By Dialogo September 08, 2009 Roughly 65 percent of mining concessions in force in Colombia are located on indigenous communities’ ancestral lands or areas with a majority Afro-Colombian population and pose a threat to the environment and their traditional way of life, representatives of those minority groups said in Bogota. These areas were awarded in concession through last year by the state-run Colombian Institute of Geology and Mining, or Ingeominas, according the results of a new study released by the National Indigenous Organization of Colombia, or Onic. The study, which was carried out by the Center for Indigenous Cooperation, or Cecoin, served as the basis for a two-day seminar on mining concessions. Taking part in that gathering were representatives of indigenous peoples, Afro-Colombian leaders and peasants affected by the handover of lands to national and multi-national companies. The coordinator of the seminar, Embera Indian Patricia Tobon, told reporters Thursday that the state “has decided to auction off the territorial and economic rights of these communities, imposing a large-scale extraction-based economy that runs counter to rights of these peoples.” The concession areas are located in 31 mining districts covering an area of more than 15 million hectares (57,900 sq. miles) that were set aside under Colombia’s 2001 Mining Code, although Ingeominas has granted concessions in other areas as well, Tobon added. The study found that the mining contracts, licenses, permits and authorizations currently in force cover an area of almost 2.93 million hectares and that bids and requests for use of another 30 million hectares are currently being processed. One project being eyed by a multinational firm is La Colosa, a gold mine located in the mountains near the western town of Cajamarca that has reserves estimated at 12.9 million ounces. Canadian company Anglo Gold Ashanti has received a license for the project but still has not received a permit for the development phase. Evelio Campos, general coordinator of Ecotierra – a non-governmental organization in Cajamarca – told the press at the Bogota meeting that the multinational has illegally explored a forest reserve in that area. That reserve is a source of three small rivers that converge to form a larger one, the Coello, which drains an area of 35,000 hectares, Campos said. The Ecotierra spokesman said 1.5 grams of gold can be obtained at La Colosa for every ton of rock and that exploiting the entire mine will require one million tons of explosives and three million cyanide containers. By mining in that area, Anglo Gold Ashanti has violated “the (Colombian) constitution, environmental norms and local development plans,” said Campos, who noted that that company has made donations and financed public works, activities and public celebrations to win the support of the local community. That same multinational is looking to exploit the gold deposits of La Toma, a rural hamlet in the southwestern province of Cauca, said Anibal Vega, the legal representative for the town’s Consejo Comunitario de Negritudes, an organization representing the Afro-Colombian community. The hamlet, a rare, highland Afro-Colombian settlement, has roughly 7,000 inhabitants, 99 percent of them black, according to Vega, who noted that that community has traditionally lived from small-scale gold mining. But Ingeominas has granted a license to the Canadian company to exploit the deposits, which Vega said poses “a great threat.” “Even the cemetery, where our ancestors are buried, is within the license area,” Vega said. Another project on Careperro hill, a sacred site for the Embera-Katio Indians of northwestern Colombia, was presented during the meeting as another project threatening the rights of minority populations. The license to Careperro was awarded to Muriel Mining Corporation, a U.S. firm, and covers 11,000 hectares of jungle between El Carmen del Darien and Murindo, towns in Choco and Antioquia provinces, respectively. “For us, the destruction of nature is the death of that same mother nature,” the legal representative for the indigenous people of Choco, Embera Indian Jorge Luis Queragama said.
