Socio-economic effect of embargo on Liberian timber examined in UN report

An assessment of the recently imposed timber sanctions on Liberia has determined that the embargo will have an impact on the country only when the security environment does not already preclude logging and timber exports, according to a new United Nations report released today in New York.

The report by Secretary-General Kofi Annan goes on to say, however, that it is clear that a newly reconstituted timber industry in Liberia - built on pillars of accountability and transparency - could be a driving force for economic growth and sustainable development in the war-torn country. "This however will be feasible only in the absence of widespread conflict," he writes, adding that the current sanctions could provide necessary "breathing space" for the reorientation of the industry.

The 10-month ban on the import of all round logs and timber products originating from Liberia went into effect on 7 July. The measure was contained in Security Council Resolution 1478 of 7 May, which extended sanctions against Liberia through 2004, and widened their scope to include a ban on timber exports in addition to existing arms and diamond embargoes. The ban was prompted because the Liberian Government had not shown that revenue from the timber industry was used for legitimate social, humanitarian and development purposes.

The resolution requested the Secretary-General to report to the Council on the possible humanitarian or socio-economic impact of the measures, but he cautions that given the current dire conditions in Liberia and the fact that the sanctions only came into effect last month, the current report should be viewed as a "preliminary evaluation" of the potential impact of the restrictions. He also cautions that many of the sources for the report are secondary and based on remote discussions. The prevailing security situation had also precluded access to the country as well as interviews with local industry and government representatives.

"The challenges were particularly acute…given the ongoing conflict in Liberia," Mr. Annan writes, stressing in particular the upsurge in fighting since March, which had left the country in the midst of a "humanitarian crisis of immense proportions," with the situation continuing to deteriorate as hostilities and chaos reins in the capital Monrovia. He notes that logging activities had been curtailed significantly towards the end of April and were eventually halted as a result of rebel advances and the escalating intensity of the fighting.

Nevertheless, the report notes that when logging activities are not already precluded by insecurity, timber sanctions will have an impact on economic activities on various levels, namely on the national economy and the job market. The report estimates that the timber industry paid $13 million to the Liberian Government in 2002. The elimination of that source or revenue would have constituted an 18 per cent reduction in revenue. Some 5,000 to 8,000 timber workers would lose their jobs under the sanctions and secondary employment opportunities the industry created - namely in the logging and port areas where timber companies operated - would likely be seriously curtailed.

Mr. Annan notes that the sanctions will affect the humanitarian and social conditions in several sectors, including health food and nutrition, education and demography. In the health sector, timber sanctions will eliminate the limited healthcare that was provided by some of the logging companies. The sanctions will probably result initially in reduced food security at the household level for timber employees and their dependents affected by the ban.