Report Highlights: Burma?s official wood exports should remain at around 475,000 cubic meters. The industry in Burma is faced with over logging due to continued unchecked illicit trading in logs...EXECUTIVE SUMMARY Burma remains more than 50 percent forested and has sizeable stands of commercial hard woods due to a sound policy of sustainable forest management that has been in place since British times. While commercial extraction of teak and tropical hardwoods is controlled under Forest Department regulations and monitoring, population growth and the resulting demand for fuel wood and agricultural land are putting pressure on both the hardwood and other forested areas. Illegal logging of hardwoods has and continues to be a problem in border areas, but the largest threat to Burma?s forest resources is encroachment by villagers seeking wood for fuel and land for crops. Accurate and reliable statistics on forest area resources, production, consumption, and trade are somewhat difficult to obtain given the extent of illicit trade and insufficient government resources to adequately monitor the sector. Nevertheless, post forecasts that annual production (based on Burma?s fiscal year of April/March) of teak logs in 2000/01 will continue to be around 475,000 cubic meters. Production of other hardwood logs will be approximately 1.5 million cubic meters. Lumber output over the same period will be about 35,000 cubic meters of teak and 240,000 cubic meters of other hardwoods. Burma?s export trade is dominated by logs. Exports of teak logs in calendar year 2000 will likely be similar to 1999, or about 247,000 cubic meters, while exports of other hardwood logs will likely be between 335,000 and 400,000 cubic meters. Production of lumber and other valueadded products for domestic use or for export is hampered by the low level of the local processing sector. The forestry sector is a good illustration of the constraints, both economic and policy, that Burma faces. Articulate and knowledgeable bureaucrats know what their problems are and have good ideas for resolving them. However, lack of resources, contradictory policies and programs between Ministries, and irresistible economic incentives often prevent these ideas from being implemented. The latter factor is a considerable problem for the forestry sector. Commercial extraction of tropical hardwoods, both officially and outside the system, are extremely profitable and an important earner of foreign exchange for the cash-strapped government. It is unlikely that the existing regulations, sound as they might be, can be completely effective in curbing illicit extraction. At the village level, the short-term economic benefits of gathering fuel wood or clearing land for crops simply overrule the longer-term benefits of reforestation or other environment-friendly land management techniques."