Trucks bogged down by road repairs in the state of Mato Grosso. Credit: Mario Osava/IPS

Edson Godinho, a truck driver with 35 years’ experience, was lucky this time. When he reached the southeastern port of Santos in early April, the line of waiting trucks was much shorter than it had been earlier, so he only had to wait 12 hours to unload his soybeans.

In previous weeks, many other truck drivers had had to wait more than 24 hours for access to unloading facilities in this port, where the majority of Brazilian agricultural exports are shipped. For several days the line of trucks was over 20 kilometres long.

Ports are the bottleneck that contributes most to the “logistics blackout” – an inability to cope with increased traffic – predicted for this year of record agricultural production and exports, according to Marcos Jank, a professor at the University of São Paulo who is an expert in this sector.

Grain production has more than doubled in Brazil since 1990, without improvement in agricultural logistics. Forecasts indicate that soybean and maize exports will grow 30 percent this year compared to 2012, reaching 41 and 25 million tonnes, respectively, and out-producing the United States.

Soybean output will amount to 84 million tonnes this year, according to Agroconsult, a consultancy.

Brazil’s overtaking the U.S. is partly due to drought in the United States, but also reflects a marked expansion of soybean cultivation, including in the semiarid Northeast.

The rise in exports and heavy rains in January slowed shipments of maize, which accumulated in a backlog that affected soybean exports, blocking the ports of Santos and nearby Paranaguá, the main ports in the country, in March. The bottleneck will be felt again with sugarcane exports beginning this month, and with the new maize crop in July, Jank said.

The chaos is not new, but it is getting worse. A bill to reform port activity regulations has been introduced by the government of President Dilma Rousseff, but congressional approval is uncertain, as more than 600 proposed amendments have been tabled.

Large investments are also needed. “A definitive solution will take 10 years,” Jank said. “We have 21st century agriculture and 19th century logistics,” he told IPS.

Speedy relief from the obstacles, he said, will require the opening of waterways, expansion of railroads, paving of highways to the north, enlarging of river and sea ports in the north and expansion of storage facilities at sea terminals in the south.

Santos, in the state of São Paulo, is 2,000 kilometres away from the main soybean producing area in the centre-west state of Mato Grosso, yet it handles nearly 60 percent of exports of the crop, most of which is hauled in by truck.

Transporting each tonne of soybeans costs nearly 70 dollars more in Brazil than in the United States, analysts say, adding that this profit drain would cease if production were shipped from northern ports, which are closer to the crops and to the export markets.

The predominance of trucks, which handle 60 percent of freight in Brazil, also makes the logistics more expensive.

Godinho is one of almost 600,000 independent truckers on Brazil’s roads, many of which are potholed or unpaved. He usually hauls soybean and maize from an area near his home, in the city of Ituverava in São Paulo, to Santos, 480 kilometres further south, and carries fertilisers on the trip home.

Without a return cargo, it wouldn’t be worth his while, because the road tolls cost 580 reals (290 dollars), almost as much as the fuel used by his truck, which carries up to 32 tonnes, he told IPS after unloading the soy at the port. On the positive side, the São Paulo highways he drives on are in good condition.

“The tolls and the bandits” are a trucker’s worst enemies, he said, although he himself has not been robbed on the highway. “But many of my friends have,” said the 57-year-old, who reckons he has had “a good life,” but is glad his three children have chosen other trades.

Congested ports are the tip of the iceberg, but the long logistical chain has many other bottlenecks.

Volmar Michelon, the co-founder of Pedromar Transportes, a firm with 85 vehicles and a hundred employees, told IPS that his drivers “wait up to 48 hours to unload soybean” in Alto Araguaia, on the southeast border of Mato Grosso, on to freight cars that transport it 1,240 kilometres by rail to Santos.

The time lost because of “lack of infrastructure for unloading, and lack of freight cars,” means the company wastes the opportunity of three more standard trips by the same truck, he complained. When this happens, there are thousands of vehicles parked by the side of the road, acting as enforced “storage,” he said.

There is no shortage of trucks, as many analysts and the press claim, “but rather an excess,” as two or three vehicles are required to do the job of one because of the delays in loading and unloading and other obstacles, he said. Adding to their number without correcting the hurdles would definitely obstruct the highways, Michelon said.

Pedromar Transportes was founded in 1981 in the south of Brazil, and moved with agricultural development towards the centre-west. In 2001 the firm settled in Rondonópolis, a commercial and industrial city in the southeast of Mato Grosso.

The company’s trucks operate only within the state, which is the largest grain producer in the country.

Between 1950 and 1980, Brazilian governments built thousands of kilometres of roads, to serve agricultural development in the west and north of the country. This led to waves of migration, deforestation, malaria and land tenure conflicts.

But agribusiness, and especially the boom in soybean production, did not precisely follow the highways, and now requires a logistics infrastructure that would provide less costly access to its markets, especially export markets.

The high cost of energy is a complaint at El Teniente, the biggest underground mine in the world, owned by the Chilean National Copper Corporation. Credit: Marianela Jarroud/IPS

The Chilean government has warned of the potential flight of mining and energy investments to Peru because of court rulings that have paralysed large-scale mining projects in the north of the country. But this fear is unfounded, at least in the short term.

Peru and Chile are in the top ten world destinations for investment in non-ferrous metal exploration, according to the Metals Economics Group, which collects information about the industry. In its 2013 report it places Chile fifth and Peru sixth, while Latin America heads the ranking of regions, receiving 25 percent of exploration investment capital.

Chile is the world’s top producer of copper and the country with the largest reserves for future extraction.

Mining investment is concentrated mainly in the north, near the borders with Peru, Bolivia and Argentina, where mines are estimated to consume 80 percent of the area’s electricity.

Against a backdrop of rising energy demand, industry owners have expressed concern about several court rulings and administrative decisions against mining projects.

One high-profile case was that of the Castilla plant, a project of the MPX Energia company owned by Brazilian billionaire Eike Batista, that was to be the largest coal-fired generating plant in South America.

The Supreme Court ordered a halt to the Castilla project in September after the community of Totoral, close to the planned site for the thermoelectric plant in Atacama region, 810 kilometres north of Santiago, filed for an injunction against it.

The ruling against Castilla was apparently the last straw for Batista’s troubled investments in Chile, where his empire is in crisis due to capitalisation of his companies based on market expectations of potential projects that have not been realised.

Six months after the court decision, MMX, another of Batista’s companies, announced that it was abandoning an iron exploration project that was at the geological mapping stage.

MMX said that problems with energy supply would drive up the cost of investment and make the project “less attractive.”

That was when Economy Minister Pablo Longueira said the “painful” decision by MMX must make Chileans aware that “Peru is a market that is becoming increasingly attractive for mining development.”

But according to Lucio Cuenca, the head of the Latin American Observatory of Environmental Conflicts (OLCA), Longueira’s statements are “fictional blackmail” because “Chile, with its strong institutions and its mining and environmental policies, is still the main attraction for mining investment at the international level.

