TABLE OF CONTENTS

1. Introduction

Preamble

The need for systematic and sustainable development assistance to the six countries forming the Greater Mekong Subregion (GMS) has long been recognised by the international aid community. Moreover the need for a harmonised approach to development by the six GMS countries has occupied the major international aid agencies for some time. The Asian Development Bank (ADB) has therefore supported a number of regional technical assistance projects that try to focus upon fostering co-operation, sharing ideas and developing regional standards and guidelines for policy in various sectors. The current project is one example of the current suite of regional projects.

Poverty Reduction and Environmental Management in Remote Greater Mekong Subregion (GMS) Watersheds is an ADB designed, Regional Environmental Technical Assistance (RETA) one year study financed by the Finnish Government. The first phase of the project, which commenced in June 1998, has been implemented by a consortium of three consultancy companies headed by Helsinki Consultancy Group (HCG), the partners being Indufor Ltd. and Widagri Consultants Ltd. (all from Finland). The overall objectives of the first phase fall into two categories. First to conduct a study of the experiences gained in watershed management and poverty alleviation in catchments that drain into the Mekong, and from this to advance strategies for appropriate development models that explore the potential for regional harmonisation of policy in the environmental and social sectors. Second, to select a number of remote watersheds conforming to MRC watershed classes I, II and III from within the GMS, for which development projects will be prepared in the second phase of the project.

During the history of the project the principal milestones of achievement have been as follows:

Structure of the main report

The Final Report is split into several volumes of work for ease of reference. It consists of the following parts:

• The Final Report (main report);
• The Regional Overview;
• Six Country Reports;
• The RRA Results in Selected Watersheds;
• Special Reports;
• Project Bibliography;
• Technical Annexes.

The Main Report, including conclusions and recommendations and the Regional Overview Report outlines the importance, and analyses the integration of, sectoral issues in watershed management and poverty alleviation. Sectors studied include policy and institutions, including non governmental organisations (NGOs), the social dimension (incorporating gender and ethnic issues), protected areas and biodiversity, agriculture, forestry and the pattern of utilisation and trade in wood products across the GMS.

The above issues are further elaborated more indepth in the six country reports containing the same sectors but focussing upon national themes and situation.

The results of rapid rural appraisal (RRA) in selected watersheds is presented in a single volume and this is followed by several stand alone special reports which have been conducted around the GMS to provide specific field oriented inputs for the sectoral reports. Examples of these studies, which have often been conducted by NGOs working in the region, include a biodiversity study in Yunnan, a GMS-wide ecotourism overview, a resource and land tenure analysis in Ratanakiri, Cambodia, the potential for rural industrialisation in Viet Nam and various social profiles of villages selected across the project area. There is also one special report on the GIS data collected from all six GMS countries and well as a Dissemination Plan for distributing information on the above reports and other information material.

Finally, the Final Report contains a comprehensive bibliography of works referred to in the text and a number of technical annexes to the main report. A full list of available reports is presented at the end of this report, in Appendix 1.

Structure of the Main Report

The Main Report provides a overview of the key issues which impact upon the incidence of poverty and environmental degradation within the project area. The particular issues related to poverty and environment in each country are explored and similarities and differences between countries revealed. An attempt is made to highlight common problems and threats that may best be tackled through regional collaboration.

The criteria used for selecting watersheds for the second phase are described and simple socio-economic and environment profiles of the selected watersheds, extracted from the RRA work, are presented.

Future development scenarios, comparing the opportunities and threats associated with differing project intervention strategies are advanced and the potential for regional collaboration at policy, institutional and project management levels, is explored.

The need to retain the cultural heritage and customs of ethnic minorities and upland peoples during the development cycle is emphasised, as is the equally important need to protect the interests and rights of women, children and disadvantaged groups to goods and services, education and health facilities.

Particular attention is paid to the advantages and potential pitfalls involved in the politics and management of transnational projects. The scope of project design planned for the second phase is explored. Finally, broad-based recommendations, currently outside the terms of reference for the second phase, are listed. These include recommendations for donor support in priority fields of activity in need of special assistance. Examples include institutional support and training programmes, the need for regional information sharing and training, a contribution to environment and poverty policy reformation, the need for national forest inventories and the establishment of forest industry databases, the need for R&D in agriculture and the pressing requirement for public awareness programmes in environmental management of protected areas.

2. Brief characteristics of the Greater Mekong Subregion (GMS)

The Greater Mekong Subregion covers a land area of 2.3 million square kilometres and supports a population of around 250 million (see key map). Although the GMS is rich in both natural resources (timber, agricultural land suited to rice production, oil, natural gas and hydropower potential) and human resources, most of the rural based population continue to live in abject poverty despite impressive economic growth across the region. It is estimated that 30 percent of the total population are below the poverty line, 70 percent of whom are women.

