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)