Inter Press Service » Integration and Development Brazilian-style http://www.ipsnews.net Turning the World Downside Up Mon, 03 Aug 2015 12:51:11 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.6 Belo Monte Dam Marks a Before and After for Energy Projects in Brazilhttp://www.ipsnews.net/2015/07/belo-monte-dam-marks-a-before-and-after-for-energy-projects-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=belo-monte-dam-marks-a-before-and-after-for-energy-projects-in-brazil http://www.ipsnews.net/2015/07/belo-monte-dam-marks-a-before-and-after-for-energy-projects-in-brazil/#comments Fri, 31 Jul 2015 20:20:19 +0000 Mario Osava http://www.ipsnews.net/?p=141821 A street in the Jatobá neighbourhood, the first of the five settlements built by the company Norte Energía to resettle families displaced from the city of Altamira by the Belo Monte hydroelectric dam in the northern state of Pará in Brazil’s Amazon rainforest. Credit: Mario Osava/IPS

A street in the Jatobá neighbourhood, the first of the five settlements built by the company Norte Energía to resettle families displaced from the city of Altamira by the Belo Monte hydroelectric dam in the northern state of Pará in Brazil’s Amazon rainforest. Credit: Mario Osava/IPS

By Mario Osava
ALTAMIRA, Brazil, Jul 31 2015 (IPS)

Paulo de Oliveira drives a taxi in the northern Brazilian city of Altamira, but only when he is out of work in what he considers his true profession: operator of heavy vehicles like trucks, mixers or tractor loaders.

For the past few months he has been driving a friend’s taxi at night, while waiting for a job on the construction site of the Belo Monte dam – a giant hydroelectric plant on the Xingú river in the Amazon rainforest which has given rise to sharply divided opinions in Brazil.

Oliveira, whose small stature contrasts with the enormous vehicles he drives, has lived in many different parts of the Amazon jungle. “I started in the Air Force, a civilian among military personnel, building airports, barracks and roads in Itaituba, Jacareacanga, Oriximiná, Humaitá and other municipalities,” he told IPS.

His sister’s death in a traffic accident brought him back to Altamira, where he became a garimpeiro or informal miner. “I was buried once in a tunnel 10 metres below ground,” he said.

He survived this and other risks and earned a lot of money mining gold and ferrying miners – who paid him a fortune – in a taxi back and forth from the city to the illegal mine. “But I spent it all on women,” he confessed.

He then moved to Manaus, the Amazon region’s capital of two million people, to work on the construction of the monumental bridge over the Negro river. After that he headed to Porto Velho, near the border with Bolivia. But he had a feeling that something would go wrong at the Jirau hydropower construction site and quit after a few months.

Just a few days later, in March 2011, the workers rioted, setting fire to 60 buses and almost all of the lodgings for 16,000 employees, and bringing to a halt construction on the Jirau dam and another nearby large hydropower plant, Santo Antônio, both of which are on the Madeira river.

After bouncing between jobs on different construction sites, at the age of 50 Oliveira found himself back in Altamira, a city of 140,000 people located 55 km from Belo Monte, where he already worked in 2013 and is trying to get a job again. But things are difficult, because the amount of work there is in decline, as construction of the cement structures is winding up.

And it is possible that workers like him, specialised in heavy construction, no longer have a future in building large hydroelectric dams. The controversy triggered by Belo Monte will make it hard for the country to carry out similar projects after this.

A bridge being built in a neighbourhood of the northern Amazon city of Altamira, because a small local river floods during rainy season. Works like these form part of the basic environmental plan designed to mitigate and compensate the impacts of the giant Belo Monte hydroelectric dam, 55 km away. Credit: Mario Osava/IPS

A bridge being built in a neighbourhood of the northern Amazon city of Altamira, because a small local river floods during rainy season. Works like these form part of the basic environmental plan designed to mitigate and compensate the impacts of the giant Belo Monte hydroelectric dam, 55 km away. Credit: Mario Osava/IPS

The final assessment of the Belo Monte experience will determine the fate of the government’s plans to harness the energy of the Amazon rivers, the only ones that still have a strong enough flow to offer large-scale hydropower potential, which has been exhausted on rivers elsewhere in Brazil.

A study by the non-governmental Socioenvironmental Institute states that if the government’s construction plans for the 2005-2030 period are implemented, the hydropower dams in the Amazon will account for 67.5 percent of the new power generation in this country of 203 million people.

The next project of this magnitude, the São Luiz dam on the Tapajós river to the west of the Xingú river, is facing an apparently insurmountable obstacle: it would flood indigenous territory, which is protected by the constitution.

Belo Monte, whose original plan was modified to avoid flooding indigenous land, has drawn fierce criticism for affecting the way of life of native and riverbank communities. The public prosecutor’s office accuses the company that is building the dam, Norte Energía, of ethnocide and of failing to live up to requirements regarding indigenous communities, who in protest occupied and damaged some of the dam’s installations on several occasions.

São Luiz, designed to generate 8,040 MW, and other hydropower dams planned on the Tapajós river, are facing potentially more effective resistance, led by a large indigenous community that lives in the river basin – the Munduruku, who number around 12,000.

Just over 6,000 indigenous people belonging to nine different ethnic groups live in the Belo Monte area of influence, with nearly half of them living in towns and cities, Francisco Brasil de Moraes, in charge of the middle stretch of the Xingú river in Brazil’s national indigenous affairs agency, FUNAI, told IPS.

Francisco Assis Cardoso (dark tank top, centre), in his new supermarket. The young entrepreneur opened the grocery store and a pharmacy in Jatobá, the new neighbourhood in the city of Altamira where his entire family was relocated due to the construction of the Belo Monte dam in the Brazilian Amazon. Credit: Mario Osava/IPS

Francisco Assis Cardoso (dark tank top, centre), in his new supermarket. The young entrepreneur opened the grocery store and a pharmacy in Jatobá, the new neighbourhood in the city of Altamira where his entire family was relocated due to the construction of the Belo Monte dam in the Brazilian Amazon. Credit: Mario Osava/IPS

Another battle, for local development, has had less international repercussions than the indigenous question. But it could also be decisive when it comes to overcoming resistance to future hydroelectric dams in the Amazon.

Norte Energía, a consortium of 10 public and private companies and investment funds, has channeled some 1.1 billion dollars into activities aimed at mitigating and compensating for social and environmental impacts in 11 municipalities surrounding the megaproject.

This sum, unprecedented in a project of this kind, is equivalent to 12 percent of the total investment.

The company resettled 4,100 families displaced from their homes by the construction project and reservoir, and indemnified thousands more. It rebuilt part of Altamira and the town of Vitoria de Xingú, including basic sanitation works, and built or remodeled six hospitals, 30 health centres and 270 classrooms.

Nevertheless, complaints have rained down from all sides.

Norte Energía installed modern water and sewage treatment plants, and sewers and water networks in Altamira. But there was a 10-month delay before an agreement was signed in June to connect the water and sewer networks to the housing units, which the local government will administer and the company will finance.

And it will take even longer for the city council to create a municipal sanitation company and for the service to begin to operate.

“My family was promised three houses, because we have two married sons,” said José de Ribamar do Nascimento, 62, resettled in the neighbourhood of Jatobá, on the north side of Altamira, the first one built for families relocated from areas to be flooded by the reservoir. “But then they took away our right to two of them, maybe because I was unable to protest, since I’m ill.”

A water treatment station built in Altamira by Norte Energía, the consortium building the Belo Monte dam in the Brazilian Amazon. It is not yet operating, because the sewage network installed in the city is not connected to the buildings. Urban sanitation is one part of the development works which the company was required to provide. Credit: Mario Osava/IPS

A water treatment station built in Altamira by Norte Energía, the consortium building the Belo Monte dam in the Brazilian Amazon. It is not yet operating, because the sewage network installed in the city is not connected to the buildings. Urban sanitation is one part of the development works which the company was required to provide. Credit: Mario Osava/IPS

Each 63-square-metre housing unit has three bedrooms, a living room, a kitchen and a bathroom, and is built on 300 square metres of land in a neat new housing development with paved streets.

Nascimento, who has prostate cancer, has a hard time walking and survives on a small pension. But he is confident that the future will be more promising for the local population, thanks to the jobs generated by the hydropower plant.

“We live much better here,” said his wife, 61-year-old Anerita Trindade. “Our old house would get cut off by the water when it rained; we had to wade through the water, on little walkways made of rotten boards. Sometimes there’s no water or transportation to get downtown, but now we’re on dry land.”

The move especially benefited Francisco Assis Cardoso, who at the age of 32 has become the leading shopkeeper in Jatobá. His family of four siblings was assigned five houses in a row. That enabled him to build a supermarket and a pharmacy together with his mother. “I worked in a pharmacy, it’s what I know how to do,” he said.

But Norte Energía has been criticised for delays in providing the promised schools, buses and health posts in the five new neighbourhoods, and for what many say was an unfair distribution of new housing.

A Plan for Sustainable Regional Development of the Xingú aims to go beyond compensation for relocation and other impacts of the dams. Together, society and governments choose projects that are financed with contributions from Norte Energía.

The Territorial Development Agenda was drafted on the basis of studies and consultations with a team hired by the government’s National Bank for Economic and Social Development, which financed 80 percent of the construction of the Belo Monte dam.

A third challenge for Belo Monte is to effectively combat criticism from voices within the power industry itself, who are opposed to run-of-the-river hydroelectric plants, where water flows in and out quickly, the reservoirs are small, and during the dry season the power generation is low.

Belo Monte will generate on average only 40 percent of its 11,233 MW of installed capacity. To avoid flooding indigenous lands, it reduced the size of the reservoir to 478 square kilometres – 39 percent of what was envisaged in the original plan drawn up in the 1980s.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Central America Fails to Take Advantage of Energy from Sun, Wind and Earthhttp://www.ipsnews.net/2015/07/central-america-fails-to-take-advantage-of-energy-from-sun-wind-and-earth/?utm_source=rss&utm_medium=rss&utm_campaign=central-america-fails-to-take-advantage-of-energy-from-sun-wind-and-earth http://www.ipsnews.net/2015/07/central-america-fails-to-take-advantage-of-energy-from-sun-wind-and-earth/#comments Wed, 29 Jul 2015 16:00:02 +0000 Diego Arguedas Ortiz http://www.ipsnews.net/?p=141781 http://www.ipsnews.net/2015/07/central-america-fails-to-take-advantage-of-energy-from-sun-wind-and-earth/feed/ 0 Opinion: A BRICS Bank to Challenge the Bretton Woods System?http://www.ipsnews.net/2015/07/opinion-a-brics-bank-to-challenge-the-bretton-woods-system/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-a-brics-bank-to-challenge-the-bretton-woods-system http://www.ipsnews.net/2015/07/opinion-a-brics-bank-to-challenge-the-bretton-woods-system/#comments Wed, 22 Jul 2015 08:12:45 +0000 Daya Thussu http://www.ipsnews.net/?p=141689

Daya Thussu is Professor of International Communication at the University of Westminster in London.

By Daya Thussu
LONDON, Jul 22 2015 (IPS)

The formal opening of the BRICS Bank in Shanghai on Jul. 21 following the seventh summit of the world’s five leading emerging economies held recently in the Russian city of Ufa, demonstrates the speed with which an alternative global financial architecture is emerging.

The idea of a development-oriented international bank was first floated by India at the 2012 BRICS summit in New Delhi but it is China’s financial muscle which has turned this idea into a reality.

Daya Thussu

Daya Thussu

The New Development Bank (NDB), as it is formally called, is to use its 50 billion dollar initial capital to fund infrastructure and developmental projects within the five BRICS nations – Brazil, Russia, India, China and South Africa – though it is also likely to support developmental projects in other countries.

According to the 43-page Ufa Declaration, “the NDB shall serve as a powerful instrument for financing infrastructure investment and sustainable development projects in the BRICS and other developing countries and emerging market economies and for enhancing economic cooperation between our countries.”

The NDB is led by Kundapur Vaman Kamath, formerly of Infosys, India’s IT giant, and of ICICI Bank, India’s largest private sector bank. A respected banker, Kamath reportedly said during the launch that “our objective is not to challenge the existing system as it is but to improve and complement the system in our own way.”

The launch of the NDB marks the first tangible institution developed by the BRICS group – set up in 2006 as a major non-Western bloc – whose leaders have been meeting annually since 2009. BRICS countries together constitute 44 percent of the world population, contributing 40 percent to global GDP and 18 percent to world trade.“Our objective is not to challenge the existing system as it is but to improve and complement the system in our own way” – Kundapur Vaman Kamath, head of the New Development Bank (NDB)

In keeping with the summit’s theme of ‘BRICS partnership: A powerful factor for global development’, the setting up of a developmental bank was an important outcome, hailed as a “milestone blueprint for cooperation” by a commentator in The China Daily.

The Chinese imprint on the NDB is unmistakable. The Ufa Declaration is clear about the close connection between the NDB and the newly-created Asian Infrastructure Investment Bank (AIIB), also largely funded by China. It welcomed the proposal for the New Development Bank to “cooperate closely with existing and new financing mechanisms including the Asian Infrastructure Investment Bank.” China is also keen to set up a regional centre of the NDB in South Africa.

If economic cooperation remained the central plank of the Ufa summit, there is also a clear geopolitical agenda.

The Global Times, China’s more nationalistic international voice, pointed out that the establishment of the NDB and the AIIB will “break the monopoly position of the International Money Fund (IMF) and the World Bank (WB) and motivate [them] to function more normatively, democratically, and efficiently, in order to promote reform of the international financial system as well as democratisation of international relations.”

The reality of global finance is such that any alternative financial institution has to function in a system that continues to be shaped by the West and its formidable domination of global financial markets, information networks and intellectual leadership.

However, China, with its nearly four trillion dollars in foreign currency reserves, is well-placed to attempt this, in conjunction with the other BRICS countries. China today is the largest exporting nation in the world, and is constantly looking for new avenues for expanding and consolidating its trade relations across the globe.

China is also central to the establishment of the Shanghai Cooperation Organisation (SCO), a Eurasian political, economic and security grouping whose annual meeting coincided with the seventh BRICS summit. Founded in 2001 and comprising China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, the SCO has agreed to admit India and Pakistan as full members.

Though the BRICS summit and the SCO meeting went largely unnoticed by the international media – preoccupied as they were with the Iranian nuclear negotiations and the ongoing Greek economic crisis – the economic and geopolitical implications of the two meetings are likely to continue for some time to come.

For host Russia, which also convened the first BRICS summit in 2009, the Ufa meeting was held against the background of Western sanctions, continuing conflict in Ukraine and expulsion from the G8. Partly as a reaction to this, camaraderie between Moscow and Beijing is noticeable – having signed a 30-year oil and gas deal worth 400 billion dollars in 2014.

Beijing and Moscow see economic convergence in trade and financial activities, for example, between China’s Silk Road Economic Belt initiative for Central Asia and Russia’s recent endeavours to strengthen the Eurasian Economic Union. The expansion of the SCO should be seen against this backdrop. Moscow has also proposed setting up SCO TV to broadcast economic and financial information and commentary on activities in some of the world’s fastest growing economies.

Whatever the outcome, it is clear that a new international developmental agenda is being created, backed by powerful nations, and to the virtual exclusion of the West.

China is the driving force behind this. Despite its one-party system which limits political pluralism and thwarts debate, China has been able to transform itself from a largely agricultural self-sufficient society to the world’s largest consumer market, without any major social or economic upheavals.