“Of the 320 billion dollars projected to be invested in Latin America from now until 2020 (according to industry estimates), one-third is forecast to be targeted to Chile,” he told IPS.

However, if investments in the electricity sector are delayed, Chile “could end up with a rather limited and expensive energy supply, so that it is not surprising that investments that could have been made here should shift elsewhere,” said economist Jorge Rodríguez Grossi, who served as energy minister in the government of former president Ricardo Lagos (2000-2006).

But in Peru, opposition by indigenous communities to different extraction industry projects creates an “unfavourable” climate, he added.

Marita Chappuis, former director of mining in Peru’s ministry of mines and energy and currently a consultant on the industry, does not believe that mining companies will move from Chile to other countries, “because the problems are basically technical and can be solved, whereas in Peru the problems are predominantly social.”

In this area, “Peru is not a threat to anyone,” she told IPS.

Although there have been no court decisions freezing mining investment in Peru, social protests have succeeded in shutting down mines. Chappuis mentioned the Conga gold mining project, an extension of the Yanacocha mine owned by the U.S. Newmont Mining Corporation, which was planned for the northern region of Cajamarca.

“Protesters succeeded in paralysing a 4.8 billion dollar project whose permits had already been approved and which was under construction. That had never happened before,” she said.

Javier Aroca, a lawyer who worked for over a decade as the coordinator of Oxfam International’s Extractive Industries Programme in the South America region, believes Peru is prepared to receive more foreign investment because the government actively foments it.

The greatest obstacle is “resistance movements against new mining and oil and gas projects in areas where there was no tradition of extractive industries,” he told IPS. “People do not want these industries because they fear losing their livelihoods.”

Social and environmental regulations are stricter in Peru. So when it comes to regulatory frameworks, “extractive investments in Chile have a more favourable environment, which I think is absurd,” he said.

According to researcher José de Echave, former deputy minister of environmental management and a member of the Peruvian NGO CooperAcción, both countries are still attractive to investors.

If a company employs bad practices in Chile, “the authorities in Peru will not necessarily be apprised of its record, which could indicate what kind of relations it would have with the local population,” he told IPS.

In short, said OLCA’s Cuenca, the basic problem faced by the mining industry on both sides of the border is community and social resistance.

“Peasant and native communities, and others, are blocking the foreign investment strategy in the sector of non-renewable natural resource extraction,” he said.

It would be worth analysing why investment projects wind up being disputed in court, said Rodríguez Grossi, who is now dean of the Faculty of Economics at Alberto Hurtado University.

In Chile, zoning laws must be overhauled so that specific areas are established for waste treatment and noisy or dangerous industries, in order to avoid affecting local people, he said.

But in Cuenca’s view, that would not be enough. The mining and energy industries “fuel a highly profitable process of economic growth involving foreign investment. But at the same time they create a lot of problems in the areas where they operate, and local people experience this and are aware of it.” That is why, he concluded, “opposition will continue.”

* With additional reporting by Milagros Salazar in Lima.

Former Angolan soldiers participate in a masonry course offered by Odebrecht's Acreditar Programme in Luanda. Credit: Mario Osava/IPS

Brazil has turned to large infrastructure as a unique way to globally expand its economy and build up its political influence, with the added bonus of furthering the development of small nations. But this strategy is not without its risks.

Angola, which has been a major focus of Brazil’s transnational construction companies, faces the economic challenges typical of a young nation dependent on revenue from oil exports and with high levels of corruption, in a context where the line between public and private interests is hazy.

An example that serves to illustrate this blurring of the lines is Companhia de Bioenergia de Angola (BIOCOM), a local biofuel company that is preparing to produce sugar, ethanol and electricity to meet domestic consumption needs.

To implement this project, which includes 32,000 hectares of sugarcane crops and the construction of an industrial plant, the Brazilian giant Odebrecht partnered up with the country’s state oil company Sonangol and the private Angolan company Damer Indústria.

Damer was founded in 2007, on the eve of BIOCOM’S inception, by then Sonangol Head Director Manuel Domingos Vicente and two generals, Manuel Helder Vieira Dias, chief of the presidential military department, and Leopoldino Fragoso, a top presidential adviser.

Vicente, now vice president of Angola, has joint investments with the two generals in the oil industry, real estate and a range of other fields. These are the most visible examples of the state’s role as an incubator for business operators and the “national bourgeoisie” that is emerging from it.

Almost everything in Angola is dependant on the government. Lands are state-owned and all business ventures begin with a government concession for the necessary plot or facilities. Sonangol has partnered up with countless companies, investing its vast oil income.

The government’s nepotism and favouritism are no secret, but these practices find little active opposition in a scantly organised civil society. “Even God, when looking for a saviour for mankind, chose his own son,” is how Angolans humorously explain the wealth amassed by government and military officials and their relatives.

Journalist Rafael Marques de Moraes heads an anti-corruption organisation that regularly posts reports online denouncing serious cases of corruption, many of them well-documented, but so far these reports have failed to trigger public scandals, as might be expected in any other country.

Odebrecht moves in this context, occupying a privileged position as a government contractor and partner due to its role in the implementation of strategic power generation, water supply and road construction works, services that are sorely needed by the population. After 28 years of operating in the country, it has not only become a leader in infrastructure works, it is also a major investor in a wide range of industries, raking in multi-million-dollar profits that are not made public.

Emilio Odebrecht, CEO of the Brazilian conglomerate, visits Luanda every year to meet with Angola’s long-standing president, José Eduardo dos Santos (in office since 1979).

The group boosted its visibility through its involvement in the Nosso Super supermarket chain – present nationwide with 29 stores and the crown jewel of Luanda’s commerce – and the Belas Shopping mall, and through its participation in the capital’s urban redevelopment, which includes upgrading slums, expanding avenues and constructing basic sanitation works.

Its policy of employing and training local labour further increases the company’s influence in the construction sector. While this is the same strategy that Odebrecht applies in all 35 countries where it operates, it is of particular importance in Angola, as the lack of skilled workers is hindering the country’s development despite the oil boom.

Odebrecht is currently the country’s largest private employer, with some 20,000 workers hired directly. Ninety-three percent of its work force is made up of Angolans.

Odebrecht’s first work in Angola – the Capanda hydroelectric power plant – served “as a school to train an elite” group of technicians, who are currently holding senior positions in the government and in business, says Justino Amaro, the first Angolan to sit in Odebrecht Angola’s board of directors.

Training workers is an essential part of every project implemented by Odebrecht. As of mid 2012, 79,000 Angolans had benefited from the company’s training programmes. University student recruits receive special training and are groomed to occupy senior positions in the company.

In major projects, Odebrecht also offers technical training for the population living in the surrounding areas, preparing any interested young people – not just potential employees – for construction jobs. These technical courses are provided through the company’s Acreditar programme, which so far has trained some 3,000 workers in its three Angola units.