Moreover, it is now apparent that such economic development has been, and continues to be, at the expense of natural resource depletion. There is, therefore, growing concern that current over-extraction of forest and other natural resources will lead to permanent environmental impoverishment and further that as forest cover is progressively removed in fragile upper watersheds, so the protective functions of soil and water conservation will continue to deteriorate. This has had, and will continue to have, negative impacts upon biodiversity and downstream water dependent agricultural production. Furthermore, as the upper watersheds become barren lands so watershed based communities will face greater hardship. The linkage therefore between people and their environment is as intimate in the GMS as elsewhere in the world. Urgently needed are initiatives that will successfully address over-exploitation of natural renewable resources, yet allow their sustainable management. These issues have been central to this and other projects.

3. Linkages between poverty and environmental degradation

The hypothesis linking the incidence of poverty with environmental decay from resource depletion is not new and remains the mainstay of policies concerning environmental degradation that underpin most development efforts in watershed management within the GMS. The simple argument is that poverty coupled with existing scarcity of productive resources causes desperation, which leads to over-extraction of natural resources, increased resource scarcity and further degradation. The cycle deepens until such communities exhaust the resource base (see appendix II). Whilst it is undeniable that poor people may well over-extract resources in an attempt to survive (with little real regard for environmental values), the reasons for their poverty must be uncovered. Lack of education, ill defined or absent land and resource tenure, ethnic group, sickness, poor health or disability may well be the initial, root causes, and any programme aimed at alleviating poverty must address these underlying causes and incorporate remedial measures within project designs. It has to be said that the argument linking poverty alleviation to environmental mitigation is unproven in practice, despite its popularity with donors. More work is needed to explore this hypothesis.

Poverty is not the only agent of environmental degradation. There are several examples of isolated, low-income communities who exploit their natural resources sustainably. It is usually only when land and resources become scarce that over-extraction occurs. In areas where the process of environmental degradation has started, the triggering factor has not always been low income but external forces that increase land and resource pressures. These include in-migration to a watershed, natural population growth, or the establishment of new protected areas or hydropower developments, which deprive displaced local populations of their traditional access to natural resources.

Other agents of environmental degradation are flagrant, unsustainable, commercial logging and large commercial agricultural cash cropping schemes that rely upon forest clearance for expansion. These activities, if not properly managed, reduce the protective watershed functions of soil and water conservation and pave the way for encroachment.

4. Workplan Implementation

The Consultant has mobilised in excess of 160 person months of international and national consultancy within the 13 month period of Phase I. The international consultants have been drawn from various technical fields covering policy, institutions, social and gender issues, wood trade, upland agriculture, biodiversity and protected areas and GIS. In order to recruit local consultants from each country that could function as in-country resource persons able to access information and data the Consultant first contracted local companies/organisations in Laos, Cambodia, Vietnam and Yunnan Province that recruited and coordinated the local consultants inputs. In Thailand and Myanmar the Consultant collaborated with several organisations, but mostly hired directly local consultant services. NGOs were extensively used for special studies where their local field knowledge could be utilised. For example NGOs were used in assessing the NGO situation in each country (including report writing) and for rapid rural appraisal in selected watersheds. Further they were used for commenting several of the project reports.

The Consultant worked closely with the Working Group on Environment (WGE) member in each participating country and through this network was able to identify and work with suitable and relevant national government partner agencies. In each case the Consultant established links with Government departments responsible for watershed management in each riparian country. Close links were also established and maintained with other stakeholders and target groups such as the Mekong River Commission Secretariat, National MRC Secretariats in each country and other development projects.

During the course of phase I all consultants worked together as an integrated team visiting the project countries and synthesising ideas and reports. This process was facilitated through workshops, seminars and other regional and national meetings. The benefits of in-service training that occurs during such an integrated process should be recognised as a significant project output. The practical difficulties involved in mobilising such a large and diverse team of consultants over such a large project area in 12 months should not be underestimated and future RETA project designs should take cognizance of the need to incorporate sufficient resources to handle the large administrative load.

During phase I the project enjoyed the regional coordination role of IUCN as well as support from STENO who provided national coordination and an institutional base in Vientiane from which the project was able to operate.

5. Studied Issues

5.1 Policy and institutions

Policies designed to regulate and ensure sustainable development activities within upper watershed areas are in place in the GMS countries but their enforcement is weak. This has led to routine overexploitation of natural resources, in particular deforestation. A lack of effort by the GMS governments to allocate land and grant land tenure has led to a lack of commitment by local communities to operate sustainable long-term practices such as tree planting. Without a sense of security that would result from land tenure, communities and individuals have migrated in and out of watershed areas and this has exacerbated land use conflict.

