Peru: Wildlife Trafficking Poses Complex Challenges

By Ana Marrugo*

A large parrot shows its multi-colored wings

A red and green macaw takes flight in Manú National Park, Peru. / Bill Bouton / Wikimedia Commons

Peru – the fifth most “megadiverse” country in the world – is losing precious wildlife because of weak trafficking laws and even weaker enforcement of them.  Home to 10 percent of existing species of flora, Peru ranks between second and fifth worldwide in the number of species of birds, mammals, amphibians, and reptiles within its borders.  The illegal trafficking of wildlife, however, is threatening Peru’s biodiversity.  It now places second in the hemisphere in volume of trafficked wildlife, trailing only Mexico.

  • Growing threats are pushing species into endangered status at a rapid rate. In 2004-14, according to Peruvian government estimates, the percentage of endangered species increased rapidly: from 14.1 to 24.5 percent of mammals; 9.2 to 35.2 percent of amphibians; and up by 50 percent of reptiles.
  • Trafficking is one source of pressure on dwindling wildlife populations. The most-trafficked species in Peru are birds, especially the white-winged parakeet and the red and green macaw, and some small primates sold as pets or to illegal zoos.  Bigger animals, such as the Andean bear, vicuñas, monkeys, and various cats, are sold for their meat.  Animal parts and reptiles and amphibians are sold for medicinal or reputedly magic uses, and reptile skins for the fashion and leather industries.  Cattle ranching, agriculture, logging, and infrastructure construction also put major pressures on animal life.
  • Peru’s National Forest and Wildlife Service (SERFOR) estimates that three quarters of the country’s most frequently trafficked species are for domestic rather than international markets. Indigenous people and peasants in the Amazon region – seeking profits far above those that can be generated from agriculture – capture animals and sell them to middlemen who then sell them to retailers in local markets or to international collectors.

Investigations of traffickers are rare, and prosecutions almost nonexistent.  The director of Neotropical Primate Conservation told reporters that “few” of the 150 cases she reported to SERFOR, prosecutors, and regional authorities – including a trafficker caught carrying thousands of parakeets – have been investigated, and “almost all cases” are retired without ever reaching a judge.  The first conviction (and one of the few known), finalized in 2016, resulted when police caught two brothers red-handed driving a car carrying an ocelot to a local market.  Offenders are usually released after paying a minor fine.

  • Getting good information is a challenge. Most estimates come from seizures of exported animals, leaving unaccounted the large portion of illegal wildlife sold in local markets, and most research focuses only on particular species.  The flow to local markets of Titicaca frog juice (thought to have extraordinary health benefits), monkey meat (for traditional cuisine), and Andean bear parts (thought to have magical properties) has been impossible to track.  Internationally, owl monkeys are sent clandestinely to Colombia for malaria research, and Chinese markets sell dried seahorse powder and an array of other substances for medicine – without leaving a trace in Peru.
  • Corruption is a perennial problem. Low-paid officers take bribes to provide protection and forged documentation permitting the transport of illegally sourced animals.  Forestry and Wildlife Law 29763 delegates virtually all responsibility for environmental crimes to local governments with poor resources and serious conflicts of interest, including officials’ collusion in the trade and local inhabitants’ dependence on it for income.

International attention in wildlife trafficking has been limited.  Unlike the illegal timber trade, this trade does not involve hundreds of millions of dollars, nor does it harm the commercial interests of the nation or its trading partners.  Major industries have not been linked to this criminal enterprise as they have in the trafficking of narcotics and timber.  Thus, international support to tackle the demand side of the market appears likely to remain feeble.  At the local level authorities rely on educational programs to teach people about the environmental impacts of wildlife trafficking, ecosystem protection and the importance of denouncing environmental crimes.  Nevertheless, wildlife trade continues to be an important source of income for impoverished communities, as well as for traffickers who frequently count on ties to corrupt officials to ensure that they can evade prosecution.

  • The impact of wildlife trafficking is not as immediately obvious as logging, and it is therefore harder to marshal political pressure for comprehensive solutions. SERFOR is expanding port controls, but piecemeal efforts have had little impact.  Since most of the trafficked animals remain in Peru and neighboring countries, efforts to discourage local demand and increase cross border cooperation would seem to offer hope – if governments get serious about addressing the problem.

June 29, 2018

* Ana Marrugo is pursuing an M.A. in Public Anthropology at American University.  She is on the team dedicated to new two-year project by CLALS and InSight Crime investigating the clandestine wildlife trafficking and logging industries throughout the region.

