Transforming Borneo

From land exploitation to sustainable development

Chun Sheng GOH*1,2,3, Lesley POTTER4

  1. Harvard University Asia Center, Center for Government and International Studies, Cambridge, MA United States
  2. Jeffrey Sachs Center on Sustainable Development, Sunway University, Kuala Lumpur, Malaysia
  3. Jeffrey Cheah Institute on Southeast Asia, Sunway University, Kuala Lumpur, Malaysia
  4. Research School of Pacific and Asian Studies, Australian National University, Canberra, Australia

* Email: chunshenggoh@fas.harvard.edu, chunshengg@sunway.edu.my

Presentation: https://asiacenter.harvard.edu/announcements/transforming-borneo-land-exploitation-sustainable-development

 

Suggestions and comments are very much welcome.

 

Introduction

Location of Borneo

Figure 1-1 Location of Borneo (CIA, 2020)

The past five decades of land-use change in Borneo mark an unprecedented, vivid example of land exploitation to induce economic development. Borneo, the world's third-largest island located in Southeast Asia (Figure 1-1), has been endowed with one of the oldest rainforests in the world. However, since the 1970s the island experienced rampant timber extraction on a massive scale;  a  huge amount of valuable tropical woods was logged and exported, either as raw logs or plywood, resulting  in millions of hectares of deforestation and forest degradation  In total, about 20 million ha of old-growth forests were destroyed from 1973 to 2018, largely due to human activities (CIFOR, 2019).

From the 1980s, the cultivation of oil palm, a lucrative cash crop grown mainly for export, was introduced throughout the island. Sabah, with a history of plantation agriculture, was the first to plant oil palm, already having 36,000 ha under the crop by 1970, about ten years before Sarawak began establishing its industry (Avé and King, 1986). West, East and South Kalimantan followed during the 1980s, Central Kalimantan in 1992. By 2018, about 22 million tonnes of the world’s vegetable oils (12%) came from the island, compared to 5 million tonnes in 2000 (FAOSTAT, 2020, MPOB, 2020). However, it is important to note that while Sabah and Sarawak have more than half of Malaysia’s planted oil palm, in 2018 the Kalimantan territories only planted 36% of Indonesia’s total, the largest proportion (52%) being grown in Sumatra, with 60% of the production (MPOB, 2020, BPS, 2020).

Oil palm is the highest yielding oil crop, with a productive lifespan of 25-30 years. Oil derived from palm fruits can be used not only as cooking oil and in other food products, but also as raw material for a wide range of additives, notably as biodiesel, and other non-edible products like soaps, detergents, and cosmetics. Palm kernel oil, extracted from the nut in the milling process, resembles coconut oil and has uses in pharmaceuticals, commercial cooking, and cosmetics. Palm oil leads in global vegetable oil supply, with close competition from soybean oil. The widespread logging and replacement of forests by oil palm and other crops has resulted in serious degradation of peatland in Central and West Kalimantan and Sarawak and greatly escalated the risk of fires, especially during periodic long droughts (Santika et al., 2020). Repeated peat and forest fire have led not only to enormous carbon stock loss but also transboundary haze that has exerted detrimental health impacts over the entire region (Zhang and Savage, 2019).

While the land-based developments over the past five decades have reduced poverty and substantially increased life expectancy, these achievements have been secured at the expense of the environment.  Such exploitative activities have generated quick revenues for Malaysia and Indonesia, but peoples’ livelihoods have also been threatened, from immediate local health risks to long-term global climate change (Santika et al., 2019b, Santika et al., 2019a). There is also evidence that the newly generated wealth has been mostly concentrated in the hands of a small group of elites, creating huge wealth gaps among the people. Communities continuing to seek traditional livelihoods - planting dry rice in swiddens, creating rubber, rattan or mixed fruit gardens, engaging in small-scale mining, hunting, fishing or collecting forest products - as well as those working as day labourers on plantations, or transmigrants trying to farm worthless land - have found themselves victimized  or ‘left behind’ in the wave of development. Today, many parts of the island are plagued by social conflicts, poor governance, corruption, and ineffective law enforcement. The over-reliance on export of primary products for fiscal revenues has also exposed Borneo to periodic economic crises due to fluctuations in commodity prices, making incomes unstable and unpredictable. All these drawbacks imply that such a development pathway is unsuitable for continuation into the future. To avoid further environmental degradation and ensure long-term sustainable development, proper strategies must be put in place to transform the conventional land-based economies.

