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SEA Watch

Indonesian Smeltdown

February 2, 2014
First on offer is our take on the Indonesian government’s recent decision to enforce its 2009 law on the export ban of mineral ore. Strange stuff in a scenario where Indonesia’s balance of payments record is worsening and the Rupiah continues to fall in value. So does President Yudhoyono think that his nationalistic “let’s build our own smelters” ban on ore exports is going to save his party from defeat at the forthcoming elections? If so, then based on Australia’s happy financial experience with digging large holes in the outback and shipping the unprocessed contents to China, he could be in for a nasty shock.