Peru: Challenges to the Summit of the Americas

By Fulton Armstrong

Men and women standing in Peruvian congressional chamber

Martín Vizarra’s inauguration as President of Peru on March 23, 2018. / Twitter: @prensapalacio / Creative Commons

The resignation of Peruvian President Pedro Pablo Kuczynski (PPK) last weekend marks not only a deepening of the crisis of governance in that country; it also signals the greatest threat yet to the credibility of the Summit of the Americas process begun in 1994.

  • The 2016 election of PPK, a technocrat with international experience, business acumen, and a stated commitment to attacking corruption, appeared at the time to reaffirm Peru’s preference for competent, if unglamorous, government. Allegations of inappropriate dealings with the Brazilian construction giant, Odebrecht, when he was a government minister in the 2000s and as a consultant prior to the last election – which he blamed on business partners – were his undoing.  He dodged charges, fought back, made deals (including releasing former President Fujimori from prison), and reportedly deployed his allies to buy votes to oppose his impeachment – all to no avail.  Vice President Martín Vizcarra, sworn in last Friday to succeed him, had been spirited off to Canada to be Peru’s ambassador last September when allegations of malfeasance as Transportation Minister led to calls for his impeachment.  But last week he pledged to make anticorruption and transparency top priorities.
  • PPK is not the only tainted politician, or even the worst, in this drama. Two of his predecessors – Alejandro Toledo (2001-06) and Ollanta Humala (2011-16) – have been indicted for offenses involving Odebrecht.  The Congress that hounded PPK out of office is itself reportedly riddled with corruption.  Odebrecht officials have testified that PPK’s congressional nemesis, Keiko Fujimori, took $1.2 million from them in the 2011 presidential race.  The respected GFK poll indicates that, at 82 percent, Congress has a worse disapproval rating (by 1 percent) than PPK did last week – with the body’s corruption being a major factor.

The crisis comes just weeks before the eighth Summit of the Americas scheduled to be held in Lima on April 13‑14, with the overarching theme of “Democratic Governance against Corruption.”  Vizcarra has directed the Peruvian foreign ministry to proceed with preparations.  The event’s anticorruption focus could produce deeply embarrassing moments for a number of hemispheric heads of state in addition to the Peruvian hosts.  Odebrecht and the Lava Jato investigations loom large over Brazilian President Michel Temer (who, despite support in the single digits, last week announced his intention to run for reelection in October).  U.S. President Trump is engaged in warfare against the Department of Justice, FBI, and special prosecutor looking into allegations that he or his campaign colluded with Russians suspected of intervening in U.S. elections.  Mexican President Enrique Peña Nieto has stumbled from scandal to scandal.  Honduran President Juan Orlando Hernández remains under a cloud because of persistent questions about the vote count in his reelection in November.  Venezuelan President Maduro would be an obvious outcast – for both his corruption and poor governance – but his peers’ own baggage would force some restraint on their condemnations.

Other than newly inaugurated President Vizcarra’s anticorruption pledge, the conditions for a successful summit around the theme of corruption and democratic governance are obviously absent, and going ahead with it risks rendering the event a laughing stock.  Changing the theme would undermine its credibility and raise the troubling questions of what meaningful topics – trade, democracy, inequality, infrastructure investment, or counternarcotics – could replace it.  There are also tempting reasons to postpone the event, including the fact that several countries – Mexico, Brazil, and Colombia among them – will be electing new presidents this year and could bring fresh, validated ideas to a meeting next year or beyond.  Postponing the event, however, would risk braking what little momentum the Summit process has and would leave open when, if ever, the perfect summit could be held.  Crises driven by corruption (and, in the case of Venezuela, the collapse of decency) have a tendency to go on for years.  Either way, Summit organizers are going to have to scale back their expectations – with a protocolary event that sacrifices substance in April, or create a pretext for postponement and hope for a more propitious moment in the future.  The Ibero-American Summit, which includes Spain but excludes the United States and Canada, is scheduled to meet in Guatemala in November under the theme of “A Prosperous, Inclusive, and Sustainable Ibero-America.”  Perhaps that event’s timing and theme will help get regional discussions back on track.

March 26, 2018

Peru: PPK Survives, But Political Crisis Deepens

By Carlos Monge*

Man holds up red and white flag

A protester in Lima holds a Peruvian flag with and image of Alberto Fujimori in prison garb with the phrase “Indulto Es Insulto… Asesino” (“The Pardon is an Insult… Murderer”). / Alan / Flickr / Creative Commons

Peruvian President Pedro Pablo Kuczynski’s commutation of former President Alberto Fujimori’s prison sentence – in exchange for some fujimorista support against his impeachment by Congress on corruption charges – has thrown the country’s politics into a tailspin and increased the prospects of prolonged national crisis.

