Forests for People

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to local people. Often degraded soils, fires, and erosion adversely

affect income-generating production opportunities. People migrate

away from these areas and seek their fortune in cities. Timberland

investments can counteract this tendency by creating employment

opportunities in these areas.

However, such investments have a political dimension too that

needs to be carefully considered. Investors will remain business-

oriented and will never become donors or come bearing gifts.

Despite all social and environmental responsibility, investment

managers are accountable for increasing the funds of investors.

Their expectations are not high compared to expected returns on

the stock markets, so the financial crisis has improved the relative

attractiveness of timberland investments. Nevertheless, TIMOs

have achieved returns between 8 and 12 per cent per annum before

fees and taxes in nominal terms. Smaller investment projects also

offer these terms, sometimes even higher. This in turn means

that money is returned to investors and a limited amount will

be available to sustainably flow to the vicinity and surroundings

of the geographical investment area. The political dimension also

requires that local populations render land as title or lease and

consequently lose control – temporary or permanently. In the agri-

culture investment business this fact is even more prominent and

land grabbing contributes to the global food crisis and increasing

food prices. The fact that developed countries process foodstuffs

– often produced in third world countries – to bioenergy further

adds to this controversial discussion.

Land grabbing for forestry is not yet a point for discussion as

forestry activities are normally restricted to soils unsuitable for

agriculture or to steep lands. Local governments and

rural communities see forest investments as providing

extremely positive momentum, contributing to sustain-

able development in remote areas. The adverse effects

of forest depletion, forest clearing and soil degradation

can be slowed down or even reversed when forests

are attributed with tradable commercial values. Rural

timber industries can be developed and the use of resid-

ual timber can attenuate fuel shortages. The timberland

investment industries and responsible investors can

contribute to these positive effects in a world where

government funds are becoming scarce and are chan-

nelled increasingly to high-debt regions in Europe or

the US. However, industries have to adapt to market

particularities in developing countries, accepting

smaller dimensions, longer terms and higher risk-return

ratios and taking higher levels of social responsibility.

Investment managers and investors cannot do this

alone; they are not development specialists and prob-

ably won’t become them. They should get the assistance

of development agencies and banks to reverse forest

losses and migration to cities. These agencies in turn

have to realize that money from investors is not a bad

thing and that it can contribute to sustainable devel-

opment. Rural areas need more attention as food and

fibres are produced. They are the backbone of every

society and forests and their products and services play

a major role in their further development.

Planned implementation of forest investments is the basis for

sustainable forest management and provides opportunities for cross-

border and cross-gender communication (Ghana)

Forest investments and food production are not mutually exclusive, as in this

example of teak combined with sweet corn in a private investment in Ghana

Image: R. Glauner