“Environmental catastrophe is not a fate, it is policy failure”
The devastating floods and landslides that struck parts of North Sumatra in late 2025 were not merely natural disasters. They were political and economic failures laid bare by nature. Entire communities were swept away, rivers overflowed with logs and debris, and thousands were displaced. What should have been a moment of collective mourning instead exposed a deeper and more uncomfortable truth: environmental destruction in Indonesia is not accidental, it is systemic.
The scale of the damage was staggering. Vast areas across North Sumatra, Aceh and West Sumatra were inundated, while river basins clogged with timber waste pointed to something far more troubling than extreme weather. Satellite data and environmental reports show massive deforestation in the Batang Toru ecosystem and surrounding regions. According to Global Forest Watch, North Sumatra alone lost nearly 390,000 hectares of forest between 2022 and 2024. In the Deli River basin, vital to Medan’s ecology, forest cover has fallen to just 5.6 percent.
These figures raise an unavoidable question: if this was merely a natural disaster, why were rivers filled with neatly cut logs, ready for processing?
The answer lies in a familiar but often unspoken practice: rent-seeking. In extractive economies, environmental degradation is rarely accidental. It is the result of policies that privilege short-term profit over long-term sustainability, and of regulatory systems vulnerable to capture by powerful interests.
As economist Joseph Stiglitz has argued, rent-seeking occurs when economic actors gain wealth not through productivity or innovation, but through privileged access to policy, licenses and political influence. In Indonesia’s forestry and mining sectors, this dynamic has persisted for decades. Concessions are granted, oversight is weakened, and environmental safeguards become negotiable.
The result is a development model that sacrifices ecosystems for immediate gains, a model that treats forests not as living systems but as inventories waiting to be liquidated. This is why ecological disasters continue to repeat themselves. Floods, landslides and haze are not anomalies, they are structural outcomes of governance failures.
When Development Creates its Own Disasters
Indonesia’s development trajectory has long relied on extractive growth. Timber, coal, palm oil and minerals have driven export earnings, but at enormous ecological cost. According to WALHI, more than 45 million hectares of forest have been legally cleared over the past five decades. Meanwhile, data from the National Disaster Mitigation Agency (BNPB) shows that more than 90 percent of disasters in Indonesia are now hydrometeorological, floods, landslides and extreme weather linked directly to environmental degradation.
The economic irony is stark. While extractive industries generate short-term revenue, the long-term costs are borne by the public: destroyed infrastructure, displaced populations, lost livelihoods and massive reconstruction bills. Between 2015 and 2022 alone, environmental disasters cost the state over Rp100 trillion.
In this sense, ecological catastrophe becomes an implicit “development tax”, one that disproportionately punishes the poor while protecting elite interests.
Rent-seeking and The Illusion of Growth
Development economists Daron Acemoglu and James Robinson argue that nations fail not because of geography or culture, but because of extractive institutions that concentrate power and wealth. Indonesia’s experience reflects this pattern. When policy is captured by business elites, growth becomes exclusionary, innovation stagnates, and inequality deepens.
The tragedy is that this model persists despite overwhelming evidence of its failure. Instead of strengthening institutions, enforcing environmental law, and promoting value-added industries, policy often bends toward corporate pressure. Environmental permits are loosened. Enforcement is selective. Accountability is weak.
As Stiglitz notes, inequality is not a natural outcome of economic forces, but the result of political choices. When elites dominate regulation, wealth becomes self-reinforcing. Profits are privatized, risks are socialized, and environmental damage becomes collateral.
Indonesia stands at a crossroads. The choice is no longer between growth and conservation, but between sustainable development and perpetual disaster management. Breaking the cycle requires more than rhetoric. It demands; stronger environmental governance and law enforcement, transparent licensing and concession systems, an end to regulatory capture, investment in sustainable, value-added industries, and political courage to confront entrenched interests.
Without these reforms, disasters will continue to be framed as “acts of nature,” when in reality they are acts of policy. The floods in Sumatra should serve as a warning: when rent-seeking governs development, nature eventually sends the bill, and society always pays the price.
