Indonesia?s Green Prosperity

Tuesday, November 22, 2011

On November 19, 2011, in Bali, Indonesia, Secretary of State Hillary Clinton signed a new partnership agreement with the Government of Indonesia providing more than $600 million of U.S. aid through the Millennium Challenge Corporation (MCC). More than half of these investments are dedicated to “green prosperity”-the sound idea that sustainable natural resource management and clean energy technologies accelerate economic growth and poverty alleviation.

What does this mean in practical terms? New U.S. funds will help Indonesia make wiser land-use decisions by, for example, guiding future palm oil plantations away from pristine rainforests and toward abandoned, degraded lands, which are abundant. These “land swaps” hold enormous potential. While palm oil plantations on degraded lands require higher up-front investments (and are therefore uncommon without government intervention), over time plantations on degraded lands are usually more productive and profitable than palm plantations grown in newly deforested and drained peat lands.

The United States can provide affordable bridge loans and long-term financing, and technical assistance to help local communities map surrounding lands, clarify land-rights and develop community-supported strategies. In so doing the United States can help Indonesia increase economic growth, strengthen its democracy, reduce illegally logging, respect the rights of forest-dependent communities, conserve threatened tropical forests and orangutans, and reduce a major source of climate pollution.

Source: Brookings (link opens in a new window)