JakartaPost-July 25, 2022
Indonesia achieved its biggest-ever trade surplus in the first half of 2022, but experts warn that relying on raw materials like crude palm oil (CPO) and coal as the bulwark of productivity is unsustainable in the long run. They agree that a wide range of factors will narrow the trade surplus, or even turn it into a deficit, if fundamental aspects of the domestic economy are not changed. The archipelagic nation’s exports to the rest of the world exceeded its imports by US$24.89 billion. That is more than twice the surplus the country achieved in the equivalent period of 2021. The details of the trade report show that raw materials continue to be of prime importance. Coal and CPO were the largest contributors to exports in the first half of the year with shipments amounting to $24.11 billion (17.09 percent of the total) and $15.14 billion (10.73 percent of the total), respectively. BPS (Central Statistics Board) data show that coal prices increased 152.28 percent year-on-year (yoy) to $284.9 per ton and CPO prices rose 49.45 percent yoy to $1,501 per ton in June. Other experts question the sustainability of the gains Indonesia reaps from the coal and CPO trade. Institute for Development of Economics and Finance (INDEF) economist Abdul Manap pointed out that some countries had begun to phase out the use of what they deem environmentally unfriendly commodities, particularly those contributing to global warming. “If we continue to depend on [coal and CPO] while the world has switched to environmentally friendly energy, in the long run we will not be able to earn foreign exchange from it. And we will also be branded as a country that is not committed to its climate-change promises,” Abdul told the Post on Wednesday. Read more at: https://www.thejakartapost.com/paper/2022/07/25/economists-warn-against-overreliance-on-coal-cpo.html.
