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Unlocking the Potential of Small and Medium Forest Enterprises

CHALLENGE

In the forestry sector, small and medium-scale enterprises (SMEs) are often considered a vehicle for development, jobs, and poverty alleviation among forest-dependent households. SMEs are thought to constitute 80–90 percent of enterprises in the forest sector, with an estimated over 40 million people employed (either part-time or full-time) through such enterprises. SMEs also primarily service the domestic markets for wood and non-wood products—markets that in many regions of the world are growing in tandem with the growing middle class.

Despite widespread support for SMEs, the success of such enterprises in the forest sector has been mixed. Forest sector SMEs, like SMEs more generally, suffer from limited access to business and financial services, lack of support to enhance their competitiveness, regulatory measures that constrain their ability to operate in a "legal" space or that create perverse incentives, and limited access to markets. These and other challenges and constraints for SMEs have been widely identified, but recommendations and efforts to address them have been fragmented and are often sectorally bounded, limiting the effectiveness of the intervention.

APPROACH

This programmatic activity proposes to adopt a “sector-neutral" approach to determine how to create jobs and growth in a sustainable manner. The step-wise approach involves first examining if forestry can contribute to a broader national sustainable development agenda compared to other sectors, especially when sustainability (including life cycle analysis) is considered. This is followed by examining if, where, and how SMEs can be part of the forestry contribution to the development objective. Where SMEs are well positioned to contribute to sustainable development agenda, the activity will provide guidance on how to enhance their competitiveness and to develop the needed regulatory, financial, and technical environment. Accordingly, such an approach starts with understanding the optimal uses of timber and non-timber products, given national and subnational development objectives, followed by assessing which subsectors of SMEs could be competitive in and how to help them accomplish this.

The long-term development objective of the proposed programmatic activity is to create market and policy environments that support competitive SMEs in the forest sector that are sustainable and contribute to job creation and growth. The long-term development objective is to increase the client’s ability to generate jobs, promote climate resilience and environmental sustainability, and fuel domestic growth through competitive SMEs. This programmatic activity will involve working with colleagues from the Finance and Markets Global Practice and from the Trade and Competitiveness Global Practice.

The work will be done under with three pillars. The first pillar will involve a high-level analysis of issues and experiences and documentation of methodologies. The aim is to bring together the evidence and justification for adopting the approach (compared with the more common approach of identifying how to make SMEs competitive independent of the trends and changes emerging in the subsector). The second pillar will involve in-depth analyses in a small set of countries. The third pillar will focus on knowledge sharing and uptake throughout the activity. The second phase will involve to roll out the approach. The second phase will have four pillars.

Pillar 1: Analysis of issues and experiences and methods  

This pillar will capture existing knowledge from:

  • Prior applications of the proposed approach in the forest sector
  • Cases in which competitive forest SMEs have helped create sustainable jobs and growth
  • Evidence of how financial and technical services are delivered to SMEs in the forest sector and lessons learned from effective efforts (this will involve drawing on experiences from rural finance initiatives and activities in the trade and competitiveness field)
  • Approaches for assessing the impact of regulations, and enhancing competitiveness.

Pillar 2: Country level analysis of demand, supply and business environment

This pillar will conduct country level analysis in 3 countries. The analysis will involve the application of tailored approaches and tools identified in pillar 1. The country level work will analyze if, where and how forest sector SMEs can contribute to the national sustainable development agenda, carry out demand, supply and business environment analysis , and propose concrete actions for enhancing the competitiveness of SMES by lifting regulatory constraints, and improving access to financial services, technical support and markets .

Pillar 3: Capture and broadcast in a targeted manner the knowledge on opportunities to engage with SMEs.

This pillar will involve:

  • Augmenting existing briefs and infographics on the extent of forest sector SMEs in countries and information on their role in meeting the demand for wood and non-wood products/services in domestic markets and any information on the employment and job creation;
  • Bringing together the work that PROFOR and partners have supported on investing in locally controlled forests, opportunities for investing in SMEs, and Forest Connect and making it more user friendly way for Bank TTLs (working in partnership with LLI); and
  • Bringing together the findings and tools developed in the other pillars into user friendly outputs and working with systems available through LLI for dissemination

A fourth pillar may be added to this activity in the coming year. This pillar would focus on enhancing the link between SMEs/community enterprises and job creation in the natural resource sector. This would entail three activities: a stocktaking on which demographic segment benefits from forest-sector SME employment and job opportunities; an assessment of the skill development needs for rural enterprises plus cost-effective models for meeting these needs as part of broader initiatives on young people and job creation; and ideas on how to increase opportunities for young people to engage in innovation in rural areas and forest-based enterprises (examples of applying models used in developing and developed countries). An alternative approach will be to fold these activities into the existing three pillars.