  • PPK was accused of involvement in corrupt deals with Peruvian and Brazilian construction companies – part of the massive Brazil-based Lava Jato scandal – while he was Minister of Economy and Prime Minister under President Alejandro Toledo (2001-06). By ordering Fujimori’s release, he rewarded Kenji Fujimori and dissident Fuerza Popular MPs, who’d already split with party leader and sister Keiko over her wavering commitment to get their father out of jail at all cost, for their votes against the impeachment.  After emphatically denying he would do so, PPK granted Fujimori a humanitarian pardon on medical grounds, after which the former President experienced a recovery robust enough to resume political activism just days later.

The Fujimori indulto has aggravated deep and longstanding tensions within and among the country’s parties and civil society.  After the impeachment proceedings collapsed, three of PPK`s MPs and three of his ministers resigned in protest, and even the lawyer who defended him against impeachment has denounced his actions as a political scam.  PPK’s popular approval has sunk to 20 percent, and reliable polls show that more than half of the population rejects the indulto.  Protests are growing.  Some 30,000 to 40,000 people marched through Lima on January 11, condemning the collusion of corrupt elites to protect each other, and more demonstrations are planned.

  • Longtime observers in Lima say that the pro-Fujimori Fuerza Popular remains deeply divided as siblings Kenji and Keiko are at each other’s throats over the control of the party and relations with the PPK administration. Even if Alberto and Kenji Fujimori continue to support PPK for a while, open wounds from the close presidential race between PPK and Keiko in 2016 complicate cooperation and in fact may deepen the riff as Keiko’s close collaborators now accuse the PPK camp causing the Fuerza Popular crisis, even denouncing that fujimorista votes were paid for.  Informed speculation is that Keiko will fan the flames of scandal enveloping PPK (even though she reportedly has her own liabilities in Lava Jato) pushing for his fall in hopes of securing early elections rather than waiting until 2021.
  • The left, centrist sectors, and even some conservatives such as Nobel Prize novelist Mario Vargas Llosa have given up any pretense of coexisting with PPK. Human rights organizations and trade unions are demanding Alberto Fujimori be sent back to prison; denouncing the “corrupt alliance” between PPK, the Fujimoris, and the business elites; and insisting that ongoing investigations be pursued no matter who they bring down.  In some sectors, the leftist call for a new Constitution breaking the bond between the state and big business is gaining support.

PPK is a lame duck president with general elections still four years away.  In Congress, which is presided over by a forceful opponent – Luis Galarreta – his base has shrunk to 15 MPs, and he depends heavily on the support of fair-weather friends like Alberto and Kenji Fujimori.  The economy grew 2.7 percent last year, according to the Central Bank, but fell short of targets.  Lava Jato – which has already landed former President Ollanta Humala in jail and prompted extradition proceedings against former President Toledo (living in the United States) – is not going away, with new information expected soon from Brazil.  Popular rejection of the political class, which is seen as corrupt and cynical, will deepen.  Talk in Lima isn’t about if PPK will go, but when.  His fate at this moment appears to depend less on his own cunning and more on the political calculations and unstable relations between the two Fujimori factions and the rest of the parties in Congress and on the strength of street protests.

January 23, 2018

* Carlos Monge is Latin America Director at the Natural Resource Governance Institute in Lima.

The Anticorruption Imperative for Latin America

By Matthew Taylor*

Bar graph showing accountability in Latin America

Graphic courtesy of author. For a larger version, please click here.

Latin America’s reactions to the massive transnational scandals involving the Brazilian construction giant Odebrecht and its subsidiary Braskem are an important sign of progress in anticorruption efforts.  But across the region, courts’ reluctance to challenge elites remains a major obstacle to deeper accountability.  Brazilian, Swiss, and U.S. authorities’ announcement in December 2016 of a multibillion dollar global corruption settlement with the Brazilian firms – valued at $3.5 to 4.5 billion – was remarkable for being the largest in history.  It was also shocking for its revelations: Odebrecht admitted using a variety of elaborate subterfuges to launder bribe payments and corrupt proceeds, including by setting up a bribe department and buying an offshore bank.  Graft allowed executives to rewrite laws in their own favor, and guaranteed that the right officials were in the right place when public contracts were up for bidding.  The firms netted $3.60 for every $1 they spent on bribes in Brazil, and admitted to paying $788 million in bribes across twelve countries, including ten in Latin America.

