Malaysia is a federation of 13 fairly autonomous states organized into three main regions: Peninsular Malaysia, Sarawak and Sabah. The country is ruled by a Federal Constitutional Monarchy with a Prime Minister, and is operating through a parliamentary system.
Geography, Climate and Population
Malaysia covers an area of over 330,000 km2, and consists of two regions some 650 km apart, separated by the South China Sea. Sarawah and Sabak are on the northern part of Borneo, and Peninsular Malaysia borders to the north with Thailand.
The climate is equatorial with generally high rainfall, much of this falling during the monsoon season. It is hot and moist year round, although the temperature is cooler in the highlands where breezes blow in from the ocean.
The population is 19.5 million (1994), estimated to rise to 24.3 million by 2010. At current rates the population is doubling every 30 years. The majority of people live in Peninsular Malaysia, 55% in urban settlements.
Malaysia's economy is one of the fastest growing in South East Asia and Malaysia has the second most open market after Singapore. GDP per capita (1993) was US$3160 with GDP growth estimated at 8.5%.
Major components of the economy are (as measured by GDP contribution):
Total exports in 1994 were US$51 billion and imports were US$49.9 billion.
The economy has always been one of the most open to international trade and investment. As such, trade and foreign investment has played a key role in the development of the economy. Because Malaysia is an open economy it is very interested in a liberal international trade regime, and its policy reform has increased competition and efficiency by increasing market openness.
Forest area in 1991 was estimated to be 57.8% of the country. This amounts to 18.5 million hectares, of which about 80% is Dipterocarp forest. The forests range from swamp (mangrove) forests, to low to montane forests. The major timber producing region is Sarawak which produces 44% of the total harvest.
While it is difficult to obtain accurate figures, it is estimated that some 14.7 million hectares of production forest remained in the early part of the current decade. Of this, 9.7 million hectares had been previously logged and would not be available for further harvest for another 20 - 50 years. Most (about 7 million hectares) was logged in the 1980s.
Production of forest products in 1992 was 54 million m3 of roundwood but this is declining for a number of reasons. The most fundamental reason is the past unsustainable over-cutting of the resource leaving little accessible merchantable forest remaining. A number of reports commissioned by the government and international agencies all pointed to a looming wood deficit, and indicated that unless drastic reductions in harvested volume were implemented, a wood famine would result soon after the turn of the century.
A 1993 study projected the overall supply/demand situation in Malaysia to fall from a surplus of 34.8 million m3 to a 4.5 million m3 deficit by 2001. A modest amount of timber will be forthcoming from plantations at the turn of the century and some additional rubberwood will be harvested. Even so, the forests will not be in good shape to supply a sustained yield into the new century.
Although less overwhelmingly significant than in other developing countries, fuelwood is another important issue for Malaysia with demand projected to rise by 1.4 million m3 between 1990 and 2010. Total demand in 2010 is projected to be 9.7 million m3. This demand will place further strain on the remaining forests and will impact on both the volume and quality of wood available in the future.
Production forests are classified as Permanent Forests and Statelands. Permanent Forests are harvested using selective practices, while Statelands are clearfelled and converted to agriculture or industrial land. With half the current harvest coming from Statelands, the country will face a major harvest level reduction when this resource is gone.
Rubberwood use is high in Malaysia with 1.7 million m3 being harvested in 1995. This is forecast to rise to 2.1 million m3 in 1998, before declining to 1.1 million m3 in 2003, reflecting the age class structure of the rubberwood plantations. The harvest is estimated to be 62% of the available resource.
Malaysia was formed in 1963 when Sabah and Sarawak, located on the island of Borneo, joined the 11 states of Peninsular Malaya in a federated system of governance. In the original agreement, Sabah and Sarawak were to be on an equal footing with the combined states of Peninsular Malaysia in a tripartite power structure. Because state governments control nearly all matters of forest policy, the political debate over state versus federal power often plays itself out in the formulation of forest policy. There can be no meaningful discussion of "Malaysian" forest policies without also discussing specifically the Sabah Forest Policy, Sarawak Forest Policy, and Peninsular Malaysian policies.
The abundant natural resources of the country have long provided for the peoples' needs including food, fuel, shelter, medicine, income and general welfare. The forest resources have also in recent times contributed to the economic development of the country through sale of timber.
Early in the 20th century, the expansion of rubber plantations and tin mining put increased pressure on the forest resources, resulting in the appointment of the first Chief Forest Officer. Forest policies began to evolve from this, including forest laws and rules enacted in the 1930s providing scientific management and control over the productive and protective functions of the forest. It is interesting to note that the first official statement of forest policy in 1922 declared that "the forests properly managed are an asset of continually increasing value and the government attaches the greatest importance to their maintenance, not only as a source of revenue, but on account of the many other benefits that accrue from the possession of them".
