AntePodium
An Antipodean electronic jounal of world affairs published by the Department of
Politics at Victoria University of Wellington [3/96]
Indonesia: Development, Degraded
Rainforests and Decreasing Global
Biological Diversity
Herb Thompson, Murdoch University, Australia
Research for this paper was made possible by a grant from the Asia Research Centre,
Murdoch University. Special thanks to Sara Kindon for pertinent and helpful
criticisms of an earlier version of this article.
INTRODUCTION
Tropical deforestation is a significant factor in the loss of global biological diversity.
Solow, et.al. [1993: 60] define biodiversity as:
"the totality of genes, species and ecosystems in a region. Genetic diversity
refers to the variation of genes within species. Species diversity refers to the
variety of species within a region. Ecosystem diversity refers to the variety of
systems of living things in relationship with their environment, within a region".
In these terms, Indonesia is one of the most biologically diverse nations on earth; and
therefore, the negative global economic and ethical consequences of continued
logging of tropical hardwoods in Indonesia must be examined. This article explores
the specific relationship between tropical deforestation in Indonesia and the decline in
biodiversity. The Government of Indonesia has put the national prerogative of
economic growth above more global concerns which, in itself, is not surprising.
However, the manner in which the decision has been carried out is of concern. The
primary evidence producing this concern is that the wood products industry is
provided with subsidised incentives which undervalue tropical rainforests.
The first part of the article describes the rapid rate of tropical rainforest destruction
with particular reference to Southeast Asia and the Pacific. The context is established
showing that complex non-linear ecological structures of hydrological, climatic,
geochemical and biological importance are being lost, in most cases, forever. This is
then followed by a formulation of the global socio-scientific problem of biodiversity
decline. To conserve all present forms of life is impossible. Natural processes such as
climatic change, shifts in sea level, mountain building, volcanic activity all influence
the distribution and abundance of life forms. The growth of human populations and
their desire for rising living standards speed up these natural processes, affecting the
profusion of biogeographical life. The problem however, is put forward by Myers
[1988: 28] as "the opening stages of an extinction spasm...for which the virtually
exclusive cause is Homo sapiens".
The specific case of Indonesia is then explored. In this particular country, one would
expect that decision-makers are making the difficult economic and ecological
decisions to carry forward the development process. However, just the opposite
appears to be true. Both government agencies and private enterprise in Indonesia are
carrying out inefficient and wasteful practices of wood production with little regard
for the issues raised above. While some ecological sacrifice is generated by a
developmental process, in Indonesia the sacrifice of biological diversity is being
carried out with little, if any, overall economic return. Therefore, before any
discussion is possible regarding the normative aspects of the economic-ecological
confrontation, simple cost-benefit inefficiencies must be overcome.
In the conclusion, practical measures are recommended to reduce the waste of tropical
rainforests, and thereby the decrease in biodiversity. When that occurs, realistic
debate may begin as to the spectrum of choices between national development and
global environmental protection.
DEFORESTATION - A NATIONAL BENEFIT OR GLOBAL LOSS?
Resource Control
As control over resources becomes a dominant issue in the struggle for national and
human survival, disagreements and differences in approaches, priorities and
philosophies emerge within and between nations. While governments pursue national
strategies of development, opposition may be generated within the nation, the region,
or on a world scale [Tadem, 1990]. Tropical rainforests have been treated as a
renewable resource for the past three decades in most of the world. There has been
little, if any, recognition until recently that rainforests are much more than the trees of
which they are made. They involve complex non-linear ecological structures which
have hydrological, climatic, geochemical and biological effects whenever a
Diptocarpaceae is felled. Ecologically, there is nothing sustainable about logging a
rainforest. First, no tropical rainforest will rejuvenate in exactly the same manner in
which it presently exists. Second, any biodiversity loss caused by rainforest
degradation is lost forever. Yet, the pursuit of development is confronted by
ecological facts that have only recently been brought to the bargaining table at a
global level.
