Madagascar - Environment Program

Document of The World Bank FOR OFFICIAL USE ONLY RePOt NNO. P-5255-MAG MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 19.8 MILLION TO THE DEMOCRATIC REPUBLIC OF MADAGASCAR FOR AN ENVIRONMENT PROGRAM MARCH 20, 1990 Thi documnt has a restictd dstdbuon and may be usd by rdpiets ody In the performncue of ter offcl dutis Its contents may not otberwise be disclosed without Wrld Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Malagasy Francs (FMG) US$ 1.00 MG 1,650 PMG 1,000 - USS 0.61 WEIGHTS AND MEASURES 1 meter (m) - 3.3 feet (ft) 1 kilometer (km) a .62 mile (ml) 1 square kilometer (Km2) - .39 square mile (sq.m) 1 hectare (ha) - 2.47 acres 1 kilogram (kg) 3 2.20 pounds (lb) 1 metric ton (m.ton) - 2,205 pounds (lb) ABBREVIATIONS AMAE - National Association for Environmental Actions (Association Nationale d'Actions Environnementales) ANGAP - National Association for the Management of Protected Areas (Association Nationale pour la Gestion des Alres Frotegoes) DEF - Forestry Department (Departement des Eaux et Forts) DPRA - Cadastral Agency (Direction du Patrimoine et de la Rforme Agraire) EAP - Environment Action Plan FTM - National Cartographic Agency MPAEF - Ministry of Livestock, Fisheries and Forests (Ministere de la Production Animals, des Eaux et Forkts) ONE - National Office for the Environment (Office National de l'Enlvironnement) VWF World Wide Fund for Nature FISCAL YEAR Goverment of Madagascar January 1 - December 31 and its ministries and agencies  FOR OFmICIAL USE ONLY DEMOCRATIC REPUBLIC OF MADAGASCAR ENVIRONMENT PROGRAM4 Credit and Proiect Summary Iorrowert Democratic Republic of Madagascar Deneficiaries: About 100,000 farm families in selected areas and buffer zones around parks and reserves. Imolenting Agencies: Ministry of Economy and Plan; Ministry of Livestock, Fisheries and Forests; the National Association for the Management of Protected Areas; the National Association for Environmental Actions; the National Mapping Agency; the Ministry of Agriculture; and the Ministry of Scientific Research. Amounts SDR 19.8 million (USS 26.0 million) le nms Standard, with 40 years maturity Onlendint Termst On a grant basis, but will be reviewed during the mid-term review depending on the amount of revenues generated by ANGAP, FTM and ANAE. Friuncinf Plans Government $ 17.2 million 1/ Other Donors $ 42.3 million 2/ IDA S 26.0 million ______________ Total $ 85.5 million 11 Including US$ 13.2 million of taxes and duties 21 UNDP, UNESCO, USAID, French, German, Norwegian and Swiss Aids, KFW (the Federal Republic of GermaAy), World Wide Fund for Nature, Conservation International. Economic rate of returns Not applicable Staff Appraisal Report: Report No 8348-MAG MM: Priority Protected Areas, IBRD No 21799 This document has a resticted distribution and may be used by recipints only in the perfonrance of their official duties. Its contents may not oftrwise be disclosed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE DEMOCRATIC REPUBLIC OF MADAGASCAR FOR AN ENVIRONMENT PROGRAM 1. The following memorandum and recommendat.on on a proposed development credit to Madagascar for SDR 19.8 million (US$ 26.0 million equivalent) is submitted for approval. The proposed credit would be on standard IDA terms, with 40 years maturity and help finance an Environment Program (the Program). Parallel and co-financing in the amount of US$42.3 million equivalent would be provided by UNDP, TUNESCO, USAID, French, German, Norwegian and Swiss Aids, RFW (the Federal Republic of Germany), the World Wide Fund for Nature and Conservation Internatinal. 2. Background. Madagascar has been identified by the international community as one of the ecologically richest countries of this planet and one where the heritage of biological diversity is most at risk. At the same time, Madagascar is one of the economically poorest. This contrast, as in many similar situations elsewhere in the world, has generated tensiont between the proponents of conservation and those of development. But It is clear that one cannot be obtained without the other. Their integration is, in fact, the key principle at the foundation of the proposed Program. It is in line with the recommendations of the UN Commission for theo Environment ('Our Common Future') and with the UNESCO concept of 'Man and Biosphere". 3. Madagascar is locked in a spiral of environmental degradation that increasingly threatens sustainable development and what remains of the country's unique ecological heritage. The protection of Madagascar's biodiversity is commanding increasing international support and galvanizing, in tne process, a growing recognition of the fundamental causes of environmental degradation. As in most of Africa, environmental issues cannot be Addressed in isolation of the impact of demographic pressure end inadequate farming methods which lead to the unsustainable exploitation of available resources. The need to deal simultaneously with a series of interdependent Issues is another guiding principle of the proposed Program. 