JAKARTA: Indonesian President Prabowo Subianto announced Wednesday that his government will centralize exports of key commodities including palm oil, coal and ferroalloy through a state-run enterprise, arguing the move could recover billions in lost revenue and tighten control over the country’s natural resources.
Prabowo said Indonesia had lost as much as $908 billion over the past 34 years because its commodities were being sold too cheaply.
“Today the Indonesian government that I lead will issue a regulation on management of commodity exports,” Prabowo told reporters. “The issuance of this regulation is a strategic step to strengthen management of commodity exports.”
Under the plan, all sales of palm oil, coal and other resources must go through a government-selected state-operated enterprise as the sole exporter, he said.
The first phase targets coal, palm oil and ferroalloy. Every three months, the government will evaluate which additional commodities fall under the mandate.
A three-month transition period will allow exporters and buyers to continue business as usual, but the government-appointed entity will monitor export transactions during that time. After the transition, all exports must be channeled through the state-appointed firm, which will be overseen by Danantara, a newly designated investment management body.
The move confirms earlier accounts from two sources familiar with the matter, who said Indonesia was planning the centralization as part of a broader push to strengthen government oversight of natural resources.
In a separate regulation taking effect June 1, all natural resource exporters must keep 100% of their export earnings in Indonesian state-owned banks.
Indonesia, a global commodities powerhouse, is the world’s largest exporter of thermal coal and palm oil.