Each year worldwide some 100,000 square kilometres of pristine rainforest is burnt to
the ground to create farmland. A further 50,000 square kilometres is logged to extract
timber of high commercial value. Secondary damage is generated by logging activity
such as road construction, use of heavy equipment, fires and the incursion of
migratory swidden farmers onto logged land. In fact, less than one-tenth of one per
cent of the world's rainforest is presently under any form of sustainable management
[Brown and Press, 1992:21; Anderson, 1989].
Destruction of natural forest in tropical countries was a familiar phenomenon to
forestry professionals as long ago as the 1920s and 1930s. However, in the 1970s (the
Second Development Decade) even the non-professionals became alarmed about the
dwindling amount of tropical forest [World Bank, 1989:19].
Of further concern is the fragmentation of the standing forests. McCloskey [1993] has
found that only 33 per cent of the world's existing tropical rainforests were found in
large wilderness blocks (400,000 hectares or more). Two-thirds of the world's forests
are fragmented and especially vulnerable. Fragmentation means that roads or other
avenues of approaches such as by motor boats and barges on rivers, allow forces of
change to encircle the remaining stands. Not only do loggers and squatters gain easier
access, but the very fact of being smaller reduces the niches for species diversity, and
breaks up ecological landscapes. The picture in Southeast Asia and Oceania is the
worst of all. Only 12 per cent (22 million hectares) of the remaining tropical
rainforests in this area are found in large wilderness blocks.
Southeast Asia and Oceania
Nearly two-thirds of the world's tropical rainforests are found in Southeast Asia. The
Philippines, Malaysia and Indonesia have utilised a significant proportion of these
rainforests to initiate development, capture foreign exchange, and create jobs, through
the felling and export of hardwoods [Poffenberger, 1990: 20]. Over the past decade,
these three nations have accounted for two-thirds of worldwide exports of hardwood
logs and products. The Philippine Diptocarpaceae forests have been largely depleted,
and as much as one per cent of the tropical rainforest in Malaysia and Indonesia are
being cut each year [Contreras, 1991; Thompson, 1993a; Thompson, 1993b; and
World Bank, 1993a]. See Table 1 below:
TABLE 1
TROPICAL FOREST RESOURCES: STATUS AND CHANGES (000 HA)
% of Area
Land
Forest
Area Deforested
deforested
Area
Area
Annually, 1981-1990
annually
Main ecological
regions
[Lowlands]
Tropical
912,000 655,500
4,900
0.75
rainforest
Moist deciduous
1,464,100 626,400
7,300
1.17
forest
Dry deciduous
720,500 212,900
2,100
0.99
forest
39,500
200
0.51
Very dry forest 547,700
523,800
2,500
100
4.00
Desert
[Uplands]
Hill and montane
650,500 178,100
2,300
1.29
forest
4,815,600 1,714,900
16,900
0.99
[Total]
[Reigons]
Africa
Asia
Latin America &
Caribbean
[Total]
Selected countries
[Latin America]
Brazil
Peru
Bolivia
Venezuela
Colombia
Guyana
Surinam
Ecuador
[Africa]
Zaire
Congo
Gabon
Cameroon
C.A.R.
