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)