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received only 3.3 percent of national income, while the richest 10 percent received 38.8 percent. Land distribution was equally skewed. In 1984, 42 percent of the nation's farms were too small to support a family, while farms larger than 200 hectares tied up almost half of all agricultural land. High birth rates, especially in rural areas, meant that more and more peasants were forced to migrate in search of land or employment.

Costa Rica's traditional land tenure policies also have exacerbated the destruction of frontier lands. Squatters were traditionally granted provisional rights to any under-utilized public or private land that they occupied for a year, if they “improved” the land by at least partially clearing it. They could then sell the land to a speculator or a cattle rancher who could receive full title. With government incentives for cattle ranching buoying demand for pasture, "professional squatters" had a compelling reason to clear land merely to sell their “improvements" and then move on to repeat the process elsewhere in the forests.

The "debt crisis” that hit Costa Rica in the early 1980s brought burgeoning unemployment and plummeting real wages, and pushed many more landless peasants toward the frontiers in search of subsistence. The roots of that crisis can be traced to the early 1970s, when economic policies biased toward industry undermined the basis for sustained economic growth. The growth Costa Rica experienced later in the decade was maintained only by rapid expansion in the government sector, which was financed by foreign loans. In 1974, Costa Rica's total long-term debt was $21.3 million (in 1984 dollars). By 1979, the debt had multiplied 13-fold and equalled 10 percent of GDP.

Due to a weakening global economy, falling commodity prices, and rising interest rates, Costa Rica found it impossible to service its debts and declared a moratorium on interest payments in 1981. To obtain approval for new loans from the International Monetary Fund, the government adopted a stabilization plan that cut government expenditures by 28 percent between 1980 and 1982. This dramatic contraction in the government sector led the downturn of the rest of the economy.

Most of Costa Rica makes poor pastureland; nevertheless, many forested acres were cleared in the 1960s and 1970s so that beef could be produced for export. Remaining forests show up dark in the background.

In just two years—1981 and 1982– short-lived. Between 1977 and 1983, the unemployment doubled and real wages number of people living below the dropped by 30 percent.

poverty line swelled by 50 percent, but Rural areas became the refuge for by 1986 it had fallen again to its earlier those with nowhere else to turn. While level. Because the economic recovery migration from rural to urban areas was was led by growth in agriculture, the a major feature of the 1970s, during the poorest people benefitted the most. five-year period leading up to 1984— Between 1981 and 1989, the incidence of which included the two years of deep poverty fell from 25.4 percent to 10.2 recession-more migrants left the

percent, even as per-capita income metropolitan area than entered it. At the declined. Today, the Costa Rican same time, the net number of those

government has better positioned itself leaving rural areas whose land resources to encourage both economic growth and were ranked as "poor" or "very poor" environmental protection. The structural dropped dramatically. Four times as adjustment policies Costa Rica adopted many squatters received rights to land in in the early 1980s laid a firm foundation the period of economic crisis as did in the for its economic future. The nation has earlier census period. The vast majority also moved to protect its natural re of these settled in districts with poor or source base by repealing the economic very poor lands—lands that were

incentives that encouraged beef exports unsuitable for agriculture.

and reforming land-tenure policies that Fortunately, although Costa Rica's encouraged forest clearing. I economic crisis was deep, it was also

The World Bank's
Post-Rio Strategy

The bank plans to follow through on Agenda 21

by Mohamed T. El-Ashry

L

wenty years ago, popular
how to operationalize sustainable

and the Environment provided the consensus held that the goals of

development, and equipped with that impetus and intellectual foundation for economic development and

knowledge, we must set about closing the bank's current four-point strategy for environmental protection were mutually the gap between the rhetoric of sustain- sustainable development, outlined exclusive. Economic development was able development and its limited practice below: believed to be unavoidably destructive to in the field. Regrettably, national and the environment and environmental

• Environmental Assessment. The first international institutions—the World protection was considered a constraint to Bank included-have in the past not

component of this strategy is the develdevelopment. Today, this dichotomous fully met this challenge of implementa

opment of a comprehensive environmenview has largely given way to a better

tion. The poverty, hunger, and disease tal assessment procedure which aims to understanding of the linkages between suffered by millions in the developing

ensure that development options under development and the environment. The world demand that we do better.

