Abstract
The jewel in the East Asian economic miracle of the 1980s and 1990s came crashing to earth during late 1997 with a collapse of the currency and disintegration of the banking system. By mid-1998 Suharto was forced out of office by a tidal wave of street protests, and raging fires were ablaze throughout the land. In this paper we draw attention to the fundamentals of the finance crisis and the environmental crisis as they relate to the state of tropical rainforests in Indonesia. It is concluded that, somewhat ironically, the dramatic collapse of the Indonesian economy and the devastating forest fires of the late 1990s may lead to the preservation of one of the earth's most significant heritage sites, the tropical rainforests and biodiversity of Indonesia.
Highlights
HistoricalParts of the Indonesian archipelago were inhabited as early as half a million years ago and forms of shifting cultivation would have been practised from very early times
The World Bank has been criticised by most international Environmental nongovernmental organizations (ENGOs) for being a force for regressive change, and the structural adjustment program" (SAP) have become noted for generating political upheaval, regressive environmental results, and increasing poverty amongst the sub-dominant groups in the less-developed world (Rich, 1994)
The forestry sector of Indonesia is situated at a major point of transition
Summary
Parts of the Indonesian archipelago were inhabited as early as half a million years ago and forms of shifting cultivation would have been practised from very early times. During this time logging and related industries contributed an average of 20% of Indonesia's total foreign exchange revenues and generated personal and corporate wealth for those involved in forest industries. It was not until the New Order government of Suharto, at the instigation of the World Bank, that there occurred the systematic and rapid exploitation of the forests to finance the increasing foreign debt and to tackle the 85% inflation rate. While the country was dazzling investors with 8 to 10% annual growth rates, Suharto's "New Order," as his 32-year reign was called, had been raiding the country's treasure house of natural wealth and cheap human labour This was accomplished by maintaining a veneer of impressive exports and returns on investment and by liquidating the country's natural capital. The long-term goal of the government has always been to raise growth to 6% in order to rapidly absorb the increasing labour force (Bird, 1996, p. 3; United States Central Intelligence Agency, 1994; World Bank, 1994, p. x)
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