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February 2, 2011 / jeni

Reading List: Forests and Conflict: The financial flows that fuel war

Forests and Conflict: The Financial Flows that Fuel War (pdf)

Arthur Blundell, 2010

Program on Forests / The World Bank

Abstract:

Many resource-dependent countries seem cursed. Logging has fueled conflict in (at least) Burma, Cambodia, Cote d’Ivoire, the Democratic Republic of Congo, and most notably Liberia, where the UN Security Council sanctioned timber in 2003 as a means of staunching the flow of revenue to the belligerents. This paper examines the major pathways that revenue from forestry can contribute to the outbreak, escalation and/or continuation of armed conflict, including:

• Fueling corruption, which undermines economic development.
• Purchasing arms and materiel, as well as trading timber directly for arms.
• Using logging operators’ security forces as militias.
• Facilitating money laundering and other financial crimes.

Even after peace agreements, fragile states remain stressed due to: contested land ownership, including overlapping logging-concession claims; reporting systems that do not provide timely and accurate information; speculators that bid on concessions hoping to later sell them for profit; and an overall lack of capacity throughout society, which can be exploited by ‘spoilers’ intent on blocking reform. Yet a failure to deal with these stresses can have dire effects: more than a third of countries recovering from civil war revert to conflict within a decade, often because belligerents gain revenue from the illicit exploitation of natural resources.

Fortunately, post-conflict countries can leverage the urgency associated with the crisis—and the concomitant boom in financial and technical assistance—and achieve rapid, visible progress while building durable institutions. However, such reform may be undermined when governments turn to forestry to provide instant—and generally exaggerated expectations of—revenue and jobs, pursuing ‘quick wins’ that compromise longer-term goals. Thus, when governments fail to deliver on promises, at minimum, valuable trust is lost, revenue for poverty-reduction strategies is unavailable, and at worst, the same natural resources that first fueled the war may cause it to morph into renewed forms of criminal violence.

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