Indonesia's Rubber Industry Has Been Hit Hard By The Outbreak, Which Has Pushed Back Poverty Rates By Nearly A Decade

- May 18, 2020-

On May 9, Indonesia's finance minister indranjwa said the covid-19 outbreak has hit the Indonesian economy hard.

"The outbreak could lead to a sharp rise in poverty across the country, reversing the government's efforts to reduce poverty from 2011 to 2020," she said.

As of 14:00 on May 11, more than 4.1 million cases had been confirmed overseas. The main rubber producing countries in the world have been affected by the epidemic. Among the rubber producing countries in southeast Asia, Indonesia has been hit the hardest, with a total of more than 14,000 confirmed cases.

Covid-19 has had a big impact on Indonesia's natural rubber industry.

Since the first confirmed case of covid-19 was detected on March 2, Indonesia has implemented "large-scale community quarantine" measures to varying degrees throughout the country from mid-to-late April to early may, extending the lockdown to areas outside the capital and further strictly enforcing the existing social quarantine measures.

The number of people living below the poverty line is likely to have increased by 5.1 million in the second quarter of this year as community isolation measures are implemented and income sources are lost.

Affected by the covid-19 epidemic, rubber prices are low, and Indonesia's rubber farmers are seriously discouraged in cutting rubber. The output of natural rubber raw materials and the construction of factories are low, and some rubber processing plants cannot operate normally.

The spread of the epidemic in Europe and the United States led to the closure of many tire and automobile factories, and the demand for raw materials was extremely shrinking. A large part of Indonesian rubber was exported to large tire enterprises in Europe and the United States, and Indonesian rubber traders had to face the pressure of delaying the shipping date or even breaking the contract.

Indonesia's ministry of public works and housing has allocated 125 billion rupees (us $8.2 million) to buy 10,000 tons of rubber and 800 tons of glue directly from rubber plantations in response to falling demand and falling prices caused by public health incidents.

It is understood that rs 100 crore was used to buy rubber and asphalt mixture for national road construction projects;

Rs 25 crore is used to buy glue and paint mixtures for road signs.

At present, Indonesia's rubber industry has been greatly impacted by the epidemic, and it is difficult to recover in a short time.

Suharyanto, the head of Indonesia's national bureau of statistics, said it was difficult to judge the future of the economy because it was impossible to predict how long the outbreak would last.

The development of Indonesia's rubber industry will depend on the situation of the epidemic, especially in the European and American countries.