JAKARTA: President Prabowo Subianto declared that Indonesia will not be intimidated by global index provider MSCI and lashed out at foreign powers he accused of insulting and interfering with the country, as a regional haze crisis and stock market rout piled pressure on his government two years into his presidency.
Speaking at a Cabinet meeting at the Presidential Palace in Jakarta on Wednesday (Oct 21), Prabowo accused MSCI of trying to frighten Indonesia, after the index provider on Oct 15 proposed stripping the country of its emerging-market status and reclassifying it as a “standalone” market.
“We keep being obstructed, right? There’s all sorts of things. MSCI, all sorts of things. They want to frighten us,” he said. “I’ll just say this to MSCI: Indonesia is not afraid of anyone and will not flinch.”
“We are not afraid. We have strength, we have courage, we are willing to make sacrifices and we do not know surrender,” he added.
MSCI, whose stock market indexes are widely followed by international investors, announced on Oct 15 that it was considering downgrading Indonesia from an “emerging market” to a “standalone market” in 2027, citing concerns about a lack of transparency in share ownership, suspicious trading activity and weaknesses in market oversight.
Such a move would make Indonesian stocks less attractive to major international investment funds, potentially prompting them to withdraw billions of dollars from the country.
The warning sparked the deepest two-day sell-off ever recorded for Indonesian stocks, with the market losing about US$82 billion (S$105 billion) in value, before recovering some ground on Oct 20.
During the meeting, Prabowo also said the forest and land fires burning across parts of the country were not purely natural, and that many corporations bore responsibility.
“Deliberately setting fires could be regarded as environmental terrorism and was a crime against humanity, as it endangered the health of millions,” Prabowo said.
“If the evidence is clear, we will act. We will revoke all the permits of companies that break the rules,” he said.
“And as for certain countries that like to insult the Indonesian nation, at the right time, we will reveal the companies.” He did not name the countries or the firms.
“Indonesia is a patient nation that is often insulted. But believe me, the Indonesian nation does not want to be harassed endlessly,” he added.
The president went on to say that “big nations” had meddled in Indonesia ever since independence, inciting division and financing rebellions and riots to divide and rule.
He cited rebellions of the republic’s early years, including the Republic of South Maluku (RMS) and PRRI-Permesta, and said many had predicted, and even hoped, that Indonesia would break apart after the upheaval of 1997-1998.
His remarks came as Singapore and Malaysia stepped up pressure on Jakarta over haze from the fires, which has pushed Singapore’s air quality to levels not seen since 2015, shut schools in Kuala Lumpur and several Malaysian states, and resulted in flight cancellations in Indonesia as well as neighbouring countries.
Singapore’s Minister for Sustainability and the Environment Grace Fu said on Oct 16 that investigations suggested some of the haze over the Republic originated from fires on land held by seven companies in Indonesia.
The National Environment Agency subsequently issued notices to three more companies, bringing the total to 10, under Singapore’s Transboundary Haze Pollution Act, which allows action against entities responsible for transboundary haze pollution in Singapore, regardless of where the burning takes place.
At home, Prabowo has faced calls to name the firms involved. On Oct 16, Alex Indra Lukman, a deputy chairman of Parliament’s committee overseeing agriculture and forestry, urged him to release the government’s data, citing findings by green groups Walhi and Greenpeace Indonesia that he said linked 52 companies with foreign capital to the fires.
An Oct 5 report by Greenpeace Indonesia, Greenpeace Malaysia and peatland-monitoring NGO Pantau Gambut linked at least one Malaysian company and four concessions with ties to Singapore-based firms to land with hotspots, but did not accuse them of starting the fires.
Forest fires across Indonesia, particularly on the islands of Sumatra and Kalimantan – made worse by a strong El Nino weather phenomenon – have sent haze across the region. - The Straits Times/ANN
