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A changing resource frontier

A basic problem

A period may now be approaching in which timber and the timber-based industry will decline in both absolute and relative importance in most of Borneo. Energy and other minerals, especially the large offshore oil and gas resources now being developed in the seas to the north and east, are likely to increase in significance. The rate of expansion of "non-oil exports," of which plywood occupies a major share, has been declining in Indonesia over the last three years (Nasution 1991; Parker 1991). Both in Malaysia and in Indonesia, oil and gas are expected to remain important energy sources well into the next century. New reserves discovered recently off the Mahakam mouth in East Kalimantan have countered predictions that both reserves and production were set to fall (OPEC 1991). Indonesia is now the world's largest exporter of liquefied natural gas (LNG), about one-half of it coming from the East Kalimantan field, and mainly destined for the Japanese market. New oil and gas fields are also being developed off Sarawak and Sabah, the former linked to the LNG plant at Bintulu, the output of which will almost double by 1995 (Malaysia 1991a).

These developments will give greater value to the mineral-rich parts of Borneo in the two national economies, but they may also put off the day when dependence on a resource-extraction strategy of development has to be relinquished. Byron and Waugh (1988) suggested that "Ricardian" limits, approached through rising economic and social costs, would bring resource depletion to a tapering end rather than a sudden "Malthusian" exhaustion. Despite signs that this is true, the delusion of inexhaustible resources has persisted well into the "Ricardian" period, so that where an end has come it has done so suddenly.

Economic criticality and resource criticality have arrived together in Sabah and threaten to do the same in parts of Kalimantan and Sarawak within a few years. Thus, these areas are clearly endangered, in the terms discussed in chapter 1. This is the consequence of basing rapid economic growth on a resource that is mined to quick exhaustion. It is the consequence also of treating all seemingly vacant land as though it were equally available for agricultural development; success, where achieved at all, has often been brief in the absence of large subsidies on imported fertilizer. Moreover, rising costs may trigger a sudden decision to halt large programmes. The basic problem has, in all cases, been a careless approach to the sustainability of resources.

Institutional weaknesses

The national and state institutions that have either spearheaded the development drive or provided massive support to its private agents have begun to change tack in the face of partial exhaustion of resources. A period of more careful and conservative management may now be ushered in, with less licence to greed and corruption than has occurred in the past. Even in the national heartlands of Malaysia and Indonesia, however, the institutions of environmental management are not strong. Across just a narrow sea they become very much weaker. Barber (1989) remarks, of a much wider area, that its institutional frameworks for environmental and resource management are a patchwork rather than a system. Both in Malaysia and in Indonesia the environmental ministries and agencies created in the 1970s are without line responsibility and have very limited professional staff. Malaysia has fewer than 100 professionals charged with a huge range of duties over the whole country and lacks both equipment and funds (Sham 1987, 64). Meanwhile, in Indonesia:

The State Minister of Population and the Environment, who does not head a department, lacks the competence to make, let alone enforce, ultimate judgements on land-use and development proposals. Government Regulation No. 29 of 1986 concerning Environmental Impact Analysis, with its forty clauses that include reference to various interdepartmental commissions at different levels, has not helped to simplify a complex problem, especially since it makes no mention of legal consequences for those who ignore its stipulations. (Hardjono 1991,13)

Actual responsibility for environmental management is widely dispersed among ministries and agencies, the centre, and the states and provinces. Their primary goals are not centrally concerned with the environment, and they are not legally or administratively obliged to accept direction from the environmental ministries. Coordination is difficult to achieve, and great scope exists for interested persons and organizations to subvert outcomes in their favour. This remains a major problem in both parts of Borneo, where state officials and ministers can face charges of corruption over the issue of timber licences without losing position or power, and where inspection to ensure compliance with regulations on the ground is minimal. Good policies may be in place, but good enforcement and even the political will to encourage enforcement are ill developed.


Even an interim balance sheet cannot rest in Borneo alone, for Borneo is but part of two countries. The benefits gained by society in Borneo have been reduced by the considerable flow of wealth outside the immediate region, but national revenues gained from Borneo have brought important benefits in the form of more rapid development to the two nations as wholes. The severest pressures arising from development have been felt by the indigenous people of Sarawak and Kalimantan, yet the impacts have not been wholly negative. The indigenous societies of Borneo are adaptable, not fragile, and though their interests have received low priority in national decision-making, they have gained diversity of economic and social opportunity and are in no danger of being destroyed. Some of the migrant settlers and workers have done well, but others find they are little better off than they were at home.

Notwithstanding rapid industrial development in the South-East Asian region and the growth of insecure employment opportunities for South-East Asians in North-East Asia and the Middle East, population growth alone makes it likely that both legal and illegal migration to resource-frontier regions will continue to be a major factor in regional development through the coming generation. Oil, gas, other mining, and resource-based industries will produce a geographical pattern of opportunity different from that created during the boom based on timber, but will not of themselves change the basic status of the Borneo provinces and states within the two countries. This requires a sort of development that is not yet in sight, yet the whole environmental future of the island depends on the evolution of a more integrated set of economies in Borneo.

East and Central Kalimantan, and Sarawak, still have a considerable portion of their forests though large areas have already been logged once; only Sabah is already at the end of a period based on the exploitation of old-growth timber. Land settlement is in difficulties, and major decisions are needed about the agricultural future in all parts of Borneo. There is opportunity for change. For the forests themselves, the future is uncertain. Better management and less rapacious cutting, if they come about, will help. Replanting of cut-over and degraded areas will probably improve the condition of the land and the economy, but the loss of biodiversity creates risk, and the rich diversity of the Malesian rain forest will survive only in quite limited areas, few of them in the lowlands. Perhaps the main hope for the forests will, after all, be Ricardian. As costs rise, demand for all but specialized woods may shift back from tropical forests to the temperate lands (Vincent 1988). The now very probable "opening up" of the eastern Siberian forests for the North-East Asian market (Australian Financial Review, 20 September 1991) will be of no benefit to the global environment but could yet be the saving of what remains of the rain forests of South-East Asia.


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