Indigenous Peoples andSustainable Development:

The Role of theInter-American Development Bank

IDB Forum of the AmericasApril 8th, 1997

Anne Deruyttere

Washington, D.C.October 1997 No. IND97-101

Anne Deruyttere is Chief of the Indigenous Peoples and Community Development Unitof the Social Programs and Sustainable Development Department in the Inter-American Development Bank. She gratefully acknowledges the assistance provided byWendy Venance and Gustavo Minc of SDS/GIS is preparing the graphs, maps andtables.

CONTENTS

I. WHO ARE THE INDIGENOUS PEOPLES? 1Demographic Data 1Definitions 2Geographic Location 3

II. WHY ARE INDIGENOUS PEOPLE IMPORTANTTO A DEVELOPMENT INSTITUTION? 4Indigenous Peoples and the Environment 4Indigenous Peoples and Poverty 5Infant Mortality 5Educational Attainment 6Income Levels 7Poverty 7

III. WHAT ARE THE MAIN ISSUES AND DEMANDS OF INDIGENOUS PEOPLES? 9Indigenous Rights 9Sharing in the Benefits of Development 10Environmental Preservation and Sustainable Management 10Culturally Appropriate Development 10

IV. HOW IS THE IDB RESPONDING? 12The Early Years 12The Eighth Replenishment 12The Indigenous Peoples and Community Development Unit 13The Bank's Strategy on Indigenous Development 13The Indigenous Peoples Fund (Fondo Indgena) 15The Challenges Ahead 15

BIBLIOGRAPHY 17

1I. WHO ARE THE INDIGENOUS PEOPLES?

This presentation focuses on the role of theInter-American Development Bank in thesocioeconomic development of the indigenouspeoples of Latin America. Following a briefdescription of who the region's indigenouspeoples are, and of the issues and concerns thatface them, this paper presents the broad outlinesof a more detailed strategy document that iscurrently being prepared. This presentationprovides some examples of what the IDB hasbeen doing to respond to its mandate to addressthe needs of indigenous peoples. It also men-tions some of the major challenges that the Bank

faces in order to be more effective in fosteringthe sustainable socioeconomic development ofindigenous people. The Bank's thrust in thisarea emphasizes the positive relationshipbetween economic development, participationand strengthening cultural heritage within aframework that recognizes the rights of indige-nous peoples.

Demographic Data

The number of indigenous people inLatin America and the Caribbean is es-timated at between 33 million and 40million, around eight percent of theHemisphere's total population. Estima-tes vary because census data are oftennot reliable and have to be supplemen-ted with information from other sources.

There are about 400 different ethnicgroups in the region, each with a diffe-rent language, social organization,worldview, economic rationality andmode of production adapted to the ecos-ystems they inhabit. In spite of theirheterogeneity, indigenous peoples sharesimilar concerns and aspirations that arebased on a holistic view of the interrela-tionship between human beings and thenatural environment, and between theindividual and the community.

Indigenous people live in all the coun-tries of Latin America, with the excep-tion of Uruguay. Table 1 shows oneof the more conservative estimates ofthe total number of indigenous peopleliving in each country. Estimates for theCaribbean islands vary between 30,000and 50,000 people of direct indigenousdescent.

Table 1Total Population and Indigenous Populationof Central and South America by Country

PopulationNational

PopulationIndigenousPopulation %

Over20%

1. Bolivia2. Guatemala3. Peru4. Ecuador

8,200,00010,300,00022,900,00010,600,000

4,142,1874,945,5118,793,2952,634,494

50.5148.0138.3924.85

Total of these countries 52,000,000 20,515,487 39.45

From3%to20%

5. Belize6. Honduras7. Mexico8. Panama9. Nicaragua10. Chile11. Guyana12. French Guiana13. Suriname

200,0005,300,000

91,800,0002,500,0004,300,000

14,000,000806,000104,000437,000

27,300630,000

8,701,688194,719326,600989,74545,500

4,10014,600

13.6511.88

9.477.787.597.065.643.943.34

Total of these countries 119,447,00 10,934,252 9.15

From0 to3%

14. Paraguay15. Colombia16. El Salvador17.Venezuela18. Argentina19. Costa Rica20. Brazil

4,800,00035,600,000

5,200,0021,300,00033,900,0003,200,000

155,300,00

94,456620,05288,000

315,815372,99624,300

254,453

1.961.741.691.481.100.75

0.16

Total of these countries 259,300,00 1,770,072 0.07

Total 430,747,00 33,219,814 7.71Source: Instituto Indigenista Interamericano, Amrica Indgena.Vol. LIII, No. 4, Oct-Dec 1993.

2Source: Based on data from Instituto IndigenistaInteramericano, ibid, SDS/GIS Remote Sensing Facility.

