Decentralization and Forest Degradation at the Regency Paser of East Kalimantan, Indonesia

This study applies the framework of institutional development approach to analyze the increased rate of forest loss when Indonesia embarked the policy to decentralize management of natural resources in 1999. The analysis aims in exploring factors that affect the links between institutional dynamic and sustainability of natural resources. The Regency Paser of the East Kalimantan province was selected as the study site, due to its characteristics of forests, characters of forest users and characters of rules that guide the uses of forests. Applying combined methods of spatial and documentary analysis, the study explains that forest covers has changed into oil-palm plantation, fish-ponds establishment, and coal mining exploitation. Results from documentary analysis show three factors successively underlie the conversion of forest into other land uses. Firstly, situation of forests in 1990 that open access and in degraded condition stimulates transfer of forest rights and transfer of forest uses. Economical crises in 1996 invites the World Bank and IMF to stabilize economical situation by intervening the policy on forest land uses. Thirdly, political reform in 1999 re-arrange authority of the government to manage natural resources induce chaotic situation on forest management. The study concludes for institutional dynamic gives impact on forest condition. Decentralization that intends to sustain natural resources through participation of local people and accountable of local government were hindered by diverse interests of actor and conflicting interests of the government at central and local level. The study recommends the government to administer institutional dynamics for mobilizing information and organization into networks of collective action in order to sustain natural resources in general, and in particular of forest resources