RESULTS

The analytical framework for knowledge generation (pillar 1) is being developed. The framework will cover four thematic areas: a) supply and demand for products in value chains where SMFEs have a significant market opportunity; b) legal and regulatory constraints to SMFE growth along the value chain; c) financing constraints to SMFE growth; and d) “know-how” constraints to growth. In addition, the three countries for case studies on country specific constraints and solutions to SMFEs are being identified with discussions underway with country management units to confirm selections.

 

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Last Updated : 06-06-2018

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Knowledge management for nature-based infrastructure

CHALLENGE

Natural systems provided communities with many important services, including protection from natural hazards, and the provision of key resources like water and energy.  Natural systems also provide additional benefits: for instance, mangroves intended for coastal protection also provide fisheries, timber, non-timber forest products, tourism revenue, and act as a significant carbon sink.  But too often engineers and project designers overlook the potential of integrating nature-based infrastructure along with built infrastructure because of factors such as a lack of training or knowledge, legal and regulatory obstacles, or funders’ unfamiliarity with nature-based infrastructure. As a result, “gray” or “hard’ infrastructure solutions have dominated the efforts to reducing and managing disaster risk. However, the demand for nature-based solutions has increased over the years as a way of better managing exposure to natural hazards and climate change, while simultaneously building the resilience of vulnerable communities in a sustainable manner.

This activity will establish a knowledge management system that explores the link between nature-based infrastructure and the risk of natural disasters and the management of water systems. 

APPROACH

In its first phase, this activity will undertake a comprehensive stocktaking of experiences with nature-based infrastructure in order to identify opportunities and obstacles to its broader use, and develop a strategy for promoting these techniques. This strategy will then be implemented to promote wider use of nature-based infrastructure in World Bank operations for forests and disaster risk reduction. Finally, a program will be developed to support the incorporation of nature-based infrastructure into World Bank operations, including funding to support assessment and implementation of nature-based solutions along with grey infrastructure, and mentoring by a core group of experts.

RESULTS

This activity is ongoing. Findings will be shared on this page when they become available. 

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Last Updated : 03-01-2017

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Support to Preparation of Programmatic Country Forest Notes

CHALLENGE:

Investment in forest management was always traditionally driven by conservation and sustainable forest management objectives. Most lending operations on forests focused on solutions within the forest sector itself. This inward paradigm changed over the recent years especially after the introduction of REDD+, which started to systematically analyze the drivers of deforestation outside the forest sector.  Additionally, the development world increasingly recognized that forests provided concrete and valuable services for other sectors. Although REDD+ initially provided new financial resources for client countries and opened engagement in many new countries, forest operations are still either underrepresented or their full operational potential has not yet been explored to tackle the underlying issues that plague the forest sector.

Therefore, CFNs will allow going deeper into the key issues in the forestry sector in a coordinated manner over time to fill knowledge gaps. The primary goal is to increase the understanding of the strategic value of forests in the Strategic Country Diagnostic (SCD) and Country Partnership Framework (CPF) process; in countries where this goal is achieved, the Country notes will help to shape a more programmatic approach to forests over time.

APPROACH:

The program supports an integrated development model that advances socioeconomic opportunities and needs without jeopardizing the health of forests, based on four features: country-owned program, appropriate mix of financial instruments, cohesive financial architecture, and long-term engagement. Activities will involve the following:

  • Analyze the threats to forests in individual countries or regions and the opportunities for socioeconomic growth in the forest sector.
  • Inform the SCDs and CPFs and then work towards a more programmatic engagement and explore how to tap into the full range of instruments available to address the underlying challenges.
  • Provide strategic inputs into the development of the Nationally Determined Contributions (NDCs).

The CFNs are meant to be ‘living documents’, in that they will be reviewed and updated regularly to reflect additional data, a changing portfolio and the evolving dialogue and engagement with the relevant counterparts. The notes will act as a template to think through the complex issues, initially internally within the Bank, but over time, in coordination with partners and clients in the country as well.  The CFN process will involve critical assessment, preparation and annual implementation of action plans to address gaps and deep dives into the solutions needed for Forest Smart Investments.

A total of 7 countries has been selected to deliver on Country Notes based on (i) priorities of the Bank and its partners, forest size and opportunities on the ground and (ii) demand coming from the country units, clients and WB management. Selected countries are: Colombia, Mexico, Ethiopia, DRC, Indonesia, Nepal and Vietnam and possibly Liberia. Other countries have already expressed interest for the next round, including Brazil, Honduras, Lao PDR, Mozambique and Turkey.