The political salience of the charges is roughly similar in all ten Latin countries, muddying the reputations of presidents or former presidents in Argentina, Colombia, the Dominican Republic, Peru, Panama, Venezuela and, of course, Brazil.  Ministers and high-level officials have been implicated in the remaining countries: Ecuador, Guatemala, and Mexico.  Nearly one year after the settlement, it is time to ask how well law enforcement and judicial processes are resolving the allegations against these high-powered public and private sector elites.

  • In a paper forthcoming in Daedalus, I argue that accountability can be thought of as the outcome of a basic equation – A = (T + O + S) * (E – D) – combining transparency (T), defined in its most essential sense as public access to information about the government’s work; oversight (O), meaning that government functions are susceptible to surveillance that gives public or private agents the right to intensively evaluate the government’s performance; and sanction (S), effectively punishing wrongdoing and establishing societal norms to their rightful place. These are tempered by institutional effectiveness (E) – understood as the outcome of state capacity, relevant laws and procedures, and citizen engagement – and political dominance (D), which diminishes the incentives for active oversight or energetic sanction.  The graph above uses a combination of data points from the World Justice Project to measure each of the five variables.
  • The comparison yields mixed findings. On average, the nations implicated in the Odebrecht settlement do quite well on transparency, effectiveness, and political dominance – the outcome of a generation of democratic rule (with Venezuela being the obvious outlier).  But all ten countries perform comparatively poorly when it comes to oversight, and abysmally when the criterion is sanction.  This does not bode well for accountability, especially if we consider that among the Odebrecht Latin Ten, the highest-scoring country on the sanction criteria is Argentina, whose score is still below the middle-income country average.  In Brazil, where trial courts have led the way in imposing sanctions on business elites, political leaders are nonetheless protected against meaningful sanctions by an arcane system of privileged standing in the high courts.

Latin American judicial systems – long rigged to protect local economic and political elites – remain the principal obstacle to accountability.  The Odebrecht settlement signaled that a new day has arrived: new international norms and law enforcement across multiple jurisdictions are likely to continue to upset the cozy arrangements that have protected the region’s elites from corruption revelations for decades.  But true accountability will only come when local courts and prosecutors are empowered to effectively punish corrupt elites.  That implies changes in legal procedure, new laws, and most importantly, political will.  Perhaps the Odebrecht case will galvanize domestic public opinion and mobilize policymakers about the need to improve local justice systems.  The enormous costs of corruption revealed by the Odebrecht settlement suggest that change cannot come soon enough.

November 6, 2017

* Matthew Taylor is Associate Professor at the School of International Service at American University.  His forthcoming article in Daedalus is entitled “Getting to Accountability: A Framework for Planning and Implementing Anticorruption Strategies.”

And the Winner is… Trump in Latin America

By Nicolás Comini*

Donald_Trump_and_Mauricio_Macri_in_the_Oval_Office,_April_27,_2017

U.S. President Trump and Argentine President Macri meet in the Oval Office. / Official White House Photo by Shealah Craighead / Wikimedia / Creative Commons

Criticism of U.S. President Donald Trump’s policies toward Latin America ranges from mild to furious in the region and among many U.S. Latin America watchers, but that anger is not likely to drive greater regional unity and demands for a more balanced relationship.  Trump’s rhetoric – emphasizing sovereignty, nationalism, and protectionism – have long been popular concepts in many countries of the region.  During Latin America’s recent “turn to the left,” for example, political leaders embraced a developmentalist emphasis on using tariffs and non-tariff trade barriers to give domestic industries an advantage in national economic expansion strategies.  But the U.S. President’s statements have generally infuriated not only the left as reflecting bias on an array of issues, such as immigration, but also the right.

  • Trump’s policies contradict the prescriptions that Washington has been advocating – and most conservative politicians have embraced – for Latin America for many years. Those prescriptions have emphasized free trade but touched on other issues as well, such as the shift (symbolic and material) of resources from traditional national defense to the “war on drugs.”  Trump’s “America First” approach undercuts his natural allies in Argentina, Brazil, Mexico, and elsewhere.  It has also given their leftist opponents a sense of legitimization of their anti-Americanism speeches, something that is surging also because of Washington’s new policies toward Cuba.
  • The U.S. summary abandonment of the Trans-Pacific Partnership (TPP), conservatives’ last great hope for deeper trade integration with the United States, left them angry. According to the ECLAC, 73 percent of all FDI in Latin America in 2016 came from the United States (20 percent) and the European Union (53 percent).  Individuals with strong anti-Communist credentials in Colombia, Chile, and Peru are all flirting with joining China’s Regional Comprehensive Economic Partnership (RCEP).

