JULIE C. RODRIGUEZ
ENVIRONMENTAL TRANSITION IN ECUADOR:
DEALING WITH THE GROWING PAINS
"It takes a special kind of arrogance for a citizen of as rich and
oil-greedy a country as the United States to decide that an impoverished
nation like Ecuador should not use its principal natural resource[--oil]."
Jan Reid, Texas Monthly, November 1995.
Ecuador, like many developing countries, faces the challenge of
providing for its people while preserving its precious natural resources
to the greatest extent possible. At the same time, outsiders tug at the
tiny country from every direction-environmentalists, creditors,
multinational oil companies-everyone wants a piece. For better or for
worse, development of Ecuador moves forward. This paper analyzes the
environmental transitions that are occurring in the wake of Ecuador's
development. The primary factors addressed are oil exploration,
agricultural development, and deforestation in the Ecuadorian Amazon.
Throughout this paper the reader will note some common themes seen
in other chapters of this monograph. For example, many of the countries
discussed in these chapters are driven to provide for growing populations
under the strict constraints of limited resources such as water and arable
land. Ecuador and other countries discussed in this monograph, such as
Vietnam and Thailand, struggle to alleviate the population pressure in
urban centers by redistributing the populations to less populated areas.
Several of the countries also redistribute their populations to assert
sovereignty or political control over a region; this can be seen in
Ecuador as well as in the Israel and Iraq. (See, e.g., Lipchin Chapter).
Such redistribution efforts often foster more problems because the
transplantations lack adequate planning, investment in infrastructure,
investment in education, and protection for the environment. Thus, a
broad view of the countries discussed in this monograph reveals some
common opportunities and challenges. Ecuador illustrates many of these.
Although Ecuador is not a large country, roughly the size of
Colorado, it is more geographically and biologically rich than most
countries in the world, large or small. Much of this richness is probably
attributable to its location on the northwestern side of the South
American continent where it straddles the equator and borders the Pacific
Ocean. (See Map 1). This location produces a tropical climate along the
coast that becomes cooler as one moves inland. Its biological richness
also reflects its diverse topography. In the west, coastal plains shape
the horizon. The Andes form a sharp boundary to this region, running
parallel north-south through the middle of the country. Several active
volcanoes checker this region. The east is dominated by the jewel of
South America, the Amazon rain forest, which is drained by the scenic Napo
River and other Amazon tributaries. (Reid, 1995). Ecuador's topography
divides the country into three distinct regions: the Costa (coastal
plains), the Sierra (inter-Andean central highlands), and the Oriente
(flat to rolling eastern tropical rain forest). (CIA, 1995). (See Map
Aside from the Amazon, Ecuador also claims another biological gem
-- the Galapagos Islands. Off the north-eastern coast of South America,
these islands contain an oasis of biodiversity, including giant sea
turtles and blue-footed boobies. Like the Amazon, the Galapagos are
threatened by human encroachment. However, the primary threat to the
Galapagos is over-enthusiastic tourism. This presents a serious problem
that could compose an entire paper on its own. The challenges facing the
Galapagos are beyond the scope of this paper.
Composed of Indians (25%), Mestizo (mixed European and Indian
ancestry -- 55%), Spanish (10%) and African (10%), Ecuador has a rich
ethnic component as well. (Lonely Planet, 1996). Its population
currently lingers around 11.5 million with an estimated growth rate of
2.4%. (Lonely Planet, 1996). Ecuador's mean population growth has
continued to decrease in the last few decades, as have the mean growth
rates of neighboring Brazil, Colombia, and Peru. (See Figure 2).
Reflecting this transition, Ecuador's population is relatively young with
36% of the population below the age of fifteen. (See Figure 1).
Consequently, although fertility is moderate (currently between 2 and 3),
the population is still expected to double by the year 2030 (Pichon,
1992), because of the demographic transition that is expected as the
population comes of age. Thus, much needs to be done at these earlier
stages to provide for the expanding population of the future.
Map of Ecuador showing rivers.
Increasing exploitation of Ecuador's precious natural resources,
such as the Amazon Rain forest, is largely a result of rural transition
and urban population density rather than excessive overall population
growth. Ecuadorians are moving eastward to the Oriente region to settle.
