Disappearing Opportunities


July 22, 2012

Deforestation can rob a country of potential renewable revenues while replacing valuable productive lands with virtually useless scrub and grassland. Tropical forests provide important renewable resources that can significantly contribute to national economic growth on a continuing basis.

In theory, logging can be a sustainable activity, generating an ongoing source of revenue without diminishing the resource base—especially in secondary forests and plantations. However, most rainforest logging is not sustainable in practice, diminishing the potential revenue for tropical countries in the long term. The importance of forestry is decreasing in many former wood-exporting countries in Southeast Asia and West Africa due to overexploitation. While several countries have moved to restrict logging, some continue to struggle with illegal operations. The World Bank estimates that governments lose about US$5 billion in revenues annually as a result of illegal logging while overall losses to the national economies of timber-producing countries add up to an additional US$10 billion per year.

After logging, one of the largest "renewable resources" provided by tropical rainforests is ecotourism. The booming market brings tens of billions of dollars annually to tropical countries around the world. Ecotourism suffers with deforestation—few tourists, let alone ecotourists, want to travel in order to see polluted rivers, stumps of former forests, barren wasteland, gorilla carcasses, and relics of recently assimilated forest dwellers.

Forest products play a crucial role in the economy of developing countries, generating more than $120 billion in reported income in the late 2000s, according to the FAO. Roughly 20 percent of that value came from secondary forest products, although that number is likely a gross underestimate since it doesn't include the value to local, non-market consumers, who use timber to build houses and collect nuts and fruits from the forest for food. Short-term economic exploitation through deforestation can be devastating to the long-term economy of developing countries not only by annihilating vital ecosystems that afford important services, but also by destroying potential forest products. Accordingly, the volume of tropical hardwood exports has fallen since 1980. Malaysia has seen a 60 percent decline in log exports, while the Philippines (a major exporter of logs during the early 1980s) has seen a virtual cessation in log exports. In both cases, the declines are due to dwindling harvestable forest resources.

Is Indonesia losing its most valuable assets?

Deep in the rainforests of Malaysian Borneo in the late 1980s, researchers made an incredible discovery: the bark of a species of peat swamp tree yielded an extract with potent anti-HIV activity. But when the scientists returned to the site to collect more material for analysis, they were shocked to find the tree, and its promise, gone.

Besides timber products, tropical countries lose potential earnings from renewable forest products like Brazil nuts from the Amazon, durian fruit from Southeast Asia, and resin from Damar trees in Sumatra. A 2012 study by CIFOR estimated that forest products generate up to 20 percent of rural income and often provides the only means to access the cash economy. Many rainforest products cannot exist without a fully functioning rainforest system. Thus deforestation puts renewable forest resources at risk.

Forest clearing in Malaysian Borneo. Photo by Rhett A. Butler

Review questions:

  • Why are seconday forest products important?

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Continued / Next: Human-Wildlife Conflict

  • 1994 figures for exports of primary forest products are included in the State of the World's Forests 1997 (SOFO) published by the United Nations Food and Agriculture Organization (FAO).
  • The revenue decline in tropical hardwood exports is estimated in N. Myers "Nature's Greatest Heritage Under Threat." Rainforests-The Illustrated Library of the Earth, N. Myers, ed., Rodale Press: Emmaus, Pennsylvania, 1993.
  • The fall in Malaysian and Philippine log exports is documented in the State of the World's Forests 1997 (SOFO) published by the United Nations Food and Agriculture Organization (FAO).
  • C.B. MacCerron (Business in the Rainforests: Corporations, Deforestation, and Sustainability, Investor Responsibility Research Center, Washington D.C. 1993) predicts that by 2000 only 10 of the 33 tropical countries that export timber will still be able to do so.
  • Myers ("The world's forests: problems and potentials" Environmental Conservation 23 (2) 1996) and D. Pimentel et al. (Pimentel, D., McNair, M., Buck, I., Pimentel, M., and Kamil, J., "The value of forests to world food security," Human Ecology 1996) estimate the value of non-wood forest products at US$90 billion for 1996.