Indonesia tightens state control over exports of vital commodities
The plan would route sales through state-owned enterprises and a Danantara-linked entity, as officials say under-invoicing and transfer pricing have drained revenue.
- On Wednesday, Indonesian President Prabowo Subianto announced plans to centralize exports of key commodities like coal and palm oil through state-owned enterprises to boost state revenues and tighten control over natural resources.
- Prabowo told parliament that Indonesia lost as much as $908 billion over 34 years due to undervalued commodity exports, describing the underreporting as 'fraud or deception' to justify the new oversight policy.
- Senior Economic Minister Airlangga Hartarto confirmed a three-month transition period for exporters, during which the government will evaluate which commodities to add to the plan every three months.
- Jakarta Stock Exchange shares fell nearly 1.5 percent on Wednesday as investors expressed 'uneasy' sentiment regarding potential pricing mechanism changes and margin compression from the announcement.
- Critics including the Palm Oil Farmers' Organisations Association warned the policy could 'fundamentally alter the structure of national palm oil trade,' while Ember analyst Dinita Setyawati suggested it could provide 'bargaining power' in future negotiations.
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President Prabowo wants to centralize through Danantara Indonesia all exports of coal, palm oil and other strategic raw materials. The measure, justified as application of Article 33 of the Constitution of 1945, aims to stop the flight of capital and the manipulation of prices, according to the former general, but has already provoked strong fears between entrepreneurs and financial markets.
Indonesia’s dangerous return to state-controlled trade
Indonesia’s President Prabowo Subianto has unveiled one of the most consequentialeconomic interventions since the fall of Suharto: a plan to centralize exports of strategiccommodities — including palm oil, coal and ferroalloys — through a state-controlledstructure linked to the sovereign fund Danantara. The official justification is seductive. Indonesia, the government says, has lost hundreds of billions […] The post Indonesia’s dangerous return…
Indonesia Plans to Tighten State Control Over Commodity Exports
Indonesia plans to tighten control over commodity exports including coal and palm oil, according to people familiar with the matter, as the government seeks to clamp down on tax evasion and bolster a plunging rupiah.
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