Indonesian fires could cost US$6 billion, experts say
Indonesian fires could cost US$6 billion, experts say
SINGAPORE (Reuters): Indonesia's forest fires could cost
Southeast Asia US$5-6 billion, experts said yesterday.
"The losses are enormous," said David Glover, director of the
Economy and Environment Program for Southeast Asia (EEPSEA).
The bill would be equivalent to 2.5 percent of the combined
total annual gross domestic product (GDP) of Indonesia, Malaysia
and Singapore in actual and indirect costs.
It could mean a loss of at least half a percentage point in
economic growth for those three countries in 1998, analysts said.
The $5-6 billion figure would represent the total bill for
1997 and for 1998 based on estimates of damage if the fires
continue until the last quarter of 1998. About half the bill is
for damage from the smog and the rest for damage to the
environment.
EEPSEA, a research group funded by Western governments, and
the World Wide Fund for Nature (WWF) in Indonesia have just
completed a study of the cost of the damage from the Indonesian
forest fires which began in earnest in August 1997.
Many of the fires were started by farmers and logging firms to
clear ground. But due to severe drought, they are now mostly
raging out of control, destroying vast tracts of priceless virgin
forest and agricultural land in East Kalimantan and on Sumatra
island.
Smoke is already building up into a gray pall that threatens
to lay a thick blanket of choking smog over much of the region,
as it did between September and November last year.
If the winds follow normal seasonal patterns, the result would
be higher medical bills, fewer tourists and a plunge in
manufacturing output, experts say.
EEPSEA put the bill for short-term health-care and losses in
industrial production, tourism, air travel and fishing in
Indonesia, Malaysia and Singapore in 1997 alone at about $1.4
billion.
But this excludes damage to the environment and long-term
health-care problems, such as cancer treatment.
"The loss for timber, plantations and bio-diversity would be
worth at least as much again as from the pollution. It could be
another $2 billion," said Glover.
The scientists are basing their predictions on the last major
Indonesian drought, which occurred in 1982/83 and brought
widespread forest fires.
That drought was also partly caused by the El Nio weather
phenomenon, a warming of the eastern Pacific Ocean which has
shifted winds and rain patterns over the last year.
In 1982/83, the forest fires began in the first year but
flared up again in the second in much the same way as they are
doing this year, Glover said.
"There were fires at that time which burned more than 3.5
million hectares (8.75 million acres). In 1982/83 the most severe
fires took place in the second year because you had a lot of
destruction already and underground peat and coal fires were
already smoldering."
Togu Manurung, policy adviser at the WWF in Jakarta, said some
47 million Indonesians were affected by the smog in 1997.
"This year, it could easily be that the drought could last
until October or November," he said.
Economists say the financial impact on the tourist industry
would be difficult to calculate. Figures from Singapore already
show a decline of more than 15 percent in tourist arrivals for
December and January year-on-year.
The state tourist board has predicted that factors including
the Asian financial crisis and last year's smog -- which has hit
long-haul tourism -- would mean 8-10 percent fewer tourists in
1998 than in 1997.
But that estimate did not take into account a return of the
smog this year.