Third-party funds have been steadily increasing during the pandemic from 7.71 percent year-on-year (yoy) in February to 8.08 percent in May, Financial Services Authority (OJK) data show. Economists have voiced concerns over liquidity in the financial system as banks launch loan-relaxation measures that could dry up liquidity.Bank Indonesia (BI) has relaxed reserve ratio requirements for local banks to boost liquidity in the financial system and has allowed banks to trade government bonds they hold with the central bank should they need fresh liquidity. These efforts could free up more than Rp 800 trillion in liquidity in the banking sector.Read also: BI sees rupiah strengthening to pre-pandemic level as it intervenes in marketAviliani, senior economist of the Institute for Development of Economics and Finance (Indef), said that to address potential liquidity problems, BI’s efforts to boost liquidity needed to be conducted as soon as possible to save banks. The ultra-rich are likely to boost their savings in banks amid the high levels of uncertainty in the overall economy, as banks increase deposit rates to lure funds, economists say.Perbanas Institute economist Piter Abdullah said deposits from high-net worth individuals would increase, defying the trend of an overall slowdown in third-party funds in local banks as lower-income people’s incomes declined as a result of the ongoing COVID-19 pandemic.“My guess is that the third-party funds that will increase are those from savers with assets over Rp 2 billion [US$138,403]. Meanwhile, savings under Rp 2 billion will decrease,” Piter said. Savings under Rp 2 billion, which are fully insured by the Deposit Insurance Corporation (LPS), account for 43 percent of deposits in local banks, while the remaining 57 percent are in accounts with more than Rp 2 billion, LPS data show. Some banks have increased their deposit rates to attract more funds. Bank Mega offers deposit rates of up to 7 percent, while Bank Mandiri, Bank Bukopin and Bank Tabungan Negara (BTN) respectively offer 6.5 percent, 6 percent and 6.25 percent, according to BI’s Money Market Information Center (PIPU) as of May 28, as published on kontan.co.id,“In normal conditions, [savers] would look for those with high rates, but in this situation, they will look for banks that they consider safe for them,” said Aviliani. She expected overall growth of third-party funds to slow down this year but that would not be reflected among high-net worth individuals.“For the upper income bracket, whose [funds] are not affected by their consumption, most likely their placement of funds will increase. Why? Because they tend to look for safety by placing their money in banks and in government bonds,” Aviliani explained.This is in contrast to the stock market, which is experiencing sell-offs as reflected in the downward price movement, she added.Read also: Indonesian banks have sufficient liquidity despite loan restructuring, pandemic: EconomistsBCA, the nation’s largest private lender, confirmed the recent uptick in third-party funds. BCA president director Jahja Setiaatmadja said that the bank’s loan-to-deposit ratio of between 78 and 80 percent so far this year indicated its liquidity was in check.“Since early January, February, March, our liquidity has increased quite well, especially from current accounts and savings accounts [CASA],” Jahja said on May 27.BCA’s third-party funds increased by 16.8 percent to a total of Rp 741.02 trillion by the end of the first quarter this year, up from the Rp 634.66 trillion at the end of December 2019. The growth in third-party funds was contributed by a 17.3 percent yoy increase in the bank’s CASA and a 15.1 percent increase in the size of time deposits.BNI Syariah president director Abdullah Firman Wibowo said the lender also saw a 16.58 percent increase in third-party funds to Rp 44.86 trillion, around 65 percent of which are in CASA.“In general, the people’s faith is still high in entrusting their funds to be kept within the national banking industry,” said LPS chairman Halim Alamsyah during a media briefing with the Financial System Stability Committee (KSSK) on May 11.Read also: Indonesia’s financial system at risk amid pandemic: KSSKBanks’ liquidity and capital are therefore at safe levels, according to the OJK in its official press statement. As of April, the ratio of liquid assets to non-core deposits stood at 117.8 percent, well above the 50 percent threshold. Meanwhile, the ratio of liquid assets to third-party funds was at 25.14 percent, above the 10 percent threshold.Banks that have resorted to increasing their rates to attract funds are for the most part smaller banks looking to keep their customers from turning to big banks.“A high deposit rate is not something that banks desire. Increasing rates in a situation like this is actually dangerous as it grinds the bank’s profits and liquidity,” Piter said. “However, a smaller profit rate is still better than having liquidity problems.”He added that the risk of moral hazard caused by banks competing to offer the highest deposit rates would not occur as increasing deposit rates resulted in added costs, while corporations would innately try to optimize profits.Topics : read more