Forest fires cost Indonesia $7.1 billion in economic losses, Latest Business News - The New Paper

Forest fires cost Indonesia $7.1 billion in economic losses

This article is more than 12 months old

JAKARTA : The total damage and economic loss from forest fires in Indonesia this year amounted to at least US$5.2 billion (S$7.1 billion), equal to 0.5 per cent of gross domestic product, the World Bank said yesterday.

The estimate was based on its assessment in eight affected provinces from June to October, though analysts at the multinational bank said fires had continued to rage through to last month.

"The forest and land fires, as well as the resulting haze, led to significant negative economic impacts, estimated at US$157 million in direct damage to assets and US$5.0 billion in losses from affected economic activities," the World Bank wrote in the report.

Over 900,000 people reported respiratory illnesses, 12 national airports halted operations, and hundreds of schools in Indonesia, Malaysia and Singapore had to temporarily close due to the fires.

Drifting smoke at the height of the dry season in September triggered a diplomatic spat between Kuala Lumpur and Jakarta.

Over 942,000ha of forests and lands were burned this year, the biggest since devastating fires in 2015 when Indonesia saw 2.6 million hectares burned.

Officials said the spike was due to El Nino weather patterns lengthening the dry season.

The World Bank also estimated a 0.09 and 0.05 per centage points reduction in Indonesia's economic growth this year and next year, respectively, due to the fires. Its growth forecast for Indonesia is 5 per cent for 2019 and 5.1 per cent for 2020.

Repeated haze exposure would reduce health and education quality and damage the global image of palm oil - an important commodity for Indonesia. - REUTERS