$22m World Bank grant highlights importance of forestry

Highlighting the importance of maintaining a strong and healthy forest industry across the globe, the World Bank has recently approved a grant totalling $22 million to boost the management of Indonesia’s tropical forests.

Indonesia’s forest cover, which is the third largest in the world, is to benefit from the grant, which was confirmed last week as part of a contribution that also includes $5 million from Danish development agency, Danida and money from the Forest Investment Programme. The entire programme was also developed alongside the International Finance Corporation and the Asian Development Bank.

It is hoped that the money will go towards helping to lower poverty among the communities that depend on the forest land, while also encouraging the preservation of the environment.

Rodrigo Chaves, the World Bank country director for Indonesia, said: “Communities who live near forests and rely on them for livelihoods are amongst Indonesia’s poorest. The Forest Investment Programme offers an opportunity for them to improve their incomes through better management of the environment.”

The money will help to lend support to the Ministry of Environment and Forestry’s Forest Management Unit initiative, which is known as KPH in Indonesia, and works to lower poverty levels among the 32 million people who live and work close to forests.

As of the end of last year, there were 28.51 million people existing below the poverty line in Indonesia, according to Indonesia’s Central Statistics Agency (BPS). Any issues in polices that do not work positively for the forest land and dependent communities will be addressed by the KPH units, it was confirmed, along with an establishment of a new data system that enables stakeholders to share their knowledge to benefit the forest land.

Diji Chandrasekharan Behr, the World Bank senior natural resources economic expert, said: “Effective operationalisation of the KPH program requires strong systems for sharing, among other things, information on land use and land cover, existing licenses and permits, approaches for forest governance and management.

Currently, the KPH programme, which is managed by Indonesia’s Ministry of Environment and Forestry, is being hindered by unclear regulations, a lack of investment funding, a lack of consistent data and poor implementation. The World Bank funding will go a long way to addressing these issues and will ensure that the KPH units are able to realise their medium-term development plans, which include a strengthening of forest management, a boosted use of natural resources, and a lowering of poverty levels across the country.

It is also hoped that the capacity of local governments, license holders and community groups will be improved in order to allow them to work together to better manage forests across Indonesia. Legislation is also set to be strengthened and made more concise in order to make sure all policies that affect the country’s forests have the forest cover and the local people’s best interests at heart.

The World Bank has said that forests are “critically important” to our planet, and, as a result, interest in investment into the asset class has steadily risen.

The forestry arena is an essential part of the development solution, with investment into forestry and forestry-related business booming. Whether it is in relation to boosting livelihoods, coping with climate change, meeting climate goals, ensuring supply chains are sustainable or carbon sinking, forests play a crucial role.

World Bank Group managing director Sri Mulyani Indrawati said: “Forests are also critically important to the stability of our planet’s vital systems. They help regulate our water supplies, sustain agricultural production and protect infrastructure. And they help the planet tackle the impacts of climate change by absorbing CO2 from the atmosphere and enhancing the resilience of natural systems to climate shocks.”

GWD Forestry spokesman James Barrett said: “I am thrilled that the essential nature of forests is being recognised on a global scale and that the World Bank funding will allow local governments, communities and investors to work to align their asset with best management practices to ensure that the land works on both an environmental and profit driven level.”

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