Prabowo Requires the Export of Natural Resources and Minerals through SOEs, Targeting Foreign Exchange Leakage

Prabowo Subianto issued new rules for the governance of the export of natural resource commodities. (Photo: Cahyo - Presidential Secretariat Press, Media, and Information Bureau)

JAKARTA - President Prabowo Subianto has issued new rules for the governance of the export of natural resource commodities. The government will require the export of palm oil, coal, and ferro-alloys to be carried out through SOEs designated as sole exporters.

Prabowo conveyed this policy in a speech at the DPR, Wednesday (20/5). He said this rule was made to close foreign exchange leakage, under-invoicing, transfer pricing, and export earnings evasion.

"The main objective of this policy is to strengthen supervision and monitoring and eradicate the practice of underpayment, price transfer practices, and the escape of foreign exchange from exports," said Prabowo.

Prabowo said Indonesia has great wealth, but state revenue is still low compared to other G20 countries. He said Indonesia's state revenue ratio is only 11 to 12 percent of GDP.

According to Prabowo, Indonesia's three strategic commodities will generate large foreign exchange in 2025. Palm oil reaches US$23 billion, coal US$30 billion, and ferro-alloys US$16 billion. In total, it is more than US$65 billion or around Rp. 1,100 trillion per year.

However, he assessed that there was still a lot of wealth that did not stay in the country.

"We don't want to be lied to anymore. We want to know exactly how much of our wealth is being sold," he said.

Prabowo also said that the potential money that could be saved from the leak reached US$150 billion per year.