Indonesia’s Natural Resources: Whose Interest and Responsibility?

*This article has been published in The Jakarta Post on 28 April 2015.

On these two days we are witnessing a big conference called “Tropical Landscape Summits 2015: Green Investment Opportunities” where both the President and Vice President are scheduled to attend. The conference aims to increase an environmental awareness, to provide a platform for government to explain their plan and policies in the related field, and to collect inputs from stakeholders.

As the conference is organized by UN Office for REDD+ (Reducing Emissions from Deforestation and Forest Degradation) Coordination in Indonesia, we also see many initiatives on having a greener economy coming from external forces. The government of Indonesia set an ambitious target of reducing REDD emission by 26% in 2020 against a business-as-usual trajectory on the G20 Summit in 2009. Private business have started to change their attitude towards an environmental-friendly one as it is required by their international buyers.

Nevertheless, several questions arise as whether it is time for the government to put a priority to the environment issue in the midst of many other urgent issues in the country? Does paying attention to this issue sacrifice other important issues like economic growth? And why do foreign parties push this issue for Indonesia? Who is actually benefited from an economy with high environmental standard?   

Indonesia is rich in natural resources. That the resources is significant for the people’s welfare is clearly seen from the data that natural resources account for around one-forth of the country’s GDP. However an exploitation of natural resources may harm both Indonesia and the rest of the world. For example, deforestation emits a large quantity of carbon dioxide not only to Indonesia but also to the whole earth. This explains the interest of the rest of the world to our environmental-related activities. Hence, a compensation from them to our losing of short-term gain due to inability to fully utilize natural resources is what we expect. Early this month President Joko Widodo renewed his commitment for a cooperation with Norwegia on REDD+ in return for Norway’s assistance of US$ 1 billion in 2010. Therefore it is clear that international interest on how we treat and manage our land has to be reflected by their assistance in terms of funding and technology sharing.

As from the domestic side, the government has to possess a long-term view on the ecosystem and the land we inherit to the next generations. As a developing nation, emitting carbon dioxide, to a certain level, as a result of our economic activity is unavoidable. It is necessary to mention that developed nations emitted the gas in a larger quantity than we do in their industrialization era long time ago. However, unwise exploitation of natural resources engenders environmental degradation which directly affect local communities where the exploitation occurs. For instance, irresponsible coal mining causes water pollution which then deteriorate the community’s health and, hence, their welfare. Another long-term view that the government should concern is the country’s dependence on fossil fuels as they heavily contribute to the thickening of greenhouse gas. The fuels’ volatile international price also trigger domestic inflationary pressure. On the other hand we have potential to develop our own renewable energy as the land stores 40% of the world’s reserve on geothermal. In brief, environmental policies will eventually support economic development although they may seem to weaken the economic growth in the short run. So it is not a trade-off between environmental policy and welfare-enhancing policy.

Having said the global interest and the importance of domestic policies on our economic activities, we should make use the external force and domestic leadership for a smooth transition of our economy to be an environmental-friendly and sustainable one. Domestic political willingness is needed for this transition. The relatively new cabinet should make use of this moment for a strong leadership in managing natural resources. Reduction of fossil fuels consumption, development of renewable sources, and law enforcement call for government’s urgent attention at this moment. The adoption of fixed-subsidy system of fuels starting early this year is a progress that the government has made. Market-based pricing will lead to a more efficient use of fuel. Furthermore, while some regulations on developing renewable sources such as geothermal have been in force, a clear and comprehensive regulatory framework is needed to attract foreign investment in this field and to enable their partnership with local either public or private agents. Moreover, law enforcement, as a common problem across sector in developing countries, is essential for an effective resource management such as eradicating illegal mining and illegal logging.

In addition to political willingness, the country should make the most of foreign assistance in both elevating local awareness as the ongoing conference aims for and compensating their cost if we are not shifting our economy from the business-as-usual path to the green one. 

In conclusion, everyone, whether national or international actors, has to take part in preserving the earth as Lady Bird Johnson, a respected environmentalist, said “The environment is where we all meet; where all have a mutual interest; it is the one thing all of us share.”