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Thursday, 13 October 2016

Forestry Industry (Logging, HTI, Plywood, Pulp, and Paper)

Published Date
Forest Resources Management in Indonesia (1968-2004)
pp 35-84

  • Herman Hidayat


This chapter discusses the state as the main actor in forestry management under the Soeharto government. When Soeharto came to power in 1966, after then-president Soekarno stepped down, he launched an economic program aimed at dragging his country out of the economic backwardness suffered by Indonesia, with high inflation and extreme debt. The forestry sector, based on the 1967 Foreign and Domestic Investment and Forestry Act, was a major part of the economic agenda to develop logging exports from 1968 to the 1970s, the plywood industry in the 1980s and 1990s, and the pulp and paper industry. The logging and industrial timber plantation (HTI) concession areas are in production forest. The Ministry of Forestry provides about 60 million ha of production forest. The first part of this chapter begins with the establishment of the 1967 Foreign Investment and Forestry Act, inviting private businessmen from foreign and domestic sources to become the main actors in the forestry sector by providing logging concessions and supporting the setting up of plywood, industrial timber plantations (HTI) and pulp and paper industries. The Soeharto regime obtained huge foreign exchange earnings from the forestry industry to a total of almost US$3 billion in 1990 alone, the second largest national income after the oil and gas sector. Therefore, several significant issues related to the forestry industry under the Soeharto government era are discussed in this chapter, chronologically through: (1) the introduction of logging forest concessions (HPH); (2) the plywood industry from the 1970s to the 1990s; (3) industrial timber plantations (Hutan Tanaman Industri/HTI); (4) the pulp and paper industry since the end of 1980s; and (5) the impact of the forestry industry on social conflict regarding land disputes between private companies and the local people.


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