WB warns RI of negative impact of mineral export ban

The World Bank (WB) warned of the negative impact of the government?s export ban on mineral ores to the country?s fragile economy as the expected long-term benefits remain uncertain.

?The World Bank estimates that the current de jure mineral export ban policy will reduce the net trade balance by US$12.5 billion and generate a total loss in fiscal revenues (royalties, export taxes and corporate income tax) of $6.5 billion in 2014-17, including a $5.5 to 6.5 billion drag on the trade balance in 2014,? the Bank said in a quarterly country economic report released Tuesday.

?While the quantum remains uncertain, negative impacts of this order from the ban, along with the broader economic issues the policy raises, suggest it is worthwhile to evaluate a wider set of policy options to ensure that Indonesia benefits to the maximum extent possible from its considerable mineral wealth in a socially and environmentally sustainable manner,? it added.

As mandated by the 2009 Mining Law, the government in January of this year imposed a limited ban on mineral ore exports to push miners to add value on the mining products by processing and refining them at domestic smelters. But certain mineral concentrates including copper are still allowed to be exported until 2017 by paying export tax, a policy that has been widely protested by miners.

Editing by Reiner Simanjuntak