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If you want to read on Planet Trails Foundation's investigative trip along the Arco Norte [Click here].

The Impact of Arco Norte

on Northern Amazonia

and the Guiana Shield

Pitou van Dijck*

Associate Professor of Economics
Cedla

 

 

textwebsite
Map produced by CABS of Conservation International

 

The Problem

 

Communications and transportation systems play a key role in stimulating economic growth by facilitating production and trade, the exploitation of potential comparative advantages of regions, and hence generating income and employment. Roads, like other forms of infrastructure, may have positive external effects that become available to investors as a public good. Consequently, public investment in infrastructure may trigger private investment in directly productive activities, thus generating a crowding-in effect. This holds particularly for roads in areas where alternative means of transportation are of only little economic significance.

At the same time, however, roads may also generate negative external effects resulting in a loss of welfare. In special circumstances, these negative externalities of infrastructural works may not be confined to the local or regional level, but may even affect welfare at the global level. This may specifically be the case with roads penetrating pristine and highly vulnerable eco systems that provide eco services by contributing in a significant manner to the world’s stock of  genetic resources and to the sequestration of carbon.

Arco Norte is a road project designed and created by Brazil, linking the northern part of Brazil with the three Guianas: Guyana, Suriname and French Guyana, and with the Caribbean Sea. As shown in the map, the road links Boa Vista in Roraima, with Georgetown, Guyana, continues parallel to the coastal line to Paramaribo, Suriname, and Cayenne, French Guyana,  re-enters Brazil and ends at the mouth of the river Amazon in Macapá, Amapa. This road is still under construction, be it that the link along the coast between Georgetown, Paramaribo and Cayenne exist already for a long time and has partly been repaired fairly recently.

On 31 July 2003, President Lula da Silva of Brazil and President Bharrat Jagdeo of Guyana met in Brasilia and officially confirmed the decision to construct a bridge over the Tacutu river and to build an asphalted  heavy duty road linking Boa Vista with Georgetown. The road project is part of a larger programme to integrate the state of Roraima with Guyana through the construction of a deep-water port , a hydro-electricity facility in Guyana and the development of high-speed dependable communications systems in the region. Transmission lines will follow the course of the new road and so will the fibre optic cable that will link Boa Vista, and at a later stage Manaus, with the intercontinental fibre optic cable, which passes north of Georgetown. Improved infrastructure is expected to contribute to investment in the region in food crops, the tourism sector and particularly in the development of an industrial zone in Boa Vista. Brazil claims an investment in a new pulp plant has already been agreed upon, which is expected to start production by the end of 2004. Seven other plants, including an aluminium smelter, meatpacking facility, soybean complex compressor, and a freeze-dried coffee plant are projected to contribute to the natural-resource based industrial development of the region. The Inter-American Development Bank (IDB) agreed to finance the pre-feasibility study for the highway and for the deep-water port.

In the same context, the heads of state of Brazil and Guyana have discussed the option to integrate Guyana in the Brazilian surveillance system Sistema de Vigilância da Amazonia (SIVAM), the System for Monitoring of Amazonia, in order to improve protection of the area from illegal invasion and occupation.

The road penetrates one of the most pristine and thinly populated stretches of rainforest in all of Amazonia and indeed in the entire world, characterized by an extremely high biodiversity. So far, the region has been little affected by economic activities such as logging, agriculture, ranching and mining, as compared to most other parts of Amazonia. Large parts of this region are protected, at least in a legal sense, by  several truly sizeable  conservation units such as forest and biological reserves and by indigenous reserves, most of which have been established during the last two decades. Among the most recent initiatives to foster protection of this unique wilderness, is the Guiana Shield Initiative, taken by the Netherlands’Committee of the International Union for the Conservation of Nature (IUCN) to finance protection and sustainable development through the Global Environment Facility (GEF) administered by the World Bank. However, notwithstanding these major initiatives to protect the region’s eco system and habitat for the  tribes of indians and Maroons, gold and nutrient mining activities encroach into the region.

Our research aims at contributing to a fuller understanding of the potential positive and negative economic and environmental effects of the Arco Norte and the changes it induces in the direct and indirect use values of the forest it penetrates. Such an assessment is critical to making rational choices among the options available to exploit the potential values of the forest.