Eq.Guinea
[Asia]
Indonesia
Malaysia
Philippines
2,243,300 600,100
896,600 274,900
5,000
16,900
0.83
1.31
1,675,700 839,900
8,300
0.99
4,815,600 1,714,900
16,900
0.99
845,651
128,000
109,439
88,205
103,870
19,685
15,600
27,684
347,000
73,000
55,500
42,000
41,400
19,300
15,200
12,300
3,200
300
60
150
350
3
3
60
0.92
0.41
0.11
0.36
0.85
0.02
0.02
0.49
226,760
34,150
25,767
46,540
62,298
2,805
103,800
21,100
20,300
17,100
3,600
1,200
200
22
15
80
5
3
0.19
0.10
0.07
0.47
0.14
0.25
181,157
32,855
29,817
108,600
18,400
6,500
1,315
255
110
1.21
1.39
1.69
SOURCE: [Burgess, 1993]
In the early 1970s the Food and Agriculture Organisation (FAO) estimated the rate of
deforestation in Indonesia at about 300,000 hectares per year; in 1981 at 600,000
hectares per year, and most recently one million hectares per year. The data are
relatively weak, but World Bank estimates confirm FAO calculations [World Bank,
1990: 20]. The private short-term financial gains that can accrue to the exploitation of
the country's forest resources have given rise to a number of serious issues affecting
both the sector's future and societal choice. In addition to the quantitative economic
benefits such as providing foreign exchange, forests also provide ecological benefits
such as protecting critical watersheds, preventing soil erosion, stabilising downstream
river flows, sequestering carbon and providing a global arboretum for biological
diversity. Often, using resources for economic purposes reduces their ecological value
and use.
One factor more than any other seems to determine the pattern of regrowth of tropical
forests: the amount of sunlight allowed through the forest's evergreen canopy. While
the tiniest hole caused by a falling branch may be enough to trigger the growth of a
climax seedling from the forest floor, if the seedling receives too much sun, it will
rapidly whither and turn into potential kindling. The threat this kindling provides is
given evidence by the great fire of 1982/83 in East Kalimantan, Indonesia which
alone destroyed 40,000 square kilometres [Brown and Press, 1992: 22]. Sufficient
evidence exists to suggest that the fire would have not been at all as severe had not
logging activity opened up the canopy. Even with "selective cutting", a seemingly
innocuous term, as much as 70 per cent of the trees may be damaged or destroyed in
the process of extracting only 10 per cent.
In June 1978 a "Strategy Conference" was held in Washington by the Department of
State and US Agency for International Development on Tropical Deforestation. It was
concluded that:
"Tropical forests are disappearing at a rapid and alarming rate...human needs and
quality-of-life
objectives are critically dependent upon proper stewardship of tropical
ecosystems...exponential
population growth coupled with a lack of alternative economic development
opportunities is the
basic cause of loss of tropical forest cover..." [Jacobs, 1988:8-9].
To estimate the loss of tropical forest, differences in reliability notwithstanding, two
studies were solicited [Lanly and Clement, 1979; and Myers, 1980], both of which
justified the concern.
Although public awareness of the need to save rainforests has never been greater
[Pearse, 1992:3], and money has flowed freely from international organisations during
the past decade, little has been accomplished [Lanly, et.al. 1991]. Following scathing
independent reviews of the FAOs Tropical Forestry Action Plan in 1990, and ensuing
criticisms from environmentalists and its own executive board, the World Bank
announced plans in 1991 for a new proactive policy to preserve tropical forests. Since
then the Bank has begun to place more emphasis on supporting programs that involve
institutional development, forest protection measures, and income-generating projects
not dependent on forest resources, which have as their primary objective the
preservation of tropical moist forests [World Bank, 1991:20; World Bank, 1995a].
In implementing this strategy, the Bank pays special attention to the 20 countries
(accounting for 85 per cent of tropical moist forests) whose forests are seriously
threatened by encroachment and destruction. Serious pressures have since been
exerted against a number of nations such as Papua New Guinea, Solomon Islands and
Indonesia. This has made little difference to the policy-makers in Indonesia; in fact,
quite the reverse as the Government has reacted strongly against "outside
interference".
In June, 1995, the specialist Forestry Officer in the Environment Division at the office
in Jakarta returned to Washington. The World Bank's "Country Memorandum Report,
1995" in which the Forestry Officer played a major productive role was also
embargoed "most likely permanently". Anecdotal evidence gathered by the author
suggests that Government officials were most displeased with the strong "green"
attitudes of both World Bank official policy and the Forestry Officer in particular.
