PAPUA NEW GUINEA TIMBER INDUSTRY VICTIM OF ASIAN CRASH

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PORT MORESBY, Papua New Guinea (February 27, 1998 - Radio Australia)--- World Bank officials in Papua New Guinea say they are unlikely to approve a plan to prop up the country's timber industry by approving the reduction of current export tax levels to zero.

As Radio Australia's Tim Palmer reports, the industry claims to have closed or scaled down three quarters of its operations and is threatening to abandon log exporting all together.

"Among conditions attached to World Bank loans to the Papua New Guinea government are environmental requirements and taxes on the export of logs taken from timber concessions. But a near total collapse in demand for PNG timber, as a result of Asia's financial meltdown, has the industry calling for a tax cut, saying otherwise it may shut down permanently.

"One proposal would see no export tax paid at all at current depressed timber prices. But the World Bank has already indicated that would not be acceptable.

"Tim Palmer, Port Moresby."

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