Institutions are generally too weak or outmoded to effectively enforce sustainable management of natural resources in watershed areas. Moreover, watershed management is multisectoral and it has been notoriously difficult to achieve a workable level of co-operation between relevant government agencies at national, provincial and district levels. Government capacity is generally insufficient to provide for sustainable management of natural resources. This is partly due to the low priority accorded to watershed management in national development agendas. Furthermore it is also a reflection that governments are expected to implement unworkable and impractical policies. The main hindrance is limited recognition that under any policy scenario, local people will be the major decision-makers concerning actual resource use within watersheds. Consequently, most government organisations are not geared towards people-centred strategies. The problem is typical of organisations charged with forest management, which enjoy some technical skills and enforcement capacity but are sadly lacking in extension services. The impacts of current watershed policy on the management of resources within watershed areas are discussed at length in the regional report on policy and institutions.

5.2 The social dimension

It is the interaction of people with their environment that is the primary focus of this study. History shows that environments most at risk from degradation are those centred in high population areas. It is crucial therefore to understand the social pressures, which continually threaten environmental integrity. Although understanding these forces is not easy, it is clear that aspects such as poverty, land and resource tenure, level of education, environmental values and attitudes are important determinants. For example, most rural communities within the GMS regard forest and its resources as open access to which they have a right to exploit as they wish. For such communities, concern for environmental protection is secondary to the daily fulfilment of basic needs such as food, shelter and water.

Despite recent improvements in poverty reduction within the GMS, acute poverty remains a significant problem, particularly for the less well educated, rurally based populations. The recent South East Asian economic recession has hindered the drive to alleviate poverty. Although levels of poverty vary across the GMS, the overall proportion of persons falling below the poverty line in the GMS is around thirty percent. The majority of these persons live in rural areas and will therefore continue to exploit natural resources in the quest for subsistence. As mentioned earlier, the lack of adequate and sanctioned land tenure agreements deter local communities from making long term commitments to land, thereby frustrating sustainable development.

The role of women and ethnic minorities in development must also be emphasised and prioritised. It is often these groups who, due to a lack of higher education and exposure to the market economy, are vulnerable to exploitation. There is a pressing need, therefore, to protect the cultural rights and traditions of indigenous communities and to ensure that future project interventions incorporate safeguards which respect indigenous customs but also provide opportunities for personal development and income generation. It is stressed therefore that, prior to the launch of any large development project, the following set of prerequisites should be agreed to form part of the project design:

5.3 Biodiversity and protected areas

Biodiversity indices, as measured by McKinnon (1997) for the whole Indo-Malayan Realm, are modest, with all countries scoring below the regional mean except for Yunnan, which was

not measured and is probably above the mean. Endemism is fairly high, especially in Viet Nam. Several species of animal are (using IUCN’s classification) critically endangered: for example, Javan and Sumatran rhinoceroses, kouprey, giant ibis and the Siamese crocodile. The survival of these species will be contingent upon habitat maintenance and preventing unsustainable offtakes.

Generally, although the GMS countries have defined protected areas policies, enforcement is very weak and all countries have numerous examples of encroachment, poaching of wild animals and unsustainable extraction of non timber forest products, fuelwood and house construction materials. These activities are also sometimes associated with the subsequent invasion of fire in protected areas. Local communities clearly view the natural resources within protected areas as open access despite clear legislation regarding usufruct rights.

It is acknowledged that successful management of protected areas requires the consideration of two approaches, applied simultaneously. The sustainable management of protected areas must rely upon effective enforcement of legislation regarding the usage of natural resources by local communities and second, communities residing in buffer zones around protected areas must be involved in the development of protected area management plans. Local communities should also benefit from employment, either directly in protected area management, or indirectly through the introduction of alternative livelihood schemes that reduce pressures on protected areas resources.

5.4 Wood supply / demand and timber trade

There is mounting international concern that the current level of roundwood removals from GMS forests serving commercial and domestic fuelwood needs is unsustainable. However, analysis of the wood supply/demand balance is hampered, first by a lack of recent forest inventory data of volumes, species composition and growth rates and second, by a lack of reliable statistics of forest removals. Yet within the confines of data uncertainties, it remains clear that commercial logging of timber species within the GMS overall is currently close to its maximum sustainable level. There are however, marked country differences; Cambodia is overcutting to a large extent, Viet Nam and Thailand are at the sustainable limit, whilst Lao PDR and Myanmar enjoy domestic processing currently well below sustainable roundwood yield. Yunnan is in transition. However, it should be noted that whilst in some cases logging is within sustainable limits when analysed at national level, localised overcutting is frequent and the subsequent environmental degradadation can be severe. Several key points can be made:

Resources and wood trade: The forest rich countries, Lao PDR and Myanmar supply large volumes of wood to Thailand and Viet Nam - countries with well established wood industries and natural forest logging bans. Cambodia runs the risk of exhausting its forest resources in the near future and Yunnan, whilst currently self sufficient, may soon run into a wood deficit. Trade in roundwood in the GMS is presented below:

Source: Regional Wood Trade Report by Tukka Castren

Domestic consumption: Whilst commercial logging may be responsible for depletion of timber species and localised environmental degradation from overexploitation, the dominant role of domestic roundwood removals must be acknowledged. Up to eighty percent of total forest removals are in the form of fuelwood and building poles for domestic use. It is likely that although this represents a large fraction, the environmental damage associated with fuelwood gathering is not necessarily serious. Generally, small wood is removed and many species are utilised; species balance thus tends to be unaffected.

