Are Logs being exported below market value?

Are logs being exported below their market value?
Tuesday, November 14th 2006
Stabroek News

Dear Editor,

I have been following with interest the reports in your newspaper on the low regard of Asian forestry companies for Guyanese labour, indigenous peoples and forests.

Your readers may be interested in clicking on the url below to read an external evaluation of Guyana's timber trade. For those who do not have access to the worldwide web, I enclose part of the text.

http://www.globaltimber.org.uk/guyana.htm

"Guyana, one of the most corrupt countries in Latin America, is noted especially for links to the illegal drug trade. Guyana has a particular reputation for money laundering …

"The unit prices cited in the ITTO's fortnightly 'Tropical Timber Market Report' indicate that the difference between the unit prices for Guyana's log exports are remarkably small relative to unit prices for equivalent products exported from other producer countries. The difference might well be attributable to transfer pricing fraud. Given that, during 2005, logs account for almost all India's (and half of China's) timber imports from Guyana, and that India and China (primarily India) account for more than half of Guyana's log exports, India and China may well be complicit in such fraud. The loss of export revenue attributable to transfer pricing fraud might amount to US$10 million during 2005. That amount represents some 2% of Guyana's export revenue (of US$500 million, roughly half of which was then attributable to gold, diamonds and sugar, and a further 10% to timber).

"One might expect that such a large percentage in lost revenue would prompt donors to at least claim to be applying effective pressure on the government of Guyana to substantially reduce those losses."

Yours faithfully,

(name and address supplied)