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Jakarta Post

A win-win solution for economy, environment

  • Nassat D. Idris
    Nassat D. Idris

    Forest and climate change specialist at the US Agency for International Development

Jakarta   /   Thu, June 9, 2016   /  11:53 am
A win-win solution for economy, environment Workers plant oil palm seedlings at a palm plantation in Kapuas Hulu, West Kalimantan. (Antara/Andre)

On International Forest Day 2016, President Joko “Jokowi’ Widodo announced an encouraging plan to issue a moratorium on new oil palm concessions.

The oil palm concession moratorium will underpin a two-year extension to an existing moratorium on primary forest clearing and peatland conversion. 

The new moratorium is expected to halt the main driver of deforestation over the past two decades. While debates arose following the announcement, we are presented with an opportunity to improve forestry sector governance for sustainable development.

Spanning 67 percent of Indonesia’s terrestrial area, forest lands have been under threat due to pressure to expand the palm oil market and accommodate economic development interests. While these problems persist, the forestry sector has not been able to counter the threats with tangible alternatives for economic opportunities. 

In fact, the contribution of forestry to gross domestic product ( GDP ) has been in continuous decline to the point where it fell below 1 percent of GDP in 2012. 

The forestry business is now dominated by logging and globally, timber is now a sunset industry. In Indonesia, the forestry sector is not even identified as a national development priority under the National Medium Term Development Plan 2015-2019. 

As a result, the recently allocated budget for the Environment and Forestry Ministry was only about 20 percent of the Agriculture Ministry’s budget, even though the Agriculture Ministry does not have any land jurisdiction. 

As a result, the Environment and Forestry Ministry has received requests to convert a large amount of its forest area to encourage economic growth, particularly through agricultural production. To address these challenges, the government has to start considering forest resources as a platform for Indonesia’s economic development. Forests should be seen as a source for sustainable growth and the benchmark for other sectors’ development. 

This way of thinking contradicts current approaches that are more focused on limiting agricultural commodities’ land expansion by increasing productivity and as a byproduct, increasing conversation.

With the third-most tropical forest of any country, Indonesia has enormous forest areas that produce tangible and non-tangible value as resources for economic growth. 

Indonesia can create demand for various creative forest-based business models such as ecotourism, bioprospecting, forest-friendly food products, fresh water supply, non-timber forest products, educational resource centers and streamlining sustainable logging and rattan with the creative industry. 

From a comparative advantage perspective, Indonesia has the potential to take the lead in an unlimited market space. 

To shift toward more forest friendly economic development, the Indonesian government, which is mandated by law to manage forest resources, must develop enabling conditions for sustainable forest-based business development.

The first priority is for the Environment and Forestry Ministry should be to employ an asset management strategy for the forest resources falling under their jurisdiction. 

The ministry should evaluate and capitalize on all economic resources within the forest area as government assets and should focus on growing those assets, including but not limited in scope to, timber, biodiversity, mineral resources, environmental services, and scenic landscapes. 

This asset inventory and database should ideally be conducted on a multilayer scale from the national level using the existing network of forest management units ( FMUs ).

Assigning an economic value to the natural resources under the ministry’s forest jurisdiction is crucial since the current licensing system and other decisions informing forest conversion are being made without considering these natural resources as assets. 

In turn, the forest assets’ value should become the baseline for any national or local level development plan and resulting investment decisions.

They should also be used as a benchmark when devolving authority and responsibility for the management of production and protected forest areas to the provincial government. Having government consider forests as robust high-value assets will strengthen their oversight and commitment to keeping them healthy and intact.

Secondly, good science should be a fundamental guide for all natural resource decisions. Understanding and applying relevant and progressive research will help land managers and the public better evaluate the right uses of forest assets. It will also accelerate return of future forest value to present value.

Thirdly, the government needs to foster forest entrepreneurship, recognizing the untapped potential of forest-based business models and the fact that this is a new and uncontested market with little competition. The domestic market should be considered the primary potential market space.

In turn, the enabling conditions for this new forest-based business development and entrepreneurship will need to be supported by a broad coalition of partners, especially partners in the private sector.

If the government makes changes in managing forest assets with the use of sound science, research and an eye toward growth and entrepreneurship, then the Indonesian economy has the potential to transform into a forest-based economy and end the debate on competing land use.

As forests face many threats, it is our job to manage them sustainably and ensure that our forests benefit Indonesia for generations to come.


The writer is a forest and climate change specialist at the US Agency for International Development. The opinions expressed in this article are his own.


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Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.