Relationship between Japanese official development assistance and tropical timber harvest levels in three southeast Asian countries

Abstract

approved: Steven E. Daniels Japan is the biggest importer of tropical logs in the world, and most of them are from Southeast Asia. It is also a major offerer of Official Development Assistance (ODA) to this area. The purpose of this thesis is to analyze the relationship between Japanese bilateral ODA to three Southeast Asian countries (Indonesia, the Philippines, and Malaysia) and tropical timber harvest levels in these countries. Two different methods are applied: econometric timber market model analysis and the Granger causality test. Timber market model analysis shows a significant correlation between Japanese bilateral ODA and timber harvest levels in Indonesia and in Malaysia. It also shows a significant correlation between timber harvest levels in Malaysia and the number of new housing construction starts in Japan. There is no significant relationship for the Philippines. The Granger causality test shows clear evidence of causality from Japanese housing construction to timber harvest levels in Indonesia, and also to Japanese bilateral ODA to Indonesia. It shows evidence of causality from timber harvest levels in Malaysia to Japanese bilateral ODA to Malaysia, too. There are no causal effects among timber harvest levels in the Philippines, Japanese bilateral ODA to the Philippines, and Japanese housing construction. All of the results can be explained in a reasonable manner by considering political, economic, and forestry situations of the three Southeast Asian countries and Japan. C Copyright by Ikuo Ota

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