Odebrecht’s corporate social responsibility actions, which include providing poor communities with running water, schools, electricity and recreational opportunities, bolster the cooperation-for-development image projected by the company through its construction activities.

This is especially valuable in Angola, a country that is still being built after 37 years of independent life, and which is undergoing a process of post-war reconstruction.

But, above all, Angola has been a very lucrative business for Odebrecht, helping it become one of Brazil’s leading companies and the most globalised. In this sense, a common complaint among well-informed Angolans is the high cost of Odebrecht’s works.

Other Brazilian construction companies, such as Andrade Gutierrez, Camargo Correa and Queiroz Galvão, are also seizing the business opportunities afforded by the Angolan market.

Brazil’s strong presence in the country is not strictly private. The large projects implemented by these companies are supported by loans from Brazil’s state-owned development bank (BNDES), which finances the exporting of inputs and services necessary for such works.

In 2008 this contributed to making Angola the leading African importer of Brazilian goods, above the more populous South Africa and Nigeria, both of which have larger economies. But in 2010, imports plummeted to half their 2008 level, recovering only slightly over the following years.

Such are the risks of operating in an economy dependent on fluctuating oil prices and with high costs of living and production due to the energy boom. Its currency tends to be overvalued and that makes national products more expensive and imported goods cheaper.

The Angolan government fosters national production to substitute for imports, which are inundating the domestic market. BIOCOM is part of that effort, as is the Special Economic Area established some 30 kilometres from Luanda, with 73 industrial plants and an initial infrastructure built by Odebrecht.

However, greater market liberalisation could thwart many agricultural and industrial ventures. Which is why Angola rejects the free trade agreement proposed by the Southern African Development Community (SADC), of which it is a member, along with 13 other countries.

A free trade agreement could bring changes not only to the economy but also to government, and that poses a risk for projects tied to current government officials whose decisions may be questioned in the future. While for the time being dos Santos’ 33-year regime seems unshakable, industrial projects like BIOCOM’s are very long-term ventures.

Women working in the vegetable gardens at the Capanda Agroindustrial Pole in Angola. Credit: Mario Osava/IPS

“We never used to eat carrots, but now we like them,” said Rebeca Soba, admiring her vegetable garden, an island of diversity in the midst of a vast sugarcane plantation.

Vegetable gardening has been introduced at the Capanda Agroindustrial Pole (PAC) as a source of income for local small farmers.

The vegetable gardens are part of a social programme, Kulonga pala Kukula (“education for development” in Kimbundu, the local African language), which also includes actions to promote health, water availability and education.

Women and a few men plant a variety of seeds brought from Brazil in 10 villages close to the Capanda hydroelectric plant, 360 kilometres from Luanda.

Some species were unknown to the local population, like parsley and arugula, which they cook rather than eat in salads. “It’s very bitter,” said Soba, a 45-year-old mother of five, who is one of the leaders of the agriculture programme for small farmers.

She and her group grow cabbage, peppers, tomatoes, kale and other vegetables on low-lying land that is too wet to be suitable for sugarcane.

Fifty-four percent of the families in the 10 villages involved were living in extreme poverty, with incomes of less than 34 cents of a dollar a day, according to a study carried out in 2009, said Kimputu Ngiaba, an agronomist with the programme who is responsible for production.

Now some women are making over 500 dollars a month when there is a good harvest, according to his records. They have also changed their eating habits, resulting in better nutrition. A decisive factor is guaranteed sales.

The Nosso Super supermarket chain, which has 29 outlets around the country and is controlled by Odebrecht, the same Brazilian group that runs Kulonga pala Kukula, buys a large proportion of the produce.

Other purchasers include the canteens that feed thousands of workers on the other PAC projects, such as the Companhia de Bioenergia de Angola (BIOCOM), a biofuel concern which currently employs some 800 people planting sugarcane and building industrial plants for the production of sugar, ethanol and electricity, beginning in 2013 if all goes well.

Initially there was little enthusiasm for the project, because the 27-year civil war had broken down bonds of trust and undermined good working habits. But after the first payment from the sale of vegetables, “the number of participants doubled,” said Ngiaba. Now, 1,020 families are involved and selection mechanisms have been put in place, he said.

Soba bought a gasoline-fuelled generator with the first payment she received – an item that is coveted by many rural and urban Angolans who want to be prepared for frequent power failures.

And Rosa André, a mother of three, was able to buy medicine and get health care for her ailing husband, who helps her in the vegetable garden when he can.

For many of the 38 families in the village of Luxilo, the money serves to support their children who are studying in Luanda. Of the seven children of Antonica José Agostina, a 63-year-old widow, three left for the capital. “Everyone goes to Luanda to study,” she said. Her husband died in the war, in 1999.

“Angolans are keen to learn,” said Felismina Lageslau, in charge of promotion of the Kulonga programme. Last year there was no malaria in the villages, and this year there was only one case, she said, referring to the success of the preventive health actions.

Wells providing drinking water in the larger villages, and rainwater harvesting in the smaller ones, contributed to reducing diarrhoea, and hence infant and child mortality, while training provided for traditional midwives reduced the perinatal mortality rate by 60 percent, said Lageslau, who is a social psychology student.

The programme is also trying to improve the production chain for cassava, a traditional crop in the region, by increasing production and commercialisation of cassava flour, a staple food in Angola. Fruit production – pineapples, pawpaws, bananas and watermelons – is also being introduced in the vegetable gardens.

Reviving family farming – which was a traditional way of life in colonial-era Angola, but took a nosedive after independence – will be a great legacy to the nation, said Felipe Cruz, head of investment in PAC, who is responsible for Odebrecht’s support for the agroindustrial sector.

Kulonga is a pilot plan set to expand in a rural area that is home to 70,000 people, stimulating production, improving health and strengthening the sense of citizenship. This plan will demand “technical insistence”, as Cruz calls steady outside support to bring small farmers out of the subsistence culture and into the world of commercial marketing.

This is the second of three lines of action to consolidate the PAC in a territory of 411,000 hectares which benefits from existing infrastructure: water and energy from the Kwanza river, roads, and a railway, Cruz said.

The first line is to attract “anchor companies”, like BIOCOM and large plantations that grow and industrialise basic grains, producing oils, flours, animal feeds and other derivatives. The absence of production chains hinders agricultural development in Angola, he said.

And the third, which is “more complex and longer-term,” is to form “a rural entrepreneurial class which is non-existent in Angola.” Small farmers, for example, will have to form their own self-managed cooperatives, he said.

Odebrecht is in the lead in the effort to rebuild and modernise Angolan agriculture, as well as executing key projects in the field of energy and restructuring the Luanda metropolitan area.

Four of the six seats on the board of the Society for the Development of the Capanda Agroindustrial Pole (SODEPAC) are occupied by Odebrecht. SODEPAC administers all the local initiatives, runs the Kulonga project, and manages BIOCOM in conjunction with its partners, the state oil firm Sonangol and the private Angolan firm Damer Indústria.

