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Last Updated: Thursday, 26 June, 2003, 23:52 GMT 00:52 UK
'Oil drilling can protect forests'
By Alex Kirby
BBC News Online environment correspondent

Countries which exploit their oil and mineral wealth are likelier to save their forests, researchers say.

The more money they make from drilling and mining, the argument runs, the less temptation there is to clear the forests.

Logging in Indonesia (PA)
More than 12 million hectares of tropical forest are lost annually
The researchers say the real message is that economics have a marked effect on the environment.

They believe cheap oil could be devastating for many tropical forests.

The researchers, from the Center for International Forestry Research (Cifor), based in Indonesia, say they receive no funding from oil or mining companies.

Their report, Oil Wealth And The Fate Of The Forest: A Comparison Of Eight Tropical Countries, says high incomes from oil and minerals can relieve forest pressure in several ways.

They strengthen exporters' national currencies, so alterations in exchange rates make it less attractive to invest in logging and in farming in forests.

Governments may also spend oil revenues on their cities, drawing people there, and letting the forests recover - or at least slowing deforestation.

Conversely, a slump in oil earnings means jobless people leaving the cities to clear the forests for crops and to hunt bushmeat.

Oil wealth

The researchers say their conclusion is far-reaching, with almost half of all tropical forests in countries relying heavily on oil and mineral exports, like Venezuela, Ecuador, Gabon, Indonesia and Papua-New Guinea.

The young are leaving, and the elephants and gorillas run freely through our gardens, destroying what little we grow to eat
Mbouila Thaopile
They put the amount of tropical forest lost annually at more than 12 million hectares (30 million acres) - an area roughly the size of Nepal.

The report's author, Sven Wunder of Cifor, said: "The prospect of Iraqi oil flooding the world market over the next few years and pushing down gasoline prices is music to the ears of consumers.

"But our research has found it could be devastating for tropical forests.

"The indirect, forest-protecting macro-economic effects oil wealth brings greatly outweigh the direct negative impacts associated with oil production and mining.

"The crucial factor is how governments spend their oil wealth."

But Mr Wunder said environmental groups should not misinterpret the report as an argument for companies to behave as they wished.

They would benefit the forests only if they avoided "practices that excessively damage the environment".

And the implications of the research went far beyond oil and minerals.

Mr Wunder said: "The key lesson is not that they are good for forests, but rather that changes in commodity prices, exchange rates and wage rates frequently have a much greater impact on the environment than most people realise."

Other international capital transfers, like bilateral credits, aid or debt relief could work in the same way.

Rural exodus

The study also supports critics of economic austerity programmes involving large currency devaluations.

David Kaimowitz, Cifor's director-general, said: "If developing countries are forced to devalue their national currencies as part of some International Monetary Fund programme, this will make it much more profitable to cut down the forests.

"That may be good for the economy, but it spells trouble for the forests."

The report cites Gabon in west Africa, known as the African Emirates for its oil wealth, to support its argument.

As the boom developed, it says, most Gabonese stopped farming, relying instead on imports.

The consequent rural exodus, the researchers say, means Gabon has probably seen marginal net reforestation since 1970.

One village chief, Mbouila Thaopile, said: "Nobody lives here any more.

"The young are leaving, and the elephants and gorillas run freely through our gardens, destroying what little we grow to eat."

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