Dear Editor,
If we restrict the export of logs we are going to drastically affect loggers. It is not clear, in the draft, if the attempt is to convert seasoned logging employees to saw-milling. How do we handle the reluctance to the transition or need for fresh training? However, I think the objective of the value-added concept is to create more job opportunities, and it is not about worker transfer. So if the idea is to create more job opportunities the dynamics need to be re-evaluated.
Of course, the main contributor to job creation is business opportunity and financial investment. Business opportunity comes from an available product and a market for that product. Marketing a product becomes easier if that product is popular. To make a product popular consumers need to be made aware of that product. Yet, even though we have close to 1000 excellent species of woods, for the great majority of the people in the world those woods do not exist.
Secondly, why should products the world hardly knows about attract more than eight to ten per cent export duty/commission? As we try to popularize our forestry resources why make it harder and more expensive to sell. When we can have twenty per cent of Americans, Canadians, Europeans and Indians clamouring for tatabu, wamara, hubaballi, greenheart floors, or crabwood furniture we can up the export commission. Right now export commission sits at twenty per cent for the top species logs. Twenty per cent? Right now if revenue is the objective we can keep export commission low but triple or quadruple exports. Of course, the commission keeps climbing over the years with a strategy to spur value-added options but it is not working and will not work because business persons have to look at the bigger picture confronting them.
Further, of the 1000 species we have at our disposal only about twenty-five are harvested regularly and about ten abundantly. Most of our wood species are hardwood. We can popularize more species and harvest them in twenty-five year cycles. We also have the advantage of doing what others do. We can start forest plantations. Yes. If there is an enhanced world demand for our woods, investors will get into that line of business. A few of our local species, for example purpleheart, are planted in plantations in Costa Rica with fertilizers to speed-up growth. The market will dictate the outcomes.
The next argument for the proposed log export ban is that other countries are going that route. I do not think that is a sound argument. Tom and some other guys are jumping off the cliff. That does not give me a reason to jump. Tom may be tired of life and wants a way out, but the other guys may be sky diving. Half way down, and out of view, their parachutes open and they glide joyfully to smooth landings. The point is that we should not bow to peer pressure. I think Guyana has to look at our unique situation, develop our own strategies and plan accordingly. What is best for our country should be the only consideration.
One situation we need to look at is our low population. Even though our objective is to create jobs, if we do create jobs at a fast rate the saturation point will come quickly. We may have to import workers and be prepared for that situation. Our work pool is not massive. Our workforce is migrating at an exorbitant rate. Added to that, the seventies was a better period to push value-added in wood. At that time almost every high school or community had Industrial Arts departments where woodwork and furniture manufacturing were taught. About 50% of the males had excellent knowledge of the value added possibilities in wood. Do not forget the community high schools where drafting, woodwork, metalwork and welding were available. Well after some sensible administrators thought that community high schools were not necessary we have two generations of practising woodworkers who do not know the difference between a mortise & tenon and a dove-tail joint.
Another argument guiding the proposed log ban is the knowledge that international buyers add considerable value to our logs, utilize every single square centimetre, may even create a monopoly and make a lot more money than the producer. The end user of any product will always pay a lot more than what the producer gets for that same product. And, in the world of commerce, it will always be like that. So it does not matter if we sell a log or go through the process of making a piece of furniture.
The producer, who will most likely be selling wholesale, will always have a lower markup than the retailer. But the producer/wholesaler will be selling thousands of pieces, while a single retailer may be selling less than ten.
Generally, new legislation and regulations are indeed needed but I feel that before that process starts Guyana and the new administration has to decide what kind of ideology the country should use to dictate a way forward towards a prosperous future. Should the country stick with the last administration policy of embracing communism/socialism or do we want to approach our development along the lines of a market driven economy, where the people as opposed to the government generate commerce. Solving that problem is the key. Legislation as it is restricts massive private investment. Any new legislation or regulation without first solving or deciding on a new ideological path for the country may not help to encourage foreign Guyanese to return with investment dollars. We will definitely not have many US companies so we will be stuck with the Asians.
In concluding, I must emphasize that our forest and its vegetation have the potential of becoming a top GDP driver for our nation. However, it needs to be given a chance to breathe. There needs to be a lot more efficiency and the industry needs to be operating at a pace to match world market demands. However, I was told by a top GFC official that the concept of giving out State Forest Permissions (SFPs) was to create subsistence job creation for small time loggers. Subsistence? Is it like subsistence farming in depressed communities? If that is true, it is no wonder we have a subsistence type industry. We have to change that concept.
Suffice it to say that the idea I put forward was knocked down.
Yours faithfully,
F Skinner