One of the issues of most concern to the environmental and forestry officers in the
World Bank in Jakarta involved the negative global externalities of declining
biodiversity.
LOSS OF BIOLOGICAL DIVERSITY - A GLOBAL PROBLEM
The loss of biological diversity is one of the most important socio-scientific problems
requiring understanding and resolution at present. The importance of biodiversity
arises not just from its role in delivering direct use, and non-use, values but in its role
as the means of assuring the resilience of the ecological systems on which human
activity depends [Barbier, et.al., 1994: 17; Perrings, et.al., 1995: 3-4; Norton, 1986].
The economic problem of biodiversity decline arises due to a 'social' loss based on the
fact that the private return to conservation is less than the return to some other use of
land, assuming all inputs and outputs are valued 'correctly in the market'. Ecologically
it is difficult to resist the intuitive view that a vast part of biodiversity loss is nonoptimal by almost any criterion [Pearce and Perrings, 1995:31].
The case of the spotted owl in the Western United States (Strix occidentalis) has
become symbolic of both the concern as well as the potential conflict which
percolates below the surface. While there is no way to measure the absolute amount
of species loss each year, Wilson [1992:268] optimistically estimates that the loss is
approximately 74 species per day, verifying Myer's concern, stated above, that we are
in the midst of one of the great extinction spasms of geological history!
One of the few agreements made at the United Nations Conference on Environment
and Development in Rio, 1992 concerned the preservation of biodiversity. The
ensuing 'Convention on Biological Diversity' provides an overall framework for
international action to protect species and their habitats. Countries ratifying the
convention are required to identify and monitor their biological resources and to
produce plans for conserving them, including the establishment of protected areas.
Article 20 of the Convention states that developed country parties should provide
"new and additional financial resources" towards the implementation of the
Convention. Since then, meetings of the Conference signatories (133 countries
represented) have taken place in the Bahamas in December, 1994, and Jakarta in
November, 1995. So far, the only unanimous substantive agreement is that the 29th of
December of each year should be declared the International Day for Biological
Diversity [Pearce, 1994: 5; and The Jakarta Post, 1995: 2].
Delegates from developing countries have demanded that industrialised countries
contribute more towards the funding of conservation efforts and delegates from
developed countries have responded to the effect that "aid fatigue" has set in and
further funds were not to be forthcoming. One of the difficulties of course, is that the
economic benefits of deforestation are seen to occur at the national level, whereas the
negative externalities of declining biodiversity are global. On the other hand, socalled "aid fatigue" is likely to increase in developed countries, particularly when it is
difficult to quantify the value of biodiversity loss. Convincing voters in industrial
nations of the value of preserving invertebrates, for example, is extremely difficult
during the present era when down-sizing of the state through budget-balancing,
deficit-slashing and tax reduction has become a dominant ideological proposition. So
far the Global Environmental Facility (GEF) is the only source from which countries
can request funds for various biodiversity projects. The facility's funds now stand at
about 2 billion USD for 1994-97. This is too little, its procedures are too slow in
meeting requests for various projects, and many financial contributions pledged to the
GEF have not been paid.
Following the Amazon Basin, Indonesia, with 144 million hectares of forest land, has
the world's second largest tropical forest area. Aside from being the source of timber
and wood products which have been Indonesia's second major export, tropical forests
are also a source of medicinal plants, resins, and dyes, and a host of other non-wood
products.
