Need to Know

December 21, 2022

Bidding on Paradise

Indonesia

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Indonesia wants to auction off development rights for more than 100 islands spread out among 25,000 acres that offer some of the most biodiverse areas of the planet.

The New York arm of auction house Sotheby’s was planning to accept bids for the opportunity to develop the Widi Reserve this month. “Every billionaire can own a private island, but only one can own this exclusive opportunity spread across 100-plus islands,” said Sotheby’s in a statement quoted in CNN.

Now, though, those plans have been pushed off until January after withering criticism from environmentalists and others. Locals especially depend on fishing in the waters around the islands known as the “Coral Triangle,” noted the Guardian.

“The islands are a sea migration route with mangrove forests and corals – a perfect zone for ecosystem regeneration,” Greenpeace Indonesia leader Afdillah Chudiel told Agence France-Presse. “That area should be protected for conservation, not for tourism purposes.”

The current holder of development rights in the Widi Reserve, Bali-based PT Leadership Islands Indonesia, said the construction of resorts, homes and a private airstrip would claim a fraction of a percent of the reserve.

Under Indonesian law, foreign investors can’t own the islands – but they can own shares of a company that might develop and own properties there, the South China Morning Post explained. Meanwhile, officials have canceled the company’s license, raising questions about whether the auction can proceed, the Sydney Morning Herald reported.

The controversy underscores how Indonesia is struggling to balance the need for trade and investment with other values that Indonesians hold dear.

For example, Indonesia recently passed a law banning sex before marriage, wrote the BBC, in a move reflecting a greater push for Islamic morals in the country, which has the largest Muslim population in the world. Violators could face up to a year in jail. Officials were quick to add, though, that the ban wouldn’t apply to foreigners, who drive the country’s large tourism industry.

China has also invested heavily in Indonesia, pumping billions into nickel mines, refineries, smelters, and even a new metallurgy school in order to develop expertise in extracting minerals from the ground, Bloomberg added.

As Reuters wrote, the country also just passed a 500-page economic reform bill that aims to improve digital commerce, the efficiency of the financial sector, and promote economic development among communities that have been overlooked in the past.

Selling pristine habitats might generate cash, but environmentalists appear to have temporarily convinced Indonesians that it will be bad for business in the long run.

This story originally appeared in the December 21, 2022 newsletter, Bidding on Paradise.