The tropical timber sector has been severely impacted by the global financial and economic crisis which stemmed from the US subprime mortgage crisis in 2007. The adverse effects include a sudden plunge in housing starts and consumer demand for tropical wood products in traditional markets, depressed prices and severe adjustments of the tropical wood processing industries in ITTO producer and consumer member countries. This proposal focuses on increasing the resilience of the tropical timber sector to the threats arising from global economic and financial shocks by increasing the capacity of ITTO producer member countries to manage, adapt, recover from and anticipate such crises. The study will develop a knowledge base for informed decision-making at international, regional and national levels on strategies for minimising the risks to the tropical timber sector from global economic and financial shocks.
The lack of resilience of the tropical forestry sector to the impacts of the recent global financial and economic crisis was raised and highlighted at the Forty-fifth Session of the International Tropical Timber Council held in Yokohama from 9 to 14 November 2009. This proposal by the Secretariat is a response towards addressing the problem, particularly the concern of ITTO producer member countries that detailed analyses of the impacts of the crisis and policy responses were required to enable them to be better prepared for future economic and financial downturns. In addition, the study will address the concern of ITTO consumer member countries that the analyses will improve the understanding of the underlying factors impacting demand for tropical wood products in consumer markets.