Indigenous people represent between thirtypercent and more than fifty percent of the totalpopulation of Bolivia, Guatemala, Peru andEcuador. Indigenous people represent betweenthirty percent and more than fifty percent of thetotal population of Bolivia, Guatemala, Peru andEcuador. Estimates for Bolivia range betweenfifty percent and seventy percent of the totalpopulation. Although indigenous people livingin Mexico account for one quarter of theindigenous people of the Hemisphere, theyrepresent slightly less than ten percent of theMexican population. Five countries (Peru,Mexico, Guatemala, Bolivia and Ecuador)account for almost ninety percent of theindigenous people of the region, with Mexicoand Peru having the largest share (see Graph 1).

Definitions

The issue of who is indigenous and who is not,has been the subject of much debate. However,international legal instruments such as ILOConvention No. 169 on Indigenous and TribalPeoples in Independent Countries adopted in1989, the draft OAS Declaration on IndigenousRights (which was recently finalized by theInter-American Commission on Human Rightsfor consideration by the General Assembly laterin 1997), and the draft Universal Declaration onIndigenous Rights under preparation at theUnited Nations have all adopted similar defin i-tions. These international covenants defineindigenous people as the descendants of theoriginal inhabitants of a geographic region priorto colonization who have maintained some or allof their linguistic, cultural and organizationalcharacteristics. In addition, self-identification isa fundamental criterion to determine who isconsidered indigenous. For purposes of collec-ting census data, the countries of the regionapply different criteria: in some countries thecensus specifically addresses the subject ofindigenous identity (by asking a question aboutlanguage(s) spoken, mother tongue, geographiclocation or self-perception). However, in manycountries the census does not address the issueand estimates are based on other sources ofinformation. Table 2 provides a sample of thedefinitions used for census purposes in somecountries.

Figure 1Indigenous Populations

in South and Central America(Percentage of Total Population by Country)

Bolivia12.0%

Guatemala

15.0%Peru

27.0%

Ecuador

8.0%

Mexico

26.0% Others

12.0%

Graph 1Distribution of Indigenous People

in Latin America

Source: Based on data from Instituto IndigenistaInteramericano, ibid.

3Geographic Location

Indigenous peoples are generally located inareas considered to be the least hospitable of thecontinent: the arid mountainous regions of theAndes and Meso-America and the remotetropical rainforest areas in the Amazon andOrinoco watersheds and in Central America. Inthe more accessible areas, indigenous peopleswere made extinct or have been pushed back bycolonization to remote and isolated regions.

It is estimated that over ninety percent ofindigenous people are sedentary subsistencefarmers, descendants of the large pre-Columbiancivilizations of Inca, Maya, Aztec and othersmaller societies in the arid Inter-Andeanplateau and Meso-American mountain regions.These indigenous people, who are often groupedtogether with non-indigenous farmers under theterm peasants or campesinos, cultivate smallplots (minifundios) and supplement their meagerresources with seasonal wage labor, miningactivities, animal husbandry and artisanal pro-duction.

High population growth rates, the expansion oflarge scale commercial agriculture, and dimi-nishing terms of trade for subsistence foodstuffshave forced many indigenous farmers torelinquish their traditional environmentallysustainable subsistence practices. This has ledto erosion on steep mountain slopes, diminishingfallow periods for slash and burn agriculture,overfishing, depletion of hunting stocks, etc.Many indigenous farmers have migrated to thepoverty belts that surround cities.

The other ten percent or so of indigenous peoplelive in tropical or dry forest areas. Traditionally,most of them were hunters and gatherers with atranshumant or seminomadic way of life and atribal organization based on small independentand loosely knit bands. Although they live insome of the most remote and pristine environ-ments, they have become increasingly vulnera-ble as a result of the pressures on their lands andnatural resources caused by oil exploration,mining and logging ventures, the expansion ofthe agricultural frontier or the crossfire causedby border conflicts, guerrilla warfare and thedrug trade.

Table 2Definitions of Ethnicity Used

in Selected Latin American Countries

Country Ethnicity Definition Sources

Bolivia Language spoken Census 1976 and Housing survey 1988

Colombia Self-perception andgeographic location

Census 1973,1981

Guatemala Self-perception Census 1973, 1981

Mexico Language spoken Census 1988, 1990

Peru Mother tongue andlanguage spoken

Census 1972,1981

Venezuela Geographic location andself-perception

National census, 1981 and Indigenous census 1982

Source: CELADE, 1994.

4II. WHY ARE INDIGENOUS PEOPLE IMPORTANTTO A DEVELOPMENT INSTITUTION?

Indigenous Peoples and the Environment

Despite their difficult natural environmentsindigenous peoples have managed to sustain anexistence in ecologically fragile areas with lowpopulation carrying capacity. Many of thesepeoples have an intricate knowledge of theirenvironments and the different plant and animalspecies, and have developed sophisticatedtechnologies for the sustainable management ofthese resources.

In fact it is interesting to observe the relationshipbetween the areas of pristine forest and thelocation of indigenous people, as the maps forCentral America indicate (See Figure 2). Thefirst three maps show the advance of deforesta-tion since the 1950's. The last map demonstratesthat the areas remaining under tropical forestcover are also the areas traditionally occupied byindigenous peoples (Guatemala is an exception,as its large indigenous population is concentra-ted in the highland areas).

