Indonesia seizes control of commodity exports to curb financial leaks
Indonesia is tightening state control over its natural resources with a new export policy. From September, all trade transactions between foreign buyers and domestic sellers will be managed by state-owned companies. The move aims to address financial losses and environmental concerns linked to resource overexploitation. The policy will roll out in phases, starting between June and August. During this period, private firms must transfer their import and export transactions to state-owned enterprises. Currently, these state firms handle only a small fraction of Indonesia’s commodity exports.
The new system targets key commodities like palm oil, coal, and iron alloys—sectors where Indonesia is a global leader. As the world’s top exporter of thermal coal and palm oil, the country also holds vast nickel reserves. President Prabowo Subianto claims the policy will optimise tax revenue, curb under-invoicing, and prevent export proceeds from being diverted.
Subianto estimates that undervalued exports have cost Indonesia up to $908 billion in lost revenue. Beyond financial gains, the centralised approach seeks to improve environmental oversight. Greater state control is also expected to strengthen Indonesia’s position in negotiations with major global powers. The shift places state-owned companies at the centre of all commodity trade by September. Authorities believe stricter oversight will reduce financial leaks and improve resource management. The policy’s success will depend on its implementation and the response from private sector traders.