4. To arrest this spiral of degradation, Madagascar has been the first country in Africa to prepare an Environmental Action Plan (EAP). It has been a joint enterprise between Government, a group of donors, including IDA, and NGOs. Government mobilized Malagasy technicians (about 150 have been involved), and donors provided financial and technical support. Special efforts have been made to include and give a prominent role to NOOs, and to integrate the results of their grass roots experience. This proved successful as reflected in the design of the Program and its evolutive and progressive approach, especially on the institutional side. Efforts have also been made to mobilize the population at large through national campaigns. More efforts will have to continue to be made to include resource users and beneficiaries in this large scale national and international cooperation effort. As an essential underpinning of this effort, the EA? is being formalized into the National Charter for the Environment. 5. Madagascar still enjoys a very good potential for development in terms of climate diversity, important irrigation schemes that could be expanded, land reserves, and minerals. However, despite its resources, Madagascar, with a per capita income of US$ 225 in 1987, has become one of the  poorest countries in the world in the last decade, largely due to the economic policies of the 1970's which seriously distorted incentives for production. In addition, strong demographic pressures and the lack of modernized and readily available farming methods have led to the extension of traditional cultivation practices with dramatic environmental consequences (slash and burn on steep hills poses setious erosion and soil conservation problems). The impact of tnvironmental degradation is difficult to assess with reliable accuracy, but economic losses resulting from lower agricultural productivity due to soil loss, damaged infrastructure, and the reduced life span of infrastructure are estimated to range from 5 to 15 percent of Madagascar GNP annually. 6. IDA has been active in tne Malagasy environment sector through several environmentally related projects, and as one of the main promoters of the EAP. The Second Agricultural Institutions Projects (Credit 1709-MAG) finances an inventory of natural resources; the Titanium Mining Engineering (Credit 1928-MAG) is helping to carry out an environmental assessment study of the proposed project; the Energy I Project (Credit 1787-MAG) stresses energy policy formulation and implementation; the Forests Management and Protection Project (Credit 1878-MAG) includes conserving four natural reserves, forest exploitation planning in the Antananarivo region and promoting private sector in reforestation; and the National Agricultural Research Project (Credit 2041- MAG) includes programs in soil conservation, watershed management and development of technologies for sustainable exploitation of natural forests. Two projects, soon to be submitted to the Executive Directors, also address environmental questionss the Pilot Agricultural Extension Project and the Antananarivo Plain Development Project. Other donors are also currently active in environment (e.g. USAID and WWF in the management of parks and reserves and the French, German and Cooperation in soil conservation and reforestation). 7. Rationale for IDA involvement. It is important for environmentally related activities to be: (i) fully integrated in the macroeconomic program of the Government to ensure their long-term sustainability and (ii) compatible with the Government's complementary efforts to address the social dimension of development. IDA's involvement will help to ensure these essential links and to bridge the potential gap between conservation and development. It will also assist Government in coordinating the many donors interested in protecting Madagascar's threatened environment. The successful donor meeting held in Paris on February 14-15, 1990 which resulted in the full funding of the Program and the donors' willingness to channel their contributions through the Program's framework are good examples of the coordinating role played by IDA. 8. Program objectives. Long-term objectives are to reconcile the Malagasy population with its environment by starting a long-term processt first to conserve threatened sites of world-renowned biodiversity while providing support to the surrounding communities to make them partners in conservation, to impr-ve their living conditions and to help them develop sustainable