0663-A1

A Report from Albania: Forest as a Safety

Net for the Poor
Maxhun Dida, Vasillaq Mine, Hilmar Foellmi, Haki Kola and Janaq Male [1]

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Abstract
More than half of Albania's surface is classified as forests (1 026 000 ha) and pastures (446 000
ha), and more than 50% of the population live in these rural areas. No other sector has such a
fundamental impact on Albania's poverty-stricken rural population as the forest and pasture
sector. In Albania, poverty reduction is a national objective and most projects or programmes
have at least a partial objective to reduce the nation's poverty.

The Albania Forestry Project (FP) funded by the World Bank (WB) and by the Italian and Swiss
Governments is being implemented with the objectives, among others, of Achieving a
sustainable increase in the productivity of forest and pasture areas and Empowering local
governments in order to meet requirements of the population for forest and pasture products,
developing non-wood products, protection and restoration of natural ecosystems.

The FP focuses on four main aspects of forest and pasture management: institutional
strengthening, sustainable forest management, communal forest and pasture management and
protected areas management. In combination, these components are expected to have a direct and
positive impact on the productivity of these areas, on the reduction of erosion and protection of
the many irrigation schemes in rural areas. Project activities are also expected to lead to a more
rational use of pastureland and to halt the current degradation process that is most threatening to
biodiversity and sustainability of ecosystems. At the same time the project is supporting the
government's decentralization efforts and is facilitating the actual transfer of forests and pastures
to the communes and the strengthening of capacities at all level of the forestry and pasture
sector. Since 2001, the World Food Programme (WFP) has also been supporting the project
through food aid to ensure a sufficient level of food security for the workers.

As a result of the FP, there have been attitudinal changes towards health and education, although
a quantitative assessment was not possible. An interesting fact is that about 45% of families rely
on at least some income generated by school-aged children, which may explain some lower
school attendance figures in rural areas.

The effects of the FP on reduction of risks and on the increasing involvement and influence in
the decision-making processes are easier to assess. The FP has very much contributed to
increasing the transparency of the processes and to facilitating communication and common
decision-making in forest and pasture resources management.

Introduction
In 1995, the Albanian Government, the WB, the Italian Government and the Swiss Government
signed the project documents of the Albania Forestry Project (FP).

Poverty reduction is one of the overriding objectives of the FP that in the course of its six years
of activities has involved a wide spectrum of the country's population. Qualitative assessments
indicate that the project as a whole has had a positive impact on poverty alleviation and that
particularly the Communal Forest/Pasture Management (CFPM) component with its targeted
interventions in rural areas, has contributed significantly to reducing poverty in very vulnerable
areas.

Based on defined national indicators, this study has been designed solely to assess the impact of
the FP on poverty reduction as related to these five indicators.

Poverty Situation in Albania

The Albanian society underwent a fundamental transition marked by changes in the production
structures, high unemployment, unprecedented emigration, changes to the family structure and to
the socio-economic dynamics within the family itself.

Albania has a relatively rich endowment of natural resource and, thanks to its coastal location
and proximity to some of the world's wealthiest economies, has great economic development
potential mainly in the agricultural sector, which also includes the rural agro-forestry aspects.
The WB ranks Albania 100-th on its list of 174 poor countries and Albania is the Eastern
European country with the highest level of poverty.

Income as an indicator of poverty

The low or very low level of income is a measure of poverty. The analysis of poverty through
incomes is based on two levels of relative poverty. -"The poor" and" very poor ". The very poor
are those living on less than USD 1/day, whereas people living on less than USD 2/day are
classified as poor.

In some areas, employment in the forestry sector (in State or Communal Forests) is the only
opportunity for local employment and one of the main factors reducing poverty and emigration.[2]
Forest and pasture areas also provide conditions for grazing and for the production of fodder for
livestock that can contribute to household income. While this is a very crucial potential for
revenue generation for the rural population, overgrazing has had a very detrimental impact on the
sustainability of the resources in some areas and, if left uncontrolled, will result in diminishing
returns for the population.

Health as an indicator of poverty

Lack of access to and the quality of health services has been identified as a main indicator of
Poverty in Albania.[3] According to Ministry of Health statistics, the average life expectancy in
Albania is relatively high: 69 years for men and 75 years for women. In 1996, only 6% of the
health budget was spent on basic health services in rural communities. The inefficient use of
these insufficient funds by local authorities further exacerbates the poor quality of preventive and
curative services in rural Albania.