By the 1930s, the country was being criticised for blindly following a forestry policy developed by India. This criticism resulted in an "Interim Forest Policy for the Federation of Malaya" in 1952. The policy laid the foundation for a series of Protective Reserves, with an even distribution in the interest of local self-sufficiency. A proportion of the revenue from Productive Reserves was to be reinvested in the form of silvicultural operations for cultivating fresh timber. It proposed to foster a real understanding of the value of the forest among the people, and become a working policy. Unfortunately it was not adopted as the official National Forest Policy.
As discussed previously, no truly comprehensive national forestry policy exists. In its place, there are policies adopted by the various state governments.
Sarawak's "Statement of Forestry Policy", approved in 1954, remains in effect, providing for reservation of permanent State Forest for protection and production, sustainable management of productive forests, economical utilisation of forest products, and promotion of exports. The general Statement of Forestry Policy is:
"To reserve permanently for the benefit of the present and future inhabitants of the country forest land sufficient:· to assure sound climatic and physical conditions, including safeguarding soil fertility, water supplies and prevention of erosion
· to supply in perpetuity at moderate prices all forms of forest produce required for agricultural, domestic and industrial use.
To manage productive forests for ongoing revenue on a sustained yield basis.
To maximise use of forest products on land that is to be converted to another use.
To foster exports as far as they are compatible with local demand."
The State Forestry Policy serves as a guide for the sustainable management of the forests, planning and implementation of the Forestry Department activities, and promotion of the value of forests.
The key policy components are:
"To preserve for the benefit of present and future generations of the state, sufficient forested land:· to maintain sound climatic and physical conditions to safeguard water supplies, and prevent soil erosion;
· to supply in perpetuity forest products for both domestic and industrial needs.
To maximise the revenue from the forest consistent with the sustained yield. To provide technically trained staff and to support research.
To accept in principle that security of tenure and long term planning is necessary for the successful management of the forest estate.
To foster an understanding amongst the people of the value of the forests to them."
Reserved forests in Peninsular Malaysia were originally delineated in accordance with the Land Capability Classification as lands unsuitable for mining or agriculture. The total natural forest in Peninsular Malaysia is made up of the permanent forest estate, national parks, wildlife sanctuaries and reserves, and stateland forests. Stateland forests could in theory be converted to other uses.
National Forest Policy
Peninsular Malaysia approved an interim National Forestry Policy in 1969, which catered for developmental forestry and forest industries consistent with the country's development. This policy was considered to be restrictive in nature, and vague. It argued for greater public participation as well as production, conservation and an export industry. This policy was approved by the National Forestry Council and endorsed by the National Land Council in 1978.
The National Forest Policy was further revised in 1992. The revision extends the policy to include the roles of research and education. This 1992 policy aims at a more comprehensive approach that addresses the requirements for sustainable management in greater depth.
This National Forestry Policy is supported by Sarawak and Sabah which have forestry policies with similar objectives.
The National Forestry policy is:
"To dedicate as Permanent Forest sufficient areas of land strategically located throughout the country in accordance with the concept of rational land use:· to ensure sound climatic and physical conditions to safeguard water supplies, soil fertility and prevent erosion;
· to supply in perpetuity all forms of forest produce as required for both domestic and industrial use;
· to conserve adequate areas for the protection of conservation values and to provide for recreation, research and education.
To manage Permanent Forests in accordance with the principles of sound forest management.
To develop a programme of forest management to achieve maximum productivity from the forest.
To ensure thorough utilisation of forest produce on land prior to its conversion to other uses.
To promote efficient harvesting and utilisation of forest products and the development of processing industries.
To support research, training and education and understanding of the multiple benefits of the forest".
This shift in emphasis in the policy to include research and education is encouraging as an indicator of the more holistic approach being taken towards forests, rather than simplistically viewing them as wood resources alone.
In earlier times there was little conflict over the use of forests, as population pressure was not great. The greatest emphasis in policy formulation was on the utilisation of the wood-based forest products, and there was little emphasis on the non-wood forest products. In more recent times the increasing demands for both wood and non-wood forest products has resulted in rapid deforestation and greater conflicts over resource use. This has resulted in difficulties for both the industrial wood sector and the domestic wood using sector.
There are several commonalities and differences in forest policies and utilisation between the three principal States. The States all encourage forest-based industrialisation, and forest policy has traditionally placed an emphasis on wood production with much less on the non-wood potential of the forest. The state governments have in the past all derived significant revenue flows from taxes related to forest products, especially from export taxes.
