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Session 6: Macrotrends for the twenty-first century

Economic growth and social trends in Asia and their implications for Asia's forests

Shiladitya Chatterjee1,2

The paper examines the major economic and social developments in Asia and their linkages. It presents progress in poverty reduction and the Millenium Development Goals (MDGs), including progress in MDG 7 focusing on forests. It shows the broad trends in economic growth, population growth and urbanization in Asia and discusses whether there are strong relationships evident among them. Topics briefly covered include trade-offs between social and environmental outcomes, if any, and the broader issue of environment and poverty.

Keywords: economic growth, social trends, Millenium Development Goals, forests, urbanization, Asia–Pacific region

Introduction

This paper presents some of the important social and economic trends in Asia and the Pacific that have a bearing on the growth and development of forests in the region. The protection and growth of forests has become a vital requirement for ensuring sustainable development. The state of our forests is an important indicator of the health of our natural resources and the environment; indicators on area under forestry and areas protected to preserve biodiversity have therefore been included among the Millennium Development Goals (MDGs). There is now growing recognition and consensus on the need to take cooperative global action to prevent global warming, evidenced by the award of the Nobel Peace prize to former United States Vice-President Al Gore and the UN’s climate change panel as well as agreements reached at the international climate conference in Bali in December 2007.3 However, there is insufficient study of the relationship between environmental developments and their social causes and consequences. A study of the inter-relationships between socio-economic factors and forests is therefore important.

This paper does not attempt to examine these inter-relationships in detail as this should be the subject of specialized research institutions. Instead it takes a broad view of them and poses a number of issues for consideration and further discussion.

Progress in poverty reduction and the MDGs

Income poverty. Any discussion of social trends must begin with a discussion of the status of poverty in the region because the elimination of poverty is considered the principal objective of development and an important indicator of welfare improvement. Progress in an important dimension of poverty, namely “income” poverty, measured by the proportion of a country’s population earning less than a dollar a day has been impressive in the region. Between 1990 and 2005, the number of the poor by this measure fell from 900 million to 600 million (ADB 2005). Yet this still represents continuance of severe deprivation on a massive scale, with more than half of the world’s poverty-stricken population still found in the Asia–Pacific region. Also, as poverty has to be viewed not only in terms of income deprivation but also with regard to lack of education, health and other such “non-income” disparities, which are now being measured through the MDG income and non-income poverty indicators, a better idea of the improvements that the region has made in this broader sense of poverty can be obtained by looking at its record in terms of progress on the MDGs. By this criterion, the region’s progress is less spectacular.

Non-income poverty and the MDGs. Thus, although the region has made improvements in primary education and in gender equality in education, with likely achievement of the MDGs in these areas, the region is unlikely to meet MDGs relating to nutrition, child mortality, access to improved water and sanitation and several environmental targets. The latter includes the target to reverse the loss of forest cover (Figure 1) (ADB, UNDP, UNESCAP 2007).

To better appreciate the scale of these non-income deprivations, it is enough to point out that currently the Asia–Pacific region still accounts for more than 50 percent of the world’s population suffering from lack of basic sanitation and access to clean water; the world’s population of malnourished children; and those infected with tuberculosis. In addition, more than 40 percent of the world’s maternal deaths occur in the region; more than one-third of the world’s children who do not attend primary school; and more than one-fifth of those suffering from HIV/AIDS (Figure 2) (ADB, UNDP, UNESCAP 2007).

Figure 1. MDG projection for Asia–Pacific     Figure 2. Total people deprived in Asia–Pacific according to selected MDG indicators

Progress on MDG 7 and the forest targets. The MDGs also include a goal on environmental sustainability (MDG 7) that has a target for reversing the loss of environmental resources. Within this target a specific indicator is on the proportion of a country’s total land area under forests with the aim of reversing the reduction of this proportion by 2015. As reported in the ADB– UNDP–UNESCAP (2007) report, the percentage of forest cover declined in most Asian countries from 1990 to 2005. These countries include Mongolia, Japan, Republic of Korea, Pakistan, Nepal, Afghanistan and all of the Southeast Asian countries except for Viet Nam. (Figure 3) Looking at subregional groupings in Asia, reversing the fall in the proportion of land area under forests is unlikely to be achieved in any of the subregions in Asia other than South Asia. The Asia and Pacific region as a whole is also unlikely to meet this important target which is a matter of serious concern. This calls for urgent remedial action by countries at risk of not meeting this important environmental target.

Although the prospects of reversing the loss of forest cover in the region are bleak, the current projections indicate that the region is likely to reverse the loss of areas protected to preserve biodiversity.

