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PAPUA NEW GUINEA RAINFOREST CAMPAIGN NEWS

Timber Industry Faces Closure

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Forest Networking a Project of Ecological Enterprises

http://forests.org/

3/15/98

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RELAYED TEXT STARTS HERE:

Title: Papua New Guinea Timber Industry Faces Closure

Source: Pacific Islands Report--Pacific Islands Development

Program/Center for Pacific Islands Studies

Status: Distribute freely with proper credit to source

Date: March 2, 1998

PAPUA NEW GUINEA TIMBER INDUSTRY FACES CLOSURE

PORT MORESBY, Papua New Guinea (March 2, 1998 - PACNEWS/Ioane)---

Papua New Guinea's timber export industry may face closure by the end

of this year unless the government agrees to reduce taxes on log

exports.

The head of the Forest Industries Association, Jim Belford, says the

industry is a "dead duck" because of the kina's low value, poor

international log prices and a dwindling Asian market.

The industry says it has closed or scaled down three quarters of its

operations, and more than 4,000 jobs have been lost.

One proposal put forward by the industry seeks the removal of all

export taxes while timber prices remain at their present low level.

The World Bank has already indicated that such a proposal is

unacceptable under the conditions attached to loans it has made to the

PNG government.

Until the recent economic downturn in Asia, PACNEWS reports, the

timber industry was PNG's biggest export earner.

The loss of Asian logging markets is a major blow to the ailing PNG

economy, already battered by last year's Sandline Bougainville

mercenary affair and the country's prolonged El Ni¤o-caused drought.

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