In the next section we shall present the Arco Norte as part of a Brazilian strategy to integrate Amazonia in a national economic and security strategy. Next we shall briefly discuss changes in the use values of Amazonia as registered so far, particularly in relation to the construction of roads. Finally we shall refer to some methodological problems which hamper a full assessment of the economic and environmental impact of roads on the forest.

Roads in Amazonia

From the late 1950s onwards, the development of the Amazon region and its integration in a national security system have become part of Brazil’s overall strategic development plans. This vision on the role and place of the Amazon wilderness of Brazil was captured by the phrase‘integrar para nao entregar’ - that is: integrate not to forfeit. The national priority from the military perspective was reflected by the establishment of the Superintendência de Desenvolvimento da Amazônia (SUDAM), the Superintendency for the Development of Amazonia, and the start of Operation Amazonia in 1966, and by many plans and programmes throughout subsequent decades. The Plano de Integração Nacional (PIN), the National Integration Programme, was started in 1970 and reflected in particular the military geopolitical priorities of the time.

Development of the region has been supported by federal governments with a combination of investment programmes in roads, airports, telecommunications and energy, and  packages of fiscal and monetary incentives for private enterprises in  mining, agriculture and cattle ranging, including income tax holidays for 10 to 15 years for qualifying firms, investment tax credits for plans approved by SUDAM, subsidized rural credits, and PIN financing of irrigation schemes.

The introduction of a massive programme of highway construction throughout the region has been a key component in this overall strategy to permanently move the frontier of Amazonia, and to bring people without land to a land without people, as put at the time of President General Medici. These government programmes have strongly impacted upon land use in Amazonia and have rapidly changed the direct and indirect use values of the region. By penetrating the forest, roads make land more accessable, hence cheaper, and link  far away production sites to markets.

The PIN boosted the construction of highways and roads throughout Amazonia and made resources available to construct 15,000 kilometers of roads. Subsequently, the Calha Norte Project, officially called the Development and Security in the Region North of the Rivers Solimoes and Amazonas, was initiated in June 1985 under President Sarney as a military project, aiming primarily at national security. The plan aimed at enhancing external and internal security by delimiting a protection zone along the western and northern boundaries of Brazil from Amazonas to Amapá, covering an area of approximately 14 per cent of the total land area of Brazil. Political instability in Brazil’s northern neighbouring countries, particularly Guyana and Suriname, was refered to as a potential threat to be contained. To stimulate security and economic development, the Calha Norte Project focused particularly on improving communication and transportation in the northern regions of Brazil. Financial means were spent specifically on  the construction of roads, airfields near Funai posts, and control over waterways. Apart from the national security dimension, the plan aimed at developing Amazonia through the creation of mining-related growth poles. A third objective of the Calha Norte Project was containment of drugs smuggling. In that perspective, the military was not in support of attracting small farmers into northern Amazonia.

The Calha Norte Project  included the failed project for the construction of the Perimetral Norte which would connect Amapá with Boa Vista by a passage south of the borders of the three Guianas. It included as well the construction of the Arco Norte road link  in the early 1980s which aims at linking  the north of Brazil with the three Guyanas, and at creating a direct access for Manaus and Boa Vista, linked by the BR 174, to the Caribbean Sea.

More recently, the project Avança Brasil was initiated in the late 1990s, aiming at investing  over 24 billion real over the perion 2000-2007 in western and northern Amazonia, and of an additional 50 billion real in the areas south and east of the centre of the Amazon region. Probably up to 60 per cent of these amounts are related to infrastructural works. The programme focuses on road improvement, and the construction of bridges, railways and other types of communication systems, rather than the construction of new roads (Andersen et al., 2002, pp 33 and 34).

