The Economic Impact and Challenges of Forests in Indonesia, the 8th Largest in the World by Forest Area
- Publish
- 2025/08/12
- Update
- 2025/08/12
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Indonesian Forests in Numbers
Indonesia’s Forest Area Ranks 8th in the World with 92 Million Hectares
As of 2021, Indonesia’s forest area ranked 8th globally, covering 92 million hectares—approximately 2.4 times the land area of Japan (37.8 million hectares).
The largest forest area is found in Papua, which holds about half of Indonesia’s total forest area at 42.5 million hectares. Papua’s forests are among the most biodiverse habitats in the world.
The second largest forest area is in Kalimantan, home to the orangutan, with a total of 36.9 million hectares. Mostly tropical rainforest, Kalimantan’s forests contribute to the Earth’s oxygen production and are often referred to as the “lungs of the world.”
For reference, the following are the results from Statista’s survey of “Ten Countries with the Largest Forest Area in 2021”:
- Russia: 815 million hectares
- Brazil: 495 million hectares
- Canada: 347 million hectares
- United States: 310 million hectares
- China: 222 million hectares
- Australia: 134 million hectares
- Republic of the Congo: 125 million hectares
- Indonesia: 92 million hectares
- India: 72 million hectares
- Peru: 72 million hectares
Reference: Statista “Ten countries with the largest forest area in 2021”
Economic Impact of Forests and the Issue of Deforestation
Forests are not only vital to the global environment but also play a significant role in the Indonesian economy.
Exports of forest products, including timber and flora/fauna, amount to over USD 20 billion (approximately JPY 2,892.69 billion) annually. For regions where forestry is a major livelihood, forests are crucial to both local communities and regional economies.
However, even these vast forests are gradually shrinking.
Since large-scale commercial logging began in the early 1970s, deforestation has been a major social issue in Indonesia. According to the Central Statistics Agency, about 23% of the country’s forests were lost between 2018 and 2020. In addition to logging, forest fires have caused severe damage, making large-scale reforestation efforts essential.
Precautions when conducting an on-site inspection in Indonesia
Some visitors consider, "My primary purpose is to conduct maintenance work at the factory, but the visa application process appears cumbersome. I will simply enter on a Visa on Arrival (VOA) and carry out the work discreetly."
However, there have been numerous cases where entering without the appropriate visa for the intended activities has resulted in significant legal and operational issues. It is therefore strongly advised to obtain the correct visa prior to travel.
Here are the types of visas and their purposes.
Indonesian Forests in Video
Mangrove Planting Tours
Mangrove forests play an important role in mitigating global warming by absorbing large amounts of carbon dioxide and storing it as carbon. They also serve as habitats for marine life and act as natural barriers protecting communities from natural disasters such as high waves and tsunamis.
With growing environmental awareness in Indonesia, tours that include mangrove planting experiences have recently gained popularity. This video captures a planting activity held on Harapan Island, located northwest of Jakarta, on March 21, 2023, in commemoration of “International Day of Forests.”
Corporate Forest Conservation Activities
In response to climate change, biodiversity conservation, and disaster prevention, many companies in Indonesia engage in forest conservation activities.
This video shows activities by the Indonesian outdoor goods manufacturer Eiger.
According to data from the National Disaster Management Agency cited at the beginning of the video, Indonesia experienced 782 disasters such as floods and landslides in 2018 alone. These disasters resulted in 105 deaths or missing persons, 222 injuries, and more than 140,000 houses being inundated, among other severe impacts.
To curb one of the contributing factors to such disasters—deforestation—Eiger operates nurseries to grow tree seedlings. These seedlings are then distributed to organizations and individuals across the country for planting activities.
For more information on corporate environmental protection initiatives, please see the related article.
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Taxi Troubles
IT company
We had planned to use a ride-hailing app for local transportation; however, due to the combination of the morning rush hour and heavy rain, no taxis were available even after waiting for over 30 minutes. In the end, we arranged a motorcycle taxi on short notice, but heavy traffic caused further delays. As a result, we were forced to postpone one of the two business meetings scheduled for the morning.
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Interpreter Issues
Cosmetics manufacturer
While traveling from central Jakarta to a client in the suburbs, our freelance local interpreter suddenly canceled. Since English was not widely understood in the area, we were unable to fully convey the finer nuances of our business discussions, which was highly regrettable. We came to realize that it would have been better to engage a professional interpreter through a reputable agency rather than relying on a low-cost freelancer.
For Companies Interested in Market Research in Indonesia
In Indonesia today, there is growing public interest in environmental issues, such as climate change countermeasures and the conservation of forest and marine ecosystems.
Corporate and foundation-led tree planting activities are frequently featured in the news, and there has also been an increase in citizen-friendly projects such as waste separation, resource recycling, and reducing plastic usage. Many companies now emphasize that their manufacturing processes, distribution channels, raw materials, and packaging are environmentally friendly, reflecting this heightened awareness.
Public priorities, needs, and trends change rapidly. The places where products are sold and the methods of promotion should be decided based on the latest trends.
If your company is interested in selling products in Indonesia, why not start with market research?
With our online market research service, you can conduct surveys targeting respondents from our panel of 110,000 Indonesians who meet your criteria. You can learn directly about what they use, what factors influence their choices, and how much they are willing to pay. Please feel free to contact us.