*Does not include coastal mangrove forest and open pine savanna.Sources: USAID Country Environment Profiles: Moreno and Gonzales, 1985; Nations and Komer, 1983. SDS/ENVGIS & Remote Sensing Facility. This map, prepared by the Inter-American Development Bank, has not beenapproved by any competent authority and its inclusion in this document is for illustration purposes only.

Figure 2Deforestation in Central America

and the Location of Indigenous People

Indigenous PeopleDense Forest Cover

5Indigenous Peoples and Poverty

Recent research at the World Bank and otheragencies demonstrates the high degree ofcorrelation between poverty and ethnicity. 1

Assuming that the vast majority of indigenouspeople are among the poorest, a rough estimateindicates that one quarter of all Latin Americansliving in extreme poverty are indigenous.However, this proportion is much higher incountries with relatively large indigenouspopulations such as Bolivia, Guatemala, Peru orEcuador (see Graph 2 for a comparison ofpoverty rates between indigenous and non-indigenous populations in four countries).

Source: World Bank, based on EIH 1989, ENSD 1989,INEGI 1989, PLSS 1991.

An example of the large disparity in povertylevels between indigenous and non-indigenouspeople is the comparison between Mexico=s

1 See Psacharopoulos G., and Patrinos, H. eds.,1994. This study correlates poverty indicators onincome and education levels with data on ethnicitybased on census information in four countries(Guatemala, Mexico, Peru and urban Bolivia) andpresents some striking conclusions regarding therelationship between being poor and beingindigenous. Another important conclusion is theneed to improve data collection and to broaden anddeepen research on the connection between povertyand ethnicity.

municipios with low, average or high indigenousrepresentation: poverty levels are almost fourtimes higher in municipios with a large indige-nous population (poverty ratio of almost 80percent) and extreme poverty levels are 20 timeshigher (extreme poverty ratio of more than 40percent; see Graph 3).

Following are some examples of the disparitiesthat exist between indigenous and non-indigenous populations in some of the mostcommonly used welfare indicators.

Infant Mortality

The infant mortality rate for indigenous peoplein Chile (whose indigenous population isroughly seven percent of the total population) ismore than twice the national average. In Guate-mala, because the indigenous population isapproximately half of the total population, thediscrepancy between the ratio for the indigenouspopulation and for the total population is lessextreme (See Graph 4).

Graph 2Population Living Below the Poverty Line

Graph 3Poverty Incidence by Percentage

of Indigenous Population inMexican Municipios

100

80

60

40

20

0

Under 10% Ind. 10%-40%Ind.

Over 40% Ind.

Not Poor

Extremely Poor

Poor

Source: World Bank, based on INEGI,

6In Bolivia, the infant mortality rate amongQuechua speakers is more than twice the rate forSpanish speakers (the comparison is slightlymore favorable for people who are nativeAymara speakers; see Graph 5).

Educational Attainment

Comparisons of educational attainment forindigenous and non-indigenous Mexican menand women indicate that although signifi-cant progress has been made for all fourgroups (especially for women) in the averagenumber of school years completed, indigenouswomen continue to be the most disadvantaged.

On average, they complete less than four yearsof formal education, versus five years forindigenous men, eight years for non-indigenouswomen and nine years for non-indigenous men(see Graph 6).

Educational attainment data for Peru, where theaverage number of school years completed hasincreased for all groups, show that indigenouswomen continue to be educated at least threeyears less than non-indigenous men and women.It is interesting to note, however, that the recentdecline in overall education levels has notaffected indigenous women and is serving as anequalizer among ethnic groups (see Graph 7).

Source: World Bank, based on INEGI. 1989.

Source: World Bank, based on ENSD. 1989.

Graph 4Infant Mortality per 1,000 Births

Graph 5Infant Mortality by Ethnicity

in Bolivia

Graph 6Educational Attainment by Ethnicity

and Birth Cohort in Mexico

Source: PAHO, Salud de los Pueblos Indgenas. 1993.

Graph 7Formal Education by Birth Cohort in

Peru (Years of Schooling)

Source: PAHO, ibid.

7Income Levels

Comparisons of income levels in Guatemalahave to be interpreted with caution becauseincome received is a poor measure of poverty,particularly in the case of subsistence farmerswho do not interact much with the market. Withthat in mind, Graph 8 shows that during thehighest income-earning years (35 to 45) a non-indigenous man earns up to 14 times more thanan indigenous woman. The ratio betweenindigenous and non-indigenous men is 3.5 to 1,and between indigenous men and women, it is 4to 1.

Poverty

A poverty map of Argentina (Figure 3) showsthat the areas of highest unmet basic needs (darkshaded areas) coincide with the location of thecountry's indigenous people (15 ethnic groups,slightly less than 400.000 people or just over onepercent of the total population). This shows thehigh correlation between ethnicity and extremepoverty.

These tables, graphs and maps show that if theIDB is to act as a catalyst to lower the levels ofextreme poverty in the region, the ethnicdimension of poverty needs to be better unders-tood and more systematically addressed in theprograms that the institution finances, as well asin the policy dialogue it maintains with thegovernments of the region.