All together, a significant system of roads, crossing  Amazonia and linking it with the rest of Brazil has been created during the past four deades. In 1960 there were only 6,000 kilometers of road in Brazil’s Classic Amazonia, of which only 300 kilometers were paved (Mahar, 1989, p. 12). A major step towards the opening of Amazonia was the start of the construction of an all weather north-south highway of 1900 kilometers between Belém and Brasilia (BR 010) in 1960, which was paved in 1974. The Cuiabá-Santarém connection of 1,600 kilometer also belong to the early components of the trans Amazonia road network. In the context of the Operation Amazonia legislative acts and decrees in 1966 and 1967 created the foundation for a comprehensive attempt at opening and colonizing Amazonia, particularly through the extension of a road system. As part of the  Plan for National Integration started the construction of the 2,300 kilometers long Transamazon highway, linking the northeast with the west of Amazonia, completed in 1974.

Work on a second east-west trans Amazonia connection as part of the Calha Norte project, the Northern Perimeter Highway,  was started in 1973 to link Macapá with Boa Vista (2,700 kilometer), but the project stagnated. Other major road links are the north-south connection between Manaus and Porto Velho (BR 319) of  nearly 900 kilometers, the 1,500 kilometer long north-east road connecting Cuiabá and Porto Velho (BR 364) completed in 1967 and paved in 1984. Other roads bound northwards, partly realised or under construction, are the Manaus road towards the Venezuelan border (BR 174) of almost 1000 kilometers, connecting Manaus with Caracara and Boa Vista, and ultimately with Caracas; the link between Boa Vista and the border of Guyana (BR 401) and the Macapá-Oiapoque connection (BR 156) of almost 700 kilometers  up to the border with French Guyana.

Remarkably, the Brazilian government refers in its report Rio + 10: Brazil on the Way to Sustainable Development’ (1992, p. 40) by way of example of sub-continental eco-efficiency in infrastructure investments to ‘…the proposed railway interconnection between the states of Roraima and Amapá, in the extreme north of the subcontinent’: that is, the railway version of the Arco Norte road link, which is, as the report puts it ‘almost completely paved’.

The plan of constructing a railway link in that regio is not entirely new: in 1927 the American explorer Alexander Hamilton Rice proposed to construct a railway linkage between Manaus and Boa Vista, and the British proposed a 1200 kilometer long railway stretch linking Georgetown with Boa Vista and Manaus, a plan that re-emerged in the 1920s and 1940s.

Changes in land use and in  use values

Spatial analysis of economic activities in Amazonia and the Guiana Shield, supported by satellite images, indicates that the northern frontier of Amazonia is as yet still  among the least affected regions in Amazonia. Overviewing Brazil’s Amazonia, agriculture – both subsistence and commercial – and cattle raising are particularly concentrated in the southern and eastern parts of Amazonia, along the river Amazone and in Roraima. Mining activities are dispersed throughout Amazonia except for the western part, and are strongly concentrated in the eastern part of Amazonia. North of the river Amazone both large and small scale gold mining activities are concentrated in Roraima, and are moreover widely dispersed in Guyana and Suriname. As a consequence of  these economic activities, deforestation has progressed specifically in the eastern and southern stretches of Amazonia while the western and northern parts are still among the least affected regions. In Brazilian Amazonia, the states of Matto Grosso , Pará, and Rondonia, put together, account for approximately 65 per cent of all deforestation, while the state of Amazonas account for only 5 per cent (Gascon et al, 2001, pp. 24-25).

Thus, the northern part of Amazonia and large sections of the Guiana Shield region are among the best preserved wilderness of tropical South America. Moreover, here we find a large concentration of nature reserves and indian tribes living in reserves, be it that these reserves differ in status and are not necessarily entirely effective in preserving the habitat.

To assess the true value of the region, a comprehensive inventory of the many different functions of the forest need to be made including the array of direct and indirect use values as well as optional and existence values of the rain forests. The rain forest  is truly multifunctional in the sense that it provides simultaneously direct and indirect use values, the latter of which become available as public goods. Exploitation of some or more of the direct use value capabilities of the forest may result in ecological degradation and limit the capability of the forest to provide some of its indirect use values.

Among its direct use values are its supply capability of timber, commercial non-timber products such as nuts, palm hearts and meat, its value as a habitat for various indian tribes and groups of Maroons, and its educational and recreational potentials, that may serve as a basis for eco-tourism, reflection and research.

Among its indirect use values may be included a variety of ecological services provided by the forest to the region or to the world as a whole, such as its contribution to the nutrient cycle, as a water control and to protect watershed, as a carbon sink and as a habitat for a diverse flora and fauna, with yet little known future economic potential. 