Globally, a broad concept of ‘bio-economy’ has caught people's imagination in producing more food and bio-based materials while dealing with the environmental issues of conventional land-based development (Bugge et al., 2016). This concept is mainly championed by ‘productivists', i.e. advocates of productivity, i.e. increasing economic output without consuming as much resources as in the past through improving system efficiency. The underlying motivation is that the economy has to keep growing, and it is believed that this can be done within safe and sustainable operating boundaries. Basically, it illustrates the transition from a fossil-fuel based to a bio-based economy by using cutting-edge biological knowledge and technological innovation to optimise the potential of land and biological resources.[1] Pressing the importance of increasing overall economic productivity, it seeks to offer a strategic means to reconcile socio-economic progress with environmental sustainability. The spectrum of strategies is wide, from upstream (intensifying primary production) to downstream (creating new products and markets) (Jordan et al., 2007, Shen et al., 2010). Along these lines, rural development is also emphasized in terms of job creation, income generation and infrastructure construction (Johnson and Altman, 2014).

Meanwhile, alternative conservation-oriented economic strategies proposed by some conservationists, which may be loosely placed under the broad concept of ‘eco-economy’2] have also received an enthusiastic resonance across the world (Kitchen and Marsden, 2009). The concept stresses the multifunctionality of land-based activities, advocating the need to observe the biological capacity of the Earth system when optimizing the human use of nature (Marsden and Farioli, 2015). Unlike the bio-economic concept, it questions the urgency of economic growth over fixing the past damages. Instead, it prioritises placing socio-economic orders in harmony with nature over economic productivity (Karsenty et al., 2014). Additionally, it seeks economic opportunities to restore the previously damaged landscapes. In general, the concept portrays a self-sufficient landscape with small-scale farming systems and alternative income-generation programmes, such as ecosystem restoration, banking on international carbon market mechanisms and other ‘green’ businesses like eco-tourism (Sills et al., 2014, Gómez-Baggethun et al., 2010, Das and Chatterjee, 2015).

Along these two broad directions of ‘bio-economy’ and ‘eco-economy’, a variety of strategies have been formulated, modelled, tested, and implemented to drive economic transformation in different parts of Borneo, albeit with a different order of priorities over environment, economy, and society. The choices of strategies, however, highly depend on local complexities shaped by endogenous political, agro-ecological, social, economic, and cultural factors(Goh et al., 2018). The transformation process becomes more complicated with non-local factors like globalisation (international trade and foreign investment), migration (within and between countries), climate change, etc. (Goh et al., 2016, Radel et al., 2019, Delphin et al., 2016, Nobre et al., 2016). While there is no strict dichotomisation between the two concepts as the development processes are mostly hybridised, general differences do exist. In the northern part of Borneo, the two Malaysian states, with greater autonomy from the federal government, tend to prioritise economic development with multiple ‘bio-economy’ policies implemented, while the more under-developed Indonesian provinces in the south have been receiving relative more influences from international conservation efforts with more ‘eco-economy’ initiatives launched. That said, differences also exist among the Indonesian provinces, with Central, West and the new district of North Kalimantan being more rural. The more accessible parts of East Kalimantan are wealthy, highly urbanised and oriented towards mining and enclave industries. The small, more densely populated province of South Kalimantan also has mining and a greater emphasis on wet rice than elsewhere in Borneo. It is also becoming quite heavily urbanised, especially in the corridor of Banjarmasin-Banjar Baru. The new ‘eco-economy’ approach appears largely applicable to the more rural provinces, but examples can also be found in the more remote regions of East Kalimantan. The Kalimantan provinces have less freedom to differ from some Central Government policies than their Malaysian counterparts, though decentralisation in 2000 resulted in challenges to some central policies, notably on land and forests. These variations make Borneo a very interesting case as they may generate new perspectives in comparing the different tracks chosen by individual territories, despite their geographical, climatic, and socio-cultural continuities.

To fully understand the dynamics of such economic transformation, careful attention must be paid to territorial-specific characteristics and on-ground realities, including historical land-use patterns. General country studies focussing on the land-based economies are available. Examples are the books edited by (Vincent and Ali, 1997) and (Jomo et al., 2004) which lucidly illustrate the strategies deployed by the Malaysian government in the 1980s to jump-start the economy using the country’s natural resources, with timber and oil palm among the major contributors. Similarly for Indonesia, edited books by (Pierce Colfer and Resosudarmo, 2002). (McCarthy and Robinson, 2016)  provide detailed accounts of the respective development pathways in Indonesia based on forest and land exploitation seeking forest and land reform and a ‘way forward’ in the modern era The equally relevant volume edited by Cramb and McCarthy (2016) focusses on oil palm and the state in both countries.

