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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, although there is inconclusive evidence that SMEs are always better placed to deliver these benefits than large enterprises. SMEs are thought to constitute 80–90 percent of enterprises in the forest sector. It is estimated that over 40 million people are 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, and recommendations and efforts have been made to address them in a fragmented and often sectorally bounded manner, limiting the effectiveness of the intervention. A possible explanation is the limited consideration given to whether SMEs should be engaged in a particular forest subsector and, if they should, how to enhance their competitiveness.

APPROACH

This programmatic activity proposes to adopt a “sector-neutral" approach to determining 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 using, when sustainability considerations (including life cycle analysis) are considered. This is followed by examining if, where, and how SMES could help 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 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 : 03-01-2017

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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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Forest Tenure Rights for Rural Development

CHALLENGE:

Secure tenure is widely recognized as an essential foundation for achieving a range of rural economic development goals. However, forest areas in low and middle-income countries face particular challenges in strengthening the security of land and forest resource tenure. Forest peoples are often among the poorest and most politically marginalized communities in their national contexts, and their tenure systems are often based on customary, collective rights that lack formal legal protection. In addition, there is limited government presence and capacity in forest areas to support and defend local rights, as well as competing incentives from pressures for other land uses.

Despite growing recognition and attention to the importance of forest tenure security, significant gaps remain in terms of methodologies, tools and knowledge resources that would enable policy makers and World Bank operational staff to avoid negative impacts and build measures to strengthen forest tenure within relevant projects and initiatives. These gaps include (i) comprehensive analytical frameworks to help identify the key factors that need to be in place for the recognition and protection of forest tenure rights, particularly customary and collective rights, (ii) methodologies for assessing the presence or absence of these factors in particular national contexts, and (iii) knowledge resources that bring together experiences and solutions for addressing and resolving these gaps.

These are gaps that internal World Bank clients had identified as challenges they confronted primarily in the project design stages. Task teams often run into problems identifying tenure issues or the right types of tenure issues within a given context, which impacts implementation and achieving the best results possible because these issues and measures to address them were not identified at the outset. This project aims to change this scenario.

APPROACH:

The project will address these gaps by conducting the following activities:  

  1. Develop an Analytical Framework for understanding and assessing forest tenure frameworks and their implementation/effective realization, with a focus on securing tenure of indigenous peoples and local communities. Recognizing the range of knowledge resources that currently exist, both within and outside the World Bank, the approach will not seek to “reinvent the wheel” but rather to consolidate existing resources, adapt and tailor them to the specific contexts and issues affecting forest tenure rights, and build consensus for their widespread use.
  2. Conduct assessments (gap analysis) and dialogues on the forest tenure situation in approximately three high-priority countries.
  3. Develop a Sourcebook (or “solutions bank”) of best practices and related tools on ways to address obstacles and improving the development and implementation of forest tenure reforms. The Sourcebook will be designed as a living document – to be updated to accommodate new innovations, case studies and further applications of the Analytical Framework. 

These activities will ensure that World Bank staff and external clients can accurately identify the right issues in forest tenure security and reflect these in the design of future products and interventions.

RESULTS:

This program is set to be approved and activities will commence soon.

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Last Updated : 05-31-2017

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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.  For instance, men have been found to dominate forest user groups and organizations involved in forest management, so enhancing women’s presence in community institutions of forest governance considerably improved resource conservation and regeneration in Nepal and India.

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. And in some areas, men’s migration from rural areas has left women to assume the spectrum of agricultural and forest management roles, often without the resources or agency to do so successfully. 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

There are 2 main outcomes that this activity aims to achieve:

1.  Within PROFOR: every PROFOR activity has clear gender-related objectives and actions identified and being implemented. This implies that team task leaders (TTL’s) recognize the importance of gender issues, identify how a project can contribute to closing relevant gender gaps, and have efficient tools and new knowledge as to how best to address gender challenges.The goal is to see improved project and program design and implementation of gender ‘best practices’, leading to projects that are more inclusive and able to measure improved equity impacts.

