K.F.S. King
K.F.S. KING is Assistant Director-General in charge of forestry at FAO. He delivered this address in May 1977 at the Bundesforschungsanstal für Forst- und Holzwirtschaft, Hamburg/Reinbek, the principal forestry and forest industries research institute of the Federal Republic of Germany.
The reason why I selected the pulp and paper industry as the subject for this address is that it is apparent to me that today this industry exerts a considerable psychological attraction for governments of developing countries. Almost every developing country with a modicum of forest resources, or with what appears to it to be a sizable market, has approached the Food and Agriculture Organization with the request that they examine the possibility of establishing some type of pulp and paper factory, of one kind or another, in that country.
This is not surprising. The developing countries have been told, with some truth, that such an industry can save or earn foreign exchange; that it can introduce local personnel to a relatively sophisticated technology; that it has high forward, backward, and lateral linkage indices and can therefore ramify and influence many other sectors of the total economy; and that it is capable of employing relatively large numbers of workers, technicians, and scientists, the first group particularly in the forest. They believe that the industry yields high profits. In short, they consider that the establishment of a pulp and paper industry in their countries would provide them with a basis for sustained national economic development.
And they are not wrong, in theory. The problem is to distinguish between theory and reality. The problem is to decide in what circumstances these benefits which are inherent in the pulp and paper industry, indeed, some may say, which are a part and parcel of the entire forest industry sector, may be realized. The problem is to choose the correct strategy for the development of this industry in the less industrialized countries.
But first a few remarks concerning one phrase in the title of my address. I have deliberately chosen the term "political economy" even though some may consider it to be outmoded and discarded. I have interpreted it to mean "economic thought seen as a branch of statecraft."
I confess that I was just a bit influenced in my choice of this phrase by the fact that I knew that I was going to deliver this address in Germany. As you are aware, during the 19th century, German economists were somewhat dissatisfied with the "deductive" methods of the English "classification" school, and evolved the "historical" school. Now in my opinion, neither the "deductive" method nor the "historical" method, when applied alone, is entirely satisfactory. It was a German, Wilhelm Roscher, who provided the vital and necessary link between the "classifical" and "historical" schools of thought. In his Outline of political economy according to the historical method, he argued strongly, and to my mind convincingly, that there was need to infuse the study of historical facts and opinions into economic analysis. It is this approach that I wish to follow today. I am of the opinion that it is impossible to properly understand the operations of most sectors of any national economy without a full appreciation of the historical factors which have shaped the sector.
However, my main purpose in choosing the old term "political economy" is that I desired to emphasize that in the formulation of develop mental policies for the pulp and paper industry, and in examining the economics of that industry, individuals, or groups of individuals, or corporations, which influence governments cannot be ignored. I desired to stress, also, the inter-connections which exist, and will continue to exist between, for example, the fiscal and monetary policies of governments and the present and future structure and development of this subsector of the world's forest industries. And I intended to draw attention to the fact that very few economic decisions are today left to be solved in the market place. Even in the industrialized countries, government interventionist policies are to be felt in almost every sector of the national economies, not least in the forest industries sector, even though homage is paid to the principle of free enterprise. It is my contention that in the developing, non-industrialized countries, such interventionist policies are even more necessary, and that in considering the establishment of a single pulp and paper enterprise its influence on the entire national economy should be considered. As important as the historical factors which have shaped the sector, are the political factors within which it operates and will continue to operate.
Elsewhere1 I have described the legacy which was left in the developing countries when the proconsular classes departed, during the period which began at the end of the last World War, and which saw the decline of political imperialism. I have listed as legacies the lack of adequate infrastructure, the dearth of training institutions, and the dependence of the economies of the former colonies on the production, for export, of primary raw materials. I have pointed out that there was created in the minds of the peoples of the colonies a dependency syndrome. I have stressed that, by and large, very few industries had been established and that the basic preconditions for industrial development were not available in the colonies, in the developing countries, themselves.
1 KING, K.F.S. (1975). The Forestry Sector and Economic International Relationships. Weyerhauser Lecture Series, University of Toronto.
A LARGE EUROPEAN PAPER MILL - for the third world, right industry, wrong scale
Many analysts are convinced that the plight of the less industrialized countries become more acute over the last decade or so. High rates of unemployment, slow rates of economic growth, adverse balance-of-payments positions and debilitating external debt burdens are but a few of the problems which are almost common to, and chronic in, the developing countries. In addition to these, there are those which are caused directly by external forces, most notable of which is imported inflation.