Natural forest management: The practice of environmentally sound selective logging of commercial species in fragile lowland rainforest ecosystems is fraught with danger. The interests of concessionaires lie less with the ethics of environmental concern than with the demands of commercial business. Moreover, even when harvesting and extraction is carried out to strict standards, the subsequent disruption to the forest fabric can be severe. Experience in the region shows that partially logged over forest quickly succumbs to encroachment, further clearance and sometimes fire. Such a cycle of degradation prevents healthy and full forest regeneration and impairs watershed protection functions of soil and water conservation. Wildlife and habitats may also alter.

Logging bans: The logging bans in operation in Thailand since 1989 and in Yunnan since 1998 have increased logging pressures upon the resource rich countries of Myanmar, Lao PDR and Cambodia to fulfil the timber demand in Thailand and Yunnan which have no legal domestic source of timber. Moreover, logging bans increase pressures for illegal logging rather than address the real issue of how to enforce sustainable forest management and utilisation policy.

Illegal logging: Illegal logging, fuelled by logging bans, lacks even rudimentary management supervision. This can result in serious environmental degradation. Roundwood removal statistics clearly do not take account of illegally logged material. Therefore the picture of sustainability is more optimistic than the real case.

5.5 Stakeholder participation and Non Governmental Organisations

The project team has interfaced with a myriad of stakeholders; regional organisations, national partners, the Working Group on Environment (WGE), government departments and independent organisations (see appendix III of the project organisation). Whilst the project is able to liaise with these interest groups it is clear that an effective bridge is required between the project and communities with whom the project will need frank and effective communication concerning future project planning. The role of Non Governmental Organisations (NGOs) in forging these project/community linkages has been explored.

There are many NGOs active in the environment and poverty sectors in most GMS countries. The Consultant has already produced an NGO database for each GMS country which details the sectors, skills and expertise of relevant organisations. This is a unique database prepared by this project. Furthermore and as mentioned earlier, selected NGOs have been closely involved in rapid rural appraisal (RRA) and participatory rural appraisal (PRA) activities within target watersheds during Phase I and will be involved in participatory project preparation planning and design during Phase II. The following table lists NGOs who have been deployed during phase I and lists their continued, potential involvement during phase II.

The specific types of work envisaged for NGOs in Phase II include:

• Networking and liaison between the project staff and local communities
• Participatory rural appraisals
• Technical research
• Market research
• Policy dialogue
• Project evaluation and monitoring

5.6 The gender perspective

It was mentioned earlier that seventy percent of the population living below the poverty line in the GMS are women. This is unacceptable and is an indictment of gender insensitive development policy. Although all GMS governments are signatories to the key international mandates on gender equality, the policies and institutions concerned with watershed management and poverty issues sadly lack the teeth necessary to allow or encourage equitable access to, and control of, productive resources by women and children. Routine abuse of womens’ rights to education is a problem. There is an alarming rise in HIV and AIDS among women in the GMS. Until the role of women in development is taken seriously, such expressions of exploitation will continue unabated.

An additional serious issue relates to land tenure and the means of production. Historically, land tenure in Lao PDR, for example, was matrilineal but recent legislative changes stipulate that land now passes to the head of the household, usually a male. Gender responsive development is a pressing priority in the development agenda.

5.7 Geographic Information

There is a considerable amount of different regional and national geographic information related to watershed management available in each GMS country . This information supports studies and planning. There should, however, be a national as well as a regional framework to share and make available the environmental data with agreed procedures of delivery and pricing and appreciation of the data owner’s copyright. Within RETA 5571, geographical information is available in a digital map library enabling the usage of maps in the reports. To make project maps available on the Internet would best serve most other users.

More detailed geographical information is available sporadically. This includes the products of national mapping agencies, also responsible for geodetic work in each country. Such information should be studied well in advance in the selected watersheds to enable the preparation of suitable material.

5.8 Data dissemination plan

The sectoral, country and regional information and concepts submitted as reports developed during Phase I are of importance to watershed management practitioners in South East Asia and around the world. In order for this material to be widely available, a dissemination plan has been formulated. The main features of this plan are:

• Web Site at ADB home pages where the project is presented and some summary and shorter downloadable reports will be available for interested parties;
• CD ROM. All reports will be made available to ADB on CD.ROM. ADB may be requested to make copies available to those who request such information;
• Reference library. The comprehensive library of regional documents (together with a catalogue/bibliography), collected by the Consultants during phase I, has been delivered to ADB and copies of articles and documents will be available from ADB upon request;
• Geographic information covering watersheds in the six project countries will be available from the ADB in digital format to some extent.

