Global Policy Forum

By Jim Lobe

In a significant challenge to neo-liberal orthodoxy, a major Washington-based think tank is calling for greater local and democratic control over environmental resources as the most effective means to lift some two billion people out of rural poverty.

It also takes issue with strategies to attract foreign investment by privatising public lands and natural resources at the expense of local control, particularly by poor communities that depend for at least a substantial portion of their income on the health of their forests, fisheries, or fields.

"Traditional assumptions about addressing poverty treat the environment almost as an afterthought," according to Jonathan Lash, WRI's president, who introduced the new study in London. "This report addresses the stark reality of the poor - their environment is all they can depend on."

"Environmental resources are absolutely essential, rather than incidental, if we are to have any hope of meeting our goals of poverty reduction," he said.

The 254-page report, "World Resources 2005: The Wealth of the Poor -- Managing Ecosystems to Right Poverty," recognises that multilateral agencies, some national governments and various non-governmental organisations (NGOs) have increasingly come to recognise the key linkages between "nature, power, and poverty" but still have a long way to go.

While increased aid to poor countries, debt relief and trade reform -- the focus of recent media attention -- are undoubtedly helpful in addressing global poverty, according to the report, they fail to address the indispensable role that local, democratic control and management of natural resources can play in reducing rural poverty.

The fact that the report is being published jointly with the U.N. Development Programme, the U.N. Environment Programme, and, most especially, the world's biggest single multilateral source of development finance, the World Bank, gives its analysis a certain official status within the development and environment community.

Coming just two weeks before the U.N. summit meeting on progress toward the achievement of the 2000 Millennium Development Goals (MDGs), one of which is to reduce the number of the world's absolute poor by half by 2015, the report marks an effort to more aggressively insert environmental and governance issues into the policy debate.

"Without this construct, the MDGs won't be reachable," declared David Jhirad, WRI's vice president for science and research, while Klaus Toepfer, director-general of the U.N. Environment Programme said the study demonstrated "the importance of healthy forests, marine environments, freshwaters and other key ecosystems for meeting internationally agreed development targets."

"In the past, the environment has been viewed as something like a Hermes silk tie or a Gucci handbag -- a luxury only affordable when all other issues have been resolved," said Toepfer. "But this report, allied with a series of other new and authoritative studies released over recent months such as the Millennium Ecosystem Assessment (MEA), overturns this myth and underlines in graphic detail the importance of 'nature's' natural capital alongside financial and human capital," he said.

The MEA, in which the WRI also played a leading role, found that almost all of the world's most-important ecosystems have been degraded by human activity over recent decades, some quite significantly. The health and management of these resources are vital to the economic well-being of local populations, particularly the poor, according to the report. "Because of their dependence on environmental income, the poor are especially vulnerable to ecosystem degradation," the authors note.

Moreover, much of the environmental income earned in development countries comes from "common pool resources" -- that is, resources, such as forests, fisheries, reefs, pastures and minerals, to which no individual has exclusive rights.

According to the report, the rural poor could not support themselves without access to these resources. Thus, when such resources are transferred to wealthier interests, such as corporations, through privatisation or other means, the environmental income of the rural poor inevitably declines. And if those interests fail to manage the resource in a sustainable fashion, the damage done to local poor communities may be irreversible.

The report, which details numerous case studies of "best practices", highlights the importance of affirmative measures, such as legal title, to ensure that such communities exercise control and management of those resources, preferably with the support of the regional and central governments.

"Unfortunately, the poor often lack legal rights to ecosystems and are excluded from decisions about ecosystem management," said Warren Evans, the Bank's environment director. "Without addressing these failures through changes in governance, there is little chance of using the economic potential of ecosystems to reduce rural poverty."

The case studies, which include wildlife management in Namibia and Tanzania, fisheries restoration in Fiji, and watershed management in Maharashtra, India, can be replicated elsewhere, including in poor rural communities in developed countries, according to the report.

The main challenge is empowering the poor, a process that requires far-reaching reforms in governance, ranging from clarifying land tenure and providing more information to local communities, to ensuring their participation in resource management and ending corruption.

"When poor households improve their management of local ecosystems -- whether pastures, forests, or fishing grounds -- the productivity of these systems rises," according to the report. "When this is combined with greater control over these natural assets, through stronger ownership rights, and greater inclusion in local institutions, the poor can capture the rise in productivity as increased income."

In cases of large-scale resource development projects -- such as mines, oil and gas development, or major forest concessions -- the report calls for the mandatory adoption by all parties, such as multilateral agencies, export credit agencies (ECAs), and private banks and investors, of "free, prior, and informed consent" (FPIC) practices that would guarantee local communities a formal role -- "and some form of veto power" -- in consultations and ultimate decisions in project design, implementation, and operation.

The World Commission on Dams and the Extractive Industry Review of the World Bank have recommended FPIC for use in all dam, gas, and mining projects.