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Kalimantan in the firing line: a note on the effects of the global financial crisis

Abstract This note examines the impact of the global financial crisis on Kalimantan's four provinces. Although growth in the region slowed dramatically with the onset of the crisis, only in the dominant province of East Kalimantan did overall growth turn (slightly) negative. There were strong negative effects on the agricultural, manufacturing and mining sectors, but these differed greatly across individual provinces. This study presents evidence on price trends for three key commodities – palm oil, rubber and gold – and discusses the effect on farmers of the steep falls in palm oil and rubber prices. Surprisingly, the crisis had remarkably little impact on open unemployment, and the ongoing decline in poverty was hardly interrupted (although this may simply have reflected the timing of the surveys used to measure poverty). The end of the crisis saw oil palm making a speedier recovery than rubber, with gold mining remaining the ‘safety net’ for poor farmers.