Jakarta, Indonesia Sentinel — The economy of Bangka Belitung (Babel) has taken a severe hit due to a widespread corruption case involving the region’s tin industry. The seizure of smelters has left many people unable to sell their mined products, leading to a collapse in purchasing power as residents struggle to make ends meet. The retail sector, a key indicator of consumer spending, has also seen a sharp decline.
“Bangka is currently experiencing an economic downturn. In regions that rely heavily on natural resources, when the industry struggles, so does the local economy,” said Budihardjo Iduansjah, Chairman of the Indonesian Retailers and Shopping Center Tenants Association (HIPPINDO), on Friday (October 11, 2024).
This pattern is also observed in other resource-dependent regions such as Kalimantan, which thrives when coal prices are strong, and Makassar, where the economy improves during the harvest seasons of commodities like coffee and nutmeg.
Babel’s economic crisis worsened as palm oil companies linked to tin mining operations were also shut down, and their accounts were frozen. As a result, many companies struggled to pay employees, leading to a wave of layoffs. According to Elius Gani, Head of the Bangka Belitung Manpower Office (Disnaker), the number of workers laid off rose sharply from 38 last year to 1,527 this year.
“With six smelters and eight affiliated businesses closed, 1,372 workers have been laid off. This has severely impacted job opportunities in the region,” Elius added.
In the second quarter of 2024, Babel’s economy grew by only 1.03% year-on-year, a sharp decline from the 5.13% growth recorded in the same quarter of 2023. The ongoing tin smelter closures and limited mining permits (RKAB) approval have hampered economic activity in Babel, where 80% of exports and 60% of the local economy depend on tin.
Eka Mulya Putra, Secretary-General of the Indonesian Tin Exporters Association (AETI), emphasized the need for better tin management and clearer regulations for local miners to revive the economy.
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“The decline in tin exports is not only due to the corruption investigation but also the limited number of RKAB approvals, which has hindered production and contributed to Babel’s economic slowdown,” Eka said.
(Becky)
