Jakarta, IO – Circular economy may be a highly popular topic in Indonesia and in developed countries, but supporters of the idea may have realized that the transition towards it is a bumpy road due to lack of public education, the sector is challenging to finance, and lack of incentives from policy makers.
Indonesia’s Coordinating Minister for the Economy Airlangga Hartarto had spoke the urgency for Indonesia to implement circular economy in a seminar titled “Blue, Green, and Circular Economy: The Future Platform for Post-Pandemic Development”, which was part of the second G20 Sherpa meeting in Labuan Bajo, East Nusa Tenggara, in July 2022.
“Environmental issues from carbon pollution, sea and land degradation, to plastic waste problems”, are affirming the urgency for Indonesia to implement a more sustainable economic approach, he said, adding “Blue, Green, and Circular Economy’ have great potential as well as benefits to help spur global sustainable economic development.”
A panelist at the discussion, however, reminded that there are many challenges to implementing a circular economy in Indonesia. Yose Rizal Damuri, the executive director for CSIS and Co-Chair of T20 Indonesia, mentioned three challenges to implementing a circular economy in Indonesia. They are: lack of understanding from the public, lack of financial support, and lack of incentives.
The circular approach in Indonesia
What is actually a circular economy? How has the government of Indonesia adopted the Circular Economy concepts into its vision and development strategies? Suharso Monoarfa, Minister of National Planning and Development Indonesia/Bappenas has mentioned how Indonesia would adopt this concept into its vision and mission.
“Circular economy is a closed loop economy system approach in which raw materials, components, and products are maintained as useful and valuable as possible so as to reduce the amount of waste material that is not reused and disposed of to landfills,” he said in his foreword in a report jointly produced by Bappenas, the Embassy of Denmark in Jakarta and the United Nations Development Program (UNDP), released in January 2021.
“The Circular Economy encourages higher green economic growth compared to the business as usual (BAU) scenario by designing systems and products that require fewer resources, ensuring that the extracted raw materials are used as efficiently and maximizing its lifespan,” Minister Suharso said in the same report.
He continued that the government of Indonesia sees that the circular economy is one of the instruments that can support the achievements of the Sustainable Development Goals and it is also one of the drivers for Indonesia towards economic transformation, especially with regards to the green economy and low-carbon development strategies.
Five sectors potentials for circular economy
Minister Suharso said Indonesia has adopted the Circular Economy concepts as the policy going forward and will be part of the government’s vision and development strategies. The concept, he said, is included in the Vision Indonesia 2045, which refers to some targets of Indonesia to achieve when the country celebrates its 100 years of independence.
Five industrial sectors in Indonesia – namely food & beverage, textiles, construction, wholesale and retail trade (with focus on plastic packaging), and electrical and electronic equipment. – have been identified to have potentials to implement a circular economy and analysis of the environmental, economic, and social potential for the implementation of circular economy were discussed in the report.
“A circular economy is more than just an opportunity for Indonesia to reduce waste and improve the environment. Like governments around the world, Indonesian policymakers are seeking to support the economic recovery from the COVID-19 pandemic,” said the Executive Summary of the joint report titled “Summary for Policymakers: The Economic, Social, and Environmental Benefits of a Circular Economy in Indonesia.”