Indonesia Wildfires Cost $16.1 Billion in 2015: World Bank

BenarNews Staff
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151215-ID-fires-620 A villager looks at a peatland fire on the outskirts of Palangkaraya city, Central Kalimantan, Oct. 26, 2015.

Wildfires between June and October that burned 2.6 million hectares (6.4 million acres) cost Indonesia an estimated U.S. $16.1 billion while millions in the region suffered, according to the Indonesia Economic Quarterly report issued Tuesday by The World Bank.

“The vast economic and environmental crisis is repeated year after year, as a few hundred businesses and a few thousand farmers seek to profit from land and plantation speculation practices, while tens of millions of Indonesians suffer health costs and economic disruptions,” the report stated.

$16.1 billion is 1.9 percent of Indonesia’s gross domestic product and more than double the reconstruction cost following the 2004 Aceh tsunami that killed thousands of people, according to the report.

“Now is the time for Indonesia to address the underlying drivers of man-made fires, enforce laws and revise policies in order to reduce the risk of these economic disasters from recurring,” The World Bank said.

Few people benefit

The fires, which covered an area 4½ times the size of Bali, were driven largely by palm oil production, according to the report. Peatland fires to clear land for palm oil plantations accounted for about a third of the blazes and created a noxious haze that disrupted trade, transportation and tourism, closed schools and negatively affected people’s health.

In early October, smog forced schools to close across Malaysia, hospitalized dozens in southern Thailand and forced international sporting events in Kuala Lumpur and Singapore to be cancelled.

In September and October, during the peak of this year’s especially noxious fires, Indonesia’s daily greenhouse gas emissions exceeded daily emissions from the entire U.S. economy on 26 days, according to the World Resources Institute (WRI), a Washington D.C.-based environmental group. The U.S. economy is 20 times larger than Indonesia’s.

“These areas store some of the highest quantities of carbon on earth, accumulated over thousands of years,” WRI said in October. “Draining and burning these lands for agricultural expansion (such as conversion to oil palm or pulpwood plantations) leads to huge spikes in greenhouse gas emissions.”

The profits from palm oil amount to at least U.S. $3,077 per hectare in three years, but the benefits extend to a select few, The World Bank said. About 85 percent of the cash flow goes to those able to take a financial risk such as plantation developers.

In October, President Joko Widodo called for a moratorium that would effectively halt the legal conversion of peatland into agricultural land and for peatland restoration, The World Bank reported.

Indonesian officials on Thursday plan to name the companies responsible for the illegal fires and suspend their business licenses while determining if they should face charges of breaching environmental laws, The Strait Times reported.


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