Environmental damage slows economic growth

Environmental damage slows economic growth

By T. Sima Gunawan

JAKARTA (JP): Has Indonesia truly enjoyed over six percent
economic growth over the last five years?

Environmentalists are now questioning the validity of the
figure and argue that the growth rate should be discounted in
view of the depletion of the nation's environment, including the
non-renewable natural resources.

This point was hammered home by environmentalists during a
recent national coordinating meeting organized by the Office of
the State Minister of Environment.

Environmentalists argue that the 6.2 percent average economic
growth rate presented by the statistics office is the gross
growth rate but that the net growth is likely to be far lower,
especially given that Indonesia's economy is still largely
dependent on the exploitation of its natural resources.

But how does one calculate the depletion rate in order to
arrive at the actual net economic growth rate?

State Minister of Environment Sarwono Kusumaatmadja sad that
according to the World Resource Institute, Indonesia's annual
economic growth rate was only four percent after subtracting the
environmental factor from the official growth rate.

Underlining the need for resource accounting, Sarwono pointed
out that the economic development should consider environmental
aspects. He warned that economic development in the long term
would have serious negative impacts unless careless exploitation
of natural resources was eliminated.

Minister of Defense and Security Gen. Edi Sudradjat in his
address to the conference also emphasized the need to include
environmental aspects in the country's development.

Edi frowned upon the exploitation of forests as well as other
natural resources in the "creation" of fast economic development.

"Don't be surprised to find out that the natural resources
depletion rate is almost as much as the economic growth," he
said, adding that the depletion rate could surpass the growth
rate if environmental management remained inefficient.

Problems hampering sustainable development concepts include
poor coordination among government officials - both in central
and regional levels - as well as in business circles and in the
public, Sarwono said.

Opened by President Soeharto and closed by Vice President Gen.
Try Sutrisno, the three-day meeting was held to harmonize the
government's policies on environmental management and to review
sustainable development programs for the Second Long Term
Development Program, which began last April and spans 25 years.

State Minister for National Development Planning/Chairman of
the National Development Planning Board Ginandjar Kartasasmita
said Indonesia is striving to boost the people's welfare in the
next 25 years and raise per capita income by four fold to $2,600.

This, he said, means that Indonesia has to achieve an average
annual growth rate of seven percent.

He was aware that it was not easy to realize the plans,
especially now in view of fact that the economic growth rate
should no longer be at the expense of environmental depletion.

In order for the economy to move away from its strong
dependence on natural resources exploitation, the government is
now putting greater emphasis on human resources development.

"Environment is more than an issue. It has become a
necessity," Ginandjar said.

Control

Ginandjar said this calls for a more efficient use of natural
resources and for this, every project must be well planned and
carefully executed.

For the past few months, the National Development Planning
Board and the Office of the State Minister of Environment, as
well as the other government offices, have been drafting an
evaluation of environmental projects proposed by central and
regional government offices.

The government has allocated Rp 2.6 trillion to finance
environmental projects for the Sixth Five-Year Development Plan,
which started in April. Out of the Rp 357 billion funds earmarked
for the 1994/1995, however, not more than Rp 8 billion is managed
by the office of the State Minister of Environment and the
Environmental Impact Management Agency (Bapedal). The rest is
under the control of Ginandjar's office.

Sarwono said that from the 1995/1996, all of the environmental
budget will be under the control of his office.