Regional organizations show no sign of providing leadership in how to respond to U.S. policy.  UNASUR is fading rapidly, in part, because it was labeled by the new conservative governments as too Bolivarian and anti-American.  Something similar is happening with the CELAC.  MERCOSUR is struggling, in part, because of the political tumult in Brazil.  Indeed, most governments are trying to remain friends with Washington, prioritizing bilateral agendas in detriment of regional (multilateral) institutions and mechanisms.

The surge in resentment toward Washington – within and among Latin American countries – is unlikely to lead to increased regional unity.  Internally, the left and right may agree that Trump is harming their interests, but their reasons are different and prescriptions for dealing with it are far apart.  On a regional basis as well, the current context accelerates the atomization of the region – and threatens to expand the bargaining power of the great powers of the United States, China, Germany, or Israel.  Although China is making inroads, in the end the United States has, and will retain, the greatest influence in Latin America – and the lack of efficient regional decision-making will prolong that situation.  Latin American fragmentation will create an image of acquiescence – and President Trump will think he is not doing so badly in the region.

October 18, 2017

* Nicolás Comini is Director of the Bachelor and Master Programs in International Relations at the Universidad del Salvador (Buenos Aires) and Professor at the New York University-Buenos Aires.  He was Research Fellow at CLALS.

Laudato Si:  Support for the Indigenous of the Amazon Benefits Us All

By Birgit Weiler*

Group of men and women stand behind a banner

Members of the Awajún community mobilize in Peru. / Andina Archivo / Creative Commons

Issuing his Laudato Si encyclical in 2015, Pope Francis put himself on the side of Latin America’s original peoples in protecting the environment in their ancestral lands, in what will be a long struggle to counteract climate change and safeguard the earth.  Laudato Si emphasized that different religions, including the indigenous peoples’, can make “rich contributions … towards an integral ecology.”  Francis wrote:  “Given the complexity of the ecological crisis and its multiple causes, we need to realize that the solutions will not emerge from just one way of interpreting and transforming reality.  Respect must also be shown for the various cultural riches of different peoples … their interior life and spirituality.”   He spoke of their wisdom especially in dealing with the earth and all the living beings.

  • For the Awajún and Wampis in Amazonas Department in northern Peru, their cosmovisión (world view) and traditional religion are an important source of inspiration and endurance in their struggle for safeguarding their living space. In the integral vision of the world they share with other indigenous peoples, all living beings – not only human beings – are considered agents within a single big energy.  Everything is connected – similar to the “integral ecology” mentioned in Laudato Si.
  • Highlighting the urgent need of a “bold cultural revolution,” the encyclical implicitly embraces the indigenous people’s concept of “Buen Vivir,” an alternative way of life based on respect for the earth and on living in relationships of interconnectedness and interdependence. This demands a change in lifestyle reducing significantly our negative impact on our planet; caring for the integrity of the ecosystems and of human life; and a real change in our way of understanding and practicing economy, “progress,” and “development.”

Governments have been slow to respond to these calls – which threaten to disrupt longstanding arrangements between the extraction industry, regulators, and legislators – but there have been some significant public signs of progress.  Last March, for example, the Fourth Constitutional Court in Lima declared that the Awajún and Wampis have the right to approve oil exploration in their ancestral lands, particularly an area known as “Lot 116.”  The court ordered exploration activities to cease and withdraw from the region until full consultation with local indigenous groups was completed.  In another case, in the Iquitos–Pucallpa region, a court ordered that the state consult with respect the indigenous people’s right to a full consultation, forcing the government to step back and begin the process anew.

 Despite this halting progress, the environment and cultures that Laudato Si reveres are under constant and, in some cases, worsening threat.  Illegal deforestation of precious tropical lumber is reaching alarming levels.  An explosion in new oil palm farms, the construction of hydroelectric power stations, and the expansion of roads and other infrastructure to facilitate extractive industries are all inflicting permanent damage.  Scientists have repeatedly pointed out that the ecosystems of the Amazon won’t be able to bear much longer the devastating impact of these activities.  As the Pope wrote, loss of the region’s tropical forests – the biggest lung of our world – and the vanquishing of peoples like the Awajún and Wampis would be a tragic loss for us all.

October 11, 2017

* Birgit Weiler is Director of the Area of Research at the University Antonio Ruiz de Montoya in Lima; collaborates closely with the Vicariate of Jaén (Catholic Church) and with the Awajún and Wampis; and contributes to CLALS’s project on religion and climate change.

Peru’s “New” Drug Strategy: Déjà Vu?

