FINANCE: World Bank says New Forests Policy Will Fight Poverty

By Emad Mekay Reprint | | Print |

Emad Mekay

WASHINGTON, Oct 31 2002 (IPS) - The World Bank on Thursday revealed a new forest policy that it says will enhance protection of the world’s endangered forests and lift 500 million people out of poverty.

Unlike the previous policy, in effect since 1991, the Bank says its new strategy will cover all forests in borrowing countries, not only so-called high-priority habitats or strictly protected areas.

It will increase coverage from an average eight percent of forest areas in developing counties to nearly 100 percent and will include efforts to have countries designate more of their forests as protected and to maintain bans on logging in these critical forests.

Few countries in either the developing world or among rich nations have been either willing or able to conserve more than 10 to 20 percent of their forest areas so the Bank felt it had to step in, said Ian Johnson, vice president for sustainable development.

"We have to focus on the other 80 percent in improving the management of those resources in a sustainable manner," he said.

According to the strategy, the Bank, the world’s largest development agency, will now only finance commercial harvesting in areas where strict environmental assessments or "authoritative scientific surveys" have been completed.

Poverty reduction will result from clauses in the new policy pushing for "community forest management" and "agro-forestry".

"We will go for small community-based projects that would be based on locals’ efforts," said a World Bank official who wished to remain unidentified. "No large-scale logging projects are planned."

Now, illegal logging results in losses of between 10 -15 billion U.S. dollars a year of forest resources. If saved and well managed, the Bank estimates, these forests could generate revenues that could support spending on education and health and at the same time reduce the areas being cleared and burned.

World Bank President James Wolfensohn on Thursday repeated admissions made two years ago that the Bank’s old policy did not stop deforestation or illegal logging. He vowed that the new policy will change that.

"The old approach of Bank disengagement from forestry clearly has not worked," he said.

World forests are important for many reasons. The economic growth of many developing countries, for example, depends on the use of their forests resources, and local communities in tropical rural areas depend heavily on forest resources for their livelihood.

Forest ecosystems also have major impacts on soil, water, and coastal marine productivity over very large areas. They also influence carbon cycles, which play a crucial role in regulating local and global climates.

Two years ago, the Bank’s independent operations evaluation department (OED) concluded that the Bank’s policy and its ban on logging in tropical forests had failed to slow down deforestation during the previous decade. The review also said that destructive and illegal logging practices continued to expand in many developing countries.

Environmental groups have previously urged the Bank to correct its strategy and expand its policy to include all forest areas and to refocus its strategy on poverty reduction and on sound economic and environmental management.

According to the Bank, forests equivalent to the land area of Greece are lost annually. The new policy aims to bring at least 200 million hectares of forest, which lie outside strictly protected areas, under forest management.

The new policy also promises strengthened tenure rights, better food security and spiritual welfare for "millions of indigenous tribal peoples living in the rainforests in areas like West Africa, Latin America and Southeast Asia”.

"This isn’t about making the world safe for multinationals, it is about trying to benefit local communities, and local people, while at the same time reducing destruction of forests," said the Bank official.

More than 1.6 billion people depend to varying degrees on forests for their livelihoods, the Bank says. About 60 million indigenous people are almost wholly dependent on forests and some 350 million people who live within or adjacent to dense forests depend on them to a high degree for subsistence and income.

The policy says that it will adopt internationally recognised standards that will enable medium-size and small logging companies in developing countries to improve their management.

But it is still unclear how the new strategy would affect environmentally damaging projects already underway.

The Bank itself has been criticised by environmentalists and civil society activists for giving little regard to forests and for often failing to adhere to policy and commitments regarding rainforest conservation.

In December, the Bank approved a new segment of a loan to Papua New Guinea (PNG), despite strong opposition from local landowners and environmental activists who say Bank-backed projects endanger the country’s rainforest, the world’s third largest.

Landowners and bank critics said that although bank loans to the government of PNG include a moratorium on new logging as a condition, neither the Bank nor the government was honouring that agreement.

The activists say because lending from the Bank and its sister organisation, the International Monetary Fund (IMF), are important for developing countries, the two agencies should work to tie loans to environmentally sound policies.

The groups often urge freezing loans as a way to pressure governments to reverse what they say are ecologically damaging practices.

They also say the Bank has to reform its economic policymaking, which furthers lending for structural adjustment, a process that promotes trade liberalisation and export-led growth.

Such policies pressure countries to slash funding for environmental programmes, and have led to a hike in logging exports and cuts in government spending on forest protection.

The Bank says it is addressing the potential impact of adjustment lending on forests in its forthcoming revision of its policies on that lending. Until then, it says it will carefully screen and mitigate "potential impact on forests in adjustment operations”.

FINANCE: World Bank says New Forests Policy Will Fight Poverty

By Emad Mekay Reprint | | Print |

Emad Mekay

WASHINGTON, Oct 31 2002 (IPS) - The World Bank on Thursday revealed a new forest policy that it says will enhance protection of the world’s endangered forests and lift 500 million people out of poverty.
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