World Bank Approaches to the Brazilian Amazon: the Bumpy Road Toward Sustainable Development
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LCR Sustainable Development Working Paper No. 13 World Bank Approaches to the Brazilian Amazon: The Bumpy Road toward Sustainable Development November 2002 John Redwood III The World Bank Latin America and Caribbean Region Environmentally and Socially Sustainable Development Department (LCSES) John Redwood III is Director of the Environmentally and Socially Sustainable Development Unit (LCSES) of the World Bank’s Latin America and Caribbean Regional Office. The findings, interpretations, and conclusions in this document are attributable to the author, and should not be attributed in any manner to the World Bank, its affiliated organizations, members of its Board of Executive Directors or the countries they represent. This working paper series is produced by the Environmentally and Socially Sustainable Development Sector Management Unit of the Latin America and Caribbean Regional Office. Additional copies may be obtained either from the author, or from LCSES Program Assistant Peter Brandriss ([email protected], or tel. 202-473-9379). Cover photo by John Redwood III Contents Abbreviations and Acronyms .................................................................................................v Introduction..............................................................................................................................1 The 1970s and 1980s: Mining, Infrastructure, and Integrated Regional Development ....2 Carajás.................................................................................................................................3 POLONOROESTE ................................................................................................................5 Other Projects and Analytical Work ...................................................................................7 The 1990s: Sustainable Natural Resource Management, Rural Poverty Reduction, and Biodiversity Conservation .....................................................10 Learning from Experience and Integrating Environmental Factors: Evaluation and Analytical Work.................................................................................10 Meanwhile Back in the Northwest: PLANAFLORO and PRODEAGRO ............................13 Fighting Deforestation and Forest Fires and Protecting Biodiversity: The G-7 Pilot Program, GEF, and PROARCO.............................................................17 Starting the New Millennium: Towards the Sustainable Development of Amazonia .....23 Country Assistance Strategies...........................................................................................23 New and Ongoing Evaluation and Analytical Work.........................................................24 New Lending and Grant Operations under Preparation ....................................................27 Looking Ahead: Challenges for the Future.........................................................................29 Annex: World Bank/GEF/Rainforest Pilot Program Loans/Grants for the Brazilian Amazon ...............................................................................................33 Completed Projects ...........................................................................................................33 Projects Currently under Implementation .........................................................................34 Projects under Preparation ................................................................................................35 References...............................................................................................................................37 - iii - - iv - Abbreviations and Acronyms ARPA Amazon Region Protected Areas Project CAS Country assistance strategy CSO Civil society organization CVRD Rio Doce Valley Company FINAM Amazon Investment Fund FUNAI National Indian Foundation FUNBIO Brazilian Biodiversity Fund GEF Global Environment Facility GTA Amazon Working Group GTZ German Technical Cooperation IAG International Advisory Group IBAMA Brazilian Institute for the Environment and Renewable Natural Resources (formerly IBDF) ICR Implementation completion report IMAZON Institute for Man and Environment in the Amazon INCRA National Settlement and Land Reform Institute IPEA Institute for Applied Economic Research LZ Land-use zoning MMA Ministry of the Environment MTR Mid-term review NGO Nongovernmental organization OED Operations Evaluation Department PAD Project appraisal document PCD Project concept document PCF Prototype Carbon Fund PCR Project completion report PLANAFLORO Rondônia Natural Resources Management Project POLONOROESTE Northwest Integrated Regional Development Program PPTAL