What makes the region and particularly the Guiana Shield area so special is its diverse endemic flora that has evolved on this precambian geological formation. IUCN estimates that the northeastern part of Amazonia, included in their concept of the Guiana Shield region, hosts an estimated 20,000 plant species and at least 4,000 vertebrate species, several of which can only be found there.

Thus, deforestation in this part of Amazonia and the Guiana Shield will affect the regional hydrology, reduce the carbon sink, result in a biodiversity loss and probably have an impact on regional and extraregional rainfall, and increase the likelihood of fires.

Although the Guyana Shield region and northern Amazonia are yet relatively unaffected by economic activity as compared to areas sounth of the Amazon river, the region is increasingly threatened, particularly by large-scale open pit mining and highly destructive and poisoning wildcat mining by garimpeiros, as well as by several forms of nutrient mining, most specifically large scale cattle ranching and small scale slash and burn agriculuture activities. Moreover, the disruption of the forest canape enhances the likelihood of forest fires.

Nutrient mining, conceived of as the unsustainable extraction of nutrients from the forest soil through cropping, ranching and logging, is both an incentive and market response to road building and among the main causes of deforestation (Schneider, p. 15). The rain forest in central and northern Amazonia may increasingly come under pressure for the following reasons related to the expansion of nutrient mining activities. First, with the depletion of world wide stocks of timber, higher prices will stimulate exploitation in the last great tropical timber reserves. To different degrees, this may also hold for some other natural resources, be it that the impact of pit mining activity on the integrity of the forest may be more locally confined than large-scale timber exploitation is. Second, infrastructural investment embedded in new governmental projects to develop Amazonia, particularly in new roads, will enhance the likelihood of deeper penetration into the forest (Gascon, 2001, p. 25). 

Nutrient mining and wilcat gold mining activities in the forest interact to the extent that smallholders account for over half of the garimpeiros, according to two surveys undertaken in Pará and Roraima. Moreover, interviews with garimpeiros inBoa Vista indicate that they invest gold in properties between 800 and 2000 hectares, located in the forest (MacMillan, 1995, pp.56-104).

Statistical studies of deforestation in Amazonia show the concentration of it along the expanding road network, which does not come as a surprise when taking into account the specific rationale of road building in the context of Brazil’s successive plans and projects to develop Amazonia, as discussed earlier.

In the period 1991-95, 33 per cent of deforestation was concentrated in an area within 50 kilometers of the eastern road network, 24 per cent  within 50 kilometers of the central road network, and 17 per cent within 50 kilometers of the western road network. All together, 74 per cent of deforestation was concentrated within a range of 50 kilometers around roads, creating long corridors through the forest.  Most new clearing takes place in areas adjacent to areas already cleared, on a moving agricultural frontier, often along a so-called fish bone pattern (Alves, 2002; see Andersen et al., 2002, p. 55).

Moving the frontier by building new roads, particularly in pristine forests, has a lowering impact on land prices by making new land available, hence stimulates colonisation, while, on the contrary, improvement of existing roads may increase land prices by stimulating intensification of land use. Investment in network expansion results in more deforestation than investment in network improvement (Andersen et al., 2002, pp. 145-147). Thus, to the extent that Avança Brasil does not so much aim at expanding the road system in the north of Amazonia but particularly on improving it, its contribution to moving the frontier may be limited and consequently this may also hold true of its impact on deforestation. Abolishment of fiscal and monetary incentives for agricultural development and cattle ranching may further reduce the impact on deforestation and so may improved land use regulation.

To reduce deforestation in the northern secttions of Amazonia and in the Guiana Shield region, and indeed in Amazonia as a whole, the incentive to nutrient mining and to wildcat gold exploitation must be reduced essentially by reducing the physical and economic accessability to land. Key policy measures in that respect are: reduction of investment in roads; reduction of fiscal and monetary incentives; and improved land tenure policies. These measures may be combined in the context of a zoning strategy for vulnerable  regions including the establishment of nature reserves and strengthening of their preservation functioning. (Schneider, 1995, p. 37)

Methodological challenges

Although the construction of the Arco Norte started in the 1980s, the impact on the forest  the road penetrates, seems to be limited. The road sections which connect the coastal area with Boa Vista and Macapá, are as of yet in a relatively poor state and it requires special four wheel drives to travel. As a consequence, traffic has been limited so far. Assessing the potential impact of the new sections of the Arco Norte on the forest it penetrates in environmental and economic terms is complicated by a number of methodological obstacles, three of which are refered to below.

