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Government Policies Affecting Forests in Latin America: An Agenda for Discussion

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dc.contributor.author Laarman, Jan G. en
dc.description.abstract This paper identifies policy issues that affect the extent, distribution, and condition of forests in Latin America. Forest management policies are only one element in the framework; policies related to agricultural development and land tenure can have potentially negative consequences for forests. Mineral exploration, hydroelectric reservoirs, highway projects, and urban expansion also have impacts on forest conversion. Finally, macroeconomic policies affect forests through their impact on investment, public spending, foreign trade, and other economic variables that have consequences for land use. Examples of the Bank's lending for forests as integrated with agricultural structural adjustment loans (AGSALs) in Honduras, Nicaragua, and Peru are presented. en
dc.format.extent 61 en
dc.subject Fiscal Policy en
dc.subject Trade Agreements en
dc.subject Agricultural policy en
dc.subject Environmental Policy en
dc.subject Forests & Forestry en
dc.title Government Policies Affecting Forests in Latin America: An Agenda for Discussion en
dc.coverage.placename Honduras en
dc.coverage.placename Nicaragua en
dc.coverage.placename Peru en
dc.contributor.other VIVIANRA
dc.date.accessioned 2011-07-21T01:44:13Z
dc.date.available 2011-07-21T01:44:13Z
dc.date.issued 1995-01
dc.identifier.uri http://www.iadb.org/en/publications/publication-detail,7101.html?id=18851
dc.format.medium ACROBAT
dc.language.iso en
dc.subject forest conservation
dc.subject trade policies
dc.subject macroeconomic
dc.subject wildlands
dc.type Working Papers
lacea.language.supported en
dc.date.modified 2016-08-17T03:08:34Z
dc.description.abstract2 Through its lending portfolio and policy recommendations, the Inter-American Develop-ment Bank (IDB) affects forests both directly and indirectly. For decades, the Bank has been engaged in lending for afforestation and reforestation. More recently, it has included forest-related components in structural adjustment loans for agriculture (Honduras, Nicaragua, and Peru). The Bank's projects for hydroelectric reservoirs, highways, mineral exploration, and urban expansion generally involve removing or adding forest cover. Additionally, the Bank's advisory role in macroeconomic policymaking affects the condition of forests through increases or decreases in public spending, investment, foreign trade, and other economic shifts. The Bank and its client governments are working to develop national capacities to analyze and debate forest tradeoffs. In addition, the Bank has the opportunity to work with national coalitions to transcend symbolic but ineffective legislative and regulatory forest instruments. This requires strategies to more effectively apply land-use zoning, tenure reform, forest concession contracts, forest management plans, pricing policies, and taxes and subsidies. Understanding the nature and types of policies that would have a favorable impact on forests poses a special challenge because of the characteristics of the resource. Forests have public good and externality aspects that are not necessarily promoted by strengthening the private sector and liberalizing markets. Moreover, much forest conversion, especially on land frontiers, is driven by policies and actions outside of the forestry sector. Our understanding of the tradeoffs between the distributional and environmental consequences of economic policies on forests is incomplete and unreliable. The impact of policies on forests is difficult to predict since it is often not evident until decades later. Finally, the use of quantitative analysis to simulate alternative policy impacts on forests is severely limited by the weaknesses of existing models. The IDB can respond by evaluating the quality of national planning and monitoring frameworks for forests. Bank resources can help fill gaps in forest inventories, valuation studies, mapping projects, community profiles, and analyses of land-use tradeoffs. Depending on context, the Bank may be justified in asking for acceptable forest planning and monitoring as a condition for agricultural and infrastructure lending. Through loan covenants and grant funds, the Bank can assist the development and maturation of intersectoral public/private coordinating bodies on forests. These can be a prominent forum where real and potential land-use conflicts are heard and addressed. The Bank is well positioned to leverage backing for national parks, reserves, and other protected areas. Through support for land-use planning and the definition of a permanent forest estate, the Bank can help client governments define and discuss protection priorities. As a lending institution, the Bank has a special responsibility to assist client governments to set fees and adjust other revenue instruments to make protected areas increasingly self-financing. Moreover, Bank conditionalities or grants to consolidate indigenous land claims help retain significant forest tracts under sustainable management. The Bank should use its influence with governments to press for limiting the number and area of forest concessions to a manageable quantity, and for awarding concessions through an open and fair administrative process. The adequacy of forest management plans, and compliance with them, should be a discussion point and possible conditionality of Bank loans for agriculture and rural infrastructure. The Bank also has the opportunity to promote partnerships between governments and nongovernmental organizations (NGOs) regarding oversight of forest concessions. The Bank should carefully monitor trends and developments in Latin America's recent experiments with forest privatization. Based on this experience and attention to general principles, the Bank could adopt practical guidelines for supporting or opposing the privatization of forests. With few exceptions, the Bank should discourage land titling inside forest boundaries except where directed colonization is backed by reliable impact assessments. Concurrently, the Bank should make every effort to strengthen land titling in settled and semi-settled areas. The repeal of agricultural subsidies that benefit frontier zones offers a potentially powerful intervention to slow the conversion of forests. At the same time, strengthening agricultural subsidies in settled areas may help raise output and employment on existing farms and ranches. The Bank could attach conditionalities to its agricultural loans to induce borrowing governments to re-specify the biogeographical zones and agri-pastoral activities eligible for government subsidies. The Bank should argue against outdated policies that consider forest clearing a land improvement and the basis for granting land titles. Although many governments subsidize tree planting on private lands with the intent of providing public benefits, these benefits should not be assumed. Instead, clear public benefits must be demonstrated if subsidies are to be rational. The Bank should promote policy discussions of the influence of land taxes on land use. In principle, the land tax favors forest conservation if croplands and pastures are taxed more heavily than forests; if newly cleared lands are taxed more heavily than established ones; and so on. The Bank should monitor the impact of reduced public spending on the capacity of forestry agencies to carry out their mandates. Additionally, the Bank should encourage public interest groups to observe the effects of liberalized trade on the environmental aspects of forest harvesting. Lastly, the Bank should cooperate with client governments in the development of investment codes and incentives to make foreign participation in forestry consistent with national socioeconomic and environmental objectives.


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