Portugal

Luis Deslandes
Sociedade Portuguesa de Celusose S.A., Lisbon

Introduction

The Portuguese economy continued its gradual recovery throughout 1995 and 1996 and some improvements were noted in terms of budget consolidation, a fall in the rate of inflation and a decrease in the current account deficit.

The Portuguese economy has been and continues to be guided by the need to meet the EU convergence criteria, so that it is forecast that fresh effort will be made in 1997 to reduce the budget deficit to levels of less than 3 percent of GDP.

Economic growth, measured in terms of the growth in GDP, was 1.8 percent in 1995 and roughly 2.6 percent in 1996. OECD forecasts for 1997 predict a growth rate of 2.9 percent.

Private consumption grew by only 1 percent in 1995, although growth rates of close to 2 percent are forecast for 1996 and 1997.

The growth in government consumption, which grew faster than private consumption in 1995 (1.5 percent), will, however, not exceed 1.8 percent in 1996 and 1997.

The inflation rate continues to fall, having been 4.1 percent and 3.1 percent in 1995 and 1996, respectively. The rate forecast for 1997 is 2.7 percent.

Interest rates have kept pace with the evolution in the inflation rate and are showing a downward trend, which should continue throughout 1997.

The unemployment rate rose from 7.2 percent in 1995 to 7.4 percent in 1996 and it is expected to stabilise at between 7.2 percent and 7.5 percent in 1997.

Investment grew by 4 percent in 1995, and OECD estimates that the figure for 1996 is in the region of 5.8 percent. The growth in investment forecast for 1997 is approximately 6.1 percent.

The value of Portuguese exports in 1995 was 22.8 x 10⁹ US$ (26.6 percent more than in the previous year). The estimated growth in this figure for 1996 is more than 8 percent.

The total value of Portuguese imports in 1995 was 26.9 x 10⁹ US$ (20.5 percent more than in 1994). The estimated growth in imports for 1996 is only 1 percent.

Forest and forest products

Afforestation operations are continuing, both through private investment and as a result of the application of European Union Regulations (as is the case with the afforestation of farming land provided for in the reform of the Common Agricultural Policy). It is estimated that the forested area is currently growing by more than 20 000 ha per year, and the current structure of the Portuguese forest is as follows:

Maritime pine	1 047 thousand ha
Eucalyptus	550 thousand ha
Cork-oak	660 thousand ha
Holm-oak	464 thousand ha
Others	379 thousand ha
Total	3 100 thousand ha

This forest is composed of two distinct parts: a planted area (maritime pine and eucalyptus) and a part comprising indigenous species (cork-oak and holm-oak). The first part produces roughly 8.5 million m³ per year (50 percent pine and 50 percent eucalyptus), whilst the second part produces roughly 150 000 tonnes of cork (the bark of the cork-oak tree) per year. The holm-oak plays a most important role in stabilising dry agrosilvopastoral ecosystems, and the felling of these trees is forbidden.

In 1996, less severe climatic conditions were decisive in there being a smaller area of forest stands burnt (28 724 ha as against 69 812 ha in 1995). The number of fires, however, continues to be the most disturbing statistic, since the fact that there were more than 29 000 fires recorded in 1996 (as against 31 200 in 1995) places Portugal far ahead of all other countries in European and world statistics. (In the same period, the number of fires in Spain and France together did not even amount to the total number in Portugal.)

The overall value of exports of forest products in 1995 was 2 669.8 x 10⁶ US$ (17.9 percent more than in 1994). It is estimated that exports of forest products for 1996 have fallen by approximately 5 percent in relation to 1995.

The overall value of imports of forest products in 1995 was 1 350.8 x 10⁶ US$ (23.2 percent more than in 1994). It is estimated that imports of forest products for 1996 have stabilised in comparison with 1995.

In percentage terms, the structure of the foreign trade in forest products in June 1996 was as follows:

	Exports (%)	Imports (%)
Wood	16	28
Cork	30	4
Pulp	19	5
Paper	29	55
Others	6	8
Total	100	100

The sawnwood industry (coniferous sawnwood) continues to record successive falls in the overall volume produced, with it being estimated that production in 1996 will be little over 1 million m³, of which 45 percent is destined for the foreign market.

The wood panel industry recorded a high level of production in 1996, with the manufacture of approximately 730 000 m³ of particle boards, 310 000 m³ of medium density (MDF) boards, 72 000 m³ of fibre boards and 24 000 m³ of plywood.

The main indicators for the pulp and paper industry in 1996 are summarised in the following table:

	Pulp	Paper
Number of mills	7a	65
Number of workers	3 100	4 000
Eucalyptus consumption	4.2 million m3	-
Pine consumption	1.2 million m3	-
Pulp consumption	-	743 000 tonnes
Recovered paper	-	300 000 tonnes
Total production of eucalyptus pulp	1.33 million ton.	-
Eucalyptus pulp produced for market	1.05 million ton.	-
Total paper production	-	977 000 tonnes
Total production for use in printing	-	438 000 tonnes
Production of paper for packaging and wrapping purposes	-	471 000 tonnes

^aTwo mills are also paper producers.

This industry has continued to make great efforts in recent years to import eucalyptus (between 400 000 and 900 000 m³ per year), with the aim of reducing the demand pressure on the Portuguese eucalyptus forest and increasing the standing volume and average age of plantations.

Amongst the most important aspects of the forthcoming investments planned for the Portuguese paper industry are the increase in capacity by INAPA (from 180 000 tonnes of printing and writing paper in 1996 to 300 000 tonnes in 1999) and the planned installation of a PM2 at SOPORCEL (from 290 000 tonnes of uncoated printing and writing paper in 1996 to 650 000 tonnes in 1999).

Other important subjects

As a follow-up to the Second Interministerial Conference on Forestry held in Helsinki, the Portuguese Government offered to hold the third conference in Lisbon in 1998. Since then, there has been a committed involvement on the part of the Portuguese forest authorities in choosing the subjects and taking part in the debates about sustainable forest management and biodiversity.

As a result of this involvement and as a consequence of this new reality, the Portuguese Parliament unanimously approved a new Basic Law governing Forestry Policy in 1996, which is currently undergoing the necessary process for the publication of its regulations.

Forest industries and owners have taken part in this work, so that there is now a broad consensus on a variety of subjects, especially on the possible introduction of sustainable forest management certification.

It is practically the unanimous position of the Portuguese forestry sector that:

· any certification procedure or system must be transparent, voluntary and non-discriminatory;

· any certification procedure or system must be based on objective criteria and make use of indicators that are suitably adapted to the species and the region;

· at the end of the day, any certification procedure or system must result in a positive demonstrative effect leading to an increase in the forested area and an improvement in the quality of its management;

· no certification procedure or system may result in a lowering of the price paid to the forest producer or in loss of competitiveness of products manufactured with certified wood.

It is this set of positions which has resulted in the national support given to ISO's initiative of setting up a Working Party with a view to adapting the ISO 14000 standards to sustainable forest management.

Until such time as the process is completed and as an interim measure, the large-scale forest owners have made the recommendation that a Forestry Code of Conduct should be adopted and generally publicised. This code is designed to guarantee that a form of sustainable management is carried out which can be checked by public opinion.

This series of procedures has been discussed in conjunction with the Spanish Forestry Sector and with USSE (Southern European Foresters' Union), which represents more than 10 million ha of planted forest. Their joint work has resulted in the creation of IBUSUS (Iberian Initiative for Forest Sustainability), which approved the Declaration of Sustainability on 29 January this year. The Declaration has been adhered to by an extremely wide range of those parties that have an interest in the Iberian forest.