6. The selected watersheds

One of the objectives of Phase I has been to select several watersheds in which feasibility studies will be undertaken during Phase II to determine development potential and options. During Phase I it became apparent that the selection of, for example, six watersheds from the total of 170 watersheds that feed the Mekong, based upon an analysis of the criteria and indicators of poverty and environmental degradation, would be challenging. Appendix IV shows the Mekong river basin. Data was collected from the six riparian countries but several problems were encountered. First, detailed data to support and test many poverty and environment indicators was simply not available at watershed or even provincial or national levels. Second, testing the validity and accuracy of data that were available was simply not possible. Third, even when reliable data were available, its coarseness prevented the poverty and environment indicators from accurately discriminating levels of poverty or environmental degradation between watersheds. Fourth and finally, the consultants discovered that the national governments have their own watershed development priorities and agendas which demand respect. In the event, considerable reliance was placed upon intuitive field assessments of watersheds so as to allow watersheds to be ranked by need according to the situation in the field and the application of common sense. Even if these four problems did not exist , there is no valid methodology for weighting and comparing such disparate data in order to qualify watershed selection.

During the mid term review workshop, held in Vientiane Lao PDR from 3^rd to 5^th February 1999, the criteria for selection of watersheds for Phase II were outlined and the methodology, summarised above, used during the watershed selection process, presented. A list of "high priority" watersheds considered to fulfil the criteria of extreme poverty and environmental degradation were tabled. These are listed below with the reasons for their selection.

Shortlist of Proposed Watersheds

Note: *1 indicates potential integrated regional project (Cambodia, Lao PDR and Viet Nam)
*2 indicates potential regional protected area project (Lao PDR and Viet Nam)

During the workshop, the national partners, WGE and other stakeholders discussed fully this list and each GMS country derived their own priority of watersheds. The workshop endorsed these national watershed priorities. The WGE and national governments chose appropriate watersheds that will provide an interesting range of opportunities for future project implementation. Indications from the rapid rural watershed appraisal field work, which are described later, would appear to confirm the selection process and its results. The following watersheds (shown on a map in appendix V) were finally selected and ranked at the mid term review in February 1999. The same watersheds were further endorsed at the final workshop in Vientiane in June 1999. Any changes in watershed selection that occur after the official close of phase I will be addressed by the phase II consultants in due course.

Selected Watersheds

Note:
The above list has been endorsed by the WGE.

It should be noted that the selected watersheds provide an interesting combination of potential regional opportunities where two or more contiguous watersheds straddle two or more national boundaries, thus presenting opportunities for regional projects, as illustrated below:

7. Development opportunities

7.1 Alternative intervention strategies

There is considerable variation in the specific environmental conditions in upper watersheds throughout the GMS. In some areas, such as northern Viet Nam, land pressure has resulted in severely degraded watersheds where progressive removal of vegetation and deforestation have led to the development of barren lands unable to sustain even subsistence cropping. In areas of lower population density, such as southern Lao PDR, the carrying capacity of the watersheds is not currently threatened yet extreme poverty still exists as in northern Viet Nam. It would appear that the ability of the natural resources within the watersheds to sustain local communities is a function of the current level of resource depletion, population pressure and threat of future in-migration. It may also be related to the relative destructiveness of the land use practices (possibly a function of ethnic group and access to market links). Strategies for intervention are therefore site specific. Three have been identified that cover the range of circumstances found in the remote GMS watersheds.

Integrated strategy: In the most densely populated and heavily degraded areas, it is unlikely that agricultural and forest production alone will be able to sustain local communities. There is evidence of out-migration from overcrowded barren watersheds where land pressure is extreme, especially in northern Viet Nam. The integrated strategy, therefore, aims to provide alternative livelihoods through employment for communities migrating to upland towns. The corollary of out-migration is that it does ease population pressure in played out watersheds and allows a chance for environmental rehabilitation. Promotion of the development of small and medium scale enterprises in the upland townships forms a major strategy proposed by this study. However, at the same time special measures are needed to ensure that the upland communities are able to capture a reasonable share of the benefits accruing from such developments. Such measures include vocational training and language training, workshops and seminars.

Market based production strategy: The second strategy is recommended in cases where land pressure is too great to allow continuation of traditional land uses, such as shifting cultivation, and focuses upon more intensive and settled agricultural practices supported by market development.

Traditional land use strategy: This approach finds application in cases where land scarcity has not rendered traditional land uses, such as shifting cultivation, unsustainable; but where opportunities for community based resource management may be explored so that sustainability of indigenous land uses may be maintained.

Furthermore, it is recommended that each strategy be supported by the provision of some basic development measures. These are the provision of essential health and education services and granting land allocation at village level.

