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The curse of natural resources in Peru: scope of a controversial hypothesis

The curse of natural resources in Peru: scope of a controversial hypothesis

By Walter Chamochumbi

Due to the exceptional conditions of its varied and complex ecogeography, Peru enjoys the privilege of being a country, like few others in the world, megadiverse. On the contrary, according to some wise economists, it seems that his great natural wealth, more than a blessing, has represented a strange curse.


Due to the exceptional conditions of its varied and complex ecogeography, Peru enjoys the privilege of being a country, like few others in the world, megadiverse. On the contrary, according to some wise economists, it seems that his great natural wealth, more than a blessing, has represented a strange curse.

It is around this issue, whether the natural wealth of a country constitutes an advantage or a disadvantage for its economic growth and development, that in this article we focus on the analysis of what has been called the hypothesis of "the curse of the natural resources ”, taking as an approximation case the state of natural resources in Peru.

1. Natural resources in Peru: need for updated inventories and information systems

Peru has such natural wealth that it makes it very difficult to know it in its entirety, especially because multiple human activities -from time immemorial- have taken advantage of it but also impacted it in multiple ways. Hence the need to have up-to-date information systems on inventory, evaluation and use of its renewable and non-renewable resources.

Renewable natural resources, according to ecologist Antonio Brack 1, Peru is characterized by:

It has a high diversity of species (flora, fauna and microorganisms), since it has 10% of the world's flora species and occupies the first places in the world in species of fauna: birds, butterflies, orchids and in other groups such as mammals, amphibians, fish and insects.

It ranks first in the world in genetic resources and agrobiodiversity. Of the four most important crops for world food (rice, wheat, corn and potatoes), Peru is first in diversity of potatoes (85 wild species, 9 domesticated and about 3000 varieties) and corn (36 varieties), and occupies an important place in cucurbits, fruit trees, cassava, sweet potato and other groups.

Peru has ecosystems of strategic importance worldwide (marine ecosystems, dry forests, highlands and Andean páramos, cloud forests and tropical forests) to guarantee evolutionary processes at global and regional level:

* It has 66 million hectares of forests, and is the second country in Latin America and the fourth worldwide in tropical forests. Very important for the capture and recapture of greenhouse gases such as CO2.

* The Peruvian sea is one of the most important fishing basins on the planet and one of the least impacted.

* In hydrographic basins, Peru has part of important shared basins at the international level: multinational (Pacific, Amazon, Titicaca or Altiplano) and binational (Puyango-Tumbes and Zarumilla), fulfilling a fundamental role in environmental services.

* The puna or Andean natural grasslands have an area of ​​18 million hectares, forming a very important ecosystem for biodiversity and the presence of endemic species;

* The cloud forests, located on the eastern Andean slopes, are of enormous importance for the biodiversity and stability of the Amazon basin.

* It has a National System of Protected Areas by the Peruvian state, of about 17 million hectares (10% of its national territory).

On the other hand, a very important feature related to the traditional use of natural resources is that Peru is a country with a high cultural diversity, with at least 44 different ethnic groups, of which 42 are in the Amazon. These peoples were distributed and settled in the various ecosystems developing valuable knowledge regarding the uses and properties of species; diversity of genetic resources (4400 plants of known uses and thousands of varieties), as well as their management techniques.

Non-renewable natural resources, mineral reserves are also very important.

Beginning in the 1990s, with the rise in the international price of minerals, there was a great expansion of mining activity in Peru, from 4 to about 23 million hectares and occupying approximately 15% of the national territory. Thus, in recent years, investment projects in mining exploration have increased along the headwaters of the hydrographic basins of the Andean mountain range (and investments have been projected, between 2002 and 2009, for an approximate value of 9,000 million of dollars). On the other hand, the oil fields –although of less magnitude than the miners- have been found mainly in the Amazon region for their exploitation, in addition to other lots to be explored. Also, recently important natural gas deposits have been exploited in the Cusco region.

