Premier Li Keqiang is embarking on a visit to several Latin American countries, with plans to discuss infrastucture investment and a railroad that will transverse the continent from the Atlantic to the Pacific oceans. From AFP:
One major mooted long-term infrastructure project is a proposed Chinese-financed US$10 billion rail link stretching some 3,500 km from the key Brazilian port of Santos to the Peruvian Pacific port of Ilo via Amazonia.
Brazil has seen its reputation hit by a huge graft scandal at oil giant Petrobras, but the firm received a boost earlier this year when it signed a US$3.5 billion financing deal with the China Investment Bank.
“China is fulfilling a desperately-needed role of investor in Latin America and the Caribbean. Brazil desperately needs investment,” said Charles Tang, chairman of the Rio-based Brazil-China Chamber of Commerce and Industry.
“The US back yard is growing a Chinese back garden, not just in Brazil but all over Latin America. [Source]
A recent study from Boston University examines China’s new role as a “driver of social and environmental change in Latin America” and how that may be impacting sustainable development. From the Executive Summary:
Latin America’s recent commodity boom accentuated environmental degradation and social conflict across the Americas. The Latin American commodity boom was largely driven by new trade and investment with China, and concentrated in the petroleum, mineral extraction, and agricultural sectors — sectors endemic to environmental degradation and often the source of social conflict over rights and working conditions. Though with some notable exceptions, Latin American governments fell short of mitigating the social and environmental costs of trade and investment of the China-led commodity boom. While China should not be blamed for the bulk of Latin America’s environmental and social problems, as China ‘goes global’ it is important to mitigate the social and environmental impacts of its global activities in order to maintain good relations with host countries and to reduce the potential risks associated with overseas investment. Although some Chinese firms have demonstrated an ability to adhere to best practices in the social and environmental arena, by and large and Chinese firms operating in Latin America thus far lack the experience or policies in place to lessen the impacts of their investments in the region. As the Latin American economies slow down there is increasing pressure on governments to ‘streamline’ approvals for the relatively few opportunities for Chinese trade and investment, and to dampen the voice of civil society organizations working to hold governments and foreign firms accountable for their actions. It is in the interests of the Latin American and Chinese governments, as well as Chinese firms, to put in place the proper social and environmental policies in order to maximize the benefits and mitigate the risks of China’s economic activity in Latin America. [Source]
At the Guardian, Jonathan Watts reports on the study and how the railway project in particular may pose a threat to Brazil’s environment and to uncontacted tribes in the Amazon:
China is playing an increasing role in Latin America, having tripled its share of regional exports in the past decade – particularly of food and minerals. But there is a considerable cost in terms of environmental degradation and social conflict, according to a recent Boston University study. Although major Chinese firms have put in place improved guidelines, conservationists and campaigners for indigenous rights fear this project will continue that trend by carving up nature reserves, crossing the land of uncontacted tribes and opening up indigenous land for development. This is expected to prompt an outcry.
“This project is iconic and is likely to become centre-stage for Latin American civil society organisations,” said Paulina Garzon, director of the China-Latin America Sustainable Investment Initiative. “It is way too big to pass unnoticed, and … will be tremendously controversial on both environmental and social fronts: first because of its size and location but also because Latin-American environmental groups and indigenous organisations are quite vocal and very well-networked.”
She said planners needed to avoid the mistakes of past megaprojects, which rushed or avoided environmental impact assessments and consultations with local people.
“It would be smart to establish a robust and meaningful multi-stakeholder consultation from the very beginning,” she said. [Source]