Graph 8Average Monthly Income

by Age in Guatemala

Source: World Bank, based on PLSS. 1991.

8Source: INDEC, based on the Censo Nacional de Poblacin y Vivienda 1991 - Serie C; Poblacin aborigen, ao 1982;Territorio (1987: XXXV); SDS/ENV GIS & Remote Sensing Facility.Note: This map, prepared by the Inter-American Development Bank, has not been approved by any competentauthority and its inclusion in this document is for illustrative purposes only.

Figure 3Percentage of the Population in Households with Unment Basic

needs and location of Indigenous People

9III. WHAT ARE THE MAIN ISSUESAND DEMANDS OF INDIGENOUS PEOPLES?

Since the 1970s, in light of the strong pressureson their lands and way of life, incipient indige-nous organizations at the regional, national andinternational level have been strengthened bytheir alliance with the environmental movement.They were also able to take advantage of thespace allowed to civil society organizations as aresult of the democratization process in manycountries of the region. This process of streng-thening organizations and forming grassrootsnetworks goes hand in hand with a strongcultural revival process in which the generationof younger and more educated indigenouspeople plays a significant role.

Given the pressures on indigenous lands,resources and ways of life, indigenous peopleare strong allies of the environmental movementin the preservation of biological diversity andthe sustainable management of fragile ecos-ystems. The message of indigenous peoples hasbeen prominently highlighted at importantinternational forums such as the 1992 Environ-mental Summit in Rio de Janeiro. In addition,the United Nations created a working group onindigenous rights and proclaimed the year andthe decade of indigenous peoples, and ILOConvention No. 169 on tribal and indigenouspeople was adopted in 1989.

Indigenous Rights

The growing international recognition ofindigenous rights coincided with the democrati-zation process in many countries of the region,and influenced the sometimes very significantgains in the legal and constitutional recognition

of indigenous rights in pluriethnic and mult i-cultural societies.2

The most important of these rights concern landand natural resources; language, ethnic identityand cultural heritage; autonomy and participa-tion.

The right to land and natural resources refers notmerely to land as a means of production andeconomic sustenance but, most importantly, asthe territory that defines the cultural and socialspace needed for the physical and culturalsurvival of the group. Hence, the right tocommunal tenure, legal recognition and demar-cation of traditionally occupied lands.

The right to language, ethnic identity andcultural heritage recognizes the multiculturalcharacter of the nation state and the right ofindigenous people to the use of their nativetongue, as well as to bilingual and crossculturaleducation.

A large measure of autonomy in managing theirown affairs, refers to the right to their ownorganizations, leadership structure, decision-making processes regarding economic and socialdevelopment, recognition of customary law, etc.This does not mean, as is sometimes misrepre-sented, that indigenous people aspire to establishindependent states. It means that indigenouspeople be given the authority to govern theirown affairs within the national legal andpolitical system. In recent years, Bolivia,Colombia and Guatemala have adopted measu-res to integrate decentralized local governmententities with traditional structures of power andauthority in indigenous communities. The legal

2 See for example Van Cott, D.L., ed., 1994.NACLA Report on the Americas, 1996; and Anaya,S.J., 1996.

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framework of the comarca, established in 1953for the Kuna people in Panama, granted one ofthe Hemispheres largest degrees of autonomy toan indigenous people.

The right to participation as beneficiaries andcontributors to the political and economicdevelopment processes in their countries,implies that indigenous people have access tokey information and are able to participate inmeaningful ways.

Sharing in the Benefits of Development

Realizing the limited ability of national go-vernments and international developmentcooperation to earmark significant new resour-ces on concessional terms to indigenousprojects, indigenous organizations as well astheir allies in the NGO and international donorcommunity, are starting to focus on the need toparticipate at the national level in the policydialogue on development issues. This isnecessary not only to ensure that nationaldevelopment initiatives target indigenous peoplein preferential ways, but also to make certainthat indigenous people do not suffer dispropor-tionately from the effects of structural adjust-ment and market oriented reforms or from theimpacts of large infrastructure projects (such ashighways or dams).

Indigenous peoples often have a strongattachment to communally held and managedland and natural resources, which form the basisof their subsistence as well as their social andcultural integrity. As a result, the social costs ofthe structural adjustments and market-ledreforms which many countries have adopted,have placed indigenous people in an especiallydisadvantageous position.

The emphasis in the debate about the role ofindigenous people in national development isthus shifting from natural resource managementand preservation issues to addressing indigenousdevelopment in the context of social sector

reform and poverty reduction strategies. Thisimplies a shift in focus from countries whereindigenous communities are living in tropicallowlands and are small minorities, to countrieswhere indigenous people comprise large sectorsof the rural peasantry.

