Reference no: EM133124167

Indonesia's demand for food is expected to quadruple by 2050, and Australian imports could help to fill the gap.

Key points:

• The pandemic means 10 per cent of Indonesia's population is classed as poor
• ABARES says increased food imports could help reverse the trend
• Once Indonesia's health crisis subsides, a growing middle class is expected to demand more imported food

Australian Bureau of Agricultural and Resource Economics (ABARES) executive director Jared Greenville says growth prospects for Indonesia's food market are enormous.

"We expect food demand to quadruple by 2050 based on rapid growth in the country's demand for more diverse and higher-value foods such as meat, dairy, fruit and vegetables," he said.

According to a new paper produced by ABARES, Indonesia's trade policies, since 2012 in particular, have contributed to many Indonesians being poor and hungry.

"The historical focus on self-sufficiency has had a high economic and social cost, particularly through higher food prices," it said.

COVID-19 restrictions, meanwhile, have pushed an extra 1.1 million Indonesians into poverty, according to the World Bank.

It says the pandemic has pushed poverty-reduction progress in Indonesia back three years and that 27.5 million Indonesians - 10 percent of the population - are now classified as poor.

Foreign investment could make food cheaper

ABARES suggests that allowing more foreign investment could decrease Indonesian food prices and improve quality.

It also predicts that once Indonesia's health crisis subsides, its growing and increasingly urbanised middle class will pressure policy makers to allow more imported food into the country.

Dr Greenville said those products could include cold-climate Australian fruit.

"Red meat is another one where there's a large opportunity," he said.

"Just because of the land mass Australia has and the relative advantage we have in producing beef and sheep meat."

Middle class will demand more imports

ABARES said it was likely that about three quarters of the value of food-consumption growth in Indonesia would come from imported products by 2050.

Dr Greenville acknowledged many Australian farmers - particularly beef producers - may be frustrated by failed attempts to sell into the Indonesian market.

But he said persistence was the key.

"Australia does have a long relationship with Indonesia, being one of our closest neighbours ... there have been frustrations in the trade and it's a fairly complex regulatory environment in Indonesia to engage with," he said.

"But I think the incremental and the long-term story really points to the value of persisting at closer market ties.

"If some of these numbers do come to bear in the future, there's going to be a big opportunity there.

Questions: 

• How does Karl Max have to do with poverty and Inequality? How does he support Poverty and Inequality? 
• How is this related to GDP and GNI?
• How poor is indonesia beased on this article?
• Why is it that  Poverty and inequality are rising amid the pandemic ?
• How can we relate poverty and inequality with neoclassical labor? 
• Can we relate this article with Karl Marx and his surplus- value ?
• Why is this article related to Karl Marx and his mandatory production economy? 
• Can we say that Karl Marx is right about this? Explain