Panama Sustainable Rural Development and Biodiversity Conservation

dropped

Panama is considered one of the most biologically diverse countries in the world (Climate change knowledge portal, the World BankGroup). The country, as part of the Mesoamerican Biological Corridor (MBC), is home to 8 of the 200 ecoregions recognizedworldwide, with 21 times more plant species per square kilometer than in Brazil, and a greater number of vertebrate species thanany other country in Central America and the Caribbean. According to the National Strategy for Biodiversity 2018-2050, the NationalProtected Areas System (SINAP) comprises 120 protected areas (PAs), 12 wildlife zones, and a variety of ecosystems, which togetheraccount for 31.8 percent of the country's land surface and 13.5 percent of the country's marine areas. Approximately 12 percent ofthe Panamanian population inhabits forested areas of the country and two-thirds of the country’s forest cover are in indigenouspeoples’ traditional territories, which include both indigenous territory and PAs, comprising some of Panama’s richest naturalresources and cultural diversity. The Panamanian territory plays an important role in the natural connectivity south of the MBC andnorthern South America, as it has played in different geological times. Biodiversity is of paramount importance not only due to theenvironmental good and services it provides, but also because an estimated 45 percent of the global economy is based on biologicalproducts and processes (World Tourism Organization, 2011). Rural inhabitants under clear land planning principles and a propergovernance structure are at the core for the preservation of Panama’s natural capital which is of national and global significance.Growth in world population has led to increased demands for greater supplies of food, causing one of the main drivers for GHGemission, biodiversity loss, and land degradation when unproperly managed. Biodiversity conservation relies on, inter alia,creating the opportunities to reduce the pressure affecting PAs. Better economic opportunities must be created for those ruralinhabitants trapped in poverty, which currently results in the need of expanding the agricultural frontier with unsustainableproductive systems that are fragmenting the ecosystem to improve their livelihoods. This scenario threatens to amplify a viciouscycle over the rural economy that could result in major threats to the SINAP. From 2006 to 2012, a total of 65,250 hectares weredeforested, of which 89 percent (58,309 hectares) were converted to areas for agricultural activities, with cattle farmingaccounting for most (45,542 hectares) of the deforested areas. The balance between forest gains and losses continues to be negativeover the period 2012-2019, with a loss of 56,369 hectares. Recent studies indicate that connectivity for most large terrestrialmammals is low in the Panamanian portion of the MBC, particularly forest in Darien, Donoso-Santa Fe, and La Amistad National Park,leading to habitats fragmentation as a primary driver of wildlife loss (Meyer, et al., 2019). Infrastructure development speciallyto create connectivity between Central and South America may threaten the natural habitats remaining and leave patches of naturalvegetation increasing biodiversity loss. Additionally, mining exploration and exploitation, hydroelectric projects, and the openingof rural roads and pathways are also part of the main drivers of deforestation, forest degradation and natural habitatfragmentation. Complicating the rural development challenge is the fact that Panama’s rural economy is highly exposed to thecombined effects of extreme weather events and climate change. The annual cost of disaster impacts is estimated to range from US$125 to 150 million (0.36 percent to 0.42 percent of GDP), which would have significant effects on long-term economic growth.Extreme weather events - intense storms, floods, and droughts - are negatively and more regularly affecting the livelihoods ofpeople living in lagging regions, predominantly women, Indigenous people and Afro-descendants. Evidence is accumulating that theincreasing frequency and severity of extreme weather events are attributable to climate change, which threatens to underminePanama’s unique biodiversity, the sustainability of agri-food systems, and the ability of the rural families to be food- andnutrition-secure, diversify, and improve their livelihoods (Panama Climate Risk and Adaptation Country profile). Climate changehas, and will continue to, adversely affect biodiversity at the genetic, species and ecosystem level. The majority of ecosystems inthe Americas have already experienced increased mean and extreme temperatures and/or precipitation which have, for example, causedchanges in species distributions and ecosystem boundaries. The main impacts on terrestrial, freshwater and marine species are theshift in their geographic ranges, and changes in seasonal activities, migration patterns and abundances (Bustamante, et al., 2018).The proposed operation aims at building institutional capacity and leveraging the activities that drive the rural economy toultimately improve the management of PAs containing biodiversity of vital importance. Building institutional capacity andcoordination of the public and private stakeholders will be essential for the operation to mainstreaming biodiversity into incomegeneration initiatives and towards a more systematic agenda for the sustainable use of the country’s natural resources. The projectwill promote sustainable and environmentally friendly investments to reduce biodiversity losses, particularly for the pooresthouseholds in the country, mostly located in Indigenous and Afro-descendants territories. As main driver of potential biodiversitylosses, both agriculture and tourism and their linkages will be the main entry points for the operation’s objective to contributeto a sustainable dynamization of Panama’s rural economy. The operation will promote the early engagement with the private sector,local communities and governments as critical partner to embrace and co-finance the proposed approach to maximize the impact of theGlobal Environment Facility (GEF) allocation. The integration of biodiversity with the agricultural and tourisms sectors willcontribute to reduce biodiversity loss giving value to the natural capital and the reinforcement of the natural assets to valuenature will be the focus. The core benefit of the project would be in favor of the protected areas and the conservation of thebiodiversity. The direct beneficiaries will include primarily (i) Indigenous and Afro-descendant communities, family farmers,producer cooperatives, small size entrepreneurs in project areas; and (ii) key public institutions -Ministry of Environment,Ministry of Agricultural Development, and the National Tourism Authority- and their civil servants would also directly benefit fromcapacity building interventions of the project. In addition, indirect beneficiaries will include those benefiting from the improvedbiodiversity management, stronger rural economy and better institutional services. Women and youth will be supported under allcomponents. The project is organized in three components: Component 1 (C1) will support institutional strengthening for land-useplanning and reinforce the skills to promote knowledge management and dissemination for the protection of the country naturalcapital. This will be done by (a) nature-based landscape vision and (b) knowledge for environmental management. The component willfacilitate technical and financial support to activities that integrate biodiversity into the public institutions and strengthennational in these environmental institutions, public policies, partner entities, local governments, and a more active participationof the private sector and communities in the conservation of biodiversity, particularly in the IPs and Afro-descendants territories(inclusive conservation). Investments under the component are intended to maintaining ecos