Driving forces for change
What are the challenges and potentials?
Summary of key driving forces
Selected major driving forces influencing the future
A number of important factors and developments will shape the forest sector in the Asia-Pacific region in coming years. In broad terms, forestry like all other sectors responds to macro-level factors. These include:
· economic growth (and related changes in personal wealth, prosperity, and consumption patterns);
· population growth and changes in demographic attributes (rural/urban balance, agricultural dependency, incomes and prosperity, changes in aspirations and expectations such as greater interest in environmental issues);
· land-use change (particularly deforestation);
· changes in social dimensions (including changes associated with cultural, ethnic, gender equity issues; changes in socio-political structures, and issues associated with improved education, welfare, and other social services); and
· evolution of political orientations and policies (within and outside the sector); and institutional/policy adaptations (such as economic liberalisation and deregulation, decentralisation, adherence to trading blocks, becoming parties to international agreements and the associated obligations).
Somewhat distinct from these more "human" macro-dimensions are environmental factors. Increasing concerns over pollution from industrial discharges, climate change, soil and water degradation, deforestation and forest degradation, and visual/aesthetic pollution are of marked significance to the forestry sector.
More direct in their influence on forestry are developments in linked sectors. Most important in many countries are developments in the agriculture sector, including developments in population settlement that may be associated with it. Critical to the future of forests is the rate at which farm productivity grows. Higher yields on land already cleared might enable a point to be reached where population increases no longer automatically call for more forests to be cleared for farming.
The energy sector is also closely linked to forestry. Most directly, woodfuels and farm residues are important elements in national energy budgets. The rate at which they are displaced by "modern" conventional fuels or at which they enter the commercial mainstream themselves will affect the forestry sector.
Transport infrastructure, particularly roads, can also have major impacts on forestry. By improving access to forests, roads offer greater ease of settlement, encroachment and deforestation. On the positive side, roads open up opportunities for viable commercialisation of forest resources.
An underlying factor often given too little attention is technological change. Apart from affecting farm productivity, it can directly increase efficiency in forestry and forest industries. The post-war period has demonstrated the power of technology to produce more from less. Between 1970 and 1994, global production of industrial roundwood rose minimally - by 15 percent. During the same period, however, products manufactured from roundwood rose by much greater margins - for example, production of wood-based panels increased by 80 percent; and production of paper and paperboard increased by 113 percent. The apparent gains for developing countries were even more striking: while production of industrial roundwood doubled, their output of panels rose 467 percent and output of paper and paperboard rose 533 percent. These improvements came largely from greater use of "wastes" to manufacture marketable products (such as reconstituted panels) and recycling of fibre for paper manufactures. Improving conversion factors in all processes also contributed significantly.
Population and rural/urban dynamics
Continued population growth, particularly in countries with large rural populations and a high dependency on agriculture, is likely to result in continuing conversion of forest land to agricultural and other uses. While, in a few countries, there has been a reduction in land permanently under crops, in most of the large countries in the region the area being permanently cropped has increased, and can be expected to continue to do so. In many countries, this expansion will take place through the conversion of forest to agricultural land. In turn, this will likely lead to a future in which the ability of the region's forests to produce the products and services expected of them is reduced. In many countries, however, tree growing outside the forest has permitted continuing availability of wood, mostly for subsistence needs but increasingly also for smallholder supply of industrial raw materials.
The rural-urban balance is shifting in the region. In some countries, both the proportion and the absolute numbers of rural people will fall; in others, only the proportion will fall while absolute numbers will increase. UN projections of rural population changes suggest that by 2025, the region as a whole will have had a net loss in rural population of some 24 million people. For the region as a whole, therefore, a slight easing of direct pressure on forests by rural people is likely with time. There will, however, be contrasts. While almost all of North Asia will become more urban, the situation in Southeast Asia will be mixed, and South Asia will have a net increase in rural population.
Unless agricultural productivity improves significantly in the countries with expected increased rural populations, increased direct pressure on forests for farming can be expected. Population pressures will increase migration pressures and immigrants may disrupt existing communities. Where these communities are forest-dwelling or forest-dependent, a broad range of social forestry issues will arise.
