Why Local Government Fail to Conserve Forest Resources?: A Gap Analysis of Fiscal Policy in Forestry Sector
F. Nurfatriani, D. Darusman, D. R. Nurrochmat, A. E. Yustika, Z. Muttaqin

Source: SEAMEO BIOTROP's Research Grant | 2013


The design of fiscal policy is expected to be structured as green design incentives for the parties especially the local government to conserve forest areas, especially in some districts in Indonesia which still havesignificant forest area. However, although some fical policies in Indonesian forestry sector are aimed atsupporting forest conservation, evidence shows that there is an increasing rate of deforestation and forest degradation. It is believed that there is some problems in the implementation of fiscal policies in forestry sector. The aim of this study is to analyse the gap between idea and implementation of fiscal policies in forestry sector.  This study modifies policy analysis method suggested by Krott (2005) to examine the regulatory, fiscal, administrative and informational gaps in the implementation of fiscal policy in forestry sector. In terms of regulatory instrument, there are conflicting regulations as well as lack of appropriate regulations to encourage local government in prioritising forest conservation. Related to the administrative instrument, thereare lack of coordination among agencies leading to suboptimal collection of NTR in forestry sector. Regarding fiscal instrument, fiscal policies in forestry sector are still focused on the valuation of timber and have not considered the environmental and social values of forest resources. In relation to information instrument, the management information system is still weak and there is lack of support from qualified human resources. The results imply that implementing green fiscal policy in the current situation needs to consider stepping strategies with the first step is providing a comprehensive regulatory framework and the second step is preparing human resources at the district level. Once the two steps are done, the implementation of the green fiscal regulation may work well.

Keywords: conservation, green fiscal policy, shared forestry revenue, gap analysis

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