Managing Uncertainty Under Indonesia’s Evolving Export Control Regime

Indonesia’s new commodity export oversight regime marks a major expansion of state control over strategic exports, but fiscal pressure, investor unease and street protests will likely push a softer monitoring model short of a full state takeover. Indonesian officials clarified on June 12 that Danantara Sumberdaya Indonesia (DSI), the new state-owned entity created to oversee commodity exports, will review export prices and trade data but will not directly sell commodities, replace private exporters or take over existing contracts. The clarification came after Indonesia began a June 1-Dec. 31 transition period during which exporters of commodities covered under the policy, which include palm oil, coal and ferroalloys, must report export activity to DSI, after technical rules issued earlier in June indicated that only the appointed state firm would be allowed to export covered commodities after Dec. 31. The government also issued technical rules clarifying that the system would cover most major…