Metla Project 3330
Globalising forest sector: Opportunities and threats to Finland?
Duration: 2002-2003
Keywords: Finland, comparative advantages, forest products, international trade
Results
Revealed comparative advantages in the international trade of forest products were measured by a ratio of exports minus imports of forest products divided by GDP. Twelwe case study countries of most dynamic net exporters of forest products from six continents were identified. During the most recent years such compartive advantages of Finland were at the level of 8 % and in Sweden and Canada not quite half of that level. the other nine countries remained at lower levels.
The annual trend changes of revealed comparative advantages were computed to be -0.45, -0.67 and +0.51 % respectively in Finland, Sweden and Canada. We can interprit the results so that in these three industrialized countries, the largest net exporters of forest products in the world, the comparative advantages have become saturated. Whereas in New Zealand, Brazil and in South Africa the respective ratios varied between 3.6-5.8 %. The results indicate that the revealed comparative advantages in the international trade of forest products are shifting from the North towards the South, and towards the countries of fast and highly profitable tree growing conditions.
For two decades strong global and other international rhetoric to decelerate deforestation has taken place. The discussion on the fate of tropical forests was largely mobilized by the early 1980s, when FAO found in its assessment that tropical natural forests were deforested by 11 million ha per annum. Then International Tropical Timber Organisation was established in 1984, Tropical Forests Action Plan next year, Rio UNCED in 1992 with a number of commitments concerning forests, its follow-up by IPF, IFF and UNFF and finally WSSD in Johannesburg in 2002.
In its 2000 assessment FAO found that tropical natural forests were still deforested by 14 million ha per annum in spite of all these global actions. This is a valid proof that deforestation cannot be stopped by global conventions or international agreements or recommendations. The keys to control deforestation lie at hands of national governments. My hypothesis is that corruption plays a key role in increasing tropical deforestation and preventing its control.
Original forest cover in any country is highly sensitive to variation of ecological conditions. In this modeling we are able to control ecological variation among countries by the first four independent variables. The rest of independent variables explain the remaining variation statistically significantly. Then we know what factors have determined that the relative forest area is lower in some countries than in some others. Simultaneously, we have revealed the underlying socio-economic causes of tropical deforestation. According to our multiple regression analysis an increase in GNP per capita is increasing, an increase in GNP per land area is decreasing, an increase in openness of trade is decreasing, an increase in agricultural productivity is increasing and an increase in corruption is decreasing relative forest area in tropical countries. We applied both ordinary least squares and weighted least squares estimation techniques at the national level of observations. The forest areas were based on the FAO 1995 Assessment. Openness of trade was measured as the value of all the exports plus the value of all the imports devided by GDP. When this ratio increased by 10 %, then forest area decreased by 5 %. Openness of trade and corruption along with seven other independent variables have appeared as a statistically significant underlying causes of tropical deforestation in the six models of this study. Also interesting aspect was that the 24-35 study countries represent the three tropical continents, Africa, Asia and Latin America. In that way the results are pantropical and they cover 54-70 % of all the natural tropical forest area.
Project leader:
Palo, Matti
Other researchers:
Katila, Pia (2002)
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Updated 12.06.2012
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