farming systems; second, to stop, or at least to slow down, soil losses and sedimentation in priority areas where erosion has the most destructive impact; and third, to establish the institutional and legal framework, the policies, and the incentives conducive to environmentally sustainable development. In this context, immediate objectives will be: (i) to establish solid bases for WAP implementation by developing human resources,  progressively building new institutions and strengthening existing ones, establishing sound environmental methods and procedures, and reinforcing management tools; (ii) to begin operations of an urgent nature, namely, protecting the patrimony of biodiversity, fighting erosion by protecting most notably the country's major economic infrastructure, and better defining and improving land security; and (iii) to prepare the second slice of the EAP through studies and pilot operations. 9. Program descrittion. The pr-gram would cover implementation of the first five years of the EAP, the completion of which would stretch over 15 years. It would consist of seven components under the overall coordination of the National Office for the Environment (ONE): (i) protecting and managing unique ecological systems together with the development of peripheral zones (including the execution of field activities by NGO's under contract with the Association for the Management of Protected Areas -- ANGAP -- within the framework of policies approved by the responsible ministries); (ii) promoting soil conservation, agroforestry, and other rural development activities in priority zones, including several large watershed areas (mostly through mini- projects involving the full participation of local communities financed by a private -- NGO run -- National Association for Environmental Actions, ANAE); (iII) developing maps and geographic information on Program areas; (iv) Improving land security through the establishment of clear boundaries for protected zones and land titling in priority areas; (v) ti ining environmental spocialists and promoting environmental awareness and education at all levels of Malagasy society; (vi) launching environmental research programs on land, coastal and marine ecosystems to better protect and manage natural resources on a sustainable basis; and (vii) developing support activities, composed of institution building, the adoption of environmental assessment procedures (and the provision of adequate funding for environmental assessments), strengthening the environmental data base, monitoring and evaluation of the different components of the program, and studies. Total costs have been estimated at US$ 85.5 million equivalent, of which US$ 37.9 million (44 percent) in foreign exchange. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and of disbursements and the disbursement schedule are shown in Schedule B. A timetable of key processing events and the status of Bank Group operations in Madagascar are given in Schedules C and D respectively. A map is also attached. The Staff Appraisal Report, No.8348-MAG of March 19, 1990 Is being distributed separately. 10. Monitoring and coordination. Perhaps more than any ether development activity, this Program does not lend itself to a rigid imple entation blueprint; by its very nature, it will continue to be a joint learning process with permanent adjustments. The Program does provide monitoring and feedback mechanisms to do so. A Steering Committee is to be established under Government's chairmanship with donor participation and that of NGOs and representatives of beneficiaries to guide Program implementation. This Committee will provide a joint forum to review implementation and draw lessons; to review and approve proposed annual plans of the Program's various components; and to agree on funding. Furthermore, donors have decided to create a Multi-Donor Secretariat (MDS). It is being established at IDA Headquarters, with USAID support. MDS is an attempt to deal with a large number of donors, international and bilateral agencies, NGOs, universities, museums, zoological and botanical gardens. MDS will aim to ensure  - 4 - coordination and the circulation of information. It will also hblp ensure that funding is planned in advance, meets priority needs in Madagascar, and is delivered on time. UNDP is also financing a local consultant to help monitor program implementation in Madagascar. 11. Actions a"reed at negotiations: Three types of agreements have been reached: (a) Institution buildinat (i) a draft decree for the creation of ONE and draft statutes for ANGAP have been prepared and reviewed. Formal establishment of ONE and ANGAP will be conditions of effectiveness as will be operationalization of the recently created National Association for Environmental Actions (ANAE); (