Forestry

Many countries under the IMF’s Structural Adjustment Programs are rich in forest resources. SAPs’ economic incentives for increasing exports of forest products can lead to more foreign exchange earnings, but when uncontrolled can result in unsustainable forestry management and high deforestation rates.

In Cameroon, IMF-recommended export tax cuts, accompanied by the January 1995 devaluation of the currency, provided great economic incentives to export timber. As a result, the number of logging enterprises increased from 194 in 1994 to 351 in 1995(3) and lumber exports grew by 49.6% between 1995/96 and 1996/97(4), threatening the country’s rainforests and natural habitat (see inset). In a recent report the IMF finally acknowledged the precarious nature of Cameroon’s export strategy and encouraged a strengthening of the government’s institutional capacity to promote the rational use of forest resources.

Between 1990 and 1995, forest loss for the 41 Heavily Indebted Poor Countries (HIPC) greatly exceeded the rate of forest loss for the world. For example, the two Central American HIPC countries, Nicaragua and Honduras, lost almost 12% of their forest, which is 7.5 times greater than the world rate. Approximately 75% of these HIPC countries had an IMF SAP at some point during this time period.(5)