China’s success story has many admirers, especially in other developing countries, prompting talk of replacing the ‘Washington consensus’ with what has been described as the ‘Beijing consensus’. The BRICS bank, it would seem, is a small step in that direction.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

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Indigenous People in Brazil’s Amazon – Crushed by the Belo Monte Dam?http://www.ipsnews.net/2015/07/indigenous-people-in-brazils-amazon-crushed-by-the-belo-monte-dam/?utm_source=rss&utm_medium=rss&utm_campaign=indigenous-people-in-brazils-amazon-crushed-by-the-belo-monte-dam http://www.ipsnews.net/2015/07/indigenous-people-in-brazils-amazon-crushed-by-the-belo-monte-dam/#comments Thu, 16 Jul 2015 21:57:33 +0000 Mario Osava http://www.ipsnews.net/?p=141614 The school in the Juruna indigenous village of Paquiçamba on the banks of the Volta Grande (Big Bend) of the Xingú River in Brazil’s Amazon jungle, which will not be flooded but will see the water flow considerably reduced due to the construction of the Belo Monte hydropower dam. Credit: Mario Osava/IPS

The school in the Juruna indigenous village of Paquiçamba on the banks of the Volta Grande (Big Bend) of the Xingú River in Brazil’s Amazon jungle, which will not be flooded but will see the water flow considerably reduced due to the construction of the Belo Monte hydropower dam. Credit: Mario Osava/IPS

By Mario Osava
ALTAMIRA, Brazil, Jul 16 2015 (IPS)

Ethnocide, the new accusation leveled against the Belo Monte hydroelectric dam, brings to light deeper underlying aspects of the conflicts and controversies unleashed by megaprojects in Brazil’s Amazon rainforest.

Federal prosecutor Thais Santi announced that legal action would be taken “in the next few weeks” against Norte Energía, the company building the dam, on the argument that its initiatives to squelch indigenous resistance amount to ethnocide.

“This will be an innovative legal process in Brazil,” said Wilson Matos da Silva, who has a direct interest in this “pioneer legal proceeding” as a Guaraní indigenous lawyer who has written about the issue in publications in Dourados, the city in western Brazil where he lives.

“Brazil has no legislation on ethnocide, a neologism used as an analogy to genocide, which is classified by a 1956 law,” said the defender of indigenous causes. “The object of the crime isn’t life, it is culture – but the objective is the same: destroying a people.

“Ethnocide only occurs when there is omission on the part of the state, which means it can be implicated in an eventual lawsuit,” added Matos da Silva.

The issue has been debated for some time now, especially among anthropologists, in international forums and courts. The novel development in Brazil is that it will now reach the courts, “a laudable initiative” that could set an important legal precedent, the lawyer said in a telephone interview with Tierramérica.

Belo Monte has been the target of numerous complaints and lawsuits that sought to halt the construction process. The company has been accused of failing to live up to the measures required by the government’s environmental authority to mitigate or compensate for impacts caused by the hydropower complex on the Xingú River which will generate 11,233 MW, making it the third –largest of its kind in the world.

The 22 lawsuits brought by the public prosecutor’s office failed to halt work on the dam. But they managed to secure compliance with several environmental requisites, such as the purchase of land for the Juruna Indigenous Community of Kilometre 17 on the Trans-Amazonian highway, who were exposed to the bustle and chaos of the construction project because they lived in a small area near the dam.

Socorro Arara, an indigenous fisherwoman whose surname is the name of her indigenous community, is fighting to maintain the way of life of the seven family units in her extended family. The island where they live on the Xingú River will be flooded by the Belo Monte reservoir, and she is demanding another island or riverbank area for resettling her family. Credit: Mario Osava/IPS

Socorro Arara, an indigenous fisherwoman whose surname is the name of her indigenous community, is fighting to maintain the way of life of the seven family units in her extended family. The island where they live on the Xingú River will be flooded by the Belo Monte reservoir, and she is demanding another island or riverbank area for resettling her family. Credit: Mario Osava/IPS

In a Jun. 29 report, the non-governmental Socioenvironmental Institute (ISA) said the conditions were not in place for the government to issue the final operating permit to allow Belo Monte to fill its reservoirs and begin generating electricity in early 2016.

ISA, which is active in the Xingú basin, said that many of the 40 initial requisites set before the concession was put up to tender in 2010, as well as the 31 conditions related to indigenous rights, have not yet been fulfilled.

Protection of indigenous territories is one of the conditions that have not been met, as reflected in the increase of illegal logging and poaching by outsiders, it said.

Norte Energía argues that it has invested 68 million dollars to benefit the roughly 3,000 people in 34 villages in the 11 indigenous territories in the Belo Monte zone of influence.

The programme aimed at providing social development in the local area has included the construction of 711 housing units and the donation of 366 boats, 578 boat motors, 42 land vehicles, 98 electrical generators, and 2.1 million litres of fuel and lubricants, as of April 2015.

In addition, teachers were trained as part of the indigenous education programme.

“But indigenous communities are unhappy because the plan was only partially carried out: of the 34 basic health units that were promised, not a single one is yet operating,” complained Francisco Brasil de Moraes, the coordinator for FUNAI – the government agency in charge of indigenous affairs – along the middle stretch of the Xingú River.

Nor is the project for productive activities, a local priority as it is aimed at enhancing food security and generating income, moving forward, he added. Technical assistance for improving agriculture is needed, and few of the 34 community manioc flour houses, where the staple food is processed and produced, are operating.

Another indispensable measure, the Indigenous Lands Protection Plan, which foresees the installation of operating centres and watch towers, has not been taken up by Norte Energía and “FUNAI does not have the resources to shoulder the burden of this territorial management,” Moraes told Tierramérica.

But the actions that prompted the accusation of ethnocide occurred, or started to occur, before the projects making up the Basic Environmental-Indigenous Component Plan were launched.

Part of what will be the Belo Monte hydroelectric plant’s turbine room in the northern Brazilian state of Pará – a mega-project which is 80 percent complete and will be finished in 2019. Credit: Mario Osava/IPS

Part of what will be the Belo Monte hydroelectric plant’s turbine room in the northern Brazilian state of Pará – a mega-project which is 80 percent complete and will be finished in 2019. Credit: Mario Osava/IPS

For 24 months, up to September 2012, Norte Energia carried out an Emergency Plan, distributing donations of necessary goods to the 34 villages, at a monthly cost of 9,600 dollars per village.

That fuelled consumption of manufactured and processed foods such as soft drinks, which have hurt people’s health, increased child malnutrition, and undermined food security among the indigenous communities by encouraging the neglect of farming, fishing and hunting, the ISA report states.

“Norte Energía established a relationship with the indigenous people that involved coopting the only outspoken opponents of the dam, and making their leaders come frequently to the city (of Altamira) to ask for more and more things at the company headquarters,” Marcelo Salazar, ISA’s assistant coordinator in the Xingú River basin, told Tierramérica.

In addition, villages were divided and the authority of local leaders was weakened by the company’s activities in the area, according to the public prosecutor’s office.

But Norte Energía told Tierramérica in a written response from the press department that “the so-called Emergency Plan was proposed by FUNAI,” which also set the amount of monthly spending at 30,000 reals.

The funds went towards “the promotion of ethno-development,” and included the donation of farm equipment and materials, the construction of landing strips and the upgrading of 470 km of roads leading to the villages, the company said.

Strengthening FUNAI by hiring 23 officials on Norte Energía’s payroll and purchasing computers and vehicles was another of the Emergency Plan’s aims, the company reported.

But the emphasis on providing material goods such as boats, vehicles and infrastructure forms part of a business mindset that is irreconcilable with a sustainable development vision, say critics like Sonia Magalhães, a professor of sociology at the Federal University of Pará, who also accuses Belo Monte of ethnocide.

“Their culture has been attacked, a colonial practice whose objective is domination and the destruction of a culture, which is a complex and dynamic whole,” she told Tierramérica, referring to the Emergency Plan.

“The Xingú River forms part of the world vision of the Juruna and Arara Indians in a way that we are not able to understand – it is a reference to time, space and the sacred, which are under attack” from the construction of the dam, she said.

Indifferent to this debate, Giliard Juruna, a leader of a 16-family Juruna indigenous village, is visiting Altamira, the closest city to Belo Monte, with new requests.

“We got speedboats, a pickup truck and 15 houses for everyone,” he told Tierramérica. “But things run out, and it was very little compared to what is possible.”

“We also asked for speedboats for fishing, although the water is murky and dirty, we don’t have sanitation, we have schools but we don’t have bilingual teachers,” he said, adding that they were seeking “a sustainability project” involving fish farming, cacao and manioc production, a manioc flour house, and a truck.

“We have customers for our products, but we don’t have any means of transport, because we won’t be able to use boats anymore,” he said.

The diversion of part of the waters of the Xingú River to generate electricity in Belo Monte will significantly reduce the water flow at the Volta Grande or Big Bend, where his village is situated.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Fishing Families Left High and Dry by Amazon Damshttp://www.ipsnews.net/2015/07/fishing-families-left-high-and-dry-by-amazon-dams/?utm_source=rss&utm_medium=rss&utm_campaign=fishing-families-left-high-and-dry-by-amazon-dams http://www.ipsnews.net/2015/07/fishing-families-left-high-and-dry-by-amazon-dams/#comments Fri, 10 Jul 2015 19:59:28 +0000 Mario Osava http://www.ipsnews.net/?p=141534 People from a fishing community on the Banks of the Xingú River in the Brazilian Amazon, at one of the meetings on the local impacts of the construction of the giant Belo Monte hydropower dam, held at the behest of the public prosecutor’s office. Credit: Mario Osava/IPS

People from a fishing community on the Banks of the Xingú River in the Brazilian Amazon, at one of the meetings on the local impacts of the construction of the giant Belo Monte hydropower dam, held at the behest of the public prosecutor’s office. Credit: Mario Osava/IPS

By Mario Osava
ALTAMIRA, Brazil, Jul 10 2015 (IPS)

Small-scale fisherpersons were among the first forgotten victims of mega construction projects like the Belo Monte hydroelectric dam on the Xingú River in the Brazilian Amazon.

“I’m a fisherman without a river, who dreams of traveling, who dreams of riding on a boat of hope. Three years ago it looked like my life was over; but I still dream of a new river,” said Elio Alves da Silva, referring to the disappearance of his village, the Comunidade Santo Antônio, the first to be removed to make way for the construction of the dam.

Now, he lives on an isolated farm 75 km from his old village, and works in the construction industry “to keep hunger at bay.” He misses the river and its beaches, community life, the local church that was demolished, and playing football on the Santo Antônio pitch, which is now a parking lot for the staff on the Belo Monte construction site.

His account of the eviction of 245 families from his rural village was heard by representatives of the office of the public prosecutor, the National Human Rights Council, the government, and different national universities, who met in June in Altamira to inspect Belo Monte’s impacts on communities along the Xingú River.

Altamira, a city of 140,000 people, is the biggest of the 11 municipalities in the northern state of Pará affected by the mega-project that got underway in 2011.

“Riverbank communities, although they are an expression of a traditional way of life…were invisible in the Belo Monte tendering process and today are finding no solutions in that process that address their particular needs,” says the report containing conclusions from one of the 55 meetings held to assess impacts.

The company building the dam, Norte Energía, offered indemnification and individual or collective resettlement to families living on riverbanks or islands on stretches of the Xingú River affected by the dam, who depended on fishing for their livelihood.

Abandoned fishing boats on the banks of the Xingú River, in a neighbourhood on the outskirts of the city of Altamira in the northern Brazilian state of Pará, whose inhabitants were removed because the area is to be flooded when the Belo Monte reservoir is filled. Credit: Mario Osava/IPS

Abandoned fishing boats on the banks of the Xingú River, in a neighbourhood on the outskirts of the city of Altamira in the northern Brazilian state of Pará, whose inhabitants were removed because the area is to be flooded when the Belo Monte reservoir is filled. Credit: Mario Osava/IPS

But in no case has an attempt been made to replicate their previous living conditions, as required by Brazil’s environmental regulations. The company only offered to resettle them far from the river. And the indemnification, in cash or credit, was insufficient to enable them to afford more expensive land along the river.

Norte Energía has failed to recognise that many local fishing families actually have two homes: one on the river, where they live for days at a stretch while fishing, and another in an urban area, where they stay when they sell their catch, and where they have access to public services such as health care.

The report said that when the families are forced to choose indemnification for their rural or their urban home, they have to renounce one part of their life, and they receive reduced compensation as a result. They are only given compensation for their other home as a “support point”, for the building and simple, low-cost equipment.

Of the hundreds of fishing community families who were evicted, most have chosen cash – even though the indemnification was insufficient to ensure their way of life – because there was no satisfactory resettlement option, according to the inspection carried out at the behest of the public prosecutor’s office.

But many are still fighting for more. One of them is Socorro Arara, of the Arara indigenous people. She is from the island of Padeiro, which will be flooded when the main Belo Monte reservoir is filled.

“Norte Energía offered us 28,000 reais (9,000 dollars), but we didn’t accept it – that’s too little for our seven families” – who include her parents, three children, two sisters and their husbands – she told IPS.

José Nelson Kuruaia and Francisca dos Santos Silva, a couple who were displaced from their fishing community by the Belo Monte hydroelectric dam, in their new home in the neighbourhood built by the company constructing the dam, which resettled them far from the banks of the Xingú River in the Amazon jungle, separating them from their way of life. Credit: Mario Osava/IPS

José Nelson Kuruaia and Francisca dos Santos Silva, a couple who were displaced from their fishing community by the Belo Monte hydroelectric dam, in their new home in the neighbourhood built by the company constructing the dam, which resettled them far from the banks of the Xingú River in the Amazon jungle, separating them from their way of life. Credit: Mario Osava/IPS

“We want to be collectively resettled along the Xingú River, all of our families together. And it has to be upstream, because downstream, everything has been changed (by the hydropower dams),” she said.

Arara’s struggle took her to the capital, Brasilia, where she talked to Supreme Court judges, officials in government ministries, and presidential aides, to seek redress.

But it is an uphill battle. The company only allowed her to register her nuclear family for compensation, rather than collectively relocating the seven family units. Furthermore, Arara is demanding that they be allotted plots of land large enough for growing small-scale crops and harvesting native fruits – activities on which they depended on the island.

Another indigenous fisherman, José Nelson Kuruaia, and his wife Francisca dos Santos Silva had better luck. They used to live in an Altamira neighbourhood that will be flooded when the reservoir is filled.

They were assigned one of the 4,100 housing units built by Norte Energía for families displaced in urban areas.

The couple also received 20,700 reais (6,700 dollars) in compensation for a shanty and equipment they had on the island of Barriguda, upstream of Altamira, where they used to fish from Monday through Saturday, hauling in 150 kg a week.

Today Kuruaia, who is 71 years old and retired, says he “sometimes” goes fishing. “I really love the river and if I don’t work, I get sick,” he told IPS, explaining why he goes out despite the opposition of his six children and his wife, “a good fisherwoman” who used to work with him until her knees started bothering her.

Jatobá, the new neighborhood where they were resettled, is on a hill far from the river. It costs the relocated fishermen 30 reais (almost 10 dollars) to transport their motors to the riverbank, where they have to leave their boats, despite the risk that they will be stolen. They all used to live in neighbourhoods prone to flooding on the banks of the Xingú River.

A bridge under construction on the Trans-Amazonian Highway. The waters from the Belo Monte dam will run under the bridge before flowing into the Xingú River in the Amazon rainforest in northern Brazil. The explosions, strong lighting at night and modifications of the course of the river have scared off the fish, according to people who depended on fishing for a living. Credit: Mario Osava/IPS

A bridge under construction on the Trans-Amazonian Highway. The waters from the Belo Monte dam will run under the bridge before flowing into the Xingú River in the Amazon rainforest in northern Brazil. The explosions, strong lighting at night and modifications of the course of the river have scared off the fish, according to people who depended on fishing for a living. Credit: Mario Osava/IPS

In response to the pressure from the fishing communities, resettled or facing relocation, Norte Energía decided to build another urban neighbourhood near the river, for some 500 families who fish for a living. But only urban fishing families will be settled there, not people from riverbank communities, like Socorro Arara.