Specifically, for Borneo, there is a wealth of literature along multiple lines of inquiry on the impacts of land-based economic development, indigenous worldviews, etc. A number of books covering aspects of Borneo island appeared at the end of the 1980s and during the 1990s. This was an era of transition from the forests to invasive crops such as oil palm, leading to a considerable flowering of scholarship concerning local traditions and the inevitability and direction of change. They included (Avé and King, 1986)People of the Weeping Forest: Tradition and Change in Borneo (written for a special exhibition on Borneo in Leiden, Netherlands. ‘Borneo: Vanishing Jungles, Cultures Adrift’). It was followed by (Cleary and Eaton, 1992)Borneo: change and development’; (King, 1993)The Peoples of Borneo’; (Brookfield et al., 1995)In Place of the Forest’ and (Padoch and Peluso, 1996)Borneo in Transition: People, Forests, Conservation, and Development[3]. These books all dealt with the forests, with the transformation of the Borneo environment and strategies for development, but the approaches differed somewhat. Borneo was seen alternately as ‘resource frontier’ (Brookfield et al., 1995), ‘underdeveloped periphery’ (Cleary and Eaton, 1992), ‘a neglected island’ (King, 1993) or most importantly, as ‘complex, diverse and dynamic’ … (Padoch and Peluso, 1996). The five books also discussed shifting cultivation (a contentious issue) and other farming systems, ethnicity, land settlement, transmigration, and resource rights, such as those of the Penan (Cleary and Eaton, 1992). King (1993) was more concerned with the socio-political organisation and material culture of the Dayak and Islamic groups, while Brookfield et al. (1995) raised issues of environmental history such as drought, forest fire and the origin of the Imperata grasslands.  Oil palm was only mentioned briefly, except in (Avé and King, 1986) and in more depth in (King, 1993) where the early developments in Sarawak and Sabah were analysed.  Kaur’s economic history of Sabah and Sarawak since 1850 (Kaur, 1998) also made a sound contribution at this time.

Two more recent books have continued to represent the whole island. The first, Reflections on the Heart of Borneo edited by (Persoon and Osseweijer, 2008), raises many questions about the Heart of Borneo, that ‘large transborder area of high conservation value shared by the three countries’, about which the contributions ranged widely, canvassing conservation issues throughout the island. De Koninck et al. (2011), ‘Borneo Transformed: Agricultural Expansion on the Southeast Asian Frontier’, skilfully combine and compare the developments on both the Malaysian and Indonesian territories in Borneo at a subnational level. While the more recent books mentioned provided useful background up to 2010, they did not further examine the potential pathways beyond primary production, e.g. downstream bio-based industries and eco-tourism that open up new opportunities for economic transformation, and how different strategies can work together or against each other. One new work, edited by (Ishikawa and Soda, 2019)Anthropogenic Tropical Forests’, is a finely detailed study of two adjacent river basins in Sarawak that has further extended the scope of transdisciplinary research in Borneo. It represents a comprehensive collection of knowledge from both natural and social scientists on topics related to commodity chains, material cycles, and food webs, with a strong focus on Sarawak, and to a much lesser extent Sabah and Kalimantan.

Recent years have not, however, seen effort to consolidate knowledge in such a way for the case of Borneo as a whole. Such a study took many years and a large number of specialists to complete. It is not envisaged that this present book would be as ambitious. However, a comprehensive review with updated information in a territorial context and comparative analyses across sectors and disciplines can be a timely work in view of the rapid changes in social, economic, and political aspects across the island in the past two decades. This can neatly fill the knowledge gap in view of the rapid changes in social, economic, and political aspects across the island especially between 2010 and 2020. This allow verifying the robustness of different strategies and narrow the set of possible strategies that can be employed in different context, through examining questions like ‘does what make sense for big players also work for smallholders?’, ‘does what failed in Central Kalimantan also fail in Sarawak?’, etc. By putting these pieces of puzzle together, this book provides a more complete picture of how Borneo has transformed in the past two decades with different strategies or interventions producing good, bad, or mixed results in different territories. The experience in Borneo can also be relevant for other tropical communities, which have seen more calls for transformation of exploitative land-based economies especially in South America and Africa.

