Indonesia to Centralize Export Control for Key Commodities

Indonesian President Prabowo Subianto announced a sweeping policy to centralize control over the country’s major commodity exports, a move aimed at boosting state revenue and asserting greater national control over natural resources. In an address to parliament on Wednesday, the president said the government will establish a new state-owned enterprise to act as the sole exporter for key commodities, beginning with palm oil, thermal coal, and ferroalloys, which include some nickel products.

The primary objective, according to Prabowo, is to combat widespread under-invoicing and transfer pricing by exporters, practices he claimed have cost Indonesia hundreds of billions of dollars in lost revenue over decades. He stated that the state has the right to know exactly how its resources are sold abroad and to set prices domestically. Under the new system, producers will sell to the state agency, which will then negotiate with overseas buyers.

The policy is set to be implemented in phases, with a three-month transition period starting June 1 during which exports will be strictly monitored. The government will evaluate every three months which additional commodities should be added to...