US needs to play constructive role in development of the Amazon

The Amazon basin is an important asset for the world in terms of its environmental endowment, economic resources, and people — which requires a long-term development approach. It is a vast territory — approximately the size of the continental United States — containing the world’s greatest biodiversity, freshwater resources, and serving as the “air conditioner of the Earth,” storing carbon and regulating rainfall and climate patterns both within the region and around the world. At the same time, the Amazon basin holds significant economic resources: natural waterways and fisheries, mineral deposits, oil and gas, and forestry products. In addition to its rich biodiversity and natural resources, the Amazon is home to between 30 and 35 million people, most of whom live in urban areas (i.e. regional capitals and medium-sized cities). In spite of being so urban, the Amazon region often lags behind other states in socioeconomic development.

The present discussion on the Amazon centers around the environmental damage occurring in the basin (including deforestation, biodiversity loss, and water pollution) and is narrowly focused on the trade-offs between environmental conservation and economic development.

Such a perspective treats the development of the Amazon as a zero-sum game, that is, if we conserve the environment, we lose out on economic growth.

This argument overlooks other important security and governance considerations in the region.

The countries that make up the Amazon have structural challenges that allow the factors driving deforestation to thrive — including weak governance, insecurity, bad planning, poverty and low-quality basic services (water, sanitation, education, health, communications). As a result, deforestation in the Amazon cannot be regarded solely as an environmental problem; it is the inevitable outcome of security, economic, and governance issues impacting the region.

Amazonian communities lack meaningful economic opportunities and basic public services. As a result of this economic vulnerability, criminal groups can push people into activities like illegal logging and gold mining and drug production that lead to uncontrolled deforestation, water pollution, and community insecurity.

On the ground, local governments often lack the institutional capacity to control these illegal operations. Moreover, Amazon countries have inadequate land registries and disorderly titling processes; large tracts of land remain undesignated and insufficiently monitored. This allows settlers to invade land that is not theirs and expand the illicit economic activities that lead to deforestation and social conflict. Limited resources, corruption, and in some instances a lack of political will makes it difficult for local authorities to stop these invasions and the environmental destruction that they bring.

Added to these problems is poor infrastructure planning. In the past, megaprojects like dams and highways have been framed as the solution to the Amazon’s socioeconomic problems. However, these projects have not delivered the economic benefits they were supposed to achieve, especially for local communities, and have augmented the environmental damage happening in the region. For all the grand dams and highways, in many Amazonian communities there are still noticeable gaps in the infrastructure for basic services such as clean water and sanitation, education, and health care.

Tackling the accelerating environmental destruction taking place in the Amazon requires countries in the region to acknowledge and address the factors at the core of deforestation: by increasing security, good governance, economic opportunities, and smart planning.

Within this context, the U.S. can — and should — play a constructive role in the development of the Amazon. As I argued recently, simply criticizing countries for the mismanagement of the Amazon won’t make the cut. If President-elect Biden is serious about supporting Brazil and the other seven countries of the Amazon (i.e. Bolivia, Colombia, Ecuador, Guyana, Peru, Suriname, and Venezuela), his administration should offer constructive ideas in terms of development, security and governance. These countries own the land in the Amazon, know the region far better than we do, and have lots of ideas and initiatives. We ought to listen to their governments, their business and security communities, and civil societies. If we come in “with guns blazing” approach, it is not going work. In a recent Center for Strategic and International Studies (CSIS) report, we argue that the U.S. can assist in three interrelated areas: governance, economic growth and security.

Working through our bilateral aid agencies (i.e. USAID, the International Development Finance Corporation) and multilateral development banks (i.e. the World Bank, and the IDB), the U.S. can help overcome some of the governance and institutional weaknesses and develop programs and platforms for sustainable development.

Governance challenges are particularly acute at the subnational level. In order improve their administrative capacity, local governments need additional human resources, salaries, technical training, and budgetary and financial tools. These resources are especially vital to areas of governance like land titling, concessions management, budgeting, security, and public service provisions.

Strengthening these governance aspects could be part of the “asks” that the Organization for Economic Co-operation and Development  (OECD) requests of Brazil and Peru — when these countries embark upon the OECD accession process. Convergence and enforcement of OECD governance standards will provide long-run economic benefits to these countries overall, signaling to the international community — and especially foreign investors — that they are ready to apply the best standards possible. Colombia, for example, was invited to join the OECD in May 2018 after passing through a five-year accession process that resulted in major legal and regulatory reforms aligned to the standards established by the OECD. Efforts to eliminate corruption should be incorporated across U.S.-funded development programs and corruption programs should be linked to U.S. national security discussions.

U.S. private sector investments can also play a part in developing sustainable businesses as viable and legal livelihood alternatives for the region’s populations. One way to do this is through expanding production of added-value products based on commodities like coffee, cacao, nuts, and superfruits, such as açai. Açai is becoming increasingly popular in the U.S., and already generates more than $1 billion per year to the Amazon economy. Unlike more extractive industries, açai production also supports environmental preservation and provides socioeconomic benefits for local communities.

Since 2000, Natura, Brazil’s largest cosmetics company, has operated in the Amazon while also contributing to the economic, social, and environmental development of the region. Natura’s “Amazônia Viva” program aims to source 30 percent of the company’s inputs from the Pan-Amazon by the end of 2020. So far, the program has generated $260 million (R$1.5 billion) in economic activity, improving the livelihoods of 4,636 Amazonian families.

In food and beverages, Coca-Cola’s Manaus factory sources half of its guaraná berry inputs from family farms across the Amazon and also invests in initiatives to provide potable water to the population (Water + Access Program) as well as technical support to implement agroforestry systems in family farms (Programa Olhos na Floresta).

On security, the U.S. should continue providing military training and technological know how to better surveil the forest. Professionalizing the enforcement agencies can minimize systemic corruption, increase the government’s ability to enforce the law over larger mafias, and create greater impact in addressing deforestation.

There is no silver bullet to address all of the Amazon’s current challenges: The region requires an integrated, all-hands-on-deck multisector approach.

These countries are sovereign and own the Amazon assets, so the international community has to be mindful of how it approaches the region. While national governments are ultimately responsible for achieving sustainable development in the region, the international community and the U.S. have an enormous supporting role to play, including both the private and public sector.

Safeguarding the wellbeing of the Amazon rainforest and the livelihoods and security of people who live in it depends on all stakeholders coming together and doing their part.

Daniel F. Runde is a senior vice president and William A. Schreyer chair in Global Analysis at the Center for Strategic and International Studies. He previously worked for the U.S. Agency for International Development, the World Bank Group, and in investment banking, with experience in Africa, Asia, Europe, Latin America, and the Middle East.