No other sector in Indonesia’s economy has more potential for improving the welfare of the rural poor as does forestry and it is within the rural regions that most forestry activities are carried out.

From forest land surveys to sustainable natural forest management and industrial timber plantation, from logging and road construction to forest-based industries, from saw milling to paper manufacturing, from forest product harvesting to forest product marketing, the sustainable development of wood and non-wood products will create an additional six to eight million jobs by the year 2000. The Ministry of Manpower also estimates that for each job created in forestry, 1.18 jobs are created indirectly. The Ministry predicts that saw milling and plywood manufacturing has an even higher multiplier of 1.47, while paper and pulp production’s multiplier is 2.06 indirect jobs created.

In an effort to develop secondary processing of forest products, generate foreign exchange and promote conservation measures, Indonesia placed severe restrictions on the export of raw logs in 1980. A total ban followed in 1985. These actions did succeed in developing the country’s highly successful saw milling and plywood industries while protecting natural resources.

A similar strategy to restrict and ultimately ban the export of raw and semi-finished rattan products has helped to conserve rattan resources and has nurtured the development of the furniture trade and secondary processing industries. Prior to the ban in 1988, some areas became depleted of rattan stock. Just two years after the ban, the value of finished rattan products jumped to $118 million.

Through these legislative directives the country has moved from being an exporter of raw tropical hardwoods to an exporter of finished products, creating jobs and supporting industries. Plywood is the country’s second largest industrial export item after textiles, currently earning nearly $3.5 billion in foreign markets. Besides plywood, one of the most important timber-based wood products in Indonesia is sawn wood. The Indonesian experience shows that moving from sawn timber to finished wood products is a slow process. The labor intensity of the furniture industry, however, makes it an important and promising investment in the nation’s future. Indonesia has already established 133 plywood mills, 2,708 sawmills, 344 rattan facilities and 127 solid wood furniture plants through the national forest-based industrial development program.

Indonesia, with the assistance of the international donor community, is helping its people realize both livelihood and employment opportunities from its non-timber forest resources. Oil, nuts and native medicines are but a few of the forest’s products now being carefully harvested to prevent depletion. Considering the importance of non-timber forest products as a source of income for the rural community, the rural cooperatives (KUD) are encouraged by the Government to take part in its harvesting and utilization. In several provinces, access to non-timber forest products is given exclusively to the KUD in the form of collection rights.

Rattan is Indonesia’s most important non-timber forest product. The nation is exploring optimum ways of managing the industry’s growth in an environmentally compatible manner while sustaining harvest levels of approximately 575,000 tons annually. A current project in South Kalimantan is helping villagers grow rattan canes in previously harvested production forests. With the help of international assistance and the Rural Population Development Program, the development of small-scale rattan plantations and forest-fringe plantations is beginning to thrive.

It is estimated that every one dollar invested in non-timber forest development projects yields at least seven times that amount in benefits for the Indonesian people. A beekeeping project in South Sulawesi with technical assistance provided by Japan has demonstrated a return on investment of up to 300 percent. With technical expertise and extension support, the Government hopes to replicate a successful Malaysian program to extract sago flour from sago palms and create as many as 2,400 jobs in a new secondary industry in Maluku.