Government to help market unsold timber: Minister

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo said yesterday the government would help private companies market the more than 5.9 million cubic meters of logs that remained unsold last year.

The minister cited the rupiah's sharp depreciation against the U.S. dollar, the prolonged dry season and weakening international demand for timber products as the main reasons for the failure to sell the logs.

The ministry charged a reforestation fee of $15 per cubic meter of timber last year. The government, however, will charge it in rupiah this year following complaints from lumber producers, he said.

"I just proposed to the President to charge for the unsold timber in rupiah," Djamaludin said after meeting with President Soeharto at the latter's residence on Jl. Cendana, Central Jakarta.

During the meeting Djamaludin was accompanied by Minister/State Secretary Moerdiono, Minister of Agriculture Sjarifudin Baharsjah, and State Minister of Investment Sanyoto Sastrowardoyo.

The government decided last month to set forest concessionaires reforestation fund fees in rupiah, starting on Jan. 1, instead of dollars. The policy is aimed at providing timber companies with more certainty in the current economic crisis.

Wood and wood-related exports totaled $6.24 billion last year, a 25-percent drop from 1996.

"The prolonged dry season caused trouble in transporting the wood," said the minister.

Many rivers dried up in last year's drought, which was believed to be the worst in the last 50 years. Rivers are the main way used to transport timber from the forest to the nearest ports, especially in Kalimantan.

Demand for plywood from South Korea and Japan, the country's main buyers, dropped sharply last year because their property sectors, the main users of plywood, were severely hurt by the currency crisis.

Wood-processing companies have complained for years about the restrictions on plywood exports, where exporters were banned from dealing directly with foreign importers.

The Indonesian Wood Panel Association (Apkindo) coordinates all plywood exports. The association set an export quota for each member and charged them fees, ranging from $6 to $20 per cubic meter of exported plywood.

Following an agreement between the International Monetary Fund (IMF) and President Soeharto on Jan. 15, Minister of Industry and Trade Tunky Ariwibowo issued four decrees which lifted all the restrictions. Apkindo was dissolved as of Sunday.

Mohammad "Bob" Hasan, the association chairman, supported the government's decision.

Soeharto also agreed with IMF to incorporate the reforestation fund in the state budget from the 1998/1999 fiscal year. The fund was previously included in off-budget accounts. (prb)