Source: ADB-UNDP-UNESCAP: MDG Progress Report 2007 for Asia-Pacifi

Figure 3. Percentage of land area covered by forest in selected Asian regions, 1990 and 2005

Economic and social trends in Asia

Economic growth. Of the major economic and social trends being witnessed in the Asia and Pacific region, perhaps the most important is the steady economic growth that the region has experienced since the 1990s. As Figure 4 shows, except for the Asian financial crisis years, economic growth rates for the Asia–Pacific region have exceeded 6 percent per annum in the entire 1996–2006 period.4

Economic growth has wide-ranging implications. It is considered by many to be the single most important factor responsible for reducing income poverty, as it helps to raise the incomes of all income classes, including the poor. Indeed, Asia’s growth process has generally favoured the poor, although in recent times there has been a tendency in many countries for growth to benefit mainly the relatively better off. As Figure 5 shows, there is a strong association between recent Asian economic growth and poverty reduction. For Asia, the Asian Development Bank (ADB) has estimated that such an association is stronger than for the world as a whole.5 Economic growth also plays a major role in reducing non-income poverty. It does this by enabling people to have greater access to education, health and other basic services as well as providing more revenue for governments to provide public services on which the poor are more dependent than the rich. However, several studies have shown that the beneficial impact of economic growth on non-income poverty is weaker for many indicators of non-income poverty, compared to income poverty.

Economic growth also has implications on natural resources and the environment. Global warming, for example, has now been determined to be anthropogenic, leading to carbon emissions from power generation, industrial activity and transportation, amongst others, which all increase with growth and industrialization. Growth similarly impacts on forests — forests provide valuable resources, such as timber, for growth, leading to their decline if logging is conducted unsustainably; but growth, through resources that it makes available to public authorities, also facilitates better efforts at forest conservation and management. However, a discussion of the relationship of economic growth on forests in the Asian context is deferred until later.

Figure 4. GDP growth for the Asia–Pacific region    Figure 5. Growth and poverty reduction developing countries

Demographic trends and urbanization. Among the broad social trends in the Asia–Pacific region, two are expected to have major implications on forests: population growth and urbanization. Population growth requires land for habitation and for growing crops, which compete with forests for land.6 Urbanization, partly as a result of industrial agglomerations, also demands land; while some of the land required for expanding urbanization comes at the expense of agricultural land, others may encroach on forested land, particularly if urban areas are contiguous to forests. Urbanization also leads to greater demand for timber for housing and could lead to deforestation unless such timber use is compensated for through reforestation or scientific and sustainable forest management practices.

Asia currently accounts for 60 percent of the total world population, or four billion people; projections state that Asia’s population will continue to grow at a declining rate to around 5.2 billion by 2050 (UNDESA 2007). Looking at population growth at the subregional level (Figure 6), population expansion will continue quite significantly, although at a declining rate till 2050 particularly in South and Southeast Asia, but the total population size in East Asia will start leveling off by 2020 and decline thereafter. This implies that negative population pressure placed on forests will continue in all parts of Asia except for East Asia after 2020.

Asia has also been experiencing rapid urbanization and will continue to do so at an unprecedented scale in the next few decades (UNFPA 2007). By 2030, all of the Asian subregions except South Asia will have more than 60 percent of their populations in urban areas (Figure 7). Urbanization is the result of rural–urban migration on a much faster scale than seen before as Asian economies rapidly transform from traditional rural and agricultural orientation to one based on urbanization, industry and services. Asia’s cities and towns were home to 44 percent of its population in 1990 and this is expected to increase to 54 percent by 2030, making it the home of the largest number of urban dwellers in any region of the world (UN Population Division 2006).

               

Figure 6. Population expansion in in Asian subregions    Figure 7. Trends in urbanization Asian subregions

Impact of Asian economic and social trends on forests

The implications of economic growth on overall welfare have been positive in the Asia–Pacific region, measured both in terms of: (a) significant increase in average per capita GDP, signifying improvements in average living standards; and (b) in reduction of absolute deprivations induced by reduction in income poverty. However, such growth is generally considered to have impacted adversely on the environment, through the generation of greenhouse gases, etc. In this paper, however, the focus is only on the implications on forests.

Cross-sectional data pooled with time series7 shows, however, that there is a weak positive relationship between per capita GDP and percent of area under forests (forest cover) using simple regression measures (scatter plot in Figure 8). However, using similar data8 there appears to be a negative relationship between urbanization and forest cover (Figure 9) and also a negative relationship9 between population density and forest cover (Figure 10). The latter relationship is also illustrated for a few selected countries in Figure 11.

Figure. 8. Regression of forest cover on per capita GDP

Figure. 9. Regression of forest cover on urbanization

Figure. 10. Regression of forest cover on population density

Source of basic data: UN Statistics Division Common Database

Figure. 11. Population and forest cover in selected countries

However, these simple regressions do not often reveal relationships well because pressure of population, urbanization and growth all combine to impact on forests. A multiple regression using cross-sectional data with these three factors as explanatory variables would therefore provide a better picture.

