Haze crisis cost Indonesia almost 2% of GDP: World Bank

JAKARTA — Forest fires in Indonesia last year cost the country at least US$16 billion (S$23 billion) in economic losses, equivalent to 1.9 per cent of its gross domestic product, according to the World Bank.

Indonesia made some mistakes in responding to challenges such as the fires and resulting haze, World Bank Country Director Rodrigo Chaves said at a media briefing in Jakarta. The cost, twice the amount it took to rebuild after the 2004 tsunami, takes intoaccount the impact on agriculture, tourism, forestry, trade and transport over five months, the lender estimated.

An annual phenomenon, smoke from illegal burning in the tropical forests and peat lands of Sumatra, Borneo and Papua last year was exacerbated last year by dry conditions from the El Nino weather pattern. The haze blanketed Singapore and parts of Indonesia, Malaysia and Thailand in September and October, shutting schools, causing respiratory illness and forcing airlines to cancel flights.

Indonesian authorities struggled to respond to the fires, many of which are set by smallholders and companies to clear land for agriculture, especially palm oil. Burning is cheaper than other forms of land preparation.

The arrival of the rainy season in early November extinguished most of the fires, clearing the skies. Yesterday (Jan 19), President Joko Widodo warned in a tweet that ‘hotspots’ were reappearing, and urged people to prevent their spread. BLOOMBERG