BIOCOM plans to produce 260,000 tons of sugar, substituting for imports, and 30 million litres of anhydrous ethanol, which added to gasoline makes combustion engines less polluting, as well as generating 45 megawatts of electricity from sugarcane bagasse (the fibrous material remaining after crushing).

Ethanol production in Angola “has not been proved to be viable, either economically or technically,” said Fernando Pacheco, an agronomist who is known to be critical of government plans and an activist in favour of family agriculture and cooperatives.

The PAC in its entirety is “too ambitious for the institutional and human capacity of Angola,” and the different projects “are not coordinated or integrated,” he said.

In his view, the priority in Angola is “to generate jobs for young people on a mass scale, but agribusiness does not do this, and it requires a great deal of scientific and technical knowledge, much of which has been lost since the 1970s,” Pacheco said.

Up to 1973, Angola produced most of the food that it consumed, and exported coffee, maize and cotton. In contrast, its harvests are now meagre and food imports have soared, according to a report published this year by the Catholic University’s Centre for Scientific Studies and Research.

This transformation was due to the war, “which destroyed production capacity and mobility,” but “also to political mistakes over many years,” such as a lack of investment in infrastructure, an overvalued local currency, and the rural exodus, the study says, while complaining about the lack of credible national agricultural statistics.

Lake Budi has already been affected by the construction of the bridge to Huapi Island. Credit: Marianela Jarroud/IPS

For more than two decades, Mapuche indigenous people in the Chilean region of Araucanía have been fighting the construction of the Ruta Costera (Coastal Highway), a megaproject initially conceived during the Augusto Pinochet dictatorship (1973-1990) which has already caused significant archeological and cultural losses and damages.

The Coastal Highway is meant to connect one end of Chile’s long, narrow territory to the other, running north to south as close to the Pacific Ocean as possible. The completed highway would be more than 3,340 km long, of which more than 2,600 km have already been built.

This highway project has become one of the main challenges facing numerous successive governments in Chile, who have consistently come up against the opposition of native communities.

In the Araucanía region, 674 km south of Santiago, the Coastal Highway would encompass 41.6 km of the Puerto Saavedra-Toltén section, precisely where the Budi Indigenous Development Area is located.

The authorities maintain that the initiative will help to integrate isolated areas, decrease travel times and promote the development of new tourism destinations.

Studies by the Universidad de la Frontera note that the area is home to “a long cultural history and clear links to this history through archeological testaments and continued cultural practices, with a high prevalence of aspects that reflect the identity and world vision of the region.”

The ancestral inhabitants of the area are the Lafkenche, a branch of the Mapuche indigenous people whose name means “people of the sea”.

Leonardo Calfuneo is a Lafkenche “lonko” (chief) in the community of Konin Budi, made up of some 60 families.

“We are opposed to this megaproject because, for the Mapuche people, it will not bring progress or development, but rather the irreparable destruction of our culture,” he told Tierramérica*.

Calfuneo lives with his wife on a small parcel of land in a cozy wood house, where they offer the bitter herbal tea known as “mate” and “sopaipillas” (deep-fried flatbread) to their guests.

“We make a living from small-scale farming, we are peasants, we are a people with a centuries-old culture and we have always lived off of the land,” he said.
Calfuneo has personally confronted the advances made by the highway project, which is not being undertaken by a construction company, but rather by the Military Work Corps, a branch of the Chilean armed forces.

In March, the military corps and their machinery carried out work on his land without authorization, destroying hedges made up of medicinal plants as well as one of the community’s sacred religious sites.

“They are coming through here and destroying everything in their path to widen the road. We are not only losing our lands, but also medicinal plants and drainage areas,” he reported.

In his community, “each family has three, five or 10 hectares to live on,” a small area of land considering that only a few decades ago this entire area was made up by Mapuche communal lands.

Through Decree Law 2568, passed in 1979, the Pinochet dictatorship divided up these communal lands into individual properties. Many of these were acquired by private parties, largely companies in the tree plantation, energy and fish farming sectors.

Local authorities claim that the Coastal Highway will enhance interconnection along the coast and thus promote the economic development of the region.

“This is a project that has taken a long time to complete, and we would like to be able to overcome the obstacles it has faced,” Andrés Molina, the governor of Araucanía, told Tierramérica.

“We support this project for various reasons. But, in practice, we have not been able to conduct an assessment of the social and economic profitability of these roads,” he admitted.

Although the quality of roads in the area has improved, “now we are working towards a social profitability study in order to be able to move forward with paving. We won’t be able to do anything until we have internally conducted a social assessment that will make it possible for us to invest as a country,” he said.

Molina’s goal is to “move forward with this as soon as possible and hopefully get the project started by the end of 2013.”

These deadlines frighten Luis Aillapán, who is the “gempin” of the community of Konin Budi – the guardian of knowledge on the culture, religion and philosophy of the Mapuche people. For him, the construction of the highway represents “great suffering”.

“We are used to our natural surroundings, to walking a short distance to the sea and fishing for the resources we need,” he told Tierramérica.

Aillapán grows crops and raises a few animals. He and his family feed themselves with what the land and sea provide for them. From his house he looks out to the Pacific Ocean on one side, green fields on the other, and a few hills that form part of the coastal mountain range.

But on the edge of his lands, the military workers and their machinery are clearing the way for the highway.

“Some of our own people have turned against us, and during the night we hear gunshots that are meant to intimidate us,” he charged.

His wife, Catalina Marileo, and their four-year-old son were charged in 2002 with assaulting civil servants from the Ministry of Public Works who were carrying out feasibility studies for the project.

Later, Aillapán, his wife, his sister-in-law Margarita Marileo and Marileo’s husband were charged and tried under the country’s anti-terrorism law, which was passed during the dictatorship and is now used almost exclusively to penalize Mapuche resistance.

The municipality of Saavedra, covering some 401 sq km between the Pacific Ocean and Lake Budi, a saltwater lake, had a population of 13,481 in 2009. More than 80 percent of its inhabitants live in rural areas, and 73.2 percent identify themselves as Mapuche.

There are 3,295 people living in the Budi Indigenous Development Area, who make up 24.4 percent of the municipality’s total population. And on Huapi Island, located in Lake Budi, there are 43 communities inhabited by some 5,000 Mapuches.

A study by the Universidad de la Frontera commissioned by the government in 2001 reported that 45.2 percent of the population was in favor of the Coastal Highway while 52.9 percent opposed it.

The situation changed when the former mayor of Puerto Saavedra, Ricardo Tripainao, traveled around the communities to explain the benefits of the highway, such as the higher prices they could charge for their products and the millions that the government would pay them for expropriating their lands.

Tierramérica observed that today, many people are angered over the government’s failure to comply with these payments and by the increase in the width of the land to be expropriated, which was initially 13 meters, but in many parts has reached 20 or even 25 meters.

