Rattan issue becomes political, fuels minister's rage

The Jakarta Post ,  Jakarta   |  Sat, 03/28/2009 1:39 PM  |  Business

It took one text message on the shortage of raw rattan supplies to fuel Industry Minister Fahmi Idris' rage.

"The coordinating minister *for the economy Sri Mulyani Indrawati* sent me a text message last night. She said the president *Susilo Bambang Yudhoyono* was worried about the furniture industry because there is a lack of raw rattan," Fahmi told reporters on Friday.

Indonesia is the world's top rattan producer and exporter, accounting for over 80 percent of world supply. Ironically, rattan exports have consequently resulted in a shortage in the key raw material for the country's lucrative furniture and craft industries.

The government had introduced a regulation banning the export of the commodity. However, it lifted the ban with a decree from the trade minister in 2005.

The 2005 regulation allows for the export of a maximum of 25,000 tons of raw rattan per year, a maximum of 16,000 tons of semi-finished rattan produced from sega and irit plants per year and the export of a maximum of 36,000 tons per year of semi-finished rattan produced from other plants.

On top of that, better export prices, along with the value-added taxation on the domestic sales of rattan products, have also discouraged raw rattan suppliers from selling to the domestic market.

Fahmi was offended as he said the message somehow implied that the ministry had not done enough to deal with the issue adding that he suspected a political motive behind the move.

"Now, I wonder why in the world they decide to resurface this rattan problem nearing the general elections? While the fact is, the industry ministry sent letters and documents proposing a solution for the issue three years ago, but nobody did anything," he said.

"I have even sent two very long letters to the president himself regarding the issue but let's not take this context into the political domain even though I am affiliated with the Golkar Party," he added.

The Golkar Party, chaired by Vice President Jusuf Kalla, is, along with SBY's Democratic Party, one of the major political parties competing in the upcoming elections.

Fahmi reiterated a request he claimed to have made long ago - reintroduce a ban on the export of raw rattan.

"No more exports of raw rattan! Exports can be allowed only on the semi-processed and fully-processed rattans such as furniture."

Indonesian Rattan Furniture and Craft Association (AMKRI) Chairman Hatta Sinatra previously said the country was running short of raw rattan since the implementation of the regulation, leading to the closure of hundreds of enterprises including small production houses.

AMKRI Secretary-General Abdul Sobur said the closures of the 144 enterprises in Cirebon, West Java, had caused 60,000 to 70,000 job losses. Cirebon is home to 80 percent of the country's total rattan enterprises.

The Central Statistics Agency (BPS) recorded that the value of finished rattan exports reached US$343 million in 2006 and US$319 million in 2007. (hdt)

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