Development imperatives for the extractive forest sub-sector

Guyana and the wider world(new1)Regrettable underperformance

Readers would have no doubt readily gleaned from the subject matter which was addressed in last Sunday’s column, whether it was a boon for Guyana or a regrettable loss as I had represented it, for a country of its size, vulnerability, and poverty, which was also exceptionally well endowed with forest resources, to be seemingly boastful of its historically comparative low deforestation rate. Instead of lamenting the underperformance of the forest sector, analysts represent this as a boon, befitting Guyana’s standing in the world of forests. Regrettably, this stance is predicated on an overly romanticized view of 1) the status of Guyana’s forests; 2) the quality of life for those who depend on the forests for their livelihoods; and 3) even the wider Guyanese community, except perhaps for the limited few who are exceptionally well-off.

Development imperatives

At this juncture, it would be appropriate for me to introduce preliminarily, a few developmental imperatives/policy prescriptions for Guyana’s forests, based on the perspective of its low deforestation rate representing a great loss. These will be further developed in coming columns.

The first development imperative is that Guyana’s leadership must take, at every opportunity, a hard-nosed approach towards placing all of the country’s natural resources to the continual service of fighting to remove the deeply embedded scourges of poverty, destitution, avoidable illnesses, ignorance, as well as a dearth of adequate basic services along with social safety-net provisions that beset the country. The removal of such societal pathologies is a necessary, but not sufficient condition, for providing an autochthonous (self-reliant) path for the improvement of livelihoods for the broad population.

A second related development imperative is that the pursuit of this endeavour requires Guyana to bring into play the best science, technology, techniques, and innovation it can access, whether from within the country or through technology transfers from abroad. This is the only sure means for efficiently developing its natural resources.

In this regard readers should observe that modern day forestry has witnessed far-reaching ground-breaking transformations. Fortunately for us, most of these breakthrough innovations can be accessed through technical assistance. This assistance could potentially flow from the recently (2015) concluded Paris Agreement, and the inter-governmental bodies, which service it, (specifically the United Nations, Food and Agricultural Organisation (FAO). There are also a host of other related inter-governmental organs/agencies, like the World Bank and the Inter-American Institute for Cooperation on Agriculture (IICA).

A third developmental imperative flows directly from the consideration that several of the recent scientific innovations in forestry fall in areas of policy and institutional design/re-design. Here I would single out such innovative techniques as 1) sustainable forestry management; 2) monitoring, reviewing, reporting and verification systems (MRVS) for the delivery of forest services; and 3) the development of private markets for forest services. Many of these innovations, and in particular, the last listed are directly linked to efforts to combat the negative impacts of global warming and climate change.

Significantly, recent experiences show that the adoption by states of these new innovations has yielded two decisive advances in combating, counteracting, and/or modifying the adverse effects of deforestation, forest degeneration and human-induced environmental deterioration. A good example of this is the growth of planted forests. Planted forests are national and regional efforts to grow and/or re-grow forests in areas where these have been either absent, in decline, or both.

The second advance follows from this circumstance having spawned the emergence of broad hypotheses and theories of forest behaviour and societal development. The forest transition theory, which this column has already addressed, is a good example.

The important observation for readers to deduce from these two examples, is that we may have already reached a stage of forest development theory and practice, where the permanent and forever loss of national and global forests are, by no means, as imminent as it was once thought to be, back in the 1970s.

Disappointing results

Readers might have already inferred from the comments provided above, as well as from those I have offered previously, how severely disappointed I am with the paltry economic returns the country has thus far obtained from its well-endowed forest ecosystems.

The National Development Strategy, 2001 has estimated that the forest sector averaged 2% of GDP for the years 1988-1993. This rose to 8% in 1999 (the highest ever in the country’s history) after Barama started production, so big was the impact of foreign direct investment.

As I have indicated in previous columns, value added contributions to economic growth for the extractive forest sub-sector have been in real terms, on average, only 2.7 per cent of total GDP in recent years, (average 2011-2015). For the last decade, (2006-2015), this contribution has declined by about one quarter.

As was also pointed out in those earlier columns, this sector’s growth performance has been volatile, ranging from 2 per cent for 2008 to 7 per cent for 2007 during the last decade. Similarly, over that decade the sector contributed an average of only 3.1 per cent.

Further, fluctuations in its growth rate have also been considerable, thus over the years 2014 and 2015, the increase was 12.3 per cent for 2014, and the decrease was 16 per cent in 2013. A roughly similar swing of 26.4 per cent took place in the 2010-2011 years.

Conclusion

Next week I shall introduce other economic features of the forest sector’s underperformance to reinforce the significance of this outcome. Later, I shall return to the issue of development policy prescriptions/imperatives as part of the concluding section of this series of columns on Guyana’s extractive sector industries in a time of gas and oil.

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