The battle being waged by the relocated families is not limited to their homes or work environments. Many want to be paid damages for losses suffered in the last four years, due to the construction of the dam.

“In four days, from Thursday to Sunday, I only caught 30 kg of peacock bass. I used to catch 60 to 100 kg in just one day, and a variety of fish: pacú, peacock bass, hake, toothless characin and filhote (juveniles of the largest fish of the Amazon, the giant piraíba catfish), which could be found year-round,” said Giácomo Dallacqua, president of the 1,600-member Vitória do Xingu fishing association.

“The explosions on the riverbank are a headache for us, because they scare off the fish,” he told IPS, referring to the use of explosives to break rocks and prepare the area for what will be the third-largest hydroelectric plant in the world in terms of generating power (11,233 MW).

To that is added the strong lighting used all night long near the construction site, the cloudy water, the dredging of the beaches to use the sand in the construction project, the damming up of streams and the traffic of heavy barges bringing in the equipment that will be used to generate electricity, biologist Cristiane Costa added.

These impacts are especially strong near Belo Monte, a district of the municipality of Vitória do Xingu, where the main plant, capacity 11,000 MW, is being built, and where the most productive fishing grounds in the region were found.

But it also occurs in Pimental, in the municipality of Altamira, where the other plant – which will generate 233 MW – is being installed, and where the dam that will flood part of the city of Altamira is being built.

Norte Energía has not acknowledged that the construction of the dam has reduced the fish catch. It argues that there is no scientific evidence, despite the complaints of local fishermen, some 3,000 of whom have been directly affected.

But the company announced seven million dollars in investment, in a cooperation agreement with the Fisheries Ministry, to create an integrated environmental fishing centre in Altamira – which will have fish farm laboratories, will breed ornamental fish, and will train local fishermen.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Will the New BRICS Bank Break with Traditional Development Models, or Replicate Them?http://www.ipsnews.net/2015/07/will-the-new-brics-bank-break-with-traditional-development-models-or-replicate-them/?utm_source=rss&utm_medium=rss&utm_campaign=will-the-new-brics-bank-break-with-traditional-development-models-or-replicate-them http://www.ipsnews.net/2015/07/will-the-new-brics-bank-break-with-traditional-development-models-or-replicate-them/#comments Tue, 07 Jul 2015 21:10:17 +0000 Kanya DAlmeida http://www.ipsnews.net/?p=141467 The heads of state of three of the five BRICS countries - Russia, India and Brazil – pose for a photograph during the 2014 BRICS Summit. Credit: Official Flickr Account for Narendra Modi/CC-BY-SA-2.0

The heads of state of three of the five BRICS countries - Russia, India and Brazil – pose for a photograph during the 2014 BRICS Summit. Credit: Official Flickr Account for Narendra Modi/CC-BY-SA-2.0

By Kanya D'Almeida
UNITED NATIONS, Jul 7 2015 (IPS)

Just days ahead of a summit of the BRICS group of emerging economies (Brazil, Russia, India, China and South Africa) in which the five countries are expected to formally launch their New Development Bank (NDB), 40 NGOs and civil society groups have penned an open letter to their respective governments urging transparency and accountability in the proposed banking process.

“In terms of the type of development the bank delivers, we don't have signs yet that the NDB will go in a qualitatively different direction than the Washington Consensus institutions." -- Gretchen Gordon, coordinator of Bank on Human Rights
The NDB is expected to finance infrastructure and sustainable development in the global South.

With an initial capital of 100 billion dollars, it was born from a combination of circumstances including emerging economies’ frustration with the largely Western-dominated World Bank Group (WBG) and International Monetary Fund (IMF).

According to a 2014 Oxfam Policy Brief, another factor leading to the creation of the BRICS Bank was a major gap in financing for infrastructure projects, with official development assistance (ODA) and funding from multilateral institutions meeting just two to three percent of developing countries’ needs.

Strained by economic sanctions as a result of the Ukrainian crisis, Moscow has been particularly keen to bring the fledgling lending institution to its feet and has been pushing international rating agencies to rate the bank’s debt, as a necessary first step for it to begin operations.

Even without counting the contributions of its newest member – South Africa – the four BRIC nations represent 25 percent of global gross domestic product (GDP) and 41.4 percent of the world’s population, or roughly three billion people.

In addition, the borders of these countries enclose a quarter of the planet’s land area on three continents.

But even as the five political leaders prepare to take centre stage in the Russian city of Ufa on Jul. 9, citizens of their own countries are already expressing doubts that the nascent financial body will truly represent a break from traditional, Western-led development models.

“The existing development model in force in many emerging and developing countries is one that favors export-oriented, commodity driven strategies and policies that are socially harmful, environmentally unsustainable and have led to greater inequalities between and within countries,” said the statement, released on Jul. 7

“If the New Development Bank is going to break with this history, it must commit itself to the following four principles: 1) Promote development for all; 2) Be transparent and democratic; 3) Set strong standards and make sure they’re followed; 4) Promote sustainable development,” the signatories added.

Gretchen Gordon, coordinator of Bank on Human Rights, a global network of social movements and grassroots organisations working to hold international financial institutions accountable to human rights obligations, told IPS, “[Although] the Bank’s Articles of Agreement have an article on Transparency and Accountability […] thus far we haven’t seen any indication of operational policies on transparency or anything relating to accountability mechanisms.”

“And unfortunately,” she added, “there is no open engagement with civil society on these questions.”

“In terms of the type of development the bank delivers, we don’t have signs yet that the NDB will go in a qualitatively different direction than the Washington Consensus institutions,” Gordon told IPS in an email.

“That is why civil society groups in BRICS countries are calling for a participative and transparent process to identify strategies and policies for the NDB that can set it on a different path and actually deliver development.”

A primary concern among NGOs has been that the BRICS bank will replicate the old “mega-project” model of development, which has proven to be a failure both in terms of poverty eradication and increased access to basic services.

A recent international investigation revealed that in the course of a single decade, an estimated 3.4 million poor people – primarily from Asia, Africa and Latin America – were displaced by mega-projects funded by the World Bank and its private sector lending arm, the International Finance Corporation (IFC).

Though these projects were ostensibly aimed at strengthening transportation networks, expanding electric grids and improving water supply systems, they resulted in a worsening of poverty and inequality for millions of already marginalised people.

Following closely on the heels of this damning expose, a major report by the international watchdog Human Rights Watch (HRW) found that the Bank’s lax safeguards and protocols resulted in a range of rights violations against those who spoke out against the economic, social and environmental fallout of Bank-funded projects.

Behind this track record, rights groups and NGOs are concerned that a new development bank operating on within a broken framework will contribute to the spiral of violence and poverty that has marked the age of mega-projects.

At a time when one billion people lack access to an all-weather road, 783 million people live without clean water supplies and 1.3 billion people are not connected to an electricity grid, there is no doubt that the developing world stands to gain greatly from a Southern-led financial institution.

What remains to be seen is to what extent the new bank will move away from the old model of financing and truly set a standard for inclusive and pro-poor development.

Edited by Kitty Stapp

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Sustainable Use of Biodiversity Could Fill Gap When Belo Monte Dam Is Finishedhttp://www.ipsnews.net/2015/07/sustainable-use-of-biodiversity-could-fill-gap-when-belo-monte-dam-is-finished/?utm_source=rss&utm_medium=rss&utm_campaign=sustainable-use-of-biodiversity-could-fill-gap-when-belo-monte-dam-is-finished http://www.ipsnews.net/2015/07/sustainable-use-of-biodiversity-could-fill-gap-when-belo-monte-dam-is-finished/#comments Fri, 03 Jul 2015 15:20:00 +0000 Mario Osava http://www.ipsnews.net/?p=141408 http://www.ipsnews.net/2015/07/sustainable-use-of-biodiversity-could-fill-gap-when-belo-monte-dam-is-finished/feed/ 0 Panama and Nicaragua – Two Canals, One Shared Dreamhttp://www.ipsnews.net/2015/07/panama-and-nicaragua-two-canals-one-shared-dream/?utm_source=rss&utm_medium=rss&utm_campaign=panama-and-nicaragua-two-canals-one-shared-dream http://www.ipsnews.net/2015/07/panama-and-nicaragua-two-canals-one-shared-dream/#comments Wed, 01 Jul 2015 23:31:54 +0000 Iralis Fragiel http://www.ipsnews.net/?p=141388 http://www.ipsnews.net/2015/07/panama-and-nicaragua-two-canals-one-shared-dream/feed/ 1 Opinion: BRICS for Building a New World Order?http://www.ipsnews.net/2015/07/opinion-brics-for-building-a-new-world-order/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-brics-for-building-a-new-world-order http://www.ipsnews.net/2015/07/opinion-brics-for-building-a-new-world-order/#comments Wed, 01 Jul 2015 11:38:34 +0000 Daya Thussu http://www.ipsnews.net/?p=141375

Daya Thussu is Professor of International Communication at the University of Westminster in London.

By Daya Thussu
LONDON, Jul 1 2015 (IPS)

As the leaders of the BRICS five meet in the Russian city of Ufa for their annual summit Jul. 8–10, their agenda is likely to be dominated by economic and security concerns, triggered by the continuing economic crisis in the European Union and the security situation in the Middle East.

The seventh annual summit of the large emerging economies – Brazil, Russia, India, China and South Africa – also takes place with a background of escalating tensions between Russia and the West over Ukraine and the eastward expansion of the North Atlantic Treaty Organisation (NATO), as well as the growing economic power of Asia, in particular, China.

Daya Thussu

Daya Thussu

Nearly a decade and a half has passed since the BRIC acronym was coined in 2001 by Jim O’Neill, a Goldman Sachs executive, now a minister in David Cameron’s U.K. government, to refer to the four fast-growing emerging markets. South Africa was added in 2011, on China’s request, to expand BRIC to BRICS.

Although in operation as a formal group since 2006, and holding annual summits since 2009, the BRICS countries have escaped much comment in international media, partly because of the different political systems and socio-cultural norms, as well as stages of development, within this group of large and diverse nations.

The emergence of such groupings coincides with the relative economic decline of the West.

This has created the opportunity for emerging powers, such as China and India, to participate in global governance structures hitherto dominated by the United States and its Western allies.

That the centre of economic gravity is shifting away from the West is acknowledged in the view of the U.S. Administration of Barack Obama that the ‘pivot’ of U.S. foreign policy is moving to Asia.“The major countries of the global South have shown impressive economic growth in recent decades … [it is predicted that] by 2020 the combined economic output of China, India and Brazil will surpass the aggregated production of the United States, Britain, Canada, France, Germany and Italy”

And there is evidence of this shift. In the Fortune 500 ranking, the number of transnational corporations based in Brazil, Russia, India and China has grown from 27 in 2005 to more than 100 in 2015. China’s Huawei, a telecommunications equipment firm, is the world’s largest holder of international patents; Brazil’s Petrobras is the fourth largest oil company in the world, while the Tata group became the first Indian conglomerate to reach 100 billion dollars in revenues.

Since 2006, China has been the largest holder of foreign currency reserves, estimated in 2015 to be more than 3.8 trillion dollars. According to the International Monetary Fund (IMF), China’s gross domestic product (GDP) surpassed that of the United States in 2014, making it the world’s largest economy in purchasing-power parity terms.

More broadly, the major countries of the global South have shown impressive economic growth in recent decades, prompting the United Nations Development Programme to proclaim The Rise of the South (the title of its 2013 Human Development Report), which predicts that by 2020 the combined economic output of China, India and Brazil will surpass the aggregated production of the United States, Britain, Canada, France, Germany and Italy.

Though the individual relationships between BRICS countries and the United States differ markedly (Russia and China being generally anti-Washington while Brazil and South Africa relatively close to the United States and India moving from its traditional non-aligned position to a ‘multi-aligned’ one), the group was conceived as an alternative to American power and is the only major group of nations not to include the United States or any other G-7 nation.

Nevertheless, none of the five member nations are eager for confrontation with the United States – with the possible exception of Russia – the country with which they have their most important relationship. Indeed, China is one of the largest investors in the United States, while India, Brazil and South Africa demonstrate democratic affinities with the West: India’s IT industry is particularly dependent on its close ties with the United States and Europe.

Although the idea of BRIC was initiated in Russia, it is China that has emerged as the driving force behind this grouping. British author Martin Jacques has noted in his international bestseller When China Rules the World, that China operates “both within and outside the existing international system while at the same time, in effect, sponsoring a new China-centric international system which will exist alongside the present system and probably slowly begin to usurp it.”

One manifestation of this change is the establishment of a BRICS bank (the ‘New Development Bank’) to fund developmental projects, potentially to rival the Western-dominated Bretton Woods institutions, such as the World Bank and the IMF. Headquartered in Shanghai, China has made the largest contribution to setting it up and is likely that the bank will further enhance China’s domination of the BRICS group.

Beyond BRICS, Beijing has also established the Asian Infrastructure Investment Bank (AIIB), which already has 57 members, including Australia, Germany and Britain, and in which China will hold over 25 percent of voting rights. Two other BRICS nations – India and Russia – are the AIIB’s second and third largest shareholders.

Such changes have an impact on the media scene as well. As part of China’s ‘going out’ strategy, billions of dollars have been earmarked for external communication, including the expansion of Chinese broadcasting networks such as CCTV News and Xinhua’s English-language TV, CNC World.

Russia has also raised its international profile by entering the English-language news world in 2005 with the launch of the Russia Today (now called RT) network, which, apart from English, also broadcasts 24 hours a day, 7 days a week in Spanish and Arabic.

However, as a new book Mapping BRICS Media – which I co-edited with Kaarle Nordenstreng of the University of Tampere, Finland – shows, there is very little intra-BRICS media exchange and most of the BRICS nations continue to receive international news largely from Anglo-American media.

The growing economic cooperation between Moscow and Beijing – most notably in the 2014 multi-billion dollar gas deal – indicates a new Sino-Russian economic equation outside Western control.

Two key U.S.-led trade agreements being negotiated – the Transatlantic Trade and Investment Partnership (TTIP) and the Trans Pacific Partnership (TPP), and both excluding the BRICS nations – are partly a reaction to the perceived competition from nations such as China.

For its part, China appears to have used the BRICS grouping to allay fears that it is rising ‘with the rest’ and therefore less threatening to Western hegemony.

The BRICS summit takes place jointly with Shanghai Cooperation Organization (SCO) Heads of State Council meeting. The only other time that BRICS and the SCO combined their summits was also in Russia – in Ekaterinburg in 2009.

Apart from two BRICS members, China and Russia, the SCO includes Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan. SCO has not expanded its membership since it was set up in 2001. India has an ‘observer’ status within SCO, though there is talk that it might be granted full membership at the Ufa summit.

Were that to happen, the ‘pivot’ would have moved a few notches further towards Asia.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

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Fracking Expands Under the Radar on Mexican Landshttp://www.ipsnews.net/2015/06/fracking-expands-under-the-radar-on-mexican-lands/?utm_source=rss&utm_medium=rss&utm_campaign=fracking-expands-under-the-radar-on-mexican-lands http://www.ipsnews.net/2015/06/fracking-expands-under-the-radar-on-mexican-lands/#comments Fri, 26 Jun 2015 07:31:38 +0000 Emilio Godoy http://www.ipsnews.net/?p=141313 A Pemex gas distribution terminal. Shale gas will account for an estimated 45 percent of Mexico’s natural gas output by 2026. Credit: Pemex

A Pemex gas distribution terminal. Shale gas will account for an estimated 45 percent of Mexico’s natural gas output by 2026. Credit: Pemex

By Emilio Godoy
MEXICO CITY, Jun 26 2015 (IPS)

“People don’t know what ‘fracking’ is and there is little concern about the issue because it’s not visible yet,” said Gabino Vicente, a delegate of one of the municipalities in southern Mexico where exploration for unconventional gas is forging ahead.