A characteristic feature of these non-renewable resources is that most of them are located in areas that overlap with protected natural areas and territories of indigenous or local communities, which has been generating various environmental and social conflicts with external operators that exploit these resources. and in many cases before the permissiveness of the Peruvian state. For this reason, it is very important to take into account that given the high cultural diversity and renewable and non-renewable natural resources that Peru has, it is essential to start from this baseline -of high natural and cultural variability- to apply economic ecological zoning criteria in planning the use of natural resources, and thus avoid or prevent the high probability of affecting other also important resources.

2. Global economic rationality versus conservation of natural resources

We know that there is currently great controversy in the different sectors of government, politics, academics and society when, regarding the situation of renewable and non-renewable natural resources in Peru, we wonder about their current state of conservation. 2 And it is that if in this regard we inquire about whether there is an updated mapping-inventory of all the extractive projects of natural resources that have operated -and are operating- in the different regions of the country, and we take as a study period only the last three decades, we will find undoubtedly a very worrying panorama regarding its current state of conservation. Indeed, the numerous environmental liabilities and the high costs in negative environmental externalities produced in the different regions give us an account of their situation.

Environmental liabilities are a main consequence of the intensive (and irrational) exploitation of natural resources, given the weak normative and regulatory framework in environmental matters of the Peruvian state. Thus, most investment projects in the exploitation of these resources were not adequately planned or supervised. But, in addition, since the 1990s, these projects have increased significantly under the facilities and incentives granted to external operators, in the midst of a new economic-commercial scenario. That is, the one we live today with the application of the neoliberal economic model, as a consequence of the expansion of the globalization process and the directive measures of the famous Washington Consensus.

However, it is also true that nowadays such measures are being questioned due to their disparate results in terms of growth and development at the level of central and peripheral countries. Thus, among the questions made in environmental matters, we find that global economic rationality does not resolve per se the problem of internalization (instrumentalization) of the environmental perspective in development processes. In such a way that for the Latin American context, we assume that the possibility of achieving concrete progress to achieve sustained and redistributive economic growth, socially equitable and compatible with the environment, will be very difficult to achieve as long as deep structural changes are not promoted in the model. current economic. With all the more reason in the case of countries like Peru, which having a great wealth of natural resources and being the main exporter of raw materials, at the same time has not managed to implement sustainable use criteria for its natural resources, and yes, for the On the contrary, it has resulted in their irrational exploitation generating various liabilities and conflicts.

But while it is true that multiple factors intervene in this, it is also true that the eminently economic approach of the country's development model continues to be one of its main limitations for advancing in terms of social and environmental policies. It is therefore not difficult to imagine that if the current economic model is not changed, Peru will continue its historical tendency to remain a developing country. In other words, it will continue with a relative growth of its economy, based on the export of its raw materials but subject to fluctuations in international market prices. Maintaining an unequal economic model that does not redistribute, but on the contrary, that deepens the largest social gap between the privileged minority sectors of the economy and the large social sectors that continue to be excluded from the modernization and development processes of the Peruvian state.

3. Environmental and social conflicts in Peru: history of a recurrent policy in the exploitation of its natural resources

In general it is known that Peru throughout its history had some periods of economic boom based on the export of its natural resources. This was the case in the 19th century with the exploitation of island guano and saltpeter, and in the 20th century with the exploitation of rubber, anchovy, oil and minerals, among other resources that until today, the case of minerals and oil, continue to boost the national economy. However, it is also known that these boom periods of the national economy were sporadic and variable, given their dependence on prices in the international market for their raw materials and the political context in which they were exploited.

On the other hand, a characteristic feature of the Peruvian economy is that its growth was based on a centralist political structure of the state, through its different governments. As a result, the extraordinary income obtained from the intensive exploitation of certain natural resources was not redistributed to promote the economic and social development of all regions of the country, especially the poorest regions from which most of the raw materials were extracted, but that, on the contrary, the profits obtained contributed to accentuate the economic, social and cultural gap between the capital and the interior regions of the country. 3

Subsequently, with the process of decentralization and regionalization that began in 2002, with the government of Toledo, the Peruvian state is today in a complex process of transition - which can take years - until it has finished reforming its entire centralist structure. And although this process may depend on multiple factors, fundamentally it will depend on whether it is assumed as a state policy by successive governments, including the current García government, which must commit effectively and sustainably to its implementation consistent with the real needs of the country. Meanwhile, the public apparatus continues to function under the inertia of a centralist system that in economic matters continues to depend on a primary export model of natural resources (in the case of minerals, oil and natural gas), but whose interests and benefits obtained by the Peruvian state of the external operators that have been exploiting them, their relevance is questioned. With all the more reason, the numerous environmental and social impacts produced by the development of extractive activities are questioned, the benefits of which do not reach the most remote and excluded sectors of the country either.

