Indonesian Minister & the removal of palm oil from the economic model?

Source: Bloomberg


Listening to the Indonesian officials comments over the phasing out of Indonesian palm oil is becoming a frightful experience for any investor. According to the minister for Environment and Forestry, Siti Nurbaya, as quoted by the mouthpiece for the ministerial affairs, the minister,

“pointed out, however, that given it is just a matter of time before palm oil is removed as a feedstock for biofuels, this renders the key substance of the EU agreement in transport fuels by 2030 completely irrelevant”.

So wait a minute. Did the minister just say the most cost efficient, best yielding industry is no longer part of the Indonesian economic slice giving away the competitive advantage for Indonesia? And with the deadline now pushed out to 2030 the industry will still face extinction? Controversially or not, the lack of strategic foresight of energy realities and the hell-bent pursuit of executing an already stillbirth Paris climate agreement shows how populist politics lack the consistency to develop a country’s industry to reach first world level.

Signing up to the Green hysteria is not policy. Pragmatic, sustained, balanced agricultural policy is.

It also suggests the minister is hell bent to kill the palm oil industry? Since her statement suggests palm oil is “removed”. Being green is one thing, being extreme is another. The lefties on the green cushions in the rafters are rejoicing and the foreign competitors are jubilant.

The Jokowi administration officials just shot themselves in the foot; with a howitzer. Deemed a political commodity the rumbling in the ranks of planters and producer is loud. But it seems no-one from the administration is listing.

“…Palm oil, corn and sugar cane — the main sources of ethanol for biofuels — are known as “political commodities” in countries like Indonesia and Thailand, both of which are headed for general elections early next year. Growers form crucial voting blocs…”

Competitors, mostly foreign and the neo-lefties posing as greenies are having a Pepsi-Cola day like Coke announcing it changes the flavor. Like Coke, the Indonesian eco-policies of Joko and Siti are killing the economy. Indonesia is set to slide into a new uncertain future with a bunch of populist politicians are steering the ship with a shipwreck in the making.

But then, why are we surprised? The economic performance is missing the marks by miles. The currency tanked and is about 1998 level, the engines for growth such as the palm oil industry and the paper and pulp industry are grinding to a halt, thanks to fake news and smear (“black“) campaigns by a bunch of leftist NGOs which are banned in India and face U.S. federal criminal racketeering charges.

And Jokowi rather listens to the NGO whisper in his ears than applies nonsensical sound economic policy. The lack of economic realities caused a fuel price fiasco in early June. But hey, handicraft, painting flower pots and other weird “alternative economic models” will save the planet.  Maybe a movie can be made about it.

Without taking more of a cynical perspective, the past years have not been kind to the Indonesian economy. Thanks to questionable environmental policies and fake news green hysteria paid for and supported by a U.S. democratic former administration pumping hundreds of millions of US dollar into destroying the economy.

The Climate Land Use Alliance or CLUA provides a 157 million (or so) US dollar per year to undermine, shape, influence and halt the Indonesian economic development. One of the key architect was the former CIFOR Secretary General Frances Seymour, her husband a long time financial supporter of Barrack Obama.

The funding of Indonesian actions is a who is who of foreign NGOs acting as fronts for the foreign interventionist policies of the former U.S. Obama administration hence raising the question if the former NGOs now in the cabinet of the Jokowi administration are influencing the policy decision making. Does this represents a conflict of interest?

Unfortunately, the administration is not heeding the warnings. And like in the U.S., like in the UK, the EU, the administration better be beware of the angry, middle aged unemployed Indonesian farmer. Thanks to the green policies of handcraft and micro economics this farmer he has one weapon: one voice and one vote!

And even if Jokowi is re-elected the populist agendas are dangerous ghosts from the populist past putting Indonesia on a dangerous paths for the industry, the country and the citizens the question to ask once the minister killed off palm oil, what industry is next?

Source :

Hamzah Galih

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