Vicente is a local representative of the community of Santa Úrsula in the municipality of San Juan Bautista Tuxtepec, some 450 km south of Mexico City in the state of Oaxaca, where – he told IPS – “fracking is sort of a hidden issue; there’s a great lack of information about it.”

Tuxtepec, population 155,000, and another Oaxaca municipality, Loma Bonita, form part of the project Papaloapan B with seven municipalities in the neighbouring state of Veracruz. The shale gas and oil exploration project was launched by Mexico’s state oil company, Pemex, in 2011.

Papaloapan B, backed by the governmental National Hydrocarbons Commission (CNH), covers 12,805 square kilometres and is seeking to tap into shale gas reserves estimated at between 166 and 379 billion barrels of oil equivalent.

The project will involve 24 geological studies and the exploratory drilling of 120 wells, for a total investment of 680 million dollars.

But people in Tuxtepec have not been informed about the project. “We don’t know a thing about it,” said Vicente, whose rural community has a population of 1,000. “Normally, companies do not provide information to the local communities; they arrange things in secret or with some owners of land by means of deceit, taking advantage of the lack of money in the area.”

Shale, a common type of sedimentary rock made up largely of compacted silt and clay, is an unconventional source of natural gas. The gas trapped in shale formations is recovered by hydraulic fracturing or fracking.

Fracking involves the massive pumping of water, chemicals and sand at high pressure into the well, a technique that opens and extends fractures in the shale rock deep below the surface, to release the natural gas on a massive scale.

The process generates large amounts of waste liquids containing dissolved chemicals and other pollutants that require treatment before disposal, environmental organisations like Greenpeace warn.

The U.S. Energy Information Administration (EIA) puts Mexico in sixth place in the world for technically recoverable shale gas, behind China, Argentina, Algeria, the United States and Canada, based on the analysis of 137 deposits in 42 countries. And Mexico is in eighth position for technically recoverable shale oil reserves.

A map of the areas of current or future fracking activity in Mexico, which local communities say they have no information about. Credit: Courtesy of Cartocrítica

A map of the areas of current or future fracking activity in Mexico, which local communities say they have no information about. Credit: Courtesy of Cartocrítica

Fracking is quietly expanding in Mexico, unregulated and shrouded in opacity, according to the non-governmental Cartocrítica, which says at least 924 wells have been drilled in six of the country’s 32 states – including 349 in Veracruz.

But in 2010 the study “Proyecto Aceite (petróleo) Terciario del Golfo. Primera revisión y recomendaciones” by Mexico’s energy ministry and the CNH put the number of wells drilled using the fracking technique at 1,323 in Veracruz and the neighbouring state of Puebla alone.

In the northeastern state of Tamaulipas, where 100 wells have been drilled, Ruth Roux, director of the Social Research Centre of the public Autonomous University of Tamaulipas, found that farmers who have leased out land for fracking knew nothing about the technique or its effects.

“The first difficulty is that there is no information about where there are wells,” Roux told IPS. “Farmers are upset because they were not informed about what would happen to their land; they’re starting to see things changing around them, and they don’t know what shale gas or fracking are.”

While producing the study “Diagnosis and analysis of the social impact of the exploration and exploitation of shale gas/oil related to culture, legality, public services, and the participation of social actors in the states of Coahuila, Nuevo León and Tamaulipas”, Roux and her team interviewed five sorghum farmers and two local representatives from four municipalities in Tamaulipas.

The researcher said the preliminary findings reflected that locals felt a sense of abandonment, lack of respect, lack of information, and uncertainty. There are 443 homes near the 42 wells drilled in the four municipalities.

The industry sees the development of shale gas as strategically necessary to keep up production levels, which in April stood at 6.2 billion cubic feet per day.

But according to Pemex figures from January 2014, proven reserves of conventional gas amounted to just over 16 trillion cubic feet, while shale gas reserves are projected to be 141 trillion cubic feet.

By 2026, according to Pemex projections, the country will be producing 11 billion cubic feet of gas, 45 percent of which would come from unconventional deposits.

The company has identified five basins rich in shale gas in 11 states.

For the second half of the year, the CNH is preparing the tender for unconventional fossil fuel exploitation, as part of the implementation of the energy reform whose legal framework was enacted in August 2014, opening up electricity generation and sales, as well as oil and gas extraction, refining, distribution and retailing, to participation by the domestic and foreign private sectors.

The historic energy industry reform of December 2013 includes nine new laws and the amendment of another 12.

The new law on fossil fuels leaves landowners no option but to reach agreement with PEMEX or the private licensed operators over the occupation of their land, or accept a court ruling if no agreement is reached.

Vicente said the law makes it difficult for communities to refuse. “We are worried that fracking will affect the water supply, because of the quantity of water required and the contamination by the chemical products used. When we finally realise what the project entails, it’ll be a little too late,” he said.

Local residents of Tuxtepec, who depend for a living on the production of sugar cane, rubber and corn, as well as livestock, fishing and trade, know what it is to fight energy industry projects. In 2011 they managed to halt a private company’s construction of the small Cerro de Oro hydroelectric dam that would have generated 14.5 MW.

The formula: community organisation. “We’re organising again,” the local representative said. “What has happened in other states can be reproduced here.”

Papaloapan B forms part of the Veracruz Basin Integral Project, which would exploit the shale gas reserves in 51 municipalities in the state of Veracruz.

Pemex has already drilled a few wells on the outer edges of Tuxtepec. But there is no data available.

Farmers in Tamaulipas, meanwhile, “complain that their land fills up with water” after fracking operations, and that “the land isn’t producing like before,” said Roux, who added that exploration for shale gas is “a source of conflict…that generates violence.”

The expert and her team of researchers have extended their study to the northern states of Nuevo León and Coahuila, where 182 and 47 wells have been drilled, respectively.

Each well requires nine to 29 million litres of water. And fracking uses 750 different chemicals, a number of which are harmful to health and the environment, according to environmental and academic organisations in the United States.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Amazon Dam also Brings Health Infrastructure for Local Populationhttp://www.ipsnews.net/2015/06/amazon-dam-also-brings-health-infrastructure-for-local-population/?utm_source=rss&utm_medium=rss&utm_campaign=amazon-dam-also-brings-health-infrastructure-for-local-population http://www.ipsnews.net/2015/06/amazon-dam-also-brings-health-infrastructure-for-local-population/#comments Fri, 19 Jun 2015 20:16:40 +0000 Mario Osava http://www.ipsnews.net/?p=141223 The new General Hospital in Altamira, which has not yet opened, will be the most modern facility of its kind in this city in Brazil’s Amazon rainforest, receiving the most serious cases from the 11 municipalities affected by the construction of the giant Belo Monte hydroelectric dam. Credit: Mario Osava/IPS

The new General Hospital in Altamira, which has not yet opened, will be the most modern facility of its kind in this city in Brazil’s Amazon rainforest, receiving the most serious cases from the 11 municipalities affected by the construction of the giant Belo Monte hydroelectric dam. Credit: Mario Osava/IPS

By Mario Osava
ALTAMIRA, Brazil, Jun 19 2015 (IPS)

Extensive public health infrastructure and the eradication of malaria will be the most important legacy of the construction of the Belo Monte hydropower dam in Brazil’s Amazon jungle for the population affected by the megaproject.

In the six municipalities in the area of the dam, where an action plan to curb malaria has been implemented, the number of cases plunged nearly 96 percent between 2011 and 2015: from 3,298 in the period January to March 2011, just before construction began, to 141 in the same period this year.

Two municipalities have had no cases this year as of May, said Dr. José Ladislau, health manager for Norte Energía, the consortium of private companies and public enterprises that won the concession to build and run Belo Monte for 35 years.

“For the past two years no one has fallen ill with malaria in Brasil Novo – that’s the best news,” said Noedson Carvalho, health secretary of that municipality which is located 45 km from the Xingú river, where the giant hydroelectric dam with a capacity to generate 11,233 MW is being built.

Malaria, which is endemic in the Amazon, is a major factor in rural poverty, Ladislau told IPS. And the Xingú river basin used to have one of the highest malaria rates in the country.

The number of cases has plummeted throughout most of the northern state of Pará, where the lower and middle stretches of the Xingú river run, thanks to mass distribution of insecticide-treated mosquito nets and early diagnosis and treatment.

The results in the vicinity of Belo Monte, where the rural population is highly vulnerable to malaria, were obtained through an 11-million-dollar offensive by Norte Energía which included the construction of laboratories and the purchase of vehicles and long-lasting mosquito nets.

“Belo Monte has given Brasil Novo what it would not have obtained on its own in centuries,” Carvalho told IPS. He mentioned the 42-bed hospital and five basic health units, which now form part of the municipal public health system.

The hospital was already there, but it was private. And due to financial problems, it had shut its doors in April 2014, leaving the 22,000 people of Brasil Novo without a hospital, just when demand was rising due to the influx of workers from other parts of the country, drawn by the Belo Monte construction project.

Sewage runs down one of the main streets of Altamira, even though there is a sewer system. Poor sanitation leaves the city’s children at risk of diarrhea, which is the cause of many admissions to the hospitals in this Amazon rainforest city near the Belo Monte hydropower dam. Credit: Mario Osava/IPS

Sewage runs down one of the main streets of Altamira, even though there is a sewer system. Poor sanitation leaves the city’s children at risk of diarrhea, which is the cause of many admissions to the hospitals in this Amazon rainforest city near the Belo Monte hydropower dam. Credit: Mario Osava/IPS

“There are 30 births a month here, on average; it was a terrible situation to have no hospital in the city,” the municipal health secretary said.

Basic health clinics were also upgraded or installed in the town. But the most serious cases will be sent to Altamira, the biggest city in the area, with a population of 140,000 according to unofficial estimates.

The Brasil Novo municipal government negotiated the purchase and renovation of the hospital, with funds from Norte Energía, through the Regional Sustainable Development Plan (PDRS). It will now be a public hospital catering to the entire population free of charge.

The PDRS, funded by the company, is focused on implementing public policies and local projects.

It comes on top of the Basic Environmental Project (PBA), a set of 117 initiatives and actions to be carried out by the consortium building the Belo Monte dam, as compensation for 11 municipalities affected by the hydropower plant.

The total investment in these projects is 1.2 billion dollars – the biggest contribution to local development by a megaproject in Brazil. The investment, a condition for obtaining the necessary environmental permits, represents 14 percent of the Belo Monte construction project’s total budget.

Three new and three renovated hospitals are the main health infrastructure provided to the 11 municipalities in question.

The biggest one, the Altamira General Hospital, with 104 beds, including 10 in intensive care, is ready to open. It inherited equipment and staff from an old municipal hospital that had 98 beds and will be turned into a maternity and infant care centre.

A new basic health unit in the São Joaquim neighbourhood, where families displaced from areas to be flooded by the Belo Monte dam have recently been resettled. The consortium building the hydropower complex on the Xingú river in the Brazilian Amazon has built 30 of these units in the five municipalities that have been felt the greatest impact from the megaproject. Credit: Mario Osava/IPS

A new basic health unit in the São Joaquim neighbourhood, where families displaced from areas to be flooded by the Belo Monte dam have recently been resettled. The consortium building the hydropower complex on the Xingú river in the Brazilian Amazon has built 30 of these units in the five municipalities that have been felt the greatest impact from the megaproject. Credit: Mario Osava/IPS

The new hospital has fully automated and centralised modern communication, lighting, air conditioning and piped water systems, and extremely strict hygiene with regard to uniforms, staff, waste disposal and sanitation, said Norte Energía’s health manager, Dr. Ladislau.

There has been criticism that the investment did not sufficiently increase hospital capacity, because the number of beds was limited by the size of the existing hospitals that were remodeled or expanded.

But Ladislau said it made no sense to create too big a system, with high maintenance and operating costs that poor municipalities would find it hard to face.

“The idea is to build a strong health network in this region of 11 municipalities…with a focus on primary health care,” and to that end Norte Energía built 30 basic health units, distributed in five municipalities, with seven in Altamira alone, he said.

“With the new health centres, improved sanitation and other preventive measures, the pressure on hospital beds will be reduced,” he said. Some 1,500 children under five are admitted to the Altamira Municipal Hospital annually, most of them for diarrhea – a problem that is avoidable with good sanitation, he pointed out.

The resettlement of families from houses on stilts on lakes and other areas to be flooded by the Belo Monte dam in new neighbourhoods built on high ground will significantly reduce the incidence of diarrhea, he said.

The basic health units installed in those neighbourhoods offer healthcare, dental care, home visits, health promotion and disease prevention, and a system of statistics to put together community health profiles making it possible to plan purchases of medicines, syringes and other supplies, said Ladislau.

The infrastructure provided by Norte Energía will depend on the municipal administration and staff which will provide services, including maintenance.

Brasil Novo is an impoverished municipality that will receive very little in the way of royalties from Belo Monte, and will find it hard to keep the hospital running, the local health secretary Carvalho admitted.

But there will be no shortage of doctors thanks to the central government’s More Doctors programme, which hired thousands of Cuban physicians willing to work in Brazil’s hinterland, and which is also managing to get Brazilian doctors to participate, he said.

But a hospital needs surgeons and other specialists who are more difficult to draw to towns in the Amazon.

There is a risk that hospitals with 32 to 42 beds in Brasil Novo and two other municipalities will be underused, because the local populations range from 15,000 to 25,000 people, and the most serious or complex cases will be referred to the bigger and better equipped hospitals in Altamira.

One illustration of the difficulty in attracting qualified personnel was the attempt to open a medical school on the Altamira campus of the Federal University of Pará, which failed due to the dearth of professors with a doctorate degree.

Local residents also criticise the company for delays in the health projects, which were supposed to get underway earlier in order to meet the increased demand caused by the influx of workers from other regions.

The delays were aggravated by the temporary closure of the health services to build new installations. That happened, for example, in the case of the General Hospital, a large facility that used to be a modest primary health clinic in a poor neighbourhood in Altamira.

“What was already precarious is now even worse,” said Marcelo Salazar, head of the non-governmental Socioenvironmental Institute in Altamira.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Organic Cacao Farmers Help Reforest Brazil’s Amazon Junglehttp://www.ipsnews.net/2015/06/organic-cacao-farmers-help-reforest-brazils-amazon-jungle/?utm_source=rss&utm_medium=rss&utm_campaign=organic-cacao-farmers-help-reforest-brazils-amazon-jungle http://www.ipsnews.net/2015/06/organic-cacao-farmers-help-reforest-brazils-amazon-jungle/#comments Thu, 11 Jun 2015 18:22:57 +0000 Mario Osava http://www.ipsnews.net/?p=141097 Darcicio Wronski displays the cacao seeds drying in the sun in his yard. His family is one of 120 grouped in six cooperatives that produce organic cacao near Medicilândia and Altamira in the Amazon rainforest state of Pará, in northern Brazil. Credit: Mario Osava/IPS

By Mario Osava
MEDICILÂNDIA, Brazil, Jun 11 2015 (IPS)

“Now we realise what a paradise we live in,” said Darcirio Wronski, a leader of the organic cacao producers in the region where the Trans-Amazonian highway cuts across the Xingú river basin in northern Brazil.

Besides cacao, on their 100 hectares of land he grows bananas, passion fruit, cupuazú (Theobroma grandiflorum), pineapples and other native or exotic fruit with which his wife, Rosalina Brighanti, makes preserves that she sells as jams or jellies or uses as filling in homemade chocolate bars that she and her assistants make.

All of the products are labeled as certifiably organic.

But the situation they found in the 1970s was more like hell than paradise, they said, when they migrated separately from southern Brazil to Medicilândia, a town known as the “capital of cacao”, where they met, married in 1980 and had four children, who work with them on the farm.

They were drawn to the Amazon rainforest by misleading ads published by the then military dictatorship, which promised land with infrastructure and healthcare and schools in settlements created by the National Institute of Colonisation and Agrarian Reform.