RESULTS:

The Concept Note for this program is set to be approved and the program will soon commence. 

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Last Updated : 02-27-2017

Catalyzing Gender-Forests Actions

CHALLENGE

Taking gender into consideration in relation to forests matters because how, why and where men and women access, use and manage forests differs. These differences matter for the design of policies, institutional arrangements and interventions aimed at supporting sustainable forest landscapes. Persistent gender gaps remain across all regions in: access to services, access to markets and value-addition activities, land and tree tenure, voice and agency, and hiring labor. In addition to these, gender differences in the capacity for addressing climate change has been recognized as an issue that affects not only productivity but widens existing gender gaps in many places. But the challenges and appropriate solutions are not the same everywhere, which is why gender analysis to identify critical gender gaps at the project inception stage is so important. 

APPROACH

PROFOR’s program on Catalyzing Gender-Forests Actions aims to see that every PROFOR activity has clear gender-related objectives and actions identified and implemented. By sharing knowledge of practices that are generating gender-responsive forest projects, programs and investments, the goal is to influence and see improved project and program design and implementation of gender ‘best practices’ across the WBG and with its clients and partners, leading to projects that are more inclusive and able to measure improved equity impacts.

The underlying theory of change of this work is that through greater awareness of the relative lack of targeted gender efforts in many forests projects and programs, and a better understanding of the kinds of actions that could be, and are being, successfully undertaken in some, that project teams will include gender-targeted investments and actions in their plans from the outset, starting at the design stage.

OUTPUTS

  • A brief, entitled ‘Enhancing Effectiveness of Forest Landscape Programs through Gender-Responsive Actions’ is part of a series of briefs on lessons for gender-responsive landscape restoration, shared at the Global Landscapes Forum meeting held in Nairobi in August, 2018. Forest Landscape Restoration (FLR) aims to achieve ecological integrity and enhance human well-being in deforested or degraded landscapes. Evidence shows that addressing gender equality and women’s rights is critical for addressing this dual objective. The World Bank, CIFOR, WOCAN, RRI, IUCN, WRI, FAO, ViAgroforestry and other partners representing civil society, multilateral organizations, researchers and private sector actors have joined together to highlight a number of useful lessons and recommendations rooted in their diverse experiences and expertise – all working in different ways to enhance the gender-responsiveness of forest landscape restoration efforts.
  • A brief, entitledGender in Forest Landscape Projects: Actions and Indicators succinctly shares practical suggestions as to potential gender-responsive activities and actions, and indicators to measure progress towards gender outcomes, that WBG clients/ project teams can potentially include in their forest landscape projects, programs and investments.
  • A guidance note entitled ‘Gender and Forest Landscapes: Enhancing Development Impacts of Projects and Programs’. It provides suggestions for developers and leaders of forests projects and programs to enhance participation by, benefits to, and empowerment of women and other potential beneficiaries with limited voice and agency. The guide identifies potential gender-responsive activities and actions that can be included throughout the project cycle.
  • Key resources for project designers, researchers, development practitioners and others with an interest in understanding the issues related to, and links between, forests and gender, including: 1) An annotated bibliography of gender and forests literature (broadly defined to include landscapes with forests and agroforestry); 2) A guide that describes a range of tools and approaches freely available for the study and analysis of issues related to forest-gender/poverty issues.
  • A Gender focused Portfolio Review of Forest Projects for the Environment and Natural Resources Program on Forests of the Wold Bank, which analyzes the forest portfolio for the past 5 years (FY11-16), identifying projects that include gender-related dimensions related to analyses, actions, and indicators for monitoring and evaluating progress towards gender-related outcomes. A brief is also available on the portfolio review.

Incorporating gender in PROFOR-supported tools and frameworks

  • PROFOR Forest-Poverty toolkit – these tools are used in a participatory manner with communities and local governments to better understand: (i) forest resource uses and forest product value chains; (ii) sustainable natural resource-based livelihood opportunities; and (iii) enabling conditions and constraints for natural resource enterprise development.  In the Philippines, a PROFOR-supported initiative collected sex- and wealth-disaggregated information using the toolkit to inform local and national forest policies and practices aimed at climate resilience.  In Cambodia, the toolkit is being used in an options assessment of ‘forest-smart’ investments for sustainable livelihoods and forest landscapes.

