The weakening of the rupiah is not merely a matter of financial markets. Behind the exchange rate figures lies pressure on Indonesia’s natural capital, including its future.(Photo: UI)
EduAsiaNews, jakarta – Universitas Indonesia The weakening of the rupiah is not merely a matter of financial markets. Behind exchange rate figures lies pressure on Indonesia’s natural capital, including its future.
A Weak Rupiah, More Attractive Natural Resources
The depreciation of the rupiah against the United States dollar is often interpreted as a monetary issue: rising import prices, inflationary pressure, and increasing foreign debt burdens. However, from the perspective of natural capital, a weakening rupiah has much deeper implications. It changes how the state, businesses, and markets perceive Indonesia’s natural resources.
When the rupiah weakens, commodities based on natural resources that are priced in dollars become increasingly attractive. Coal, nickel, palm oil, rubber, cocoa, coffee, fisheries products, and forestry goods can generate higher revenues in rupiah terms. In the short term, this appears beneficial. Exports may increase, foreign exchange earnings are pursued, and nature-based sectors are seen as economic lifelines.
Yet here lies the paradox: nature becomes more valuable as a commodity, while at the same time becoming more vulnerable to losing its value as an ecosystem.
Natural Capital Is More Than a Commodity
Natural capital does not only refer to timber, minerals, oil, fish, or land as natural resources. It also includes ecosystem services through ecological functions: forests as carbon sinks, peatlands as water storage systems, mangroves as coastal protection, rivers as life-support systems, and biodiversity as the foundation of ecosystem resilience.
The problem is that markets are quicker to price commodities than ecological value. The prices of coal, nickel, or crude palm oil are immediately reflected in dollars. However, the value of forests that regulate the water cycle, mangroves that prevent coastal erosion, or biodiversity that maintains ecosystem stability is often not fully captured in economic accounting.
As a result, when the rupiah weakens, the state may be pushed toward seeking quick foreign exchange from nature, while ecological losses are delayed, hidden, or even unaccounted for.
Pressure on Extractive and Land-Based Sectors
Rupiah depreciation has the potential to increase pressure on extractive and land-based sectors. Governments and businesses may be increasingly driven to accelerate the production of export commodities. In a tight fiscal situation, the expansion of mining, plantations, and commodity-supporting infrastructure may be seen as a quick way to generate foreign exchange.
In the energy sector, a weak rupiah makes imported oil and fuel more expensive. If the state’s response focuses mainly on price stabilization through subsidies, fiscal space for ecosystem restoration, conservation, energy transition, and environmental enforcement may shrink. In the food sector, higher costs of fertilizers, feed, energy, and food imports may encourage domestic production expansion. This is positive if done through sustainable intensification, but dangerous if it leads to extensification—land expansion that sacrifices forests, peatlands, or high conservation value areas.
Thus, exchange rate pressure can transform into ecological pressure.
The Illusion of Natural Wealth
A weakening rupiah can also create an illusion of wealth. In rupiah terms, the value of natural resource exports appears to increase. Companies record higher revenues, state income may rise, and the trade balance may improve. However, if natural stock declines, water quality deteriorates, forest cover is lost, emissions increase, and ecosystem services are degraded, then the nation’s true wealth is actually decreasing.
This highlights a crucial distinction between income from nature and natural wealth. Income may rise due to exploitation, but ecological wealth may decline due to degradation.
Turning Currency Pressure into a Green Momentum
A weakening rupiah does not have to lead to environmental exploitation. Instead, it can become a momentum to strengthen a green economy based on natural capital. Indonesia needs to accelerate natural capital accounting, strengthen environmental standards, expand high-integrity carbon markets, enhance peatland and mangrove restoration, develop sustainable fisheries, and reduce dependence on imported fossil energy.
The key is to shift orientation: from pursuing extractive foreign exchange toward building green foreign exchange. Nature must not be treated merely as a source of quick money, but as the foundation of economic, climate, food, water, and life resilience.
A Test for National Development Direction
The weakening of the rupiah places Indonesia’s natural capital in a vulnerable position. On one hand, natural commodities become more financially attractive. On the other, ecosystems face increasing pressure due to foreign exchange needs, fiscal constraints, and incentives for exploitation.
Therefore, a weakening rupiah is not only a test for Bank Indonesia and the Ministry of Finance. It is also a test of Indonesia’s development direction: whether the country will sell off its nature more rapidly to ease economic pressure, or instead use currency crises as a moment to strengthen natural capital as the foundation of national resilience.
