Whoever loses, the Bank always wins

Profits from Indonesian forests next

1 February 2008 | Guest comment

In the past year, particularly after the Stern report successfully made tropical countries like Indonesia and Brazil into climate villains, the World Bank has been rushing to expand its carbon business. Encouraged by conservation NGOs and northern governments (mostly countries with commitments to reduce greenhouse gas emissions under the Kyoto Protocol), the Bank developed its campaign to ‘combat’ climate change through curbing carbon emissions from deforestation in tropical countries.

However, every official in the Bank, including Robert Zoellick the president, has never answered properly about the World Bank’s failure in the forestry sector since the 1980s. A lot of evidence showed that the Bank’s overall policies to ‘help’ developing countries in fact trapped these countries in debt crises, almost bankrupting some of them. It is because of the same old recipe of development: raw materials export – minerals, oil, gas, and of course timber.

It was a little bit absurd when the Bank launched its new initiative for forest carbon brokerage (the Forest Carbon Partnership Facility or FCPF) in Bali last December. People would think that the Bank had a very good proposal both for people and, of course, business. In fact, nobody noticed that the Bank, through its lending and development policies, has been promoting deforestation in tropical countries like Indonesia.

In the same year that the Bank was preparing the forest carbon initiative, through the Indonesia Forest Strategy it promoted so called Partnership Plantations and prioritised support to the forestry department’s plantation programme. This initiative is actually aligned with the government of Indonesia’s IMF programme of 1998 that opened exportation of palm oil, and pulp and paper industries (including tree plantations) so that Indonesia could pay its debts.

With these two contradictory initiatives, the Bank actually does not have any intention of curbing environmental and climate crises nor poverty. The Bank’s only intention is to gain as much profit as possible from both northern and southern governments. In the meantime there has never been any apology nor debt cancellation for the Bank’s past operations that created crises and poverty in southern countries. The Bank is still collecting money from previous lending though it failed and harmed people and the environment, while continuously preparing to collect more profits from the forest carbon initiative. Even through technology transfer, the Bank is preparing to expand lending, creating more debt and gaining more profit.

Another hypocritical thing is that the Bank always avoids talking about the International Finance Corporation’s (IFC) harmful operations in many parts of the world. The IFC keeps on pouring money into carbon emissions generating projects such as oil and gas, mining, plantations, and cattle ranches encroaching on tropical forests.

At this point, is the World Bank the hero of the planet? Will the world really give this opportunity to the Bank even though it is part of the problem in destroying the local environment and the climate?

Torry Kuswardono, Climate change campaign coordinator, WAHLI (Indonesian Forum for Environment) torry@walhi.or.id