Future Challenge: A Paradigm Shift in the Forestry Sector - Smallholder Tree Growing for Rural Development and Environmental Services - page 437

at an annual average rate of respectively 112,000 and 63,000 ha (Table 21.4). Forests
within this category contribute to soil and water conservation and other sorts of pro-
tective functions. Positive trends are evident in private forest ownership (increased by
2.7 percent) and forest areas reserved for social services (increased by 0.8 percent),
but in terms of land area these gains are miniscule.
Negative trends in the regional forest base are associated with a loss of forest
functions and services. This is alarming as most of the world's population resides
in Asia (FAO 2005; UNDP/UNEP/WB/WRI 2005). The decreases in forest area
and accompanying accelerated shortages of forest products will affect both rural
and urban populations throughout the region.

21.3 Population Growth, Economic Development

and Demand for Forest Products

While the forest base will decrease, human population and economic development will
grow, increasing the demand and consumption of forest and wood products throughout
Asia and elsewhere. In 1995 South and Southeast Asia were home to, respectively,
1,109 million (23 percent of the world population) and 437 million (nine percent)
people in 1995 (ADB 2004). Projections indicate that by 2010 populations will
increase to 1,557 million (a 40 percent increase) in South Asia and 590 million (a 35
percent increase) in Southeast Asia, assuming medium fertility levels (Chipeta et al.
1998). Annual population growth for individual countries in South and Southeast Asia
ranged between 0.8 percent in Thailand and 2.4 percent in Bhutan during 2000-2005.
In 2005 gross national income (GNI) per capita varied between US$270 for Nepal to
US$4,970 for Malaysia (Table 21.2). Increases in GNI between 2000 and 2005 varied
between 17 percent for Nepal to 125 percent for Indonesia. Chipeta et al. (1998)
project annual increases in gross domestic product (GDP) of five to eight percent
throughout South and Southeast Asia. At such growth rates, it can be expected that the
Asian middle class will double or triple in the next decade. It is expected that by 2010
the Asian middle class, excluding Japan, could number between 0.8 to 1.0 billion peo-
ple, forming a middle class market segment to equal or surpass that of the US and
Europe combined (Naisbitt 1995 in Chipeta et al. 1998).
Population and economic growth will increase the demand and consumption of
forest products, which in turn will be reflected in expanded global trade of these
products (Photo 21.3). According to FAO (2005) major Asian forest products
traded in international markets include industrial roundwood (59 million cubic
metres with 14 percent for export markets), wood-based panels (35 million cubic
metres; 46 percent exports), sawnwood (32 million cubic metres; 25 percent
exports), paper and paperboard (32 million cubic metres; 35 percent exports), and
pulp for paper (16 million cubic metres; 17 percent export). Yet, the production and
trade of forest products vary greatly across countries. Indonesia is by far the great-
est producer of industrial roundwood (based on the 2002 data; see Table 21.3) but
Malaysia is the largest volume exporter of industrial roundwood.