consideration are environmentally sound accords agreed to at the United Nations Agenda 21-the main operational

and sustainable. All projects the bank Conference on Environment and Develproduct of UNCED-provides the post

helps to finance-other than those such opment (UNCED) indicate that develop- Rio world with a starting point. A

as education or family planning projects, ment policy makers have come to realize remarkably comprehensive document, it

which are unlikely to have direct, that degradation of the environment and

adverse environmental consequences guides the implementation of national depletion of valuable natural resources and international policies in support of

must undergo an environmental analysis not only impede economic development

or a full environmental assessment, sustainable development into the coming but threaten human survival. At Rio, the century. Agenda 21 also embodies one

depending on their potential environworld community reached an unprecof UNCED's major themes—that

mental impacts. Borrowers' environedented consensus on the need to fully concerted action and shared responsibil

mental assessment capabilities are integrate environmental concerns into ity by developed and developing

strengthened by methodological, the mainstream of economic decision countries are crucial for addressing the

technical, and staffing assistance promaking. This is essential for successfully linkages between development and the

vided by the bank, and internal bank redirecting the economic, demographic, environment.

support for environmental assessment and political forces that underlie envi

has been bolstered until borrowers'

What role should the World Bank ronmental degradation at both local and play in response to the Earth Summit's

capacities have improved. global levels. clarion call for sustainable development?

Environmental assessment is a vital To ensure that this vision materializes. With its long-standing commitment to

first step. It recognizes and responds to a however, we need to move beyond poverty reduction and uniquely diverse

powerful reality: If soils are damaged, agreement on the need for better and capacity—in technical assistance, project

aquifers depleted, and ecosystems integrated policies and on to their finance, policy dialogue, and research

disrupted, then regardless of any shorteffective implementation. We must learn the bank is well placed to adopt, and

term income benefits, the long-run follow through on, the holistic approach

prospects for development will be (El-Ashry is Chief Environmental Advisor

undermined. But environmental championed by Agenda 21. The Earth to the President and Director of Environ- Summit and the bank's own 1992 World

assessment is only part of a strategy for ment at the World Bank.) Development Report on Development

sustainable development. With the

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Better access to education can help break the cycle of poverty, population growth, and environmental degradation. The World
Bank plans increased funding for education, health, nutrition, and family planning. This primary school is in Calcutta.

addition of four billion people to our numbers over the next 40 years, it is not enough simply to protect the environment and promote economic growth. We must strike at the roots of poverty. • Reduction of Poverty. The second component of the bank's strategy for sustainable development builds on the relationships between poverty alleviation, economic efficiency, and environmental quality. More than any other influence on the environment, none is as immediately powerful as poverty. For the poor just to survive, they are compelled to take what they can from the land today, and they lack the means to conserve their natural resources for tomorrow. Yet, they suffer most directly and severely when these resources deteriorate.

To improve the environmental health of developing countries, we must attack the political consequences of poverty as well as its economic basis. Poor people

are often politically marginalized and excluded from the decision-making and policy-implementation processes. Local community participation and consultation can change this by establishing the legitimacy of development efforts and policies at the outset, building powerful constituencies for environmental stewardship, and greatly improving the prospects for successful implementation. The key to effective change is empowering the poor to break the vicious cycle of poverty, population growth, and environmental degradation.

This means better access to education and social services as well as a voice in and "ownership" of development efforts that affect them. The bank's annual social sector lending is projected to average about $5 billion over the next three years. Lending for clean water and sanitation is expected to double, and investments in education, health, nutrition, and family planning are expected to increase

by two-thirds. And with the 10th grant refunding of the International Development Association (IDA) the lending arm of the bank--IDA has pledged a stronger attack on poverty in the poorest countries of Southeast Asia, Africa, and Latin America. Particular emphasis will be on poverty reduction, family planning, and social services for women in these areas.

Building on the synergy between poverty reduction and economic efficiency also has a powerful impact on the environment. The bank is working with its borrowers to develop policies that can provide both substantial economic and environmental benefits, such as the elimination of subsidies for environmentally harmful activities, clarification of property rights, and liberalization of trade. The elimination of energy subsidies in developing countries, for instance, would save governments nearly $230 billion each year with a dramatic

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Ten countries, including the Philippines, have national environmental action plans that will help foster sustainable development. These terraced rice fields are part of a Philippine project studying the comparative success of different strains.

impact on air quality. Where the links makers in environmental planning and
between poverty and the environment investment strategies by reviewing
are not so positively related, policy environmental priorities and identifying
measures can minimize the tradeoffs by required policy actions, investments, and
targeting environmentally destructive institutional changes, coordinated across
behavior with market-based incentives, economic and social sectors. EAPs also
such as taxes or charges, or government facilitate policy dialogue between
regulations. A recent study of air

donors, recipients, and beneficiaries, as
pollution from transport in Mexico City, their development is based on a process
conducted by the bank and the Mexican of popular participation at all levels of
regulatory authorities, recommended a the community. Ten such action plans-
mix of such policies—mandated emis- for Burkina Faso, Egypt, The Gambia,
sion standards, fuel improvements, and a Ghana, Lesotho, Madagascar, Nigeria,
gasoline tax—some of which the city has Rwanda, the Philippines, and Sri
already begun to implement.

