia's aspirations to hold world-class sports competitions have run aground. The first was the failure to win the 2022 World Cup because it was defeated by Qatar. Second, they also failed to bring in the 2032 Olympics after being defeated by Brisbane, Australia.

So bringing MotoGP to Mandalika is the right step. At least in the next 10 years, there is hope that the eyes of the world will be on Indonesia because the contract with Dorna as MotoGP owner is valid for 10 years.

Performance Fee

It is not known with certainty the number of costs that must be incurred by Indonesia to host MotoGP. Dorna as the owner of the premium class motorcycle racing event is very close to maintaining confidentiality when it comes to money.

That said, Indonesia had to spend around IDR 150 billion, which was paid to Dorna as a fee. The amount of money is equivalent to 10.4 million US dollars.

The Minister of Finance, Sri Mulyani Indrawati through her Instagram account @smindrawati said that the allocation of funds of IDR 1.3 trillion had been taken from the APBN. The budget was injected into the manager of the Mandalika Special Economic Zone, PT Indonesia Tourism Development (Persero) or better known as ITDC (Indonesia Tourism Development Corporation).

“Our money also contributes in supporting this grand event, including through PMN and support to related Ministries/Agencies, VAT incentives for import duties and import taxes. All of this support is given for the smooth running of this long-awaited event," Sri Mulyani wrote on her Instagram account on March 20, 2022.

According to the details from Sri Mulyani's Instagram, the State Investment (PMN) of IDR 1.3 trillion was given to ITDC. Then IDR 1.18 trillion is allocated to the APBN through the Ministry/Agency (K/L) budget.

In addition, IDR 240.73 billion as VAT incentives for taxable services, and import duty and import tax incentives of IDR 10.41 billion. So according to the amount disclosed in Sri Mulyani's Instagram, the costs incurred were IDR 2.73 trillion.

Indonesia clearly needs a storefront, a MotoGP class showroom. According to data from Total Energie which is the sponsor of the KTM Racing team, MotoGP is watched by at least 400 million television viewers worldwide. Not a small amount.

The problem now is not in the amount of money that must be spent, but in the policies issued by each government regime. It is no secret that in Indonesia, every policy always changes with the change of regime.

So the sustainability of the MotoGP Mandalika will not be due to a cost issue, because Indonesia is a country with an economy level number 16 in the world and the first in Southeast Asia. The sustainability of this premium class motorcycle racing is very dependent on the next policy of the Government of Indonesia.