Indonesia: Japanese debt means ban on Teak exports ends?
Elfian Effendi, executive director of Greenomics, a nongovernmental
organization, said the government should lift the ban on log exports
only to Japan. The exports, he said, should only be allowed if Japan
intended to erase Indonesian debt. “If Japan agrees to use log exports
as a form of compensation to erase Indonesia’s debt, then log exports
can be allowed,” Elfian said in December. According to Elfian, more
than 70 percent of Indonesia’s foreign debt is with Japan. In
addition, Japan always asks Indonesia to open teak log exports to the
country.
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State-owned forestry company PT Perhutani said it supported the
government’s plan to lift the ban on teak log exports so it could
export its excess supply due to weak domestic demand. “We can export
90,000 to 100,000 square meters of teak logs,” said Upiek Rosalina
Wasrin, chief executive of Perhutani. “I hope Perhutahi can [start]
exporting it this year.” Upiek said that exporting high quality teak
logs was urgent because the domestic market can only absorb a small
number of good quality teak due to its high price. High class teak
logs sell for Rp 20 million ($1,760) per square meter in the
international market. Perhutani produced 300,000 square meters of
high-quality teak wood in 2008.
The domestic market can only absorb
about 10,000-15,000 square meters for the furniture industry. The
demand could further decline this year due to the economic slowdown.
Upiek also emphasized that the company would only export
premium-quality teak logs and retain medium-quality teak for the
domestic market.
Earlier, Forestry Minister M.S. Kaban said the
government could lift the ban on log exports from industrial forests
in anticipation of a decrease in demand in the domestic market because
of the global crisis. One reason why exports of teak logs was banned
was to control illegal logging.
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Lifting a ban on export of logs is indeed the need of hour during this economic slowdown. By doing so, it would certainly fetch the better price for the high quality teak logs by opening it to global market rather than restricting it to any particular country. This will also make it less dependent on the domestic markets for consumption to a great extent.
However, prolonged delay would also result in deterioration of the quality caused due to occurence of hollows after a period of time. This move would certainly lead to optimum utilisation of the resources for the country and serve the purpose for its nation.
Initiative is pretty simple and straight forward.
Hope to see a postive move in this regard very shortly.