The politics of increasing the role of forests to promote pro-poor growth While many of the policies and investments needed for forests to sustain pro-poor

7.4. The politics of increasing the role of forests to promote pro-poor growth While many of the policies and investments needed for forests to sustain pro-poor

growth are known, they are often not implemented. This section identifies how to make change happen and provides some examples of how this has taken place. It demonstrates what coalitions are needed to make investments in forestry and what management improvements need to happen, including the empowerment of the poor and the supporting role of donors.

7.4.1. Making large-scale commercial forestry sustainable and pro-poor In many low-income countries, natural forestry resources represent a valuable

commodity. However, these are often distributed on a patronage basis for political gains. Revenue generation for the treasury tends not to be an objective. This is evident in many forest-rich countries such as Cambodia, Ghana, Indonesia, Myanmar, Cameroon, the Central African Republic and Liberia (WRI, 2000). The timber-processing industry is often

NATURAL RESOURCES AND PRO-POOR GROWTH: THE ECONOMICS AND POLITICS – ISBN 978-92-64-04182-0 – © OECD 2008

II.7. FORESTRY FOR PRO-POOR GROWTH

closely tied to the political elite and benefits from artificially low log prices and subsidised credit.

There are some countries, such as Cameroon and Ghana, where reforms are now being attempted to raise forestry prices through auctions and timber taxes, but these face major resistance. In countries such as Ghana and Indonesia where the forest industry is largely run by nationals, the resistance is domestic, but in many other places, such as many African countries, commercial logging is conducted by foreign firms.

There are one or two exceptions, demonstrating that large-scale commercial forestry can be sustainable. Inspiration Furniture is a Malaysian-based moulding and garden furniture exporter with sales of USD 20 million, which received the Forest Stewardship certification in 2001, and saw profits increase by 5% with new demand in Germany and elsewhere in Europe (FSC, 2004). Latin America shows signs of having some of the most pro-active private sector operators, such as Bolivia. The country is among the most forested countries in Latin America and now has 25% of its forest area certified. This is the highest proportion of any tropical country (Box 7.4).

Box 7.4. Bolivia is a world leader in certified timber The recent commitment by the Bolivian timber company, CIMAI/IMR to certify

300 000 hectares of its forests will bring Bolivia’s certified forest area to over 2 million ha. The company already has several thousand hectares of certified forests, which has led the marketing director to state: “Without FSC we would not have a business today.” This increase means that 25% of Bolivia’s forest area will be certified by the Forest Stewardship Council – the highest national coverage of any tropical country. The certified forests, mostly in the southwestern Amazon, include 13 forest concessions on state lands, two private properties and one indigenous communal land. Certification has helped generate USD 16 million a year in exports especially to the American and European markets where demand for certified timber is strong. The environmental and economic benefits of certification include product diversification. Before 1985, 85% of wood products were of mahogany, but by 2004, there was a marked growth in demand for FSC-promoted products and exports of abundant, but lesser known, species. The FSC standards also protected the rights and welfare of neighbouring people. The certification process was helped by a decade of the most progressive forest laws in the region.

Source: IUCN (2005); FSC (n.d.).

7.4.2. Create opportunities for small and medium sized producers While forest management and tree-growing by smallholders can potentially produce

substantial income, it requires access and land tenure security, which the poorest people tend not to have (FAO, 2003). Furthermore, there are strong asymmetries of information, power, and organisation between the beneficiaries of deforestation and those who bear its burdens. The diffuse interest groups favouring forest conservation find it hard to organise themselves to counterbalance the concentrated interests of forest degradation. Therefore, political challenges over access rights, transparency and accountability must be addressed. In particular, constituencies for conservation and better governance should be supported; public monitoring and disclosure of forest conditions and management should be improved; forest and agricultural products should be certified; and more flexible

NATURAL RESOURCES AND PRO-POOR GROWTH: THE ECONOMICS AND POLITICS – ISBN 978-92-64-04182-0 – © OECD 2008

II.7. FORESTRY FOR PRO-POOR GROWTH

approaches to environmental regulation should be introduced. These measures can help diverse groups to organise, to check abuses of power and to cut the costs of reaching agreements for pro-poor forest management.

There is already some positive experience in South Asia, Latin America and Africa from which lessons can be learned. As a result of extensive redistribution of forest resources in developing countries, 22% of the total forest area in these states is now owned by, or reserved for, communities and indigenous groups (Scherr, White and Kaimowitz, 2004). Again, this does not guarantee that poverty will be alleviated, but it may improve the chances. One positive example is the development of extractivist reserves in Brazil (Box 7.5). Driving these positive developments are innovative coalitions for reform that bring together the poor themselves, often supported by civil society actors, and in some cases, international pressures from donors, NGOs and consumers.

Box 7.5. Extractivist reserves in Brazil: Sustaining pro-poor growth Some of the most impoverished groups in Brazil live in the forests. Rubber-tappers live

isolated deep in the forest, depending on rubber and other forms of “extractivism”. They are largely migrants from the northeast, whose families tapped rubber during the early part of the 20th century. However, unable to compete with Asian rubber, the government decided to shift to other forms of development, such as agriculture, cattle-ranching and mining, leaving the tappers marginalised. The return of Brazil to democracy in 1985 helped precipitate major efforts by marginalised groups in Brazil to become organised. Indigenous Indian groups formed the Indigenous Peoples Union (IPU). At the same time, the National Council of Rubber Tappers (NCRT) was formed with Chico Mendes as its first president. In 1986 the NCRT joined the IPU to create the Alliance of Forest Peoples. The rubber- tappers helped stimulate calls for what have become known as “extractive reserves”. With considerable civil society support, both within Brazil and internationally, and pressure from the World Bank, the government was forced in 1995 to create almost 900 000 ha of extractive reserves. As of 2000, this had grown to 16 reserves covering 3.4 million ha with more under discussion. However, there are still challenges in making the reserves work. In the 1990s these included middlemen who dominate the extractivist economy and falling rubber prices. However, by 2000 some of the early challenges were being overcome as local families shifted into more diversified agricultural I sources of income and then benefited from rising rubber prices.

Source: Brown and Rosendo (2000) and Ruiz-Perez et al. (2005).

NATURAL RESOURCES AND PRO-POOR GROWTH: THE ECONOMICS AND POLITICS – ISBN 978-92-64-04182-0 – © OECD 2008

ISBN 978-92-64-04182-0 Natural Resources and Pro-Poor Growth: The Economics and Politics © OECD 2008

PART II

Chapter 8