I do not wish to imply that all these ills arc caused by the actions of the developed countries. Indeed, I am certain that many of the problems of the developing countries, such as the inequitable distribution of incomes, can and must be solved by the developing countries themselves. I am positive, also, that several of their difficulties are created by the less industrialized countries themselves in that they have tried to adopt, willy nilly, northern hemisphere styles of living, northern technologies, and northern concepts of welfare and happiness which not only are not always relevant to their particular situations and stages of evolution, nor indeed inherently desirable, but perhaps more important, which have forced them into direct competition with the industrialized countries. The handicaps which the developing countries bear are such, however, that only an optimist would believe that they can hope to compete successfully, in present and prevailing circumstances, with the industrialized countries.
But the developed countries must share some of the blame for the precarious nature of the economies of the developing countries. The commodities exported by the developing countries to the developed suffer from greater price instability than those exported by the industrialized countries. Moreover, in many developed countries there are restrictive trade measures which effectively prohibit manufactured and processed articles, which emanate in the developing countries, from competing effectively in developed countries. One consequence of this is, of course, the accrual of the value added, through processing, in the already rich developed countries and not in the poor developing countries. In addition, the developed countries have adopted support policies which bolster and maintain inefficient producers (in the Western, capitalist, free-enterprise sense of the term) thus enabling them to undersell the producers of the developing countries
|
This industry exerts a considerable psychological attraction for governments of developing countries. |
This list of practices which hamper the economic development of the less industrialized countries is not exhaustive. I suggest, however, that it is sufficiently long to make the point that we are all responsible.
The leaders of the developing countries are aware that there can be little hope for the amelioration of the conditions of misery and want, which the majority of their peoples experience, if the existing economic order is allowed to continue. They have therefore advocated the founding, the creation, the establishment, if you will, of a New International Economic Order.
The main theme of the New International Economic Order is the restructuring of international economic relations in such a way as to make it feasible for countries of the Third World to initiate or accelerate internally located and relatively autonomous processes of growth, diversification and integration. These processes are to be designed in such a way as to enable Third World countries to mount effective attacks on emerging internal crises, principally mass poverty, mass unemployment, and growing food deficits. Emphasis is placed on ensuring, through trade and aid, increased net inflows of real resources to the developing countries.
It seems evident to me that the ultimate objective of the New International Economic Order, which is the development of the peoples of the Third World, and in particular those who bear the brunt of the inefficiencies and inadequacies of the world's leaders, will not be attained if conventional theories, policies and instruments of economic development are continued to be employed. They have failed in the developing countries in the past. They are failing now. New concepts and approaches must therefore be applied.
It is against this background of turmoil, depression, poverty, misery, want and injustice, on the one hand, on the other, a new concept which appears to provide some hope for the "feeble" of this world, that I now wish to examine the political economy of the pulp and paper industry.²
² This analysis relies heavily on FAO (1976) - The North American paper industry. Working Paper No. 17. PPIDP; FAO (1977) - An analysis of the growth potential for the pulp and paper industries sectors in developing countries. PPIDP, arid FAO (1977) Pulp and paper in the perspective of developing countries. Working Paper No. 19. PPIDP.
In 1975, the consumption of paper by developing countries, which accounted for about SO percent of the world's population, was approximately 11.5 million tons, or 8 percent of the word's production of paper in that year. The per caput consumption per year in most of these countries was less than 10 kg. In Latin America, where there is a specific demand for packaging paper and for paper board, the average annual consumption was 25 kg per caput. In contrast, in the highly industrialized economies, on the average, annual consumption was 200 kg per caput.
Eighty-four percent of the paper consumed in the United States is utilized by intermediate industries as part of the goods and services which they provide; 9 percent is for personal consumption; and businesses and government consume 7 percent. Research into paper consumption patterns within the U.S. has indicated that paper is not an important cost element in the intermediate industries. For example, in the packaging industry, which alone consumes 55 percent of the paper utilized in the U.S., the cost of paper is seldom higher than 1 percent of the particular product. In newspapers and journals, especially those with wide circulations, the relative cost of paper, though substantially higher than for packaging, is still not a major element in the total cost structure of the final product. The same pattern may be discerned in Europe which consumes 30 percent of the world's paper production.
