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Commentary: Will the smoke wake up Southeast Asia?

Business Week - October 8, 1997

Michael Shari &150; For years, environmentalists have pleaded with governments in Southeast Asia to save the region's vast rain forests. Officials responded that if wealthy western nations were so concerned, they should foot the cleanup bill. They also downplayed the damage loggers and planters caused by lighting fires every dry season to clear land on Sumatra and Borneo. The consequent smog dissipated quickly enough for Indonesia and its neighbors to ignore these annual pollution spells.

This fall, nature has revealed the alarming hollowness of the official position. A delay in the monsoon and a deep drought have left the fires to burn out of control across 300,000 hectares&150;and the haze to thicken like a deadly blanket. Birds have fallen, and schoolkids have fainted in playgrounds. The economic destruction&150;to tourism, to crops, to land&150;has been huge. The disaster has shown how dangerous it is to rely on reckless development for nonstop growth. And it sends a signal to the region's policymakers: Rethink your attitudes toward the environment and growth now, before it's too late.

Pulp faction

There's a lot to rethink. Local activists at the Indonesian Forum for the Environment charge that the tight connections between the Suharto government and its favored business associates have played a large role in creating this devastating smog. Indonesia's palm oil, plywood, and pulp-and-paper industries win land concessions from the government. Then after cutting down valuable trees, they burn commercially unviable ones and plant cash crops like oil palm, acacia, and eucalyptus. "They use fires for land clearing because it is the cheapest way," laments Antung Dedy, subdirector for environmental damage at Indonesia's Environment Ministry. Also to blame are migrant farmers from overcrowded Java who use their traditional slash-and-burn practices.

Embarrassed by the scale of the disaster, the ministry has announced an investigation into the roles played by 176 companies in starting the fires. But businessmen close to President Suharto are defiant. "Why should we burn? We need the raw materials. It does not make sense," said Mohamad "Bob" Hasan, chairman of Apkindo, Indonesia's plywood cartel, at a press conference. He blamed local farmers and accused environmentalists "that have connections with communist groups" of slandering reputable firms. While the companies deny any wrongdoing, the economic and environmental destruction mounts. Now that zero visibility has closed remote airports, Malaysian travel agencies have lost more than 30% of their business, and Silkair and Merpati Nusantara Airlines have canceled some flights from Singapore. Tourism makes up 3% of Indonesia's gross domestic product, 11% of Singapore's, and 6% of Malaysia's. The out-of-control fires have even destroyed 3,000 hectares of oil palm plantations in North Sumatra. Indonesia, which had hoped to export 4.5 million metric tons of palm oil this year, now has to import oil to meet domestic needs.

The region may suffer permanent ecological damage from this season of woe. In primary rain forests not yet burning, a 20% reduction in sunlight has lowered temperatures by 6C, which will affect fungi in the soil that promote new growth. The fires killed many small mammals, leaving tigers without food. Parched soil and ash will wash out to sea, smothering coral reefs, concludes Ron Lilley, species conservation officer at the World Wide Fund for Nature in Jakarta.

When the monsoons arrive and put out these fires, the region's governments will probably forget the whole matter. That would be a huge mistake. Southeast Asia's development is now so intense that the region's governments must manage it more effectively. That means sharing information on environmental threats with neighbors, giving regulators more clout, funding studies of the impact of logging, scrutinizing the relationship between government and business, and speeding response to disasters. The alternative is to reap more short-term gain until the costs of a polluted environment become overwhelming. That's the kind of setback the now-beleaguered nations of Southeast Asia cannot afford.