Indonesia Readies to Lose up to US$600mn as Jokowi Bans Bauxite Exports
TEMPO.CO, Jakarta - Indonesian President Joko Jokowi Widodo acknowledged that the ban on bauxite ore exports that he has just announced will lessen shipments of these commodities to consumers abroad in the early years. The country is estimated to lose export value from washed bauxite reaching around US$500 to US$600 million per year.
“Usually, there is a decline in export value at the beginning, but in the second, third, fourth year [of the policy implementation], the leap may start to be visible,” he said in a press conference at the Jakarta State Palace, Wednesday, December 21, 2022.
The ban on bauxite ore exports is announced two years after the ban on nickel ore exports in 2020. The ban, which will take effect in June 2023, is decided for the sake of domestic bauxite downstream.
The state head is confident that the ban will yield good results as the nickel export ban. The export value from nickel increased from Rp17 trillion or US$1.1 million at the end of 2014 to Rp326 trillion or US$20.9 million in 2021, or a 19-fold increase.
By the end of 2022, the nickel export value will reach more than Rp468 trillion or US$30 billion. On this basis, the new export ban policy will increase state revenue from Rp21 trillion to around Rp62 trillion. “So don't hesitate, I tell the ministers to not worry about this policy, we have to be confident,” Jokowi emphasized.
Besides, the potential loss caused by the bauxite ore export ban of up to US$600 million is only from one component. Coordinating Minister for the Economy Airlangga Hartarto said the export ban will apply to all forms of raw bauxite, not only washed bauxite.
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