World Bank: Indonesia forest fires cost $5.2bn in economic losses

The World Bank also estimated a 0.09 and 0.05 percentage points reduction in Indonesia’s economic growth in 2019 and 2020, respectively, due to the fires. (AFP)
Updated 11 December 2019

World Bank: Indonesia forest fires cost $5.2bn in economic losses

  • Economic losses equal to 0.5 percent of Indonesia’s gross domestic product
  • Drifting smoke at the height of the dry season in September triggered a diplomatic spat between Jakarta and Kuala Lumpur

JAKARTA: The total damage and economic loss from forest fires in Indonesia this year amounted to at least $5.2 billion, equal to 0.5 percent of gross domestic product, the World Bank said in a report on Wednesday.
The estimate was based on its assessment in eight affected provinces from June to October 2019, though analysts at the multinational bank said fires had continued to rage through to November.
“The forest and land fires, as well as the resulting haze, led to significant negative economic impacts, estimated at $157 million in direct damage to assets and $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.
More than 942,000 hectares (2.3 million acres) of forests and lands were burned this year, the biggest since devastating fires in 2015 when Indonesia saw 2.6 million hectares burned, according to official figures. 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 percentage points reduction in Indonesia’s economic growth in 2019 and 2020, respectively, due to the fires. Its growth forecast for Indonesia is 5 percent for 2019 and 5.1 percent for 2020.
The blazes were “manmade and have become a chronic problem annually since 1997” because fire is considered the cheapest method to prepare land for cultivation, the bank said.
Because about 44 percent of the areas burned in 2019 were in peatlands, carbon emissions from Indonesia’s fires were estimated to be almost double the emissions from the fires in the Brazilian Amazon this year.
The European Center for Medium Range Weather Forecast estimated a total of 720 megatons of CO2 emissions came from Indonesian forest fires in January-November this year.
Longer-term effects of repeated fires were not included in this estimate, the World Bank said. Repeated haze exposure would reduce health and education quality and damage the global image of palm oil — an important commodity for Indonesia.


US ‘cloud’ supremacy has Europe worried about data

Updated 40 sec ago

US ‘cloud’ supremacy has Europe worried about data

PARIS: Europe is sitting on a wealth of data that is the 21st century equivalent of a precious metal mine during the gold rush.
But instead of exploiting it themselves Europeans may be allowing American tech giants to gain control of all the excavation equipment, some experts say, pointing to a flurry of European companies announcing deals with US tech players for cloud services.
Renault, Orange, Deutsche Bank, and Lufthansa recently plumped for Google Cloud. Volkswagen signed up with Amazon Web Services. The French health ministry chose Microsoft to house its research data.
The cloud is a term for offering data storage and processing services externally so clients don’t need to invest as much in costly gear.
This trend has sparked concern particularly in Germany, which has a rich trove of data thanks to its powerful industrial sector.
The EU is “losing its influence in the digital sphere at the moment it is taking a central role in the continent’s economy” warned a recent report by a group of experts and media leaders under the leadership of the former head of German software firm SAP, Henning Kagermann.
“The majority of European data is stocked outside of Europe, or, if stocked in Europe, is on servers that belong to non-European firms,” it noted.

A senior French official recently delivered an even more blunt assessment in a meeting with IT professionals.
“We have an enormous security and sovereignty issue with clouds” said the official at the meeting, which AFP attended on the condition of respecting the anonymity of participants.
“In many cases it is convenience or a sellout” by European companies and institutions “because it is simpler” to sign up with US tech giants than find European options, said the official.
“However we have very good firms offering cloud and data services,” he added.
One of the causes of concern for Europeans comes from the Cloud Act, a piece of legislation adopted in 2018 that gives US intelligence agencies access in certain cases to data hosted by US firms, no matter where the server may be physically located.
“My company is American and I know very well what the implications are of the legislation,” said a Franco-American executive.
“And given what is happening in US policy debates, that situation won’t be getting better.”
Beyond the integrity of data, it is the capacity to analyze and exploit that information that worries many European experts and policymakers.

If in Europe “we are just capable of generating data and need others to exploit it then we are going to end up in the same situation as countries with mineral resources that rely on others to process it and end up with meagre economic benefits,” said the French official.
The French and Germans unveiled in June the GAIA-X project that aims to develop a competitive European cloud offer.
Rather than encourage the development of a European champion — in the mold of Airbus in response to Boeing — that would offer the full gamut of services, the project takes a different tack.
It aims to set standards so different firms could offer storage, processing, security and artificial intelligence services seamlessly. It would operate as a marketplace of sorts where each client could find the services they need without having to leave European jurisdiction.
It is hoped GAIA-X’s decentralized model might prove a better fit with the issues raised by treatment of data from connected devices.