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(Add dropped word in sixth paragraph) JAKARTA, April 21 (Reuters) - Indonesian farmer Albertus Wawan hopes a new government regulation means the small plot of land where he grows palm oil trees in a forest reserve on Borneo may be recognised as a legal plantation and eligible to access funding. But the hopes of thousands of smallholders like Wawan for the acceptance of their farms inside designated forest areas is alarming green groups and comes at time when palm oil is under scrutiny in some Western countries for its links to deforestation. The changes, part of President Joko Widodo’s sweeping liberalisation of regulations to boost Southeast Asia’s biggest economy, illustrate the trade-offs countries make to protect the environment or provide jobs to raise living standards.

Jakarta rayaChristian schmollingerWahyu perdanaBambang hendroyonoAlbertus wawanEd daviesMusdhalifah machmudKanisius terengJoko widodoThomson reuters trust principlesIndonesia ministry of environmentEconomic affairsPresident joko widodoSoutheast asiaMinistry secretary general bambang hendroyonoDeputy coordinating minister