4.1. Supply vs Demand
4.2. Future Development
4.3. Implications
On the basis of Table 10, the growth of wood-based products is around 4%. This figure seems to be caused by shortage of natural logs. Table 17 illustrates the log demanded by wood-based industries. The demand for logs seems to be continuously increasing over time and this is likely to continue as the wood market is going to be more open in the future.
Table 17 - Wood-based Industries Log Demand
|
Wood-based Industries |
1990 |
1991 |
1992 |
1993 |
1994 |
|
Logs for Sawn Timber * |
22,200,000 |
21,000,000 |
21,200,000 |
21,600,000 |
21,800,000 |
|
Logs for Plywood ** |
21,082,000 |
21,234,000 |
23,328,000 |
23,824,000 |
23,364,000 |
|
Logs for Woodworking *** |
193,644 |
223,032 |
228,526 |
237,674 |
242,411 |
|
TOTAL |
43,475,644 |
42,467,032 |
44,756,526 |
45,661,674 |
45,405,411 |
Source: Capricorn Indonesia Consult, Inc. 1997
|
Remarks: |
* based on calculation 2 cu m log/cu m sawn timber |
|
|
** assumption: other wood-based panels use sawn limber, other products waste, etc. |
|
|
*** based on calculation 1.35 cu m log/cu m woodworking |
Compared to the log production (Table 11), it is clear that wood-based industries experienced log shortages in the period and this situation is consistent with an increasing incidence of illegal cutting. Additionally, the log shortage experienced for sawn timber (see also Table 11) is considered to be a logical consequence of unfair domestic log market mechanism which favours plywood although it is understandable because the plywood in that period and even up to now is the major (and single) priority product for export purposes.
Based on Table 12, it is estimated that the prediction of production and consumption of pulp in Indonesia by the year 2000 is as given in Table 18.
Table 18 - Prediction of Production-Consumption of Pulp (1995-1999)
|
Description |
1995 |
1996 |
1997 |
1998 |
1999 |
|
Consumption (ton) |
1,902,707 |
2,276,233 |
2,534,165 |
2,702,951 |
2,862,018 |
|
Production (ton) |
1,910,566 |
2,282,385 |
2,587,885 |
2,923,560 |
3,045,520 |
|
Balance (ton) |
7,859 |
6,152 |
53,720 |
220,609 |
183,502 |
Source: Capricorn Indonesia Consult, Inc. 1997
Table 18 suggested that there is increasing trend in balance of pulp in domestic market considering to be potential supply for export market. It is a good opportunity to open a new market segment, especially for helping domestic pulp mills are not integrated with downstream industry.
On the basis of the figure above, and considering that the ASEAN Free Trade Agreement takes effect in 2003, a world free market comes into effect in 2006 as well as IMP demands among others to eliminate export tax gradually, the structure of wood-based industries is expected to change dramatically. All kinds of wood-based industries would face a similar challenge and could seek opportunities to become a "winner" in exports. They have to fight to become winners and competition is expected to be more and more serious as players from other countries are also freely involved in the same markets. Under this scenario, one thing that will most probably occur is that environmental and social problems could increase significantly.
Facing the above potentially unstable future, Indonesia is going to hold consistently to the implementation of the principle of sustainability already stated in GBHN. Under this commitment, all possible structural change would be required to operate within imposed limits. The key point is that the future log production from natural forests will be based strictly on natural carrying capacity expressed as the amount of annual allowable cut. Besides, Indonesia would intensify continuously the establishment of forest plantations such as TE, community forests, and community mangrove forests. To achieve realistically all this, Indonesia would involve all possible stakeholders to actively participate in all steps of the forest development process.
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Indonesia is one of the key forestry countries of the Asia-Pacific region and the world. Ideally, a vision of the future developments would have been prepared but the preparation of this document has occurred at a time of particularly high uncertainty. The country has just agreed upon some substantial policy reforms for the economy as a whole, some (such as the proposed liberalisation of the log market) with direct bearing on forestry; the currency has devalued precipitously; many industries have become dislocated. The Ministry of Forestry will need to respond to these rapid changes in addition to recent decisions which give it responsibility for caring for estate crops like rubber, palm oil, tea, etc. In view of this situation, it is best to await a return to more settled conditions before outlining what the future may hold for the forestry sector. |
The phenomena and scenarios illustrated above suggest some implications partly that it is the time to rapidly reform the structure of wood-based industries by providing all industries similar opportunities to develop their industries in a more fair and competitive market atmosphere. It is also necessary for the industry to strengthen its capability and efficiency to get a better bargain in world markets while not forgetting to remain with the bounds of SFM.
The establishment of forest plantations would be intensified through strengthened human resources to speed up the programme. The programme itself is aiming to compensate for log shortage from natural forests as well as to serve as a strategic effort to rehabilitate secondary forest and logged-over areas. In other senses, the programme is also designed to reduce social problems and people pressure on the forest area that will be more serious in the future.
Another possible alternative is to actively promote diversification of forest utilisation, with a view to sustainability; in other words, it is time to intensify non-timber forest utilisation as a complement to timber harvesting. Ecotourism is one prospective choice of such forest utilisation in the future, with the basic idea behind ecotourism being "saving nature by selling it".
The perfect implementation of the above ideas will make it possible to achieve suitable trade-offs between the present and future generations' needs in terms of forest resources. To implement all the above ideas, Indonesia will adopt appropriate supportive policies as well as relevant financial resources.
The likely future conditions illustrated above have implications that are very important for Indonesia. Firstly, there is need to implement structural change in forest-based industries partly to assure reform of the log market and trade mechanism that takes into account a future where world market mechanisms are more influential. Secondly, strongly encourage all forest-based industries to have their product produced efficiently and sustainably so that they can increase their competitiveness in the future world market. Thirdly, since efficiency is a key idea in this context, it is also necessary to create consistency and transparency especially in decision-making processes regarding utilisation of forest as public goods. Fourthly, property rights in forest utilisation must be strengthened and made more clearly defined in future. Finally, relevant policies and actions will be directed to support all these things and make it possible for them to be further implemented. Possible policies and actions will be based on in-depth and comprehensive research and development activities.
