It is a frightening statistic that shows how the financial crisis could undermine efforts to protect the environment in Asia. A new study has shown that between 1995 and 1997, the output from around 350 major water polluting factories fell by around 15%. "In the event of a financial or economic crisis, environmental concerns are put on the back burner," notes the study, partly because of a belief that lower production will automatically lead to lower levels of pollution. "We show, on the contrary, that the pollution problem may become worse during the crisis period."

The report makes three recommendations: continue monitoring and inspection programs by BAPEDAL, Indonesia’s environment agency; increase reliance on voluntary approaches and community and market incentives to influence polluters as the conventional enforcement system is likely to perform inadequately during the crisis; and ensuring all new investments minimize reliance on end-of-pipe treatments and maximize the use of clean technologies. The study was based on data from BAPEDAL and was prepared by Shakeb Afsah, senior policy advisor to the United States-Asia Environmental Partnership program.