But among the inhabitants of the municipal capital of Puerto Saavedra, an urban area with numerous tourist attractions, feelings towards the highway are favorable, since it will attract more visitors and reduce the town’s isolation.

The Military Work Corps camp in charge of the highway construction is moving to one of the shores of Lake Budi, a cultural heritage protected area.

Governor Molina says that there are “plans” for consultation with the indigenous communities, as established by International Labour Organization Convention 169, since “the idea is for the project to be carried out on a participatory basis.”

Convention 169, which was adopted in 1989 and entered into force in Chile in 2009, establishes guarantees for indigenous communities, and in particular the right to be consulted on activities or projects in their territories.

However, said Molina, “We are not going to carry out consultations until the project has been fully approved.”

* This story was originally published by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme, United Nations Environment Programme and the World Bank.

Santo Antônio hydropower station under construction, October 2010. Credit:Mario Osava/IPS

As governments struggle to find ways out of the persistent global financial crisis, Brazil’s development model offers an alternative path to recovery and growth, according to some economists and politicians.

“Brazil provides hope for African as well as European nations because Brazil has shown that you can succeed at globalisation by opting resolutely not only for growth but also for a better distribution of wealth,” Togolese economist Kako Nubukpo told IPS.

The former head of economic analysis and research for the West African Economic and Monetary Union (WAEMU) was in Paris to participate in a two-day ‘Forum for Social Progress’ that took place here this week, headed by Brazil’s ex-president Luiz Inácio Lula da Silva, current president Dilma Rousseff and French president François Hollande.

Focusing on how to ‘choose growth’ and ‘exit the crisis’, the forum was also a space for progressive experts to call for a new kind of global governance that “puts people first” and ensures environmental sustainability.

“Brazil has shown us that the challenge is to take people’s aspirations into account as much as possible, because with enlightened leadership we can win in the development process,” Nubukpo said.

“In Africa today we have the impression that our leaders are more accountable to the International Monetary Fund and the World Bank than to their own people.”

Nubukpo and other participants praised the “usefulness” of the forum, but Lula himself said he was tired of meetings held simply to discuss the crisis. In a passionate speech, he called on governments to find the courage to adopt “obvious” solutions, especially regarding the poor.

“If a ruler cannot offer democracy, dignity and hope to his people, what do we need governments for?” he asked.

Describing how he embarked on plans to make Brazil a respected player on the world stage, Lula described policies that have been both lauded and criticised. His administration notably instituted the ‘bolsa familia’ (family grant) programme, a national system of cash transfers for poor families to assist them in keeping their children in school.

The government also set up a ‘pro-uni’ (pro-university) programme in which low-income students receive scholarships for university, with the aim of providing the country with more skilled workers.

Some critics say that the measures have had unintended consequences, such as families sending children to school just to get the funds, but Lula defended the policies.

“I had the conviction that it was necessary to do something different than what had been done (before) in Brazil,” he said at the forum, which was co-hosted by the French Jean-Jaurès Foundation and by the Instituto Lula, an organisation Lula founded after leaving the presidency in 2011.

“We decided to pay the bolsa familia through bank branches, (using) magnetic cards that were given to the women in each household (not to the men, who could go out and spend the money on beer) and…this was a revolution for building bank accounts for low-income brackets,” he added.

One of Instituto Lula’s goals is to “bring Brazil and Africa closer together” and to “improve Brazil’s integration with Latin America” – two objectives that the former president said would change the global status quo.

“It’s necessary to build new paradigms so that we can discuss trade issues and not be locked in the traditional gaze of looking to the United States or the European Union to solve our problems for us,” he said.

According to Lula, if industrialised countries did more for Africa, they would also reap benefits in the future. “Why doesn’t the developed world, which is facing a consumption problem, extend long-term funding to African countries at lower interest rates so that Africa can develop their own industries and agriculture?” he asked.

He said that the ocean between Latin America and Africa should be seen as a conduit for, rather than a barrier to, trade.

African anti-poverty activist Bruno Ondo Mintsa, president of the Association Printemps du Quart-Monde, told IPS that the “Brazilian miracle” was a source of motivation for Africans.

For Africa, which has immense natural wealth but continues to be plagued by abject poverty, “Brazil shows that the problem is one of democracy, of governance and wealth distribution,” Mintsa said. “It’s scandalous that such a rich continent as Africa should have people living in such poverty.”

For some European socialists, Brazil exemplifies a middle way between what French president Hollande called the “outright rejection of globalisation and the gullible acceptance of even its (most) extreme consequences”.

“Although we’re looking for growth, we know all too well that the kind of growth we had before the crisis is no longer sustainable,” Hollande told participants at the forum.

The solution will not be found by looking back, he added. Instead, “We have to create a new era.”

According to Hollande, the priorities have to be growth, jobs for young people, energy transition and fighting inequality. He is all too familiar with the perils of ignoring these key areas – French unemployment rose to 10.3 percent in the third quarter of this year, the highest in 13 years, and youth unemployment is close to 25 percent.

On Tuesday, just as the Forum for Social Progress began, the French government’s own National Conference for the Fight Against Poverty drew to a close with the announcement of an ambitious two-billion-euro plan for moving forward.

The roadmap includes increasing income support, extending free national healthcare, creating emergency housing and providing an allocation of funds for unemployed young people aged 18 to 25. Some opposition politicians criticised the plan as a handout, but activists said it was time real political attention was given to the poor.

“France can learn a lot from Brazil,” retired French medical doctor and professor Alain Goguel told IPS. “We prop up the banks with trillions, but re-launching the economy by helping the poor is an original idea. It should be imitated if it works.”

(END)

Cambambe dam and reservoir on the Kwanza river, to be raised another 30 metres. Credit: Mario Osava/IPS

The Kwanza river in the heart of Angola will be a symbol of Brazilian partnership in African development when power stations along the country’s main source of water are fully operational.

Nine hydroelectric plants and water treatment stations will endeavour to supply the most urgent needs of the metropolitan area of Luanda, and to extend the electricity supply at least to the centre-north of Angola. The process will take more than a decade.

Supplying clean water to 90 percent of the residents of Luanda will take until 2025, according to the master plan. The difficulty is to keep up with the growth of the population in the capital, which is projected to reach 13 million people by then, around twice the present number.

The Cambambe hydropower plant benefits from the Kwanza river’s location in the centre and north of the country, but it also reflects Angola’s misfortunes. Only now, five decades after the first phase was completed, is the complex about to become fully operational. The delay was mainly due to the civil war which wracked the country from independence from Portugal in 1975 until 2002.

An expansion of the hydroelectric station will increase the power supply five-fold, by raising the height of the dam by 30 metres (to 132 metres), as had already been planned in the time of the Portuguese colonial authorities, said Fabricio Andrade, the local manager of the Brazilian company Odebrecht which heads the consortium in charge of the works.

