The tropical timber industry in Gabon: a forward linkages approach to industrialisation
The breadth and depth of forward linkages in the tropical timber industry of Gabon is a result of three inter-acting drivers: the nature of final markets, ownership of production, and sector-specific policy. The Forestry Code set explicit domestic processing targets built on the trajectory of French processors. Still, while this is theoretically in line with European market demands for wood products, the forced beneficiation resulted in Chinese, Malaysian, and Gabonese producers, whose prime activity is the exploitation of logs for processing industries in China, to limit their participation in forward linkages to the sawnwood sub-sector, characterised by low entry barriers and negative producer margins. Gabon's comparative advantage lies in the exploitation of its natural resource tropical timber for export markets. Logging is also a 'superior' technology allowing the appropriation of resource rents. These are largely diluted in processing due to production cost penalties such as high reservation wages, inadequate infrastructure, lack of skills, and the political economy of Gabon. The conflict between the envisaged forward linkages approach to industrialisation (in light of falling oil reserves), industry actors' market focuses, motivations, and capabilities, as well as conclusions drawn about comparative advantages and linkage-blockages, has significant consequences for industrial development.
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