Our forests can be leveraged as a major asset in the evolving globally integrated risk management systems

http://www.stabroeknews.com/index.pl/article?id=56521892

Our forests can be leveraged as a major asset in the evolving globally
integrated risk management systems
Stabroek News,
Thursday, June 7th 2007

Dear Editor,

The Stabroek News editorial, 'Iwokrama: a role in a hotter world,' has
reminded us of risk factors and potential catastrophic losses. It also
underscores 'thinking global and acting local' in an integrated global
eco-system. The rainforests in a global ecosystem have contributed to
climatic stability. The benefits of the rainforest are rapidly
declining with deforestation. Destruction of the rainforests has
contributed to carbon emissions, among other factors that increase
global warming. Steady increases in temperature and its contribution to
accelerated melting of parts of the polar and snow-capped regions in
the world pose risks of flooding. Unexpected flooding creates
catastrophic losses to coastal and riverain communities in below
sea-level countries that have little control over the effects of global
warming. Stabroek News has made a timely appeal to develop risk
management processes in managing 'one of the last four intact
rainforests in the world (planet earth).'

Thinking local should place Guyana's tropical forests in a unique
position to leverage its billion- dollar asset in the evolving globally
integrated risk management systems and for Guyana to cope with the
rising tides from global warming. In the previous 20 years, poor
countries justified 'harvesting' the forest because of their economic
need to service the public debt through enhancing national liquidity.
Guyana was in a relatively poor and illiquid position when major
commercial exploratory leases, were soon followed by timber sales
agreements, signed with logging operators in Guyana, around 1989 and
thereafter. Recently, poor countries were given the opportunities to
reschedule and cancel major amounts of international debt. The pressure
on liquidating the stock of forestry assets should have declined
proportionately and a better quality of foreign direct investment
sought to replace forestry-depleting projects. Instead, Guyana is
experiencing accelerated deforestation with many risk factors, global
and local.

The first local risk factor is sustainability in 'harvesting' scarce
species without replanting and regard for the species gestation cycle
and economic costs. This would be a major loss to Guyana for such
species as Purple Heart, reported by Janet Bulkan as having a stock of
reserve asset of 1 percent, while companies are practicing sales
maximization and exporting 30 percent of the log volume in this species
alone (SN 2007-05-31).

In the absence of replanting, nurturing, and monitoring how sustainable
is this trend, even if 'sustainable harvesting' practices are followed?
Guyana's economic position is made worse when we consider that Purple
Heart timber or logs are not made into floor or wall boards before
exporting. This is real value-added, economic losses for Guyana. Guyana
would not be able to sustain its own import requirements in all other
areas with such losses, including future imports of Canadian pine for
cupboards and furniture, once sold by Gafoor and Sons, circa 1975 in
Lombard Street, or similarly, stone imports from other countries.

The pricing side for Guyana's crude timber or logs presents a second
economic risk. Bamboo and other wooden floors from China, sold in the
United States may be a substitute for Guyana's relatively expensive
local hardwood floors. More data is needed to evaluate whether a
similar quality and square footage of floor in Guyana could be bought
with the same amount of US dollars from China.

A third risk management factor relates to both deforestation and rapid
depletion of individual species of tree as illustrated by Janette
Bulkan, 'you cannot speak of trees in aggregate,' (SN 2007-05-31).
Guyana has four major types of forests, namely our mountain forest, our
evergreen forest, our rainforest, and our savannah forests.
Biologically diverse species should be managed by the stock of each
type of commercial asset, in each forest and with regard to the use and
additions to the stock of that asset to prevent extinction and loss of
bio-materials for Guyanese to create domestic businesses and employment
opportunities to build wooden infrastructure, such as buildings,
bridges or parts of bridges.

A fourth forestry risk management factor is the 'pillage and plunder
of the commercial forests' of Akawini, Kwebanna, Bethany, Orealla,
Kabacaburi, (that famed bird-land), Manawarin, and Wakapau Amerindian
communities, noted by Mr. Peter Persaud in in his letter captioned
"These groups are wrong to call on Barama to cease operations in
Akawini village lands" (07.05.28). These practices should not be
tolerated by any community. Land use models and strategic plans should
be used by logging companies, partnering with government and local
communities to spend part of their timber revenues to produce viable
non-forest timber products for local and export sales by residents.
This would add to existing significant steps toward poverty reduction,
economic and social sustainability in our communities, using own
account revenues of the forestry sector. Broad social objectives have
already been noted in projects of the Iwokrama risk management,
economic development program. Pillage and plunder may be water
'over-the-dam.' There is yet time for investment from own account
revenues in planting commercial forests and sustainable harvesting when
the crop matures. The Asia-Pacific region recorded the highest rate of
forest plantation in the world over the past five years.
(http://www.fao.org/newsroom/en/news/2006/1000277/index.html).

A fifth risk management factor relates to national economic accounting
for the stock of non-renewable forestry resources by species of
exportable timber or log. Guyana could reduce its risk exposure in the
overall rate of forest species extinction by considering the cost of
forestry depletion and forest degradation. The FAO in its manual for
environmental and economic accounts for forestry reports the cost of
forest depletion and degradation in selected countries. For example,
Costa Rica's cost is minus 5.2 % of the value of output measured by the
gross domestic product (GDP), while that of Philippines is minus 3% of
GDP. Forestry depletion costs should also consider future import costs
as non-renewable stock of forestry assets expire.(http://www.fao.
org/docrep/ 007/j1972e/J1972E05. htm#2749)

The cost measure for Guyana's depletion of its non-renewable forestry
resources and degradation of the environment, including the raising of
river bottoms in the riverain areas and siltation of river-mouth
estuaries is not included in the FAO's report. It should be assumed to
be at least that of Costa Rica's. This wipes out the entire forestry
sector 4.87 to 5 percent of Guyana's forestry contribution to its GDP
in 1997 and lower in later years. The position is worse if the required
forestry management capabilities in monitoring and forestry rangers'
services are subtracted. Realistic policies should therefore be in
place to protect Guyana from policies that are uneconomical or
exploitative in a negative sense. A failure to reduce risk factors
would distort the economy, creating an imbalance between low income and
higher desired spending for consumption and investment and on the
pricing side, low income against the tide of rising import prices.

Yours faithfully,

Ganga Prasad Ramdas