Posted on 07/05/2023 4:06:24 AM PDT by FarCenter
JAKARTA – Indonesia is under rising fire at the World Trade Organization and by the International Monetary Fund (IMF) for the government’s seemingly haphazard policy of banning mineral ore exports, a market intervention Jakarta insists is just and necessary to maximize its economic and industrial growth.
In a sharply worded statement accompanying its 2022 country report, the IMF called for Indonesia to phase out the restrictions and not extend them to other commodities. “The increasing use of trade measures and industrial policies may destabilize the multilateral trade system,” the IMF said.
The Joko Widodo administration has so far been unyielding, insisting that Indonesia is well within its rights to add value to its minerals, specifically nickel, bauxite, copper and tin, to become a newly industrialized state.
Nickel exports were banned in January 2022 and bauxite shipments followed on June 10. Tin and copper bans are scheduled to come next. “We have to dare to take these steps,” Widodo, a fervent advocate of the value-added policy, said last year.
Economic Coordinating Minister Airlangga Hartarto has described efforts by developed nations and international organizations to push for controls on other countries’ export policies as a form of modern-day colonialism that will inhibit Indonesia’s economic growth and development.
(Excerpt) Read more at asiatimes.com ...
This is what I understand. The people who own the ore want to mine it, refine it, and sell the refined product. The WTO is upset? Why? Either the owner of the ore will produce a product that will be bought at his price, or he’ll fail, and the market won’t buy it. Then, the owner of the ore will go out of the refinement business and go back to selling raw ore. That sounds like the free market. Forcing someone to sell their ore at a lesser price than they could otherwise achieve on their own sounds like what the empires did to their colonies.
WTO obviously is captive to established processors who don’t want to lose their middleman’s profits.
Under WTO rules this is considered an illegal government subsidy of the country’s industries that use these ores in their production processes.
The nerve!
Sounds like an attempt to have foreign manufacturers invest and build factories in Indonesia that would use the domestically produced ores in Indonesian located factories. They are copying what China is doing with rare earths.
The EMPIRE is not happy. Amusingly the EMPIRE says it isn't an empire.
Ah, I missed that bit. Thank you. Well, it’s their ore. If they can resist the pressure put on them by the WTO then they can do whatever they want. The US protects its industry too. Alcohol in gas is a farm subsidy. Also, the US has a law where we can stop all export of unrefined oil whenever the president pleases. Then there’s Boeing...can’t say they aren’t subsidized left right and center. France wants to tax the world for climate change, but it’s to protect French industry.
——Indonesia is well within its rights to add value to its minerals”——
Indonesia has thrown off the post colonial isolation thinking and is moving the world center of gravity eastward, away from Europe. The capital is being moved to Borneo to develop that island and to reduce the stress on Jakarta.
For all the pro Putin Russophiles here, the population of the single Indonesian island of Java is greater than the entire Russian Federation. That is Java is, Russia isn’t
Our former rulers in London, prior to the Revolution, forbade the colonies from manufacturing goods that Britain could provide. The WTO must want to return to Mercantilism as the model for trade. Awfully colonialist of them.
I have no problem with what the Indonesian government is doing, but they can’t have it both ways. If they are going to subsidize their industries by restricting the export of raw materials, then they shouldn’t be able to sell their manufactured products on the global market under the WTO’s agreements for capping or eliminating tariffs on finished products.
That’s right, though I’d point out that trade agreements have major exceptions that apply to many roll of the things you mention there. Agriculture, energy and military hardware aren’t covered by most trade agreements. But you’re 100% correct about the rest. It explains why nobody in these developing countries should be taking the U.S. seriously anymore.
With a population of 280 million which is over 85% Sunni Muslim, Indonesia is the most populous Muslim country in the world.
China was
Indonesia is
Indonesia needs all it’s minerals, at home, for domestic consumption
The US is about 335 million.
The EU is about 450 million.
How old is the WTO? Begun in 1995, replacing GATT. New kid on the world clock, so to speak. Busy telling nations what the "rules" are. The US and then China are the two largest "contributors" to the WTO. Indonesia has been a member of the WTO since it began. So this is not about "rules" and enforcement, in the long run. Indonesia is in dispute over a number of "trade" issues., including steel "dumping" and EU "biofuel" and Brazilian chicken and more. The WTO is not an enforcement entity with as much power as the US thinks it has. Indonesia seems to be flexing its national muscle against multinational companies. as part of the larger "you've got resources, and we want it" global conflicts.
I will suggest that Indonesia is flexing it’s nationalistic muscles to utilize natural and population resources to the benefit of all it’s people.
With the withdrawal from China, Indonesia is mentioned as an Asian relocation for some multinational manufacturing enterprises. Those enterprises bring jobs and need the available finished mineral products produced locally
We went to war with Japan out of fear that Japan would take the then-Dutch East Indies, with its supplies of rubber.
We do not disagree. If every nation on this earth were to "utilize natural and population resources to the benefit of all its people," I suspect this would be a far different world than it is today.
Volkswagen just invested in a mine that would clearcut the Indonesian Rainforest and use giant coal fired smelters to refine nickel to use in their EV batteries.
Killing Orangutans to save the Planet.
Hardly any minerals are "consumed." Instead, they are used as raw materials for other processes. In Indonesia's case, the "other processes" are manufacturing industries that export much of what they produce.
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