Sand Ban As A Political Tool

Recently Indonesia banned sand export.Though it is not targeted on certain countries but Singapore as the main ( I think the only ) sand importer from Indonesia facing quite a problem suddenly. Many opinions surfaced on this ban both from Singapore and Indonesia side.

I am trying to give a neutral view ( though I myself an Indonesian ).I try to elaborate my observation and thinking into several points as follow :

1. What the real motive behind this ban ? Or in other word : Why Indonesia need to ban sand export ?

This question discussed quite a lot especially by Singapore bloggers.

Several theories and explanations surfaced to answer this simple question :

a. Environmental issues

Indonesian Environmental Minister,Rachmad Witoelar explained that the sand export for years has caused severe environmental problem to Indonesia side.The sand mining supposed to be done in inland part of any islands.But as the lack of supervision and high level of corruption then the sand mining has been done mostly in outside part of the islands which caused severe environmental problem.The regulation actually stated also that some percentage of revenue from sand export need to be ploughed back to environment preservation. But so far nobody can really guarantee about the implementation or the actual effect from this ploughing back money. The recorded sand export by Indonesia government was around $ 6 million but the recorded sand import from Indonesia by Singapore government was around $ 260 million. Such as striking difference !!

By simple math the difference was : $ ( 260-6 ) million = $ 254 million or 42 times than the record by Indonesia government.

Then where all this money has gone ?

I only can assume for this ( as no valid proof ) as follow :

- Poor record by Indonesia government ( moderate possibility as sand is not a high tech stuff so the value can be easily determined by simple math )

- Poor record by Singapore government ( low possibility considering the efficient and modern civil service in Singapore )

- Smuggling by sand exporters ( very high possibility )

First to be considered is the vast Indonesia sea which very hard to be controlled fully by Indonesian Navy,Police and Customs.

Second to be considered is rampant corruption by officers.High possibility the sand smuggling detected and known by officers ( navy,police and etc. ) but then bribing the officers can negotiate and solve all the problems.

- Undervalued or overvalued sand price ( low probability )

I believe only low probability for this as the exporters and importers ( businessman type people ) surely will not allow this to happen for long time. Nobody want to lose out from their businesses.Supply and demand law simply control the price of commodity.If sand has been overvalued by Singapore importers then I believe it will be adjusted very soon and if the sand has been undervalued by Indonesian exporters then very soon they will increase the price to get more profit. As simple as that as it is business anyway.

b. Political play/Wayang by Indonesia part to force Singapore signing extradition treaty as soon as possible

This theory of political play/Wayang has been cited and strongly believed by many people both in Singapore and Indonesia. Many Indonesian politicians ( members of DPR including some government officers ) support this idea of political manouvre against Singapore to force them signing the extradition treaty as soon as possible. This then caused uproar and strong reactions from Singapore side ( Minister,MP,Singapore bloggers and etc. ).

Singapore objected to this as :

- It causes problem with construction projects

Later on it will continue with raising property prices,slowing down of the economy growth and less job openings.

- The extradition treaty has been agreed to be discussed and related concurrently with defence treaty

- The finger pointing towards Indonesian counterpart that the lack of progress on extradition treaty partly because Indonesia do not prepare the needed paperworks properly.

Though I believe this thing can happen with the performance of civil servants in Indonesia but I do not buy into this finger pointing as the paperworks surely will be prepared properly by Indonesia if 30 years has passed for this. It is true that Indonesian civil servants tend to work slower than private employees in Indonesia and Singapore civil servants.But they made things happen finally.If you make Identity card in Indonesia you may need 1 week to go but you surely will get it ( except recent system change to computerized system which caused several months just to get an IC ).

Now it is interesting to explore more about extradition treaty. By Indonesia Government’s account the discussion for this has been more than 30 years since Soeharto era. It has been dragged for so long by delays and reasons from Singapore ( perhaps political plays also before ).

There is a theory that suggested after Indonesia negotiating for so long and finally feels diplomatically exhausted then Indonesia resorted to this political play to increase the pressure to Singapore which has bigger share on dragging it for so long.

This theory is quite reasonable.But then there is another question : Why Singapore need to drag it for so long ?

This theory actually trying to explain it more in economical perspective.It is widely discussed that corrupted money from Indonesia somewhat needed to help Singapore economy ( analysis by Andy Xie who worked with Morgan Stanley before and based in Hongkong currently ).Sudden departure of this money meant shock to Singapore economy which can dampen the economy growth and prosperity of Singapore.We need to consider carefully the fact that actually 40% of high end condominium in Singapore owned by Indonesian and 18000 from 55000 ( a third ) of super rich persons in Singapore actually Indonesian holding Singaporean PR ( all the data from recent surveys ). Considering this fact actually we can see easily that the stay and movement of super rich Indonesian holding Singapore PR is important both for Singapore and Indonesia.

My personal point of view for this theory is that harbouring or protecting criminals from neighbours is not an ethically right thing to do although Indonesia which demands for this is not so clean also ( despites efforts for several years after the topple down of Soeharto’s regime ).

2. How to solve this banning issue / problem ?

a. Signing of extradition treaty between Indonesia and Singapore

Surely if the motive behind this sand banning really about extradition treaty then signing of extradition treaty can solve it all. Sand banning soon can be lifted whether there is any price increase after that or not.

b.Environmental preservation

If the motive behind this sand banning purely because environmental issue than do not expect that it will be lifted pretty soon by Indonesia. And I believe that the best way for Singapore to deal with it is by finding other countries to supply this sand ( Cambodia,Myanmar and etc. ) although the transportation price will be much higher as those countries quite far away from Singapore.

That is all the points I observed and thought about after several weeks observing and analyzing the polemics about this sand ban. Hopefully can give a neutral insight and useful.Thanks.

Cheers,

Herman