Thus, like petroleum used to be, paper is regarded in the industrialized market economies as a low-cost commodity that is to be taken for granted in the modern life style. Indeed, its contribution to the overall cost of living, compared to all other inputs, is so small that its relative insignificance encourages wasteful consumption. To cite one example: in North America, where the recovery of paper for recycling is as high as 20 percent, 46 million tons were discarded as waste. This is equivalent to four times the total annual paper consumption of all the developing countries taken together.
Since 1969 the consumption of paper and paper board has increased at a rate of between five and six percent per annum. A recent assessment made by FAO suggests that, because of the current world economic situation, the rate of growth in the foreeseable future will be between two and three percent per annum overall, with lower rates of growth for specific products, such as newsprint.
However, because the consumption of paper in developing countries is now so low, the future rate of growth is likely to be higher than at present. As I have said, in 1975 the developing countries consumed 11.5 million tons, and it is forecast that by 1990 they will utilize between 28.75 and 37.5 million tons of paper per year. It should be noted, however, that these forecasts suggest that Latin American markets will consume about 55 percent of all the paper utilized in developing countries.
In that same year, 1975, total world consumption of paper amounted to 142 million tons, 92 percent of which was consumed by the more industrialized world.
The world's capacity, in 1975, to produce pulp was estimated to be 136 million tons; its capacity to produce paper and paper board, also in 1975, was rated at 175 million tons. However, in 1975 actual production was somewhat below capacity, 109 million tons of pulp and 136 million tons of paper being produced, of which some 95 percent was manufactured in developed countries. Although a substantial surplus of capacity over consumption existed in 1975 for both pulp and paper, this was reduced in 1976 through increased utilization in response to rising demand.
|
Most of those with forests, or what look like good markets, have asked FAO to help them establish mills. |
So much for the consumption and production statistics. Let us now have a closer look at the structure of the industry. We will confine ourselves to the North American and European regions, because between them they dominate both production and consumption.
The main points about the paper industry of North America are: first, it is bigger than that of any other region in the world, possessing as it does 40 percent of the world's capacity; second, that it is entirely self-sufficient for its raw material requirements; and third, that it sells more than 90 percent of its output within the region.
Moreover, the paper industry in North America is more elaborate, and more sophisticated technically in its range of processes and end products than anywhere else in the world.
If the North American producers, Canada and the U.S.A., are compared, significant structural differences emerge. Canada's paper industry is the smaller, possessing only 20 percent of the continent's capacity. In addition, it exports about 75 percent of its pulp and paper production, of which some 70 percent go to the U.S.A., the rest being shipped to other areas, mainly Europe and Japan. In contrast, the U.S.A. has little external trade in these commodities, as its imports of Canadian pulp and paper are offset, to some extent, by its exports, mainly to Europe, and to a lesser extent to Japan and other regions.
The main Canadian exports are pulp and newsprint, and the chief U.S.A. exports are and other container boards. The U.S.A. imports about 60 percent of its newsprint, and about seven percent of its pulp requirements from Canada. There is little trade in converted products.
A significant trend of the North American pulp and paper industry, during the last two decades, has been the move toward greater integration. For example, the Weyerhauser Company has integrated backward toward the resource, while other companies have established forward linkages with various types of paper and paper board conversion industries. Still other companies have merged themselves, or have been merged, with quite dissimilar types of corporations, presumably to spread the risks, and to absorb losses which occur in the troughs of the cyclical fluctuations which are such a significant aspect of the industry.
There are 450 companies in the U.S.A. and 70 in Canada that are active in the pulp and paper business. They range from large multi-national giants to small family-owned one-mill operations.
The top twenty companies in the pulp and paper industry taken as a whole in North America account for about 65 percent of the region's total production. In this respect, they are less dominant than the top 20 companies in other basic industries. For example, in the petroleum, coal, primary metals, chemical and rubber industries, the top 20 companies account for more than 90 percent of production. Nevertheless, there is a growing tendency for still greater concentration of control in the pulp and paper industry.
However, in pulp production, the top 20 companies account for nearly all of the output. Non-integrated paper mills are therefore dependent on the leaders of the industry for their raw materials.
The large paper companies in North America all operate in the international arena - if only in export marketing when they do not have actual operations abroad. The most important overseas area is Europe. This region is followed closely by Latin America and then by Japan. Most companies operate in more than one overseas country - some in as many as eight.