The type and extent of forest remaining in each State varies widely too, and as a result each State takes a different view of its forest and has different issues to cope with. Sabah contains some of the world's richest remaining rainforest, and shifting cultivation remains a major driver of deforestation. Peninsular Malaysia however has much poorer forests and conversion of forest to permanent agriculture is the major cause of deforestation. Sarawak contains valuable peat swamps where the much prized ramin trees are exploited.
The increasing evidence of the impact of deforestation on both industrial and domestic wood users has resulted in significant changes to forest utilisation. Levels of harvest are in decline and even the current reduced harvest is, according to some, unsustainable.
There has also been a significant move away from the export of unprocessed logs and a move towards much greater levels of onshore processing. There appear to be significant distortions in the policy relating to royalties and rents.
A series of royalties are payable by the exporter of forest produce to the various governments. In general these royalties are based on the value of the timber being exported. This appears to encourage the loggers to high grade the forest (i.e. to remove only the most valuable trees as the royalty on them as a percentage of total value is much lower). While in itself this is not too serious, the process of removing the trees from the forest is often very destructive of the residual forest. Thus the younger and lower value stems which could have formed the basis for a second cut from the forest in the future are to some degree damaged beyond the point of economic recovery. A further related issue is that the process of high grading extracts a lower volume per hectare, so more hectares are covered to recover a set volume.
It seems essential to use methods of royalty and rent collection that dissuade loggers from the practice of high grading, rather than encouraging it. An enforcement system is needed that ensures loggers are responsible in their operations. This highlights the second very important matter, that of enforcement of the requirements of various concession regulations, and the requirements of government forestry policy. As many of these operations are found in remote locations with poor infrastructure and often poorly paid local officials, there exists considerable opportunity for "indiscretions" to go undetected at best, and ignored at worst.
The Malaysian Uniform System of forest management required the retention of sapling and advanced growth in the stands being harvested. In Sabah in 1977 this was discarded as it was deemed to be not working due to the damage being done to the stand during logging, preventing the adequate retention of advanced growth. This is a rather backward step and is akin to removing speed limits on roads because no one obeys them, rather than considering how people can be encouraged to comply, including upgrading enforcement methods.
As in all countries, forest policy cannot operate in isolation to other economic and infrastructural policies. The major issues of non-forest policy to be considered relate to tax policy, industrialisation policy, foreign investment, resettlement programmes and tenure related issues. As in many Asia-Pacific countries, conflicts between traditional resource users (generally indigenous people) and the more recent demand for industrial fibre supply to industry and to produce export income, continue to plague Malaysia. Resettlement schemes, while not on the same scale as those found in Indonesia, are used in Malaysia. These result in considerable removal of forest as the resettled people turn land to agricultural use.
Tax policy and industrialisation policy also have a role to play. Malaysia has traditionally not offered tax holidays to purely extractive timber companies, unlike many other countries. There has, however, been a move from the late 1970s to encourage the industrialisation of the forest industry through the use of royalty and trade policies. Manipulation of royalties has been much more successful in promoting industrialisation than the imposition of quotas. For example, until 1979 in Sabah almost all exports were in log form. The timber royalty imposed after this time provided very strong incentives for investments in sawmilling.
While superficially, investment in sawmilling in the country appears to be a move in the right direction, the policy of pursuing further processing should not be followed at the expense of rational management of the forest. Indeed, in many cases the development of processing capacity may place even greater demands on the forest than simply the extraction of the most valuable logs. Examples of this can be seen in many countries, where as the sawmill nears the end of its log supply (e.g. its concession is cut) there are so many jobs at risk that the mill is given a new concession simply to maintain employment levels. Often this new log supply is from an area that was previously designated as some form of reserve.
Government policy must put in place a sound and rational basis for managing the forest for a sustainable yield of wood and non-wood products, and not simply focus on maximum short term output of economic goods.
These policies need to extend not just to the forest itself, but to the land the forest occupies. While it is necessary, and even arguably desirable for areas to be converted from forest to some other land use (usually agriculture), careful planning is required to ensure that this is carried out in a balanced and sustainable way. A major conflict can occur where both agriculture and forests are most productive on the same types of land. In the past the agricultural lobby has often won the day as their production is more immediate. However, over time problems have surfaced, the most pressing of which in most rural areas is the supply of fuelwood.
Further conflict over resource allocation can arise with industrial development demands. In Sarawak in particular, the demand for electricity is resulting in large scale hydroelectric development with the consequent loss of large areas of forest.
While some progress in thinking has been made, implementation has not kept pace. For example it is noteworthy that logging is permitted in water catchment areas under more restricted guidelines than elsewhere, but the total area of Permanent Forest that is totally protected is still only about 2%. Thus, although the National Forestry Act provides a platform for the multiple use management of the forest, the actual situation suggests a still strong bias in the Act and its interpretation towards management of forests for timber.