First, an adequate assessment of the effects of infrastructural investment on changes in land use in a forested area requires a long-term analysis. The response of economic subjects to improved access to a region in order to invest in economic activity such as nutrient and mineral mining -  and by doing so changing the ecology and economy of the area - depends on a number of factors, only one of which is the road itself. It may require some years to asess the investment  response to the construction of the road.

Second, measuring deforestation, fragmentation, and edge effects as a consequence of improved access and investment in economic activity, may, in itself, be complicated and expensive. The Sitema de Vigilância Ambiental (Sivam) may be useful in the future for monitoring changes in forest coverage. However, Andersen et al ( 2002) show that combining information from satellite images with land surveys may be complicated.

Third, an economic assessment of the consequences of changes in land use is hampered by imperfect functioning of many of the markets involved and by the absence of markets for several eco services provided by the forest at the local, regional and global level. This holds particularly for the economic valuation of biodiversity and carbon sequestration. These complications must be tackled in order to make a comprehensive valuation of the forest to enable comparison of alternative options for its exploitation. Moreover, longer-term forecasting of variations in direct and indirect use values, resulting from future patterns of demand and supply of natural resources and ecological services, are hard to make (Trindade de Almeida and Uhl, 1999; Van Beukering and van Heeren, 2003). Hence, a rational assessment of the costs and benefits of alternative types of exploitation of available resources in the area is seriously hampered

At least some of these complications must be tackled in order to design rational payment systems, based on some sort of costs-benefit analysis related to the eco-services that are provided by northern Amazonia and the Guiana Shield, as proposed by the Guiana Shield Initiative taken by the Netherlands’ Committee of the International Union for the Conservation of Nature (IUCN, 2003). Such payments for eco-services, particularly to regional and global markets,  may alter the balance when choosing between different options for exploiting the rainforest in this unique part of Amazonia.

 


 

References

Alves, D.S., ‘An Analysis of the Geographical Patterns of Deforestation in Brazilian Amazonia in the 1991-1996 period’in: C.H. Wood and P. Porro (eds), Land Use and Deforestation in the Amazon, University Press of Florida, Gainesville.

Beukering, P. van, and A. van Heeren, Economic Valuation of the Iwokrama Forest, Guyana – A Stakeholder Perspective, IVM, Free University of Amsterdam, internal report, March 2003.

Andersen, L. et al., The Dynamics of Deforestation and Economic Growth in the Brazilian Amazon, Cambridge University Press, Cambridge, 2002.

Gascon, C. et al., ‘Deforestation and Forest Fragmentation in the Amazon’, in:  R.O. Bierregaard, Jr et al. (eds), Lessons from Amazonia, The Ecology and Conservation of a Fragmented Forest, Yale University Press, New Haven and London,  2001.

MacMillan, G., At the End of the Rainbow? Gold, Land and People in the Brazilian Amazon, Earthscan Publications Ltd, London, 1995.

Mahar, D., Government Policies and Deforestation in Brazil’s Amazon Region,  A World Bank Publication in cooperation with World Wildlife Fund and the Conservation Foundation,  The World Bank, Washington, D.C., 1989.

Ministry of Planning (of Brazil), Rio + 10: Brazil on the Way to Sustainble Development, Texts from Brazil, Number 09, 2002.

Schneider, R., Government and the Economy on the Amazon Frontier, World Bank Environmental Paper, Number 11, 1995.

The Netherlands’Committee of IUCN, The Guiana Shield Initiative, project proposal, Amsterdam, 2003.

Trinidade de Almeida, O., and C. Uhl, ‘Developing a Quantitative Framework for Sustainable Resource-Use Planning in the Brazilian Amazon’, in: P. May (ed.), Natural Resource Valuation and Policy in Brazil, Methods and Cases in Conservation Science, Columbia University Press, 1999.