Societies, economies and the natural environment at large have felt profound and wide-ranging impacts from the financial and economic crisis. As the global crisis deepens, the impact on countries, especially developing ones, has on par worsened all parts of the economy with rising unemployment and endangered their natural resources.

In these times of hardship, forests and the forest sector are particularly vulnerable: rising pressure on forests for energy and subsistence farming as well as an increase in illegal activities pose serious threats affecting progress towards sustainable forest management (SFM). The impact of this crisis will end up spreading and further widening the poverty gap, increasing the cost of the crisis to the environment and climate change.

The crisis affects the world’s forests through a variety of ways. There has been an increase in unemployment in urban areas and in forest encroachment as unemployed people returned from cities to rural areas. There has also been a loss of employment and income in the forestry sector, including manufacturing of wood and non-wood forest products, as well as pulp and paper due to reduction of domestic and export demand. There has also been a move towards shifting cultivation due to lack of other means of food supply and overexploitation for fuel for the rural poor. All these contribute to further deforestation and forest degradation. In addition, forests have been adversely affected by cuts in government expenditure, hence reducing capacity for forest law enforcement.

While the present crisis is much larger than the 1997 Asian financial crisis, past lessons suggest that the impacts on land-based sectors such as forestry and agriculture are likely to be dramatic. After 1997, large areas of forests were cleared, burned and converted to other uses for poverty stricken people. The drop in demand for agricultural commodities caused an adverse effect on agricultural production, income and employment in rural areas where the majority of the poor people live, adding enormous pressure on forestlands for food and shelter.