Because income is such an important influence on consumption of almost all goods and services, increasing prosperity will present major challenges for forestry in the Asia-Pacific region. Average real per capita GNP in the region tripled between 1962 and 1992, from $438 to $1,310. During the same period, the world average grew by only 75 percent, from $1,688 to $2,956. A recent review81 projects that within the next 15 years some 700 million people in the People's Republic of China, India and Indonesia alone will have an average per capita income equivalent to that in Spain today. If past rates of economic growth are continued, by the year 2010, the Asia-Pacific region (excluding Japan) will have gross spending power about 50 percent more than that of the United States of America today.
81 Original sources cited in Chipeta, M.E, A. Whiteman and D. Brooks (1997). Review of Asia-Pacific Economic and Social Development till 2010 (with focus on economic growth and population). Document APFSOS/WP/47. FAO, Rome.
Although recent economic adjustments in a number of Asia-Pacific countries have had dramatic, short-term consequences, most observers continue to expect renewed long-term growth in the region's economies. The following may also be noted:
· A great increase in domestic purchasing power in the region will create domestic markets far larger than the world has seen before. Such changes will be challenging for both timber-based and non-wood forest products. For non-wood forest products, many of which are gathered at low intensities, methods of production and distribution must be adapted to market conditions. In countries where the control of access to forests is weak, this could lead to greater problems of illegal logging and poor forest management as producers seek to meet expanding market demands. In countries with large forest products export sectors, the diversion of supplies to domestic consumption could be quite rapid. This would lead to major net importers such as the People's Republic of China and Japan importing more from sources outside the region. If external sources are also limited, substitution by other materials for wood-based products would need to be contemplated;
· Forest products have been an engine for economic growth in several countries of the region (notably Malaysia and Indonesia). The forestry policy challenge facing these countries, and others hoping to emulate them, will be to achieve developed-country status without excessively depleting forest resources in the process. This will require better long-term planning in the forestry sector and probably stronger forest protection policies.
· Greater interest in non-production forest functions may develop with greater incomes. Many of these will be environmental and recreation services. Concern for the environment and for the ecological services provided by forests are not yet perceived as priorities in the greater part of Asia and the Pacific, as many countries are more preoccupied with the role of forests in producing economically or socially useful physical goods. As the region's people become richer, however, they are likely not only to put additional pressures on forests in the Asia-Pacific region through increased demand for goods, but they will also shift the balance of their demands toward greater prominence of services.
· The developed countries of the region have already withdrawn large areas of their natural forests from industrial production functions. This trend has now spread to some of the developing countries. India and Thailand, for example, have introduced environment-driven policies restricting industrial harvesting in natural forests. If this trend continues as countries prosper, there could soon be considerable reduction in the future wood supply potential. It might also require a large redirection of forestry policy in some countries in the region to favour industrial plantations or other compensatory measures, including increased import-dependency (as India is already responding to log shortfalls).
For the Asia-Pacific region, as elsewhere, reconciling increasing demand and expanding market opportunities with sustainable forest management will be a challenge in the future. For a number of countries in the region, industries producing for both domestic and export markets rely on imports of raw materials, particularly fibre for paper and paperboard. Trade is thus a way to complement the region's own resources where they fall short; but it also offers an outward channel for products in surplus. Interdependence through trade is increasing both within the region and further afield, but it complicates the policy challenges facing the region's forest sector. Specific developments that could affect sector development include the pace of progress toward greater liberalisation;82 progress in mainstreaming trade certification; and attitudes toward tropical timbers in international trade. Widespread adoption of environmental guidelines (of the kind seen increasingly in Europe) requiring larger shares of recycled fibre in paper, could also affect the sector and trade patterns, including commodity composition.
82 Two analyses prepared specifically for this outlook study provide in-depth insights: (1) Brown, C. (1997): The implications of the GATT Uruguay Round and other trade arrangements for the Asia-Pacific forest products trade. Document APFSOS/WP/03. FAO, Rome. (2) Waggener, T R. & C. Lane (1997): Pacific Rim demand and supply situation, trends and prospects: implications for forest products trade in the Asia-Pacific region. Document APFSOS/WP/02. FAO, Rome.
