JAKARTA — Indonesia will require exports of key commodities including palm oil, coal and iron alloys to be handled by state-owned enterprises starting in June, President Prabowo Subianto told parliament in a recent address. Prabowo said the country had lost as much as $908 billion because its commodities were undervalued when they were exported.

The first phase of the export control plan is expected to run from June through August, when private companies will turn over their import and export transactions to state-owned enterprises. By September, state-owned companies are expected to manage all trade transactions between foreign buyers and domestic sellers. Prabowo described the underreporting of exports to reduce taxes as "fraud or deception" and said the move was aimed at closing those gaps.

"The primary objective of this policy is to strengthen oversight and monitoring — and to combat under-invoicing, transfer pricing and the diversion of export proceeds," Prabowo said. "This policy will optimize tax revenue and government revenue, as well as the management and sale of our natural resources."

"We do not want our revenue to be the lowest simply because we lack the courage to manage what belongs to us, what belongs to the Indonesian people," he added.

State-owned enterprises currently handle a portion of Indonesia's exports of palm oil, coal and iron alloys. Indonesia is the world's largest exporter of thermal coal and palm oil, and holds the world's largest known reserves of nickel, with China and the United States competing to control those reserves.

Energy analyst Putra Adhiguna said the announcement is the government's biggest move to directly control the nation's commodities. He said the policy would boost state revenues and help make up for shortfalls caused by higher subsidies provided to protect consumers from higher fuel prices caused by the energy shock from the Iran war.

Energy analyst Dinita Setyawati said the change could shift Indonesia's position in international markets. "Greater state control will give Indonesia greater bargaining power in future negotiations with superpowers keen on securing access to the country's vast resources," she said.

"The new centralized commodities system could also help Indonesia address long-standing environmental issues caused by the overexploitation of its natural resources, but that will depend on how policies are implemented," Setyawati said.

The government has cracked down on unauthorized mining operations over the past few months and has pushed to develop domestic refining of commodities such as coal and nickel. In 2020, Indonesia outlawed exports of raw nickel ore. Indonesia's central bank raised its key interest rate by 0.5 percentage point to 5.25% on Wednesday, mainly to counter a weakening in the rupiah.