 

Scope and structure

This book attempts to systematise the strategies proposed or implemented to transform the land-based economies in Borneo and further discuss the underlying dynamics. It is generally guided by three research questions: (i) what strategies are implemented or proposed to transform the land-based economies? (ii) what are the current status, opportunities and challenges of these strategies in different perspectives? and (iii) how they complement or contradict each other in a territorial context? The framework of the book was established based on the authors' experience and discussions with various actors (local communities, governments, researchers, industries, international organisations, NGOs, etc.) in 2009-2020 while working in different capacities. The draft was discussed, debated, verified, and gradually developed through in-depth discussions both with and among the key informants.

This book is organised in 15 chapters grouped into four parts. Part (I) consists of this introduction and Chapter 2, in which both quantitative and qualitative background information about the island is provided, including a summary of the post-independence land-based development in chronological order.

The chapters in Part (II) describe five productivity-oriented strategies for transforming land-based economies in Borneo. Chapter 3 gives an overview of the first strategy, i.e. boosting upstream productivity of oil palm and timber, the two major commodities in Borneo’s export-oriented economies. It provides a detailed account of the biological and physical limitations, as well as the problems associated with small farmers and labour availability. The next strategy, activating under-utilised low carbon land resources for future production is analysed in Chapter 4. Both the biophysical and non-biophysical characteristics of such land resources are examined, and the factors that affect the mobilisation of these land resources are identified.

The next three chapters primarily deal with strategies related to downstream activities and markets. The efforts in upgrading and diversifying downstream activities, particularly the oleochemical industries and biorefineries are elaborated upon in Chapter 5. This is followed by a discussion about the importance and the current status of infrastructure and investment. Chapter 6 provides a broader perspective of value creation through strategic branding the two aforementioned commodities, i.e. timber and palm oil. The market status, schemes, impacts, and challenges are analysed. Lastly, the strategy of establishing domestic demand for bio-resources to boost local growth and supply security is reviewed in Chapter 7. The motivation and effectiveness of implementing this strategy in food, energy and bio-material sectors are assessed.

Part (III) consists of Chapter 8 – 12 which cover conservation-oriented development strategies. These five chapters are arranged in a way analogous to the five chapters in Part (II). Corresponding to the productivity-boosting strategy described in Chapter 3, enhancing agro-ecological resilience is portrayed as an alternative strategy in ensuring long-term growth in Chapter 8. Adoption of a landscape approach in (re)designing the land-use system, with a special focus on peatland restoration, is deemed the key to ensure the resilience of the land-use systems in Borneo. In addition, commodifying ecosystem services is perceived as a revolutionary approach to address the perennial issue of environmental degradation as described in Chapter 9. It is fundamentally different from most of the other strategies as it does not measure the outputs in terms of biological products or human-based services. Instead, it attempts to arbitrarily create value for ecosystem services and markets to trade them. The issues of measurement, monetisation, scheme design, and implementation are elaborated.

As the counterpart of Chapter 5, Chapter 10 portrays the potential of establishing eco-based tertiary sectors, such as eco-tourism, as an alternative to conventional industrialisation. Meanwhile, Chapter 11 focuses on marketing products from smallholdings to create new value propositions. This strategy is complementary to the one described in Chapter 6, but with different focuses and approaches. Chapter 12 represents more of an ideological approach than an economic strategy. It describes the idea of a self-sufficient farming-hunting-gathering system in the rural areas largely linked to traditional lifestyles. This is discussed in the context of urban-rural transition, ethnicity, and land-use practices.

The last part of this book, Part (IV), has three chapters. Chapter 13 describes how the individual Bornean territories have adopted different combinations of strategies to transform their land-based economies in the past two decades. The differences are cross-examined in terms of system of government, external influences, the urban-rural transition, and socio-cultural characteristics. Then, Chapter 14 explores future perspectives against the backdrop of the digital revolution, discussing the application of new technologies for realising the transformative strategies. Finally, Chapter 15 concludes.

 

[1] The term ‘climate-neutral’ was used by some reports to place the concept of bio-economy in the context of climate change, see e.g. (Fritsche et al., 2020)

[2] Bear in mind that this term is only used for a broad indication. While the term ‘bio-economy’ has been widely discussed for its definition and scope, we could not find a term with that level of attention for the alternative strategies. The term ‘green economy’ was not used here because it covers not only the land-based sectors but all economic activities.

[3] A second, updated edition of this book was published in 2003.

 

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