The three location-specific project intervention strategies are summarised below:

7.2. Potential intervention types

The potential for regional collaboration: There are several examples of regional co-operation in the GMS, especially in the transportation and power generation sectors, where the regional linkages are strong enough to confer mutual advantage to all participating countries. Although the transboundary impacts of watershed management projects exist, they are more nebulous than in road construction or power generation projects. Promotion of trans-national watershed management projects therefore requires very careful analysis to support their justification. Individual governments are wary of making strong regional commitments due to preoccupation with their national priorities. However, a number of potential opportunities for regional collaboration have been identified. These are:

7.3. Opportunities and threats to development

The project opportunities are seen to be:

Project implementation: The opportunity to learn from the mistakes of previous projects and to design appropriate, simple, achievable projects which can make a positive impact upon the lives of watershed based communities, whilst also assisting with the development of rational and sustainable natural resource management in watersheds.

Regional institutional strengthening and collaboration: The opportunity to foster positive linkages and dialogue between riparian country governments over poverty and environmental concerns that have common origins and perhaps regional solutions through the development of policy harmonisation.

The project risks are:

Political will: Political will at national and regional levels is insufficient to catalyse reforms in land tenure, resource policy, resource management and policy enforcement to be effective and projects are not fully supported by government.

Scale: The scale of poverty and environmental degradation in watersheds in the GMS is so large that a pilot project has no perceivable impact on the big picture, nor is the project concept replicable in other sites.

Capability: There is a real danger that any project design will overestimate the apparent capability of local communities and government structures to implement even simple field based activities due to a lack of interest, commitment or skill.

Community participation: Whilst community participation is seen as an essential tool to project identification design and implementation, it is also a very slow and cumbersome process to gain consensus from many stakeholders each with slightly differing agendas.

8. Conclusions

Key issues impacting the level of poverty and environmental degradation in the GMS have been identified in this study. A shortlist of candidate watersheds worthy of feasibility study and possible project intervention has been drawn up based upon the fulfilment of criteria that attempt to measure poverty and environmental decay. A project intervention strategy has been advanced which is site specific. Future project design should take cognisance of the following conclusions regarding the development of policy and institutions responsible for watershed management and poverty alleviation:

Status of watersheds: The GMS suffers from extensive rural poverty and environmentally degraded upper and lower watersheds of importance. The protective functions of many watersheds are seriously threatened by deforestation as a result of unsustainable commercial logging (both legal and illegal), fuelwood collection, shifting cultivation and encroachment. Important habitats have been lost and biodiversity is threatened by poaching and uncontrolled international trade in wildlife and wildlife products.

Political: Whilst regional organisations attempt to create harmonised responses to environmental management, the scope to develop transnational watershed development projects in Phase II is subdued by the understandable preoccupation of national governments to prioritise their own development agendas ahead of regional issues. This lack of enthusiasm by national governments to co-operate with each other will only alter if collaboration confers mutual advantage or if countries need to stand united in the face of an external threat.

Many of the problems associated with sound environmental management of critical watersheds have simple technical solutions but without political will, supported by enforcement of legislation, solid progress will not be possible. For example, land use planning and land allocation are not new concepts, yet without policy defining who may do what, where and how, and in the absence of meaningful land tenure and sensible controls on logging, prospects for sustainable management of natural resources remain dim.

Policy: The proliferation of gender insensitive policy in the GMS has resulted in the impoverishment of women and flagrant disregard of their equitable rights of access to goods and services. One of the manifestations of widespread exploitation of women is the current HIV/AIDS epidemic sweeping through the GMS countries, which has become a major public health concern. Equitable access to productive resources and education for women must become a priority of government policy in the future.

Although access to basic health and education services is a human right there are numerous examples in the GMS where ethnic minorities and other groups routinely lack these services. Education, in particular, forms one vital avenue through which to escape from poverty. GMS governments must provide basic health and education services to all sectors of their communities.

Institutional: Many of the government and other institutions responsible for specific activities related to watershed management apply outdated mandates which bear little relevance to current issues in environmental mitigation and poverty alleviation. However, there is plenty of opportunity for institutional reform. Further, there are many local centres of excellence such as field based NGOs, and research institutes that contain a crucible of valuable, local knowledge and expertise that can be tapped during phase II and subsequent phases of the project.

Generally the capacity of government officers involved in the management of watersheds and protected areas is insufficient to allow the resources to be sustainably managed. Future management of forest and other natural resources will lie with the local communities who use the resources. Human resource development programmes therefore should focus on developing skills within these communities. Government officers are also in need of innovative new training in extension and community resource management so that they are able to communicate and work effectively with community guardians of resources.

The GMS governments are aware of these problems and although policies to safeguard the environment are generally in place, their enforcement is very weak. The current institutional capacity to embrace the multisectoral nature of watershed management is inadequate at national, provincial and district levels. Watershed management involves a myriad of institutions and co-ordination between these is poor. Many institutions are no longer relevant to the current needs of effective watershed management. If watersheds are to be properly managed major institutional reform is required.

Technical: Although the linkages between the incidence of poverty and environmental degradation are complex, generally the extent of environmental decay correlates with population pressure. The need for alternative forms of income generation that are less destructive to these acute areas is therefore pressing, as is the need for sensible population growth control compatible with the land and resource base in each country.

