Forests and Economic Development

Integrating Forests into Sustainable Economic Development

 

Forests are one of the most mismanaged resources in many countries. This is because forests are seriously undervalued, many of their environmental benefits are not captured by market values. Poor governance has fueled illegal activities. The rapid rates of deforestation in the last decades are largely a result of the spillover effects of poor policies in other sectors as well as lack of governance in the forest sector itself.

 

Helping governments to improve economic policy and the management and governance of the forest sector is therefore an important priority, including forest concessions policy and allocations.

Efforts to bring about credible systems for socially, ecologically and economically sound management of production forests should be coupled with systems for independent certification and monitoring. Identifying and promoting markets for local, regional and global markets for forest products is a related priority.

 

Engaging the Private Sector through Collaboration with the International Finance Corporation

 

Private sector investment in the forest sector in developing countries is seven times greater than the total official development assistance (about $US1.5 billion) for the forest sector. This makes engaging the private sector essential in promoting socially and environmentally sustainable forest sector development in Bank client countries.

 

Since publication of the Bank's Forests Strategy and Policy in 2002, there has been a rapid escalation of International Finance Corporation (IFC) investment in forest based industries. The IFC is giving special emphasis to both large and smaller scale industries and to projects that will contribute to the three pillars of the Bank’s Forests Strategy. A particular concern of Bank management has been to ensure that  Bank Group supported investments in private sector forest industrial companies meet the requirements of Bank Operational Policy 4.36. The Policy establishes guidelines for mandatory independent certification of private company forest harvesting  and  management operations.

 

Learn more: Sustainable Forestry: An IFC Commitment [pdf]