The greater height of water in the reservoir will increase the capacity of the four old turbines, from 45 to 65 megawatts (MW) each. Barring unforeseen circumstances, the expanded station will be ready in 2015, to generate 960 MW and mitigate power outages in Luanda.

The legacy of the war continued to have an effect on the plant during the expansion phase. Construction of the spillway needed was only able to commence after an area of landmines was cleared, which took six months, Andrade said.

Odebrecht was contracted by the Angolan state National Electricity Company (ENE) to carry out three tasks at Cambambe.

The first, which began in 2009, is to refurbish the four original turbines which had deteriorated to the point that they could not generate even half their nominal capacity of 45 MW. A final turbine remains to be refitted with electronic control panels, which will provide “more safety with fewer workers,” Andrade said.

The other two tasks are to raise the height of the dam and spillway, and build a new generator complex, which is to be ready by 2015.

The construction site employs 2,100 people, 89 percent of whom are Angolan, mainly from the surrounding area or the nearby city of Dondo.

There are also 238 workers of a wide range of nationalities, who live together on-site. They come from 15 countries, from Latin America to Eastern Europe, Andrade said.

The foreign employees work for Odebrecht or its partner companies in the project: the Brazilian firm Engevix, France’s Alstom and Germany’s Voith Hydro.

Rufino Álvarez, from Peru, is a typically mobile worker who goes from one mega works project to another. He started out in his own country in 1981, working for other Brazilian transnational corporations, before he joined Odebrecht 25 years ago.

The company sent him to several countries, and he arrived in Angola in 2009 along with his boss, Brazilian equipment manager Roberval Fonseca. They worked on various infrastructure projects in Luanda. Before coming to Cambambe this year, he went home to Peru for a long visit and then to Colombia.

“My work is two-fold: I have one job at the work site and another teaching Angolans, so that this country can continue to grow,” said Álvarez, adding that he has not brought his family over because his children “are all grown up.”

Fonseca, for his part, is keen on employing women and training them to work on soldering jobs and electrical apparatus and motors – trades that were once considered exclusively men’s work. “They are quicker learners, they do everything more carefully and with greater discipline, and are more efficient,” he said, adding that he was happy with the six women workers he has hired so far.

The structures built at Cambambe are small compared with other power plants with a similar capacity. That is because its machine room is underground, installed in a tunnel that fits a large truck. The new second generator will also be underground, with water flowing under the hill to turn the turbines.

And the reservoir itself is small in size. In its middle reaches, the Kwanza river has a steep descent of 940 metres over just 200 kilometres, and its riverbed forms deep valleys and curved gorges, all of which are favourable to the generation of hydropower.

This means the expansion of the Cambambe complex will also have minimal environmental impact. The reservoir will only be enlarged by six square kilometres, said Vladimir Russo, the head of Holísticos, the firm that carried out the environmental impact assessment for the project.

No population will be affected by the dam, because people were never allowed to settle around the hydroelectric station, which was protected during the war, said Russo, who was a management director for the Environment Ministry and a founder of Juventude Ecológica Angolana, an environmental NGO created by young Angolan activists.

Laúca, the biggest power station to be built on the Kwanza river, will have a reservoir size of only 16.6 square kilometres, according to a feasibility study by Brazilian consultancy Intertechne. That is next to nothing for a capacity of 2,067 MW.

Odebrecht is also the Brazilian partner in the Laúca dam on the Kwanza, a river that has given its name to Angola’s currency since 1977, in recognition of the symbolic value of the river.

The Brazilian corporation has also built the Capanda dam, 140 kilometres upstream. The project was contracted in 1984 but only completed in 2007, due to delays caused by the civil war.

This year the company was in charge of diverting the Kwanza river in preparation for the construction of the Laúca hydroelectric complex – situated between Capanda and Cambambe – which has still not been put out to tender.

Odebrecht is also responsible for the public company Águas de Luanda’s project to draw water from the Kwanza for treatment and distribution in the suburbs surrounding the capital.

Near the Capanda hydropower station, Odebrecht has undertaken the development of an agroindustrial hub where it plans to produce sugar, ethanol and electricity from sugarcane, maize and other crops. The project will be based on the large Pundo Andongo estate and will also promote family farming.

This is only part of the Brazilian company’s business activities and projects in Angola, where it is the largest private sector employer, with a total of nearly 20,000 workers.

The Rofue community centre, covered with slogans from the Mapuche struggle for land and rights. Credit: Marianela Jarroud/IPS

“This is a project that reflects the occupation…of Mapuche territory,” said Iván Reyes, an indigenous leader staunchly opposed to the construction of an international airport in the southern Chilean region of Araucanía.

Reyes, an agricultural technician, said the construction project was approved thanks to an environmental impact study “based on lies” that was carried out by Arcadis Geotécnica, the Chilean subsidiary of a Netherlands-based international consulting and engineering company.

The study “says there will be no impact on communities in the area. But in a later analysis, we detected that the base line and measurements had been manipulated,” he said.

The new airport, whose construction was actually approved in 2005, is now one of the most high-profile projects of the right-wing government of Sebastián Piñera. It is being built in Quepe, 20 km from the city of Temuco and nearly 700 km south of Santiago.

The La Araucanía New International Airport, which will replace the Maquehue Airport, will have a 2,440-metre runway and a 5,000-square-metre passenger terminal.

The Chilean company Belfi, which was granted the concession for 20 years, is building the new airport.

“This is an emblematic project for this region,” the governor of La Araucanía, Andrés Molina, told IPS.

“Our Maquehue Airport is one of the worst-situated in the country, with a runway that is hard to land on, and with a difficult approach, because of the fog over the hills of Temuco,” he said.

Temuco, which is halfway between the Pacific Ocean and the Andes foothills, is in the middle of prairies, pasture and farmland, and forests.

The new airport will be built in this agricultural and forested area, at a cost of more than 120 million dollars. “Tourism in this area is growing by 30 percent a year, which offers interesting prospects,” Molina said.

He proudly noted that 700 million dollars were invested in projects in the region in 2012, up from 79 million dollars in 2009.

Although a few Mapuche communities support the new airport, which they see as a step forward for the region in terms of economic and cultural development, many others are staunchly opposed, arguing that it will undermine biodiversity and the environment, and will destroy their ancestral territory.

The Mapuche, Chile’s largest indigenous group, number nearly one million in this country of over 16 million people, and the struggle for their ancestral land in the south of the country has frequently pitted them against large landholders, logging companies and other private interests.

“This is the straw that broke the camel’s back, in terms of economic interference in Mapuche territory,” Fidel Tranamil, a traditional “machi” or healer, told IPS. “We already have the logging and hydroelectric companies…We are culturally invaded by politics and religion, and the life of the Mapuche people would be put at further risk by the new airport.”

At the age of 23, Tranamil is already a Mapuche leader, in charge of the religious life of his community, Rofue. He is tenaciously opposed to the construction of the airport, which he describes as “a gateway to invade Mapuche territory.”