However, except for Container Corporation, in no case do overseas operations amount to more than 25 percent of a company's business, although in some cases export sales might exceed this proportion. MacMillan Bloedel and Weyerhauser appear to be the biggest exporters: exports amounting to 40 and 30 percent respectively of their recent sales. Union Camp and International Paper follow in the 20 to 25 percent range.
The big companies are all managed by highly professional and experienced managers and are, in the main, owned by tens of thousands of shareholders.
At the lower end of the scale of size, the leading companies will typically have 40 to 60 plant operations, employ 15 to 20 thousand workers, have paper-making capacity of just under one million tons per year and have sales of just under $1 000 million. The bigger companies will have from 150 to 200 plant operations, employ from 30 to 50 thousand workers, have paper-making capacity of about three million tons per year (the capacity of International Paper is seven million tons per year), and have sales in the $2000 million to $3 000 million per year range. Europe, with 12% of the world's population, consumes about 30 percent of the world's paper production. The continent's present production of paper is about 45 million tons, which not only makes Europe self-sufficient in paper, but permits it to be a net exporter of about 500 thou sand tons.
However, Europe is a net importer of some types of paper: newsprint (450 thousand tons) and paper board (740 thousand tons).
It is a net exporter of printing and writing paper (1.7 million tons).
Europe's production of pulp, in 1974, was 29 million tons. It was found necessary, however, to import 3.25 million tons of wood pulp in order to meet the excess in demand for pulp which has been, over the last ten years or so, a constant feature of the subsector. The capacity of Europe's pulp mills was estimated to be 33.4 million tons in 1975. It has been forecast that this will increase to 39.1 million tons in 1980. The region's capacity to produce paper was 52.2 million tons in 1975. This is expected to rise by 10.4 million tons by 1980.
|
FAO seeks conditions for establishing small- to medium- size mills in developing countries |
The average production of a European pulp mill is 53 400 tons. The largest production units are to be found in the Nordic countries where the average production is about 100 000 tons per year. The largest individual unit is the Husum mill in Sweden which is owned by Mo and Domsjö. It produces, on average, 492 000 tons of sulphate pulp each year.
In the European Community there are 164 pulp mills, of which 143 are integrated with paper mills; 57 of the 89 paper mills that are to be found in Sweden are physically integrated. Many of the remainder, however, may be considered to be also integrated because they belong to larger pulp and paper companies and supply their pulp to their parent companies' paper mills. Fifty of the 58 mill units in Finland are integrated.
In almost all European countries pulp mills are increasing in size. If Sweden is taken as a typical example, the average mill capacity has increased from 44 000 tons in 1960 to 123 000 tons in 1975. The sulphate mills arc the largest, with an average capacity of 197 000 tons per year.
Although the largest European pulp and paper mills are located in the Nordic countries, it is in England that the paper companies with the largest turnover are to be found. These are Bowater Corporation and Reed International. The Swedish companies, Svenska Cellulosa and Stora Koppaberg, are in third and fourth place, respectively.
Bowater and Reed have expanded into other fields to such an extent that they cannot now be counted solely as forest industries companies. Only 42 percent of the turnover of Bowater's and 55 percent of Reed's, in 1975, originated from sales of pulp, paper and converted paper products. Indeed, the same story applies to Stora Koppaberg, which in 1975 obtained only 41 percent of its sales from its forest industry division.
Svenska Cellulosa (with 80 percent of its sales from forest products) and Wiggins Teape, the United Kingdom company, with its entire turnover coming from paper and paper products, are the exception to the general rule that the top paper companies are parts of conglomerates. Here, the North American pattern is repeated. Several of the companies have grown large, not through increasing their output of forest products, but through extension into large converting and trading operations, and also through entering into entirely new fields of activities.
There seems to be a growing tendency for European companies to establish links with North American companies operating in North America, either through the forging of partnerships with existing mills or through the establishment of new mills. In the same manner, several North American forest industry companies are listed as partners in major European pulp and paper enterprises. In addition, some have substantial interests in the tertiary conversion industries.
There is also increased cooperation, if one is permitted to use a euphemism, among European companies and countries. This has long been the case in the Nordic countries, but most recently the tempo has quickened and the spread widened. To quote one example: the building of Undland Papier Mill in the Federal Republic of Germany by two Finnish companies - Kymin Kymenne and Kaukas.
The other characteristics of the North American segment of the industry apply, in varying degrees, also to Europe, except with regard to the vital question of wood supply. All the estimates available in the Food and Agriculture Organization indicate that even with improved and more efficient methods of production, harvesting and conversion, Europe would still be short of wood, for almost the whole range of wood products, well into the next century.