By Paul Gootenberg*

Eradicacion de la coca

“Peru’s national drug control agency just released a four-year counter-drug strategy in April that warns of the urgency to reverse the ongoing surge in cocaine production.” / Editora Perú / Creative Commons

Peru, with a capacity to produce about 350-450 tons of cocaine a year, has been approaching Colombia as the world’s top exporter since around 2011, but its new drug strategy is not likely to reverse that trend.  Most Peruvian coca now comes from the Valle de los Ríos Apurímac, Ene y Mantaro (VRAEM), and most cocaine flows towards Brazil not the United States.  Peru’s national drug control agency, DEVIDA (National Commission for Development and Life Without Drugs), just released a four-year counter-drug strategy in April that warns – again – of the urgency to reverse the ongoing surge in cocaine production but offers few compelling or new ideas on what to do.  The report notes the “high risk for Peru that our country will repeat the cases of Colombia and Mexico” in violence, corruption, and other costs of a massive illicit narcotics trade.  The strategy has some serious flaws, however.

  • Although the report touts itself as a “Plan Integral,” military spending and eradication far outstrip “alternative development.” Coca “supply control” is the core of the program, though development efforts (mainly with cacao) are offered. Peru’s plan is mechanically sequenced – Pacification, Eradication, Services, and Development – and its rigid militaristic strategy draws criticism.  The latter seems basically directly against VRAEM peasants.  In 2014, a similar plan was announced to eradicate “50 percent” of the VRAEM coca in just one year, but nothing occurred because of the risky security environment.
  • The sources of some key data are unclear. The report cites UN information but apparently without taking into account the substantial flow of cocaleros and cocaine traffickers deeper into Amazonia, near the Brazilian and Colombian borders.  It generally treats the VRAEM, Peru’s main producing area, as an isolated containable “world apart” – poised for national “recuperation.”  Security threats in the area, including guerrillas, actually made holding off eradication since 2014 a wise move – it would have pushed cocaleros into the arms of guerrillas – but the new report fails to consider any blowback from its plan.
  • It glosses over the shortcomings of Peru’s security services to carry out what remains a heavily security-based strategy. It makes the startling admission that only 1.5-2.0 percent of VRAEM cocaine and 3-8 percent of cocaine nationally is seized – one of the lowest interdiction rates in the world.  (Colombia’s improved intelligence enables it to grab about half of cocaine in-country, and even weak Bolivia does better policing illicit cocaine.)  The ease of smuggling in Peru is directly related to the open corruptibility of Peru’s police, military, and politicians.  But except for money laundering, DEVIDA’s report barely addresses the corruption problem.
  • Peru, unlike Colombia and Bolivia, has never questioned the UN/U.S. international drug regime, nor does this report. But Peru should expect little overseas eradication aid in the Trump era, raising big doubts about the sustainability of a long-term program.

As Colombians learned after decades of drug war against coca growers, including Plan Colombia, forced eradication is one of the most inefficient and futile ways to combat drugs. Studies by Colombian economist Daniel Mejía show that the marginal cost of eliminating a kilo of cocaine from markets by aerial spraying is a whopping $247,000 – far more than a kilo’s price on the street.  Eradication also provokes violent conflict and propels growers to new areas, and Peru has many tropical basins ripe for raising coca.  Effective intelligence to hit labs and intermediary layers of cocaine trades pays bigger dividends.  So does enlisting cocalero unions on the side of the state – to self-police as in Bolivia (now with the region’s least illicit cocaine) and Colombia (where the 2017 peace accord now recognizes cocalero rights).  Peru marginalizes cocaleros, precluding the sort of socio-political strategy needed for success.  All in all, DEVIDA’s strategy makes it interesting to see whose plan will produce the best results by 2021 – Peru’s, Colombia’s, or Bolivia’s?

June 13, 2017

* Paul Gootenberg is Chair of the Department of History at Stony Brook University and author of Andean Cocaine: The Making of a Global Drug (University of North Carolina Press, 2008).

Who Really Benefited from the Commodities Supercycle – and Who Loses with Its End?

By Carlos Monge*

2017-05-13 AULABLOG_Carlos_Monge_graphic

Latin American governments and business associations have tended to overstate the benefits of extractive industries during the commodities supercycle that ended in 2014-15.  Resource-rich Latin American countries did experience high rates of economic growth and diminished poverty and inequality during the boom years.  On the surface, this would appear to strengthen arguments that – despite their negative environmental impact – extractive industries are the key to progress, especially in resource-rich areas.  Nevertheless, a closer look at data from household surveys in Bolivia, Chile, Colombia, Ecuador, and Peru shows that things are a bit more complicated.

