Thank you for your coverage of the issue of log exports from Guyana in the August 20 and 27 issues of Stabroek Business. The Commissioner of Forests' response was reassuring, it is heartening to hear that "the commission was now looking at gathering solid information… the GFC is conducting an analytical review and would by the end of September take a position that should satisfy both parties" (August 27).
In the meantime, there is pertinent information on the issue on GFC's website (www.forestry.gov.gy) and in other publications in the public domain. I offer some of it for the benefit of the many Guyanese who are interested in these issues but lack access to the bare necessities of life, much less to the worldwide web.
The forests of Guyana are our collective patrimony, the harvesting of which should bring the widest possible benefits - in access to production forests for Guyanese, royalty payments to the State, creation of added value in downstream processing, jobs for Guyanese, etc. - while being sustainably harvested.
Your article quotes the FPA President as saying log exports were a matter of economics, that manufacturers should do the math. Well, the following figures for production and royalty payments for logs and chainsaw lumber in 2002 and 2003, available on GFC's website, are instructive. They show that proportionately, the State gets more royalties per cubic metre (M3) from chainsaw loggers (who are generally small operators) than from log producers (large operations). One does not have to be an economist to grasp the import of those figures. In 2002, even though log production was almost ten times greater in volume than chain-sawn lumber, royalty payments were not commensurate. In fact royalty payments were less than twice as much. The same trend can be observed in the 2003 figures, and indeed for the entire decade (1993-2003). The reason for the difference, as your editorial pointed out, lies in the additional value that accrues to even the minimum of downstream processing - in this instance, sawing up a log into boards.
Significant for a country with high unemployment also, the chainsaw lumber sector provides more employment to Guyanese than do the large loggers, even though allocated less than one-third of production forests. In a recent report (2003) researched and written by GFC and IIED (UK) staff members pointed out that by 1999, 18 large forest concessions, of which seven were expatriate-controlled, managed three times as much of the State Forests allocated for production as did more than 350 modest State Forest Permit (SFP) operations. These 18 companies control 65 per cent of all production forests under Timber Sales Agreement (TSA) contracts.
For comparison, the 30% of the remaining production forests under SFPs provide employment to 75% of the employees in the forestry sector.
I hope that the Commissioner's promised Report on the issue will also contain information on the Asian forestry workers who have been imported by the expatriate forestry concessions since the mid-1990s.
It would be instructive for us all to learn how many forestry workers have been imported, what jobs they do, how long they remain in Guyana, and whether they contribute to PAYE. At a time when talk of trafficking in persons is very current, our authorities should ensure that the rights of foreign workers in Guyana are also protected, even though they are doing jobs that Guyanese are well qualified to do.
The GFC statistics also make clear that the colonial inequities in the allocation of production forests continue almost 40 years after independence was gained. Even more alarming is how little the people and State coffers of Guyana gain from this trade in prime hardwood logs that are being high graded ('creamed off') at a rate never before witnessed in Guyana.
The figures on export volume and value, also extracted from the GFC's market reports, provide yet another illustration of the lower values for a higher volume of logs. The value added accrues in Asia, the principal destination of Guyanese logs. Their economies benefit while ours is reduced to being a supplier of raw materials.
In fact, over a five year period (1999-2003), as the figures below show, the export value of sawn wood was consistently higher than logs, for smaller volumes. The export values of furniture and other products are of course even higher, and it would be good to see the breakdown in the Commissioner's promised report.
Another aspect which should trouble all Guyanese, however, is the fact that in the aggregate the logging operations are creaming off the prime hardwood species. Yes, at the end of the day, the forest continues to look reassuringly green and the forest cover seems unbroken. But at a rate and coverage never before seen in Guyana, underneath that canopy, the commercial tree species are gone. Ours is a country with no serious silvicultural programme for reforestation. Yet, the figures below show that about 50% of log production in the second half of 2003 targeted two species only, while the logs that make up 'Other' consist of other prime Guyanese hardwoods. This has been the pattern throughout the 1990s. The GFC Market Report for the 4th quarter 2003 supports this conclusion in its statement: "There was an increase of log production in the Special Category of 10% as compared to the cumulative period of 2002."Log production by species (as % of total extraction)
It may be on account of the intensity of concentration on a few species that within a decade, the Barama Company for example, had high-graded all the plywood and other commercial logs in the north western half of its concession, in which it had put down its headquarters and a sawmill, so that by 2002, it had shifted its operation to coastal Guyana. As the company put it in a press release and subsequent newspaper story in May 2003:
Barama's forestry operations were originally located at Port Kaituma in the North West District but have been shifted to Buck Hall on the Essequibo Coast which is nearer Georgetown and its East Bank Demerara plywood factory at Land of Canaan.
Buck Hall, according to Girwar Lallaram, its marketing manager, is a cost-saving project with a few other elements.
"Originally we were operating in the North West area and the cost of transporting logs was extremely high. The second consideration was that our main species was running out in the North West area. So we had to move to the concession nearer to the Essequibo Coast" (Barama adapts to environmental and commercial concerns: Gives Guyana high marks for forest management. Stabroek News, May 10, 2003).
Barama also benefited from some tax concessions as a result of the move to Buck Hall under the government's incentives scheme. So much for forest sustainability and a level playing field.
In contrast, the information on species production by chainsaw loggers shows an opposite trend - the extraction of 'Other' species and kabukalli account for about 70% of production. As the figures below show, the much maligned chainsaw loggers supply the domestic market for timber, while the large TSAs, in the main, concentrate on log production on contract to the Asian exporters.
Chainsaw lumber production by species (as % of total extraction)
A standard definition of an enclave economy is one where linkages are lacking between the export sector and the internal economy. By that definition, forestry exploitation in Guyana is even more of an enclave sector today than it was in 1991 when the first large TSA was awarded to a foreign company in the hope that it would spur development. The last set of figures on forestry's contribution to GDP, reproduced in GFC's Market Reports, suggest otherwise. In 1993, forestry's contribution to the GDP was 2.9%. Ten years later, in 2002, the contribution had increased by less than 1% to 3.25%.
Foreign logging outfits will pack up and leave when they have completed their extraction of commercial log species for overseas export. That is the colonial model of boom and bust, alive and well in this bleak new world of globalisation. But since Guyana gets dubious benefits from it, it is perhaps a good time for us and our policy-makers to reflect on what kinds of livelihoods can be provided for remaining Guyanese and what kind of forest will remain when there are no commercial trees left standing. That time is not far away.