Managing Forest Resources for Sustainable Development : An Evaluation of the World Bank Group's Experience

The World Bank Group’s forest interventions have contributed substantially to beneficial environmental outcomes. However, poverty reduction, for the most part, has not been satisfactorily addressed. Forest projects that promote participatory forest management have been the most successful at balancing poverty reduction, livelihoods and environmental aims (with efforts to link forest products to market), but this integration is lacking in other sector interventions. IFC’s downstream investments are creating jobs, including those in the upstream sector, helping forest companies produce higher value-added products, increasing productivity and production capacity, and fostering outgrower schemes. Despite increased efforts by IFC to support certification—a proxy indicator for sustainable forest management— challenges remain in this area. Regarding downstream investments, IFC’s impact could be expanded by greater attention to creating demand for certified supplies. And despite the reorientation of the strategy— including the operational safeguards that were put in place and efforts to support policy and institutional reforms— there have been negligible outcomes in integrating natural forests into economic development in an environmentally and socially sustainable way. The World Bank has been able to adapt the partnership structure and focus of work within the partnerships to the changing context of the global forest-related priorities and dialogue. The Bank has also had a major role in shaping these global priorities. Broadening the partnership approach toward other land-based sectors and commodities has been critical given the increasing importance of extra-sectoral factors as drivers ofdeforestation and forest degradation. The evolution of the partnerships towards holistic landscape-level approaches that combine forest conservation and sustainable forest management (SFM) with climate changemitigation and adaptation, improved food security and climate smart agricultural development are significant achievements. The Bank’s efforts to integrate broader governance concerns and issues, including the efforts to protect and enhance the rights of indigenous forest-dependent communities, into these approaches are also recognized as important achievements. In several cases, World Bank Group cooperation has facilitated effective outcomes in the forest sector. The World Bank Group has been most effective when the Bank’s work to help countries lower barriers to private sector entry have been combined with IFC and MIGA support to catalyze sustainable investments in the forest sector. Action on such complementary services was found in China, Nicaragua, Russia, and Uruguay— but nowhere else. The monitoring and reporting systems of the World Bank forest sector operations are inadequate to verify whether its operations are supporting forest management in an environmentally and socially sustainable way, in line with the 2002 Strategy and the Bank Group’s Operational Policies. Environmental indicators used in forest projects are mainly process or effort measures (such as the number of hectares planted, or numbers of hectares under management plans). Most indicators of poverty alleviation were less direct than is desirable both for accurately assessing project outcomes and for comparison across projects. Poverty reduction indicators like numbers of productive investments made are imperfect measures of whether programs are reaching the most vulnerable members of a community. World Bank and IFC projects often assumed, without verification, that benefits would accrue to the poor within targeted areas, rather than to community members with more wealth or power.