Tranamil, or “machi Fidel” as he is known by the local community, is one of the most active indigenous leaders in the area. He has been arrested several times, and his home is frequently searched by the police. Since 2005, his mother has been living with seven pellets in her right knee, after a harsh police crackdown on a protest.

Many of Tranamil’s “peñis” (brothers and sisters) have been prosecuted under Chile’s draconian counter-terrorism law, inherited from the 1973-1990 military dictatorship of General Augusto Pinochet.

The law, which has been widely criticised by international bodies such as the Inter-American Commission on Human Rights, has been used to squelch activism by Mapuche people demanding the return of their ancestral land.

The house where Tranamil and his mother live is warm and quiet. They raise pigs and chickens, and have a small vegetable garden.

“But soon, airliners will be landing every minute. That will not only violate our spiritual life but also our culture and harmony,” he said.

He also said that to build the airport, “between 200 and 300 hectares of native (old-growth) forest will be cut down, and lost forever. It would take 400 years for the trees to grow back to their current height.”

But Molina argued that opposition to large projects like the airport is the work of “leaders who have emerged under the wing of leftist parties, and who don’t care about their communities, but are motivated by ideological concerns.”

Meanwhile, construction of the airport is moving ahead, despite attempts by Mapuche activists to block it, including cases brought in court, which were dismissed.

In September 2011, Tranamil himself turned to the United Nations Human Rights Council to denounce that the airport was being built “without consultation with the concerned communities, in contravention of” International Labour Organisation Convention 169 concerning indigenous and tribal peoples.

But Molina maintained that the communities were consulted. He said that a working group was set up and that the government had been providing support “in the areas of productive development, infrastructure and housing.”

Despite his opposition to the project, Reyes said “the world is not going to end because an airport is built.

“Do you hear the noise from the highway? Later we’ll have the noise of the airplanes, just like we have the high-voltage power lines, and the railroad,” he said, with a resigned tone.

“The important thing is that the airport has reawakened the dormant Mapuche activism and mobilised our communities once again,” he said. “In the wider context, planes flying 100 or 50 metres over our heads are a minor problem.”

Signs in Chinese reflect China’s heavy participation in the construction of the new Angola. Credit: Mario Osava/IPS

“In Luanda there are no matches.” This was the first line of a report written by Nobel Literature laureate Gabriel García Márquez in the Angolan capital in 1977.

Soap, milk, salt and aspirin were other products that were hard to come by in a city that, he wrote, “surprised” visitors with “its modern, shining beauty,” although it was actually “a dazzling empty shell.”

The emphasis that the Colombian writer put on the shortages suffered by the war-torn country injured the pride of the Angolans who read his report. But he effectively described the chaos inherited from Portuguese colonialism and the war of independence, a year and a half after Angola became independent.

Today, 35 years later, it is the excesses and glaring contrasts that shock the visitor to this city in southwestern Africa. Shiny new cars on brand-new roads and highways lined by thousands of still-empty or half-built office buildings, apartment blocks and residential towers stand in sharp contrast to the sprawling slums around the city.

Signs on construction sites written in Chinese clearly reflect the Asian giant’s high level of participation in the construction of today’s new Angola.

The most ambitious project carried out by companies from China is the Nova Cidade de Kilamba (Kilamba New City), a huge development designed to house half a million people, 20 km south of downtown Luanda.

When it is completed, the new neighbourhood will have more than 80,000 apartments built for large families – the norm in Angola – in buildings five to 13 storeys high. The development is also to be fitted out with dozens of schools, child care centres, health clinics and shops.

Nearly one-quarter of the buildings have been completed. But almost all of them are empty, even though more than 3,000 apartments were already available when the development was inaugurated in July 2011.

Also involved in building the new city are Brazilian firms, especially construction giant Odebrecht, which is in charge of key projects like electricity and water grids and the construction of roads.

The foreign presence in the massive new developments “is not something to be admired, because it shows that there are no national companies with the capacity to build them,” said one of Angola’s most prominent writers, Artur Pestana, better known as Pepetela, who is also a professor of sociology.

“The Chinese build faster, they work round-the-clock shifts, and they offer almost interest-free long-term loans,” he said. But they employ few Angolan workers and “there are many complaints about the quality of their construction work,” he added.

Meanwhile, Brazilian companies “apparently learned their lesson from a few initial fiascos which made them the butt of national jokes, and they now stand out for the quality of their work,” which enables them to compete with the Chinese, said the author, who has published many historical novels that are critical of the government of José Eduardo dos Santos, president since 1979.

Odebrecht, a Brazilian consortium that operates in 35 countries, became a leader in infrastructure works in Angola after 1984, when it signed a contract for the construction of the Capanda hydroelectric dam on the Kwanza river, 360 km from the capital, built to supply Luanda.

The civil war, which broke out after independence, led to lengthy delays in construction of the dam, which did not begin to generate electricity until 2004.

The end of the armed conflict in 2002 unleashed a wave of investment in the reconstruction and modernisation of Angola, fuelled by the country’s oil revenue and Chinese credit.

Besides the construction of other large hydropower dams, Odebrecht is involved in the production of sugar, ethanol and electricity from sugarcane, and is expanding the waterworks and sanitation in Luanda, while building condominiums, roads and highways.

It is also dedicated to diamond mining, and controls the chain of 29 Nosso Super supermarkets.

It was the first non-oil company from Brazil to begin to operate in Angola with a “long-term outlook,” said Victor Fontes, director general of the Angolan company Elektra, which specialises in power and water grids. He said this had the positive effect of attracting other firms also interested in the long haul, instead of just short-term opportunities.

The director of institutional relations at Odebrecht Angola, Alexandre Assaf, told IPS that the consortium is committed to “continuity” in Angola, above and beyond the effects of wars or the global economic crisis.

Five years ago, only nine percent of the “strategic posts” in the company were held by Angolans – a proportion that has risen to 41 percent, he noted, to illustrate the company’s commitment to local development.

In that group, Assaf included not only directors and managers, but also young university graduates who have been hired by the company to be trained as future leaders.

But Elektra’s Fontes argued that Odebrecht’s “near-monopoly position in some sectors hinders local initiative” by standing in the way of the development of small and medium-sized local firms that could work on smaller-scale projects, such as the upgrading of streets and neighbourhoods, that do not require the involvement of transnational corporations.

In addition, the country pays “more than what is reasonable for certain infrastructure works and services” carried out by the Brazilian company, which are of high quality but are also costly, said Fontes.

He acknowledged, however, that Odebrecht “has brought good management and performance strategies, and the best in the construction industry in the area of workplace safety,” for example.

The challenge faced by foreign and Angolan companies is addressing the serious problems that have accumulated in Luanda, where the population has grown exponentially.

In 1970, Luanda was home to just over 475,000 people, according to the last census carried out by the Portuguese colonial government. Today, the population of the city is over seven million.

