Indef Reveal Challenges in Banning Nickel Ore Exports

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Laila Afifa

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  • TEMPO.CO, Jakarta - Institute for Development of Economics and Finance (Indef) Director Tauhid Ahmad says that the accelerated export ban on nickel ore will potentially cause new problems in the form of negative balance of trade or trade deficit.

    “The exports will drop, maybe to the level of zero,” said Tauhid at the Hotel Le Meridien in Jakarta, October 2. 

    According to the records, Indonesia’s nickel export from January to July of 2019 was worth US$362 million, which is why Tauhid questions what the government will profit from once the potential income is lost. 

    Moreover, he predicts that the export ban will be followed by the increase of the global nickel prices considering that Indonesia is one of the world’s main suppliers of nickel. He fears that the rise in price will drive entrepreneurs to conduct illegal exports. 

    “It would be just as the export on wood was imposed, illegal exports increased,” he said. 

    The nickel ore export ban alone has sparked a reaction from around the globe with the European Union planning to file a lawsuit to the World Trade Organization (WTO). The government persists that this ban will drive nickel ores to be processed domestically which will improve the product’s added value before being exported.

    CAESAR AKBAR | DIAS PRASONGKO