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Over the past decade the Asia-Pacific region has experienced tremendous changes in nearly every aspect. These changes have been particularly profound in the forestry sector, where society has dramatically increased its demands and expanded its expectations for goods and services. Almost all countries in the region have moved towards sustainable forest management at the policy level and in many countries institutional structures are also gradually changing. This report reviews the status and trends in forestry policy, legislation and institutions in 12 countries and outlines the extent to which changes in these areas have been effective in supporting transitions towards sustainable forest management. Trends in governance and efforts to tackle illegal logging are also assessed. The report highlights the need to develop consensus over the roles of forestry in national development as a fundamental pre-condition for improving forest management. Policy measures should promote economic growth balanced with resource conservation and poverty reduction. This involves clear and equitable allocation of rights and responsibilities, application of appropriate technology and environmental safeguards, and removal of disincentives for investment in forestry. Most of all, forestry institutions need to be flexible and responsive in capturing opportunities and striving to optimize the contribution of the forestry sector to emerging needs.