Public Disclosure Authorized Optimizing Guinea-Bissau’s Public Disclosure Authorized natural wealth Helen Edmundson Public Disclosure Authorized Poverty Reduction and Economic Management Africa Region September 2014 Public Disclosure Authorized Acronyms and Abbreviations CAIA Celula de Avalicao de Impacte Ambiental CBA Cost Benefit Analysis CER Certified Emission Reduction CPIA Country Policy and Institutional Assessment DBT Dulombi-Boé-Tchetche EIA Environmental Impact assessment EU European Union EU ETS European Union Emission Trading Scheme FAO Food and Agriculture Organization GDP Gross Domestic Product GEF Global Environment Fund GNI Gross national income MRV Monitoring Reporting and Verification NTFR Non-timber forest resources ODA Official Development Assistance PA Protected areas REDD Reducing Emissions from Deforestation and Forest Degradation RER Real exchange rate SEEA System of Integrated Economic and Environmental Accounts SNA System of National Accounts SSA Sub-Saharan Africa UN United Nations UNDP United Nations Development Programme VER Voluntary Emission Reduction WAEMU West African Economic and Monetary Union ii Acknowledgments This paper was prepared during 2012-2013, with the involvement and advice of several experts in The World Bank Group and the government and agencies of Guinea-Bissau, as well as local Bissau-Guineans. Without their support and input this paper would not have been possible. Esther G. Naikal and Marie Le-Grange from the Wealth Accounting and the Valuation of Ecosystem Services (WAVES) team provided support and advice on the methodologies and cross-cutting assumptions needed for the natural wealth and adjusted net savings calculations. Gary Joseph Raymond McMahon and Martin Lokanc gave useful inputs and suggestions on Guinea-Bissau’s minerals, their prospects, and key assumptions on how the sectors are likely to evolve. Jingjie Chu’s work and modelling on West Africa’s Regional Fisheries Trust Fund contributed to the assessment of Guinea-Bissau’s fishing sector, updated with local data. Tanya Yudelman’s expertise and knowledge of Guinea-Bissau’s biodiversity, in addition to support and insights from Institute of Biodiversity and Protected Areas (IBAP) helped strengthen this paper’s overview of protected areas. The paper also benefited from peer review comments from Sebasstien Dessus, John Virdin, and Glenn- Marie Lange. Fernando Blanco, Miria Pigato and Vera Songwe provided additional comments, which further strengthened the overall narrative and focus of the findings. Judite Fernandes helped coordinate the inputs from the peer reviewers, ensuring their comments were duly addressed. Finally, this paper could not have been completed without the support and technical expertise of Jose D'Bettencourt. He conducted all of the interviews and collated on-the-ground information. His knowledge of the issues, combined with his familiarly of the country made his insights and findings invaluable. The preparation and analysis in this paper has been a team effort. I apologize to those highlighted above for any mistakes or misrepresentation of views. The findings are intended to help facilitate a dialogue on Guinea-Bissau’s natural wealth, both exhaustible and renewable forms. I hope therefore that in this regard, the paper starts a useful debate on how best Guinea-Bissau can benefit from its natural resources. iii Contents Acronyms and Abbreviations ....................................................................................................................... ii Acknowledgments ........................................................................................................................................ iii Executive Summary ...................................................................................................................................... 1 A. Introduction ........................................................................................................................................... 4 B. What does the past tell us: Guinea-Bissau’s current natural wealth estimates ..................................... 5 C. What does the present tell us: new estimates of Guinea-Bissau’s natural wealth ................................. 8 I. Exhaustible resources ........................................................................................................................ 8 Phosphate ............................................................................................................................................ 10 Bauxite ................................................................................................................................................ 12 Exhaustible resource considerations ................................................................................................... 13 II. Non-Exhaustible resources ............................................................................................................. 17 Fishing................................................................................................................................................. 18 Timber and non-timber forest related resources ................................................................................. 25 Mangroves ........................................................................................................................................... 29 Carbon ................................................................................................................................................. 32 Crop and pasture land ......................................................................................................................... 33 Protected areas/Biodiversity ............................................................................................................... 38 III. Total wealth ................................................................................................................................ 42 D. What does the future hold: policy implications for sustainable development .................................... 43 Exhaustible resources .......................................................................................................................... 44 Non-exhaustible resources .................................................................................................................. 44 Fishing................................................................................................................................................. 44 Timber and non-timber forest resource ............................................................................................... 45 Carbon ................................................................................................................................................. 46 Crop and pasture land ......................................................................................................................... 47 Biodiversity/protected areas ................................................................................................................ 47 Appendix A - Methodologies and assumptions .......................................................................................... 49 References ................................................................................................................................................... 62 List of Figures Figure 1. Current estimates of total wealth in Guinea-Bissau ...................................................................... 6 Figure 2. Current natural wealth per capita estimates for Guinea-Bissau ..................................................... 6 iv Figure 3. Phosphate, Bauxite and Petroleum prices have been increasing ................................................... 8 Figure 4. Guinea-Bissau’s RER has stayed relatively constant over the past decade ................................. 15 Figure 5. Landings of artisanal and industrial fish ...................................................................................... 24 Figure 6. Exports of processed and unprocessed wood .............................................................................. 27 Figure 7. Top five export destinations for Guinea-Bissau’s Exports .......................................................... 35 Figure 8. Top five exported products from Guinea-Bissau......................................................................... 35 Figure 9. Tourism arrivals and receipts of West Africa countries with “pre-emerging” tourism sectors ... 39 Figure 10. Average tourism receipts per tourist arrival .............................................................................. 39 Figure 11. New and old calculations of Guinea-Bissau’s total wealth ....................................................... 42 Figure 12. Gross and adjusted net savings .................................................................................................. 43 Figure 13. Total volume of timber exports ................................................................................................. 55 Figure 14. Export unit values of Guinea-Bissau’s main timber exports .................................................... 55 List of Tables Table 1. Biomass and fishing potential estimates for demersal fish, 2011 ................................................. 19 Table 2. Artisanal and industrial fishers catch breakdown ........................................................................