In addition, and more difficult to measure economically, the Indonesian rain forests
are biologically rich, with more than 10,000 species of trees, 500 species of mammals
of which 200 are endemic, and 1,500 species of birds of which 430 are endemic, all of
which play a vital role in regulating the ecosystem [Parkinson, 1993: 4]. The nation
has the world's longest list of species threatened with extinction including: 126 birds,
63 mammals and 21 reptiles. Some of the more well known include the Javan and
Sumatran rhinoceros, Asian elephant, Sumatran tiger, clouded leopard, orangutan, and
Sulawesi macaque. Two birds, the Javan Wattled Lapwing and Caerulean Paradise
Flycatcher have become extinct in the past decade [Ministry of Forestry, 1991: 38-39]
and the Bali Starling is seriously endangered. One study revealed that just 10 hectares
of rainforest in Borneo contained some 700 tree species, the total number of species
found in all of North America [Kramer, et.al., 1995: 14]. In sum, Indonesia is
classified as being part of Malaysia, one of, if not the most, biological diverse regions
on the planet, as well as one of the most threatened ecologically [Whitten, 1987: 25,
50-51; World Bank, 1990:21; and Maijer, 1981].
Recent studies brought to our attention by Cleary and Eaton [1992:136] give some
indication of the magnitude of biodiversity on the outer islands, as well as its potential
importance. A study of three villages on the Apo Kayan plateau of East Kalimantan
(which exists right in the heart of some of the most intensive logging activity in the
world) identified 213 different plant species that the local Kenyah people use for
medical purposes [Leaman, et.al., 1990]; and in another small village in Central
Kalimantan, over 100 species were reported to have medicinal value [Riswan et.al.,
1990]. Finally, in a study of Iban longhouses in the Pantu area of western Borneo a
total of 142 different plant species were found to be used by this community. Of
these, 60 species were used for handicrafts, such as the manufacture of mats, baskets,
hats, dyes, and weaving material. A further 46 species were used for construction, 47
for food, 22 for medicines, and 10 for fish and dart poisons [Pearce, et.al, 1987].
Few species of vertebrate are lost entirely when a rainforest is logged, though the
local populations of some may collapse. While large herbivores such as elephants and
deer may thrive on the new growth of pioneer vegetation following logging, the
species that fare least well are those with highly specific food needs such as birds.
Primates, including orangutans on Borneo, are particularly vulnerable. While logging
cannot be singled out as the only cause of reductions in, or threats to animal
populations, commercial logging has been the first activity responsible for widespread
tropical forest conversion in the outer islands such as Kalimantan. It is logging which
opens the way for more extensive shifting cultivation and for the accelerated
resettlement programs [Hafild, 1994:5].
At present, Indonesian forest management policy delineates biological diversity
conservation from forest utilisation. Biological conservation practice is concentrated
only in nature reserves, wildlife sanctuaries and in some national parks. Restrictions
on annual allowable logging are based on estimated growth and physical limitations
such as steep slopes, and regeneration rates prior to the next harvest. Considerations
such as wildlife food sources, nesting sites, migration routes or mating seasons of
wildlife are not taken into account. The protected areas themselves are not immune
from disturbance. Many nature reserves and national parks are threatened by illegal or
semi-illegal logging, landless farmers, and fire. For instance, extensive areas of
Leuser National Park in northern Sumatra and Tanjung Puting in Kalimantan are
illegally logged even today [Hafild, 1994:59-61].
Because most species are not monitored it is very difficult to detect which ones are
likely to disappear when tropical forest destruction occurs. In fact, no species
inventory within any single tropical ecosystem exists in Indonesia. This knowledge
gap between tropical forest ecosystems and biological diversity leaves us with only
intangibles when attempting to prescribe a formula to address the problem [Pearl,
1992].
INDONESIA - TURNING ECOLOGICAL REGIMES INTO WOOD
Translating a commitment to sustainable forestry, evident in the Constitution and
Government regulations [Warren and Elston, 1993], into practical reality is frustrated
by the country's acute population pressures in certain areas, the size and geographical
dispersion of its forests, the need to search for additional agricultural land, the
continuing quest for increased output and non-oil productive options, the desire to
raise income, and the need to reduce poverty [Parkinson, 1993:vi]. Given the national
requirements for foreign exchange, industrial growth, employment generation and
regional development, government agents have chosen to provide incentives for the
development of wood-based industries more rapidly than international experts and
representatives of conservationist organisations would prefer. The often declared
objectives of the Indonesian Government are generally twofold: to reduce the
country's reliance on the oil sector as a source of foreign exchange and government
revenues, and to stimulate job creation [US Department of State, 1992:3]. For quite
some time, wood manufacturing has been the second-largest source of foreign
exchange earnings after oil and natural gas, and is seen as a significant generator of
employment.