There is a dearth of inventory data concerning the current status of natural resources within the region. Precise data concerning the rate and extent of environmental degradation is also lacking. Whilst anecdotal evidence of progressive environmental degradation is compelling, the environmental conservation debate would receive greater credence in the political arena if supported by solid and widely available information.

All future development projects must receive political support at all levels plus endorsement by local communities. Project designs must be location/site specific and must incorporate community safeguards such as the provision of basic essential health and education facilities and services, the retention of indigenous languages, culture and traditions and the provision of land tenure titles and usufruct rights.

The success of future development projects will be contingent upon design features that stress achievable objectives and activities that are not over-ambitious. Job creation in rural industries needs to be given increased priority in the most densely populated areas.

9. Recommendations of RETA 5771

Recommendations fall into three categories as follows:

9.1 Over-arching general GMS-wide policy recommendations

Need for land use planning: Governments of the GMS should review their land use plans and refine these in light of the need to protect fragile upper watersheds, leaving production to the lower, less environmentally sensitive portions of watersheds. This process should be a participatory one involving local communities.

Land and resource tenure: In areas where land demand is very high, the transfer of land from state custody to household or community tenure will grant poor communities ownership of productive resources and a better means to survive. Areas of strict protection and conservation should perhaps remain under state ownership and control until community custody proves feasible. The introduction of community land tenure instruments are of particular importance to the successful development of community based forest resource management schemes.

Community based resource management: Renewable natural resources can provide goods and services to rural based communities in perpetuity if properly managed. Devolution of the control of forest and other resources from the state to community level can confer a sense of ownership towards, and responsibility over, such resources. The value of community based management is that abuse in interpretation of what constitutes sustainable use is subject to automatic monitoring through social control. It is recommended that GMS governments continue to support community based management and make the necessary commitment to training communities and government officers in the required skills of sustainable resource management, extension and outreach.

Population control programmes: A large part of the cause of environmental degradation can be traced to excessive population pressure in certain watershed and other areas and the poverty suffered by many communities is also linked to too many people competing for too few resources. The pattern of population pressure on the land is very variable both between the GMS countries as well as within each country. For example, population densities vary from 17 persons/km² in Lao PDR to 224 persons/km² in Viet Nam. Although most of the GMS countries have some programme of population control all countries, except Thailand, will double their populations within 20 years. It is recommended that the GMS governments do not become complacent about population regulation but pursue their existing programmes vigorously.

Community safeguards: During the implementation of development projects the rights of upland communities should be protected. Some of the areas of concern, such as the need for resource tenure, and the need for participatory planning during the project preparation cycle have been mentioned. Other concerns include the provision of enabling legislation and social contracts to protect indigenous peoples cultural rights, languages and customs, the development of mechanisms to control in-migration into a project area, the need for human rights to be respected according to international standards and the need for national governments or a project to provide adequate health and education services for indigenous peoples.

Political will: All GMS countries must accept the need for, and apply, political compromises to solving environmental and social problems.

9.2 Specific recommendations for Phase II of RETA5771 concerning feasibility studies and project preparation

Project objectives: The overall objective of Phase II is to prepare detailed yet practical project designs that integrate poverty alleviation initiatives with sustainable natural resource management. Implicit within that definition is the need, when designing project interventions, to safeguard the cultural integrity and social welfare of upland communities whilst at the same time encouraging institutional and policy reformation in a drive to create an enabling environment and manage change.

Watersheds and activities: It is recommended that the following sequence of activities are pursued during phase II of the project:

• Regional feasibility study in Nam Ou watershed in Lao and in Luishahe in Yunnan
• Pre-feasibility studies in:
  Stung Pursat watershed in Cambodia and:
  Se San watershed in Viet Nam
• Preliminary field assessments in Mae Kok watershed in Thailand and Myanmar

The reasons for selecting these specific watersheds were elaborated earlier. The reasons for selecting Lao PDR and Yunnan for the feasibility are as follows. First, of the five selected watersheds, Lao PDR and Yunnan provide the best geographic configuration for a regional project. Second, there is substantial cross border economic activity with environmental and social impacts for communities residing in the watershed areas which will raise issues that a regional project could address. Third, Phou Dene Dinh national biodiversity conservation area (NBCA) in Phongsaly province has high biodiversity values which could become threatened by current developments in the west of the province. The pre-feasibility studies in Cambodia and Viet Nam will be important national level studies which should lead to projects for implementation.

The preliminary fieldwork in Myanmar and Thailand is intended to develop dialogue and co-operation between the two countries and to allow Myanmar continued access to information and training opportunities in phase II. It is recognised that full scale future project development in Myanmar may be contingent upon a change in political climate and that Thailand has abundant technical and other resources making project justification more difficult than in her neighbouring countries.