The aim was to populate the Amazon, which the de facto government considered a demographic vacuum vulnerable to invasions from abroad or to international machinations that could undermine Brazil’s sovereignty over the immense jungle with its rivers and possible mineral wealth.

The Trans-Amazonian highway, which was to run 4,965 km horizontally across the country from the northeast all the way to the west, was to link the rainforest to the rest of the nation. And thousands of rural families from other regions settled along the road.

The unfinished highway, unpaved and without proper bridges, became impassable along many stretches, especially in the rainy season. The settlers ended up isolated and abandoned, practically cut off from the rest of the world, and large swathes of land were deforested.

Rosalina Brighanti or Doña Rosa in her kitchen, where she makes jams and preserves, holding a sign advertising the organic chocolates made with the family’s special recipes, which are popular with consumers and businesses in Brazil and abroad. Credit: Mario Osava/IPS

Rosalina Brighanti or Doña Rosa in her kitchen, where she makes jams and preserves, holding a sign advertising the organic chocolates made with the family’s special recipes, which are popular with consumers and businesses in Brazil and abroad. Credit: Mario Osava/IPS

Medicilândia is a product of that process. The city’s name pays homage to General Garrastazú Médici, president from 1969 to 1974, who inaugurated the Trans-Amazonian highway in 1972. The town emerged on kilometer 90 of the highway, and was recognised in 1989 as a municipality, home today to some 29,000 people.

“For the pioneers of the colonisation process it was torture, there was nothing to buy or sell here,” said 55-year-old Rosalina Brighanti, who everyone knows as Doña Rosa. “Some foods we could only get in Altamira, 100 km away along an unpaved road.”

Her husband Wronski, originally from the southern state of Santa Catarina, where his father had a small farm, impossible to divide between 10 sons and daughters, followed “the Amazonian dream.”

After running into failure with traditional crops like rice and beans, Wronski ended up buying a farm and planting cacao, a local crop encouraged by the government by means of incentives.

His decision to go organic accelerated the reforestation of his land, where sugarcane used to grow.

Cacao is increasingly looking like an alternative for the generation of jobs and incomes to mitigate local unemployment once construction is completed on the giant Belo Monte hydropower dam on the Xingú river, near Altamira, the capital of the region which encompasses 11 municipalities.

The dam’s turbines will gradually begin operating, from this year to 2019.

A cacao tree laden with beans, in the shade of banana trees on the Wronski family farm in Medicilândia, a municipality in the Brazilian Amazon rainforest state of Pará, where organic farmers are helping to reforest the jungle. Credit: Mario Osava/IPS

A cacao tree laden with beans, in the shade of banana trees on the Wronski family farm in Medicilândia, a municipality in the Brazilian Amazon rainforest state of Pará, where organic farmers are helping to reforest the jungle. Credit: Mario Osava/IPS

The Belo Monte construction project has drawn labour power away from cacao production. “That has caused the loss of 30 percent of Medicilândia’s cacao harvest this year,” Wronski told IPS during a tour of his farm.

“I know a family that has 70,000 cacao plants, whose son is working on Belo Monte and not in the harvest,” the 64-year-old farmer said.

The hope is that workers will return to the cacao crop once large numbers of people start to be laid off as the construction of the dam comes to a close. For routine maintenance of the plants, only the families who live on the farms are needed, but additional workers are necessary at harvest time.

From settler to reforester

José “Cido” Tinte Zeferino, 57, brought his passion for growing coffee from the southern state of Paraná to the Trans-Amazonian highway. But since coffee production wasn’t feasible in that area, he tried several other crops until hitting on organic cacao in Brasil Novo, a municipality bordering Altamira and the Xingú river.

Today his passion is forestry – the huge trees he has planted or preserved on the 98-hectare farm he bought 15 years ago.

Cacao trees require deep shade, but according to other members of the cooperative Cido went overboard, at the expense of productivity. He says, however, that “I produce 2,800 to 3,000 kgs a year, and thanks to the better prices fetched by organic cacao, it’s enough to live on.”

What he likes most is being surrounded by the giant trees on his land; his house is invisible from the road, hidden behind the dense vegetation. He has completed the journey from settler to reforester.

Wronski and his wife Brighanti don’t have a seasonal labour problem. Six families – some of them relatives and others sharecroppers – live on their farm and take care of the cacao trees in exchange for half of the harvest.

They also hire seasonal workers from a nearby rural village where some 40 families live, most of whom do not grow their own crops.

Cacao farms employ large numbers of people because “the work is 100 percent manual; there are no machines to harvest and smash the beans,” local agricultural technician Alino Zavarise Bis, with the Executive Commission of the Cacao Cultivation Plan (CEPLAC), a state body that provides technical assistance and does research, told IPS.

Besides providing jobs and incomes for people in the countryside, cacao farming drives reforestation. Two-thirds of the population of the municipality of Medicilândia is still rural, and a view from the air shows that it has conserved the native forests.

That is because cacao trees need shade from taller trees. When the bushes are still small, banana trees are used for shade – which has led to a major increase in local production of bananas.

“We have the privilege of working in the shade,” joked Jedielcio Oliveira, sales and marketing coordinator of the Organic Production Programme carried out in the Trans-Amazonian/Xingú region by CEPLAC, other national institutions and the German Technical Cooperation Agency (GTZ).

But organic production is still small-scale, accounting for just one percent of total cacao output in the Amazon state of Pará, where Medicilândia is located.

“That’s around 800,000 tons a year of cacao beans grown by a niche of 120 families, grouped in six cooperatives,” said Bis.

Wronski presides over one of them, the Organic Production Cooperative of Amazonia, and he was just elected to head the Central Cooperative, recently created to coordinate the activities of the six organic cacao cooperatives, including marketing and sales.

“Organic cacao farmers are different – they are more aware of the need to preserve the environment, more focused on sustainability,” said CEPLAC’s Bis. “While conventional farmers are looking at productivity and profits, organic growers are interested in taking care of the family’s health and well-being, and preserving nature, although without ignoring profit margins, since they get better prices.”

New members have to be invited by a member of one of the cooperatives and approved in assembly, “and the process of conversion to organic takes three years, which is the time needed to detoxify the soil from the effects of chemical fertilisers and poisons,” he said.

Cacao farmer José Tinte Zeferino, known as “Cido”, in front of his house, which is hidden by dense vegetation and surrounded by his cacao trees, in the municipality of Brasil Novo, near the Xingú river and the Trans-Amazonian highway. Credit: Mario Osava/IPS

Cacao farmer José Tinte Zeferino, known as “Cido”, in front of his house, which is hidden by dense vegetation and surrounded by his cacao trees, in the municipality of Brasil Novo, near the Xingú river and the Trans-Amazonian highway. Credit: Mario Osava/IPS

“The entire production system has to be organic, and not just the final product,” another cacao producer, Raimundo Silva from Uruará, a municipality to the west of Medicilândia, who is responsible for commercial operations in the new Central Cooperative, told IPS.

Organic cacao from Pará supplies, for example, the Austrian firm Zotter Chocolate, which boasts 365 different flavours and sells only organic, fair trade chocolate. Among its clients in Brazil is Harald, which exports chocolates to more than 30 countries, and Natura Cosméticos.

The industry in general, although it prefers the more abundant and less costly standard cacao butter, also adds the richer organic cacao to produce the best quality chocolates.

Conventional cacao, which uses pesticides and other chemical products, is still predominant in Pará. A small chocolate factory, Cacauway, was founded in 2010 in Medicilândia by the Trans-Amazonian Agroindustrial Cooperative, which groups traditional producers of non-organic cacao.

“The future of cacao is in Pará, which has favourable conditions for production, like abundant rains, fertile soil, and family farmers who live on the land, unlike the large landowners who live in the cities,” said Bis.

Pará is surpassed by another northern state, Bahia, which accounts for two-thirds of national cacao production. But productivity in Pará averages 800 kg per tree – double the productivity of Bahia, the expert noted.

And cacao trees in the Amazon rainforest are more resistant to witch’s broom, a fungus that reduced the harvest in Bahia by 60 percent in the 1990s. At the time, Brazil was the world’s second-biggest producer, but it fell to sixth place, behind countries of West Africa, Indonesia and even neighbouring Ecuador.

This article forms part of a reporting series conceived in collaboration with Ecosocialist Horizons.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Infrastructure Investments in Emerging Economies Hit Record Levels – but at What Cost?http://www.ipsnews.net/2015/06/infrastructure-boom-in-emerging-economies-hits-record-levels-but-at-what-cost/?utm_source=rss&utm_medium=rss&utm_campaign=infrastructure-boom-in-emerging-economies-hits-record-levels-but-at-what-cost http://www.ipsnews.net/2015/06/infrastructure-boom-in-emerging-economies-hits-record-levels-but-at-what-cost/#comments Thu, 11 Jun 2015 16:50:16 +0000 Kanya DAlmeida http://www.ipsnews.net/?p=141081 Large-scale energy and logistical infrastructure initiatives in Brazil are notorious for their delays. The majority of railways, ports, highways and power plants are several years behind schedule. Credit: Darío Montero/IPS

Large-scale energy and logistical infrastructure initiatives in Brazil are notorious for their delays. The majority of railways, ports, highways and power plants are several years behind schedule. Credit: Darío Montero/IPS

By Kanya D'Almeida
NEW YORK, Jun 11 2015 (IPS)

According to new data released by the World Bank Tuesday, investments in infrastructure in 139 emerging economies shot up to 107.5 billion dollars in 2014, with just five countries – Brazil, Colombia, India, Peru and Turkey – accounting for 73 percent of the total.

The update, published by the Bank’s Private Participation in Infrastructure (PPI) database, reveals that projects with private participation in the water, energy and transport sectors totaled 51.2 billion in the first half of 2014, compared to 41.7 billion in the first half of 2013.

"The concept of ‘appropriate scale’ has been deleted from […] policy discourse because now instead of ‘small is beautiful’, the catchphrase is ‘big is better’.” -- Nancy Alexander, director of the Economic Governance Program at the Heinrich Böll Foundation
Based on a review of investments in some 6,000 projects in 139 low- and middle-income countries between 1990 and 2014, the data show that the energy sector accounted for the greatest number of new projects, but the transport sector captured the largest amount of investment, securing 55.3 billion dollars or 51 percent of the total.

Some 33 road construction projects attracted 28.5 billion dollars in investment, with four of the top five road projects in Brazil and one in Turkey. Five airport projects secured 13.2 billion dollars in investment commitments.

Driven largely by massive infrastructure booms in Brazil, Colombia and Peru, Latin and America and the Caribbean accounted for 55 percent of global investments, snagging 69.1 billion dollars last year.

These mega-projects include 11 major ventures, eight of them in the energy sector, in Peru alone, amounting to over eight billion dollars, the largest of which, the Lima Metro Line 2, brought in 5.3 billion dollars in investment.

Not all regions are seeing an increase. Both India and China experienced declines last year, with the latter witnessing its lowest infrastructure investment levels since 2010, at 2.5 billion dollars. India’s commitments dropped down to 6.2 billion dollars.

In sub-Saharan Africa investment plunged from 9.3 billion in 2013 to 2.6 billion in 2014, although increased infrastructure activity in Ghana, Kenya and Senegal suggests that the downward trend might soon be reversed.

Despite uneven investment levels globally, the Bank estimates that spending on infrastructure projects in 2014 represents 91 percent of the five-year average between 2009 and 2013.

In a statement released on Jun. 9, Bank officials claimed, “This is the fourth highest level of investment commitments ever recorded, exceeded only by levels seen from 2010 through 2012.”

What this data reveals is that a global consensus to bolster public-private partnerships in mega-projects is bearing fruit.

Practically every major international organisation from the United Nations to multilateral development banks believe that strengthening road, energy and transport networks are crucial at a time when one billion people lack access to an all-weather road, 783 million people live without clean water supplies and 1.3 billion people are not connected to an electricity grid.

But a closer look at the track records of these gigantic infrastructure projects and new plans for financing them suggests that pouring billions of dollars into highways and dams in the developing world not only enriches some of the wealthiest sectors of the population, they also threaten to further impoverish the poorest, thereby widening global inequality.

‘Appropriate Scale’ – a thing of the past

The world’s most cited scholar on mega-project management and planning, Bent Flyvbjerg of Oxford University, found that on average only one in 1,000 mega-projects is completed on time, within its stated budget and with the ability to deliver what was promised.

Flyvbjerg’s extensive database on the subject reveals that approximately nine out of every 10 large-scale projects incur cost overruns, often over 50 percent of the stated budget – an expense borne primarily by taxpayers.

According to Nancy Alexander, director of the Economic Governance Program at the Heinrich Böll Foundation, these massive projects can cost “potentially billions and trillions of dollars, so when they go over budget and over time, they can devastate the national budget of a country.”

Alexander told IPS that, while there is a very real need for improved infrastructure, particularly in developing countries, there is an equally urgent need to tailor such ventures towards those who would most benefit from the services.

“Whether they are in education, healthcare, water or electricity, projects really need to be appropriate in scale to meet their goals. But the concept of ‘appropriate scale’ has been deleted from […] policy discourse because now instead of ‘small is beautiful’, the catchphrase is ‘big is better’.”

Part of the reason for this change, experts say, is the push to use investment in infrastructure to finance development, particularly by strengthening public-private partnerships and by ‘financialising’ investment.

Research by the Heinrich Böll Foundation reveals that the G20 group of major economies aims to finance the so-called infrastructure gap by tapping into the roughly 80 trillion dollars in long-term private institutional finance – from pension funds to insurance schemes – by creating infrastructure as an “asset class”.

Under this model, governments will undertake a range of public-private partnerships (PPPs) and financial institutions will package and sell financial products “that offer long-term investors a stake in a portfolio of PPPs”.

“When speculators take stakes in physical infrastructure,” the organisation says, “such infrastructure is subject to the whims of herds of investors [and] could trigger instability in the provision of basic services.”

Already, a lack of evidence on the success of PPPs suggests that the current pace of investment in infrastructure with private participation is at best a gamble – and at worst a recipe for disaster.

In a sample of 128 World Bank-financed public-private partnerships, 67 percent of those in the energy distribution sector failed, as did 41 percent of those in the water sector. These are the findings of the World Bank’s own independent evaluation group (IEG).

Other research indicates that mega-projects seldom lead to improvement in access to basic services, since many such ventures are undertaken to serve global, rather than local, demand.

“Energy projects, for instance, are often launched to serve a mine, or you’ll see a dam or power plant built for the same purpose – as is the case with the Inga Dam in the Democratic Republic of the Congo,” Alexander explained.

The very countries highlighted in the Bank’s latest update have a poor track record of successfully managing mega-projects.

Large-scale energy and logistical infrastructure initiatives in Brazil, for instance, are notorious for their delays, while the majority of railways, ports, highways and power plants are several years behind schedule.

Meanwhile, back in April, an expose published by the International Consortium of Investigative Journalists (ICIJ) revealed that in the course of a single decade, some 3.4 million people were evicted from their homes, torn away from their lands or otherwise displaced by projects funded by the World Bank.

Fifty percent of those displaced by large-scale ventures – ostensibly aimed at improving water and electricity supplies or beefing up transport and energy networks in some of the world’s most impoverished nations – reside in Africa, or one of three Asian nations: China, India and Vietnam.

The investigators further alleged that the Bank and its private-sector lending arm, the International Finance Corp, pumped 50 billion dollars into projects that financed governments and companies accused of human rights violations.

Brent Blackwelder, president emeritus of Friends of the Earth International, told IPS that “planning bigger and bigger projects despite the failure rate proves what Einstein said: that the definition of insanity is doing the same thing over and over again and expecting different results.”