(See Table 1). The rural population in the Oriente increased 37% in less
than ten years. The primary causes of this migration are increased access
due to road building for oil exploration and favorable land tenure
practices because of the government's inability and unwillingness to
police the forest area. (See Land Clearing discussion below). Thus,
three transitions in the Oriente region are closely intertwined: the
energy transition, that is the move to oil development and use that began
in the 1970's; the forestry transition as forests were cleared for the oil
development and rural farming; and the ultimate agricultural transition.
Map of South America.
Figure 1. Age Structure of Population. Pie
Figure 2. Mean Population Growth Rate.
Trends in Ecuador's Rural Population, By Region
Province 1974 1982 Relative Change (%)
Sierra 1,943,769 2,078,767 6.9
Costa 1,708,855 1,719,671 0.6
Oriente 150,492 206,246 37.0
Source: Instituto Nacional de Estadistica y Censos (INEC), Encuesta
Nacional de Fecundiad (Quidto: INEC, 1982) cited in Douglas Southgate and
Morris Whitaker. "Promoting Resource Degradation in Latin America:
Tropical Deforestation, Soil Erosion, and Coastal Ecosystem Disturbance in
Ecuador", Economic Development and Cultural Change, July 1992, p.796.
Ecuador enjoys one of the most stable republics in Latin America.
(Reid, 1995). However, this free government is held captive by an economy
saddled with high levels of foreign debt and very low national income
levels. Ecuador is a relatively poor country. GDP per capita income
hovers around $1,000, ranking it 71st in the world for per capita GNP.
(Lonely Planet, 1996). (See Map 3). The bulk of its GNP is derived from
oil production and banana exports. (See Figure 3). The discovery of oil
reserves in the eastern portion of Ecuador has resulted in a steady and
steep increase in GNP. (See Figure 4). Growth rates in the Ecuadorian
economy are largely a function of the prices of its primary exports, oil
and bananas. (CIA, 1995). When these products are doing well, Ecuador's
economy follows. Consequently, its heavy reliance on a limited number of
products has made it vulnerable to international shocks and economic slow
downs in other countries. (MIEB, 1994).
Foreign Debt/Debt Service
Ecuador's foreign debt has steadily increased over the last two
decades, brimming at over $14 billion in 1995. (See Figure 5 and Table
2). A large portion of this was a result of overly optimistic
expectations of oil revenues. The government borrowed from other
countries to fund Ecuador's oil development activities and social programs
but was unable to repay the debts when oil prices dropped substantially.
(MIEB, 1994). "Under newly renegotiated international debt agreements,
the country must achieve 5 percent-a-year growth over the next 20 years or
face default." (Goering, 1996). Without oil development, Ecuador has no
chance of meeting the demands of its foreign creditors.
Map. GNP per Capita by Country.
Figure 3. Estimated Exports, 1994.
Figure 4. GNP per Capita.
Figure 5. Ecuador's Total External Debt
Figure 6. Rainforest Distribution in South
Ecuador's External Debt in 1995
Type of Debt Millions of U.S. Dollars
Total External Debt 14,366
Long-Term Debt 12,172
Short-Term Debt 2,015
Total Debt Service 1,234
Interest Payments 750
Source: "Executive Summary", Statistics and Quantitative Analysis,
Ecuador: Basic Socio-Economic Data,
Compounding its financial troubles further, Ecuador historically
experienced high rates of inflation, at times reaching as high as 55%.
However, a series of economic reforms helped decrease this considerably in
1994 to 25%. (CIA, 1995). This was primarily due to former President
Sixto Duran-Ballen's policies that, inter alia, cut subsidies, balanced
the budget, and raised fuel prices and utility rates. (CIA, 1995). These
reforms helped stabilize Ecuador's shaky economy.
II. The Ecuadorian Amazon
Ecological characteristics, biodiversity
While merely the size of Colorado, Ecuador packs a powerful punch
of biodiversity. It houses more plant and bird species than all of North
America. (Conniff, 1991; 39-40). Ecuador is one of the richest in South
America in terms of flora species (including a large number of endemic
species). "The country perhaps features as many as 20,000 plant species,
compared with an estimated 20,000 for all of Central America including
southern Mexico, and 25,000-30,000 for all of Brazilian Amazonia."