In the end, the periods of boom and growth of the national economy, based on the intensive exploitation of certain natural resources, do not leave significant contributions to the integral national development, but there are numerous conflicts around the exploitation of these resources, either due to their irrational exploitation, depleting them or progressively deteriorating them, and by the consequent affectation of other important resources, as means of life for the local communities of the surroundings. This is the case of important investment projects in the exploitation of non-renewable resources from the subsoil: mining projects along the Andean mountain range or oil projects in the Amazon region (both in their exploration, operation, or closure phase). Unfortunately, many of these projects have developed with the appearance of different types of environmental and social conflicts with local communities. 4

Thus, we recall some of the most notorious conflicts in 2006, between external operators and local communities, with the participation of the Peruvian state. Those who, for the most part, continue to this day in complex negotiations without being fully resolved for the parties in conflict:

* The conflict with the peasant communities of the department of Cajamarca, regarding the operation of the Yanacocha Mine, due to the exploitation of important gold deposits and its environmental implications with the aquifer reserve areas and natural sanctuaries considered as intangible areas by the local population .

* The conflict with the peasant communities of the provinces of Ayabaca and Huancabamba, in the department of Piura, regarding the Río Blanco mining project in the exploration stage by Minera Majaz.

* The conflict with the indigenous communities surrounding the rupture zone in certain sections of the pipeline that transports the natural gas of the Camisea project, from the Cusco region to Lima, due to the operator's deficiencies in the installation of the trunk line of the gas pipeline.

* The conflict with the Achuar, Quichua and Urarina indigenous communities in the Corrientes river basin, in the Loreto region, and the Pluspetrol oil company. In this case, evidencing an old contamination problem generated by the discharges of production waters in oil extraction in lots 1AB and 8 in said region.

* The repeated conflicts in the city of La Oroya and the serious public health risk due to polluting emissions from the metallurgical complex owned by Minera Doe Run Peru, who requested a new extension of the deadline for compliance with its PAMA, generating controversy among the population and the various business, labor, environmental and social sectors for and against this breach of the operator.


As a result of the numerous conflicts that have been occurring on a recurring basis in the country, particularly since the 1990s, along with global economic rationality, a great - and in many cases uneasy - national debate has arisen in the various levels of Peruvian society, regarding the causes that generate these conflicts, the cost-benefit relationship of these important projects, the political context and the country's development model, as well as their economic, social and environmental implications.

A debate that also involves elucidating the role that a country's natural resources should play in development matters. That is, if its resources can be considered strategic, within the framework of an open economy, to serve in the design of short, medium and long term strategies. And so, on the one hand, take advantage of its natural wealth in a sustainable way and, on the other, contribute effectively to sustained economic growth and national development. Or, on the contrary, they become a source of distortions in their internal politics, waste of spending, corruption and poverty. In short, it becomes an inevitable curse.

4. The curse of natural resources: more than a gypsy sentence, a controversial economic hypothesis.

Various economists argue that it is the wealth in non-renewable natural resources of some countries that apparently leads to their poor economic growth and development (they cite the case of oil countries such as Venezuela and Ecuador, or mining and gas countries such as Bolivia and Peru, among others. ). And they also point out that the poverty in natural resources that other countries possess does not prevent them from achieving very high economic growth and development (they cite the case of Japan, among others). Resulting in that this phenomenon that contradicts classical economic theory has been enunciated as the hypothesis of "the curse of natural resources." Econometric studies worldwide seem to confirm its paradoxical implications. In other words, in general, countries that are poor in natural resources have historically presented better economic performance and development than countries that are rich in natural resources.

