Project Amazonia: Characterization - Social1
NOTE: For the purpose of this project all social and economical issues that are mentioned pertain to Brazil. The reason the focus is narrowed to such a small scope is due to the difficulty of tracking multiple national governments and because the vast majority of the Amazon can be found within Brazil.
The most populous country in South America, Brazil was granted its independence from Portugal in 1822. It spent over half a century fighting off military dictatorships to become a federative republic. By the 1970's, Brazil had used its vast natural resources and labor pool to become South America's leading economic power. However, it still faces internal conflict due to the unequal distribution of wealth. Also, it is often in the spotlight internationally because of its ecological issues, mainly the conservation of the Amazon region.
According to a census taken in 1996, Brazil has a population of 176,029,560 people. Religiously, the country is 80% Roman Catholic, a result of Portuguese colonization. 83% of its citizen over the age of 15 are literate, and 55% are of mainly European descent. 38% of the population is a mix of European and African, and the other 7% are African, Asian, or indigenous.
Economically, the people of Brazil are far from equal. 22% of the country lives below the poverty line, and 10% of the population controls 46.7% of the wealth. Approximately 6.4% of the population is officially unemployed.
The Economy
Economic trouble currently plagues Brazil. Despite plans to reduce the rapid inflation during the 1990s, the economy began to stagger again this year. The economic instability in recent months has been primarily due to international fears that the policies regarding free trade and deflation will be abandoned by the newly elected Brazilian president, Lula. Brazil will continue importing such products as oil, electricity, and wheat while manufacturing goods including food, chemicals, textiles, and automobiles. Due to the economic insecurity, the government’s primary focus is the welfare of the people. The poverty level, unemployment rate, and new president remain the chief political problems. Therefore, the preservation of the Brazilian Amazon maintains only a secondary goal. Although the Brazilian economy is one of the ten largest in the world, the country is facing some economic challenges.
Recent History
An economic downturn in the late eighties and high levels of inflation in the early nineties prevented economic growth; however, the “The Real Plan” instituted in 1994, was an attempt to slow the inflation by pegging the real to the US dollar. Inflation was curbed, although not fast enough to prevent the considerable Real exchange rate appreciation that occurred during this transition period. This appreciation caused the price index of domestic goods to rise in relation to the price index of foreign goods. This contributed to large annual current account deficits. In spite of this, foreign capital continued to flow into the country as inflation rates stabilized and the instability of the eighties subsided. In the late nineties, the Asian financial crisis and the Russian bond default reduced the risks that foreign investors were willing to take, causing capital account surpluses to drop, preventing adequate current account maintenance. In 1998, Brazil received a $41.5 billion IMF-led international support program after creating a fiscal adjustment program and promising structural reform. The real became independent of the dollar in January of 1999, causing devaluation but moderating the slowdown of economic growth that began in the summer of 1998. Brazil’s debt to GDP ratio was lower than the IMF target in 1999 and economic recovery continued into 2000, with foreign direct investment running at more than $30 billion dollars.
The economy began to falter again this year, prompting the IMP to pledge the largest government bailout in history, a loan of $30 billion. The economic troubles in recent months have been mostly due to international fears that the new leftist President Luiz Inacio Lula da Silva will reject the free-trade and anti-inflation policies of the former president Fernando Cardoso. These claims remain to be either confirmed or disproved as the new president becomes situated, for presently the future of the economy is unclear.
Brazil’s nominal GDP is currently projected at $650 billion, while its peak occurred in 1997/98 at $800 billion, prior to the currency crisis of 1999. Overall, the Brazilian economy is by far the largest in South America, the second in the Western Hemisphere only to the United States, and second in the developing world to the People’s Republic of China. It is consistently listed as one of the ten largest economies in the world.
The growth of the GDP has fluctuated over recent years. The GDP was at 3.3% in 1997, 4.5% in 2000 and a mere 1.5% in 2001 (World Bank Group). Current projections for 2002 lie around 2.3% (Santander Central Hispano Investment). GNP per capita has fallen in recent times, hitting US$4,740 in 1997, US$3,590 in 2000 and dropping to US$3,060 in 2001 (World Bank Group). The GNP fell as well from US$776.6 billion in 1997 to US$611.2 billion in 2000 and all the way to US$528.5 billion in 2001.
As of the 1990 estimate, 17.4% of the population lies below the poverty line, with an unemployment rate of 7.1% (2000). The tenth of the population with highest income receives 47.6% of capital earned, while the bottom tenth receives only 1% (Central Intelligence Agency). This type of wealth distribution has been a significant contributor to social conflict and the recent regime change.
The national debt of Brazil has been a topic of significant controversy. The debt to GDP ratio increased 26% between 1994 and 2002, with the Net Consolidated Public Debt of R$708.45 billion, i.e. 56% of the GDP. The majority of this debt lies in the Net Federal Government Debt (including the National Treasury and Social Security System) recorded at R$455 billion in May of 2002, 36% of the GDP, but also includes the state and local government debts at around R$235 billion (18.6% of GDP) and the Net Public Enterprises Debt at R$27 billion (2.1% of GDP) (Banco Central do Brasil).
(Courtesy of The Central Bank of Brazil and Ilan Goldfajn)
Many economists are concerned over whether Brazil can be held accountable for this debt over the long run, however Brazilian states have made substantial reforms in recent years to reduce inflation, stabilize the economy and increase transparency and debt recognition. Adjustments to the real exchange rate have been made to improve external accounts, but do increase the Debt to GDP ratio, an effect that the Brazilian Government claims should not reoccur after the initial spike. Apart from these, the government claims that its current primary surplus of 3.75% of the GDP is high enough to handle the debt without serious problems, that fiscal discipline has been achieved at all levels of government (i.e. the federal, state and local governments are not generating structural primary surpluses), the recent Fiscal Responsibility Law ensures “a sound and more permanent fiscal regime” (Goldfajn 8) by placing limits on all government borrowing and a Constitutional ban on any law that modifies existing financial contracts through forced restructuring are enough to ensure that Brazil will meet it debt, given the time to do so. Included below are projections by the Banco Central do Brasil.