  • The inequality gap between individuals, as measured on the GINI Index, has narrowed, but the gaps between groups of the population have not evolved evenly. For example, the National Resource Governance Institute (of which I’m regional director) recently completed a study of the performance of social indicators during the supercycle that concluded that the poverty gap between urban and rural populations has increased in all countries.  (The report is available in English and Spanish.)  In Peru and Chile, the gap increased more in territories where extractive territories are located, while in Colombia, Bolivia, and Ecuador less so.  The gap between indigenous and non-indigenous populations increased only in extractive territories in Ecuador, decreasing in both extractive and non-extractive settings in the rest of the countries considered.  Regarding gender, in all five countries the gap between men and women increased slightly in non-extractive territories and decreased a bit more in extractive ones.

This report establishes correlations between the increase in extractive activities, the availability of extractive rents, and patterns of inequality reflected in social indicators, but it does not establish a causal relation between such variables.  For example, the data show that urban populations in Peru’s extractive regions have benefited more than rural ones – which some very preliminary research shows is probably because urban centers provide extractive projects with the goods and services they need, while less sophisticated rural areas do not.  At the same time, rural populations have to compete with the extractive projects for those same urban goods and services, and with local governments for the labor force that the public sector contracts to develop infrastructure projects that are paid for through increased revenues delivered by the extractive sector.  This is what we have called the “Cholo Disease.”  A variation of the “Dutch Disease,” it reflects a loss of competitiveness resulting not from large exports of raw materials causing the currency to appreciate, but rather from increases in the cost of labor and of urban goods and services consumed by campesinos.  However, a more definitive explanation regarding exactly how this happens in Peru and in other countries certainly needs further research.

While our data clearly show the impact of mining and hydrocarbons extraction and the resulting expenditure of extractive rents on the poverty gaps between urban and rural populations, men and women, and indigenous and non-indigenous populations, further investigation into the causes and consequences is needed.  The end of the supercycle has already meant a fall in growth rates and extractive revenues, leading to a worrisome rebound in poverty rates.  We are still unable to answer, however, the question of how broadly it will impact the substantial segments of Latin America’s population that emerged from poverty but remains in a vulnerable position – and how it will aggravate poverty gaps among individuals and between groups in extractive and non-extractive territories.

May 16, 2017

* Carlos Monge is Latin America Director at the Natural Resource Governance Institute in Lima.

Latin America: End of “Supercycle” Threatens Reversal of Institutional Reforms

By Carlos Monge*

Monge graphic

By Eduardo Ballón and Raúl Molina (consultores) and Claudia Viale and Carlos Monge (National Resource Governance Institute, América Latina), from Minería y marcos institucionales en la región andina. El superciclo y su legado, o las difíciles relaciones entre políticas de promoción de la inversión minero-hidrocarburífera y las reformas institucionales, Reporte de Investigación preparado por NRGI con colaboración de la GIZ, Lima, Marzo del 2017. See blog text for high-resolution graphic

Policies adopted in response to the end of the “supercycle” have slowed and, in some cases, reversed the reforms that moved the region toward greater decentralization, citizen participation, and environmental protection over the past decade.  Latin American governments of the left and right used the commodities supercycle to drive growth and poverty reduction at an unprecedented pace.  They also undertook institutional reforms aimed at improving governance at large.

  • Even before demand and prices for Latin American energy and minerals began to rise in the early 2000s, some Latin American countries launched processes of decentralization (Colombia and Bolivia); started to institutionalize mechanisms for citizens’ participation in decision making (Colombia and Bolivia); and built progressively stronger environmental management frameworks (Colombia and Ecuador). Peru pressed ahead with decentralization and participation at the start of the supercycle, and when it was in full swing, created a Ministry of the Environment.
  • Implementation of the reforms was subordinated by governments’ overarching goal of fostering investments in the extractive sector. Indigenous consultation rights in Peru, for example, were approved in the second half of 2011, but implementation was delayed a year and limited only to indigenous peoples in the Amazon Basin.  President Ollanta Humala, giving in to the mining lobby, claimed there were no indigenous peoples in the Andes and that no consultations were needed around mining projects.  Local pressure forced a reversal, and by early 2015 four consultation projects on mid-size mining projects were launched.

These reformist policies have suffered setbacks since the decrease in Asia’s and particularly China’s appetite for Latin American energy and minerals has caused prices to fall – and the value of exports, taxes, and royalties, and public incomes along with them.  The latest ECLAC data show a decline in economic growth and a rebound of poverty both in absolute and relative figures.  The gradual fall in the price of minerals starting in 2013 and the abrupt collapse in oil prices by the end of 2015 reversed this generally favorable trend.

