Opening Remarks to the UNFF8 Panel on the Financial Crisis and Sustainable Forest Management: Threat and Opportunity

Opening Remarks by Mr. Sha Zukang, Under-Secretary-General for Economic and Social Affairs to the UNFF8 Panel on the Financial Crisis and Sustainable Forest Management: Threat and Opportunity New York, 20 April 2009

It is a pleasure for me to moderate this panel on a topic that is at the centre of discussion in every government cabinet, every media outlet and probably every household in the world – the global financial and economic crisis. The crisis has impacted fundamental aspects of human life: from homes and jobs to hopes for the future, to global trade and markets and the financial and economic system, to the environment we live in.

Many countries have taken steps to stem the tide of financial turmoil and economic downturn, and are continuing attempts to stabilize their financial sectors and stimulate their economies.

Earlier this month, in a major international response to the crisis, leaders of the Group of 20 agreed to substantially increase the resources (over $1 trillion) available through international financial institutions, to ensure that these institutions have the facilities needed to address this crisis in a coordinated and comprehensive manner. They also committed to give particular attention to the impact of the crisis on the poorer developing countries, as the Secretary-General urged in his address to the G20 Summit.

The impact of the crisis on developing countries – including on their natural resources – is of grave concern. As underscored in the report of the Secretary-General to this session on “finance and other means of implementation for sustainable forest management”, the financial and economic crisis will exacerbate pressure on forests for food and other basic needs. The crisis will likely put serious limitations on investment for sustainable forest management, and may affect national public resources and ODA as well.

While the current global crisis is much broader and more profound than the 1997 Asian financial crisis, we can still learn a few lessons from that experience. The impacts of the Asian financial crisis on land-based sectors, such as forests and agriculture, were dramatic. Large tracts of Asian forests were cleared, burned and converted to other uses by people desperate to eke out a living.

The financial crisis affected the commodity markets, and the forest sector economy suffered as general demand for forest products declined sharply. In Sri Lanka, the rubber industry crashed from failure to export rubber to crisis-hit countries like Malaysia and Indonesia, which were traditional importers of rubber.

The sharp decline in demand for agricultural commodities in general, led to adverse effects on agricultural productivity, income and employment in the rural sector, where the majority of the region’s poor people live. This, in turn, put pressure on forestlands for food and shelter, as the rural poor found themselves without jobs and incomes.

The current financial and economic crisis is the latest in a cascade of interconnected crises – economic, social and environmental – all of which underscore the need for a sustainable development approach.

Yet, as the Secretary-General has made clear, these crises afford a valuable opportunity to make new large-scale investments in energy efficiency, clean energy and green jobs, including through the economic stimulus packages being considered by some governments. Indeed, he is urging all countries to channel the resources intended to stimulate economic recovery to also serve the public purpose of global sustainable development.

Consider the Civilian Conservation Corps (CCC), a New Deal programme established by the US Congress with its Emergency Conservation Work Act of 1933. The CCC, which lasted until 1942, was a public works relief programme for unemployed men. It passed the test of a programme which could have a quick economic stimulus effect, as the enrollees began to be mobilized almost immediately after the bill’s passage.

Sometimes referred to as Roosevelt’s Tree Army, the CCC was responsible for planting more than 2 million trees, slowing soil erosion on 40 million acres of farmland, and developing 800 state parks. The CCC’s work was particularly important in helping to stem the erosion and degradation of land in the prairie states of the Dust Bowl. It is an interesting example of a green stimulus – of how efforts to address a financial, economic and employment crisis can also contribute to addressing another crisis of sustainable development. In the 1930s, it was the Dust Bowl and soil conservation; today, deforestation and climate change.

Today’s guest panel will offer us perspectives on the challenges – and opportunities – posed by the current crisis to sustainable forest management. I hope it will also propose some constructive solutions and approaches.

In doing so, the panel will also provide a context for the important decision to be taken, this session, by the Forum on financing for sustainable forest management and the implementation of the forest instrument.

We have with us today, a group of distinguished experts from some of the key international organizations that are dealing with development assistance, timber trade and environment, and offer significant knowledge, and practical experience that is relevant to this crisis.