Revisions to the Bank’s 1991 Forest Strategy

Why were revisions to the Bank’s 1991 Forest Strategy and policy necessary?

A key element of the previous Forest Strategy and policy was the ban on the World Bank Group providing finance to commercial logging in primary moist forest in any circumstances. The implementation of this policy was reviewed by OED in 1999 and 2000.  Their results were published in 2000 (The World Bank Forest Strategy – Striking the Right Balance).  The OED Review found that while the 1991 Forest strategy sent a strong signal about changed objectives in the forest sector with a new focus on conservation, the effectiveness of the strategy has been modest and the sustainability of its impact uncertain. 

 

In essence, the review found that the two central objectives of the strategy – slowing deforestation and increasing forest cover had not been achieved.  Furthermore, the OED review concluded that these implementation failures and outcomes were rooted in a number of limitations of the strategy and the associated operational policy.  In particular OED found that:

·         The focus on tropical moist forest was too narrow;

·         While the strategy diagnosed the problems of externalities, it did not provide financing mechanisms to address the divergent costs and benefits of conservation at the local and global levels;

·         The strategy failed to address key governance issues;

·         The Bank lacked an internal implementation strategy and incentive structure in terms of staff and administrative resources to support the high transaction costs of the strategy;

·         The strategy gave insufficient foresight to the powerful forces of globalization and economic liberalization that are affecting forests; and

·         The Bank adopted an overly cautious approach in the wake of the controversy that surrounded the formulation and implementation of the 1991 strategy.

 

OED identified a number of elements needed to make a revised strategy more relevant to current circumstances and to strengthen the Bank’s ability to achieve its strategic objectives for the forest sector.  These included: establishing partnerships with all relevant stakeholders to fulfill both country and global roles; broadening the focus on primary tropical forest to encompass all types of natural forests; reducing illegal logging and actively promoting improved governance and enforcement of laws and regulations; and addressing the livelihood and employment needs of all poor people while safeguarding the rights of indigenous people.