Edited by Kitty Stapp

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Native Communities in Mexico Demand to be Consulted on Wind Farmshttp://www.ipsnews.net/2015/06/native-communities-in-mexico-demand-to-be-consulted-on-wind-farms/?utm_source=rss&utm_medium=rss&utm_campaign=native-communities-in-mexico-demand-to-be-consulted-on-wind-farms http://www.ipsnews.net/2015/06/native-communities-in-mexico-demand-to-be-consulted-on-wind-farms/#comments Wed, 03 Jun 2015 07:32:40 +0000 Emilio Godoy http://www.ipsnews.net/?p=140947 A wind park in the southern Mexican state of Oaxaca, where local communities and indigenous people are fighting the installation of wind turbines in their territory. Credit: Courtesy of the International Service for Peace (SIPAZ)

A wind park in the southern Mexican state of Oaxaca, where local communities and indigenous people are fighting the installation of wind turbines in their territory. Credit: Courtesy of the International Service for Peace (SIPAZ)

By Emilio Godoy
MEXICO CITY, Jun 3 2015 (IPS)

“It hurts us that our land is affected, and the environmental impacts are not even measured. Wind farm projects affect streams and hurt the flora,” said Zapotec Indian Isabel Jiménez, who is taking part in the struggle against the installation of a wind park in southern Mexico.

The 42-year-old healer says the turbines endanger medicinal plants, which are essential for her traditional healing work in the city of Juchitán in the state of Oaxaca, 720 km south of the capital.

“We are right, we know the truth,” Jiménez told IPS. “That’s why we are resisting this, and exercising our rights.”

The Zapotec indigenous woman is one of the leaders of the opposition to the Energía Eólica del Sur (Wind Energy of the South) company’s plans to build a wind park in the area to generate 396 MW that would feed into regional power grids.

Jiménez belongs to the Asamblea Popular del Pueblo Juchiteco – the Juchiteco People’s Assembly – founded in February 2013 to protect the rights of native communities in the face of the introduction of wind farms in their territories.

They are protesting the ecological, social and economic damage caused by wind parks.“They threaten us, they insult us, they spy on us, they block our roads. We don’t want any more wind turbines; they have to respect our territory because it is the last land we have left.” – Isabel Jiménez

In addition, they are complaining about incompliance with International Labour Organisation (ILO) Convention 169 Concerning Indigenous and Tribal Peoples, which requires prior, free and informed consent, and the U.N. Declaration on the Rights of Indigenous Peoples, both of which have been ratified by Mexico.

In November an inter-institutional technical committee made up of delegates of local, state and federal governments began a consultation process with regard to the wind park, and decided to conclude the informative phase in April despite the objections raised by local communities, and move on to the deliberative phase to discuss the viewpoints of the different parties.

Local inhabitants worry that the procedure followed will be used as a model for future projects forming part of the country’s energy reform, whose legal framework was enacted in August 2014, opening up electricity generation and sales, including renewables, as well as oil and gas extraction, refining, distribution and retailing, to participation by the domestic and foreign private sectors.

“The problem is that there has been no consultation process to obtain free, prior and informed consent,” Antonio López, a lawyer with the non-governmental Economic, Social and Cultural Rights Project (PRODESC), told IPS. “They are trying to speed up these processes, and the conditions are created to hold a certain kind of consultation process favourable to the projects.”

PRODESC advises local communities in the area in defence of their rights.

On Apr. 24, Zapotec communities filed a lawsuit in federal court against the consultation process that was carried out. The ruling is expected to be handed down shortly.

Juchitán is located in the Isthmus of Tehuantepec, a windy narrow land bridge between the Atlantic and Pacific oceans in Mexico’s southern state of Oaxaca where a large proportion of the country’s wind energy projects are being developed.

The isthmus, which is 200 km wide, is now home to 21 wind farms, including 12 in Juchitán, according to the Mexican Wind Energy Association.

Renewable energies, not including large hydropower dams, account for seven percent of electricity generation in Mexico. Wind power generates 2,551 MW a year, and the plan is to scale that up to 15,000 MW by 2020.

According to the National Institute of Statistics and Geography, there are 11 million indigenous people, distributed in 54 different communities, in this country of 120 million people. But that figure is considered an underestimate because it only includes people over five who speak a native language.

The Isthmus of Tehuantepec is mainly inhabited by Zapotec, Huave, Zoque, Mixe and Chontal Indians.

“There have been many problems with the application of the consultation process, such as a lack of information and attacks on community leaders and rights defenders,” Andrea Cerami, a lawyer with the defence and public policies section of the non-governmental Mexican Centre for Environmental Law (CEMDA), told IPS.

He said that when a state plans infrastructure works or other projects in native territories without due consultation, it violates the rights of communities, which are protected by international treaties and national laws.

Mexico’s laws on fossil fuels and the power industry, which form part of the country’s energy reform, stipulate that local communities must be consulted. But the law on fossil fuels does not offer a way out for the owners of land, who must reach an agreement with the public or private companies in question or accept an eventual court verdict.

Civil society organisations complain that the planned energy projects would overlap rural indigenous territories – a source of conflict that makes properly conducted consultation processes essential.

Since January, Rarámuri indigenous communities in the northern state of Sinaloa have blocked the construction of a gas pipeline between Sinaloa and the U.S. state of Texas across the border, until a consultation process is carried out to obtain their free, prior and informed consent.

The Yaqui Indians in the northern state of Sonora are likewise fighting the Acueducto Independencia, a pipeline that has carried water from Sonora to the northern city of Hermosillo since March 2013, despite several victories in court by the native communities.

In Oaxaca, Mixe indigenous groups had to go to federal court to see their right to consultation enforced before the National Water Commission, with respect to the use of wells on their land.

“They threaten us, they insult us, they spy on us, they block our roads,” complained Jiménez, who has practiced traditional healing since 1993. “We don’t want any more wind turbines; they have to respect our territory because it is the last land we have left.”

Energía Eólica del Sur has a history of conflicts. Until 2013 the company was named Mareña Renovables, which tried to build a 396 MW wind farm in the town of San Dionisio del Mar, on Oaxaca’s Pacific coast.

But the wind park, with a projected investment of 1.2 billion dollars, including 75 million from the Inter-American Development Bank (IDB), has been stalled since 2013 as a result of court verdicts in favour of the local communities that would have been affected. As a result, Energía Eólica del Sur decided to move to Juchitán.

In December 2012 the international Indian Law Resource Center filed a complaint on behalf of 225 inhabitants of seven indigenous communities with the IDB’s Independent Consultation and Investigation Mechanism (ICIM), regarding the loan.

The complaint seeks damages given the absence of adequate consultation with the communities at the start of the project and the lack of measures in its design and execution aimed at avoiding negative impacts.

In September 2013, the IBD’s Panel of the Compliance Review Phase admitted the complaint. It has been investigating the case since December 2014, in order to draw up a report and proceed to oversee compliance with its provisions.

“This is an opportunity to make sure people are informed in the future,” López said. “We want to give the legal system a chance to respect human rights.”

Cerami, whose organisation, CEMDA, advises the Yaqui Indians in their struggle, said the consultation process helps defuse conflicts.

“Already existing social and environmental conflicts can be exacerbated, and they can escalate in intensity and trigger other kinds of actions,” he said. “The consultation is a mechanism for dialogue that should favour broad participation and help parties with different interests reach understandings.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Growing Mobilisation Against Introduction of Fracking in Spainhttp://www.ipsnews.net/2015/06/growing-mobilisation-against-introduction-of-fracking-in-spain/?utm_source=rss&utm_medium=rss&utm_campaign=growing-mobilisation-against-introduction-of-fracking-in-spain http://www.ipsnews.net/2015/06/growing-mobilisation-against-introduction-of-fracking-in-spain/#comments Tue, 02 Jun 2015 08:01:09 +0000 Ines Benitez http://www.ipsnews.net/?p=140916 Hundreds of demonstrators protest against fracking in Santander, the capital of the northern Spanish region of Cantabria. Credit: Courtesy of Asamblea Contra el Fracking de Cantabria

Hundreds of demonstrators protest against fracking in Santander, the capital of the northern Spanish region of Cantabria. Credit: Courtesy of Asamblea Contra el Fracking de Cantabria

By Inés Benítez
MALAGA, Spain, Jun 2 2015 (IPS)

Thousands of people in Spain have organised to protest the introduction of “fracking” – a controversial technique that involves pumping water, chemicals and sand at high pressure into shale rock to release gas and oil.

“We are all different kinds of people, local inhabitants, who love our land and want to protect its biodiversity,” activist Hipólito Delgado with the Asamblea Antifracking de Las Merindades, a county in the northern province of Burgos, told Tierramérica.

The company BNK España, a subsidiary of Canada’s BNK Petroleum, has applied for permits to drill 12 exploratory wells and is awaiting the environmental impact assessment required by law.

On May 3 some 4,000 people demonstrated in the town of Medina de Pomar in the province of Burgos, demanding that the government refuse permits for exploratory wells because of the numerous threats they claimed that hydraulic fracturing or fracking posed to the environment and health.

While no permit for fracking has been issued yet in Spain, 70 permits for exploration for shale gas have been granted and a further 62 are awaiting authorisation, according to the Ministry of Industry and Energy.

“Thanks to the fight put up by local inhabitants, “a permit for exploration in the northern region of Cantabria was cancelled in February 2014, activist Carmen González, with the Asamblea Contra el Fracking de Cantabria, an anti-fracking group mainly made up of people from rural areas in that region, told Tierramérica.

Critics of fracking say it pollutes underground water supplies with chemicals, releases methane gas – 25 times more potent than carbon dioxide as a greenhouse gas – into the atmosphere, and can cause seismic activity.

“There are more and more negative reports on fracking,” geologist Julio Barea, spokesman for Greenpeace Spain, told Tierramérica. He said that in this country there is “complete social and political opposition to the technique, which no one wants.”

But Minister of Industry and Energy José Manuel Martínez Soria backs the introduction of fracking “as long as certain conditions and general requisites are fulfilled.”

A year ago, 20 political parties, including the main opposition party, the Spanish Socialist Workers Party (PSOE), signed a commitment in the legislature to ban fracking when the government elected in December is sworn in, “because of its irreversible environmental impacts.”

Only four right-wing and centre-right parties, including the governing People’s Party, which is promoting unconventional shale gas development, refrained from signing the accord.

Thousands of protesters took part in a demonstration against fracking on May 3, 2015 in the northern municipality of Medina de Pomar, where 12 permits have been granted for shale gas exploration. Credit: Courtesy of Ecologistas en Acción

Thousands of protesters took part in a demonstration against fracking on May 3, 2015 in the northern municipality of Medina de Pomar, where 12 permits have been granted for shale gas exploration. Credit: Courtesy of Ecologistas en Acción

Fracking involves drilling a vertical well between 1,000 and 5,000 metres deep, down to gas-bearing layers of shale rock. Then the well is extended horizontally up to three km, and between 10,000 and 30,000 cubic metres of water, sand and chemicals are injected at high pressure to fracture the rock and release the oil and gas, which along with the additives is pumped up to the surface.

The companies interested in fracking in Spain downplay the dangers and stress this country’s shale gas potential, especially in Cantabria, the Basque Country and Castilla y León – where Burgos is located – in the north, although exploration permits have also been granted in other regions.

“Like any activity it involves risks, but the technological advances make it possible to minimise them,” said Daniel Alameda, director general of Shale Gas España, a lobbying group for prospectors in Spain.

In an interview with Tierramérica, Alameda said the companies “are totally aware that they have to respect the environment.”

He argued that it is “technically impossible” for fracking to pollute aquifers since the hydraulic fracturing takes place some 3,000 metres below the underground water reserves, and the wells are isolated with a protective barrier of steel and cement.

“It’s a load of eyewash to say fracking doesn’t pollute,” activist Samuel Martín-Sosa, international coordinator at Ecologistas en Acción, told Tierramérica.

He pointed out that a court sentence has already been handed down against fracking, in the U.S. state of Texas, where an oil company was ordered in 2014 to pay damages to a family who suffered numerous health problems because of the proximity of a number of natural gas wells.

Shale Gas España also denies any link between fracking and seismic activity. “We don’t cause earthquakes. We have all of the tools necessary to ensure that the activity does not pose a threat to local residents or to the companies themselves,” Alameda said.

But in a 2014 document, the Geological and Mining Institute of Spain warned that fracking could cause radioactivity in water, pollute aquifers and the atmosphere, and cause earthquakes.

Martín pointed out that most lawsuits never make it to trial because the companies reach out-of-court settlements containing confidentiality clauses that prevent those affected by the wells from speaking out.

The United States is the world’s leading producer of shale oil and gas, followed by Argentina. In July 2011 France became the first country in the world to ban fracking, and 16 other European Union countries have since followed suit, while Spain and 10 others permit the use of hydraulic fracturing, with the United Kingdom in the lead.

Alameda said shale gas would create jobs, reduce energy dependency and improve the country’s trade balance.

Spain imports around 80 percent of the energy it consumes, according to statistics from the 2011-2020 Energy Efficiency and Savings Action Plan. Those involved in the exploitation of unconventional gas estimate that their wells will make the country self-sufficient for 90 years – although that can only be proven through exploration.

But to reduce dependency, “the way forward is not the extraction of gas; we can’t allow the continued burning of fossil fuels,” said Martín-Sosa of Ecologistas en Acción.

The environmentalist criticised “the absolute promotion” of shale gas by the government, when what is needed, he said, is “a change in energy model” starting with the replacement of fossil fuels by renewable energy sources.

But clean energy “faces more hurdles than ever” from the national government, he complained.

Shale Gas España, meanwhile, asserts that “the oil and gas industry is compatible with renewable energies.”

In 2013 and 2014, four of Spain’s 17 “autonomous communities” or regions passed laws banning fracking. But the central government introduced changes in the authority over the development of fracking, which allowed the regional laws to be revoked by the Constitutional Court.

Martín-Sosa said that what is needed is a national ban on fracking, rather than attempts to regulate it.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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A Chimera in Growing Cooperation Between China and Brazilhttp://www.ipsnews.net/2015/05/a-chimera-in-growing-cooperation-between-china-and-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=a-chimera-in-growing-cooperation-between-china-and-brazil http://www.ipsnews.net/2015/05/a-chimera-in-growing-cooperation-between-china-and-brazil/#comments Thu, 21 May 2015 22:31:02 +0000 Mario Osava http://www.ipsnews.net/?p=140757 Chinese Prime Minister Li Keqiang with his host, Brazilian President Dilma Rousseff, during the ceremony for the signing of agreements that ended the Chinese leader’s two-day visit to Brasilia, on May 19. Credit: EBC

Chinese Prime Minister Li Keqiang with his host, Brazilian President Dilma Rousseff, during the ceremony for the signing of agreements that ended the Chinese leader’s two-day visit to Brasilia, on May 19. Credit: EBC

By Mario Osava
RIO DE JANEIRO, May 21 2015 (IPS)

A total of 35 agreements and contracts were signed during Chinese Prime Minister Li Keqiang’s visit to Brazil, as part of the growing ties between the two countries. But there is one project that drew all the attention: the Transcontinental Railway.

The railroad will stretch over 5,000 km from the port of Açú, 300 km northeast of Rio de Janeiro, to a port in Peru. The Peruvian port will be selected after feasibility studies are carried out to determine the viability of specific sites, according to the memorandum of understanding signed by Brazil, China and Peru.

“It’s crazy,” said Newton Rabello, a professor at the Federal University of Rio de Janeiro who specialises in transportation systems. “The 4,000-metre barrier of the Andes mountains and the high costs make the project unviable from the start,” he told IPS.

“Railroads don’t like rugged terrain; all of the ones laid in the Andes mountains were closed down and the so-called bullet train between Rio de Janeiro and São Paulo didn’t work because of the absurd costs,” explained Rabello, an engineer with a PhD from the Massachusetts Institute of Technology (MIT).

He argued that other railways proposed for creating a connection between the Atlantic and Pacific oceans won’t work, for the same reasons – including the ones that cross the areas of greatest economic density such as South America’s Southern Cone region, where the only thing needed is to build stretches to complement already existing railways.