Educational as an indicator of poverty

During the last 10 years, public financing for education has covered 10% of the budget
expenditures, but this share has been constantly decreasing. These indicators fell from 3.8% in
1995, to 3.3% in the year 2000, which is much lower than in East-European Countries. The
enrolled level has fallen for both preschool and secondary education. The figures indicate
tangible decreases 37% and 36% respectively (compared with the 1990 level).[4]

Exposure to high risk as an indicator of poverty

According to the WB's study about 75 % of the poor families in addition to their economic
problems (lack of income or unemployment), also suffer from social problems, such as divorce,
death of one of the household heads, disability and health problems. However, there is no clear-
cut division between the groups at risk and economic poverty because they are inter-related and
determine one another.

Exclusion from decision-making as an indicator of poverty

The poor have little voice or influence in today's decision-making processes.The Government's
policies are clearly intended to shift power from the central level to the local level. Among the
important policy developments in Albania are the recognition of private property rights and the
privatization of public property; decentralization and strengthening of the role and capacity of
local government; continued transformation to a market-driven economy. The development of
forestry and pasture sector activities throughout the country and to ensure their optimal
contribution to the socio-economic growth and sustainable development of the country.[5] A
concrete example of decentralization is the Government's Komuna transfer programme, which
calls for the transfer of 40% of state forest and 60% of pasture lands by the end of 2004 (see also
Box 2).

Box 1. Description of the Forest and Pasture Transfer Scheme

The programme for transferring state forests and pastures in use to communes aims at sustainable
and participatory management of forests and pastures and at strengthening of local governments. It
calls for the transfer of 40 percent of the state forest area and 60 percent of the state pastureland by
the end of 2004.

The transfer of forests and pastures in use to communes that has been supported by the FP of the
WB and USAID has led to improved management of degraded forests by increasing the interest
and participation of communities and local government. This process is already completed on 40
percent of the communes.One key problem encountered in this process that still needs to be
resolved is the sharing of responsibilities and cooperation between the district forest service, local
government and community and the extent of communal authority in using their resources

Forestry Project activities

Components

The FP is an integrated project combining all aspects of forest resource administration,

management and protection and consists of the four components; (i) Institutional development,
(ii) Sustainable forest management, (iii) Communal forest and pasture management, (iv)
Protected areas management.

Improvements of forest and pasture

The investments made by the FP in forest and pasture improvements are expected to have a
significant long-term impact on forest and pasture resources. In line with the project objectives,
the FP has invested into all crucial aspects of forest and pasture management. Commencing with
a revised resource planning approach the project has introduced more integrated and
participatory resource planning both for state forest management and communal forest and
pasture management. To date some 125 such plans have been prepared and most of them are at
various stages of implementation. Implementation activities include thinning (>16,000 hectares),
forestation (820 ha), erosion control fencing and wall construction (6300 m3), pasture
improvements (350 hectares), construction and reconstruction of water points for livestock (117).
In support of better resource management, monitoring and control, the FP has made significant
investments in acquisitions of vehicles, and motorcycles, radio-communication and office
equipment for DGFP headquarters and for the district offices, such as computers, copying and
fax machines. Significant investments were also made in improving the working environment for
forest service staff through rehabilitation of offices and community participation. An important
aspect for the sustainability of FP activities is the extensive training programme that is being
supported by the FP. Capacity building is also one of the main thrusts of the FAO-TA Project,
which in close collaboration with the FP assists in the delivery of training programmes and
provides technical assistance to all stakeholders in the forest and pasture sector.

The World Food Programme

In October 2000, the Government of Albania formally approached WFP to provide assistance in
support of Communal Forestry and Pasture Management in order to expedite the progress of
implementation. After long discussions with DGFP/PMU and FAO, WFP decided to participate
in the Communal Forestry and Pastures Management component with monthly food package.

Main Findings
The analysis of the responses from the numerous households and organizations has provided
very valuable information that allows the authors to formulate the following specific findings.

Probably the most important finding of this assessment is that the FP has been able to work with
the most appropriate target group, namely the extreme poor in the rural areas, mainly, but not
exclusively through the communal forest component.

The median total income of the surveyed households in 2001 was 130,000 Lek (USD 929),
including the cash contributions of the FP and in-kind benefits such as food supplements and the
benefits from the utilization of forest and pasture resources.

1. The level of income from forestry activities for participating households is estimated at about
39,000 Lek (USD 270/year), or 30% of total income. This is in line with the level of input, which
is on average about 3 months. The contribution of WFP is targeting the most direct need and
gives households some more room to make expenditures for other needs. Furthermore the people
indicated that the income obtained from the FP is mainly used for food, to a lesser extent for
health, transport and education

2. In providing these opportunities for additional income and in improving the forest resources
potential, the FP has contributed to strengthening the sense of security by increasing the
disposable income. The findings of the survey suggest that financial resources from the FP are a
contributing factor for health and education and that the awareness about both aspects has
increased due to the FP.

3. One of the critical findings of this survey is that people want to work and be self-reliant.
Employment opportunities are what most people want and only a minority of those surveyed
think that assistance programmes such as the FP and the WFP are the long-term solution to their
problems. They are seeking other options for realizing their own economic potential and a
majority would like access to a small loans/credit programme to help them get started.

