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.