Download Report - Independent Evaluation Group - World Bank

The Economic Importance of Brazil’s Forests
cost of inputs and machinery, and leading to rapid forest conversion.
Trade liberalization has supported Brazil’s comparative advantage in
agriculture and livestock, and has stimulated expansion of the service
and durable goods sectors (EIU 1999b) as well as growth of agriculture
along the forest margin.
International trade has been a small share of the market for forest
products, unlike in Indonesia. 8 Although forest-related exports in Brazil
grew from US$100 million in 1985 to about US$500 million in 1997,
Brazil currently supplies only 4 percent of the global market for tropical
wood (Barreto et al. 1998). Since 1980, the relative importance of
the forest sector to Brazil’s international trade has increased only slightly.
In that year, it accounted for 5.42 percent of total exports and 1.2 percent
of imports. In 1998, these values had risen to 7.14 percent and
1.98 percent, respectively. 9 About 50 percent of exports are cut wood,
25 percent are plywood, and 12 percent are laminates (Verissimo and
Lima 1998). The modest size of the export market, therefore, may mean
that certification, which has begun to attract much attention in Brazil
and internationally will have less impact than its proponents hope. However,
this situation could well change in the future.
Trade liberalization, which began in earnest in the early 1990s and
received a major boost with the 1995 implementation of Mercosul and
recent currency devaluations, has already boosted exports, including
the export of forest products. Brazil is therefore poised to increase its
supply of wood products on the global market as other traditional suppliers
of tropical timber, such as Indonesia and Malaysia, exhaust their
resources.
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