 Indonesia's forests are a concern of the World Bank because of their social, economic and environmental importance and the Bank's interest in promoting high quality economic growth and lasting poverty reduction. Currently, the country's forest resources are not contributing as they should to poverty reduction, economic and social development, and environmental sustainability. Instead, forest areas are threatened with degradation, fragmentation and destruction. A quarter of the “state forest area” in Indonesia lacks tree cover. In recent years, the country has been losing up to 2 million hectares annually, mainly due to illegal cutting and land conversion fueled by excess processing capacity and a lack of effective management and law enforcement.
Forest loss undermines rural livelihoods, ecosystem services and Indonesia’s ability to meet poverty alleviation goals. Poor forest governance damages the investment climate, rural economic potential, and Indonesia’s competitiveness and international reputation. Forest crime exacerbates problems of budget and fiscal balance, and diverts public revenues that could be better spent on poverty reduction and development goals. As Indonesia moves from transition to stabilization and growth, there is a tremendous opportunity to help the government find new ways of managing forest areas in partnership with local communities, contributing to democracy, justice, equity, rural sector investment, jobs and growth. Sustaining Indonesia’s Forests: Strategy for the World Bank, 2006-2009 provides a framework for the Bank to clarify its goals in the sector, as well as the timing, resource implications, and risks of deepening engagement. The strategy also lays a foundation for mainstreaming forestry issues into the CAS and broader policy reform interventions. The strategy is a road map for internal discussion and decision-making, but also can offer some insights to the public on the Bank’s views. Read the full report (1.8mb pdf) |
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