THE WORLD BANK R IA WORLD BANKGROUP /r~ The Myanmar Country Environmental Analysis (CEA) was developed in partnership with the Forest Department (FD) under the Ministry of Natural Resources and Environmental Conservation (MONREC). The CEA enhances understanding of the forest sector and will enable the World Bank to design and implement a set of strategies and specific actions in support of the Government of Myanmar agenda of sustainable development in the forestry sector. The CEA forestry report outlines the status, socio-economic significance of forestry, deforestation and degradation trends, the legal and institutional framework, and ongoing policy reform. The report highlights progress to date in the implementation of the Myanmar Reforestation and Rehabilitation Programme (MRRP) (2017-2018 to 2026-2027). As part of the CEA, the World Bank partnered with The Centre for People and Forests (RECOFTC) and Oikos to assess potential for scaling up community forestry and community forestry enterprises (CFE) in Myanmar. Photos (from top clockwise): Lesya Verheijen, RECOFTC, RECOFTC, RECOFTC. Forest and land-use 2017 The forestry sector is an important source of employment. In 2015/16, it provided more than 886,000 jobs, accounted for 4.1 percent of national employment, and generated up to US$93.7 million in wage earnings (MEITI 2019). Rural households depend on forests for a range of material benefits, ecosystem services, and cultural values. There appears to be strong correlation between poverty and forest cover at the township level, particularly in ethnic majority upland states. This is because a large majority of all rural households rely on fuelwood, and 63 percent of rural land is either forest or woodland. Over the last century, timber for commercial purposes, including teak and other timber species, has been extracted in huge volumes. In recent decades, timber extraction has consistently exceeded the ACC. For 2015/16, official extraction levels are stated as 60,052 tons for teak (just over 11 percent of the 2009/10 levels), and 619,742 tons for other tree species (around 23 *- percent of 2009/10 levels). Over the last few years, there has been a strong focus on expanding timber plantations, including mobiliSing the private sector. With forested area progressively degrading, the urgency has increased, and the MRRP Source: SERVIR Mekong 2017 sets specific targets for increasing the area of state- owned and private plantations. Forestry has traditionally played a major economic role dominated by commercial teak exports, although U o8 ecn fhueod s odfe o rlepotmvaluesesined the exmrel eaki d exports cooking and heating. It is also an important source of export values fell since the extreme peak in wood exports eeg o ml-cl nutis in 2011 of close to US$2.2 billion due to overharvesting energy for small-scale industries. which led to the enactment of the log export ban and to reduced Annual Allowable Cut (AAC). Total state receipts from the forestry sector Forest ecosystem services are valued at US$7.3 billion represent 8.3 percent of overall government per year. The largest contributions come from insect revenues (in 2015/16) (MEITI 2019). pollination supporting agriculture (37.4 percent) and mangrove fishery nurseries (15.5 percent) (Emerton and * Estimates put the value of illegal timber exports at Aung 2013). four times the documented value (Rait6er, Samson, and Nam 2015). * In 2015/16, forest sector accounted for only 0.2 percent of GDP. * Non-timber forest products (NTFPs) and wood fuel are largely outside of the formal sector. As a result, their economic value is are not accurately captured in the above figures. The following policy measures were also adopted to address forest loss and degradation: (i) 2014 - raw log From 2000 to 2014, Myanmar lost an estimated export ban, (ii) 2016/17 - temporary one-year logging 14,619 ha of mangroves, resulting in an economic loss of ban, (iii) 10-year logging ban in the Bago Yoma region, US$2.4 million per year in mangrove ecosystem services and (iv) downward revision of AAC. values (Estoque et al. 2018). However, this is not just an economic issue. Myanmar is considered one of the most t t t r vulnerable countries to climate change, and mangroves play an important role in coastal protection. The Forest Department (FD) is responsible for sustainable forest management, restoration of degraded forests, watershed protection, community forests, mangrove conservation, and research and By February 2019, there were 248,967 ha of community development. There are currently 8,000 permanent staff forests in Myanmar. These forests were covered by with plans to fill 7,400 vacant positions. Historically, 4,711 community forestry user groups (CFUGs) or the ED has had a limited capacity to effectively control around 119,985 households. While the recent scale up ile. lg ad oveextracto of community forestry is impressive, many CFUGs are considered inactive and progress is below the National Forest Master Plan (NFMP) target of 919,000 ha by 2030/31. Most remaining forests are located outside the PFE on Vacant, Fallow and Virgin (VFV) lands. In addition, Significant changes have been made to the legal and a large part of those forests is still under customary policy framework supporting community forestry in management. Myanmar. This has resulted in a progressive enabling environment for the establishment of community Currently, there is no agreed process in place that forestry, CFUGs