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1 INTRODUCTION

The contribution of the forestry sector to national economies is one dimension of sustainable forest management1 and information about this is needed to monitor progress in this respect. In countries and regions where the contribution to national economies is high, this information can be used to gain the attention of important policy makers. It can also be used to respond to the general perception that the sector is relatively unimportant and to highlight the contribution of the sector to poverty alleviation.

The Food and Agriculture Organization of the United Nations (FAO) is frequently asked for information about the economic importance of the forestry sector by policy makers and others with an interest in the sector. Previous work on this subject at the global level was published almost ten years ago (FAO, 1995) and that study only examined the contribution of the forestry sector to Gross Domestic Product (GDP). Furthermore, the simple methodology used in that study was to multiply the quantity of processed forest product production by the value of production (using international trade prices). The use of international trade prices and the calculation of the gross value of production (rather than value-added) led to an over-estimate of the contribution of the sector to GDP.

Because of the interest in this subject and the problems with the previous FAO report, work on this study was started in mid-2003 and completed by early-2004. The work involved three main activities: the collection of statistics from published national and international sources; the estimation of missing data points (in order to complete the dataset so that regional and global totals could be produced); and analysis of the dataset.

1.1 Scope and objectives of the study

Compared to the previous FAO study, the scope of this study was expanded to cover the following three economic indicators: employment in the sector; value-added (i.e. the forestry sector’s contribution to GDP); and the value of forest products exports and imports (i.e. the sector’s contribution to trade balances).

The scope of the “forestry sector” was defined as including the following sub-sectors: forestry (ISIC Division 02), wood industry (ISIC Division 20) and the pulp and paper industry (ISIC Division 21).2 The detailed definition of each of these sub-sectors is broadly comparable to the production and trade statistics compiled each year by FAO and presented in the FAOSTAT database (http://faostat.external.fao.org).

In addition, statistics for the furniture industry (ISIC Class 3610) were also collected, although they have not been included in the total for the forestry sector and no effort was made to estimate missing data points in this part of the dataset.

The objectives of the study were to produce a consistent and comparable dataset on forestry sector employment, value-added and the value of trade for every country and territory in the World, to examine the quality and amount of published data on this subject and to describe and comment on the trends in these indicators over the last ten years.

The dataset that was finally produced covers all of the major countries and territories in the World and presents data for every year from 1990 to 2000. This data has been stored in a computer database, which may be improved and updated. The database can be freely obtained from FAO (e-mail: arvydas.lebedys@.fao.org or adrian.whiteman@fao.org).

1.2 Limitations of the study

The compilation of the dataset revealed a number of constraints and limitations, mostly related to the quality and availability of published statistics (especially from developing countries). For example, no published statistics were available at all for some countries and estimates had to be produced for the whole of the period 1990 to 2000.

The methodology used to produce these estimates is explained in the next section of this report and it is believed that the regional and global totals probably give a reasonable indication of the true magnitude of the indicators at this scale. However, at the level of individual countries, the presence of FAO estimates (rather than published statistics) should be noted and these estimates should be treated with caution.

Another limitation examined in the report is the problem of underestimation, especially with respect to the generation of employment and value-added in informal activities such as the collection of woodfuel and non-wood forest products. For many developing countries, these activities are significant and it is suspected that the contribution of these activities is not captured in published statistics. Therefore, it is probably correct to state that the figures presented here only represent activities in the “formal” forestry sector. This is a very serious limitation of this study, which may be examined in a future study on this topic.

1.3 Structure of the report

The rest of this report is divided into two major sections, followed by a short section presenting a summary and the conclusions of the study. The next section describes the terminology, data sources and methodology used in the study. It also discusses in more detail some of the limitations described above. The section after this presents the data at the global and regional levels and the analysis of the historical trends in the data. This section is further subdivided into three sub-sections covering employment, value-added and trade. Two annexes present detailed information for each country and a list of references used as sources of information for each country.

1 For example, economic indicators are one component of criteria and indicators for sustainable forest management.

2 In most national statistics, economic activities are divided into different sectors and sub-sectors (e.g. agriculture, forestry, fishing, mining, construction, etc.). The International Standard Industrial Classification (ISIC) is a classification system that is used to ensure comparability between different countries and was the classification system used as the basis for most of this analysis (see next section for more description of the ISIC).

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