Wednesday, August 23, 2017

Minister details role of peat governance in Indonesian GDP

JAKARTA (foresthints.news) - Numerous fundamental steps that have been taken in an effort to implement peat governance in a comprehensive manner are based on various directions from President Joko Widodo. These measures seek, among other things, to prevent any repetition of forest and land fires, in particular those originating in peatlands, in the future.

This was reiterated by Environment and Forestry Minister Dr. Siti Nurbaya to foresthints.news at her official residence on Sunday (May 28).

The minister recalled how the widespread forest and land fires of 2015 spread significantly across peat domes, making them extremely difficult to extinguish, as happened in the province of South Sumatra that same year.

"The fact is that more than 90% of the peat domes on the island of Sumatra have been turned into acacia and palm oil plantations. The situation certainly requires comprehensive peat governance," she explained.

The following two photographs are of peat domes which were burned in 2015 in a South Sumatra pulpwood concession. The fires at that time were very hard to put out. Fortunately, amid much frustration, heavy rain finally arrived to extinguish the peat fires.

 



 

The minister pointed out that 2015's peat fires led to a decline in Indonesia's economic growth that year.

"Indonesia's economic growth didn't reach, let alone surpass, 5% in 2015. Instead, it hovered at around just 4.9%," the minister said.

Peat governance and GDP

Minister Siti Nurbaya went on to explain that data from the Indonesian Central Bureau of Statistics (BPS) indicated economic growth in Indonesia of 5.02% in 2016, more than 95% of which derived from the contributions of sectors other than the palm and pulp & paper subsectors.

The minister said that the contribution of the plantation subsector - which includes the palm oil industry - to overall national Gross Domestic Product (GDP) in 2016 stood at 3.79%. This figure includes palm oil plantations in mineral soils and peatlands.

"The Minister of Industry, in his letter to me, wrote that palm oil accounts for 3% of Indonesian GDP. Of course, these are palm oil plantations in mineral soils and peatlands. This figure means that 97% of Indonesia's GDP does not come from palm oil," the Environment and Forestry Minister explained.

The following two photographs show how a palm oil company in South Sumatra province was caught by the ministry carrying out peat violations by undertaking new palm oil plantation development in 2015's burned peat areas.

 



The minister added that the pulp & paper industry contributed less than 0.76% to Indonesia's GDP in 2016.

Minister Siti Nurbaya elaborated further on Indonesia's GDP figures. "The letter from the Minister of Industry to me also mentioned that the pulp & paper industry accounts for less than 1% of Indonesia's GDP. In other words, more than 99% of the country's GDP does not emanate from the pulp & paper industry."

As such, even though the palm oil and pulp & paper industries play a fairly important part in the Indonesian economy, their contribution is actually below 5%. Nevertheless, these two subsectors continue to receive government support.

Warning from the President

Minister Siti Nurbaya also recalled that in late January 2017, the President gave a warning about the economic losses of over IDR 220 trillion (approximately USD 16.1 billion according to World Bank calculations) caused by forest and land fires, especially those stemming from peatlands.

The minister added that the President described how other sectors of the economy also suffered huge economic losses as a result of 2015's peat fires.

The minister cited some other issues that the President's caution touched on. "This doesn't even take into account the severe losses that the wider public were forced to endure directly - such as health problems and the disruption to education at schools."

Current efforts constructive, not destructive

Minister Siti Nurbaya sought to emphasize that the peat governance efforts currently underway are not at all intended to shut down the ongoing contribution of the palm and pulp & paper subsectors, even though the contribution of these two subsectors to Indonesia's GDP is very small, at just under 5%.

"Peat governance efforts are being done gradually as part of a process, but they must be consistent. In this way, the two instruments of peat governance - regulation and law enforcement - can be implemented optimally," the minister explained.

The contribution of the palm and pulp & paper subsectors of less than 5% is being maintained by peat governance efforts, the minister continued, in exactly the same way as the contributions of other economic sectors/subsectors - which contribute in excess of 95% to Indonesia's GDP - are being maintained.

"The ultimate goal of these peat governance efforts is to bring about healthy and good-quality economic growth, as opposed to economic growth tainted by peat fires which cause public health problems and disturb other economic sectors/subsectors," Minister Siti Nurbaya summed up in concluding her interview with foresthints.news.

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