Economic hardship is by far the most cited risk factor in rural areas and also the main reason
why almost 70% of the respondents have considered migration. Barriers to migration have
prevented them from doing so, and for many the FP has made staying a bit easier.

There is a definite expectation for increased benefits in the future from the forest resources,
particularly in terms of fodder for livestock, timber and from increased site productivity. These
benefits are directly linked to the investments made into forest and pasture.

Participation in project activities has strengthened the participation in forest and pasture resource
management. Most respondents are satisfied with their associations and also find the
collaboration with the DFS as a productive, although there is considerable room for improving
the participatory processes at all levels.

Effects on Organizations

The majority of organizations, state or private, noticed an overall increase in funding over the
last five-year period and for 57 % of the respondents this increase is due to FP activities. The
contributions of the FP is especially important for the CFPUAs (almost 100% of investments
come from the FP) and the private companies who received some 80% of their 2001 revenues
from the FP.

This strong economic dependency of CFPUAs and private contractors is a risk for future
viability of these non-state organizations, although some 73% of the organizations expect the
future situation in the forest and pasture sector to improve, even without the assistance by a
project.

At the commune level, the overall condition with respect to forest and pasture resources should
gradually improve, especially in areas where the CFPUA manage their forests and pastures
properly and generate revenues from fees and from the sales of products from forests and
pastures.

The contributions made by the FP in terms of infrastructure, communication equipment, and

transportation and particularly training, have significantly increased functionality and the
efficiency of the DGFP.

Effects on Natural Resources

The FP has a direct impact on the environment and on the future potential of the resources. The
investments into forestation, thinning and erosion control have added to the forest growing stock,
and growing potential in the communes and will contribute a future stream of benefits to these
communes. The expected future benefits are in form of better grazing opportunities, increased
yields of fodder for livestock, sustainability in fuelwood production and higher value of
commercial timber.
Conclusions and Recommendations
Conclusions

1. From the data collected and analyzed it can be concluded that the FP has had a positive impact
on poverty reduction in Albania in those areas where project activities were implemented. Over
50% of the household expenditures go towards covering food costs, which is very characteristic
for very poor households. It makes them very susceptible to risks, as any reduction to their
income will affect almost directly their budget available for food. Thus, support to their income
and food supplies are very effective and will diminish their sensitivity towards risks.

2. Although this contribution is relatively significant, it is not enough to change the poverty
status of the affected families, which remain extremely poor. It is clearly evident, that the
additional cash resources and food supplements are an important contribution that facilitates
coping with the serious problems caused by poverty.

3. That the institutional strengthening, sustainable forest management and protected areas
management component also support the poverty reduction objective is also evident from the
survey. This process, however, is still at an early stage and should increase with further
decentralization.

4. Closer analysis however shows that this optimism rests on the assumption that the government
of Albania continues to invest into the sector after the completion of the FP. Indeed, achieving
these general expectations, the efforts towards sustainable forest and pasture management have
to be continued.

Recommendations

1) Government and donors have to continue the efforts to reduce extreme poverty in the rural
areas of Albania. The considerable technological and infrastructural improvements introduced by
the FP should be an incentive for the government to secure the needed resources to build on and
fully benefit from the investments made so far by the FP.

2) Decentralization within the Forest Administration should proceed in close collaboration with
other Ministries to ensure proper cooperation and allocation of resources;

3) Capacity building and participatory processes should be further developed in connection with
the decentralization process and DGFP extension services should be strengthened.

4) Since in many areas it will take considerable time until communal forests and pasture areas
become sufficiently productive to provide a net return to the people in the communes, longer-
term cash flow projections based on management plan interventions should also be prepared.

5) Communes could be specifically supported to facilitate integration into these regional plans
that should cover broad economic development objectives based on resources, skills and tourism
potential.
6) Environmental and natural resources management planning should be more and more based
on watersheds, rather than on smaller management units.

7) Capacity building of all actors (DGFP, DFS, CFPUA) is needed to achieve sustainable natural
resources management. An integrated multi-disciplinary approach to capacity building should be
aimed at - driven by government policies.

8) In line with decentralization, the main partners for implementation of any assistance
programmes should be the DFS and the local governments.

9) CFPUAs should be formally organized at the regional and national level.

10) With the review of the legal framework of the forest sector, the further steps towards private
ownership of forest and pastureland should be considered as one of the options to solve rural
poverty.

[1]
Email: jmale@dppk.net
[2]
Michel Midre report "Communal Forest and Pasture Management Evaluation Report"
[3]
Growth and Poverty Reduction Strategy - GPRS 2002-2004
[4]
Growth and Poverty Reduction Strategy 2001
[5]
Growth and Poverty Reduction Strategy 2001