Brazil's bail-out is a time bomb

by Danielle Knight and Abid Aslam

Washington, March 18 - Brazilian groups, in Washington this week to meet government and development bank officials, have branded their country's international financial bailout an environmental and social time bomb.

Emergency loans assembled by the International Monetary Fund (IMF), designed to shore up the country's flagging financial markets and dwindling foreign exchange reserves, are being offered in return for austerity measures that will devastate the Amazon region in particular, the Brazilians say.

"The impacts of the ill-advised IMF loan package in the Amazon will be borne by the forest and the people of the Amazon," says Claudionor Barbosa da Silva, president of Amazon Working Group (GTA), a network of more than 350 non-governmental organisations (NGOs) in the region.

Spending cuts envisioned in the Brazilian government's deal with the IMF include a possible 90% reduction in Amazon conservation programmes and a two-thirds decrease for rainforest protection and efforts to demarcate lands belonging to indigenous people, he warned.

"Austerity measures will also force people facing unemployment in the cities to illegally clear and log the forest and (resort to) small-scale mining for survival," says Euclides Pereira, of the Coordinating Group of the Indigenous Organisations of the Brazilian Amazon (COIAB), which represents 56 indigenous groups.

Brazil is not alone in facing such dire consequences. Russia is considering cutting Siberian old- growth forests - previously considered too remote to be commercially viable - to raise desperately-needed cash, according to Friends of the Earth. Indonesia, under IMF pressure to raise revenues, has lifted a ban on log exports and slashed export taxes from 200% to 30%. The country reportedly also plans to expand cash-crop plantations to 3.9 million hectares from 2.4 million hectares.

Brazil, Russia and Indonesia, all in economic turmoil, are home to 47% of the world's remaining ancient forests, according to the Washington-based World Resources Institute.

Brazil's setbacks come at a time when the Amazon is in desperate need of conservation, the advocates say. Some 52 million hectares - or 12.5% - of Amazon jungle was destroyed in the period 1978-96 alone.

With 2,700 bird species and more than 2,000 different types of fish, the Amazon is one of the most biologically diverse areas in the world - and also one of the most threatened, according to Steven Schwartzman, senior scientist at the Environmental Defence Fund, which is hosting the visiting Brazilians.

Cattle ranches, gold mines and soy plantations are rapidly replacing the dense tropical forest at an average rate of about 13,000 acres a day - or eight football fields per minute, Schwartzman notes. "The ecological and social crisis of the Amazon has never been worse."

The Brazilians, while protesting cuts in environmental programmes, also say existing measures need to be overhauled. They highlight a $250 million pilot project for Amazon conservation funded by the Group of Seven (G-7) economic powers and administered by the Brazilian government and World Bank.

Some of the conservation efforts supported by the project have been successful, activists concede, but implementation has slackened since 1995 and much money provided by the donors has yet to be spent.

As a consequence, the project is failing in its principal goals: reducing the rate of deforestation and strengthening the public sector's capacity to enact and enforce sound environmental policies.

"Deforestation in the Amazon has not only increased but in 1995 reached the highest rate yet recorded," the Brazilians say in a written critique presented to the Bank.

World Bank officials, unavailable for immediate comment on the latest criticism, previously have said conservation efforts are plagued by recurring drought exacerbated by the El Nino weather phenomenon and slow implementation amid technical problems and political in-fighting among agencies charged with carrying out the work. Environmental officials at the Bank also have voiced concern about the impact of financial crises on conservation programmes in Brazil and elsewhere but their worries have taken a back seat in the global lender's response to economic turmoil.

Rather, the agency has committed unprecedented sums in support of the IMF's emergency loan packages. These have concentrated on macroeconomic stabilisation, financial governance, and corporate restructuring aimed at soothing panicked foreign investors.

Early successes under the Amazon conservation pilot project need to be revived, argues Jose Juarez Leitao dos Santos, president of Brazil's National Council of Rubber Tappers. In particular, he urges that 10% of the Brazilian rainforest be transformed into 'extractive reserves' by the year 2002.

These legally-protected areas were first proposed by Chico Mendes, the rubber tapper, labour organiser and environmentalist who was assassinated in 1988.

Extractive reserves seek to resolve the conflict between cattle ranchers - who want to clear the forest for pasture - and tappers, who depend on rubber tress for their livelihood. Land is set aside for management by local communities, who harvest forest products in ways that do not harm the environment.

In the past decade, some 20 reserves have been established on three million hectares, according to Leitao dos Santos. He says his 10% goal will allow rubber tappers to defend about 50 million hectares while securing land rights and improving the living conditions of tens of thousands of poor families.

"Brazilian President Fernando Henrique Cardoso has committed to creating new extractive reserves for our people and to funding price support for the Amazon wild rubber," he says. "We are here to encourage the World Bank and the Inter-American Development Bank to help him fulfil these commitments."

The above article by the Inter Press Service appeared in the South- North Development Monitor (SUNS).