Other accords signed by President Dilma Rousseff and Li, or by some of the 120 businesspersons who accompanied the Chinese leader, are more concrete and opportune for the Brazilian government, which is facing a fiscal adjustment and does not have the resources to carry out necessary infrastructure projects and revive the stagnant economy.

The accords involve a total investment by China of 53 billion dollars – a figure mentioned by the Brazilian government without confirmation from China or a detailed breakdown because it covers initiatives in different stages – some still on paper, such as the interoceanic rail corridor, and others which will go out to bid.

But the participation of Chinese companies and capital will make it possible to jumpstart many infrastructure projects that have been delayed or stalled, such as railroads for the exportation of the soy grown in Brazil’s Midwest and Northeast regions.

A 50 billion dollar fund will be established toward that end by the Industrial and Commercial Bank of China (ICBC) and Brazil’s Caixa Econômica Federal.

Industry, meanwhile, will be the prime focus of the government’s Bilateral Productive Cooperation fund. China will provide 20 to 30 billion dollars and Brazil will later decide what its quota will be.

The industrialisation of Latin America is one aim of China’s development finance, Li said in Brasilia, in response to complaints about the asymmetry of trade relations, with Latin America’s exports practically limited to commodities.

Li’s visit to Brazil represented the first part of his first Latin America tour, which is taking him to Colombia, Peru and Chile until his return home on May 26.

The Ponta da Madeira bridge in Northeast Brazil, which will be connected with iron ore mines by means of a new railroad that will transport the mineral to the ships that set out from this region for China. Credit: Mario Osava/IPS

The Ponta da Madeira bridge in Northeast Brazil, which will be connected with iron ore mines by means of a new railroad that will transport the mineral to the ships that set out from this region for China. Credit: Mario Osava/IPS

The agreements signed in Brasilia for financial cooperation accentuate the much-criticised asymmetry. Chinese banks granted seven billion dollars in new loans to Brazil’s state-owned oil company Petrobras, which come on top of earlier credits that guarantee oil supplies to China.

Another beneficiary of the agreements is Brazil’s mining giant Vale, included in a four billion dollar credit line for the purchase of ships to transport 400,000 tons of iron ore.

Oil and iron ore make up nearly 80 percent of Brazil’s exports to China. Hence China’s interest in improving this country’s transport infrastructure, to reduce the cost of Brazil’s exports, besides providing work for China’s construction companies now that domestic demand is waning.

Another agreement opens up the Chinese market to exports of cattle on the hoof from Brazil.

Brazil has exported some industrial products to China, mainly from the aeronautics industry. The sale of 22 planes from the Empresa Brasileira de Aeronáutica (Embraer) to a Chinese company was finalised during Li’s visit. A prior accord had established the sale of a total of 60.

Bilateral trade amounted to 77.9 billion dollars in 2014, with a trade surplus for Brazil, although it is shrinking due to the fall in commodity prices. The goal is to reach 100 billion dollars in trade in the near future, according to the Chinese prime minister.

The stronger relations, especially the increase in Chinese investment, “could be positive for Brazil, but we have to control our enthusiasm over the closer ties,” said Luis Afonso Lima, president of the Brazilian Society of Transnational Corporations and Economic Globalisation.

“China may have more to gain than us in this process: they are seeking suppliers (of raw materials) throughout Latin America, but without any urgency because their economy has slowed down; they can think things through strategically, with a view to the long term,” the economist told IPS.

“With more experience built up in their ancient culture, they know what they want – they are seeking more global power, and alliances with emerging countries from other regions, like Brazil, expand their influence,” he said.

With nearly four trillion dollars in foreign reserves, they can finance the development of any country, he said.

Meanwhile, Brazil, “which is in an emergency situation and in need of short-term financing, is merely reacting, without any strategy,” he said. “That is why the enthusiasm over Chinese investment worries me; we could end up frustrated, and worse, it could expose us to manipulation, like what happened with Argentina.”

Lima said Brazil had already been frustrated once: when Brazil officially recognised China as a market economy in 2004, offering it better trade conditions, China failed to live up to its commitment of 10 billion dollars in investment in industry in this country.

Another disappointment was the promise to install in Brazil a 12 billion dollar plant by the Chinese company Foxconn, to produce electronic devices. In the end the investment amounted to less than one-tenth of what was promised when the deal was announced in 2011.

But today’s circumstances favour greater economic complementation between the two countries and more balanced bilateral trade.

“China stopped putting a priority on exports and is stimulating domestic consumption, while Brazil is in the opposite situation, with a reduction in internal demand and a greater export effort, which opens up a possibility of synergy between the two countries,” Lima said.

But clear goals are needed to take advantage of this opportunity, he said, “along with long-term planning with clearly defined priorities, the necessary reforms, and productive investment in manufacturing….but the Brazilian government seems to be lost.”

The Transcontinental Railway is designed “to prioritise exports of soy and minerals” to Asia, mainly China, he said.

“Historically railroads led to a major reduction in costs for land transport, replacing draft animals and carts,” said Rabello. “Costs fell from six to one, and even lower in some cases, and that stuck in the minds of people who still see trains as a solution, because they have no idea of today’s costs.”

As a result, several parallel railroads are being built in Brazil, running towards the centre of the country, where agricultural production, especially of soy, is on the rise. Where there was only one precarious railway for carrying exports they now want to offer three or four alternatives, or even more, such as the interoceanic rail corridor, which is “excessive,” the professor said.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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“Megaprojects” Can Destroy Reputations in Brazilhttp://www.ipsnews.net/2015/05/megaprojects-can-destroy-reputations-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=megaprojects-can-destroy-reputations-in-brazil http://www.ipsnews.net/2015/05/megaprojects-can-destroy-reputations-in-brazil/#comments Mon, 18 May 2015 07:04:00 +0000 Mario Osava http://www.ipsnews.net/?p=140652 Scale model of one of the offshore oil platforms exploiting Brazil’s “presalt” reserves, on exhibit in the research centre of Petrobras, Brazil’s state oil company, in Rio de Janeiro. Credit: Mario Osava/IPS

Scale model of one of the offshore oil platforms exploiting Brazil’s “presalt” reserves, on exhibit in the research centre of Petrobras, Brazil’s state oil company, in Rio de Janeiro. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, May 18 2015 (IPS)

Megaprojects are high-risk bets. They can shore up the government that brought them to fruition, but they can also ruin its image and undermine its power – and in the case of Brazil the balance is leaning dangerously towards the latter.

As the scandal over kickbacks in the state oil company Petrobras, which broke out in 2014, grows, it is hurting the image of former president Luiz Inácio Lula da Silva (2003-2011) and his successor, President Dilma Rousseff, both of whom belong to the left-wing Workers’ Party (PT).

In its 2014 balance sheet, the company wrote off 6.2 billion reais (2.1 billion dollars) due to alleged graft and another 44.6 billion reais for overvalued assets, including refineries.

But the real magnitude of the losses will never be known. The company lost credibility on an international level, its image has been badly stained, and as a result many of its business plans will be stalled or cancelled.

The numbers involved in the corruption scandal are based on testimony from those accused in the operation codenamed “Lava-jato” (Car Wash) and in investigations by the public prosecutor’s office and the federal police, which indicated that the bribes represented an estimated three percent of Petrobras’ contracts with 27 companies between 2004 and 2012.

The biggest losses can be blamed on poor decision-making, bad planning and mismanagement. But the corruption had stronger repercussions among the population and the consequences are still incalculable.

It will also be difficult to gauge the influence that corruption had on administrative blunders, which are also political, and vice versa.

Two-thirds of the devaluation of the assets was concentrated in Petrobras’ two biggest projects, the Abreu e Lima Refinery in the Northeast, which is almost finished, and the Rio de Janeiro Petrochemical Complex (COMPERJ), both of which began to be built when Lula was president.

Petrobras informed investors that COMPERJ, a 21.6-billion-dollar megaproject, abandoned the petrochemical portion of its activities in 2014 as they were considered unprofitable, after three years of waffling, and was downsized to a refinery to process 165,000 barrels a day of oil.

It will be difficult for Petrobras, now under-capitalised, to invest millions of dollars more to finish the refinery, where the company estimates that the work is 82 percent complete. But failing to finish the project would bring much bigger losses.

Thousands of workers laid off, economic and social depression in Itaboraí, where the complex is located, 60 km from the city of Rio de Janeiro, purchased equipment that is no longer needed, which costs millions of dollars a year to store, and suppliers that have gone broke are some of the effects of the modification and delays in the project.

The Santo Antônio hydroelectric plant on the Madeira river, in the northwest Brazilian state of Rondônia, during its construction in 2010. Credit: Mario Osava/IPS

The Santo Antônio hydroelectric plant on the Madeira river, in the northwest Brazilian state of Rondônia, during its construction in 2010. Credit: Mario Osava/IPS

The Petrobras crisis is also a result of the crash in international oil prices and of years of government fuel subsidies that kept prices artificially low to help control inflation.

It also endangers the naval industry, which expanded to address demand from the oil company.

Shipyards may dismiss as many as 40,000 people if the crisis drags on, according to industry statistics.

The industry was revived in Brazil as a result of orders for drills, rigs and other equipment to enable Petrobras to extract the so-called presalt oil reserves that lie below a two-kilometre- thick salt layer under rock and sand, in deep water in the Atlantic ocean.

The Abreu e Lima Refinery, which can process 230,000 barrels a day, has had better luck because the first stage is already complete and it began to operate in late 2014. But the cost was eight times the original estimate.

One of the reasons for that was the projected partnership with Venezuela’s state oil company, PDVSA, which Lula had agreed with that country’s late president, Hugo Chávez (1999-2013).

PDVSA never made good on its commitment to provide 40 percent of the capital needed to build the plant. But the agreement influenced the design and purchase of equipment suited to processing Venezuela’s heavy crude. The project had to be modified along the way.

Plans to build two other big refineries, in the Northeast states of Ceará and Maranhão, were ruled out by Petrobras as non-cost-effective. But that was after nearly 900,000 dollars had already been invested in purchasing and preparing the terrain.

The disaster in the oil industry has stayed in the headlines because of the scandal and the amounts and sectors involved, which include four refineries, dozens of shipyards and major construction companies that provided services to Petrobras and have been accused of paying bribes.

But many other large energy and logistical infrastructure projects have suffered major delays. These megaprojects mushroomed around the country, impelled by the high economic growth during Lula’s eight years in office and incentives from the government’s Growth Acceleration Programme.

Railways, ports, the expansion and paving of roads and highways, power plants of all kinds, and biofuels – all large-scale projects – put to the test the productive capacity of Brazilians, and especially of the country’s construction firms, which also expanded their activities abroad.

The majority of the projects are several years behind schedule. The diversion of the São Francisco river through the construction of over 700 km of canals, aqueducts, tunnels and pipes, and a number of dams, to increase the supply of water in the semi-arid Northeast, was initially to be completed in 2010, at the end of Lula’s second term.

But while the cost has nearly doubled, it is not even clear that the smaller of the two large canals will be operating by the end of this year, as President Rousseff promised.

Private projects, like the Transnordestina and Oeste-Leste railways, also in the Northeast, have dragged on as well.

Resistance from indigenous communities and some environmental authorities, along with labour strikes and protests – which sometimes involved the destruction of equipment, workers’ housing and installations – aggravated the delays caused by mismanagement and other problems.

The wave of megaprojects that began in the past decade was explained by the lack of investment in infrastructure suffered by Brazil, and Latin America in general, during the two “lost decades” – the 1980s and 1990s.

After 1980, oil refineries were not built in Brazil. The success of ethanol as a substitute for gasoline postponed the need. The country became an exporter of gasoline and importer of diesel fuel, until the skyrocketing number of cars and industrial consumption of fuel made an expansion of refinery capacity urgently necessary.

Nor were major hydropower dams built after 1984, when the country’s two largest plants were inaugurated: Itaipú on the border with Paraguay and Tucuruí in the northern Amazon rainforest.

The energy crisis broke out in 2001, when power rationing measures were put in place for eight months, which hurt the government of Fernando Henrique Cardoso (1995-2003).

The return of economic growth during the Lula administration accentuated the deficiencies and the need to make up for lost time. The wishful thinking that sometimes drives developmentalists led to a mushrooming of megaprojects, with the now known consequences, including, probably, the new escalation of corruption.

Not to mention the political impact on the Rousseff administration and the PT and the risk of instability for Latin America’s giant.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Unifying Transmission from North to South Means Cheaper Energy in Chilehttp://www.ipsnews.net/2015/05/unifying-transmission-from-north-to-south-means-cheaper-energy-in-chile/?utm_source=rss&utm_medium=rss&utm_campaign=unifying-transmission-from-north-to-south-means-cheaper-energy-in-chile http://www.ipsnews.net/2015/05/unifying-transmission-from-north-to-south-means-cheaper-energy-in-chile/#comments Thu, 07 May 2015 00:39:52 +0000 Marianela Jarroud http://www.ipsnews.net/?p=140480 The interconnection of Chile’s two major power grids will unite the country in terms of energy and bring down costs in one of the countries in the world with the most expensive electricity. Credit: Ministry of Energy

The interconnection of Chile’s two major power grids will unite the country in terms of energy and bring down costs in one of the countries in the world with the most expensive electricity. Credit: Ministry of Energy

By Marianela Jarroud
SANTIAGO, May 7 2015 (IPS)

Chile expects to have a more efficient and stable electricity market, with a more steady – and above all, less expensive – supply, when the country’s two major power grids are interconnected over a distance of more than 3,000 km.

“It’s not sufficient simply to increase our electricity generating capacity, if we don’t strengthen our transmission capacity at the same time. If we want to be a developed country, we have to aim for diversity in our energy mix and stability in power transmission,” Energy Minister Máximo Pacheco told IPS.

This project “opens up enormous opportunities for progress and stability for Chileans, with cleaner and cheaper energy,” he added.

Chile’s long, thin territory has an installed capacity of approximately 17,000 MW to supply its 17.6 million people and its productive sectors.

In this country power generation and distribution are in the hands of private and mainly foreign corporations, and regulated by the government’s National Energy Commission, which is also coordinating the interconnection.

Of the country’s total installed capacity, the central grid, SIC, accounts for 74 percent and the northern grid, SING, accounts for 25 percent, while the smaller grids in the southern regions of Aysén and Magallanes produce less than one percent.

SING stretches from the region of Arica in the extreme north, bordering Peru and Bolivia, to Antofagasta, while SIC runs from the northern city of Taltal to the Big Island of Chiloé, in the south.

Together they total more than 3,000 km in this South American country, which is 4,270 km long.

The interconnection project, already under construction with a total projected investment of one billion dollars, is being carried out by the French company GDF Suez and involves installing an additional 580 km of transmission lines.

The new power lines will carry energy from the Mejillones power plant in Antofagasta, which forms part of the SING grid, to the Cardones substation in Copiapó, in the northern region of Atacama, which is part of the SIC grid.

Chile currently imports 97 percent of the oil, gas and coal it uses, and its energy mix is made up of 63 percent thermal power, 34 percent hydroelectricity and three percent non-conventional renewable energy (NCRE) sources.

The Italian-Spanish firm Endesa-Enel wants to build a large dam on Lake Neltume, in the town of the same name in the Los Ríos region in southern Chile – a plan that is staunchly opposed by local residents, especially indigenous communities, which defend it as sacred territory. Credit: Marianela Jarroud/IPS

The Italian-Spanish firm Endesa-Enel wants to build a large dam on Lake Neltume, in the town of the same name in the Los Ríos region in southern Chile – a plan that is staunchly opposed by local residents, especially indigenous communities, which defend it as sacred territory. Credit: Marianela Jarroud/IPS

This country’s shortage of energy sources has made the cost of electricity per megawatt/hour (MWh) for industry in Chile one of the highest in Latin America: over 150 dollars, according to the World Economic Forum’s Global Energy Architecture Performance Index Report 2014.

