A new World Bank report released in partnership with six other institutions, including CIFOR, examines the challengesfacing Indonesia in managing the country's forest resources to better assist economic development, rural livelihoodsand environmental protection.

Launched in February, ‘Sustaining Economic Growth,Rural Livelihoods & Environmental Benefits: StrategicOptions for Forest Assistance in Indonesia’ is aimed athelping the private and public sectors and civil societyimplement sustainable and equitable forest governanceand management.

The report says poor governance has led toconsiderable environmental degradation, significantlyreduced rural livelihoods, a poor investment climateand diverted public development funds. World BankCountry Director for Indonesia Andrew Steel called ondecentralized governments and forest sector stakeholdersto “implement policy actions to save Indonesia’s uniqueforests” and to develop a “comprehensive framework thatintegrates sustainable forest management into the globalstrategy for mitigating climate change and preservingbiodiversity”

CIFOR’s Director General, Frances Seymour, alsohighlighted the question of governance. Emphasizingthe need to learn from Indonesia’s experience duringthe Asian financial crisis, she said it was vital to avoid anyrepetition of past governance mistakes that saw billions ofIndonesian taxpayer dollars squandered on forest relateddebt.

Ms. Seymour also addressed the role of anti-moneylaundering legislation in fighting illegal logging andother forest-related crime. Indonesia is the first country inthe world to use anti-money laundering laws to identifycompanies and business that may be involved in activitiesharmful to the environment.

Other key issues raised by Ms. Seymour included theimportant role of civil society in holding the governmentand the donor community accountable and theconsiderable scope in Indonesia for research in to the linksbetween forests and climate.

The report places strong emphasis on helpingsmallholder tree farmers, who already generate billions ofdollars for the national economy, and could further assistIndonesia’s fight against poverty land tenure and accessissues were properly addressed.

Overall the report was well received withingovernment, donor and forestry circles. However, thereaction of a number of Non-Government Organizations(NGOs) was far less positive. Many NGOs are concernedthe report is too supportive of plantation development,which they regard as a potential threat to both peopleand the environment (see box).