Malaysia - Summary
Removal of forest in Malaysia in favour of utilization of transfer to alternative land uses has, as in many other countries, resulted in substantial increases in GDP, to the benefit of the people. As with other countries, there comes a time when further removal of forest could actually reduce living standards rather than enhance them. It is always difficult to say when that point is reached, and in fact there is no real answer. There are however indicators which should not be ignored. In Malaysia these include the very real likelihood of moving from being a major exporter of wood to a minor player or even a net importer. The real and increasingly poorly satisfied fuelwood market is another of the indicators. A further indicator is the increasing concern being expressed by the world community about the loss of forest resources.
The solutions are not simple. However by recognising the issues some progress can be made. Key issues include:
· Poor or inadequate resource information relating to the extent of the remaining forests, their wood and non-wood value, their ecology and their management requirements.
· Significant market distortions such as tax and resettlement policies leading to forest resource and forest land allocation decisions unrelated to the needs of the forest.
· Inadequate recognition of the rights and needs of indigenous people who continue to rely on the forest for their existence.
· Development of a compliance and enforcement capability towards the management of the forest, including both education and enforcement.
· Acceptance of the paradigm of forests as multi-functional is a first important step towards sustainable management, but it is even more important to mobilise action towards maximising the long term (inter-generational) benefits of this multiplicity.
· The need to include non-wood forest products in the National Forestry Act.
· The autonomy enjoyed by the state governments in the management of their forests could be interpreted as hindering the development of a truly national approach to sustainable forest management, and may be used for political leverage in non-forestry issues.
The open economic policy which Malaysia has followed puts it in a good position to further develop as world markets are opened up, and both tariff and non tariff barriers to trade are reduced.
With the world's ever increasing demand for cheap sources of wood, even greater pressure is placed on the remaining wood resources in the country. In order to benefit from the natural resources with which Malaysia is endowed, some important policy moves are required.
Rational development of forest management technology is an obvious and urgent need. With the range of forest types present and the range of pressures on the forest, this will require considerable effort. Further, to be most effective it must take an holistic view of the forest and its "products" (both wood and non-wood), and it must take a regional view rather than a simple State view. Forests and their ecology have developed without the concept of national and state boundaries. These human imposed concepts often cloud our judgement about the best means of managing and protecting resources.
This holistic view requires a more unified approach to forests on the part of the various governments (State and Federal) and a recognition that the issue of sustainable forest management must transcend State or, in some cases, even National matters.
While adopting a state, national or even higher perspective, sight should not be lost of the fact that in order to ensure long term protection of the forest resource, there is a need to involve local people. The value of the forest must be recognised in an holistic way. Current legislation does not encourage this, and in some cases actively discourages forest protection. For example law which will only give title to land to people once they have removed the forest cover continues to support the concept that forest land is of no value until such time as it is converted to something else. For people to want to protect the resource they need some "ownership".
As a significant part of the population continues to rely on fuelwood for their domestic cooking and heating, the supply of this commodity will need careful management to replace the very ad hoc management currently practised. The volume of fuelwood consumed annually is such that it justifies deliberate development and replacement of forest resources in areas close to large populations that have not yet moved to alternative energy sources. Management of fuelwood requires both policy input from government to ensure equitable resource allocation, and research. Research is required to address fundamental issues, including the most efficient means of producing the required fuelwood (or some alternative energy source), and the most efficient method of utilising the resource once it is produced, with the aim of reducing total demand.
Implications of Inappropriate Action
Fuelwood demand in Malaysia is significantly less important than in may other countries in the region. Nevertheless, requirements pose a largely insidious threat to forests. Much of the "market" for fuelwood is informal, making it difficult to measure and even more difficult to manage. Yet management of this demand is required in order to permit the forest resource to provide not only a short term fuelwood supply, but also a full range of other benefits.
In fuelwood issues and in most other forest-related issues, involvement of local people is vital. If they cannot be convinced of the need for long term, sustainable management of the forest resource, and also be convinced that this is in their own interests, then progress will be slow or non-existent. The risks of such an outcome are substantial. They include a rapid decline in the ability of the forest resource to provide the products required, and a consequent need to source alternative supplies at a high economic and social cost. In particular, replacement of forest resources is capital intensive - often at a time when other capital demands are also high due to the dislocation created by the inability of the forest to supply the products required.
Involvement of local people can pose major problems. The nature of forest policies is that they are generated at the centre and must flow "outwards" or "down" to those affected. There is however an essential need for feedback to that centre in order to adapt policy to changing situations. Failure to meet the needs of local people usually results in the policy being ignored, or even in some situations being deliberately flouted - often in response to real or perceived threats that people feel.