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World Bank Reviews Global Forest Strategy

Press Release No:2000/193/S
Contact Person:
Caroline Anstey (202) 473-1800
Merrell Tuck (202) 473-9516

WASHINGTON, January 28, 2000 Forestry experts, environmental activists, industry representatives, and government policy-makers met at the World Bank this week to examine the Bank's 10-year-old forestry strategy and contribute ideas to a new strategy under preparation.

A report commissioned by World Bank President James D. Wolfensohn has found that the 1991 forestry strategy has a mixed record and needs to be adapted to the changing dynamics of the forest sector and the aspirations of developing countries. In particular, the strategy's strict bias toward conserving existing forests was found to discourage innovative forest management schemes sponsored by local communities and enlightened private interests.

"The Bank's strategy was quite successful in reorienting lending towards conservation and in ensuring that the Hippocratic oath of 'doing no harm' in the anti-logging policy was duly observed in the design and implementation of Bank-financed projects. However, it also discouraged creative experimentation and partnerships with the private sector and local communities," said Uma Lele, who headed the evaluation team in the Bank's independent Operations Evaluation Department (OED).

This week's two-day workshop triggered a dialogue among participants who explored whether and how competing perspectives can be bridged and partnerships facilitated towards conservation and the sustainable and equitable use of forest resources.

Addressing the workshop participants, OED Director-General Bob Picciotto said, "The OED evaluation of the decade-old forest strategy and this workshop confirm that the World Bank is a learning organization intent on drawing lessons from its operations for the benefit of the entire development community. The OED Forestry analysis illustrates that donor policies need to be more flexible if they are to promote the right balance between prudence and results orientation for optimal development impact."

Picciotto pointed to the Bank's efforts in examining its forestry strategy, including the Forestry Forum created by Wolfensohn with the aim of connecting leaders of private companies active in the forest sector with the civil society and public policy makers. Wolfensohn has also launched an alliance with the World Wildlife Fund to promote sustainable management of 200 million hectares of forest. Finally, he requested a reassessment of the 1991 strategy, of which the independent evaluation of Bank forest operations is an integral part.

Drawing on the OED evaluation, as well as on extensive regional consultations and complementary analyses, a new Bank forest strategy is under preparation under the leadership of Ian Johnson, Vice President of Environmentally and Socially Sustainable Development, who views global alliances as critical to the success of the Bank's forest policy and who judges the OED's review to be "hard hitting but fair in dealing with one of the most important, complex and intractable issues faced by the development community." The Board of Directors will review the new strategy by the end of the calendar year.

The Bank's forestry policy dates back to 1991 when the Bank's Board of Directors endorsed a new strategy to enhance preservation of natural forests. But the new OED report found that changes in the global economic environment, such as buoyant demand for wood products, weak forest protection mechanisms in developing countries, and stagnant aid flows, have changed the realities within which the World Bank operates.

The OED's review looked at forest operations in three forest rich countries (Brazil, Cameroon and Indonesia) and three forest poor countries (China, Costa Rica, India). It concluded that World Bank involvement was highly beneficial and appreciated in forest poor countries by promoting regeneration and tree planting and by helping to meet the basic needs of the poor through production forestry. On the other hand, the Bank's conservative strategy inhibited a fruitful dialogue with country authorities in forest rich countries and discouraged support of innovative forest management schemes sponsored by local communities and enlightened private interests.

Encouragement of good environmental practices by private companies is a joint priority for the World Bank and its private sector affiliate the International Finance Corporation. Curbing illegal logging requires basic policy shifts and improved governance in forest rich countries, the aim of an intensive on-going dialogue with Indonesia and Papua New Guinea under adjustment programs funded by the Bank.

The focus of Bank operations is broadening beyond tropical moist forests to encompass other natural forest types as well, including the temperate and boreal forests of Russia and other countries in Europe and Central Asia. Scarce concessional finance is being directed to the protection of biodiversity through the Global Environment Facility.

Deforestation affects 20 million hectares a year in the developing world and tropical moist forests are shrinking fast. One of out four of the world's poor depend directly or indirectly on forests for their livelihood. Biodiversity, climate change and protection of indigenous peoples depend on effective protection and management of forest resources.

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