IMPLICATIONS FOR THE FORESTRY SECTOR

It is not intended in this section to derive or report even approximate mathematical correlations between economic and social changes and the forestry sector's development. Instead, the intention is to mention the broad areas of linkage, with anecdotal reference to some key impact areas.

Relationship with state of forests and non-industrial goods and services

The relationship of both income and population with state of forests is complex and not fully understood. Studies underway attempt to link forest loss or degradation with population density or growth but so many other factors are also important. The patterns of land use, including manner of land clearing for agriculture or other purposes is important. Annex 5 tabulates countries or territories (stratified by income) for which information was readily available in terms of population growth rate, expected changes in rural population, significance of agriculture and observed rate of change in the area under permanent cropping. No clear evidence of correlations or patterns emerge.

The table nevertheless reveals certain countries for which the coincidence of circumstances requires particular attention to the possibility of rapid forest loss. Examples include Pakistan, Bangladesh, Vietnam, Solomon Islands, Laos, Papua New Guinea, Bhutan, Cambodia, Nepal, Myanmar and Philippines. In the case of Pakistan, population growth over 2% annually; Rural population expected to grow over 30% between 1994 and 2025; Highly agriculture-dependent (over 20% of GDP in agriculture); annual increase in permanent crops over 3%. For Bangladesh, there is over 1.5% p.a. population growth rate; rural population increase over 10%; agriculture over 30% of GDP; agricultural frontier expanding at over 3% annually. In Cambodia, the deforestation threat exists despite earlier contraction of permanently farmed land - probably due to war. In the Philippines, rapid rural depopulation may stabilize forest loss especially if prosperity also group rapidly.

The large population of Asia can be expected to exert considerable pressure on land and other natural resources unless more economic activities that are not based on the land can emerge to offer alternative livelihoods. Productivity gains have so far been high due to greater fertilizer and irrigation use for some major countries. In the remaining countries, productivity gains in agriculture may not increase as fast and since population growth in some remains high, there could be location-specific expansion of the farm frontier into forests. Such an eventuality would be made more likely by the fact that Asia is (at present at least) the most rural major continent: in 1990, only 30% of Asia's population lived in urban areas, compared with over 70% in Latin America and nearly 35% in Africa.

According to FAO (1997), in broad terms, Asia and the Pacific shows a forest area reduction between 1980 and 1995 of 6.4% compared to reductions of 10.5% and 9.7% for Africa and Latin America/Caribbean respectively. Developing countries together had a forest loss of 9.1% for the period while developed ones gained 2.7% with Europe gaining 4.1%. It can be said that, in spite of heavy consumption of industrial forest products in developed countries, wealthy countries somehow seem to have the capacity to maintain or increase their forests while developing ones do not yet have it. In broad terms, the same may be said at Asia-Pacific level but there does not appear to be a clear link according to gradation of income among the developing countries. Also, as shown in Table 18, no clear links are apparent between level of agricultural dependency and apparent speed of agricultural frontier expansion.

No focused research is known about the relationship between degree of urbanisation and demands on forests. One could speculate that high urbanization may reduce direct need for land clearing but urban populations may still exert indirect demand for forest clearing if agriculture remains poorly productive. Similarly, demands for many forest products do not lessen merely by being concentrated in cities - some may rise or decline, if urbanisation is associated with income changes.

Other considerations of possible implications of Asia's income and population change for forestry could include:

· The actual decrease (overall for the region and in specific countries) of rural population or slow increase which would tend to reduce the direct subsistence-farming induced pressures on forests. This may not mean reduced overall pressure since there could be compensatory increase in land clearing for industrial agriculture.

· Edwards (1997) reports that over the past 25 years or so energy consumption per head ha more than trebled in less-developed East Asia and more than doubled in South Asia. In spite of this, in 1994 energy consumption per head in South Asia was less than 5% and in East Asia less than 13%, of the average of the high-income countries. Asian prosperity will tend to close this gap but fuelwood, while remaining important in rural areas, is unlikely to be an important player at national level in the fast-growing economies. In Republic of Korea, post-war fuelwood plantations are now redundant for the original use and are ending up being potentially diverted to industrial fibre use or for amenity. PR China expects a similar drift away from fuelwood.

