- Missed Nvidia? 2 incredibly cheap artificial intelligence (AI) stocks to buy before they skyrocket 39% to 50%.
- History says that great companies can become disappointing stocks. Is Nvidia next?
- S&P 500 falls as $5.3 trillion options tests loom: Markets are closing in
- Did Amazon Just Say ‘Checkmate’ to Nvidia?
- Malaysia’s Prime Minister outlines leadership ambitions in energy and chip manufacturing
- The scandal-ridden Chinese road in Montenegro
Does the industrial upgrade of Indonesia work as a mandatory model for the Philippines? Both countries are among the richest in Southeast Asia in terms of natural resources. Indonesia has a status as a global mineral heavyweight: it is an important producer of copper, the world’s largest thermal coal expansion, the second largest tin exporter, and has the sixth largest bauxite reserves. It also has the largest number of nickel reserves worldwide. Although the Philippines have more limited deposits of tin, coal, copper and bauxite, it contains considerably larger chromiet and gold reserves than Indonesia. The use of these comparative benefits through strategic industrial policy has a huge economic potential for the Philippines.
In the past decade, Indonesia has aggressively expanded its export of intervening mineral goods, such as processed Ferronickel and Pig Nickel. The total export of these products has risen from $ 3 billion in 2012 to $ 30 billion in 2023. During this period the contribution of the island of Sulawesi, the location of most nickel deposits from the country, to GDP of Indonesia, getting up From 4 percentage in 2012 to 7 percent in 2023. Sulawesi’s annual growth rate has streamed Up to 7-9 percent between 2020 and 2023, much higher than the national average of 3-5 percent. It is crucial that this thriving melting sector is not only dependent on investments, but also on robust training and development of skills.
This success was achieved by a ban on the export of rough nickel, which encouraged foreign investments in the intermediate production process. By banning exports, nickel mine companies had no choice but to sell to domestic melting companies, around 80 percent of them from China. A small number of large Chinese melting companies have started dominating the market, so that a oligopsia Where they dictated prizes that were considerably lower than international rates.
However, this economic triumph has received considerable social-milie costs. The nickel export restrictions of Indonesia and the associated extractive activities have had serious consequences. Extensive land spaceIn more than 5000 hectares, has taken place on Sulawesi and Halmahera, another island with considerable nickel deposits on the Maluku Islands. The smelters, who jointly rely on 12 GW of Kolenkracht, have generated enormous pollution, emit 60 million Annually tons CO2, which strengthen the status of Indonesia as the world’s third largest CO2 emitter. This has led to degraded air quality, adverse consequences for public health health, contaminated coastal ecosystems, decimated fishermen’s stocks and damaged coral reefs. Residents of Sulawesi are now confronted with the highest levels of cancer and other health problems in the country. A 2022 survey showed that 40 percent of children under five suffered from asthma on the island and that adult cases of lung disease have risen by 25 percent in the smiling heavy areas.
In view of these serious social environmental effects, the model of Indonesia is demonstrably not a suitable blueprint for the Philippines or another tool of land to pursue. After the nickel-based industrialization of Indonesia, will probably encounter considerable implementation challenges, generates unintended negative consequences, wors out political and social tensions and possibly lead to concern about national security.
Firstly, the Philippines face significant challenges in Land for Industrial Development. Many national packages lack the correct documentation or registration, so that local elites and landowners with political connections can block such initiatives to preserve land for speculative purposes. These groups can effectively hinder the government’s efforts by challenging them through legal channels and other ways. In addition, the legal framework of the country is characterized by overlapping and conflicting regulations.
For example the Indigenous law legislation of 1997 Recognizes the ancestral domain of indigenous communities, but this recognition is often ignored by other government agencies. Likewise, the extensive agricultural reform program of the Department of Agrarian Reform Land distributes, while the Department of Environment and Natural Resources grants permits for activities such as Houtkap and Mijnbouw. Local governments make things more difficult by implementing their own planning and destination laws. Moreover, the population density of the Philippines of 382 people per square kilometer is more than double that of the 151 of Indonesia, making agricultural problems worse. The agricultural reforms of Indonesia, on the other hand, give priority to the control of the state about resources, making indigenous groups and other actors weaker and thereby limit formal disputes.