Using a multiple linear regression,10 therefore, on the percentage of forest cover with proportion of population to total land area, GDP per capita and percentage of urban population as regressors, again confirmation is found of a significant negative effect of population and urbanization on forest cover and a very small positive effect of GDP per capita on forest cover. This is shown in the following regression:

For = 53.7 – 2.4 (Pop) + 0.01 (PGDP) – 0.7 (Urb) R2: 0.298
                      (-5.79)          (5.81)             (-4.36)
       note: t-values are given in parentheses

Where:

For Percentage of forest cover
Pop Population density (population per hectare)
PGDP GDP per capita
Urb Percentage of urban population to total population

In the Asian context, therefore, both population increase and urbanization seem to be impacting adversely on forests, while growth does not appear to have any adverse effect on forests, although it may impact on other aspects of the environment. The reasons why growth may not be impacting adversely on forests are manifold. One is that it generates less dependence on agriculture (this point is discussed further hereunder). However, the other two major social developments, population and urbanization, do have significant adverse effects on forests. This implies that the continued population expansion and urbanization that the region will witness will continue to put pressure on forests. Unless proactive measures are taken to counter these effects, we may see a further dwindling of forest cover.

It must be pointed out that while growth, population increase and urbanization are major social trends, there are other social factors that may also be impacting on forests. These also affect the future of forests in Asia and are discussed briefly hereunder.

Social and environmental convergence

The above sections have indicated that although economic growth by itself does not seem to have adversely affected Asia’s forests, other social and demographic factors such as rising population and urbanization do appear to have played a role in reducing forest cover. Apart from these two major developments, other social trends such as decentralization and changes in governance standards may also affect forests, although they are not discussed thoroughly in this paper. That there are significant trade-offs between social objectives and protection of forests is clear, and often starkly demonstrated, particularly in developing countries. The dichotomy between protecting forests and wildlife (such as the Bengal tiger) and increasing cultivable area that generates encroachment on forest land, thus bringing humans and beasts into conflict, has been well-documented (e.g, the Sunderbans in South Asia).12

Despite such short-term trade-offs, that improvement of the environment, including augmenting forest cover, is essential for the survival of the planet, has finally been universally recognized. This requires that environmental and social goals must converge in the long term because forces which protect the environment also improve the chances of sustainable growth and poverty reduction.

It is now increasingly recognized that poverty is caused to a large extent by environmental factors (ADB 2008 forthcoming). Soil degradation, desertification, flooding, rising sea levels and loss of natural resources all play a role in affecting livelihoods and reducing incomes, with the poor being affected the most. Natural calamities, such as cyclones and typhoons, which are occurring with increasing frequency as a result of climate change, bring misery mainly to the poor and impoverish the vulnerable populations living just above the poverty line. Some estimates (ADB 2008 forthcoming) indicate that half of the extreme poor in Asia estimated at 640 million living on less than one dollar a day (i.e. around 320 million) are poor owing to environmental factors. Climate change is likely to increase this number.

There is thus an urgent need to pay attention to the environment, in order to halt and reduce poverty; protecting forests is an essential part of this effort. This, however, is a long-term effort and as indicated above, there will be short-term trade-offs that will need to be addressed. People — mainly the poor — whose livelihoods depend upon farming and using forest resources, will have to be provided with alternative livelihoods so that forest cover can be expanded. However there appears to be a lack of coordination of efforts between environmentalists who advance the cause of forest protection and those of social scientists who point out that the needs of the poor require attention.

The international conventions on environmental protection are moving towards the development of international actions, goals and targets on the environmental front. From the outset, in order to strengthen coordination between environmental and social objectives, they need to be integrated with the already established MDGs. International aid supports the achievement of the MDGs, under MDG 8, for instance, and new global aid commitments necessary to assist less developed countries in adaptation to climate change13 need to be integrated with this thrust so that efforts in the environmental direction do not come at the cost of social counterparts under the MDGs.

At the microlevel, as far as the forestry sector is concerned, a similar coordination of effort is needed to see that the needs of the poor — such as those in the Sundarbans — and the needs of expanding forest cover do not come at the expense of each other. Education, capacity building, training on alternate livelihoods and encouragement of investments to provide outlets for the same are some essential measures that policy-makers must adopt. A multidisciplinary approach will be essential.

Conclusions

The purpose of this paper was to present the recent social and economic trends in the Asia and the Pacific region and their effects on MDG 7, particularly on the target relating to forest cover. Given current trends assessed in 2007 — the crucial half-way mark between 2000 when the international community agreed collectively to the MDGs and 2015 by which time the goals have to be met — the Asia and Pacific region is unlikely to meet the MDG target of reversing the loss of forest cover that existed in 1990 by the target date of 2015. It is conjectured that the task is likely to become harder given two major social trends that appear to have a negative impact, namely increased population pressure that will continue in the region and also rapid urbanization. Although rapid economic growth does not appear to have any adverse impact on Asia’s forests — although it is known to have a negative effect generally on the environment — the other two social developments will pose increased pressure on land under forests.