Integrated Project for the Protection of Indigenous Peoples and Land in the Amazon PROARCO Program for Prevention and Control of Forest Fires in the Deforestation Arc PROBIO National Biodoversity Project PRODEAGRO Mato Grosso Natural Resources Development Project PRODESQUE Amazon Fire and Deforestation Monitoring and Control Project PROTEGER Amazon Fire Prevention, Mobilization, and Training Project RESEX Extractive Reserves Project SAR Staff appraisal report WDR World Development Report WWF World Wildlife Fund - v - - vi - Introduction1 Environmental sustainability has become increasingly central to the World Bank’s mission over the past several decades, particularly after the 1987 Brundtland report articulating the principles of sustainable development.2 As part of a major reorganization in 1987 the Bank established a central Environment Department as well as Environment Divisions in each of the six operational regions. A central Vice Presidency for Environmentally (later Environmentally and Socially) Sustainable Development was created in 1992. That same year the Bank’s annual World Development Report (WDR) was devoted to the theme of development and the environment, and constituted the Bank’s principal contribution to the Rio Earth Summit.3 Ten years later the Bank published a new WDR, Sustainable Development in a Dynamic World: Transforming Institutions, Growth, and Quality of Life, which served as its flagship document for the Johannesburg Summit. In addition, the Bank recently published Making Sustainable Commitments, which represents its first explicit corporate environment strategy. The growing importance of sustainable development is reflected in the evolution of the Bank’s country policy dialogue, analytical work, and lending operations on poverty and the environment. This can be illustrated with reference to the vast and ecologically sensitive “Legal Amazon”4 region in Brazil, an area covering more than 5 million square kilometers and currently holding some 21 million inhabitants, more than two-thirds of whom live in urban areas.5 This paper will review a number of significant Bank-supported activities in (or, in the case of analytical work, on) the region, identifying the principal changes in focus and approaches to development over time and drawing some preliminary conclusions and lessons from this rich and diverse 6 7 experience. 1. I would like to thank Robert Goodland, Anthony Hall, Josef Leitmann, Dennis Mahar, Sergio Margulis, and Robert Schneider for their helpful comments on an earlier draft and Stael Baltar, Hans Binswanger, Kenneth Chomitz, Christoph Diewald, Philip Fearnside, Josef Leitmann, Judith Lisansky, Kenia Parsons, Robert Schneider, Claudia Sobrevila, Loretta Sprissler, and Nils Tcheyan for helping me to access some of the information cited in this paper, and Peter Brandriss for helping me to finalize it. The paper was initially presented in a workshop on environment and sustainable development at the Third European Congress of Latin American Scholars in Amsterdam in July 2002 and I am grateful to the participants for their helpful observations. 2. The Bank’s current mission statement reads, in part, “to fight poverty with passion and professionalism for lasting results; to help people help themselves and their environment by providing resources, sharing knowledge, building capacity, and forging partnerships in the public and private sectors.” 3. One key message of the 1992 WDR was that “…protection of the environment is an essential part of development. Without adequate environmental protection, development is undermined; without development, resources will be inadequate for needed investments, and environmental protection will fail.” 4. “Legal Amazonia” refers to the areas in the Amazon Basin formerly entitled to receive fiscal incentives under the 34/18-FINAM system (see footnote 15 below), including all of the present states of Acre, Amapá, Amazonas, Mato Grosso, Pará, Rondônia, Roraima, and Tocantins (formerly the northern part of the state of Goiás), and most of Maranhão. 5. For non-Bank discussions of sustainable development issues in the Brazilian Amazon, see Bierregaard, et. al. (2001), Browder and Godfrey (1997), Bunker (1985), Cardoso and Muller (1977), Davies de Freitas (1998), Fearnside (1986), Goodman and Hall (1990), Goulding, Smith and Mahar (1966), Hall (2000), Hecht and Cockburn (1989), Nitsch (2000), Schmink and Wood (1984), Smith, et. al. (1995), Smith (1999) and UNAMAZ (1998). 6. While not specifically considered in this paper, many of the observations below may also be of direct relevance and applicability to the Amazon portions of the other countries – Bolivia, Peru, Ecuador, Colombia, Venezuela, Guyana, and Suriname – in the broader Amazon River Basin. For an example of Bank analytical work done elsewhere in the Amazon region