The World Bank Group seeks a middle path between development and environmentalism , writes John Berthelsen, Asia Sentinel.

The global oil palm industry, providing either the world’s most indispensable cooking oil or the last nail in the coffin of the world’s rain forests, is the focus of an intense struggle for funding within the World Bank Group, the world’s biggest development lender.

The bank and its investment arm, the International Finance Corporation, are gingerly entering the controversy over deforestation and sustainable development for palm oil. The IFC is working on a new plan to determine the bank’s direction on lending to the sector. The bank group has temporarily suspended its new investments in the sector, it said in a prepared statement, until it finalizes its common approach.

Called the Draft Framework for Engagement in the Palm Oil Sector, the 48-page document by the IFC seeks to provide the rationale for the bank group’s operations in fighting poverty without compromising economic, environmental or social sustainability. The final draft was presented to a World Bank group management session in Frankfurt on Sept. 1 and is now to be disseminated to interested parties who will attempt to sway it in different directions.

Sources say there is a considerable controversy going on within the bank itself between advocates of development and environmental critics. Whatever the World Bank and the IFC does is bound to have a big effect on the industry. The World Bank and the International Monetary Fund (IMF) together probably have more sway in the third world than any other institutions. The path of development suggested by the framework on palm oil can be expected to have a considerable impact, for good or ill, on what is called the earth’s green lung – the vast and endangered tropical rainforests of Africa and Southeast Asia.

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