Good prospects in forestry sector

Good prospects in forestry sector

From Bisnis Indonesia

With reference to the editorial in Bisnis Indonesia of June 30, 1998, titled A matter of confidence, allow me to express the following opinion.

While it is not my intention to belittle the significance of the role played by exporters of textile and textile products and footwear, two sectors which recruit a large number of workers and are excellent foreign-exchange earners, I believe that the integrated forestry sector -- forest concessionaires and the timber processing industry -- also recruit as many workers as the two sectors mentioned earlier.

In terms of foreign exchange, we must think dialectically, namely in terms of gross and net foreign exchange earnings, in order to put things in their rightful place.

It is true that the textile and footwear sectors generate the largest foreign exchange earnings in the non-oil and non-gas category. However, as 80 percent of the components are imported, the net foreign exchange earnings are only about US$2 billion. The forestry sector, meanwhile, generates gross foreign exchange earnings to the amount of $5 billion. As in this sector only 10 percent of the components are imported, the net foreign exchange earnings amount to $4.5 billion, much bigger than those in the textile and footwear sectors.

Unlike the textile and footwear sectors, the forestry sector, in this case, the timber processing industry, is relatively free from problems brought about by the import of raw materials.

It does not mean, however, that producer exporters of processed timber are free from problems. They do have serious problems, for example when the price and the demand get low.

Producer exporters do not need liquidity loans but they do wish to be granted some concessions, for example postponement in the enactment of government regulation No.48/1997, which stipulates an increase of 100 percent in the land and building tax in forest areas controlled by forest concessionaires.

And then in the case of the reforestation fund, forest concessionaires are obliged to pay fees for the reforestation fund although they, by virtue of so many regulations issued by the forestry ministry, practically undertake reforestation by themselves.

It would be a good idea if the fee is no longer called the reforestation fund fee because it does not suit its utilization.

Last but not least, all the ranks in the ministry of forestry and estate affairs must launch a moral reform drive to minimize collusion.

DEHEN BINTI

Banjarmasin, South Kalimantan