Guyana and the wider world Part 6

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Guyana and the Wider World
Poverty and the forestry sector Part 6
By Janette Bulkan
Stabroek News
Sunday, March 11th 2007

The preceding five columns of 'Guyana and the Wider World' examined the disjunctures between Guyana's natural forest bounty and the stated national commitment to poverty eradication through sustainable use of our natural resources, including job creation and skills training. The brief overview of four areas singled out for attention by the Poverty Reduction Strategy Programme (PRSP) - economic policies, governance,
infrastructure and social services - confirmed the continuing disconnect between national policies and sectoral practices. The findings suggested that the structural underpinnings of endemic poverty, as described by Guyana's PRSP, still exert their
(strangle)hold in the forestry sector.

This column will conclude the discussion on the failure of the forestry sector to alleviate poverty, and introduce the subject of next week's column which will follow the supply chain to the principal destinations for Guyana's prime hardwood logs. In 2004, David Kaimowitz, then the Director General of CIFOR (Center for International Forestry Research)evocatively described the boom in imports of wood fibre into China, consequent on its 1998 partial ban on logging in natural forest and the
rapid expansion of wood-using industries, mostly geared to export markets, as "the giant sucking sound of Chinese forestry imports."China has been 'hoovering up' cheap timber from all sources, especially from countries with weak marketing skills like Guyana. In response,what measures did our policymakers take in those following eight years from 1998 to protect Guyana's own fledgling downstream processing wood-using industries, to guard against the over-cutting of prime timber species in large-scale concessions and to ensure the implementation of their business plans by FDI-benefiting (Foreign Direct Investment) logging companies? Talk is cheap, as the saying goes, but even the public record of 'talk' on the matter of increasing
log exports at the expense of local value-adding processing of forest products was sparse and episodic until the sheer volume of public debate in the independent press in the latter half of 2006 led to a belated government response, now being planned.

On the supply side, a laissez-faire approach in the matter of log exports has prevailed. In this policy vacuum the low-investment timber traders have been 'licking up' and shipping out our under-priced prime hardwood logs. Timber traders can hardly be expected to look out for Guyana's interests. However, national policy-makers and regulatory agencies are tasked to do so; it is an obligation in the act which created the Guyana Forestry Commission in 1979. As the previous columns on this issue detailed, Guyana's prime timber species, forest-dependent
citizens and industries have all suffered from the absence of preparedness to deal with monopsonistic FDI companies operating here and competing to export the same timber species used in local industries.

The lack of action in the national interest harkens back to a colonial situation when colonies existed for the benefit of the mother country,and marketing was done by the colonial owners. Guyana is willing to sell its resources cheaply, and it requires little effort in marketing to capture a substantial mark-up (the excess rent) simply by trading logs into the export market. However, there is no mother country to fall back on when the last useful log has left our shores. As for the
latest breed of neocolonial overlords who dominate both logging and log trading, they hold us in deserved contempt for the lack of stewardship and inter-generational responsibility which we display. Even their logging truck drivers force Guyanese drivers to give way.

According to Amartya Sen, the Indian-born Cambridge economist who won the 1998 Nobel Prize for Economic Science, poverty is not only about economic deprivation. Rather it is defined and sustained by a sense of helplessness, and the marginalization of the poor. Sen's theory is borne out by the lack of organic linkages between the citizenry in Guyana - from the forest-dependent to the Stabroek Market pavement
vendors - and the decision-making structures of the state. The parallel operations of regulatory agencies and project implementation units with overlapping mandates but lacking coordination among themselves, never mind with national constituencies, stifle the hope of improved governance. The Stabroek Market is a stone's throw away from City Hall and from the National Assembly, but it might as well be in the 'bush'
or 'backdam.' These interest groups bump visually and tangibly into the other, yet lacking structural linking mechanisms, generally only interact in situations of confrontation. This is the enduring tragedy of Guyana.

The introduction of the IMF-required Structural Adjustment Programme (SAP) in Guyana in the late 1980s included opening up the forestry sector to Foreign Direct Investment (FDI). The government-expressed view at the time was that FDI would lead to an influx of capital in Guyana, expansion of local value-added industries, and an increase in a trained and skilled workforce, in short, economic development based on
sustainable use of nature's bounty. However, in place of the envisaged forward development planning linked to in-country industrial processing, with pre-identified forest areas opened for open competitive bidding including the offering of premia for resources access rights, the forestry sector is now even more of an enclave
sector than it was in 1991. The forestry sector has retrogressed in the past two decades, now reduced to supplying Guyana's prime timbers in log form, at the lowest prices globally for equivalent species, to China and India principally. As one commentator ruefully noted, it is as if the Guyana Sugar Corporation (Guysuco) were to revert to selling sugar cane instead of sugar.

This retrogression of the forestry industry into supplier of a primary commodity (prime hardwood logs) to India and China principally has been accompanied by monopolization of the best-stocked State Production Forests by four Asian companies through secret Foreign Direct Investment (FDI) agreements; the importation of Asian forest workers who continue to displace Guyanese forestry workers even when the
foreigners have no more skill at using equipment than the Guyanese operators of bauxite mining equipment, and even after 15 years of in-country presence; and the starving of in-country downstream processors of wood supplies.

It is not predestination or a rule of nature that Guyana has to be poor. We have the timber resources which are being turned elsewhere into high-value products. We have had the policies since at least 1980 to say that is what we should be doing. I will explore in subsequent columns some reasons for why this logic seems to have no resonance at government level or for most national investors, while the same logic
drives efficient and profitable industries in India and China.

On the occasion of Chinese New Year, the Guyana Chronicle headlined Ambassador Zhang Jungao's message as 'Bound to be another fruitful year' (Guyana Chronicle, February 18, 2007). The ambassador was looking out for China's interests, as he well should. We ignore Guyana's interests at our collective peril.