Enhance Livelihoods of Forest Communities

March 16, 2016

Bart Verweij / World Ban

An estimated 1.3 billion people – about one-fifth of the global population – ­derive direct and indirect benefits from forests and trees in the form of employment, forest products, and contributions to livelihoods and incomes. Some 300–350 million people--about half of whom are indigenous-- live within or close to dense forests and depend almost entirely on forests for subsistence. Hundreds of millions more, including people in cities, depend on forest resources for food, construction materials, and energy.

For rural households living near forests, as much as 22 % of their income comes from timber and non-timber forest resources, a contribution larger than wage labor, livestock or self-owned businesses. About half of the income from forests is non-cash and includes food, fuel, fodder, construction materials, and medicine. This non-cash contribution, or “hidden harvest,” is especially important for the extreme poor and women-led households. In some countries, payments made by users to preserve forest ecosystem services such as watershed protection can also represent a significant source of income for forest dwellers.

Research focused on people with access to forests finds that about 1 in 11 people are lifted out of extreme poverty thanks to forest resources. Forests also provide a crucial safety net for rural people, especially indigenous peoples, in times of economic distress, helping them to offset agricultural income lost due to weather shocks, crop failure, or changes in commodity prices.  At the same time, people who rely on forests for their income can also face uncertainty regarding forest access and use in locations where ownership is ill defined, contested or insecure.


The World Bank supports client countries in managing forests sustainably to reduce poverty for forest communities and generate opportunities for rural populations.

Participatory forest management is a longstanding focus of the Bank’s work on forests. Building on successful experiences, the Bank works with clients that want to strengthen and expand local rights of use and access over forest resources , particularly for indigenous groups. Country-specific needs and circumstances guide the approaches and models for our engagement. In South Asia, where community-based forest management approaches are common, our investments focus on enhancing productivity and equitable distribution of benefits. In Africa, strengthening the social organization of communities takes priority. In Latin America, where participatory forest management is frequently well established, the emphasis is on integrating community-managed forests into the forest product value chain and expanding market access. In Europe and Central Asia, efforts center on ensuring that as forest management is decentralized, funds are transferred and technical capacity is built at local levels.

Nature-based tourism, featuring forests, has the potential to generate revenues for both local communities and government. The Bank supports countries in seizing such opportunities by facilitating a coordinated approach that preserves forests, addresses the regulatory framework, creates transportation and lodging infrastructure, and develops related professional skills.

The Bank is a leader in supporting the development of markets for ecosystem services and for global public goods, especially for forest biodiversity. It has two decades of experience primarily in Latin America. The Bank works with countries to establish payment for ecosystem services arrangements, providing technical support, enabling learning across countries, and testing innovative approaches. In South Asia, teams are piloting direct unconditional cash transfers to forest dwellers for sustainable forestry practices.


The Bank has contributed to innovative participatory forest management arrangements in Albania, Brazil, Costa Rica, and Lao-PDR with local communities gaining a much larger stake in forest management and in the rehabilitation of degraded woodlands, pastures, and watersheds.

In Albania, the Bank helped to establish participatory planning and management of forest and pasture lands for 251 communities, improving their forest and pasture resources and watersheds. Results include an 8% increase in income earned from forest activities in communal forest and pasture lands, a 28% increase in income earned from forest and agriculture activities in micro-catchments, and a 220,000 ton reduction in erosion.

In Brazil, local communities designed a project that is implementing agroforestry initiatives based on native and adapted fruits, establishing processing units for agriculture and non-timber forest products, and assisting in the production and commercialization of handicrafts in the Cerrado region.

In Costa Rica, the Bank has helped to strengthen the national PES program, increasing participation of indigenous communities. The investment significantly increased the number of small and medium-sized land owners participating in the PES program.

In Lao-PDR a Participatory Sustainable Forest Management approach covers an area of 2.3 million ha, bringing together the provincial, district, and local authorities to engage more than 400,000 community members in more than 1,000 villages.

In Senegal, the Sustainable Participatory Energy Management Project (PROGEDE by its French acronym) helped combat Senegal’s rapidly growing demand for household fuels and the associated degradation of forests and the rural environment. The project also introduced gender-equality goals, resulting in women being integrated into inter-village forest management committees and comprising 33-50%  of the committees. Women also increasingly participate in training sessions on forest cutting and carbonization techniques, pursuits formerly dominated by men.