Social equity of voluntary boards is favorable due to the lack of discrimination between small 

and large board members.  Mandatory boards were found to negatively impact within a social 

context by transferring risk of changing market prices to those groups traditionally 

disadvantaged in society; that is, the low income and resources poor communities, which may 

or may not be in rural areas.  Mandatory boards have negatively impacted sustainability of 

natural resources management by moving natural resources and the Indonesian economy 

further away from sustainable development.  For example, the incentives provided to plywood 

producers under The Indonesian Plywood Marketing Association s (APKINDO) coercive 

marketing arrangements clearly encouraged maximization of the volume of timber processed 

into commodity grade plywood.  "By no stretch of the imagination could such a forestry 

resources development trajectory be called sustainable" (NRMP Report No. 55). 

Lesson Two: Impacts of Policy Recommendations and Identifying Appropriate Policy Clients 

While results of NRMP s trade policy studies provided clear directions for future policy 

development, little response was achieved in creating alternative policy settings.  Increased 

government focus was placed on some of the marketing associations, but the need for further 

deregulation retained its economic policy dominance.  The lesson learned from these studies 

pertains to the critical importance of identifying an appropriate policy client, who holds the power 

and responsibility for the policy issue at hand.  As with all economy wide policies, the power 

within the policy process does not lie solely within planning agencies or agencies responsible for 

natural resources management.  As such, policy recommendations from these agencies are 

often rejected by those who hold power within economic trade policy decision making as one 

means of limiting the agencies' power and influence within the policy process.  The rapid 

movement and loss of project champions within a given GOI agency also limits the usefulness 

of policy analyses. 

1.3.5  Economic and Environmental Interactions  

NRMP developed a predictive capacity for Bappenas to assess impacts of alternative economic 

growth strategies on important environmental  parameters.  The purpose of the forecasts was to 

provide planners with input into the second twenty five year long term development plan.  

NRMP sought to identify an appropriate balance between modernizing traditional sectors and 

establishing new industries.  Identifying industries worthy of encouragement was a secondary 

goal of the project.   

NRMP used data from twelve sectors on expected technological change and current and 

expected input output relationships to develop a dynamic input output model.  The model was 

used to identify impacts of economic growth and technical change on employment, natural 

resources use, and environmental degradation in Indonesia.  The period covered was from 

1985 to 2020.  Two economic growth scenarios (5% and 7% GDP growth per annum) with two 

technological change strategies were modeled:  i) continuation of existing trends and policies, 

and ii) an alternative strategy with emphasis on environmental protection. Technological change 

was quantified as changes in intermediate, capital, and labor inputs per units of output as well 

as measures of natural resources use.  For comparative purposes, the base scenario combined 

a moderate economic growth rate, with a continuation of current policies towards the 

environment.  For the electricity sector, a third scenario involving cleaner production of power 

was included in the model.   

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