(Courtesy
of Ilan Goldfajn)
In conclusion, the health of the Brazilian economy has been improving by most standards over the last half decade; however, recent political events have cast doubt over its future. The policies and reforms of this incoming government will determine the health of the entire Brazilian economy, and thereby, the willingness of its people to support conservation efforts in the Amazon River Basin.
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Brazil gained its independence from Portugal on September 7, 1822. In 1988, the current constitution divided the country into 26 states and one federal district, all governed by a strongly centralized federal republic located in Brasillia.2 The executive branch consists of the President, Luiz Inácio da Silva3 , elected in October 2002, who acts as both chief of state and head of the government, and the cabinet he appoints.
The legislative branch, called the National Congress, is a bicameral system consisting of a Federal Senate and a Chamber of Deputies. Each state or federal district has 3 senators and representatives to the Chamber of Deputies based on their population. Currently, the legislative branch has 594 members.
The judicial branch is dominated by the Supreme Federal Tribunal, which is made of 11 ministers appointed by the president and approved by congress. There are also smaller federal and republic courts.
Important Government Organizations4
IBAMA (Brazilian Institute for the Environment and Renewable Natural Resources):
Background: The IBAMA, the Brazilian Institute for the Environment and Renewable Natural Resources, is the critical environmental governing agency of the Brazilian Government. It regulates the use of the environment, especially the rainforest. It is responsible for creating laws restricting logging, farming, land-clearing, construction, deforestation, waterway use, and air regulation, amongst other things.1
Critical Analysis: In general, the IBAMA is an organization that lacks the ability to fulfill its responsibilities to the fullest. An overview from the Amazon Region Protected Areas (ARPA) project says, "IBAMA resources are insufficient to manage effectively a large number of small units; protected areas lack staff and staff with necessary skills-on average, there is on IBAMA employee for every 27,650 ha of protected (only 20% of the 575 employees administering protected areas have a higher education; and budgetary processes are centralized and inflexible. Some of IBAMA's problems are being addressed with the help of PPG7 projects. The Extractive Reserves, Forest Managment and Flood Plains Management Projects are currently being implemented under IBAMA, but using a different model from the NEP. In these projects, the Project Coordination unit is headed by a highly qualified staff contracted under UNDP and not subjected to political appointment. This coordination unit is inserted ".1
CONAMA: The National Environment Council (CONAMA)
The National Environment Council (CONAMA) was created by Brazilian environmental Law No. 6,938 in August, 1981. According to the First national report for the Convention on Biological Diversity, "CONAMA establishes the norms and criteria for the licensing of polluting or environmentally damaging activities and determines, whenever necessary, research on alternatives and of the possible environmental consequences of public or private projects."3
Amazon Region Protected Areas (ARPA) Project:
The aforementioned Amazon Region Protected Areas (ARPA) Project is a 10 year government program. It was created to establish a "mosaic" of protected areas in the Brazilian Amazon. Each year, it expands its ambitions, as it works towards its goal of rainforest conservation. Its policies provide a possible template for our conservation strategy; however, ARPA goals extend only to creating Protected Areas (PAs), not to pursue more aggressive conservation strategies. Therefore, their policies are noteworthy, but certainly not wholly applicable to Project Amazonia's goals. The PRT plans to coordinate demarcation efforts to coincide with future PAs in order to conserve financial resources, centralize power, and augment ARPA power and effectiveness.
In conclusion, the PRT will pursue healthy public relations with IBAMA, CONAMA, the Presidency, SIVAM, and ARPA in order to maximize Project Amazonia's success.1
American Relations
Congress biannually reviews foreign aid, including aid to Brazil. There are many American conservation groups, including Greenpeace and Amazon Conservation Team (ACT), which have already established strong public relations with important US politicians and representatives.
Greenpeace is lobbying Washington to curtail excessive American exportation of this valuable tree of the Amazon. Favorable relations with both Greenpeace (amongst other groups) and US policymakers are important for a successful resolution.
International Relations:
Japan: The Japanese Government is conduction a National Network Genome Project with incredible success in the Amazon near the Rio Negro River. This demonstrates their interests in the Amazon and their potential willingness to aid in further research and preservation.
Holland: A Dutch group named the National Institute of Amazon Research (INPA) is a leader in Amazon research. Future research support and cooperation can be expected of this group and similar organizations.
End of Characterization
1 - http://www.cia.gov/cia/publications/factbook/geos/br.html#top
*unless cited otherwise, all information on this page came from source 1
2 - http://www.brcactaceae.org/brazil.html
No author. “The ARPA (Amazon Region Protected Areas) Project Overview: Report PID11197.” 9 May 2002: n. pag. On-line. Internet. 12 October 2002. Available WWW: http://www-wds.worldbank.org/servlet/WDS_IBank_Servlet?pcont= details&eid=000094946_020517041439
No author. “The ARPA (Amazon Region Protected Areas) Indigenous People Strategy: Report IPP17.” 31 May 2002: n. pag. On-line. Internet. 12 October 2002. Available WWW: http://www-wds.worldbank.org/servlet/WDS_IBank_Servlet?pcont= details&eid=000094946_02070304122181
(AUTHOR UNKNOWN). “First national report for the Convention on Biological Diversity. Chapter IV Legislation, Policies and Programmes: Implementing Article 6 of the Convention on Biological Diversity”.
