Rattan Smugglers Scoff at Export Ban

Don’t put your nest egg into rattan baskets and try to ship them out of the country. You might be arrested for smuggling.

Not only that. When the problem first appeared, Atty. Gen. Sukarton Marmosudjono said: “I may have to use the subversion law and threaten smugglers with the death penalty.”

Three shipping containers filled with loosely woven baskets were impounded recently. Their owners, not identified, were accused of trying to sneak raw rattan out of Indonesia in the form of finished goods, which can be exported legally.

Officials said the baskets were to be dismantled in another country and the rattan crafted into more valuable products.

A government prosecutor demanded life in prison and a fine of 30 million rupiahs ($16,593) for H. W. Ng, who was charged with illegally exporting almost 2,000 tons of raw rattan to Hong Kong and Taiwan.

Ng fled Indonesia before the court delivered the sentence demanded by the prosecution.

Indonesian jungles produce more than 80% of the world’s rattan. Vines of the long, flexible wood, which grows wild, once were exported in huge quantities to be made into wicker furniture, baskets and other items.

Wicker is a catchall term for items woven of rattan, reed, cane, dried grasses and other flexible materials, even twisted paper. Rattan, willow and bamboo are the most popular natural fibers, according to industry sources in Jakarta.

After timber, rattan is the most important forest product in Southeast Asia. Despite its near-monopoly, Indonesia made relatively little money from rattan because it exported only the low-value raw material, not such finished products as furniture.

Foreign manufacturers, most of them in Taiwan, Hong Kong and China, made the real profits.

To change that, the government imposed a ban in late 1986 on the export of raw rattan. A later decree specified that semi-processed vines and cane webbing could leave the country only in the form of furniture or other finished products.

The Philippines banned raw rattan exports in 1977, Thailand in March, 1977, and Peninsular Malaysia last year.

Indonesia’s purpose was to develop manufacturing industries that would make rattan furniture and create jobs.

Similar methods were used to force the growth of a domestic plywood industry. After a ban was imposed on the export of uncut hardwood logs in 1985, Indonesia became the world’s leading source of plywood.

“We are the world’s biggest exporter of plywood, and in the near future it is hoped that this will be followed by the export of finished goods made of rattan, which is a natural resource possessed by few other countries,” President Suharto said.

Criticism of the ban came from the European Community, United States and others. They pointed out that Indonesia is a member of the General Agreement on Tariffs and Trade, which discourages non-tariff barriers.

Some critics said the ban was imposed before Indonesia had established itself as a producer of quality finished products. Sophisticated marketing methods were neglected by a government that had viewed rattan goods as handicraft, a cottage industry.

Stockpiling of raw rattan before the ban and smuggling since gave foreign manufacturers a few years of breathing space. New sources of supply are being developed in Vietnam and Papua New Guinea, but those who want to continue using Indonesian rattan legally must invest in plants within the country.

Officials say Indonesia has 280 rattan processing companies, compared to 33 in late 1986. More than $250 million has been invested in new factories and more than 80,000 jobs provided, they say.

Indonesia exported about 70,000 tons of raw rattan annually before the ban. It brought in $63 million in 1985 and exports of semi-finished rattan brought total earnings to $86 million.

Last year, rattan exports earned more than $330 million.