Environmental Preservationand Sustainable Management

In general, indigenous people have adapted wellto their ecologically sensitive environments. Inaddition they have an extensive knowledge ofthe natural resources that surround them andhave often adopted very complex methods andtechnologies to manage their habitat in asustainable manner. Indigenous people regardthemselves as an integral part of nature ratherthan seeing nature as being subject to humandomination. Indigenous peoples, whose territo-ries have often suffered severe damage fromencroachment by mining, logging, poaching andcommercial farming, or who were forced toresort to environmentally damaging practices asa result of high population growth rates, areinvariably demanding the preservation orrestoration of their natural environments as acondition for their involvement in other develo-pment efforts.3

Culturally Appropriate Development

Past efforts to improve the situation of indige-nous people were often based on the notion thatin order to benefit from development, theyneeded to sacrifice their culture and identity, andbecome integrated or assimilated into thenation=s economy and society. In addition, theapproach used to achieve this goal was veryoften paternalistic and resulted in dependency ongovernments, religious institutions or NGO.

3 See for example N. Paccari, 1995; Akwe:kon, 1992;COICA, etc.

11

Recent efforts to address the specific needs anddemands of indigenous peoples in the context ofpoverty reduction strategies, reflect a major shiftin thinking about the role of culture in develo-pment. Experience with some small-scaledevelopment projects has shown that strengthe-ning cultural identity and promoting sustainablesocioeconomic development are mutuallyreinforcing rather than mutually exclusiveobjectives. To the extent that developmentefforts are anchored in local values, aspirationsand social organization, culture becomes anasset rather than an impediment to development.Thus, people more easily adopt the changes thatwill lead them out of poverty and deprivation. 4

As the Vice President of Bolivia in a recentpresentation at IDB Headquarters so eloquentlystated, development for indigenous people isdevelopment with identity. Culture is not anobstacle to development (as was the prevailingview for many years), but rather the start-upcapital for sustainable social and economicdevelopment, because it builds on peoplesvalues, aspirations and potential rather thanimposing a development model from the topdown and from the outside in. Development andcultural identity are thus not mutually exclusivebut rather part of the same virtuous circle ofsocioculturally sound and sustainable develo-pment.

4 See for example the experience of the Inter-American Foundation and many NGO for casestudies of successful grassroots projects withindigenous peoples. The IDB's Small ProjectsProgram also includes several highly successfulprojects integrating socioeconomic development andcultural identity.

This virtuous circle between culture and develo-pment can be achieved only to the extent thatdevelopment experts understand the local cultureand create genuine opportunities for participa-tion, not only in project implementation but alsoin project identification and design. Althoughthis is relevant for all target population groups,identifying the appropriate channels for effectiveconsultation with and participation of indigenouspeople is often more difficult than with popula-tion groups who share the same language andsimilar cultural codes as those of theAdevelopment experts.@ Language barriers, fearof outsiders, cultural norms which may limitdirect communication, or the existence ofAinvisible@ subgroups such as women or youngermembers of the community, are all factors thatneed to be taken into account when designingmethodologies and procedures for the participa-tion of indigenous groups.

Thus, sociocultural analysis, or stakeholderanalysis as it is often called, becomes a ne-cessary condition for effective communityparticipation, to identify and understand popula-tion subgroups, the relations of power betweenthese subgroups and the extent to whichcommunity organizations represent interestgroups and can play a role in the participationand project design and execution process.5

5 See Norman Schwartz and Anne Deruyttere, 1996.

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IV. HOW IS THE IDB RESPONDING?

The Early Years

The Bank began to address the potential negati-ve effects of the projects it finances on indige-nous peoples in the mid-1980s, as part of itsquality control procedures. Internal procedureswere adopted in 1990 to avoid or mitigatenegative impacts. These procedures wereinstrumental in fostering important projectdesign changes to avoid negative impacts, aswell as in the adoption of project components toaddress the risks that indigenous peoples facedas a result of Bank-financed projects. Success-ful initiatives have included comprehensivetitling and demarcation of indigenous lands,community development and measures to enableindigenous participation in project design andexecution.

The Bank has long been involved in moreproactive indigenous peoples projects. Forexample, a number of projects have supportedbilingual primary and adult education or healthand nutrition programs specifically targeted atindigenous people. In addition, indigenouspeople have been the main beneficiaries of manyrural development programs designed to benefitthe peasant population, be it for rural infras-tructure or support for productive activities(although indigenous people were often notidentified as such). In recent years an increasingnumber of environmental protection programs,such as watershed management or sustainableforestry projects, have targeted indigenouspeople. Several social investment funds finan-ced by the Bank have supported communityinfrastructure projects in indigenous communi-ties. The Bank=s Small Projects Program, hasdirectly benefited approximately 40 indigenousorganizations or NGO dedicated to indigenousdevelopment.

In general, however, these efforts were carriedout either on an exceptional basis at the marginof the Bank=s mainstream activities (such as thebilingual education programs), or with littleattention to the specific needs, priorities andaspirations of indigenous people, as differentfrom other low-income population groups. Oneof the few exceptions to this general trend wasthe support provided to the Indigenous PeoplesFund (Fondo Indgena) since its creation in1991.