What has our analysis revealed? It has shown that the pulp and paper subsector, as it obtains in those regions in which it has been most successful, has certain characteristics:
· It is generally big in scale, and there is a growing tendency to increase mill size.· To survive periods of recession or down-turn it often forges links with companies which are totally outside the forest industries sector - in other words, it diversifies and becomes a part of conglomerates.
· It is extremely capital intensive - this is a function, mainly, of the large mill sizes.
· It demands a high level of technical skill and managerial competence.
· It employs competent researchers in its continuous quest for improvements in technology, general efficiency and marketing.
· The American market is, to all intents and purposes, self-contained and offers little hope in the near and in the foreseeable future as an outlet to new producers.
· The top 20 North American companies produce a sizable proportion of the total output of pulp and paper in those countries.
· The top 20 North American companies produce nearly all of the pulp consumed in the region.
· Only in Europe are there possibilities for the sale of "new" pulp, but this may be more apparent than real, because of the beginnings of a tendency for European ownership to merge with North American, and because of the favourable wood-supply position on the North American continent.
· The bigger companies are squeezing the smaller ones out of business.
· There appears to be a tendency for the amalgamation of producers' interests, although strong anti-trust laws, both in the U.S.A. and in Europe, effectively prevent collusion.
What are the lessons for the developing countries? It seems obvious that the developing countries cannot hope to follow the patterns of growth and development which have emerged from our analysis of the pulp and paper sector in the United States and in North America. Nor is it perhaps desirable that they do. But yet it is almost certain that these developing countries will be faced with a shortage of paper if they do not take steps now to provide themselves with the production capacity they will need in the years ahead.
Let me illustrate the point I wish to make by referring to those countries of southeast Asia which comprise the Association of Southeast Asian Nations ASEAN: Indonesia, Malaysia, the Philippines, Singapore and Thailand. I have chosen this group to illustrate the problem because it seems to me that the effects of a shortage of paper could be most dire in this region. Forecasts of paper consumption for the area suggest that the total paper requirements are likely to double by 1985 and that by the year 2000 they could be more than five times greater than the 1974 consumption.
If nothing is done, this would, of course, mean a drain on the region's scarce foreign exchange resources. This, apart from the positive linkage effects which the establishment of a pulp and paper industry could have on the general economy and the absorption of a proportion of unemployed labour.
Aware of the probable dangers to the economies of the developing countries if there are not adequate supplies of paper, aware also of the benefits which can accrue to these countries through the establishing of these industries, but aware, still further, that if the habits and practices of the industrial world are transferred lock, stock and barrel, to the developing countries, their economies could be wrecked, the Food and Agriculture Organization has attempted, during the last two years, to formulate new methods of approaching this problem. Our present philosophy has been evolved through the realization that, in any case, for whatever reason, large mills were not being established in the developing countries; that if they were to be established, their establishment, with the high capacities recommended, would in many cases be against the developmental needs of many developing countries, and would be detrimental to their best interests; and that the normal price which would have to be paid by the non-industrialized countries through continued dependence on the industrialized countries would be considered by some governments to be too high.
Many developing countries cannot afford, even to borrow, the large amounts of capital that are needed to establish pulp and paper mills of capacities of 750 to 1000 tons a day. These are the sizes which the international clubs of consultants continually recommend. In at least 33 percent of the cases which we have examined in FAO, the establishment of such large mills would result in one pulp and paper mill, of the sizes to which I have referred, making a contribution of at least 40 percent to the gross national product of the countries. Such great reliance on one commodity would be, in most cases, undesirable. It is particularly so in the pulp and paper industry in view of its notoriously cyclical performance. It would be even more reprehensible if the final product were pulp for which there were no tied, no secure markets. Unfortunately, this is the type of mill which has often been recommended.
Because of these considerations, FAO has concentrated on the potential for the establishment of small- to medium-scale integrated pulp and paper mills designed to meet the domestic or regional market requirements of developing countries. Particular attention has been given to the minimum size of an economically viable mill that is capable of producing the required range of paper goods from local fibre.
