The timber industry

http://www.stabroeknews.com/index.pl/article?id=56524770

The timber industry
Editorial,
Stabroek News
Tuesday, July 17th 2007

In what has virtually been a one-woman campaign Ms Janette Bulkan has
brought to public attention the fact that this country has not been
earning the kind of revenue it could and should from the timber
industry. In a series of articles in the Sunday Stabroek under the
rubric of Dr Clive Thomas's `Guyana and the wider world' column and in
a number of letters, some of them responding to criticisms from those
who disagreed with her views, Ms Bulkan has argued mainly but not only
that two many logs are being exported with no value added. In other
words, we are remaining primary producers, as we have been of sugar for
centuries.

In the course of the debate it has become obvious that the local timber
industry is under-capitalised and not competitive, a condition that is
no doubt at least in part attributable to those long years from the
seventies in which the private sector was marginalised and under
continual threat of expropriation. So bad has the situation become that
some companies have sub-contracted Barama, which enjoys special tax
concessions, to run some of their grants. And Barama has been exporting
large quantities of logs from their own and other grants to lucrative
markets overseas.

Though one can sympathise with the local timber producers and indeed
with all those private companies that have had to survive for the last
thirty years in the most difficult conditions that have made it
difficult to compete even with the regional private sector (a devalued
currency that makes new equipment hideously expensive, high interest
rates, excessive electricity costs, a depressed local market), anyone
who has followed Ms Bulkan's arguments will be convinced that the
present situation is unsatisfactory and a solution is needed. Indeed,
it is clear that the Minister of Agriculture is himself aware of this
and is canvassing various solutions, including the banning of log
exports, though one senses that a final policy has not been arrived at.
There has also been some ambivalence on a substantial proposed new
investment which seems to have been unduly delayed to the extent that
the investor may look elsewhere. Why has there been such a long delay?
And one remembers the difficulties experienced a few years ago by Mr
Hamley Case and his colleagues with their aborted project.

Whatever the reasons, given its potential the timber industry has been
under-performing and the possible downstream developments such as
plywood and furniture have been far from spectacular, with one or two
obvious exceptions. The experiment with sustainable forestry at
Iwokrama is also of considerable interest. Ms Bulkan has done a lot of
work to bring the whole issue to national attention, indeed she has had
the energy to take her case against what she considers unfair
exploitation by Barama overseas. It has been a remarkable demonstration
of well-informed and intelligent activism. The most desirable outcome
would be for the government to see her as a resource rather than an
impediment and to invite her for dialogue. What the ministry badly
needs is the kind of independent, well-researched advice that is guided
entirely by the national interest, that Ms Bulkan can give. Such data
would enable the ministry to examine the options available.