(Myers, 1980; 141). The region remains largely unstudied so biologists
can only guess what lurks in Ecuador's misty forests. Unfortunately, huge
amounts of forest have already been lost. The western half of the
country, where the bulk of the human population resides, has lost 95% of
its forests in the last two decades. (Conniff, 1991; 40). The bulk of
the islands of forest that remain are perched atop coastal ridgelines that
are more difficult to access. (Conniff, 1991).
In the eastern third of the country Ecuador's Amazonian rainforest
is a hotspot for biodiversity. It contains only about two percent of
South America's rain forest, (See Figure 6), but contains a
disproportionate amount of the region's biological diversity. The region
is very wet with little variation in rainfall as a result it is composed
of predominantly upland moist forest (mostly evergreen rain forest from
tree-like on the eastern side of the Andes to the lowland plains).
(Myers, 1980; 141). The lush region is threatened with destruction.
Estimates of deforestation in Ecuador vary. An estimated two percent of
Ecuador's existing rain forest is lost annually. (Pichon, 1992; 664).
Consequently, Ecuador has experienced the highest rate of deforestation of
all the Amazon countries. (Pichon, 1992). "All estimates indicate a
significant deforestation that could lead to a total depletion of closed
forests by the year 2030." (Pichon, 1992; 667 citing Hicks, Daly, Davis,
& Lourdes, 1990).
Land Clearing and the Link to Oil Exploration and Land Tenure Laws
Historically the rain forest and its indigenous people were
protected from disturbance by a lack of access. The bulk of forest land
is owned by the state as forest patrimony or as part of a public park or
reserve. However, the government failed to take control of these lands
because the government lacked the resources to police the area and the
forest resources were not seen as valuable enough to warrant development.
(Southgate and Whitaker, 1992; 790). Instead, the undisturbed land was
classified as "unproductive" under the Land Colonization Laws passed in
the 1960's and, therefore, up for grabs by new settlers. (Myers, 1980;
142). The purpose of these laws was threefold. First, the Amazon was
perceived as an "area with almost infinite space and resources, mak[ing]
it an excellent 'escape valve' for socioeconomic imbalances and population
pressures in other regions, offering a 'land without people' to 'people
without land' . . . ." (Pichon, 1992; 666). Ecuador's growing population
was applying increasing pressure to Ecuador's urban centers (See Map 5;
Figure 7); and, as urban populations became more dense, the numbers of
urban poor continued to increase as well. The government could solve the
problem of urban population pressure and the poor at the same time by
sending them east. One caveat, however, was that there were no efforts to
help establish the colonists in the east. Although the policies stated
that settlement would only occur if adequate infrastructure was created,
in most cases this did not occur, and any infrastructure that was created
was to support multinationals working in the area. (Pichon, 1992).
Second, the agricultural production that would result from this new
settlement would, hopefully, create a surplus that could help support the
growing population. Third, the new settlers would help create a "live
border". For many years Ecuador and Peru have been in conflict over the
border. Ecuador is particularly sensitive to further encroachments on its
territory because it has lost "more than 70% of its original territory to
Colombia, Brazil, and Peru" since 1830. (Pichon, 1992; 666). Populating
the unoccupied land with Ecuadorians was viewed as a prime national
security move to keep out Peruvians. Thus, under the land tenure laws a
commons was created, but for several years no one took advantage of it
because gaining access was so difficult.
The discovery of oil in the Oriente region, which encompasses the
Ecuadorian Amazon, stole the forest's protection. Oil companies had the
capital to build the extensive road systems necessary to exploit the
forest. This also allowed outsiders to free-ride on the new road system
and penetrate the rain forest borders. Settlement ballooned thereafter,
particularly near petroleum zones which grew at a rate of 8% annually
between 1974-82 compared to the national average of 2.5%. The entire
Amazon region is estimated to have a growth rate of 5% annually;
naturally, the bulk of this growth is derived from immigration. (Pichon,
1992; 667). (See Table 1).
Map. Percent of Population Living in Urban Areas,
Settlement occurred spontaneously as individuals and groups
migrated east from the densely populated west in search of a better life.