We have not chosen, deliberately, to ignore the well-established principle of the economies of scale. We are of the opinion, however, that the principle is not well understood by many of the engineers and accountants who are concerned with the development of pulp and paper industries in the developing, and indeed in the developed, countries. This is not the place to examine the issue in detail. I wish merely to state here that the optimum size of a mill is not necessarily the same in different countries and under different conditions; that in deciding on mill size the specific objectives of economic development of a country are of great importance; and that some industries might be considered by some countries as vital and strategic infrastructure. In short those decisions on scale cannot be made by the consideration of only one factor. Indeed they should not be.
Be that as it may, integrated mills, based upon a chemical pulp line to produce between 100 to 200 tons of cultural and/or industrial paper grades per day, have been shown to be acceptable, under certain conditions, with investment costs, at 1976 prices, of up to about $120 million. The continued adaptation of technology has, however, advanced to a point at which it is now possible to consider the construction of small-scale integrated plants based upon thermo-mechanical or chemi-thermo-mechanical processes to produce a restricted range of cultural paper grades on slow-speed paper machines. These plants can have a paper output of as low as 50 tons per day and can be established at a capital cost of $33 million at 1976 prices. Contrary to conventional wisdom, the pulp and paper industry appears to be flexible in its choice of scale of operation.
The concept of the small- to medium-sized integrated pulp and paper mills opens up a number of potential investment opportunities which have not hitherto been considered, because of the blinkered concentration on market pulp mills which require massive capital investment, major resource commitments, and sophisticated servicing. The smaller mills employ more people per unit of investment. They are not subject to the vagaries of external demand. They reduce the dependence on outside, foreign technology. This is noteworthy for two main reasons: operating costs are lower because foreign experts are expensive; and, more important, the spirit of self-reliance, so vital for the self-respect and spiritual development of the developing countries, is more easily fostered. They demand less capital, thus bringing the investment possibly within the reach of the developing countries themselves, but certainly within the grasp of the regional banks.
The strategy we intend to recommend to the developing countries is therefore as follows:
· Do not attempt to imitate the industrialized countries in their pursuit of producing the biggest and the most. Given the existing economic order, you simply cannot compete with the developed world in a game which they have been playing for a long time, and for which they have formulated the rules. In any case, it is doubtful whether the practices of the developed world in the field of pulp and paper are worth emulation.· If there are tied, agreed and firm markets for the pulp that you are capable of producing, then other things being equal it could be good policy to produce pulp alone. Do not, except under the most exceptional circumstances, produce market pulp, that is, pulp which you hope to sell. In general, your economies cannot afford the risk of failure to sell.
· Establish integrated pulp and paper mills and concentrate on the home and regional markets.
· Go for small- and medium-sized mills and do not be mesmerized by the conventional wisdom of the northern hemisphere in this regard. Consider the economic development of the national economies, and not solely the financial returns to the particular firm, the particular enterprise.
· Do not try to reproduce the quality of paper which obtains in the northern hemisphere for your local markets. The quality is often unnecessarily high, too costly, and a luxury the developing countries cannot afford.
With these principles in mind, we in the Food and Agriculture Organization have prepared a preliminary estimate of the total capital investment needed to establish pulp and paper mills in a range of developing countries.
We have identified 27 opportunities for investment in seventeen countries. The unit costs range from a capital investment of $40 million to $525 million for a regional pulp and paper mill in southeast Asia where all the conditions appear favourable for a large-scale enterprise. The total investment cost, at 1976 prices, is $6 803 million, of which $2 780 million are scheduled to be spent in the period 1985 to 1995, and the remaining $4 023 million are scheduled to be invested before 1985. If two large regional mills are excluded, the average cost of the mills we propose to recommend to be established is $175 million; however, the investment required for four of the mills is below $50 million, for nine mills it is between $51 and $100 million, and for another six mills it is between $101 and $130 million.
I believe that our examination of the political economy of the pulp and paper industry has served to demonstrate the complexity of industrial growth and development in the industrialized countries of the world. I think that from our analysis, the conclusion is inescapable and unavoidable that the developing world should not slavishly follow that pattern of growth and structure of the industry which has evolved and which prevails in the industrialized countries. If the developing countries continue to be advised by "international experts" to adopt the practices and customs of the industrialized north in the field of pulp and paper, and if they continue to accept their advice, they will be forced to labour, like Sisyphus, without adequate reward for their onerous efforts. If, however, they look anew at the subject, if they understand the implications of analyses such as we have done today, if they realize that a reverence for size is a snare and a delusion, then, perhaps, some progress might be made in the subsector of pulp and paper, and indeed in the entire forestry and forest industries sector.