Stakeholder involvement and participation: Specific issues to be addressed during project design will include the need for human resources development, ensuring equality of opportunity and access to goods and services for women and children, the need to establish workable models for land and resource tenure, the need to design project management structures that recognise the importance of wide stakeholder participation in the planning and routine management of projects. Project designs must take full cognisance of local knowledge and desires regarding preferred species, agricultural practices etc. The need to design and implement an effective project monitoring system that allows accurate measurement and assessment of demand driven indicators of achievement in poverty alleviation and environmental amelioration is a priority.

Project financing arrangement: During the design of potential projects one of the most salient objectives will be to design a range of project types suited to differing donor requirements. The possible range could include large projects with healthy rates of economic and financial return that are attractive to aid agencies anxious to disburse loans, as well as smaller regional or national technical assistance grant packages and small village-based low cost programmes of interest to bilateral donors, NGOs and national funding from riparian country governments etc.

Intervention strategies: Integrated, market based, traditional use: It is recommended that the three intervention strategies, integration with rural industry, market based production through settled agriculture and sustainable management of traditional land use practices, be chosen as potential site specific development models in phase II. It is also strongly recommended that any project design incorporates basic health and education components.

Project scope and structure: Many projects fail because they are over-ambitious and suggest unrealistic objectives and targets. It is recommended that in phase II simple objectives are set and that well accomplished pilot projects can form the models for subsequent replication across larger areas, perhaps by different organisations and donors. Many rural development projects assume a multisectoral, integrated approach that is sometimes too complex to manage effectively. Consideration should therefore also be given to simpler sectoral projects of manageable dimensions.

9.3. General recommendations to ADB for future consideration regarding regional collaboration

As a result of RETA5771 a number of issues worthy of further attention have become apparent. These are:

Information sharing and data dissemination: In order to capitalise on the investments made in this and other regional technical assistance projects in the GMS, it is recommended that the reports produced by RETA5771 be made available by the ADB for distribution to interested parties.

Forest inventory in all the GMS countries: The GMS countries suffer from a lack of up to date information on the extent of their forest resources. Calculation of sustainable harvesting levels is therefore problematic. It is recommended that the subregion be prioritised for assistance with national forest inventories but that the exercise is undertaken using standardised protocols and methods to ensure comparability of data across the region.

Monitoring trade in forest products: Unsustainable harvesting of both forest and non-timber forest products is rampant in the GMS. International and local border trade in these products from resource rich to resource poor countries fuels this exploitation. Institutional weakness and a lack of transparency exacerbate the problem. It is recommended that the establishment of a regional monitoring system may focus urgent attention to the regulation and monitoring of trade in timber and non-timber forest products. Both the national inventories and trade monitoring would benefit from the collection of harmonised statistics in the GMS.

Review of logging bans in GMS: Logging bans fuel illegal logging and encourage unsustainable forest management. It is recommended that the efficacy of the current logging bans in the GMS be reviewed and recommendations made for refinement in forest management and utilisation policy.

Human resources development: One of the principal outputs of development projects, which can be sustainable, is in- service training. Whilst there is scope to increase activity in regional and national training programmes, a suitable vehicle for this has to be found. It is not easy to find one institution to carry this load, given the multi-sectoral nature of watershed management and poverty alleviation. Aid agencies may wish to consider providing additional funds in order to strengthen existing regional institutions such as the Regional Community Forestry Training Centre in Thailand, or to the establishment of additional training centres in the other GMS countries if warranted.

Research & Development: Research into agricultural and forestry crops is undertaken by the individual GMS governments but results from crop trials and production techniques are jealously guarded and regional collaboration is sadly lacking. The agro-ecological conditions within the mountainous areas of the GMS countries are sufficiently similar to allow some regional co-operation. Apart from the regional dimension there are a number of specific initiatives worthy of further work. These are:

• Secondary species
  Over-exploitation of the well-known, commercially acceptable, fine hardwood species is threatening species survival and market substitution is urgently needed. There are a plethora of secondary species of comparable wood quality which, when successfully marketed, would help to restore normal species composition to partially logged forests.

• Plantation development
  Domestic fuelwood cutting accounts for the vast majority of total roundwood removals in the GMS. The establishment of community based fuelwood plantations in areas of extreme shortage, may reduce pressure on natural resources, although communities often prefer to use natural species and may elect to walk long distances in search of traditional fuels. The use of indigenous species for plantation development should be encouraged.
• Agriculture products and their markets
  There is a need to identify crops with high value that can be grown in upland locations and transported easily to markets. Given the infrastructure limitations in upland areas, the production of high value spices holds promise. Spices are light and easy to transport large distances and are easily stored pending optimum market conditions. It is recommended that project designs in phase II explore the potential for species such as cardamom and cinnamon. Markets should be explored and developed for selected crops.

Appendix I

FINAL REPORTS
STRUCTURE & AVAILABILITY

The structure of the draft final reports of RETA 5771 (which are available upon request) is as follows.:

Appendix III

ORGANISATION CHART

Map of Selected Watersheds