Secondly, the implementation of a similar project in the Philippines would probably have an even more serious environmental impact due to the decentralized mining board of the country. Deforestation would probably increase as a result of the need to expand mining concessions. The Philippines are the home of worldwide biodiversity hotspotsWith more than 6000 plant species, as well as areas of intact forests such as the Sierra Madre. Expansion of mining activities in regions such as Palawan, Caraga and Zamboanga could jeopardize the Philippine Eagle, Tamaraw and other endangered species. Moreover, increased deforestation would aggravate the effects of natural disasters such as flash floods.
Only in 2022, only 3 percent From mining companies in the Philippines met the Filipino environmental standards. Building a smeldery in the Philippines would require the construction of more coal -fired power plants to offer electricity, so that the dependence on the country is further anchored, which accounts for 57 percent of its electricity generation. The Philippines also have nickel terts of a lower quality, known as a laterite, which requires more energy to melt and generates 30 percent more waste. With a higher population density, contamination by coal -fired power plants would be more serious than in Indonesia, where nickel cries took place on the relatively remote island of Sulawesi.
Water pollution, marine damage and soil grade would also increase, and the Filipino government has shown that it lacks enforcement capacity to ensure that mining companies meet water -waste standards. The archipelago geography of the Philippines would mean that environmental damage to coral reefs and coastal communities, which is already struggling with the effects of climate change, would be important. In addition, poor waste management practices, comparable to those in Sulawesi’s Morowali Industrial Park, can lead to the leakage of heavy with metal with metal snail waste.
Thirdly, the implementation of a similar nickel project in the Philippines would probably intensify the political or social conflicts with various local actors. An important problem would be the relocation of the large traditional and small -scale mining community of the country, which includes roughly 300,000 miners Working on both formal and informal concessions. Many of these small -scale miners rely on mercury and cyanide in their nickel laterite processing, a practice that can be disturbed. Although limiting these environmentally friendly harmful activities itself can be useful, Proof from Indonesia suggests that these smaller miners can easily move their activities elsewhere in the country to compensate for the expansion of large -scale mining.
In addition, since the 1990s, decentralized board has enabled local elites such as governors and mayors to indicate “small -scale” mineral areas within mineral concessions. Artificially depressing nickel prices, as seen in Indonesia, would aggravate the despair of these already vulnerable small -scale miners, who use more power in the Philippines compared to their Indonesian counterparts, which may lead to serious conflicts.
And finally, the inviting of Chinese melting companies for the Philippines in exchange for lower ore prices, according to the Indonesian model, would be an important threat of national security. Given the relative distance of Indonesia of the most assertive actions of China in the South Chinese Sea, despite continuous frictions around the Natuna Islands, the elites enables to tolerate potential safety risks in pursuing economic development. However, the active territorial disputes of the Philippines with China in the South Chinese Sea make such a regulation much more precarious. The inability of the Philippines to effective Monitor and regulate Chinese investments, as evidenced by the proliferation of Chinese scam compounds and online gambling companies, also connects the risk that these smelters will be used by the Chinese state to put pressure on the Philippines. With China who already has a significant influence on the critical energy of the Philippines grille The transmission sector, which makes further Chinese dominance in the strategic vital nickel industry, could have serious geopolitical consequences for the country.
Ultimately, the feasibility nuisances, probable relegation of the environment, increase increasing political and social struggle and security problems that the Philippines must map a diverse course from Indonesia. Given the robust services of the Philippines, alternative development programs are viable-nonsense that are not dependent on mineral-driven progress supported by Chinese.
The Philippines must actively pursue alternative foreign investors, such as Japanese or American companies, who are willing to invest in smelters and refineries without the limitations of artificially depressive prices and other problematic factors. Securing support from both Filipino and foreign governments could considerably encourage these companies to invest and strengthen economic development in this crucial Indo-Pacific alliner.