Indonesia : The Challenges of World Bank Involvement in Forests

Abstract

This case study is one of six evaluations of the implementation of the World Bank's 1991 Forest Strategy. This and the other cases (Brazil, Cameroon, China, Costa Rica, and India) complement a review of the entire set of lending and nonlending activities of the World Bank Group and the Global Environment Facility. A review of World Bank assistance to Indonesia in the forest sector since 1991 faces two challenges. The first is maintaining a distinction between an assessment based on quick solutions to outstanding problems and one based on long-term underlying objectives and historical facts, and how they shaped government and Bank actions toward Indonesia's forests until 1997. The second challenge is to assess the performance of the Bank's 1991 Forest Strategy in a situation where, despite largely adopting the principles that its strategy espouses, the Bank has been unable to influence the rate of destruction of natural forests. Following a brief discussion of the background and context to the current forest sector situation in Indonesia, this review is divided into two parts. The first part presents the state of the forests and the forest sector and identifies the pressures on forests and the key issues. The second part assesses the Bank's involvement in the sector and concludes with the main findings of the review.