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Deforestation and Land Use Changes Induced by the East Asian Economic Crisis

Listed author(s):
  • Stefano Pagiola

    (World Bank)

East Asia is one of the most important areas of tropical forests worldwide. Considerable concern has arisen that the East Asian economic crisis would result in a further worsening of the already high pressures experienced by the region’s forests. This report examines the available evidence on the impacts of the crisis on deforestation and land use in the affected countries. It focuses on three main countries—Indonesia, Thailand, and the Philippines. The analysis shows that there has been a great diversity of effects across and within countries, depending on the extent and nature of the impact of crisis. No simple story emerges. The balance of the available evidence does not seem to support the more pessimistic scenarios that were proposed early in the crisis. Indeed, one can point to at least some evidence suggesting that some sources of pressure have been alleviated. Other evidence, conversely, suggests that some pressures may have increased. The net effect of these factors is hard to gauge, both locally and at the national level. In many cases, the pre-existing trends are likely to continue to dominate, with the crisis merely nudging them slightly higher or lower. This reinforces the need for long-term attention to these important environmental problems. The basic conclusions that emerge are: (a) There has been a continuum of effects, with Indonesia most heavily hit, the Philippines the least so, and Thailand somewhere in between. (b) Within this overall pattern, there is also substantial variation in the impact within each country, across regions and across sectors. (c) The primary mechanism through which deforestation trends are likely to have been affected is through changes in relative prices and the coping strategies of rural households. There is little evidence to support hypotheses that return migration has had a major impact. In Indonesia, the weakening of government authority and enforcement powers is also a major source of concern. (d) There is little evidence to support the more alarmist fears of vastly accelerated deforestation processes resulting from the crisis; indeed, in some cases pressures may actually have been reduced. In the absence of data on actual land use changes, analysis is limited to examination of changes in pressures. In some cases, these changes act in opposite directions, making it difficult to predict what the net effect will be. That tree crops have been the major beneficiaries of relative price changes further complicates the assessment, since they can be less environmentally damaging than other agricultural uses. Much will depend on whether any expansion of tree crops occurs on existing agricultural land or by converting additional forest land. The extremely high level of threats to East Asian forests that existed even prior to the crisis leave little room for complacency even if some of the more alarmist scenarios of the crisis’ impact do not seem to have occurred. Some aspects of the crisis are likely to have worsened already high pressures, others to have slightly alleviated them. The underlying pressures created by demand for more agricultural land and for timber and wood products remain. These conclusions indicate that the main policy priorities remain those of improving the management of the region’s forest and land resources.

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Paper provided by EconWPA in its series Others with number 0405006.

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Length: 49 pages
Date of creation: 24 May 2004
Handle: RePEc:wpa:wuwpot:0405006
Note: Type of Document - pdf; pages: 49. PDF of working paper
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  1. Hamilton, Kirk & Clemens, Michael, 1999. "Genuine Savings Rates in Developing Countries," World Bank Economic Review, World Bank Group, vol. 13(2), pages 333-356, May.
  2. Frankenberg, E. & Thomas, D. & Beegle, K., 1999. "The Real Costs of Indonesia's Economic Crisis: Preliminary Findings from the Indonesia Family Life Surveys," Papers 99-04, RAND - Labor and Population Program.
  3. Angelsen, Arild, 1995. "Shifting cultivation and "deforestation": A study from Indonesia," World Development, Elsevier, vol. 23(10), pages 1713-1729, October.
  4. San, Nu Nu & Löfgren, Hans & Robinson, Sherman, 2000. "Structural adjustment, agriculture, and deforestation in the Sumatera regional economy," TMD discussion papers 52, International Food Policy Research Institute (IFPRI).
  5. Edward B. Barbier, 1990. "The Farm-Level Economics of Soil Conservation: The Uplands of Java," Land Economics, University of Wisconsin Press, vol. 66(2), pages 199-211.
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