Today, BIC is publishing a translation of an important study on international finance for forests in Peru, titled “Un Bosque de Dinero” or “A Forest of Money” in English, which was written in collaboration with Derecho, Ambiente y Recursos Naturales (DAR). This extensive study examines financing from Multilateral Development Banks (MDBs), National Development Agencies, and the Government of Peru, with the finding that funds are currently distributed in an uncoordinated manner and are therefore not used as effectively as they could be. The study covers investments over the previous two decades, and identifies trends and projections for future financing. This study is unique in that it dives into how this money is disbursed: namely through federal and subnational government bodies, and furthermore, how these government bodies function. The coordination of funds and the relative capacity of different government bodies is a theme examined throughout the study.
“A Forest of Money” details sub-national funding in the Loreto region, located in northeastern Peru, on the border of Colombia and Brazil. Loreto is vitally important as it contains more than 50% of Peru’s forests. However the study reveals how Loreto receives much less than 50% of Peru’s international funding for forests.
The study also points out the difficulty in determining the exact amounts of financial flows, due to vague finance disbursement descriptions. Investments in Loreto are a good example of this problem that is systemic across Peru.
According to Cesar Gamboa, the executive director of DAR, “Climate financing for forest conservation still presents many challenges in Peru: the first step is from planning ad-hoc projects to developing a national forest policy that does not yet exist. Funds should be managed through a program or a national institution that is responsible for managing forests, and should place more emphasis on regional governments, which are the ultimate authorities of Amazonian forests. Furthermore, there should be more focus on indigenous lands, stronger governance, transparency and access to information, and participation of civil society. The goal is to prevent negligence and corruption around the distribution of funds, but above all to improve the government administration of climate funds. ”
Indigenous peoples and forest finance is another overarching theme of this study. Indigenous land rights are discussed as an important precursor to disbursing forest funds and engaging in forest projects. The report found that formally titled lands for indigenous people have less than half the rate of deforestation as surrounding areas. The role of indigenous peoples in forest finance ranges from projects where indigenous peoples are briefly consulted to projects that are designed and implemented by indigenous peoples themselves.
This study identifies challenges and provides several specific recommendations for improving investments in forests in Peru, while focusing on existing challenges and gaps in coordination of funds. In order to ensure that international funding is used effectively to reduce deforestation and support people’s rights to manage forests in Peru, the study recommends that these funds should first support capacity building and coordination between government agencies and other international finance implementing bodies.