Cecilia Perla (2005, citing Sachs and Warner: 1995, p.21) 5, whose theoretical explanation is based on a model called "Dutch disease", points out that among the various opinions on the subject prevails the one that maintains that, in effect, "there is a statistically significant association, inversely proportional, between the intensity of natural resources and economic growth, and in which, in addition, the first is the cause of the second. In such a way that this inverse relationship is called the curse of natural resources ”. It also points out that it is the economies rich in non-renewable natural resources (that is, in subsoil assets such as minerals, natural gas and oil) that have the worst economic performance. In a similar sense, Carlos Gómez (2002) maintains “that the empirical evidence induces him to think in the opposite direction to the logic of a mechanical vision of the natural capital-economic growth relationship, because the intensive use of nature does not, strictly speaking - no advantage for economic growth ”.

Another study by Michael Ross (2001) 6Based on econometric analysis, they reach similar conclusions: "That the states that depend on their oil and mineral exports face greater problems of poor living conditions and poverty." It finds that countries that are poor in growth and development but rich in non-renewable resources, their export volumes of oil and minerals correlate with exceptionally high rates of infant mortality, with high rates of child malnutrition and low investment in public health, as well as with greater inequality in their national income. In addition, it points out that countries dependent on these exports tend to suffer "high levels of: corruption, authoritarian governments, government inefficiency, military spending and armed violence."

On the other hand, other authors point out that econometric studies on the validity of the hypothesis of the curse of natural resources are dissimilar. Rudolf buitelaar 7 -quoting Sachs and Warner 1995, Davis 1995, Gavin and Hausman 1998, Altamirano 2000-, he points out that, while, on the one hand, Sachs and Warner (from the Center for Economic Policy Research at Harvard University) 8 find that the GDP growth rate is negatively correlated with different measures of natural resource abundance (in a sample of 97 developing countries using a 20-year time series) they conclude “that this cannot be a coincidence but that there must be something in the endowment of natural resources that explains the unsatisfactory performance ”. On the other hand, he points out that Davis, for his part, develops a "Mineral Dependency Index" for 91 countries and correlates it with a wide group of economic and social development indicators. From which he concludes that "it is difficult to argue that the countries most dependent on mineral resources have had a less satisfactory economic and social performance than others."

Of the two cases cited, regarding the validity of this hypothesis, Buitelaar points out that both reach opposite results. Thus, while Davis' study does not find it valid, other researchers, such as Sachs and Warner, claim to find evidence that there is a negative relationship between the intensity of natural resource exports and the rate of economic growth. And that in the case of Latin America, countries with an abundance of natural resources seem not to achieve satisfactory performance in economic and social terms. So is there a causal relationship between the stock of natural resources and the performance of national economies?

Buitelaar notes that depending on the variables under study, the results may vary, although the authors may reach similar conclusions: “Different specifications produce opposite results, but the authors generally reach quite similar conclusions: the causal relationship passes through the dimension of economic policies. It is not natural resources per se but inadequate economic policies that cause the weak economic performance. It is not inevitable that countries rich in natural resources will have lower economic growth. It should be possible to design appropriate policies given the endowment of resources. Significant welfare gains could be obtained from appropriate policies for economies endowed with natural resources. ”(Op cit de Rudolf Buitelaar)

Indeed, contrary to what can be assumed from the studies that suggest the validity of this hypothesis, there is not sufficient evidence of a cause-effect relationship: natural wealth-poor economic growth. In this sense, we agree with what Buitelaar pointed out, since it is reasonable to suppose that the causal relationship in the curse of natural resources should first pass through the scope of the governments' economic policies rather than through their only potential for natural wealth. Ergo, it is not natural resources - by themselves - but inadequate economic policies and weak institutional frameworks that cause the weak economic performance of nations and their relative and uneven development. Consequently, this kind of "economic determinism" suggested by the aforementioned hypothesis is not true, by which the countries with the greatest wealth of natural resources, the case of Peru, are always condemned to have poor economic growth and to have greater economic growth. social gap and poverty.

On the contrary, with the greater potential of natural resources that a country has, it should be possible to design adequate economic policies that are committed to the national interest, above other purposes and particular interests, to achieve better negotiation terms with external operators. . Apply policies for diversification and productive transformation, planning and sustainable use of natural resources, as well as policies for effective redistribution and greater investment in terms of social development for the poorest regions of the country.

