Tropical hardwood exports and economic development

Three countries in Southeast Asia, Indonesia, Malaysia and the Philippines were chosen and the capacity of the forest sector to contribute to the process of indigenous growth and development was analysed. Direct action in the rural sector is vital to help alleviate poverty and unemployment in the Third World. Although there is a lack of a general, substantiated strategy for the rural sector, small scale, labour intensive industrialization would be a useful part of such a strategy. Export substitution has been successful in several Asian countries." Any role that the forest sector could have in promoting rural development would depend upon the capacity of the forest industries to increase local retained income, local value added and employment opportunities. The nature of their production functions would be highly significant. Economies of scale and integration were recognised as common features. The extent to which industrial policy can influence labour intensive industrialization and technological innovation seemed crucial. Conventional views of the role of the forest industries in the development process were judged to be partial. Examination of the supply and demand relationship of the forest sector in each of the three countries showed that the rapid expansion of international trade in forest products and the growing proportion of tropical hardwood exports from Southeast Asian producers reflected the dominance of log exports from the countries studied. The importance of foreign exchange earnings as a proportion of each country's export bill was the prime consideration. In Indonesia, the forest sector's fortunes were found to be determined by the role of foreign investment. The picture was slightly different in Malaysia. In Peninsular Malaysia the forest sector has been integrated with agriculture through land-clearing schemes for agricultural development. The growth of processed forest products was noted. In Sabah, indigenisation measures have affected the control of the resource with the state government playing an active part. The mixed fortunes of the Philip-pines which has lost prominence as a log exporter and is suffering-competition from the in-transit processors, reflected that, most of the growth in processed forest products was closely reliant upon import dependent industrialization policies. Log exports are especially dominant in the remoter areas of each country and heavy investment in infrastructure would be needed to establish forest industries. Measures taken to reduce or ban log exports have been applied to ensure a supply of logs to the existing industries in Peninsular Malaysia and the Philippines. The analysis of the forest sector in these countries used a framework which emphasised the importance of employment, local income and value added. Adopting the criteria of past national development objectives the sector has made a substantial contribution: the main criterion being that of foreign exchange earnings. It was contended that the expressed aims of achieving employment and social justice could not be met by a furtherance of the present pattern of resource exploitation or by the development of the forest sector for large scale, export oriented operations. Instead, a subordination of this role was recommended and policies which would involve the multi-faceted nature of rural development should recognise the potential of the existing forest .industries. Policies ought to favour local entrepreneurs, local skills and indigenous forest industries. The country specific nature of the forest sector's contribution to economic development may only be realised where the needs of the rural sector are taken to be paramount.Forestry, Faculty ofGraduat