Broad challenge - achieving appropriate leadership
Services of forests
Non-wood forest products
Industrial wood products
Challenges related to people and forests
Challenges related to forest and tree resources
Challenges related to policies and institutions
The Asia-Pacific region has some major attributes and endowments that give it potential for a high profile on the world forestry stage. For example:
· the region continues to have an extensive forest resource endowment ranging from humid tropical forests to temperate forests; it has one of the world's most biologically diverse forest resources;
· the Asia-Pacific has the world's largest forest plantation estate and substantial stocks of agricultural tree crops with wood- and fibre-production potential (coconut, rubber, oil palm, etc.); both are being expanded at a rapid pace;
· the region consumes more woodfuels than any other region;
· the Asia-Pacific has large and growing markets spanning subsistence to sophisticated modern consumption, and comparable in size to the European market for many industrial forest products;
· the region is a significant producer of much that it consumes but still relies heavily on imports;
· several countries in the region are major forest product exporters, while several others are major importers; the region thus figures prominently among the major trading regions in forest products;
· the Asia-Pacific is unique among the global regions in spanning both developed and developing countries;
· the region has demonstrated institutional capacity to organise its societies for rapid and sustained development; and
· the region has a rich endowment of forest biological diversity, and a long tradition of using the forest as a source of medicines, food and other non-wood products, some of which are already entering the modern mainstream.
A broad challenge for the Asia-Pacific region relates to achieving appropriate leadership in forestry. The region possesses an enormous level and variety of knowledge, skills and practices that are relevant and valuable for other countries and regions. The region is, however, only beginning to assert itself as a leader in world forestry. The region needs to confidently identify areas for potential leadership and move forward robustly in promoting its strengths to capture these areas of leadership.
The biggest challenge related to the provision of services of forests will be to achieve public awareness and acceptance that services are as important as timber benefits and that they can be economically realised. This may require convincing the middle class that ignoring ecological services of forests will cause enormous downstream costs that will directly affect them in negative ways. A further challenge is to create self-sustaining "markets" for services or ways for beneficiaries to share the costs of sustaining forests for noncommercial service functions.
Accordingly, an influential factor will be developing further valuation methods for pricing externalities and for identifying beneficiaries. If policy-makers can be influenced by such methods, it will be possible to secure more support for maintaining and investing in the diversity of services of forests.
The main challenges that are likely to face NWFPs development in the future include the following as key elements:
· Policy and institutional issues
- Lack of focus in programmes: in most countries, NWFPs have not been screened to identify those with potential to develop into mainstream products. Promotional efforts are thus dispersed over too many NWFPs, many of which have no commercial future. It will be necessary to ruthlessly select for priority attention only those products with great potential (according to location and socially sensitive criteria) and draw promotional resources to them.
- Absence of investment in research and development: efforts are also handicapped by lack of a focused agenda; there are too many NWFPs for all to be supported.
- Institutional and policy neglect: this is partly due to lack of awareness of potentials and to dispersed attention. Once priority NWFPs are identified, programmes for their sustainable development can be more easily prepared and supported.
- Lack of competitiveness and consequent challenge from synthetics: there is need for aggressive marketing of the "environment-friendly" attributes of NWFPs, and efforts to gain mainstream acceptance for selected products rather than to simply have "niche" status in the market.
· Resource issues and responses
- Small scale of industry: this tends to be associated with marginalisation in national economies, weak absorption capacity, and high transaction costs.
- Economic weakness of NWFP-dependent communities: the weakness of such communities means that they are unable to protect themselves against powerful outsiders that may appropriate most of the value in commercialising NWFPs.
- Deficient management practices: due to the small-scale of operations, management systems and practises have not been adequately developed for many products.
· Technical and management issues
- Absence of inventory information: without such information, sound management decisions are difficult to make.
- Lack of integration into the overall management of forests: NWFPs and timber are mutually supportive if NWFPs are managed along with wood in an integrated manner.
- Domestication of NWFPs: for NWFPs that achieve mainstream commercial importance, domestication and plantation establishment are essential. Yet within "forestry plantation" programmes, little has been done to deliberately integrate selected NWFPs.
- Unsustainable harvesting: at present, incentives encourage over-exploitation of many NWFPs, and there are few regulatory checks on their harvesting.
- Inefficiency in processing: technology for processing most NWFPs is outdated and research to improve it is lagging. The situation is exacerbated by lack of skilled workers, management expertise, investment and marketing arrangements.
The main policy challenge for wood energy development in Asia and the Pacific is to promote technically viable, economically efficient and environmentally sustainable woodfuel use. The broad policy areas that need to be addressed include: improving information related to wood energy, improving the functioning of markets, developing wood-energy strategies, and strengthening wood-energy planning capabilities.
Related to the main policy areas, the major challenges to wood energy development are:
· Social: the challenge is primarily due to the low socio-economic status of the majority of traditional fuel users. Low socio-economic status means they and their problems are easily marginalised.