5. The abundance of natural resources in Peru: a deserved blessing, but unheard of curse in the hands of its rulers

When verifying the abundance and variety of natural resources that Peru has, it is logical to think that it is a deserved blessing for the stoic Peruvian people. But, unfortunately, in the hands of their rulers, by not having taken advantage of them with sustainable use criteria, they seem to become an unheard of curse. And it is that since the beginning of the republican period, the economic policies of the governments -in general- have had a bad influence on the intensive (and irrational) exploitation of their natural resources, always subject to external factors (those related to the market). Actually, that has been the real curse, since being a country with important reserves in non-renewable resources (minerals, oil and gas), and considerable investments in extractive projects of these resources, in addition to its no less valuable renewable resources, it continues to be a poor country whose current poverty levels are around 50% of its national population, without the major structural reforms to overcome its poverty and relative development until today.

What, then, has been the real contribution of these extractive projects of natural resources in terms of economic growth, development and improvement of the quality of life of the Peruvian people? What reasons explain this "curse of natural resources" in the case of countries like Peru? To what extent has your historical tendency to apply a primary export model brought you real benefits in economic, social and environmental development? In this regard, we find that for economists like Joseph Stiglitz 9, there are three main reasons that may partly explain the questions asked:

- The enormous profit expectations that derive from the exploitation of resources such as oil, minerals or gas, and which apparently guide political and business leaders towards perverse objectives. (We assume that global economic rationality prevails, the most negative effects of which come from what is called the rationality of "wild capitalism");

- Natural resources are subject to highly volatile and determined prices in international financial markets, which can enter into sudden crises with serious consequences for the poorest countries. (This is the case of the price of minerals that today have a favorable situation in the international market but that could change later); Y

- Natural resources are subject to the well-known "Dutch disease" theory. That is, when there is the existence of an important sector dedicated to the exploitation of natural resources, which arises, for example, from a favorable situation in international prices, affecting the distribution of employment in the economy among the sectors of tradable goods. and not marketable. This reallocation of work can markedly reduce a country's economic growth rate, rather than stimulate it.

In this regard, various authors point to other considerations. For example, in relation to the implications of the primary export model that characterizes the historical trend of the countries in the region. According to Jürgen Schuldt “All historical evidence points in the same direction: in the long run, the export of non-renewable raw materials tends to" develop underdevelopment "in our countries. And this is not the fault of imperialism, nor of the fact that we possess enormous natural wealth, nor of the mining companies. The problem lies almost exclusively with our governments, with our entrepreneurs and with ourselves, as academics or as citizens. Because we have not been able to devise the economic policies and the legal-structural reforms required, nor to form the necessary alliances and consensus, to take advantage of our enormous potentialities - apart from even temporary primary / export booms - to ensure the transition from our economy towards self-reliance, national integration and the expansion of the internal market. " (Op cit de Jürgen Schuldt, 2004). 10

In effect, the weakness of the institutions, the greater corruption and the lesser political will and democratic commitment of the governments, the centralism, the lack of long-term development planning and, if the short-term and populist policies, the greater inequality In the distribution of income, social exclusion and little public transparency with civil society organizations, are recurrent situations that result from the poor ideological and political condition of the ruling class that we have had in the country for decades, before the simple natural wealth that it possesses. Therefore, it is not the simple economic determinism of the countries rich in natural resources that can explain their poor economic performance and poor development, but rather the lack of a political class committed to the great national interests to lead the necessary structural reforms -for decades delayed- of the Peruvian state.

Is it then possible to achieve economic growth and further development and improvement of quality of life, with a sustainable use of natural resources? Yes, although a difficult answer when a series of variables to consider come into play. However, it is known that there are experiences of countries that, contrary to what is suggested by the resource curse hypothesis, their natural resources have not been an obstacle to their growth and development. The question is to study these experiences, evaluate them and recreate them to apply them in each country, as it could be in the Peruvian reality: “… let's study the economic and socio-political history of countries rich in natural resources, which achieved it at the end of the 19th century and early of the XX, like Australia, Canada, Finland, Norway, New Zealand and Sweden. O, como lo vienen intentando por diversas vías y aparentemente con buen éxito, durante las últimas décadas, países como Costa Rica, Malasia, Mauricio y Botswana…” (Op cit de Jürgen Schuldt, 2004).El asunto, además, es tener claro que no se trata de un problema en estricto técnico, ya que el tema sustantivo es antes político para luego asumir las decisiones más convenientes respecto al modelo de desarrollo a seguir y los lineamientos económicos, sociales y ambientales que se desprendan de ello.