Settlers were primarily subsistence peasants looking to make a living on
the pristine lands; under the land colonization laws, settlers could
eventually gain title to land that they cleared and maintained. (Myers,
1980; 142). A large number of these settlers engaged in agriculture such
as cattle ranching and farming.
Figure 7. Ecuadorian Population Living in Urban
Ecuadorian land tenure laws further contribute to deforestation
because land claims remain insecure until the complex requirements to
create title are fulfilled. (Southgate & Whitaker, 1992). Adjudication
of claims takes years because of the country's antiquated record-keeping
system. Until title is established, claimants are vulnerable to other
settlers establishing conflicting claims. As long as title is insecure,
settlers do not bother to invest in soil conservation measures or other
land improvements; indeed some measures such as land fallowing put the
farmer at risk of having another come along and claim the idle land.
Additionally, they clear more land around the perimeter of their farmed
areas to discourage other settlers from laying conflicting claims. Both
of these factors do not bode well for Ecuador's forests. Thus, land
clearing under this regime occurs for two reasons: first, it establishes
ownership; and, second, land must be cleared to make up for loss of
productivity -- rain forest soils are frequently exploited without care so
their productivity decreases rapidly. (Rudel, 1995; 187).
Logging the tropical forests is uneconomic. Profits from non-wood
forest products exceed those from timber extraction. (Southgate &
Whitaker, 1992). For example, rare mahogany trees are harvested and sold
for a mere $3 a tree for plywood. (Conniff, 1991; 44). Logging prices
are depressed primarily because of governmental regulations. In 1982 a
ban was imposed on logging concessions. Consequently, timber may only be
obtained through agricultural settlers that are far less efficient
loggers. Settlers agree to sell their trees to lumber companies in
exchange for a price and infrastructure support, such as construction of
roads and schools. (Gonzalez, M., 1995a). When the lumber companies
contract to cut down the settlers' trees they will destroy large amounts
of trees in pursuit of the "three or four commercially-viable trees" on
each hectare. (Gonzalez, M., 1995a). The heavy machinery used to extract
the trees is the main culprit of forest destruction. It destroys the many
trees that just happened to be in the path of the commercially viable
trees and crushes the fragile soil below. The settlers' logging is also
subsidized by low gasoline (subsidized) prices because the gas is needed
to power their chain saws. But, the biggest reason for low timber prices
is the prohibition on log exports. From an environmentalist perspective,
such a ban sounds like a good idea; no chopping down of the forest to ship
it off to the developed countries to make paper plates. However, the
result is essentially the same with a lot less profit. The trees have
such a low cash value that they are not preserved at all and no
reforestation occurs. A tree in Ecuador valued at $2-$4 each would be
valued in markets such as Italy at $15 each. (Southgate & Whitaker, 1992;
797). There is not much of an incentive to grow trees at the Ecuadorian
rate. Additionally, forestry research is weak so production returns are
low, (Southgate & Whitaker, 1992), and the government subsidizes
conversion of forests to pasture. (Pichon, 1992).
III. Oil Production
The discovery of oil in Ecuador in the late 1960's/early 1970's
transformed the country. (See Figures 4 and 8). Almost instantly,
petroleum became the predominant source of energy, and the country
experienced explosive economic growth. (Pichon, 1992). Although the
amount of oil reserves in Ecuador, 2 billion barrels, is small in
comparison to others (e.g., Venezuela has 63 billion and Mexico has 50
billion), the country was so poor that such an influx of revenue from oil
sales had the potential to overhaul the Ecuadorian economy. (Reid, 1995).
As a result, the Ecuadorian government became captured by petroleum
interests. Oil was seen as a quick fix to the problems that had been
plaguing the country for decades. "Petroleum development offers
immediate, predictable benefits for which the most influential social
groups are clamoring." (Pichon, 1992; 672). Thus, many other interests,
such as the protection of natural areas (including those that were
officially protected), were rolled over in favor of oil development.