But the condominiums and residential towers mushrooming around the city have not curbed the housing shortage, because those in need of homes cannot afford to purchase or rent the new units, which were built for a middle class that is still small. And despite the large number of empty housing units, the prices have not gone down.

A lack of piped water and electricity services are also common complaints in the midst of the construction fever.

The solution is on its way, according to government plans, whose strategic projects are being carried out by Odebrecht. But it will take years to silence the back-up generators heard all around the city during the frequent blackouts, and to ensure a steady supply of piped water.

But production of aluminium is helping to drive industrial development in the Northeast, Brazil’s poorest region, Adjarma Azevedo, the president of the Brazilian Aluminium Association (ABAL), which represents the industry, told IPS.

Because energy is the biggest input, growth of the industry is fuelling the construction of large hydropower complexes in this country, which are touted as a renewable energy source but opposed by environmental and indigenous rights activists.

Aluminium is also the product with the highest recycling rate in Brazil, said Azevedo.

Aluminium production fuels the construction of hydroelectric dams in Brazil, like the Santo Antônio hydropower station, seen here under construction in October 2010. Credit: Mario Osava/IPS

The growing use of aluminium facilitates faster construction and saves on transport fuel because aluminium weighs less than other products.

Consumption of aluminium in Brazil is growing faster than the economy in general, and it is driving demand for low-cost energy, in order to meet domestic needs with nationally produced aluminium.

ABAL estimates that the domestic market will grow at an average of 7.2 percent a year up to 2025, despite the fact that aluminium is a product sensitive to swings in trade.

In 2009, the use of aluminium fell 10 percent due to the global economic crisis. But demand rallied the following year, when it climbed 31 percent. And it continued to grow, by 8.2 percent, in 2011. But it has stagnated once again this year.

The fast growth of activities and products that use abundant aluminium, such as the construction, packaging and automotive industries, explain the optimistic projections, Azevedo said.

The rise in wages and incomes among working- and middle-class families in Brazil in the last few years has led to a boom in housing renovation and improvements, which has increased demand for construction materials.

Demand for aluminium has also been driven up by the works required for holding the 2014 world football cup in 12 Brazilian cities, and the 2016 Olympic Games in Rio de Janeiro.

At the same time, the government has adopted rules establishing that new cars must reduce emissions – an environmental goal that will require new technologies, as well as lighter-weight elements made of aluminium, the president of ABAL said.

But domestic production of the metal is unlikely to keep up with demand if the cost of electricity in Brazil remains one of the highest in the world: it currently represents more than one-third of the cost of production of primary aluminium.

In September, the centre-left government of Dilma Rousseff proposed measures to reduce the cost of electricity, including tax cuts and an extension of concessions for the generation, transmission and distribution of electric power, which would expire between 2015 and 2017.

The main objective is to bolster the competitiveness of industry in general, to prevent the premature and irreversible shrinking of the manufacturing sector in the face of the sharp increase in production costs in recent years.

According to ABAL, however, the measures fall short and are vulnerable, because they depend on approval by Congress, where the government bill has already been bombarded with 431 proposals for amendments.

“With the megawatt-hour at 35 dollars, it is possible to maintain aluminium production at the current levels. But if the price dropped, it would stimulate new investments to expand production,” Azevedo said.

The average global cost of electricity stands at around 40 dollars per megawatt-hour. But the average goes down to 27 dollars if China – where electricity is subsidised – is excluded from the estimate. Businesses in Brazil complain that they have paid up to 60 dollars per megawatt-hour.

The aluminium industry is seeking to cut costs by generating its own electricity. To do that, the industry has become the main partner, for example, in the Estreito hydroelectric dam on the Tocantins River in central Brazil, with a potential of 1,087 MW.

In Tocantins, some 500 km downstream, the enormous Tucuruí dam was built 28 years earlier, with a capacity to generate 8,370 MW, much of which is used by aluminium mining and industrial complexes.

Activists accuse the industry of promoting the construction of the Tucuruí dam to obtain energy at subsidised prices, with no regard to its negative social and environmental impacts. For example, the reservoir flooded nearly 3,000 square kilometres of land, mainly forested, and displaced tens of thousands of people who lived in the area.

Azevedo, who previously presided over the Brazilian branch of the U.S.-based ALCOA, one of the companies that supposedly benefited from the dam, sees things in a different light.

Brazil was suffering from the effects of the sharp rise in oil prices after 1973, and needed abundant energy to carry out its ambitious economic development plan and replace expensive imported oil.

Tucuruí offered a solution, Azevedo said, and Japanese investors and transnational companies likeAlcoa were invited to develop large-scale projects to mine bauxite and convert it into alumina and aluminium.

The companies thus served as “anchors that fixed energy in the region,” where the small scale of the economy and the sparse local population did not generate enough demand for such a large hydroelectric dam, he said.

But Azevedo added that “it wasn’t a good location,” because it was far from the main consumer markets, in an area without roads, infrastructure, skilled workers, or suppliers of services.

Nevertheless, the companies accepted the challenge, making Tucuruí feasible, and training suppliers and local workers, he added.

To offset the costs, the government offered a 10 percent discount for 20 years in the contracts to supply extra-high voltage electricity, after the first 230 kilowatts. But, he insisted, it was not a subsidy.

Alcoa also partnered with two other transnationals, BHP Billiton and Rio Tinto Alcan, to build the Alumar industrial complex and produce alumina and primary aluminium in São Luis, capital of the northeastern state of Maranhão, 980 km east of Tucuruí.

It would have been better to set up shop closer by, thus avoiding long-distance power transmission as well as the transportation of raw materials over nearly 2,000 km, said João Meirelles, director of the non-governmental Peabirú Institute, based in Belém, the capital of the northern state of Pará.

Aluminium is a logical product to exploit in the eastern Amazon jungle, especially in Pará, where enormous deposits of bauxite are concentrated along with rivers with hydropower potential, Meirelles told IPS, differing from his fellow environmentalists by defending this development option.

Aluminium is “a material of the future” and “the most reusable product,” he argued.

But, Meirelles said, “local production must be verticalised,” and final products should be manufactured, instead of merely exporting primary aluminium to the more-developed south of Brazil and to other countries, as is the case today. He also called for the promotion of “integrated development,” which generates more jobs for skilled workers and “local human capacity.”

Meirelles acknowledged the environmental and social damage caused by industrial undertakings that exploit natural resources in the Amazon region. But he believes it is possible to mitigate the damage, as Alcoa is attempting to do at its new bauxite mine in Juruti, in the state of Pará.

And he put the damage caused in perspective, saying cattle ranching is the main culprit to be fought to curb deforestation.

He also advocated new forms of negotiating compensation for the impacts of major works like hydroelectric dams, mines and roads.

It is necessary to fight “for strategic goals” such as an end to deforestation in the rainforest, instead of merely limiting demands to solutions for local problems, like getting hospitals built or sanitation systems expanded in towns and cities affected by the projects, which are questions that should be addressed by the government, he said.