Government to help market unsold timber: Minister

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)