In Indonesia, large scale timber harvesting began in the late 1960s. Initially, the bulk
of concessions were awarded to foreign companies which have since been replaced by
locally owned entities. Most concessions are owned by (or at least have strong
corporate linkages to) wood processing companies (primarily plywood
manufacturers). Although around 580 concessions exist in Indonesia, more than 30
per cent of the resource area is under effective control of 20 companies and five or six
corporate groups dominate the sector [World Bank, 1993a: 33].
Logging operations in production forest concessions should be managed in a
sustainable manner through implementation of the Indonesian Selective Cutting
System. However, the required pre-logging inventories and post-logging residual
stand inventories are not conducted properly or reported truthfully; there is overcutting within annual cutting plans, and cutting outside approved boundaries is
frequent; re-logging at more frequent intervals than the 35-year required cycle is not
uncommon; and control and supervision by the Ministry of Forestry has been
ineffective. Further, the current royalty level of about 15 USD per cubic metre greatly
undervalues the resource, which could be worth as much as 90 USD per cubic metre
based on the international market price of comparable quality logs. Low domestic
prices for logs, in turn have led to inefficiencies in both the logging and wood
processing industries and a lack of market diversification. Poor logging practices
waste an estimated eight million cubic metres annually, including damage to the
remaining trees, while the lower technical efficiency of Indonesian plywood mills
wastes another three million cubic metres. Together, this amounts to a third of the
total annual harvest [World Bank, 1994: 53-56].
This rampantly excessive exploitation of the rainforests has been made possible
during the past two decades due to a mixture of market and policy failures [Thiele,
1994]. Controls on forestry products are by far the most important category of failureinducing restrictions. By 1978-80 Indonesia had become the world's largest exporter
of tropical hardwood logs (20 million cubic metres in 1980) [Hasan 1991:11]. This
along with oil and gas exports increased the neo-mercantilist concern on the part of
the Indonesian Government. Exporting raw materials and importing finished
manufactures is never perceived as a road to long-term development. In 1975, the
Government had initiated a programme aimed at the gradual reduction of log exports
which culminated in a complete ban in 1985. Although the aim of the programme
according to Robison [1990:105] was to develop self-sufficiency with mutually
reinforcing backwards and forward linkages, a subsidiary aim was to increase the
value-added component of gross national product. Restrictions on the export of raw
logs forced producers into sawnwood and plywood processing. A sharp drop in the
value of log exports was followed by a slow climb in the value of plywood exports,
which by 1983/84 was worth 579 million USD out of a total value of 1,484 million
USD for all manufactured exports.
In 1989, high export taxes (250-1,000 USD per cubic metre) were applied to sawn
timber in an effort to drive raw materials into the secondary processing sector
(woodworking, moldings, furniture) where value added was expected to be higher. In
general however, the main beneficiary of this policy has been the plywood cartels
which have been provided with a supply of cheap logs. In 1992, the ban on log
exports was replaced with export taxes, in superficial recognition of the pressure from
world trade agreements. The impact on resource allocation from the change-over from
controls to taxes is negligible because the taxes are high enough to replicate the
protection provided by the ban. It remains the case that only processed products can
be exported. Because of the exorbitant taxes, domestic log prices are considerably
below international levels. For illustrative purposes, prices for Meranti logs exported
from Sabah (along with Sarawak the largest exporter of tropical logs in the world)
have averaged around 160 USD per cubic metre since 1986 with recent prices over
300 USD per cubic metre; domestic prices of equivalent logs in Indonesia currently
average around 90 USD per cubic metre. Even this price may overestimate what most
plywood mill operations pay, since the majority are affiliated with logging
concessions and consequently obtain their logs at cost - approximately 67 USD per
cubic metre inclusive of government royalties (currently 22 USD per cubic metre)
[World Bank, 1993b:67].