  • Forest Governance tool - this participatory governance assessment approach aims at putting practical approaches into the hands of practitioners, policy makers, and decision makers and enable them to systematically consider and address the wide range of governance issues involved in sustainable forest landscape management. This tool is being broadened in scope to include gender issues and tested in several countries, including Mexico and Liberia.

  • ROAM - PROFOR assisted IUCN in incorporating gender in the Restoration Opportunities Assessment Methodology (ROAM) approach. It now includes social and cultural aspects of forest landscape restoration (gender, culture, youth). Applications in Malawi, Brazil, and Rwanda have resulted in new gender-responsive restoration guidelines, and it soon will be implemented in Mozambique and Burundi.
  • Country Forest Notes – These Notes aim to assess forests’ contribution to poverty and economic development, and analyze current and potential underlying drivers of deforestation in order to promote sustainable development at transformational scale.  They identify the potential for ‘forest-smart’ investments and help to streamline and coordinate WBG engagement in the forest and other sectors critical to sustainable forest management and forest-smart development goals (agriculture, energy, mining, etc). Originally envisioned to focus on the why, what and how questions and opportunities around livelihoods, poverty reduction and forest interventions, gender dimensions (the ‘who’) are also now being incorporated for many countries, including Vietnam, Liberia, Mexico, Zambia and Nepal.
  • PRIME – A new framework aimed at identifying investments, policies, projects, and strategies key to sustainable poverty reduction in diverse forest landscapes highlights five key areas – Productivity, Rights, Investments, Markets, and Ecosystem services, or PRIME. Gender considerations play a role in all five, and thus are highlighted as a cross-cutting and critical area to consider within this investment framework. Forest project designers, governments and others can apply it to enhance the role of forest landscapes in poverty alleviation in a more equitable and sustainable manner.

A global exchange of gender-forests information

Just how are forest landscape projects and initiatives addressing gender-related challenges and opportunities? A recent global event was a good place to pose this question to a diverse range of forest agency staff and others working on climate change and forest landscape management challenges. A joint Forest Investment Program (FIP) and Forest Carbon Partnership Facility (FCPF) Knowledge together some 150 participants from over 40 countries in Luang Prabang, Lao PDR on Sept 28, 2017 in conjunction with FIP and FCPF pilot country and country participant reporting and planning meetings. This event focused on knowledge sharing and joint learning on a wide range of topics such as engaging private sector in landscape programs, small and medium-sized forest enterprise financing for sustainable forest management, successes and challenges in combating illegal logging, communicating on REDD+, and gender.

  • A detailed summary of the gender session and many other shared gender-forests resources from the Laos meeting can be found here

 

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Last Updated : 08-27-2018

Resilient Landscape –Develop Learning to Support Operations

CHALLENGE

Land degradation, deforestation, climate variability and unsustainable land use represent multi-dimensional challenges that require integrated solutions across boundaries to address. For example, programs that promote resilient landscapes should be designed to connect forests, croplands, irrigated agricultural lands, woodlands, protected areas, and agro-silvo-pastoral lands that will optimize the provision and utilization of ecosystem services. Subsequently, World Bank client countries have been increasingly seeking support to move towards such an integrated approach to manage the multi-faceted challenges of managing land, water and other natural resources. This activity will, therefore, consolidate knowledge products that stakeholders can utilize to enhance their knowledge and create synergy on applying resilient landscape concepts to their work.

APPROACH

Two main activity components will be undertaken under this program:

1: Develop and launch a full online Landscape Approach 101 eCourse to be published on the WB Open Learning Campus for WB staff and external clients. The eCourse will consist of 4-5 hours of self-paced learning and will include discussions on key concepts and elements of creating an enabling environment for a landscape approach and the governance structures and tools that support landscape operation. A learning brochure and CD will be produced to accompany the course.

2: Support operationalizing resilient landscape through peer-to-peer knowledge exchange activities by pairing peers at the project level and across regions and countries. The e-course contents will be adapted into face-to-face learning modules, followed by a series of facilitated on-line learning events, BBLs, and putting together practical guides for operational teams.

