Peru's economic boom - why it ain't all that great.

I started writing this thinking to focus in on a particular story I ran across on the BBC but it peaked my interest and so I thought I'd write something a bit broader. So the story relates to 80% of timber exports in Peru coming from illegal logging and how the paperwork gets fixed to make it all seem legitimate. 

Reading that is hardly a surprise, it happens all over the world in developed and undeveloped countries but here in Peru it's just part of daily life. Everyone loves it, officials get a nice kick-back, companies make a small fortune, individuals at the lower levels of the pyramid make out quite well too and best of all the country's GDP growth looks great. Who could complain? Well for one the Peruvian people might want to complain (they're not doing much of it as they're too busy scraping by most of the time and quite like a boost to the size of their wallets) because the practice is hardly sustainable.

Here are a few examples of why and if you don't have time to read this then in short Peru is raping it's natural resources for a short term gain and long term loss.

Puerto Maldonado Gold Rush

A before and after satellite pic of the affected area

Puerto Maldonado has become home to a multi-million (maybe billion) dollar enterprise that is producing huge amounts of gold. Driven by record prices for gold and laxed trade regulations gold production in this region has ramped up massively. Extracting the gold has come at a price though - the gold lies as sediment mixed in with tonnes of earth so to extract it the earth is mixed with water and mercury which causes the gold to clump together. Once the miners are finished they dump this toxic waste back in to the holes they dug it out from and slowly but surely the mercury leaks in to the ground water and rivers. Reports suggest 80% of the population of Puerto Maldonado have mercury poisoning which will be a lovely surprise for them when a whole generation of deformed babies are born.

The mines obviously have a major effect on more than just the local human population though, reports last year were that 40,000 hectares of rainforest had been felled in the process including 1,500 hectares of national park (one of the most bio-diverse regions on the planet). This activity will have major long term impacts on everyone in Peru for a very short term gain.

On the positive side the government has attempted to bring illegal mining under control and it has been reported production has fallen, this may be as much to do with falling gold prices and lower gold yields than with the government's half assed crack down though.

Illegal Timber

Illegal logs being floated downriver to a region where
logging is allowed

The story that got me writing so it may as well be mentioned - 80% of Peru's timber is illegally produced before being legally exported and the Chinese and Americans are lapping it up. Peru suffers an estimated 250,000 hectares of deforestation a year of rainforest making it second only to Brazil in doing it's best to destroy the lungs of the world. 

We may already be able to associate human action with an irrecoverable change in the Amazon eco-system. The Amazon along the Peru/Brazil border has been hit by 2 mega-droughts recently (2005 and 2010) and satellite data suggests that the affected regions have not been able to recover. See this story from 2013.

Legal Mining

Protests against Glencore's Tintaya mine in Cusco

It's not just the illegal resource boom that's causing havoc in Peru but the legal (obviously big corporations are legal) sectors as well. In an investigation by the Peruvian Ministry of Environment the Tintaya mine in Espinar, Cusco showed evidence of major pollution that 2.2% of samples were severely contaminated and that 52.7% of samples exceeded at least one official safety threshold. Independent research based on Canadian soil guidelines found that 100% of samples breached at least one safety threshold. The local people protested (fairly violently) against the mine and a state of emergency was declared for a month, 2 people died during the protests. Glencore denied that they caused the pollution stating that it was naturally occurring - they received an $84,000 fine. In 2010 the Tintaya mine posted pre-tax profits of $320 million. 

Other examples of serious breaches in standards are available from Chinalco's Toromocho mine in Junin and Doe Run's La Oroya mine in Lima. To make matters worse the Ministry of Environment will be stripped of it's ability to examine mines for pollution and it's right to declare areas exempt from development.