++

This huge conglomerate empire had about 30 subsidiaries: real estate, shipping and port development, tourism and hotels, insurance, oil marketing, steel complexes, office buildings, 80 aircraft, and its tankers at one time added up to more tonnage than the Indonesian Navy. In 1975-76 it was disclosed that Pertamina had incurred international and domestic debts totalling over US$10 billion. Indonesia is still staggering from the collapse of this multi-billion dollar conglomerate, and the country has a long way to go before it digs itself out of the Pertamina recession. There are even more shocks to come when additional debts of Pertamina fall due. In order to make up for the losses, the government in early 1976 pressured about 35 foreign oil companies into 'renegotiating' their productionsharing contracts so that the government's cut is now 85%. This move will net the government more income, but the Indonesian investment climate has soured as a result of it. Indeed, the whole S.E. Asian region is affected. Oil companies have laid rigs up, sent their oil survey ships home, called off contracts, and only a few are still looking for oil.

This situation will drastically decrease oil production as existing wells run dry. As the demand for petroleum products increases over the next few years, Indonesia will have less and less of its most ready foreign exchange-earner at a time when it is most needed. Forests cover 300 million acres of Indonesia's total land area of 475 million acres (60% of Sumatra, 77% of Kalimantan, 52% of Sulawesi, 75% of Irian Jaya and the Moluccas), and are now being rapidly plundered and not replanted. From only US$6 million in timber exports in 1967, there was a dramatic increase to over US$330 million in 1973 (12% of exports). At the present rate, in 28 years there will be no forests left. Agriculture constitutes approximately half of the GNP with about 35% of all arable land devoted to cultivation. Four out of every five Indonesians work the soil, the majority small farmers in rice growing villages. Of 40 or more commercial crops, only rubber, tobacco, sugar, copra, palm oil, hard fibre, coffee and tea are of national importance economically.