Timber firms called on to help cope with crisis

Timber firms called on to help cope with crisis

JAKARTA (JP): Noted businessman Probosutedjo called yesterday
on the government to raise money from the country's forest
concession holders to cope with the currency crisis.

Probosutedjo, President Soeharto's half brother, proposed the
government charge all concession holders US$100 for every hectare
of forest.

With such a rate, the government would be able to collect
about $5 billion from the concession holders, who currently
control about 55 million hectares of forest.

"The funds are enough to pay our foreign debt that has
matured," Probosutedjo was quoted by Antara as saying after a
ceremony to take the oath as a new House of Representatives'
member.

Probosutedjo, chairman of the Mercubuana Group, said the
measure was reasonable given that concession holders were only
obliged to pay a small reforestation fund, while their profit was
"very big".

According to the existing law, forest concession holders have
to pay reforestation funds and forest royalties relative to the
amount of trees they fell. The funds and royalties are adjusted
by the government every six months.

The Forestry Ministry said the reforestation funds collected
last year totaled Rp 880.7 billion (US$275 million) up from Rp
809.6 billion in 1995. Forest royalties increased to Rp 592.78
billion in 1996, from Rp 539.33 billion in 1995.

But Probosutedjo said the government had to issue a ruling to
legalize such a measure.

Concerns regarding the country's monetary situation peaked
again in the past few days after the rupiah continued declining.

The rupiah reached a new low of Rp 3,405 yesterday on the spot
market, currency dealers said.

Speculative attacks on Southeast Asian currencies this week
were the most powerful since regional currencies buckled under
massive selling after the de facto devaluation of the Thai baht
on July 2.

The Thai crisis also spilled over to other Southeast Asian
currencies.

Since July 1, the ringgit has fallen about 29 percent against
the U.S. dollar, the baht by 47 percent, the peso by 31 percent,
the rupiah by 38 percent and the Singapore dollar by 8 percent.
(jsk)