The Eighth Replenishment

The Banks Eighth Capital Replenishment of1994 directed the institution to renew its focuson poverty reduction and social equity issues.Indigenous people were specifically identified asone of the target groups for Bank assistance.The Eighth Replenishment mandate refers toindigenous people in the following way:

Indigenous groups, who comprise a dis-tinct and significant segment of the po-pulation of the region, are endowed with arich cultural and linguistic heritage andhave developed social and economicpractices that are well suited to the fragileecosystems they inhabit. Indigenousgroups typically belong to the pooresteconomic strata. Accordingly projectdesign and execution should seek tostrengthen the capacity of indigenousgroups to undertake and implement de-velopment projects. In recognition of theimportant role of indigenous groups asboth contributors to and beneficiariesof future development efforts in the re-gion. the Bank will step up its efforts toobtain additional financing for programs

13

benefiting indigenous groups in order toadequately address their needs.6

Instead of simply avoiding or mitigating thenegative impacts of Bank-funded projects onindigenous peoples (the reactive approach), theIDB is now pursuing a more proactive approachaimed at seeking out opportunities to foster thesocial and economic advancement of indigenouspeople.

The Indigenous Peoples andCommunity Development Unit

The Indigenous Peoples and CommunityDevelopment Unit (IND) was created in 1994 toact as a focal point of Bank activities in thisarea. The unit is part of the Social Programs andSustainable Development Department (SDS)established to strengthen the institutionalconditions necessary for the Bank to moreeffectively respond to the challenges of theEighth Replenishment. The Unit is responsiblefor indigenous peoples issues, involuntaryresettlement, community consultation andparticipation (shared with other IDB staff), andsociocultural soundness analysis.

Even though the Unit has a very limited capaci-ty, it plays an important role in four functionalareas:

1. Development of the Bank's policies, stra-tegies, best practices, methodologies andguidelines in the four thematic areas men-tioned above.

2. Participation in the quality control andenhancement process of all Bank operations.The Unit has a seat on the Committee onEnvironment and Social Impact (CESI,

6 Board of Governors, Inter-American DevelopmentBank, Report on the Eighth General Increase in theResources of the Inter-American Development Bank,AB-1704, 8/94, p. 22.

previously known as the CMA), and sys-tematically screens all Bank operations fortheir potential impacts on indigenous peopleat an early stage in the project preparationprocess.

3. Support to project teams on an as-neededbasis in the design and monitoring of Bankoperations that require technical expertise inthe area of indigenous peoples, communitydevelopment or involuntary resettlement.

4. Leadership role in the development ofinnovative, experimental or pilot projects forindigenous development.

The role of the Indigenous Peoples and Commu-nity Development Unit in the Bank is thus oneof support in the policy area as well as inspecific projects.

The Bank's Strategy onIndigenous Development

The Indigenous Peoples and CommunityDevelopment Unit is preparing a Bank strategyon indigenous development that will cover inmore detail the issues mentioned earlier, andwill systematize the Bank's approach in thisimportant area of the Eighth Replenishmentmandate. The strategy will undergo an extensi-ve consultation process with indigenous peopleand organizations, and with NGO and experts inother organizations, as well as with Bank staff.

The strategy will reinforce the Bank's recentefforts to broaden its approach and seekout opportunities for the genuine participationof indigenous peoples in Bank projects.The strategy is buttressed on three main pillars.First, to mainstream indigenous needs, concernsand demands into the Bank's regular operations.Second, to develop specific initiatives to addressindigenous issues. Third, to strengthen its

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procedures and actions in an effort to avoid,mitigate and compensate for negative impacts onindigenous peoples.

Where possible and appropriate, the Bank willstrive to mainstream indigenous needs, concernsand demands into regular operations, particu-larly in social sector and environmental mana-gement projects. That is, it will facilitate accessby indigenous people to these programs, fromwhich they have been excluded because ofsociocultural factors, prejudice or the urban biasprevalent in many of them. The seven examplesthat follow illustrate how indigenous needs havebeen incorporated into Bank operations in recentprojects.

1. Social Investment Programs in Peru (FON-CODES), Guatemala (FIS), Guyana (SI-MAP) and Bolivia (FISE) incorporatespecific measures to remove barriers thatmake it difficult for indigenous communitiesto participate, or include targeting ofgeographic areas that are largely indigenous.

2. Primary education programs includecomponents specifically designed to meetthe needs of indigenous people for mult i-cultural and bilingual education (Mexico,Costa Rica and Guatemala).

3. A social forestry program in Nicaraguaincludes a component to support indigenouscommunities in the sustainable managementof forestry resources.

4. The sustainable development program forGuatemala's Petn region is an integratedparticipatory project which includes landtitling and sustainable forestry activitiesspecifically designed for indigenous mi-grants from the highlands.

5. A program to strengthen governanceand decentralization in Bolivia supports ef-forts to reorganize municipal boundariesto coincide with indigenous territories.

Governance will be made consistent withtraditional indigenous leadership and deci-sion-making processes.

6. An alternative development and cropsubstitution project in Colombia includes aspecific component for indigenous peoplesfocusing on integrated development, institu-tional strengthening of indigenous organiza-tions, land demarcation and titling initiativesas well as productive activities and socialservices.

7. A program in Argentina to address the needsof the most vulnerable population groupsincludes a component specifically designedto provide institutional strengthening andcommunity development to indigenous peo-ples.