· Economic: the main challenge is to ensure the financial feasibility of large-scale dedicated wood-energy supplies, particularly on public lands (forest and community lands) where a majority of the poor collect their woodfuel.
· Technological: this challenge is primarily associated with the costs of technological adoption. Technology transfer is expensive.
· Institutional: government policies for bio-energy development and the role of the private sector are not clear in most countries.
· Legislative: existing policies and legislation in the forestry, agriculture and energy sectors are not geared to promote wood-energy development and may often not be conducive to its planned development. For example, issues related to land ownership and tree tenure are especially important in wood-energy development.
Ensuring reliable supplies of industrial wood products at prices that are competitive with other industrial consumer products is among the key challenges the region will face in the future. Given its open trade stance, the Asia-Pacific region would be ill advised to seek self-sufficiency for all products that are in "deficit." In keeping with the spirit of Asian success, it would be more appropriate to identify and pursue those products and forest activities for which the region has a comparative advantage while continuing to import other products.
Decisions on what policies and products to emphasise may need to be taken soon. It is likely that regional and global supplies of wood will contract in the near future in response to environmentally driven policies. Policies to support industrial forest products will need to be compatible with such environmental policies, and they will have to be realistic in their approach with regard to wood supplies.
The following themes and trends represent immediate challenges for the industrial wood sectors:
· Increasing substitution of coniferous timber for hardwood production. While supplies of natural forest hardwood timbers are increasingly constrained, a number of countries within the region and outside the region have rapidly maturing plantation estates that will provide significantly increased volumes of softwood in the next decade. These supplies, particularly in engineered forms, will provide considerable scope to substitute for hardwood species in many applications. Natural forests in the Russian Far East also have potential to replace North American supplies in the future.
· Adapting to greater emphasis on fibre processing as opposed to solid-wood processing. As supplies of high-quality, large-dimension logs suitable for sawnwood and plywood decline, the focus will shift toward substitute products, including small-dimension logs, residues, non-wood fibre and recycled fibres. Revamping industrial capacity in tropical Asia to cope with smaller logs will be one of the biggest challenges affecting competitiveness of the sector; however, it will require considerable re-investment.
· Further moves toward increased processing in developing producer countries (as opposed to consumer countries). This has progressed furthest in countries such as Indonesia and Malaysia, but is steadily occurring in other countries with extensive resources as well. Considerable difficulty exists, however, in countries with weak institutional capacities.
· Increasing dependence of the region on trade to meet demands for forest products. Wood production within the region, with the exception of the few plantation-rich countries, is unlikely to increase markedly from the present.
· Adapting to increased environmental measures in trade. Irrespective of the degree to which certification may become a requirement, there will be pressure to accommodate more strict criteria for forest management in order to trade easily.
Four main areas related to people/forest relationships warrant special attention. The first is to assist indigenous forest-dwelling communities to increase the range of livelihood-supporting options. Increasing interaction with migrants is exposing traditional forest-dwelling people to competition, but also to skills and to knowledge of alternative lifestyles. The challenge is to use this contact positively and to minimise conflicts.
The second challenge relates to mainstreaming collaborative forest management between governments and local communities living near forests. So far, the tendency has been to release only poor-quality forests for joint management. This has understandably produced a climate of mistrust. Attempts to cede richer forests and to introduce lucrative processing activities into joint forest management agreements have been introduced only recently and in only a few locations. Building capacity and enhancing confidence among local people are needed to enable them to take on modern management and commercial tasks successfully. Three-way collaboration among people, government and commercial firms may be useful in transferring capabilities to local people.
The third challenge is to make tree planting on farmlands more financially attractive. Agroforestry and tree planting have too often been subsistence focused. Where commercial orientations have been adopted, oversupply has sometimes occurred and prices have fluctuated erratically. A considerable challenge, therefore, is to accompany promotion of tree planting with support for market development.
The final major challenge is to promote production forestry for low-income urban centres or to make existing forestry activities more responsive to needs of urban areas with many poor people. The main issues relate to ensuring high productivity to compensate for high land costs near cities and identifying and strengthening institutions responsible for urban forestry.
Generally, countries with high incomes are increasing forest cover (although many first destroyed their forests and have since regrown new ones), while lower-income countries are losing forests or significantly degrading them. This suggests a clear link between wealth and capacity to conserve or increase forest cover. The main driving force through which wealth operates is in reducing the need for land conversion to agriculture and rural settlement. Wealth may also reduce the pace at which forests are harvested for subsistence needs (such as fuelwood), but could lead to increased industrial harvesting.
