NOTES

1. In Brazil the FAO-WRI data indicate a decrease in deforestation from 0.6% per annum in 1980-90 to 0.5% in 1990-95, or a reduction of 16.6%. Thus, while the rate of deforestation for Brazil seems to be overstated by the FAO-WRI estimates, the change through time is quite similar to that provided by PRODES.

2. See, for example, Rice, Gullison, and Reid (1997), who show that, given the high real interest rates prevailing in the region, no sustainable forest investment can compete with mining the forest resources, even in lands that are privately owned or subject to long concessions.

3. Not all natural-resource degradation, however, is consistent with economic growth. There are plenty of examples in Latin America of great natural-resource losses that have yielded very little growth, or have even been counterproductive. Most countries in Central America have reached a level of forest loss that is causing serious economic losses due to soil erosion and to increased risks of natural disasters. Deforestation in areas where soils are particularly poor and inadequate to support agriculture or other activities even for short periods, or in steep areas and watersheds, where it is likely to cause natural disasters, flooding, and soil erosion, are examples of wasting natural resources with little or even negative growth effects for the countries.

4. Given the fragility of tropical soils, natural biomass plays a more important role in tropical areas than in temperate areas. Thus, the individual country’s interest might be expected to call for somewhat greater forest areas in the tropics than in temperate regions.

5. Foreign assistance might still be effective in preserving certain unique localized ecosystems that might be particularly important to protect for special characteristics that are not found elsewhere. That is, foreign assistance to the still highly forested countries of South America can be effective when it is targeted to the protection of sites that do not have good substitutes.