The forestry sector is made up of numerous enterprises involved in log production, plywood, timber, round wood, non-timber forest products, fuel wood, manicole palm, and production of value added forest products (e.g. wooden furniture). The sector currently contributes around 4% of GDP, around 20,000 to employment, and around 6% to total exports. Guyana’s abundant supply of high quality raw forest, including many lesser known species, provides this sector with the means to become a significant economic driver of the national economy. However, lack of policy definition in the past, deteriorating infrastructure, lack of business reinvestments, evolving unfavorable market conditions, and little apparent interest in generating value added jobs in timber processing have all contributed to the diminishing importance of traditional forestry products in the national product during the past two decades.
Nevertheless, whilst in the past, the timber industry has been largely unregulated, making it difficult for companies to invest, things have started to change. Through the Forestry Commission’s National Forestry Plan of 1997, measures have been put in place for the conservation, protection, management, and utilization of Guyana's forest resources, while ensuring that the productive capacity of the forests for both goods and services is maintained or enhanced. For example, it is now compulsory for all concessions in excess of 8000ha to conduct an Environmental and Social Impact Assessment Plan (ESIA), a Forestry Management Plan, and a Forestry Inventory (FI) prior to issuance of a concession. A Code of Practice for Forest Operations detailing environmental and social procedures must also be complied with. A national management level inventory has recently been completed and necessary supporting systems are in place to guard against illegal logging. As a result of these measures, Guyana is now deemed by the International Community to be conducting Sustainable Forest Management at the level of the Forest Concession. There have also recently been positive investments in the sector with a number of new projects as well as several expansions which have created additional employment and increased activity in the sector.
The Government through the GFC continues to promote strategies in partnership with all stakeholders to enhance the development of the forestry sector. However, despite this recent progress, difficult challenges confront the sector. The fact that Guyana’s forestry resource is so much larger than the rest of the other CARICOM countries should signify that Guyana can take advantage of the CARICOM region’s considerable forest product-related demand, especially the demand of the substantial and growing Caribbean tourism industry. But the sector’s comparative advantage is constrained by many factors such as high energy and transportation costs and out-dated technology and equipment. Thus the forestry sector currently suffers from poor economies (high harvesting and production costs) partly due to mediocre tree stocks (low tree concentration per hectare; wide range of varieties), expensive infrastructure, the high-cost of production inputs (such as energy) and unproductive labor. Whilst Guyana’s log to timber recovery rate is similar to that of some other countries, some experts maintain that with the right policies and appropriate milling technology, the current recovery rate yield could be doubled to 65-70 percent.
A key factor determining Guyana’s potential to export value-added wood products is the actual availability and cost of timber production, followed by the cost of transformation and transportation and the technological ability to produce to tight specifications. Hence, improvements at the extraction end will be crucial to the long term viability of the value added forest products sector (see Chapter 5).
Actions in Progress and Planned Activities