Sustainable Development In Brazils Amazon Rainforest Economics Essay

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Over the past fifty years the increased deforestation and economic exploitation of Brazil's Amazon rainforest has created a host of environmental and socio-economic problems for the inhabitants, both native and those forced into the 'Amazonian' region.

While at face value the issue of unsustainable exploitation of the Amazon appears to be solely an economic driven policy, the roots of the problem lie in the political nationalist agenda of the 1960s and subsequent policies which curtailed the rights of indigenous South American Indians in order to facilitate short term development.

This essay will explore both the history of the Amazon and the policies which shaped its exploitation. Following this, an examination of how recent legal and social reforms have impacted on the region and how proposed sustainable development policies may be implemented to improve Brazil's current situation and bring them closer in line to its close neighbour - Costa Rica.

Brazilian nationalism over Amazonia needs to be understood from the perspective of Brazil's expansionist history in South America, and it's imperialist past in the region. The regions past has been one of conflict between Brazil and Bolivia , in particular during the rubber boom in the 1900s (Barbosa, 2000 p.36).

During the Cold War, Amazonia was seen as an area of importance by the government in order to protect again communist guerrillas. Operation Amazonia, was a military scheme adopted by the government in order to develop the region and create an effective buffer zone to protect national security (Hecht and Cockburn, 1989 p. 103).

In 1964, a military coup against the left-leaning President Joao Goulart put in place a military government in Brazil (Burns, 1980 p.37). The military takeover of the country fostered an increased sense of nationalism which was directly translated into national security, in particular in the Amazon which not only bordered Chile, Ecuador and Bolivia, but was home to many indigenous Indians who were viewed as disloyal and separatist (Barbosa, 2000 p.37).

Populating the area with surplus landless population in other regions of Brazil aimed to not only ensure the area remain Brazilian, but also allow for the exploitation of resources and fuel in the area in order to revitalise Brazil's participation in the global economy. (Burns, 1980).

Economic incentives for investment in the Amazon began with Law 5.1744 of October, 1966. (Barbosa, 2000 p.40). These laws allowed (initially 50%) of a company's tax liability to be invested in projects in Amazonia - essentially turning taxes into venture capital.

In addition, easy access to credit allowed for the development of new projects in the timber industry. (Hall, 1987 p.531) . Following land clearance, the government substantially increased cattle ranching projects with the peak period of investment from 1967-1972 (Bunker, 1985).

Investors obtained property rights under conditions in which they must 'improve the land' leading to clearance simply on the rational of tax benefits (Hall, 1987). It was soon found that after a period of five years the use of soil became too impoverished to sustain either subsistence farms who had plots sold to them, or cattle ranches leading these individuals to simply move further on clearing more virgin foresee (Fearnside, 1988 p.284).

In this period roughly 10 million hectares of land were converted from forest to pasture, (with an estimate 90,000km2 in 1970 cleared for cattle ranching (Hecht, 1985 p. 673). Other activities have including mining of soils for minerals, petroleum and use of wood unsuitable for commercial purposes to be made into charcoal for use in the production of pig iron. (Anderson, 1990).

As mentioned above, the exploitation of the Amazon not only resulted in severe environmental consequences, but also had a dramatic impact on the lives of in particular the Indigenous people of the region. With little social or legally standing in Brazil, indigenous populations had their land converted into large cattle ranches or into farming plots by Brazilian peasants (Treece, 1987) .

One of the largest cattle ranching projects Carajas claimed an estimated forty Indian communities, inhabited by 13,000 people (Treece, 1987 p.6) . Displacement has caused these people to relocate to other areas of the Amazon and exposed many to malaria, water-borne diseases such as schistosomiasis and intestinal infections(Treece, 1987).

Furthermore the introduction of gold prospectors to newly cleared land has resulted in mercury, used in the separation of gold from sand and silt, to flow into river systems polluting drinking water and fish - the major source of protein for indigenous communities (Barraclough, 1992).

Whilst the current use of the Amazon is clearly unsustainable, recent attempts to protect sections of the rainforest and the furthering of sustainable 'extractive' economic industries has provided some protection for both the forest and its inhabitants.

Extraction of products such as rubber and Brazil nuts has supported populations in the Amazonian interior since long before the government supported migration to the area (Anderson, 1990). These systems can produce indefinitely, so long as the products are extracted with the minimal precautions already known to rubber tappers and nut gatherers in the region (Anderson, 1990).

