- In the mid-twentieth century, the combination of poverty and inequality generated political instability that gave rise to socialist and nationalist movements in different Amazonian countries.
- In societies as stratified as those of the Pan Amazon, shaped by class, ethnicity and geography, inequality is sustained by very real and concrete structural barriers.
- This has resulted in the exponential growth of the informal economy, in which people do not pay taxes to their governments. Irregularities extend to the rural economy, in which smallholder farmers and miners operate without regulation, often damaging ecosystems.
One of the main social and economic challenges facing Amazonian countries is inequality. Although the standard of living of the lower economic strata is better now than at any time in history, tens of millions of people in Amazonian countries are either poor or live on the margin of poverty. Worse still, they face real and palpable barriers to improving their economic situation. The recent pandemic and subsequent economic turmoil have constrained the ability of governments to pursue policies that mitigate inequality via revenue transfers and subsidies and, more importantly, to invest in educational reforms that might change the structural impediments to social mobility.
Poverty in Latin America is a legacy of a deeply stratified society that is a product of class, ethnicity and geography. In Brazil, people of color from the northeast (Nordestinos) are much more likely to be poorer and less educated than their white compatriots from the south and southeast. In the Andes, elites tend to be of European extraction or have a mixed ethnic background and a strong identification with Western cultures, while the less affluent are Quechua or Aymara communities from the high Andes.
In the mid-twentieth century, poverty and inequality led to political instability that spawned socialist and nationalist political movements. Economic experimentation and mediocre governance worsened the situation, and the subsequent economic volatility caused poverty levels to increase over several decades. Entrenched poverty and the lack of opportunity drove millions of people to seek a better life on the Amazonian frontier. The offer of free land was a deliberate attempt to resolve long-standing structural barriers to national development, as well as a convenient policy to deflect dissatisfaction with economic stagnation and social stratification. Perhaps it was coincidental, but the highest rates of migration into the Amazon occurred during the 1980s, the so-called ‘lost decade,’ when an economic slowdown severely limited the ability of governments to provide solutions to their citizens.
Urban areas across the region are characterized by an informal economy that is manifest in street markets and the provision of services by freelance artisans. Unable to find stable employment, these people are forced to make a living by selling goods and services outside the formal economy. They are not criminals, but hard-working men and women who contribute a significant share of national GDP. Moreover, the informal economy is a two-way street where both buyer and seller collude to avoid the costs of taxes and regulation; however, it also eliminates the benefits afforded by labor law and consumer protection.
Most social scientists focus on the urban manifestations of the informal economy, but its tentacles extend into the rural economy. These include small farmers who grow the produce sold at unregulated food markets, paying no taxes on their production or their land. They generally receive no assistance from government extension agencies and lack access to credit from financial institutions. Instead, most rely on predatory agents peddling crop pesticides and loan sharks offering credit with usurious interest rates. As to regulations governing land use and deforestation, they share their urban counterparts’ views of permits and licensing fees: the rules are not meant to apply to them but are intended for large-scale operations.
In the recent past, the lion’s share of deforestation has been caused by corporate or large-scale producers; nonetheless, smallholders have caused a significant portion. This sector is now responsible for between seventy and eighty per cent of all deforestation in the Pan Amazon, and, although it is only a fraction of the levels recorded in the 1980s, 1990s and early 2000s, it is more than sufficient to cause real and permanent damage to the functionality of the Amazonian ecosystem. In the Andean foothills, smallholders routinely clear forests on extraordinarily steep slopes with no consideration for long-term sustainability or the impact of erosion on infrastructure assets like highways and reservoirs. In some jurisdictions, small farmers may be legally exempt from land-use regulations but, even where laws exist, little effort is made to enforce them.
Similar behaviors prevail among informal gold miners. Here the disdain for environmental impacts is egregious, while mine operators ignore multiple labor and safety standards. In the last few years, there has been an increased effort to collect royalty payments that are allocated to municipal and regional governments. Most miners pay nothing, and those that do are probably under-reporting revenues, while programmes to improve social and environmental performance focus largely on safety rather than environmental liabilities. Not surprisingly, small-scale miners think remediation, mitigation and compensation are intended only for large companies, which are considered ‘rich’ and usually ‘foreign’.
Changing the behavior of small-scale farmers and miners is a very large challenge. The reasons are multiple, but they are linked to their self-perception of being disadvantaged. In their view, they have achieved what they have because of their hard work, despite being denied a good education or the opportunity for decent employment. Many have paid a ‘fee’ to obtain title to their landholding or mining concession. In many cases, these documents are not legally valid, but were the only documents they could obtain, because the state does not provide a cost-effective way to formalize their possession.
There are hundreds of thousands of small-scale farmers and miners, which makes elected officials reticent about forcing them to change their production strategies. Obligating them to change their practices using law enforcement mechanisms will be difficult, because of their electoral power or their ability to disrupt society by civil protest and, in the case of miners, their ability to quickly replace equipment and resume operation after a police raid.
Banner image: The recently logged Cerrado area in Brazil. Credit: Rhett A. Butler.
“A Perfect Storm in the Amazon” is a book by Timothy Killeen and contains the author’s viewpoints and analysis. The second edition was published by The White Horse in 2021, under the terms of a Creative Commons license (CC BY 4.0).
To read earlier chapters of the book, find Chapter One here, Chapter Two here, Chapter Three here, Chapter Four here and Chapter Five here.
Chapter 6. Culture and demographic defines the present