An over-expansion of production capacity in wood-based commodities has occurred
because the return on investment is high due to the excessively low administered price
of the log input. As of 1990, there were 2,843 plywood and sawnwood mills which
required a total log input of 54.9 million cubic metres per year. The existing
maximum supply capacity of production forests is only 31 million cubic metres per
year. Thus, there is an excess demand of at least 23.9 million cubic metres as a result
of over-investment. Further, the ownership of forest concessions, log trading, and
wood-processing is highly concentrated in the hands of a few timber magnates. As
such, these business groups behave like quasi-cartels and practice collusive behavior
such as price fixing and intra-firm pricing, which further depresses the real value of
natural logs.
Most timber concessions have a duration of 20 years when the minimum harvesting
cycle is 35, providing no incentive to reforest. Concessions are allocated arbitrarily by
a small circle of forestry officials, to a small number of concessionaires, for a small
concession fee, all of which invites corruption. Overly generous incentives and
subsidies have been given to the plywood and sawnwood industries by restricting log
prices to a level far below their market scarcity values. Extremely low forest fees have
permitted high economic rents to be captured by the private sector. The anomaly is
that much of the excess rent is absorbed in inefficiencies in logging and processing
[World Bank, 1993a:xii]. Regulations are not enforced and penalties not levied for
over-cutting, high-grading, or illegal entry to contiguous lands due to the inadequate
number of forestry staff in the field [Hargono 1991:13]. Many concessionaires also do
nothing to protect their holdings from encroachment and fire once they are logged
[Parkinson, 1993:13]. While it is not possible to quantify what proportion of forest
operations have created significant adverse impacts on local communities, it is
apparent, from the very extensive amount of case study and anecdotal material
available, that such impacts are widespread and serious [World Bank, 1993a:50].
Field work initiated by the author of this paper and others in Kalimantan [See
Poffenberger and McGean, 1994] indicate that the environmental costs of timber
operations have been heavy and unfairly borne by the local, forest-dependent
communities along the Mahakam River. The availability of rattan, gum, and other
important economic non-timber forest products has declined sharply in logged-over
areas. Wild animal populations have diminished. One of the largest forest fires in
Indonesia's history occurred in 1982-83 as a result of logging and residue and drought
which has reshaped the landscape. Companies have consistently refused to consult
with the local communities before beginning timber operations on communal lands.
Finally, in an attempt to move local communities away from logging areas, the
indigenous Dayak people's time-tested, long-term fallow and rotational swidden
strategies are being prevented by government extension agents, being replaced by
demonstration projects noted for their failure. All of this micro-level ecological
degradation has led to Kalimantan being identified as one of the major fourteen
deforestation zones or 'tropical hotspots' in the world by the Joint Research Centre of
the European Commission and National Aeronautical and Space Agency of the
United States [Myers 1993: 11].
The World Bank has observed that poor logging practices, combined with
inefficiencies in the wood processing industries, waste timber resources equivalent to
a third of the harvest. Including estimates of illegal logging, the rate of timber
extraction from Indonesia's natural forests exceeds the assumed rate of regeneration,
calling into question the log-term supply of logs for domestic production [World
Bank, 1994: xvi]. In 1995 the World Bank was even bolder: "At current rates of
exploitation and with today's inefficient logging and industry practices, suppliers of
commercially sized logs will come into short supply by the year 2010 or earlier"
[World Bank, 1995b: xiv].
