The World Bank, Development,
and the Fate of Forests
Thomas Fogarty and Andrew P. Schaffer
The global problem of deforestation, particularly in the tropics, is one which has emerged as a major point of contention between advocates for environ- mental preservation and advocates for economic development. As the most prominent multilateral development organization, the World Bank has been the target of significant criticism for its lack of attention to environmental degradation caused by Bank-funded development projects. With particular regard to the environmental degradation associated with deforestation, the World Bank has been criticized for its lack of attention to the direct and indi- rect environmental effects of various types of projects on forests generally and on tropical moist forests specifically. In its 1991 forest policy paper, the World Bank, citing remote sensing data and extensive ground studies, esti- mated that deforestation was occurring at a rate of 17 million to 20 million hectares per year, with the vast majority of losses occurring in tropical moist forests located in developing countries (IBRD 1991, 3, 5, 18).
Forest degradation or elimination is largely the result of nonforestry projects. Dam construction results in the creation of reservoirs that can potentially engulf huge tracts of forest land, as was the case with the Tucurui Dam in Brazil, a World Bank-funded hydroelectric energy project with an impounded reservoir of 2,160 square kilometers (at maximum surface elevation) in a zone of tropical rainforest (Vaux and Goldman 1990, 109; Baker 1993, 176). Road construction facilitates human entry into previously inaccessible forest areas. Such construction has often been supported by the World Bank, committed throughout its history to development aid in the transportation sector. Trans-