Everybody loses
p. 15 · Read in the full issue
By Samvulum
IN a follow-up report, FIA research officer Tate said the PNG Government stands to lose about SUS9O million in
foreign exchange earnings and SUS3O
million in tax revenue as the worsen ing Asian economic crisis creates havoc for the PNG timber industry.
He said landowners would lose about SUSI 2 million in royalties and .other pay ments. A January survey by the FIA cover ing its members who operate about 70 per cent of the industry revealed the widespread impact of the crisis in Asia - PNG’s traditional export market.
Tate said that since the crisis began at the end of last year 3530 Papua New
Guineans and 436 expatriates had lost their jobs. The figures, he said, represented about 30 per cent of the total industry workforce.
Of the 21 companies surveyed, Tate said 13 had ceased production altogether while the rest were operating at an average 30 per cent capacity with emphasis placed on reading, maintenance and production for processing only. He said there was a total of 332,600 cubic metres of timber in stock of which only 174,200 cubic metres were subject to sales negotiation while 46,000 cubic metres worth about SUS 4 million had been written off. Tate said the companies predicted significant falls in production and exports this year compared with 1997. Forward estimates, he said,
were for production of 2.5 to 2.7 million cubic metres and exports of 1.7 to 2.3 mil lion cubic metres. He said: “This is a decline of approximately 1 million n cubic metres on the 1997 level.
The losses to the industry participants based on these figures would be: foreign exchange loss of SUS9O million, losses to government tax revenue of K3O million and losses to landowners from royalties and other payments of KlB million.
“Overseas export demand for PNG timber products and logs is at a low point wdth buyers unwilling to commit themselves to further shipments, even at low prices.” Tate said the outlook for employment in the industry was bleak and could worsen if the market conditions deteriorated further. ■