The response of the governments of resource-dependent countries has been “race to the bottom” policies, which included steps backward in fiscal, social, and environmental policies.  Governments’ bigger concern has been to foster investments in the new and more adverse circumstances.  In this new scenario, the processes of decentralization, participation, and environmental management have been negatively impacted as local authorities and citizens’ participation – as well as environmental standards and protocols – are perceived by companies and rent-seeking public officials as obstacles to investments.

  • Peru’s Law 30230 in 2014, for example, reduced income tax rates, weakened the oversight capacity of the Ministry of the Environment, and weakened indigenous peoples’ claim public lands.

The correlation between the supercycle years and the progress and regressions in reforms is clear. (click here for high-resolution graphic).  During the supercycle – when huge amounts of money were to be made – companies and government were willing to incorporate the cost of citizen participation, decentralization and environmental standards and protocols.  But now, governments are desperate for new investments to overcome the fall in economic growth and extractive rents, and extractive companies are not willing any more to assume these additional costs.  Those who oppose the “race to the bottom strategy” are fighting hard to restore the reforms and to move ahead with decentralization, increased participation, and enhanced environmental management, to achieve a new democratic governance of the territories and the natural resources they contain.

April 7, 2017

* Carlos Monge is Latin America Director at the Natural Resource Governance Institute in Lima.

Peru: Can the Shamans Save the Glaciers?

By Karsten Paerregaard*

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A ceremony at Mount Huaytapallana during the Andean New Year. / Photo by Karsten Paerregaard.

Peru – one of the countries in the world most vulnerable to climate change – is experiencing a surge in religious ceremonies highlighting the plight of its rapidly shrinking glaciers, but the increased attention has downsides as well.  Peru has 70 percent of the world’s tropical glaciers, which provide most of the country’s fresh water and have been integrally linked to the identity of the Andean people since the Incas.  They are rapidly shrinking, however.  Mount Huaytapallana, a 5,500-meter-high glacier about 300 kilometers east of Lima, has shrunk 50 percent over the past quarter century – with profound implications for life throughout much of Peru.  Shamans in the region, whose ceremonies and offerings have long constituted a critical means of regulating the relationship between society and nature in the Andes, are reviving the practices to draw attention to this environmental crisis.

  • Most participants in ceremonies on Mount Huaytapallana come from Huancayo and other nearby cities in the central highlands, hoping that Huaytapallana will listen to their prayers and bring them good fortune. The Andean New Year on June 24, one of the most spectacular events, attracts more than a thousand people.  They offer food, drinks, candles, and cloths that are burned while the shamans say prayers to Huaytapallana in Quechua.  The event reminds people of the suffering that global warming is causing to the mountain.
  • In the southeastern highlands, Mount Ausungate attracts even bigger crowds. Around the feast of Corpus Christi each year thousands of pilgrims walk up to a sanctuary to pay tribute to an image called Señor de Qoyllur Rit’i (the Lord of the Snow Star), declared an Intangible Heritage Site by UNESCO in 2011.  The image represents Christ, who according the local legend revealed himself at the sanctuary in the 18th century, but it is also a religious relic of a pre-Columbian tradition of worshipping Andean mountain deities.  Dance groups from eight communities of pilgrims, known as naciones, play music and dance around the clock, and men dressed as bears climb the nearby glaciers of Ausungate to set up crosses and until recently set off fireworks.  An estimated 50,000 visited the sanctuary last year.

The glaciers are symbols of both the country’s indigenous past and the damage that global climate change is inflicting.  The growing participation in Andean ceremonies with religious overtones reflects the deepening concern for the profound social, economic, and spiritual implications of the environmental degradation.  It is fueled by a search for alternative answers to problems that global climate change is causing in Peru and that the country’s governments so far have failed to provide.  The surge in interest also, ironically, is cause for concern.  According to the regional government of Junín, responsible for the protection of Huaytapallana’s environment, visitors leave more than four tons of trash on the mountain every year.  The commercialization of the offering ceremonies makes it difficult to hold the shamans accountable for participants’ activities.  At Qoyllur Rit’i, Peru’s Ministry of Culture is in charge of preserving the pilgrimage according to Andean traditions, enhancing people’s awareness of Ausungate’s cultural importance, but pilgrims’ presence on the glaciers remains an issue of continuous dispute.  Shamans and environmentalists are a potentially powerful alliance, but even mitigating the environmental impact of activities by people concerned with climate change is not a simple matter.

February 6, 2017

* Karsten Paerregaard teaches in the School of Global Studies at the University of Gothenburg in Sweden.  He has participated in a CLALS project, funded by the Henry Luce Foundation, on Religion and Climate Change in Cross-Regional Perspective.