Govt to impose quota on log export

Govt to impose quota on log export

JAKARTA (JP): The government will impose a quota on the export
of logs, sawn timber and rattan to guarantee a sufficient supply
for domestic demand, a minister said yesterday.

Minister of Forestry Djamaludin Suryohadikusumo said the
export quota would not break the government's reform commitment
made to the International Monetary Fund (IMF).

"The supply of logs, sawn timber and rattan will be
prioritized to meet domestic demand. What remains after domestic
demand is met can then be exported," Djamaludin said in a media
briefing.

He said he, along with Minister of Industry and Trade Tunky
Ariwibowo, would further study domestic demand first, especially
for logs, before coming up with new rulings on a quota.

Djamaludin said the Ministry of Industry and Trade had issued
nine decrees dated Jan. 21 to deregulate exports, abolish joint-
marketing associations and quotas of plywood, sawn timber and
processed-wood.

Under the new decrees, concession holders and wood-processing
industries are allowed to export logs or other wood products if
they have allocated at least 5 percent of their production to the
domestic market.

The decrees also stipulate that sawn timber could be exported
by special registered wood-processing industries, while the
export of rattan could be carried out by licensed rattan
collectors.

Djamaludin said further requirements of registered exporters
of logs, sawn timber, processed wood and rattan would be
determined later by the Ministry of Industry and Trade along with
the Ministry of Forestry.

President Soeharto announced early this month a series of
drastic economic measures, approved by the IMF, which is expected
to lift the nation out of its present economic crisis.

One of the reforms stipulates that starting March 1, the
export tax on logs, sawn timber, rattan and minerals will be
reduced to a maximum 10 percent value-added tax with appropriate
resource rent taxes imposed.

The export taxes will be replaced by resource rent taxes,
which will protect the environment while eliminating the bias
against production for export rather than for domestic use.

The government currently imposes an export tax of 200 percent
on logs, aimed to encourage timber companies to fulfill local
demand and to force buyers to purchase Indonesian processed-wood
products which have a higher value.

The reform also stipulates that the government will eliminate
all other types of export restrictions, such as quotas, in three
years. The only exceptions will be for those restrictions imposed
for health and security reasons and temporary measures introduced
in the event of occasional domestic shortages. (gis)