A major challenge is to avoid irreplaceable or irreversible losses or damage until incomes rise sufficiently to enable developing countries to reverse forest-cover changes. One sign of hope is that in many "deforested" countries, trees outside forests are actually increasing in number. Particularly in South Asia, where forest loss has been greatest, a challenge will be to promote an integrated view of forest and non-forest goods and services, and to manage these as a unified system. At present, foresters tend to focus on forests and act as if trees outside strict forest areas matter less. Similarly, they tend to ignore tree crops (being the responsibility of agricultural agencies) despite the fact that these yield substantial raw material that substitutes for forest products and is used by forest industries. For their part, agencies responsible for agriculture often focus only on the oil, latex or fibre for which the tree crops were initially planted. In the future, blending objectives and achieving acceptance of joint responsibility for such "frontier" or "interface " crops will be one of the key policy and institutional challenges in the region.
To promote progress in developing forest and tree resources, the following main challenges will have to be successfully addressed:
· setting achievable targets and implement forest development plans that combine forest resource expansion, conservation, enhancement and rehabilitation, and holistically cover wood, non-wood and service benefits of forests;
· taking firm action to progressively enhance conservation, reforestation and forest productivity and to reduce or halt deforestation and forest degradation; policies and actions both within and outside the forestry sector are needed;
· introducing and scientifically implement integrated management of forest resources;
· emphasising socio-economic benefits in forestry programmes in addition to financial profitability; and
· complementing forest resources with supplies from small-scale woodlots and trees outside the forest by providing incentives, removing obstructions and disincentives, and supporting research, extension, technology transfer, market information development and local credit facilities.
The forestry policy challenges facing the Asia-Pacific region cover as wide a spectrum as the countries' levels of resource endowment and socio-economic development. In the richer countries, societies can better afford to conserve much of the remaining natural forests for their environmental, recreational and aesthetic purposes. Some developing countries and territories, such as Singapore, the Republic of Korea, Hong Kong SAR, China and to a lesser extent Malaysia and Thailand, are also moving in this direction. The rest of the region will find it very difficult in the near-term to forego economic benefits from forest exploitation. These countries have fewer alternative income and employment-generating sectors to provide for the material needs of their societies.
Most societies would like more of all types of forest products and services, but trade-offs are necessary. The challenge is to maximise the output of all forest benefits simultaneously, perhaps through increased efficiency, better technology, and more skilled labour. Sound policies and solid institutional capacity will be crucial in this endeavour.
In identifying the policies and strategies to implement, an open approach is needed without preconceived value-judgements about forests, their value to society, deforestation, forest change, and suchlike.
In coming years, it will likely become increasingly difficult for forestry to capture the attention of policy-makers on the basis of economic development alone. Even in countries where the sector is internationally important, it rarely represents the main motor of development. Indeed, the relative significance of forestry, even in economies of moderate size, such as Malaysia, is decreasing as other sectors expand much more rapidly. Furthermore, the land occupied by forests is, in many cases, more valuable in alternative uses. Therefore, policy discussion should increasingly centre on trade-offs such as those between maintaining forest cover versus converting forests to agriculture or other land uses, maintaining forests in production status versus protection status, and sustaining benefits for indigenous forest dwellers versus broader society.
Trees and forests can be managed in many different ways. The Asia-Pacific region offers a full continuum of possible institutional arrangements. There is no single "correct" system; each must be judged according to its ability to deliver goods and services within the local historical, cultural, economic and political context. The exact choice of institutional arrangements is, just like decision on policies, a prerogative of individual countries.
Throughout the region, and the world, however, institutions are rapidly changing and many new institutions are demonstrating strong interest in forestry. The result is that institutional arrangements related to forests and forestry have become much more complex. A major challenge in coming years will be to mediate the differing views of the diverse interest groups in forestry and to channel their energies into productive forestry activities.
There will also be a need to function more effectively in cross-sectoral situations considering that the decisions in other sectors often have major impacts on forests. Similarly, the increasing globalisation of forestry requires that national and even local institutions dealing with forestry become au fait with international forestry issues and discussions.
To remain relevant in the future, forestry institutions will need to develop improved knowledge and mechanisms for dealing with emerging issues such as urban forestry, commercialisation of genetic resources, carbon sequestration, ecotourism, joint forest management, verification of sustainable forest management practise, product certification and various transboundary issues.