Do Large-Scale Forestry Companies Generate Prosperity in Indigenous Communities? The Socio-Economic Impacts of Tree Plantations in Southern Chile

Abstract

Since the 1980s, forest plantations have expanded globally in response to the commercial demand for wood products. Research has focused mainly on the economic and environmental impacts (carbon reduction) of the forestry industry. There has been less interest in the social impact of large-scale forestry plantations; in particular, what has been the effect of the expansion of tree plantations on local communities. This research focuses on this issue and evaluates the positive (employment and income) and negative (poverty and income inequality) externalities of the expansion of the forestry industry in Indigenous and non-Indigenous population located in six regions of Southern Chile, where 73% of the rural Indigenous people live, over the period 1997-2015. The findings show that the expansion of the forestry industry has not reduced unemployment or improved incomes for the Indigenous or non-Indigenous population. On the contrary, it has increased poverty and inequality between them.