Indonesia’s disappearing islands: a climate crisis wake-up call for Jakarta?
- Amid rising sea levels, two uninhabited islands off the province of South Sumatra have slipped beneath the waves – and others may soon follow suit
- The disappearances prompted ratings giant Moody’s to caution against the negative impacts such events can have on a country’s credit profile
Betet Island and Gundul Island now sit between one and three metres below sea level, according to the Indonesian Forum for the Environment, which warns that other low-lying islands in the archipelago nation might soon follow suit.
The implications of a rise in sea levels for the credit rating of an affected country “depend on the frequency and severity with which they occur” as well as the country’s “adaptive capacity to cope”, according to Moody’s sovereign risk group senior analyst Anushka Shah.
“So far, we do not assess such events to have had a material impact on Indonesia’s sovereign credit profile, partly because they are balanced by other mitigating aspects and credit strengths,” she said, adding that “such shocks”, if repeated “over time could hurt”.
Moody’s warning, which comes as the rating agency has begun to place greater emphasis on environmental, social and governance issues in its credit quality assessments and investment decisions, was welcomed by Indonesian environmentalists such as Dharsono Hartono, co-founder of Rimba Makmur Utama, a company that runs eco-restoration and preservation projects.