At present however, the principle problems impeding the maintenance of these systems are: low economic return in comparison to short term profits derived from deforestation and difficulty of these extractivists to secure legal claims to land in the face of appropriation by squatters and ranchers (Anderson, 1990).

The process of reserve area acquisitions is sometimes concentrated in the most productive areas because of bureaucratic advantage conferred by existing documentation of the claims of rubber and Brazil nut 'barons' (Bunker, 1980).

However, such shrinking of extractive areas may not continue unopposed into the future: rubber gatherers have organised themselves to press for legal recognition of 'extractive reserves' (Schwartzman & Allegretti 1987).

In terms of the economic benefits to Brazil through pursuing such a scheme is further based on economic policies in Brazil. The rubber market in Brazil is heavily subsidized by government pricing policies, because certain types of fungus detrimental to rubber crops do not exist in southeast Asia, plantation of rubber was considered inherently cheaper than it was to produce in the Amazon (Anderson, 1990).

Since the 1980s, the world rubber market has depressed to the point where many productive commercial plantations in Malaysia and Indonesia have been replaced by other crops (Anderson, 1990).

Brazil currently imports two thirds of its rubber; the remaining third being produced within the country and bought at a price that, although low from the point of view of rubber tappers, is far above that which can be found in the international commodity market (Anderson, 1990).

Production could be further improved by introducing technology used in native rubber stands. Although such technologies currently exist, they have not received government incentives (Anderson, 1990). A report from the Brazilian Ministry of Industry and Commerce, which sets national policy for rubber production in Brazil, states that an introduction of such technologies could increase production by at least 40% (MIC 1986).

In light of this proposition, the legal and institutional structure is crucial to the development and continuity of such a programme. To provide a judicial basis for this concept, a working group was established within the now-existent National Institute of Colonization and Agrarian Reform (INCRA).

Following the recommendations of this group, INCRA issued Decree 627 in 1997 which established proposed guidelines for settlement and extraction in the Amazon region (Anderson, 1990). The decree utilised the judicial concept of land-use concessions by which the State assumes ownership of the reserves and cedes them for exclusive use by the practitioners of traditional extractive activities during a minimum period of thirty years (Anderson, 1990 p. 261).

Institutionally the reserved will be administered by a group of elected local inhabitants; this group can either assume the form of an association or a co-operative, according to local conditions. To date such schemes have been successfully implements but creating such an interest is still heavily bureaucratised and difficult process (Anderson, 1990).

Perhaps the greatest facilitator in preserving a sustainable approach to Brazil's Amazon can be found in international development aid. In a similar financial and sociological position to Brazil in the 1970s, Costa Rica similarly had an implemented policy of economic expansion of undeveloped forest land, party to avert social discontent caused by inequalities of land distribution (Barbosa, 2000).

As in Brazil, peasants could claim lands by occupying and 'improving them' (Barbosa, 2000 p.36). The purposes of clearing such land lay primarily around cattle ranching. The key difference between the paths taken by Brazil and Costa Rica lay primarily in the latter's willingness to accept assistance from abroad whilst the formed viewed such an approach as a foreign takeover (Thrupp, 1990).

Costa Rica throughout the 1980s thus accepted debt-for-nature swaps to reduce its $4.5 million dollar US debt (Thrupp, 1990). Policies formulated were legislated to ensure sustainable development was part of the national developmental policy of the nation (Costa Rica, 1997: Panorama Geral).

Such funding allowed for the establishment of 21 reservations in the country occupying an area of 320,888 hectares encompassing a population of 25,000 Indians (Barbosa, 2000 p.144 ). Since this time sustainable measures of forest use age with restricted plantations of bananas and coffee have led to increased reforestation from 31km(2) per year in 1985 to 147 km2 in 2000 (Barbosa, 2000 p.144).

While the future of the Amazon remains one of critical concern not only for Brazil, but for the world, the ability to effect positive sustainable practices to reverse the trend of deforestation and long term economic security is achievable.

Such a reverse of the status quo can only be carried out by substantial and effective government policies - both economic and legal and the realisation at a State level that the Amazon is more valuable intact than destroyed.

By encouraging equitable debt relief in the same way as Costa Rica, Brazil could effectively implement a government protection of the Amazon and by reducing subsidies on cattle ranching and tariffs on rubber production, it could effectively transform the use of land in the region from short term farming and ranching to long term sustainable development for Brazilians and in particular the indigenous community of Brazil.