RESULTS

  1. The full online eCourse on Landscape Approach 101 launched in March 2017 published on the WB Open Learning Campus. A self-paced course is now available (see link at left). 
  2. In partnership with African Union‘s NEPAD-TerrAfrica Secretariat, and the Bank’s ENR GP, the eCourse contents have been adapted into face-to-face training materials and were used them to support a regional training on “Resilience Landscape” in Nairobi, Kenya in July 2016. Attendees included Natural Resource Management (NRM) project managers, country program coordinators, Sustainable Land Management (SLM) focal points from ministries of Environment, Forestry, and of Agriculture, representing 18 TerrAfrica countries -- Lesotho, Kenya, Togo, DRC, Guinea Bissau, Burkina Faso, Malawi, Madagascar, Nigeria, Uganda, Zimbabwe, Cote d’Ivoire, Ghana, Gambia, Senegal, Burundi, Niger, and Comoros. The attendees rated the training highly and served to test the content of the adapted eCourse.
  3. The Bank’s ENR GP and Climate Change CCSA, in collaboration with Mozambique Government delivered a training workshop on the “Landscape Approach” in Nampula, Mozambique, in February 2017. The content of the training was mainly adapted from the Landscape Approach 101 e-course. Participants included 50 representatives of institutions that have direct interest on the landscape approach in Cabo Delgado, Nampula and Zambezia provinces, where the World Bank is supporting the preparation and/or implementation of different integrated landscape management projects. These include the Mozambique Forest Investment Project, the Agriculture and Natural Resources Landscape Management Project, Mozambique Conservation Project, and REDD+ Readiness support.

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Last Updated : 04-05-2018

Extractive Industries in Forest Landscapes: Balancing the Trade-offs and maximizing the benefits

CHALLENGE

About 3.5 billion people live in countries rich in oil, gas, or minerals. Many of these countries also suffer from poverty, corruption, and conflict stemming from weak governance. Nonrenewable mineral resources play a dominant role in 81 countries, which collectively account for a quarter of gross world product, half of the world’s population, and nearly 70 percent of those in extreme poverty. The World Bank Group’s involvement in extractive industries seeks to help countries seize the opportunities that mining companies offer for development, poverty reduction, and boosting shared prosperity. Most World Bank Group interventions in extractive industries are in the governance area, to encourage transparent management of industry revenues so that they provide benefits for local people and so that the industries themselves respect local community needs and the environment.

At the same time, more than one-quarter of the world’s active mines and exploration sites overlap with, or are situated within, a 10-kilometer radius of, a strictly protected area. Nearly one-third of all active mines and exploration sites are located within areas of intact ecosystems of high conservation value, most of them forests. Almost one-third of all active mines are located in stressed watersheds. Infrastructure developments associated with oil and mineral developments represent the most important threat to ecosystems through physical incursion into forests and disruption of the ecosystems. Road and railway development could be particularly harmful. Building a new road drives direct deforestation through tree cutting, but this impact is generally limited. Most importantly, roads are the major vehicle for forest degradation through further incursion into forest areas for agriculture, hunting, artisanal mining, and other potentially harmful activities. Added to that, a large-scale mine has considerable energy requirements, which will lead to the construction of hydropower dams, oil and gas pipelines, and power lines. Nevertheless, oil and mining companies can contribute considerably to sustainable forest management, and have done so in the past, by implementing measures for forest conservation and community development in and around their concessions.

There is increasing pressure on individual companies to implement standards to mitigate and offset negative environmental impacts. Yet there is a limit to what private-sector-driven, project-specific measures can do.  These kinds of voluntary standards also tend not to affect artisanal and small-scale miners and other "rogue" players, who tend to have the largest environmental footprint. In order to address all players, an integrated landscape-level planning and enforcement process is needed.

APPROACH

This program will transform the way the World Bank Group works with its clients on extractive industries in forest-rich countries, so that oil, gas, and mineral extraction contribute to sustainable forest management and poverty reduction for the people depending on those forests. The program also introduces this knowledge to the Bank's vast networks of private companies and government partners.

Activities have been chosen based on the most urgent issues impacting the forest sector, and existing World Bank Group projects that have the potential for the greatest impact and replicability. Two major studies are underway, focused on Artisanal and Small-Scale Mining (ASM) and Large-Scale Mining (LSM), and how to make these sectors forest-smart.The lessons and recommendations will be based on both good and bad practices in different parts of the world, looking at a range of geographical, governance, and ecological factors. The two studies include analysis of the thematic areas and the identification of 15-20 case studies each, following a detailed analytical framework that was developed to support consistency and comparability. 

RESULTS

The studies on LSM and ASM are being finalized. They focus on 10 critical minerals where extractive activities bear the greatest implications for forests. Early results indicate that certain minerals are overwhelmingly sourced from mines located in forests, including bauxite (80 percent) and manganese (63 percent). This category also applies to a quarter of mined diamonds and gold. Importantly, many of these mines are located in ecosystems of high conservation value. Moreover, in the top 13 countries with high levels of artisanal mining activity, forest cover is on the decline. These early findings highlight the global importance of identifying and promoting forest-smart solutions.

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Last Updated : 10-10-2018

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