Lanka-have been completed by IDA

countries thus far. Nineteen more are Setting Priorities and Defining National Strategies. The third part of the expected by the close of the bank's 1993 bank's post-UNCED strategy is to assist

fiscal year. Regional environmental member countries in setting priorities,

action plans are also underway (e.g., in building institutions, and formulating

Central and Eastern Europe and in

Africa) to address environmental targeted policies for environmental stewardship. To this end, the bank problems that transcend national continues to provide advice and help

borders. arrange technical assistance for countries Environmental action plans explicitly in the preparation of their national

recognize that the environment cannot be environmental action plans (EAPs). The

sectorially delineated. By integrating EAP process aids government decision sustainability considerations into a

country's entire development strategy,
EAPs represent the holistic, cross-
sectoral approach called for by Agenda
21. They also help development assis-
tance institutions and donor agencies set
their own appropriate targets and
funding priorities. The bank's own
country assistance strategies are rein-
forced by analytical and policy work
done as part of national EAPs.
• Global Environment Facility. The
fourth and final component of the bank's
strategy calls for addressing interna-
tional environmental challenges through
participation in the Global Environment
Facility (GEF). Two important conven-
tions, dealing with biodiversity conser-
vation and climate change, were signed
in Rio, and the GEF has emerged as both
a facilitator and funding mechanism to
secure the participation of developing
countries in realizing the goals of the Rio
conventions and for integrating global
environmental concerns into the devel-
opment process.

Established in 1990 as a three-year pilot program to address global environmental issues of climate change, ozone working to articulate linkages to the depletion, loss of biodiversity, and

biodiversity and climate change convenpollution of international waters, the tions, and to assist developing countries GEF is implemented by the U.N. Devel- in the formulation of their national action opment Program, the U.N. Environment plans and strategies under these convenProgram, and the World Bank. The GEF tions. A major challenge for the GEF is provides a reasonably large volume of how it can play the catalytic role of additional resources to developing integrating global environmental countries to invest in global environmen- considerations into the regular developtal protection. In total, industrialized ment assistance programs sponsored or and developing countries have pledged co-financed by bilateral and multilateral some $1.3 billion to the facility for

agencies—particularly in the areas of commitment over the three-year pilot energy planning and development, forest phase. The facility is also uniquely management, and agriculture. Another important because it is specifically challenge is integrating the global actions designed to serve the interests of the it supports into country priorities and world as a whole. Protection of the national sustainable development plans. global commons has typically been

The GEF illustrates a new approach to considered a classically unresolvable North-South cooperation on the imporproblem of collective action, but at UNCED, the international community rose to the challenge of defending the global commons from further degradation. The GEF stands as the practical manifestation of that resolve. A number

social and cultural of donors pledged in Rio a two-to-three fold increase in its resources beyond the

issues, such as the pilot phase. In the transition from pilot to perma

role of women in nent status, the GEF is undergoing a number of important institutional adjustments. Membership will become universal—any country that wishes to join the GEF will have the opportunity to do so without paying a membership fee, tant issues of global environment as they and can join the current restructuring relate to sustainable development in discussions. Efforts are underway to developing countries. Institutionally, it establish decision-making procedures may be a model for broader international within the facility that guarantee a

cooperation without setting up new balanced and equitable representation of bureaucracies. More important, I believe the interests of developing countries the GEF points to a willingness on the while giving due weight to the funding part of the world's wealthier states to efforts of donors. The GEF is also

safeguard the inheritance of future

More emphasis is
being given to

generations by helping developing countries mitigate their growing contribution to global environmental degradation.

Behind the transition from policy integration to implementation at the World Bank is a spectrum of research and analysis that informs policy making for environmentally sound development. The research efforts of the bank's environment department and other sector departments emphasize the integration of environmental concerns into the bank's policy work through, for example, the economic valuation of environmental "goods" and "bads" and improving efficiency in energy production and use. More emphasis is being given to social and cultural issues, such as the role of women in development, cultural heritage and indigenous peoples, and the challenges of equitable resettlement practices. To this end, a new division of social policy has been established in the bank's environment department.

The challenges of environment and development are daunting, and the real work of integration and implementation lies ahead. International institutions have a major role to play in bringing about a new era of international cooperation for sustainable development. We have accumulated an unprecedented wealth of scientific knowledge and improved tools for analysis and prediction, and we have gained the technical and institutional experience to take action. Further, the agreements at UNCED mark the beginning of an international political will to take the necessary steps to protect the earth on which our survival depends. I

development ....

Environmental Indicators at Different Country Income Levels

Urban population
without adequate sanitation

Municipal wastes
per capita

Carbon dioxide emissions
per capita*

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10,000

100,000

100 1,000

10,000

100,000

10,000
100,000 100

1,000
Per capita income (dollars, log scale)
Note: Estimates are based on cross-country regression analysis of data from the 1980's.
Source: World Bank

*Emissions are from fossil fuels.

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