Can Liberia’s forest economy benefit the poor?

The “paradox of plenty” debate tends to focus on fossil fuels and minerals. Countries that are rich in these resources are often – paradoxically – kept financially poor, with the proceeds of natural wealth largely profiting political elites, foreign companies and commodities traders, rather than being used strategically to bring whole populations out of poverty.

What is often overlooked is that forests too can be a curse, not a blessing, for countries that are rich in them. Across the Amazon, the Congo basin and many parts of South-East Asia, rainforests have been stripped out at a dizzying rate to line the pockets of foreign logging companies and their supporters in government. Forest communities – often among the country’s poorest – are robbed persistently of the resources they rely on for life and livelihood.

Kofi Annan’s Africa Progress Panel has long advocated for Africa’s natural wealth to be better managed so that it drives dynamic and inclusive growth. While its 2013 report looked at the issue of Equity in the Extractives, in 2014 Grain, Fish, Money highlighted the paradox of poverty amid plenty within the forestry sector, focusing on one example that is close to my heart – the forests of Liberia.

It’s time to reopen that report. A recent $150 million forest protection deal between Liberia and Norway signalled a bold new direction in forest management – to shift Liberia’s forest economy from a model of extraction to one of protection, and to make forest communities the beneficiaries. The first payment from Norway is now due. As Grain, Fish, Money showed, the history of the forest sector warns us to be vigilant.

Liberia has an area of forest the size of Denmark, which for years was a cash cow for a handful of people. As the UN security council has highlighted, during the country’s 14 years of civil war the illicit sale of Liberian timber on international markets was a major source of funding for the warring factions.

When President Ellen Johnson Sirleaf took office in 2006, she promised a new era in forest management. She pledged to tackle corruption in the forestry sector, cancelled all logging concessions and started with a clean slate.

But what played out in Liberia was typical of the sector worldwide. The country’s forests remained at the behest of industrial-scale, export-based logging, and profit through elite capture and extraction remained the norm. Permits intended to benefit small-scale landholders were abused by large logging companies that ignored laws and dodged taxes. Income from the sector fell dramatically short of expectations, delivering just about 6% of an official estimate between 2012 and 2013.

The Liberia-Norway deal is an opportunity for a fresh start. The Norwegian government has pledged $150 million up to the year 2020 if Liberia keeps its forests standing – putting communities in charge of conserving their forests, and keeping industry out.

Norway’s minister of climate and environment, Tine Sundtoft, called this commitment “brave and farsighted”, with Liberia choosing “a sustainable approach to development”.

With Liberia still reeling from the impact of the Ebola crisis, avoided deforestation payments can help the nation to rebuild along a new development course, bolstering local capacity to protect forests, concentrating income gains among the poor, and averting the huge social and environmental fallout of large-scale logging.

Saah David of Liberia’s forest authority says: “The deal with Norway creates the economic space in which we can support government revenue while exploring new, community-based approaches to forest management which generate livelihoods but represent a shift away from traditional industrial-scale logging.”

The payoffs will be felt internationally too. At this year’s Paris climate conference, the world is set to agree a deal to stay on the right side of the danger line on climate change. Forests will be integral – as a resource not to extract but to be kept alive and nurtured as a key sink for carbon emissions.

In October, Liberia’s forest authority is sponsoring an international conference in Monrovia on rethinking Liberia’s forests, where several issues will be explored. These include looking at how a proper economic assessment can be made, for example, of the non-cash bounty of the forest, including the food, medicine, shelter and spiritual sustenance it provides.

Such questions go to the heart of the paradox of plenty – that the natural wealth of many emerging economies is being chopped down, mined or pumped, and is lining the pockets of a privileged few at the expense of the global poor.

Thankfully, Liberia is now wising up to the short-termism and devastation of the old “development” path. If the country gets its forestry transformation right this time, it could inform and enable locally controlled forest management on a global scale.

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Author: Max Bankole Jarrett is the deputy director of the Africa Progress Panel

Image: A boy sits among branches as supporters of Liberia’s opposition Congress for Democratic Change party gather under a tree for political discussions as election results are announced in the capital Monrovia, November 10, 2011. REUTERS/Finbarr O’Reilly