State budget secured by forest funds
State budget secured by forest funds
JAKARTA (JP): The forestry ministry has transferred Rp 596 billion (US$270.90 million) of its reforestation funds to the finance ministry as contingency state budget reserves, a minister said yesterday.
Should oil prices turn out lower than the government estimate, he added, the funds would be used to cover any shortfall in budget revenues.
"But it is entirely up to the finance minister to decide on the allocation of those reforestation funds, all of which have been collected from forest concessionaires," Minister of Forestry Djamaludin Suryohadikusumo told members of the Agriculture, Forestry and Transmigration Commission of the House of Representatives (DPR).
The government, Djamaludin added, may use the funds either as contingency reserves to meet any shortfall in budget revenues or as investments in other projects during the next 1995-96 fiscal year beginning in April.
The government has set $16.50 as the average oil price per barrel as the basis for estimating its oil and natural gas tax revenues in the coming fiscal year. Hydrocarbon will account for around 20 percent of the Rp 66.2 trillion internal state revenues budgeted for next fiscal year.
The transfer from the forestry ministry increased the amount of reserves held by the government to more than Rp 2.2 trillion. Of the total, Rp 1.7 trillion comes from budget surpluses accumulated over the last three years.
Official figures recently showed that over the past five years, Rp 3.04 trillion in reforestation funds have been raised by forest concessionaires.
The reforestation funds, whose amount depends on the species and quality of harvested logs, are designed to finance reforestation programs.
However, forest concessionaires who harvest their forests according to the government-mandated sustainable management rulings, are supposedly entitled to get back the funds they have paid to the forestry ministry.
Many House members have often suggested that the reforestation funds be counted in the state budget as government revenue so that their use can be supervised through the annual state budget.
Management
The forestry ministry has retained the management of the forestry fund collection.
Many individuals and non-governmental organizations (NGO), however, were surprised last year when the forestry ministry, by virtue of a presidential decree, transferred approximately US$185 million of interest accrued on the funds to the state IPTN aerospace company in Bandung as an interest-free loan.
Eleven NGOs filed a suit against President Soeharto through the State Administrative Court but the presiding judge turned down the suit, arguing that the court had no authority to hear the case.
Djamaludin did not mention anything yesterday about the $185 million transfer to IPTN.
He said the government, if forced by an emergency situation, might use the remaining reforestation funds to help balance the state budget.
The government was forced to use part of its reserves last year to compensate for the Rp 1.71 trillion deficit in the 1993- 94 budget, which was originally expected to balance at Rp 62.3 trillion.
The deficit was caused primarily by the drop in world oil prices and larger-than-planned operating and investment budgets.
Djamaludin also said that his office plans to spend Rp 858.42 billion of the reforestation funds to finance various forestry development projects in the next 1995-96 fiscal year.
He added that Rp 425.62 billion (49.58 percent of the total funds) will be used to develop 219,000 hectares of industrial timber estates, run mostly by state firms. (hdj)