Indonesian Government Growth Down, Corporates’ Earnings Uncertain
Across Indonesia, an area half the size of Switzerland burned in less than four months this year, with investors’ capital going up in smoke. From July 1st to October 20th, 2015, 97,000 fires were detected in Indonesia, and over two million hectares of forest caught fire, one-third of which were High Carbon Stock peat forests. Sumatra and Kalimantan were hardest hit with over 800,000 ha burnt each. Papua has over 350,000 ha of land burnt. Investors may lose money as ineffective oversight and enforcement by plantation companies, as well as local and national government, has allowed fires to burn without proper control measures in place. The resulting haze in Southeast Asia is now a material financial issue for investors as governments, individuals, and investors consider legal and financial action.
This new analysis by Chain Reaction Research assesses some of the financial implications of the fire crisis in Indonesia and what it could mean for investment in the regional palm oil industry going forward. We invite you to read and share the full report below.
Key Findings
- Ineffective governance drives fires resulting in industry anxiety
- Analysis projects Indonesian government could lose USD 35 billion in revenue
- Investors sell shares
- Supply chain contracts now in question
- Government agencies question license to operate
- Casualties cause potential future health risk liability
Download as PDF: Fires Burn Southeast Asian Assets: Indonesian Government Growth Down, Corporates’ Earnings Uncertain
