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Executive summary

Latin American forests have global importance due to their size: one fourth of the world’s total forests and one half of the tropical forests lie in the region. They provide important global and national environmental services. This paper involves an assessment of trends in the forestry sector in these countries plus an examination of the main forces that have shaped these trends in the past and are likely to do so in the future. The report begins by briefly introducing some of the social, environmental and economic issues that are defining the structure for forest management and policy, and how they can influence the development of the forestry sector. A brief overview of the forest industry state in the region provides a baseline for the analysis of issues, projections and the resulting implications for forests.

The impact of the socio-economic driving forces for the forestry up to 2020 are analysed in this paper. For the purpose of this study, developments in the following areas have been determined as likely to be most important population, Economic development, aid and investment, land issues, trade, government and institutions. The main findings and conclusions are:

As countries get richer and more urbanized, they tend to put less pressure on land; countries in Central America will have more land pressure than the ones in South America. It is also reasonable to believe that demand for forest products will grow in South America. Latin America in general is highly dependant on the US for trade with the exception of MERCOSUR countries that depend on each other and the EU. Latin America is rapidly integrated through trade. Also, new trade associations are foreseen, but probably poor economies have less chance to take advantage of these agreements, particularly of the FTAA.

As countries get richer, they will tend to get less aid and other countries will remain poor and dependant on aid. Using the GDP per capita projections, countries like Guyana, Nicaragua and Honduras, which are particularly dependant on aid, will stay in the same situation until 2020. Bolivia, Suriname, Paraguay and Guatemala, lower-middle income economies, are not as dependant as the former two, but its economic situation will not improve much either. Ecuador and El Salvador and especially Belize might improve its current economic situation, therefore, will tend to receive less aid. The rest of countries do not receive more than 1% of aid and will improve its economic situation with respect to 2000.

An aspect to be considered is the projected land use and land cover of Latin America for 2020. In the regional perspective, forest are 44% of the total land followed by permanent pastures with 30,6%. Arable land is 7% and permanent crops only 1,5%. All of these indicators have increased respect to 2000, except for the forest one. Forest area are more than 20% of the country land area by the case of Chile, Costa Rica, Ecuador, Guatemala, Mexico and Panama but less than the new regional indicator (44%) for 2000. Permanent pasture will still be the second main land use, in 2020, Argentina, Bolivia, Colombia, Costa Rica, El Salvador, Mexico, Nicaragua Paraguay and Uruguay have more than 30% (regional indicador) of permanent pastures. Countries which are likely to loose at least 20% of their forests by 2020 are Mexico, Belize, Ecuador, Guatemala, Nicaragua and Panama; and more than 60% in El Salvador if current deforestation rates continue. On the other hand, the major expansion of pastures expected for 2020 is of more than 60% in El Salvador.

Forestry normally is faced with inefficient government administration and unsolved land issues that block the development of forestry.

Tenure insecurity is an obvious disincentive for managing trees and forests; it is also the main obstacle for forest certification, together with uncontrolled colonization. Land tenure of natural forests varies considerably throughout Latin America. In tropical South American countries with the largest forest areas, most of the forests are State owned. In the southern cone countries, 75 % of the forest land in Argentina is privately owned and in Chile, 70 % of the natural forest area is private. Colombia has private forest management and tribal group property, 18 million has in 1998, Honduras, has also, private property for natural forests since 1992. Effective ownership is weakly established in most Latin American countries, causing considerable difficulties for sustainable forest management.

In general, most of the plantations belong to the private sector in Latin America. High land concentration of land for plantations is found in Chile, where 71% of the plantations belong to 2% of the forest owners and the rest to small and medium sized owners. In Argentina, all commercial forest plantations belong to the private sector. The other extreme is Mexico where social land tenure has been a constant obstacle for the development of large-scale forest plantations because of legal and organizational constraints.

Brazil, Chile, Paraguay, Ecuador and Bolivia are net exporters of forest products (1996-2000). There is a great difference between Brazil and the rest of ALADI countries in terms of value of exports for the same period; Mexico, Colombia and Venezuela are net importers for the period 1996-2000. Mexico accounts for 56,4% of ALADI forest imports, followed by Brazil, Argentina and Venezuela, 15%, 9,8% and 7,5% respectively. The rest of countries account for 11,2% of ALADI forest imports.

Most of the economies are service-oriented. This would make us re-evaluate forestry as a secondary activity and turn it into a tertiary one, producer of environmental services, especially for countries with less industrial and technical advantages. Therefore, it is important to know which forestry services are available and which is the value of these services.

Fiscal incentives have been phased out (Brazil). Incentives directed to small landowners (Chile). Incentive program for co-operative and private landowners (Mexico).In Latin America, the utilization of forest resources has focused mainly on the extraction of wood and non-timber forest products, with little attention to the potential income from environmental services (stabilization of climate, watershed protection, carbon sequestration, necessary to create both national and international policies and instruments that will permit key actors to capture income and the society in general to benefit from the environmental services provided by forests and recreation, among others).

The forestry sector has economic potential in many countries in Latin America. But first changes must take place within the forestry sector which could be conducive to economic growth. These changes can only be achieved through the active participation of the local community, the traditional inhabitants and forest producers, for example. Traditionally, there has been a lack of consensus among different interest groups in Latin America. But recently with the democratization processes moving forward, there has been an improvement in the relations between various sectors of civil society. This will hopefully facilitate dialogue between the different groups for sustainable forestry development.

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