The Bamboo and Rattan Sectors in Asia: an Analysis of ... - INBAR
The Bamboo and Rattan Sectors in Asia: an Analysis of ... - INBAR
The Bamboo and Rattan Sectors in Asia: an Analysis of ... - INBAR
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Further up the PCS, export regulations (or fiscal mech<strong>an</strong>isms apply<strong>in</strong>g to exports)<br />
have a strong impact on the sector, especially <strong>in</strong> Indonesia where ratt<strong>an</strong> production<br />
exceeds domestic consumption. In effect, such export barriers serve as a tax on raw<br />
material producers, <strong><strong>an</strong>d</strong> a subsidy to m<strong>an</strong>ufacturers <strong><strong>an</strong>d</strong> exporters <strong>of</strong> f<strong>in</strong>ished products.<br />
In other words, it re<strong>in</strong>forces <strong>an</strong> exist<strong>in</strong>g imbal<strong>an</strong>ce <strong>of</strong> power <strong>in</strong> favor <strong>of</strong> m<strong>an</strong>ufacturers<br />
<strong><strong>an</strong>d</strong> exporters to the disadv<strong>an</strong>tage <strong>of</strong> raw material producers.<br />
<strong>The</strong> ma<strong>in</strong> fiscal <strong>in</strong>centives operat<strong>in</strong>g <strong>in</strong> the ratt<strong>an</strong> sector currently are the taxes<br />
on the export <strong>of</strong> raw material that replaced the orig<strong>in</strong>al regulatory export restrictions.<br />
Indonesia <strong><strong>an</strong>d</strong> the Philipp<strong>in</strong>es have imposed such taxes. <strong>The</strong> effect is essentially the<br />
same as that <strong>of</strong> the regulatory mech<strong>an</strong>isms because the taxes are so high as to be<br />
prohibitive. However, unlike the outright b<strong>an</strong>, the tax mech<strong>an</strong>ism allows for some<br />
<strong>in</strong>cremental adjustment. That is, the tax could be reduced to encourage some exports<br />
<strong>of</strong> raw material while still keep<strong>in</strong>g prices down <strong>in</strong> the produc<strong>in</strong>g country. In Indonesia,<br />
for example, small-diameter c<strong>an</strong>e is available <strong>in</strong> surplus, <strong><strong>an</strong>d</strong> prices are so low that<br />
some ratt<strong>an</strong> gardens are be<strong>in</strong>g converted to other uses. At the same time, there is a<br />
dem<strong><strong>an</strong>d</strong> on the <strong>in</strong>ternational market for small-diameter c<strong>an</strong>e, <strong><strong>an</strong>d</strong> for semi-processed<br />
c<strong>an</strong>e products such as core <strong><strong>an</strong>d</strong> sk<strong>in</strong>. Indonesi<strong>an</strong> ratt<strong>an</strong> producers <strong><strong>an</strong>d</strong> semi-processors<br />
are, however, unable to cash <strong>in</strong> on this situation as export b<strong>an</strong>s <strong><strong>an</strong>d</strong> prohibitive taxes<br />
(<strong><strong>an</strong>d</strong> especially mech<strong>an</strong>isms that restrict the trade <strong>of</strong> semi-processed material) preclude<br />
sell<strong>in</strong>g to this market.<br />
<strong>The</strong> trade-<strong>of</strong>fs <strong>in</strong> this are difficult to measure. As the lead<strong>in</strong>g producer <strong>of</strong> ratt<strong>an</strong>,<br />
Indonesia may be <strong>in</strong> a position to exercise a degree <strong>of</strong> control over the market. By<br />
prevent<strong>in</strong>g raw material from enter<strong>in</strong>g the world market, they are able to <strong>of</strong>fer a tw<strong>of</strong>old,<br />
short-run competitive adv<strong>an</strong>tage to domestic ratt<strong>an</strong> products m<strong>an</strong>ufacturers:<br />
first, foreign competitors have reduced access to raw material <strong><strong>an</strong>d</strong> second, domestic<br />
raw material prices are kept relatively low. However, this adv<strong>an</strong>tage <strong>in</strong> the process<strong>in</strong>g<br />
sector is ga<strong>in</strong>ed at the cost <strong>of</strong> considerable foregone earn<strong>in</strong>gs for unprocessed <strong><strong>an</strong>d</strong><br />
semi-processed ratt<strong>an</strong> to the raw material producers <strong><strong>an</strong>d</strong> semi-processors. Moreover,<br />
the long-run effect <strong>of</strong> this artificial reduction <strong>in</strong> dem<strong><strong>an</strong>d</strong> for raw material maybe<br />
reduced production <strong>of</strong> raw material <strong>in</strong> the country. A new, lower, supply equilibrium<br />
may be reached with<strong>in</strong> the country as marg<strong>in</strong>al producers switch to other activities.<br />
Additionally, the policy may stimulate a further shift as <strong>of</strong>fshore competitors seek<br />
alternative source <strong>of</strong> raw material supply from non-traditional suppliers (different<br />
countries, cultivation) <strong><strong>an</strong>d</strong> reduce their ratt<strong>an</strong> requirements through substitution. <strong>The</strong><br />
study shows that these trends are already well underway.<br />
<strong>The</strong> ma<strong>in</strong> government <strong>in</strong>vestment <strong>in</strong> the bamboo sector has been <strong>in</strong> direct<br />
m<strong>an</strong>agement <strong>of</strong> bamboo resources (especially <strong>in</strong> India). Research has been limited <strong>in</strong><br />
most <strong>of</strong> the countries studied. Additionally, there are government-supported tra<strong>in</strong><strong>in</strong>g<br />
programs for artis<strong>an</strong>s <strong><strong>an</strong>d</strong> craft workers <strong>in</strong> several countries, <strong><strong>an</strong>d</strong> some limited<br />
assist<strong>an</strong>ce with trade <strong><strong>an</strong>d</strong> export promotion. Generally speak<strong>in</strong>g, there has been<br />
relatively little <strong>in</strong>vestment <strong>in</strong> the sector relative to its value ---- <strong>an</strong>other <strong>in</strong>dication that<br />
the sector is undervalued by governments.<br />
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