Borneo island, located at the center of Southeast Asia
Borneo is the third largest island in the world, at the geographic center of Maritime Southeast Asia and divided among three countries: Brunei, Indonesia and Malaysia. The amount of natural resources Borneo possesses is so rich that if evenly distributed, its 19 million inhabitants on average would enjoy the living standard of Italy.
Unfortunately for Borneo, most of its resources went on to feed Malaya and Java, leaving little for the natives, where 23% of the population live under international poverty line. Brunei, the only independent country on the island, largely avoided such fate and is currently a high-income nation.
If Borneo was one independent entity, could it had been another Asian economic powerhouse? We would never know the answer, but even in its underdeveloped state, here are some fascinating economic stats of Borneo:
Borneo is the world’s no.1 exporter of tropical hardwoods
Borneo is the world’s largest exporter of tropical hardwoods and is essential to the global construction (plywood) industry. Valuable Borneo ironwood tree ulin typically sells for around US$2,000 per cubic meter abroad. Ramin, another tropical hardwood sells for approximately US$1,000. A single teak log for example can fetch as much as US$20,000.
As a result, the island has been rapidly deforested over the decades, with illegal logging increasingly becoming a concern among the authorities.
Borneo is the world’s no.2 producer of palm oil
Borneo is the world’s second largest producer of palm oil, trailing only Indonesia’s Sumatra island. Palm oil exports have over the years fueled massive wealth in Malaysia and Indonesia, akin to the role of real estate in Hong Kong’s wealth generation.
Nearly half of the top 10 wealthiest person in both countries now have businesses involving oil palm, among them, Robert Kuok (Wilmar International), Lee Kim Hua (Genting Plantations), Lee Shin Cheng (IOI Corp), Tiong Hiew King (Rimbunan Hijau), Eka Tjipta Widjaja (Sinar Mas), Anthony Salim (Salim Group), Martua Sitorus (Wilmar Indonesia), Sukanto Tanoto (Raja Garuda Emas Group) and Putera Sampoerna (Sampoerna Strategic)
Borneo is the world’s no.4 exporter of coal
Borneo has massive deposits of coal, 22 billion tonnes of it. A recent report from the International Energy Agency (IEA) states that coal is poised to replace oil as the world’s top energy source possibly in the next five years, driven almost entirely by China and India. A standalone Borneo would be the fourth largest exporter - approximately 9% of the world’s coal exports, only after Australia, Indonesia (minus Kalimantan) and Russia.
Coal mining in Kalimantan has catapulted Singaporean-born Bayan Resources founder Low Tuck Kwong into one of the wealthiest billionaires in Indonesia, just within a short four-year time after his company’s IPO.
Borneo is the world’s no.2 exporter of LNG
Borneo is rich in oil & gas, which formed the backbone of its economy today. While incomparable to that of Middle East, the total oil reserves is still significant at 4.1 billion barrels. The real jewel though, is natural gas, which at 3.784 trillion cubic meter, made Borneo’s natural gas reserves the largest in Asia, more than China’s 3.1 trillion cubic meter and only slightly below the entire Australian reserves (3.825 trillion cubic meter)
With a relatively smaller population, most of Borneo’s natural gas are converted to LNG for exports. Qatar is currently the world’s largest LNG exporter, followed by Malaysia and Indonesia, whose main LNG export hubs are both in Borneo; Bintulu and Bontang, while Brunei the tenth largest exporter. Taking into account the combined figure, Borneo is the world’s second largest exporter of LNG (53.2 MT) only after Qatar (75.5 MT)
Borneo is the world’s no.4 producer of pepper
To the west of Borneo, there is Maluku (Moluccas) Islands, known to the 16th-century Dutch and Portuguese traders as the ‘Spice Islands’. Spice trade once allowed the Tidore and Ternate sultanate to grow into one of the wealthiest islands (akin to modern-day Singapore) in Southeast Asia until the Dutch conquest.
Like Maluku, Borneo is known for its spice, especially pepper, which is the world’s most traded spice today. Sarawak single-handedly accounts for 98% of Malaysian pepper production, and with the rest of Borneo, the island produces a combined 10% of the world’s pepper, making it the fourth largest producer after Vietnam (34%), India (19%) and Brazil (13%).
Laos is scheduled to be ASEAN hydropower hub with a hydroelectric potential of about 26,500 MW. This is pale compared to Borneo’s 50,000 MW - enough to power the island 15 times under current consumption patterns. If fully utilized, it could unlock ultra-cheap electricity for Borneo inhabitants and attracted heavy industries from across the globe.
The most shameful irony however, is that many of the 19 million people in energy-abundant Borneo still have no access to regular electricity supply. The sawmills of Kalimantan have to rely on their own backup generator sets for sources of power. For someone who could have enjoyed Asia’s cheapest electricity, the people of Borneo suffer from regular blackouts and electricity deficits.