The Bank is undertaking stand-alone initiativesdeveloped specifically for indigenous people toaddress those cases where because of highvulnerability or lack of appropriate mainstrea-ming opportunities, indigenous people needaccess to resources specifically targeted toenable them to address their demands. Recentstand-alone initiatives are described below.

1. The Community Development for PeaceProgram in Guatemala is targeted to return-ing indigenous refugee communities. Theprogram will assist in the task of rebuildingsocial capital and community organizations.

2. The Global Facility for Small Projectsin Southern Mexico will assist indigenousorganizations in Chiapas, Oaxaca andGuerrero with productive activities, trainingand institutional strengthening.

3. Technical cooperations will finance activi-ties to strengthen indigenous organizationsin the Peruvian Amazon.

4. A leadership training program in Guatemalawill exclusively benefit indigenous women.

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5. A process of consultation with indigenousorganizations and experts on the Draft OASDeclaration on the Rights of IndigenousPeoples has been undertaken.

6. A pilot program on indigenous health isbeing undertaken in conjunction with thePan American Health Organization.

The Bank will continue to strengthen its proce-dures and actions to avoid, mitigate or compen-sate potential negative impacts on indigenouspeoples. Particular attention will be paid to theeffects of large infrastructure projects (i.e. roadsand dams), and the impact of structural reformprograms to reduce public sector inefficienciesand promote private sector initiatives. Recentexamples of these activities are mentionedbelow.

1. An environmental and social technicalassistance program has been developed tomitigate the potential negative impacts asso-ciated with paving the Southern Highway inBelize. The program includes communitydevelopment and consensus building activi-ties regarding the future of the indigenousreservations and lands.

2. The PMACI program, associated with theBR365 highway project in the BrazilianAmazon, includes land demarcation and ti-tling and other impact mitigation compo-nents specifically designed to benefit in-digenous peoples.

3. The integrated rural development programand several roads projects in Paraguay in-clude land titling and community develop-ment initiatives for indigenous peoples.

The Indigenous PeoplesFund (Fondo Indgena)

The Indigenous Peoples Fund was created in1992 at the initiative of the Ibero-AmericanSummit of Heads of State, with a membership of22 signatory countries. The political supportthis initiative has received from member

countries is demonstrated by the fact that thelegislative bodies of 19 countries have alreadyratified their membership.

The Fondo Indgena is a tripartite organization,with equal representation from the governmentsof the region, the indigenous people of theregion and donor countries from outside theregion. Its purpose is not to duplicate effortsalready under way, but rather to contribute withnew initiatives or to add value to existingprocesses or activities. Its unique role is that ofa broker. It provides a forum for the exchangeof information, strategy definition, negotiationand conflict resolution at the national andinternational level. It also provides technicalexpertise in the identification and design ofgenuinely indigenous projects.

At present, the Bank is supporting the designand implementation of a strategy to achieve thefinancial sustainability of the IndigenousPeoples Fund by means of creating an en-dowment fund which could be administered bythe Bank. The endowment fund would have twoobjectives. First, to generate annual revenues tocover nonrecoverable costs related to technicalassistance, institutional strengthening, training,project identification and consensus buildingefforts with indigenous organizations as well asfor the operational costs related to the TechnicalSecretariat and the governing bodies of theFund. Second, to use the capital of the en-dowment fund as leverage to generate newresources from the international financialmarkets and the donor community for invest-ment in productive projects and other revenuegenerating initiatives carried out by indigenouscommunities and organizations.

The Challenges Ahead

The issues discussed below have been identifiedas some of the most important areas for futureresearch and policy definition in order for theBank to better respond to the challenges presen-ted by indigenous people and governmentsalike.

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1. To deepen the understanding of poverty inindigenous communities, developing cultur-ally sensitive poverty indicators that candefine poverty in terms of unsatisfied basicneeds, taking into consideration the natureof traditional subsistence economies. Theseeconomies are characterized by low levels ofcash income. Basic needs are largely satis-fied through non-market mechanisms for theredistribution of goods. It will be crucial totake into account indigenous views and aspi-rations regarding poverty and development.The latter is particularly important becausepoverty may also be seen as a relative con-cept rather than an absolute one to the extentthat it includes not only the material condi-tions but also the aspirations of the peopleinvolved.

2. To develop methodologies from successfulsmall scale, participatory and socioculturallysound projects (often funded and executedthrough NGO or grassroots organizations),and use them in larger programs financed bythe IDB, taking into considerations thelimitations, time frames and efficiency re-quirements of the institution.

3. To better understand and more systemati-cally take into consideration the impacts ofstructural adjustment and market orientedreforms on indigenous peoples in order tominimize risks and maximize their opportu-nities for social and economic development.

To ensure that indigenous communal land tenuresystems, consensus driven democratic traditions(as opposed to majority rule), traditionalauthority and decision-making structures andcustomary law practices are respected andstrengthened in the design and execution ofprograms that support government reform andstrengthen participation in civil society.