That is the 13th highest cost in the world, and in the region it is only surpassed by the Dominican Republic’s 210 dollars per MWh, and Brazil and El Salvador, where the cost is 160 dollars per MWh.

“Chile has the highest cost of electricity in Latin America, and the power bill went up 30 percent in the last five years,” said Pacheco. “This has a strong impact on our families and hurts the competitiveness of our companies.”

He said the interconnection project, postponed for decades due to technical and technocratic reasons, “is an historic milestone” because it not only makes supply more efficient, stable and steady but also guarantees lower costs and gives a boost to the economy.

According to the National Energy Commission, the interconnection will bring 1.1 billion dollars in benefits to the country because of the drop in power grid costs and prices, linked to greater competition and a reduction of risks in the market.

“This has an enormous value given that it is equivalent to building approximately 35,000 social housing units. That is the magnitude of the economic benefit of this project for the country,” the minister stressed.

In concrete terms, households supplied by the SING northern grid will notice a 13 dollar drop in the price of MWh, while homes covered by the southern grid, SIC will see a three dollar drop.

In the case of industry, there will be an estimated 17 dollar reduction in the price per MWh in the north and nine dollars in the central and southern parts of the country.

In addition, “investment in the energy sector will increase, which will definitely be good news for our country,” Pacheco said.

But the economic benefits are not the only attractive aspect of the project. The minister said “the aim of the connection between the country’s two major grids is that the clean, abundant energy in the north can reach the centre and south.”

This means environmentalists share the government’s optimism.

Manuel Baquedano, director of the non-governmental Political Ecology Institute, told IPS that this is “one of the most important projects for the country” because it entails greater flexibility in energy management and, as a result, lower costs.

The expert pointed out that “the north has a surplus during the daytime” due to the enormous solar power potential in the Atacama desert, the world’s driest, while in the centre and south of the country, served by the SIC, “there is a surplus at night” because of the great hydropower potential.

As a result, he said, “each system can contribute to the other, producing a more stable supply and bolstering the use of NCRE sources, which require back-up energy sources.”

“It’s a key project, because Chile’s problem today is not generation but transmission of energy,” Baquedano said.

In her second term, which began in March 2014, President Michelle Bachelet promised to increase the share of energy produced by NCRE sources to 20 percent by 2025.

“Several of the measures proposed on the government’s agenda are aimed at meeting that goal, such as expanding the power grid, improving competitiveness in energy generation, and making the operation of the power grids more flexible,” the minister said.

He added that the future development of the power grids “will play a central role in facilitating compliance with that target at lower costs, taking advantage of the coordinated use of the transmission corridors.”

“What we are seeing is a proliferation of wind and solar power projects in the north, more than the construction of hydropower dams in the south. The public no longer tolerates megaprojects,” Baquedano said.

Against that backdrop, “I’m not afraid of the interconnection. On the contrary, I believe it is a very important element for the development of NCRE sources,” he concluded.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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The Blue Amazon, Brazil’s New Natural Resources Frontierhttp://www.ipsnews.net/2015/05/the-blue-amazon-brazils-new-natural-resources-frontier/?utm_source=rss&utm_medium=rss&utm_campaign=the-blue-amazon-brazils-new-natural-resources-frontier http://www.ipsnews.net/2015/05/the-blue-amazon-brazils-new-natural-resources-frontier/#comments Sat, 02 May 2015 06:49:52 +0000 Fabiola Ortiz http://www.ipsnews.net/?p=140417 An oil tanker in Rio de Janeiro’s Guanabara Bay. Just 250 km from the coast lie the country’s presalt oil reserves, the wealth of the so-called Blue Amazon. Credit: Fabíola Ortiz/IPS

An oil tanker in Rio de Janeiro’s Guanabara Bay. Just 250 km from the coast lie the country’s presalt oil reserves, the wealth of the so-called Blue Amazon. Credit: Fabíola Ortiz/IPS

By Fabiola Ortiz
RIO DE JANEIRO, May 2 2015 (IPS)

The Atlantic ocean is Brazil’s last frontier to the east. But the full extent of its biodiversity is still unknown, and scientific research and conservation measures are lagging compared to the pace of exploitation of resources such as oil.

The Blue Amazon, as Brazil’s authorities have begun to call this marine area rich in both biodiversity and energy resources, is similar in extension to the country’s rainforest – nearly half the size of the national territory.

And 95 percent of the exports of Latin America’s giant leave from that coast, according to official figures.

Brazil’s continental shelf holds 90 and 77 percent of the country’s proven oil and gas reserves, respectively. But the big challenge is to protect the wealth of the Blue Amazon along 8,500 km of shoreline.

“We haven’t fully grasped just how immense that territory is,” Eurico de Lima Figueiredo, the director of the Strategic Studies Institute at the Fluminense Federal University, told Tierramérica. “To give you an idea, the Blue Amazon is comparable in size to India.”

“But we aren’t prepared to take care of it; it isn’t yet considered a political and economic priority for the country,” the political scientist said.

Figueiredo, who presided over the Brazilian Association of Defence Studies (ABED) from 2008 to 2010, said the Blue Amazon is a term referring to the territories covered by new treaties on international maritime law.

Brazil is one of the 10 countries in the world with the largest continental shelves, in an ocean like the Atlantic which conceals untold natural wealth that offers enormous economic, scientific and technological potential.

According to the United Nations Convention on the Law of the Sea, a country’s Exclusive Economic Zone (EEZ) comprises an area which extends to 200 nautical miles (370 kilometres) off the coast.

Official map of part of the Blue Amazon, off the east coast of Brazil, where conservation and research are lagging behind economic development, mainly by the oil industry. Credit: Government of Brazil

Official map of part of the Blue Amazon, off the east coast of Brazil, where conservation and research are lagging behind economic development, mainly by the oil industry. Credit: Government of Brazil

Brazil’s EEZ was originally 3.5 million sq km. But it later claimed another 963,000 sq km, which according to different national institutions – including scientific bodies – represents the natural extension of the continental shelf.

The U.N. Convention’s Commission on the Limits of the Continental Shelf (CLCS), made up of 148 countries, has so far sided with Brazil, adding 771,000 sq km to its EEZ. The decision on the rest is still pending.

Brazil’s demand, at least with respect to the expansion of the continental shelf granted so far, meets the requisites of the U.N. Convention and grants the country the power to exploit the resources in the expanded area and gives it the responsibility of managing it.

The recognition of Brazil’s claim, although only partial, has annoyed some neighbour countries, because of the huge economic benefits offered by the additional continental shelf it was granted.

Figueiredo said the challenge now is to monitor and protect the continental shelf. “We don’t have full sovereignty with regard to the maritime territory. Brazilian society is unaware of the important need to protect the Blue Amazon. There are enormous shortcomings, with respect to our needs.”

In 2005 a plan was approved to upgrade the navy with an estimated investment of 30 billion dollars until 2025. Defending a country is a complex task, said Figueiredo, because it involves a number of dimensions: military, economic, technical and scientific.

But scientific research in Brazil’s marine territory is currently far outpaced, he said, by the exploitation of resources such as the oil located 250 km off the coast and 7,000 metres below the ocean surface, beneath a thick layer of salt, sand and rocks.

Development of the so-called presalt reserves, discovered a decade ago, would make Brazil one of the 10 countries with the largest oil reserves in the world. And they already provide 27 percent of the more than three million barrels a day of oil and gas equivalent produced by this country.

“That region belongs to Brazil, the country has assumed commitments with the U.N. to monitor and study the living and non-living resources like oil, gas and minerals. If we don’t preserve it, we’ll lose this great treasure,” oceanographer David Zee, at the Rio de Janeiro State University, told Tierramérica.

In his opinion, Brazil is far from living up to the commitments assumed with the international community. “We have duties – we have to meet the U.N.’s scientific research requirements. We have to take greater care of our marine resources,” he said.

Apart from the oil and gas wealth, a large part of the EEZ borders the Mata Atlántica ecosystem, which extends along 17 of Brazil’s 26 states, 14 of which are along the coast.

The environmental organisation SOS Mata Atlántica explains that coastal and marine areas represent the ecological transition between land and marine ecosystems like mangroves, dunes, cliffs, bays, estuaries, coral reefs and beaches. The biological wealth of these ecosystems turns marine areas into enormous natural nurseries.

And the convergence of cold water from the South with warm water from the Northeast contributes to biological diversity and provides shelter for numerous species of flora and fauna.

But only 1.5 percent of Brazil’s maritime territory is under any form of legal protection, Mata Atlantica reports.

Thus, ensuring national sovereignty over jurisdictional waters is still an enormous political and military challenge. In March, some 15,000 naval troops and 250 Navy boats and aircraft took part in Operation Blue Amazon, the biggest of its kind carried out so far in Brazilian waters.

“This was an opportunity to train and guarantee the security of navigation, crack down on drug trafficking, and patrol the sea. The mission involved the entire territorial extension of Brazil,” Lieutenant Commander Thales da Silva Barroso Alves, commander of one of the three offshore patrol vessels that Brazil has to monitor the Blue Amazon, told IPS.

These vessels control the extensive coast in “areas of great economic interest, exploitation and accidents. Illegal fishing is also a recurrent issue,” he said.

The officer argued that the extraction of marine resources should be carried out in a “conscious, sustainable fashion,” with the aim of preserving biodiversity.

Figueiredo, the political scientist, concurs. “Our ability to defend the Blue Amazon depends on our capacity to develop technical-scientific means of protecting biodiversity in such an extensive area,” he said.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Cash-Strapped Latin American Countries Turn to China for Credithttp://www.ipsnews.net/2015/04/cash-strapped-latin-american-countries-turn-to-china-for-credit/?utm_source=rss&utm_medium=rss&utm_campaign=cash-strapped-latin-american-countries-turn-to-china-for-credit http://www.ipsnews.net/2015/04/cash-strapped-latin-american-countries-turn-to-china-for-credit/#comments Tue, 28 Apr 2015 01:06:31 +0000 Mario Osava http://www.ipsnews.net/?p=140358 Cidade de Kilamba is a new housing development built entirely by Chinese firms south of Luanda, the Angolan capital, to accommodate half a million people in five- to 13- storey apartment buildings with “smart” elevators, schools, shops and leisure facilities. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Apr 28 2015 (IPS)

Angolans are generally grateful for China’s participation in the reconstruction of their central African country, in spite of the fact that some of the roads and buildings built by Chinese firms are of poor quality, and mainly Chinese labourers have been hired rather than local workers.

To rebuild the infrastructure destroyed by the civil war, Angola needed finance which was denied to it by the West, whereas China supplied credit and engineering expertise without imposing impossible conditions on a country that only achieved peace 27 years after winning independence in 1975, Angolan leaders declare.

On the opposite side of the Atlantic ocean, several Latin American countries in financial difficulties have recently turned to China as a sort of lender of last resort. Argentina and Venezuela, for example, lacking access to international credits, obtained large loans from Chinese banks.

For China, it makes no sense to refuse loans to countries with strong agricultural production or that possess plenty of commodities, especially oil and gas. There is no need to be concerned about their solvency if their products guarantee their loans, whatever the reasons for their difficulties.

Brazil’s state oil giant Petrobras announced on Apr. 1 an injection of 3.5 billion dollars from China to relieve its finances, which have suffered from the corruption scandal that has rocked the economy, the government, large companies and several political parties in the country since 2014.

The loan from China Development Bank is helping Petrobras weather a storm that also includes gross management and planning mistakes which raised the cost of constructing two refineries, of the purchase of another plant in the U.S. city of Pasadena, Texas, and of other projects by tens of billions of dollars.

The crises faced by potential Petrobras suppliers provide opportunities for China, but are not seen as indispensable. China Development Bank previously loaned Petrobras 10 billion dollars in 2009, when the oil company appeared prosperous and had recently discovered vast reserves in the pre-salt layer off the Brazilian coast.

This loan will be repaid by a minimum of 10 years’ oil supply to China.

Unequal exchange

“China’s financial power tends to accentuate the trade imbalance,” when countries or whole regions export virtually only commodities to China, and import Chinese manufactured goods, said Luis Afonso Lima, president of the Sociedade Brasileira de Estudos de Empresas Transnacionais e da Globalizaçao Econômica (SOBEET – Brazilian Society for the Study of Transnational Corporations and Economic Globalisation).

Iron ore and soy account for 75 percent of Brazilian exports to China, he said, while imports from China are nearly all manufactured goods.

But China “is a new trading partner with a high degree of complementarity, and a win-win situation could be created if we knew how to make the most of the opportunity,” Lima said.

“Brazil must do its homework and define what it wants from China in the long term, and then negotiate, instead of merely reacting passively to Chinese demands,” he said.

In his view, now is the time to make changes to that unequal exchange, because China is facing “the prospect of reducing its exports and stimulating the dynamics of internal demand, whereas in Brazil it is the reverse: the domestic market is weakening and more exports are needed.”

But Lima recognises that Brazil’s economic and political difficulties do not favour the definition of long term strategies and goals in negotiations with an ascendant power like China.

Booming investment

China’s growing involvement in Latin America is also marked by growing investment. SOBEET identified 69 projects announced by Brazil since 2010, the vast majority in processing industries involving medium-sized amounts, that is, less than 100 million dollars.

Only three investments are over one billion dollars: in the first, the State Grid Corporation of China (SGCC) invested five billion dollars, mainly for the purchase of power transmission lines; the second is for extracting and exporting iron ore; and the third is for processing soy.

The list is not complete because of the difficulty of monitoring Chinese investments that are routed through other countries, such as European nations, and arrive at their productive destination without the nationality of origin being known, Lima complained.

China has been increasing its foreign direct investments since the turn of the 21st century, and they reached over 206.8 billion dollars in 2013, according to United Nations figures published by SOBEET.

Latin America has not been a priority destination for Chinese investments. The region has received only 4.1 percent of the total, according to the Economic Commission for Latin America and the Caribbean.

However this will change over the next 10 years. China will invest 250 billion dollars in the region over this period, President Xi Jinping announced in January in Beijing, at the first Ministerial Forum between China and the Community of Latin American and Caribbean States (CELAC).

Some projects are exceptional, like the interoceanic canal in Nicaragua which will compete with the Panama Canal and will cost an estimated 40 billion dollars, four times the GDP of Nicaragua.

A large part of the capital already invested is oil-related. State Chinese oil companies are already taking part in oil and gas extraction in Argentina, Brazil, Ecuador, Peru and Venezuela.

But the most spectacular growth in China-Latin America relations has occurred in trade, which increased 22-fold between 2000 and 2013, to reach 275 billion dollars in 2013. And it is set to double again by the end of this decade, Xi predicted.

The expansion in trade exacerbated the imbalance, but the terms of exchange improved with the boom in prices of Latin American commodities, which lasted at least until 2012.

Credit penetration

The amounts involved in Chinese loans to the region are lower than the trade figures, but also reflect the Asian giant’s expansion and its priority interests in oil, minerals and agricultural produce.

Between 2005 and 2014, borrowing from China by the region totalled 119 billion dollars, according to the databank of Inter-American Dialogue, a forum for political and business leaders of the Americas that includes former presidents of several countries.

Of this total, nearly half – 56.3 billion dollars – was loaned to Venezuela, which possesses the world’s largest oil reserves. Next in order of importance are Brazil and Argentina, which are big exporters of soy and received 22 billion and 19 billion dollars, respectively.

Mexico, the second largest Latin American economy, is in sixth place in terms of loans from Chinese state banks, with 2.4 billion dollars, less than one-quarter of the amount borrowed by Ecuador (10.8 billion dollars) and less even than the credit extended to The Bahamas (2.9 billion dollars).

Edited by Estrella Gutiérrez/Translated by Valerie Dee

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