Indonesia expands state control of exports for key commodities

Indonesia is significantly expanding state control over its key commodity exports, requiring state-owned enterprises to handle the overseas sales of vital resources like palm oil, coal, and iron alloys. President Prabowo Subianto announced the policy to parliament on Wednesday, framing it as a necessary measure to combat revenue losses from undervalued exports.

The president stated that Indonesia had lost as much as 908 billion due to commodities being undervalued upon export. He described practices like underreporting export values to reduce taxes as fraud. The primary objective, he said, is to strengthen oversight and combat under-invoicing, transfer pricing, and the diversion of export proceeds to bring more money into government coffers.

As the world's largest exporter of thermal coal and palm oil and holder of the largest known nickel reserves, Indonesia is a major player in global commodity markets. Experts note that state-owned enterprises currently handle only a modest portion of these exports. Analysts say the new centralized system represents the government's most significant move to directly control the nation's commodities trade.

The policy is scheduled to be...