Along with these inefficiencies in output, the liquidation of natural forest for timber
results in irreversible losses. This includes the destruction of what was formerly a
perpetual stream of income from nonwood forest products for millions of people,
typically cultural minorities for whom tropical forests have been a traditional abode.
Cash income is lost, as well as materials for shelter and food in the form of meat, nuts,
fruits, and fibres. The tangible, immediate costs to, generally, poor forest dwellers
extend well beyond these losses including costs attendant upon increased erosion,
greater difficulties in river transportation, forest fires and flooding that follows in the
wake of deforestation. Employment gains for poor unskilled labourers in logging and
timber processing are extremely limited. And very substantial economic rents have
been destroyed by commercial undertakings in natural forests; and rents that were not
destroyed, given government policies, accrued to the wealthy rather than the poor .
On straight-forward efficiency grounds therefore, the forestry sector in Indonesia
leaves much to be desired. On equity grounds forestry policies have proven to be
regressive both in practice and effect. Normally, the more difficult values identifiable
in tropical rainforests are never included in economic analyses because of their nonquantifiable and in some cases intangible nature. Biodiversity is one such value.
CONCLUSION
Tropical rainforest is commonly recognised as one of the most ancient and stable
ecosystems on Earth. While even virgin, or primary, rainforest suffers much natural
disturbance by, for example, cyclones, landslides, volcanic activity and drought, the
present rate of disturbance by logging activity in Indonesia is excessive.
From a policy perspective, three characteristics of biological diversity are critical: its
public good nature, the existence of thresholds in ecological systems, and uncertainty
about those thresholds and the wider values of biodiversity. Not one of these
characteristics can meaningfully be incorporated into a cost-benefit analysis. If
economists are to be relevant from a policy perspective on this issue, then they must
begin to approach the problem ecologically. In the meantime, economists have
something to offer in a minimal fashion. Simple policy changes can be made,
economically, to stop wasting the timber that is presently standing in Indonesian
rainforests. Before the real debate can begin between those who wish to preserve
global heritage and those who see economic growth as mandatory, agreement must
first take place regarding the abolition of present inefficiencies and inequities in the
Indonesian forestry sector [Tobey, 1996: 25-28]. Some simple changes at each level
to negate the negative externalities generated by tropical rainforest logging include
the following actions. Until, at the very least, these changes occur, a debate centred on
economic and ecological criteria remains fatuous.
At the local level, more attention must be given to consultation with local
communities, with a specific allocation of forest royalty proceeds provided directly to
them for local developmental needs.
At the national level export bans and taxes on logs must end since they simply
provide an incentive to use what is, in fact, a scarce resource (tropical timber) as if it
were plentiful. Further, the subsidies and protection are presently limited to a few
cartels and some of the wealthiest cronies of the New Order regime, with little benefit
to the indigenous poor. These increase inequities, both in the industry and in the
country.
At the regional level, incorporating both Japanese and Oceanic consumers, an
"ecolabelling" process could easily be instituted, possibly through APEC. This
process would provide for the inspection of all logging operations and regenerating
areas, permitting importation of only that wood produced according to what is on
paper, the most stringent environmental protection laws and regulations of Indonesia.
At the international level, the Global Environmental Facility must come to grips with
the fact that most of the world's biological heritage exists in poor nations. Given the
positive benefits of protecting this heritage and taking the precautionary principle
seriously, it is essential for all those nations who pledged funds to the GEF in Rio in
1992 to pay up. If the loss of biodiversity is a global problem then it must be solved
by global contributions. This is a responsible ecological position. In the meantime,
representatives of the Indonesian Government and wood products cartels must begin
to take a responsible economic position.
Biological diversity is to the planet what the genome is to the individual human.
Erwin Schrödinger once described a complex molecule as the container of the codescript for life [Bowman, 1994: 59]. Analogously, biodiversity is a code-script for
Earth, and more rapidly than is at all necessary, it is being erased.
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