2.  Across WBG forestry-related operations and investments: policy, operational and institutional changes within the WBG that show greater gender-responsiveness, leading to national and subnational partners also incorporating gender responsiveness into their policies and strategies.

Both of these outcomes will be achieved by working closely with task team leaders and other stakeholders and sharing knowledge of practices that are starting to generate sought-after gender outcomes in relation to forest-related projects, programs and investments – e.g. through a gender portfolio review, an e-book focusing on forests, poverty and gender, seminars, a forests-gender guidance note, trainings, events and presentations.  Lessons learned in the agriculture sector and case studies that demonstrate the kinds of gender actions that can make a big difference will be shared with project leaders, e.g. through concept note and proposal reviews, guides, briefs, etc.

RESULTS

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.

This activity officially started in November 2016, but there are several outputs that are now available, including:

  • 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 are available 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.

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Last Updated : 06-02-2017

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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

Activities are still ongoing, but the following outputs have been delivered:

  1. The full online eCourse on Landscape Approach 101 has been published on the WB Open Learning Campus. The course is scheduled for pilot-launch globally in March 2017.
  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 : 02-27-2017

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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 powerlines. At the same time, 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.

Program components have been chosen based on assessing the most urgent issues impacting the forest sector and the existing World Bank Group projects that have potential impact and replicability, in which this program can learn from and/or build upon. This program presents four pillars that provide the backbone of research for the studies:

  1. The first pillar of this program is resource corridors—a sequence of investments and actions to leverage a large extractive industry investment in infrastructure, goods, and services into viable economic development and diversification along a specific geographic area. Case studies will develop good practices for "forest-friendly" corridor planning and development
  2. Artisanal and small-scale mining (ASM) is the second pillar. ASM is still by far the largest mining sector in most developing countries in terms of employment. More than 100 million people worldwide rely on this sector for income. Because of the often informal nature of ASM, its impacts—both direct and indirect—are much harder to regulate and mitigate than those of large-scale mining. Case studies will build upon lessons from both past and ongoing projects to come up with concrete recommendations on how to address the impact of ASM on forests before, during, and after mining activities.
  3. The third pillar of this program is climate-resilient development. Climate change exacerbates the negative environmental and social impacts of mining and its associated developments. Mining-induced land use change can reduce resilience by driving deforestation and loss of forest resources. But if well-planned and regulated, mining can also contribute to climate resilience, for example through REDD+. This "climate-smart mining" component will build upon existing projects on extractives, deforestation, and climate change. The lessons learned will help forest- and mineral-rich countries effectively develop climate-resilient policies that promote the systematic integration of climate change considerations to address issues related to the extractive industries and ecosystems vulnerability.  Doing so will work to ensure the long-term sustainability of the environment, industry, and local development.
  4. The fourth pillar deals with mine reclamation, which can create useful landscapes that meet a variety of goals—from the restoration of productive ecosystems to the creation of industrial and municipal resources. The case study will look at the existing situation, as well as existing good and bad practices, and will come up with recommendations for a forest restoration strategy for existing mine sites. It will also address opportunities, challenges, and obstacles to achieving better mine site rehabilitation in forested areas, focusing on small-scale and informal mines.

The main outputs of this program will be research reports, toolkits, policy papers and recommendations, and multi-stakeholder dialogues (through workshops, webinars, and round table discussions.

RESULTS

Results to date include a detailed analytical framework to provide consistency among the different case studies and serve as the underpinning for research. The analytical framework has been presented to a core group of stakeholders and was refined based on feedback. Based on this analytical framework, two major studies will be conducted on 1) how to make small scale and large scale mining ‘forest smart,’ 2) lessons from both good and bad practices in different parts of the world. In the process of completing the studies, communication with stakeholders will be conducted along the way to enhance knowledge and increase the relevance of program results to key stakeholders

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Last Updated : 02-27-2017

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