· The emergence of mega cities may also make the economics of provisioning with fuelwood/charcoal unfeasible, even in poor cities. Rapid urbanization could thus reduce the relative significance of fuelwood in overall energy and wood products end use mixes except in countries (Thailand appears to be an example) where charcoal is in great demand.

· Prosperity brings demand for recreation in natural, semi-natural or in any case "green" environments. This is bound to influence the end-use profile for the region's forests.

Demand for industrial forest products

The most direct effort to link the rapid economic growth to forestry is that of Hohol (1997) who focused on implications for potential forest products consumption. Hohol asked what the implications for forest products demand both industrial (pulp and paper, building materials) and fuelwood could be if the following speculations by The Economist could come to pass: that PR China could replace the United States as the world's largest economy by 2020; that India could replace Germany in fourth place; and that developing countries' share of world output could grow to 62% of world output by 2020. Hohol noted that in 1991, the world's economy used 2.5 times as much wood as it did in 1950 and one-third more per person and that recent growth had taken place largely in developing countries.

FAO's own analysis (1997) shows that a combination of population growth and income growth has led to considerable change in forest products consumption; it may be noted that for some products, volumes have declined while both population and income have grown¹¹. Using 1970 (= 100) as base, the level of 1994 production for selected forest products (which, at world level, approximately equals consumption) was:

Product	Developing	Developed	World
Fuelwood & charcoal	170	102	160
Industrial roundwood	200	98	136
Sawnwood	204	84	100
Wood-based panels	567	144	180
Pulp for paper	500	143	167
Paper & paperboard	633	180	213

Source: FAO (1997) State of the World's Forests 1997 (Tables 4, 5)

Totalling all developing countries masks the far more dramatic changes for Asia alone but nevertheless gives a glimpse of the important shifts that may lie ahead.

Looking at the paper industry, Hohol (1997) suggests that Asia will account for half of the world-wide sales growth for all paper and paperboard grades over the next 25 years; for 45% of total world-wide growth in printing/writing paper consumption between 1995 and 2010. He shows that consumption of printing/writing papers in Asia (excluding Japan) grew at 11.2% annually and has nearly trebled in the decade 1985-95 from 4.8 million metric tons to 14.0 million metric tons and could treble again to 41 million metric tons by the year 2010. Human capacity development necessary for rapid economic development will include primary level literacy upgrading and this is certain to continue boosting demand for cultural paper in the newsprint or printing and writing grades.

Rapid economic growth also in most cases involves fast expansion of manufacturing and of infrastructure, including that induced by urbanization-related housing construction. Both developments can drive demand for forest products - manufacturing requires wood or wood-fibre based packaging; infrastructure development demands construction materials such as sawnwood and panels.

Working on only one country, PR China, Buongiorno et al (1996) looked at the influence of economic and demographic changes on demand. They projected that by the year 2010, the needs of PR China in roundwood equivalent would correspond roughly to the total current US production, in spite of its much lower consumption per capita. They reported already significant acceleration in demand for wood and derived products in PR China from the combination of a booming economy and teeming population; consumption of wood-based panels grew fastest since the reforms of 1978 (14% p.a. in the 24 years before 1978, and 24% after). Paper and paperboard consumption and production have grown at 12% per year for the last 40 years. By 1992, PR China had become the third largest producer of paper and paperboard, surpassing Canada, and following the US and Japan. It was tenth in the early 1970s. In one year alone, from 1991 to 1992, PR China's paper and paperboard consumption grew 23%, more than any other country In 1992, PR China also surpassed Japan to become the third largest producer of total pulp, after the US and Canada if one includes production from recycled fibres.

The information produced by Buongiorno et al gives evidence of the joint importance of both income and population for consumption: with per capita GNP in PR China only 5% of that of the US in 1993, the per capita consumption of paper and paperboard, 14 kg in 1991, was also only 5% of that for the US and 6% of Japan's. Mainland China had per capita consumption levels of only about 8% of the paper consumed by those with much higher income living in Taiwan Province of China and Hong Kong SAR, China. The rapid economic development explains the fast increase in PR China's consumption - although per capita levels remain low in line with its incomes. The large totals thus arise only because the low consumption levels are multiplied by the country's big population.

11 Substitution and efficiency gains are part of the reason why the increase in consumption of some products has been slower than population and income growth would otherwise lead one to expect.