and CFE. The revised Community would lead to the recognition of customary tenure Forest Instruction (CFl) 2016 also encourages enterprise rights. There are competing targets for agricultural development and provides for commerciali6ation of land use and establishing the PPF on what is considered timber and NTFPs and services for local communities. VFV land. These targets could put large parts of existing The new CFI (2019) was released in May 2019 as the forest areas under threat. report was being finali6ed; its analysis is not included in the report. The MRRP includes ambitious targets to restore close Increased transparency, dialogue and social inclusion to I million ha of degraded and deforested forest are some of the key elements of Myanmar's forest within the PFE by 2026. The plan is to achieve this reform process. This can contribute to the national through a combination of plantations, community peace building process and may even reduce conflict in forestry, agroforestry, natural forest regeneration, and some ethnic areas. enrichment planting projects. Global experience shows that community forestry and The NFMP (2002-2031) includes a target of increasing smallholder plantations can be financially and socially Reserved Forest (RF) and Protected Public Forest (PPF). viable. They can also meaningfully contribute to rural The aim is to increase RF and PPF to 30 percent of total income generation and forest restoration. Community- land area by 2030 (up from 24.5 percent) and Protected based forestry represents international best practice, Areas (PA) to 10 percent (up from 5.85 percent). It is also providing tenure to communities to stimulate commits to enabling 919,000 ha of community forests. investments and creating trust, income, and business opportunities. New Forest Law (2018) and the Conservation of Biodiversity and ProtectedAreas Law(2018) introduced changes that reflect the transforming country context and acknowledge the customary natural resource uses and management by local communities. They also recogni6e the importance of biodiversity conservation. standards, and engage with community through support for community-controlled forest enterprises and outgrower schemes. Improving the quality of timber processing in Myanmar to 1 c could provide an important economic opportunity. Myanmar currently loses economic value from little or wasteful low-quality timber processing of some of the world's most value timber. This is in contrast to Vietnam which, over the last 10 years, has invested heavily in high value-added processing and forest small and To achieve this, the medium enterprises. Today, Vietnam is the fifth largest FD will need additional skills, budget, technology exporter of wood products globally, with revenues more support, and civil society support. than twenty times that of Myanmar. The CEA recommends several actions to improve sustainable forestry management in Myanmar. A World Bank forestry investment project is currently Recommendations for short term actions include: under preparation with the FD. Other initiatives relevant to the forestry sector include potential World Bank *Te here isimchan capms t to ea e hupdCFw h support, as part of projects under preparation, to: (i) thceasPFEThere is limited capacity to handle the community forestry and CFEs in Rayin, Rayah and increasing demand for CF. The ED needs to develop Mon States, and (ii) mangroves, forest restoration, an efficient delivery mechanism to manage the and community forestry in Rakhine State, (iii) nature- scale-up of CF establishment and implementation. based tourism as part of the Ecotourism Policy and This can be done by simplifying and accelerating Management Project. the hand-over processes for the establishment of CF, improving institutional support to communities, and enabling effective local management. * Un Despite high degradation of production forests, sustainable production forestry is still viable in some areas but needs a critical stock-taking effort to define a sustainable way forward. to attract reputable and chain of custody-certified private companies that can boost the plantation sector and, at the same time, promote technology transfer, set high environmental photo: @Thiri Aung Emerton, L., and Y. M. Aung. 2013. "The Economic Value of Forest Ecosystem Services in Myanmar and Options for Sustainable Financing." International Management Group, Yangon. Estoque, R. C., S. W. Myint, C. Wang, A. Ishtiaque, T. T. Aung, L. Emerton, M. Ooba, Y. Hijioka, M. S. Mon, Z. Wang, and C. Fan. 2018. "Assessing Environmen- tal Impacts and Change in Myanmar's Mangrove Ecosystem Service Value due to Deforestation (2000-2014).' Global Change Biology 24: 5391-5410. https://doi.org/10.1111/gcb.14409 MEITI (Myanmar Extractives Industry Transparency Initiative). 2019. EITI Report for the period April 2015 - March 2016 (Draft). EITI Myanmar - Forestry Sector. Report prepared for the Myanmar EITI Multi-Stakeholder Group by Moore Stephens LLP. Rait6er, D., J. Samson, and K. Nam. 2015. "Achieving Environmental Sustainability in Myanmar." ADB Economics Working Paper Series 467, Asian Develop- ment Bank, Manila. SERVIR-Mekong (Sistema Regional de Vlisualiaci6n y Monitoreo de MesoAmerica). 2017. "Land Cover Portal." Retrieved at: https://rlcms-servir.adpc.net/ en/landcover/. This policy brief is based on World Bank. 2019. Myanmar Country Environmental Analysis. Forest Resources Sector Report. Washington, DC: World Bank.