Middle East War a Boon for Indonesia's 'Treasure Trove', How Can That Be?

Indonesia is reaping benefits from the heated geopolitical tensions in the Middle East, specifically through revenue from exports of leading commodities such as coal and crude palm oil (CPO), which are considered the nation’s treasure trove. This was disclosed by Bank Indonesia’s Senior Deputy Governor Destry Damayanti to CNBC Indonesia. Destry explained that the ongoing war has driven up global crude oil prices, which in turn lifted other commodities like coal and CPO. “Firstly, because commodity prices rose, but actually these commodity prices are also balanced by other commodities that rose as well. For example, coal,” Destry stated. The Senior Deputy Governor said Indonesia is profiting from the rise in coal commodity prices because it is one of the world’s largest producers. As a result of rising oil prices, Destry revealed a potential energy shift towards coal, which is relatively cheaper, meaning demand for coal will also increase. Indonesia stands to benefit from this scenario. “Of course, we can take advantage of this, firstly with the increase in energy prices then pushing up coal because many countries are switching back to coal,” Destry said. Destry noted that Indonesian coal could become competitive for other countries amid the weakening of the rupiah exchange rate. “This also certainly presents an opportunity for Indonesia because, on one hand, the depreciation of the rupiah also makes our coal more competitive,” she added. The same applies to crude palm oil, where Indonesia is one of the largest producers in the world.