4. To create transparent and effective ways tofoster the participation of indigenous peo-ples (including indigenous women, youthand elders) in policy dialogue and in specificprojects and programs sponsored by theIDB.

5. To find appropriate ways to deal with suchurgent but controversial issues as intellectualproperty rights, conflict resolution, custom-ary law and others, which are at the fore-front of indigenous demands.

6. Finally, to ensure that the Bank developsappropriate mechanisms and procedures sothat all stakeholders fully participate in thedesign and execution of programs. This willrequire that its project preparation processcorrectly identify and address the needs andaspirations of its most hidden and vulnerablepopulation groups, in socioculturally appro-priate ways ways.7

7 Further information on the Bank's IndigenousPeoples and Community Development Unit andthe Bank's initiatives with regard to indigenouspeoples, can be found at the following website:www.iadb.org/sds/.

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BIBLIOGRAPHY

Akwe:kon Journal. 1992. Indigenous Economics: Toward a Natural World Order, Cornell University.

Anaya, S. J. 1996. Indigenous Peoples in International Law, Oxford University Press.

Crdenas, V.H. 1997. Indigenous Peoples, Development and Democracy in Latin America, IDB,SDS/IND.

CELADE. 1994. Estudios Socio-demogrficos de pueblos indgenas. Chile.

Davis S., ed. 1993. Indigenous Views on Land and the Environment. World Bank Discussion Paper 188.

Davis, S. H. and Patrinos, H. A. 1996. Investing in Latin America=s Indigenous Peoples:The Human and Social Capital Dimensions. The World Bank.

Deruyttere, A. May 1994. The Indigenous Peoples Fund: An Innovative Mechanism in Support of theEthnodevelopment of Indigenous Peoples of Latin America and the Carribbean. IDB, WorkingPaper ENP108.

Gray, A. 1991. Between the Spice of Life and the Melting Pot: Biodiversity Conservation and its Impacton Indigenous People. IWGIA, Copenhagen.

IDB. 1994. Board of Governors, Report on the Eighth General Increase in the Resources of the Inter-American Development Bank , AB-1704, p. 22.

Iturralde D. and Krotz E., eds. 1996. Indigenous Peoples and Development: Poverty, Democracy andSustainability, Indigenous Peoples Fund/IDB, SDS/IND No. IND96-102.

Moreno and Gonzales, 1985; Nations and Komer, 1983. SDS/ENV GIS & Remote Sensing Facility.

N. Pacarri, 1995; Adwe:kon, 1992; COICA, etc.

Paccari, N. 1995. La mujer indgena, medio ambiente y biodiversidad, in: Derechos de los pueblosindgenas: situacin jurdica y polticas de Estado, Torres Galarza. ed. Abya Yala, Quito.

PAHO, Salud de los Pueblos Indgenas. 1993.

Psacharopoulos, G. and Patinos, H. (eds). 1994. Indigenous People and Poverty in Latin America:An Emperical Analysis. World Bank.

Schwartz, N. and Deruyttere, A. 1996. Community Consultation, Sustainable Development and the Inter-American Development Bank: A Concept Paper. Inter-American Development Bank, IndigenousPeoples and Community Development Unit, No. IND-101.

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Uquillas J. and Rivera J.C., eds. 1993. Pueblos Indgenas y Desarrollo en Amrica Latina. The WorldBank, Environment Division.

Van Cott, D. L., ed. 1994. Indigenous People and Democracy in Latin America, Inter-AmericanDialogue.

Van de Fliert, L., ed. 1994. Indigenous Peoples and International Organisations. Spokesman, England.

Van Cott, D.L., ed., 1994. NACLA Report on the Americas, 1996; and Anaya, S.J., 1996.

World Bank, based on EIH 1989, ENSD 1989, INEGI 1989, PLSS 1991.

World Bank, based on IneGI. 1989.

World Bank, based on PLSS: 1991.

World Bank. 1991. Operational Directive 4.20: Indigenous People.

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INDIGENOUS PEOPLES AND COMMUNITY DEVELOPMENT UNIT

Publications

Norman Schwartz and Anne Deruyttere, 1996. Community Consultation, Sustainable Development andthe Inter-American Development Bank : A Concept Paper. No. IND-101. (Available in Englishand in Spanish).

Involuntary Resettlement Policy. Policy Profile. (Available in English and in Spanish).

Working Papers

Anne Deruyttere. Indigenous Peoples and Sustainable Development. The Role of the Inter-AmericanDevelopment Bank. April 1997. No. IND96-101.

D. Iturralde and E. Krotz (eds.). Indigenous Peoples and Development: Poverty, Democracy andSustainable . December 1996. No. IND96-102.

Involuntary Resettlement in IDB Projects: Principles and Guidelines (Available in English, Spanish andPortuguese). December 1996. No. IND96-101.

To obtain copies of these publications, please contact:

Lina UribeIndigenous Peoples and Community Development Unit

Social Programs and Sustainable Development DepartmentInter-American Development Bank

1300 New York Avenue, N.W.Washington, D.C. 20577

USA

Telephone: 202-623-1256Fax: 202-623-1463

e-mail: linau@iadb.org