Indonesia is experiencing one of the highest rates of tropical forest loss in the world.

• Indonesia was still densely forested as recently as 1950. Forty percent of the forests existing in 1950 were cleared in the following 50 years. In round numbers, forest cover fell from 162 million hectares to 98 million hectares.

• The rate of forest loss is accelerating. On average, about 1 million hectares per year were cleared in the 1980s, rising to about 1.7 million hectares per year in the first part of the 1990s. Since 1996, deforestation appears to have increased to an average of 2 million hectares per year.

• Indonesia's lowland tropical forests, the richest in timber resources and biodiversity, are most at risk. They have been almost entirely cleared in Sulawesi and are predicted to disappear in Sumatra by 2005 and Kalimantan by 2010 if current trends continue.

• Nearly one half of Indonesia's forests are fragmented by roads, other access routes, and such developments as plantations.

Deforestation in Indonesia is largely the result of a corrupt political and economic system that regarded natural resources, especially forests, as a source of revenue to be exploited for political ends and personal gain.

• Logging concessions covering more than half the country's total forest area were awarded by former President Suharto, many of them to his relatives and political allies. Cronyism in the forestry sector left timber companies free to operate with little regard for long-term sustainability of production.

• As part of the effort to boost Indonesia's export revenues, and to reward favored companies, at least 16 million hectares of natural forest have been approved for conversion to industrial timber plantations or agricultural plantations. In many cases, conversion contradicted legal requirements that such plantations be established only on degraded land or on forest land already allocated for conversion.

• Aggressive expansion of Indonesia's pulp and paper industries over the past decade has created a level of demand for wood fiber that cannot currently be met by any sustainable domestic forest management regime.

• Forest clearance by small-scale farmers is a significant but not dominant cause of deforestation.

Illegal logging has reached epidemic proportions as a result of Indonesia's chronic structural imbalance between legal wood supply and demand.

• Illegal logging, by definition, is not accurately documented. But a former senior official of the Ministry of Forestry recently claimed that theft and illegal logging have destroyed an estimated 10 million hectares of Indonesian forests.

• Massive expansion in the plywood, pulp, and paper production sectors over the past two decades means that demand for wood fiber now exceeds legal supplies by 35-40 million cubic meters per year.

• This gap between legal supplies of wood and demand is filled by illegal logging. Many wood processing industries openly acknowledge their dependence on illegally cut wood, which accounted for approximately 65 percent of total supply in 2000.

• Legal logging is also conducted at an unsustainable level. Legal timber supplies from natural production forests declined from 17 million cubic meters in 1995 to under 8 million cubic meters in 2000, according to recent statistics from the Ministry of Forestry. The decline has been offset in part by timber obtained from forests cleared to make way for plantations. But this source appears to have peaked in 1997.

• Industrial timber plantations have been widely promoted and subsidized as a means of supplying Indonesia's booming demand for pulp and taking pressure off natural forests. In practice, millions of hectar