Resulta pues a todas luces inconveniente seguir pensando, frente al problema-posibilidad de desarrollo país, que nuestra gran riqueza natural sea –a su vez- nuestro mayor obstáculo para salir de la pobreza. Por el contrario, es imperativo realizar un giro político estratégico para aprovechar la gran potencialidad natural y las enormes oportunidades que ello le puede permitir al Perú en proyección al mercado global.

El reto será armonizar nuestra visión de desarrollo con las distintas actividades productivas, las potencialidades naturales y su capacidad de soporte, y las necesidades sociales como parte de un proceso concertado y descentralizado de planificación integral territorial para alcanzar el desarrollo humano sostenible. En tal sentido, el punto de quiebre radicará en entender que la planificación, vista como un proceso participativo, concertado, descentralizado e inclusivo, será la base del futuro desarrollo nacional.

*Mag. Ing. Agrónomo, Consultor en Gestión Ambiental y Desarrollo.

Notes:

1 En artículo “Biodiversidad: firmeza necesaria” y “Biodiversidad. y geopolítica peruana”, de Antonio Brack Egg (2004 y 2003).

2 Con mayor razón cuando nos preguntamos respecto a si son válidos, desde el punto de vista del interés nacional y las leyes, los términos y condiciones para su explotación por los operadores externos.

3 Es recién a partir del 2002 que se inició, con no pocas dificultades, un complicado proceso de descentralización y regionalización. Al respecto, diversos analistas coinciden en señalar que este proceso de descentralización y regionalización es quizá una de las reformas más importantes de las últimas décadas del estado peruano; sin embargo, a pesar de su gran trascendencia, el proceso avanza muy lento y con muchos contrastes por ello se ha criticado la poca voluntad política e inercia del Gobierno de Alejandro Toledo por no haberlo impulsado en mejor forma.

4 Lo que observamos en las zonas rurales son niveles de pobreza persistentes, que vienen aconteciendo paralelamente con un proceso progresivo de superposición o traslapamiento territorial en el desarrollo de determinadas actividades extractivas, como la superficie destinada a la actividad minera sobre la superficie de finalidad y uso principalmente agropecuario, pastoril y forestal. Esta situación se está manifestando en la ocurrencia de distintos tipos de conflictos de uso de estos recursos. Por ejemplo, conflictos de uso del recurso suelo y agua en territorios pertenecientes a cerca de 3300 comunidades involucradas con el uso minero de sus tierras, y que representan aproximadamente el 55% de las comunidades reconocidas en el país.

5 “¿Cuál es el destino de los países abundantes en recursos minerales? Nueva evidencia sobre la relación entre recursos naturales, instituciones y crecimiento económico.”, de Cecilia Perla, 2005, Documentos de trabajo 242, 61 p.(http://www.pucp.edu.pe/economia/pdf/DDD242.pdf )

6 Ross, M. (2001), “Sectores Extractivos y Pobreza”. Investigador del Departamento de Ciencias Políticas Universidad de California, Informe de Oxfam América, 23 p.

7 En “Capítulo I: Conceptos, inquietudes y aglomeraciones en torno a la minería” IRDC.

8 Citados por Carlos Gómez G., 2002, “Crecimiento Económico y Desarrollo Sostenible”. en p. 15, Universidad de Alcalá.

9 Citado por Joan Oriol Prats, en “El hechizo de los recursos naturales: ¿existe solución?”, Edición 12, martes 26 de octubre de 2004. Gobernanza Revista internacional.

10 En “Somos pobres porque somos ricos”, de Jürgen Schuldt (2004), Convenio La Insignia / Rel-UITA, 12 de julio.


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