This does not necessarily mean that the decline in forest cover cannot be reversed through proactive action. There is still time and countries in the region acting within their national spheres as well as collectively through regional cooperation can make a big difference. Action to increase the productivity of land and labour in agriculture, which competes directly with forests for land, as well as encouraging alternative non-agricultural livelihoods, particularly for those who cannot sustain themselves adequately in agriculture, are important measures. Increasing education and skills are important instruments in this regard. Governments also need to identify alternative sources of revenue other than logging and take more proactive measures to implement their own national laws to protect forests. More cooperative action between countries in the region to protect forest resources seems necessary.

However, action by governments alone will be insufficient and may prove woefully inadequate for the tasks ahead. Other stakeholders have important roles to perform. The private sector’s cooperation in the sustainable management of forests is crucial. Many groups have incorporated environmental improvement objectives as part of their corporate social responsibilities and this trend, if widely adopted, will make a major difference. Finally, the role of NGOs, civil society and communities in raising awareness of the need to protect and expand forests, to act as the eyes and ears of the public authorities, to monitor closely the activities of those who violate national laws and also to act in concert with public authorities in the common objective of nurturing and protecting natural resources and forests, is essential and will help in ensuring that they are preserved for future generations.

Bibliography

Asian Development Bank (ADB). 2004. Key indicators 2004. Manila, ADB.

ADB. 2005. Key indicators 2005. Manila, ADB.

ADB. 2008 (forthcoming). Environmental poverty: new perspectives and implications for sustainable development in Asia and the Pacific. Manila, ADB.

ADB, UNDP & UNESCAP. 2007. MDG progress report 2007 for Asia and the Pacific. Bangkok.

De Souza R., Williams, J. & Meyerson, F. 2003. Critical links: population, health, and the environment .Population Bulletin 58, 3. Population Reference Bureau.

Gardner-Outlaw, T. & Engelman, R. 1999. Forest futures: population, consumption and wood resources. Washington, DC, Population Action International.

Meyerson, F. 2004. Population growth and deforestration: a critical and complex relationship. Washington, DC, Population Reference Bureau.

Oka, N. & William, D. 2004. The policy dilemma for balancing reforestration funds. Decentralization Brief No. 1. Bogor, Indonesia, Center for International Forestry Research.

UN Department of Economic and Social Affairs (UNDESA). 2007. World population prospects 2006. New York.

UN Development Programme (UNDP). 2007. Human development report 2007/2008. New York.

UN Population Fund (UNFPA). 2007. State of the world population 2007. New York.

Databases

UN Statistics Division Common Database.
World Development Indicators Database.


1 #6 ADB Avenue, Mandaluyong City, 1550, the Philippines. Tel: 63 2 632-6708. E-mail: schatterjee@adb.org.

2The views expressed in this paper are those of the author and do not necessarily reflect the views of the Asian Development Bank. I am thankful to Joseph Addawe for data support for the regressions in the paper.

3 UN Climate Change Conference, Bali, Indonesia, 3–14 December 2007.

4World Bank, World Development Indicators Database.

5 In Asia, a 1 percent increase in growth has been estimated to have led to a reduction of 2 percent in the incidence of poverty; whereas for the world as a whole, the reduction in poverty incidence is only 1 percent for the same increase in growth. The difference is attributed to better income distributions in Asia compared to other developing regions (ADB Key Indicators 2004).

6 Meyerson (2004) also alludes to this.

7 UN statistics database for 39 Asian developing countries using GDP per capita and percentage of forest cover data for 1990, 2000 and 2005. It is assumed that the coefficients of the regressions have not changed over time. (A set of regressions to test for changes in the intercept term confirmed this.)

8 UN statistics database for 39 Asian developing countries using percentage of urban population and percentage of forest cover data for 1990, 2000 and 2005.

9 UN statistics database for 38 Asian developing countries using population per hectare for 1990, 2000 and 2002 and
percentage of forest cover data for 1990, 2000 and 2005.

10 UN statistics database for 38 Asian developing countries using population per hectare for 1990, 2000 and 2002 and
percentage of urban population, GDP per capita and percentage of forest cover data for 1990, 2000 and 2005.

11 Issues related to this were discussed, for example, at the East Asia Ministerial Conference on Forest Law Enforcement
and Governance, 11–13 September, 2001. Bali, Indonesia.

12 See for example Amitava Ghosh’s well-researched novel The hungry tide.

13As argued in the recent UNDP Human Development Report 2007/2008.

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