Decentralization of Forest Administration in Indonesia, Implications ...

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Christopher Barr, Ida Aju Resosudarmo, John McCarthy, and Ahmad Dermawan 17 a specific geographic and/or administrative locale at a particular point in Indonesia’s decentralization process. Readers who are interested in a more detailed analysis of the changes occurring in particular regions are encouraged to consult these case study reports, all of which can be found at http://www.cifor.cgiar.org . Endnotes 1 This section draws heavily on Anne Larson’s excellent synthesis of the experiences and lessons learned from forestry sector decentralization initiatives in Africa, Asia, and Latin America (see Larson 2005). 2 Citing Bazaara (2003), Larson notes that “the obvious response to low capacity is to build capacity, not recentralize control; another is to retain certain technical decisions, but not all decisions.” 3 Agrawal and Ribot (1999) emphasize that in analyzing any decentralization initiative, it is particularly important to understand why some powers are not devolved: “It is precisely by an examination of what is not devolved that the hidden politics of decentralization becomes visible and the influence of these hidden interests becomes amenable to analysis.” 4 Larson notes, however, that deGrassi (2003) makes these arguments in reference to forest administration in Ghana, but does so “without any recognition or admission that central control has in fact failed to protect forests sustainably.” Moreover, she points out that “these arguments have been used to justify appropriation of forest resources by the government, elite and domestic and international firms, and are presented in terms of decentralizing all powers to all forests versus decentralizing nothing.” 5 The forestry reforms included in the January 1998 Letter of Intent between the IMF and the Indonesian government were largely aimed at promoting sustainable forest management through enforcement of selective cutting regulations, increasing the government’s capture of timber rents, and raising efficiency levels in all segments of the timber and wood processing industries. See Barr (2001) for a more detailed discussion of how structural adjustment was implemented in the forestry sector.
Chapter 2 Forest Administration and Forestry Sector Development Prior to 1998 1 Christopher Barr 2.1 Introduction In the forestry sector, Indonesia’s decentralization process has occurred after three decades of highly centralized control over forest administration and intense timber extraction under Soeharto’s New Order regime. When the New Order government came to power in 1966, however, commercial timber extraction in the vast hardwood forests of Indonesia’s ‘Outer Islands’ 2 existed on only a very small scale, and the central government held little authority to administer forests in these regions. The Soeharto government moved quickly to secure the state’s legal-regulatory control over the nation’s forests with the introduction of the Basic Forestry Law in 1967. After a brief period of sharing administrative authority with provincial and district governments, the New Order leadership concentrated control in the hands of the national forestry bureaucracy and embarked upon a project of large-scale industrial logging. Over the ensuing decade, the New Order government distributed some 60 million ha of Outer Island forests to private and state-owned timber companies, many of which were closely linked to military and political elites. During the early-1970s, Indonesia emerged as the world’s largest exporter of tropical logs, and the forestry sector became the country’s second-largest source of GNP. With a national ban on log exports in the early-1980s, the government pushed the sector downstream into plywood production and concentrated the industry into the hands of a few powerful conglomerates. Through the 1990s, the government also provided lucrative subsidies to support a series of major investments in the pulp and paper industry. In adopting such policies, the New Order government transformed the forestry sector into an important engine for national economic development. At the same time, it also effectively transferred several billion dollars in timber rents to a relatively small number of companies associated with the regime’s senior leadership. This chapter traces the changing dynamics of administrative and regulatory control in Indonesia’s forestry sector from the period following the nation’s independence in 1945 to the end of the New Order regime in 1998. In doing so, it describes the historical context within which the considerable pressures for decentralized control of forests during the post-Soeharto period have emerged. Indeed, the policies and practices employed by the New Order government to secure timber rents for elites at the national level generated deep resentment among stakeholders in forested regions throughout Indonesia. At the same time, the Soeharto regime’s emphasis on rapid timber extraction as a means to generate both government revenues and informal
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Page 7 and 8: Preface Indonesia is currently ente
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References Agrawal, A., Ostrom, E.
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Since the collapse of Soeharto’s
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