Indeed, under the Law of Mineral Resources and Hydrocarbons, prospecting
regions in protected areas and other government land are ceded to oil
companies. (Pichon, 1992). No amelioration of environmental damage is
required, and even if it was, there is no enforcement of such
Oil development does seem to have had substantial positive effects
on the economy. For example, after the oil boom began, average incomes
increased 500% since the 1960's. (MIEB, 1994). In addition, oil now
makes up 60% of the government's budget, which does not make the
government too keen on reducing oil development. The government sees oil
development as necessary in light of the need to support its economy and
pay off external debt. But, others are pressuring it to preserve the
forests first. The Environment Unit Chief of Ecuador's oil branch of the
government (Petroecuador), Manuel Navarro, stated it plainly: "All of a
sudden we have pressures from organizations from Europe, from the States,
claiming the Amazonian jungle has to be untouched, the same way they're
demanding we pay off the debt; they're still getting cheap export goods.
I think it's a little unfair the pressure we have from different sides.
They say, 'Don't use this, don't touch this,' but do we have an
alternative?" (MIEB, 1994 (citing National Public Radio, "Vanishing
Homeland: Ecuador, Amazon and Oil," Morning Edition, January 13, 1992)).
Hence, the conflict pervades national policy.
Figure 8. Total Commercial Fuel Production.
Enter U.S. Multinational Oil Companies
Multinational oil corporations immediately took notice and began
infiltrating Ecuador's natural areas in search of more oil. The
Ecuadorian government receives hefty benefits from the presence of the
multinationals through royalties based on production levels and taxes.
(MIEB, 1994). In addition, after the multinationals' contracts are up the
operations are taken over by Petroecuador. Low and behold, a mutually
symbiotic relationship was formed between the U.S. multinationals and the
Multinational and Petroecuador oil production activities have
resulted in extensive pollution as a result of dumping untreated toxic
wastes into unlined waste pits and water sources. For example, the waters
that are brought up from the oil wells that have naturally high chemical
content are typically re-injected into the wells in the United States to
prevent contamination of the water supply and other ill effects. However,
in Ecuador oil companies frequently pump the contaminated water directly
into nearby rivers and streams. Thus, local people are poisoned by water
pollution and wildlife and plant life are also put at risk. A 498 km
pipeline was built by Texaco in the early 1970's that connected the
Oriente to the refining and processing stations in the capitol, Quito, and
then on to the port city of Esmeraldas. (MIEB, 1994). (See Map 2). The
pipeline is the main source of oil transport and a major source of
environmental damage. Leaks from the pipeline have resulted in a larger
quantity of spilled oil (10 million gallons) than was spilled from the
Exxon Valdez. (MIEB, 1994).
While multinational oil companies have taken much away from the
Amazonian region, little has been invested in the region itself. The bulk
of revenues generated are "capitalized outside the Amazon region."
(Pichon, 1992; 668). Thus, oil production does little for the livelihood
of most Ecuadorians in the region who rely primarily on the agricultural
Since the oil boom, Ecuadorians have become increasingly reliant
on petroleum domestically. Government subsidization of oil prices
contributed to this greatly. As a result, "[e]xperts predict, that, if
new fields are not developed, Ecuador will have no oil exports by the end
of the century." (MIEB, 1994). Nonetheless, established oil reserves and
oil exports are increasing. (See Figure 9). Ecuador's oil exports for
September 1996 were at 7.21 million barrels of crude oil, up from 6.27
million at the same time last year. (Reuters, 1996b). To facilitate this
increase, Ecuador has sold oil concessions for an additional 1.6 million
hectares. (Ward, 1994). The primary motivator for this sale was the push
to reduce the ballooning foreign debt.
Recently, Indigenous groups and environmentalists from Ecuador and
abroad have been successful in pushing those developing oil in sensitive
areas such as the Amazon to implement sound environmental practices. For
example, Occidental, a multinational oil company that is preparing to
drill in Ecuador has planned several environmental steps including
"cutting seismic trails by hand for the smallest disturbance to 'surface
vegetation' and having a width no greater than 1.5 meters; keeping road
construction to a minimum by supporting seismic shooting by helicopter;
clustering drilling of production wells, should development go that far;
re-injecting all effluents; having central facilities for separating and
pumping crude at new fields, rather than having each field with an
individual unit; and planting new trees to replace those cut in all
operations." (Schneider, 1996). In addition, oil companies such as
Maxus, are establishing security measures to keep out colonizing settlers
to maintain the integrity of the indigenous populations in the regions.
(Reid, 1995). It is unclear whether the government will continue these
measures when the companies leave the region when their contracts are up
and Petroecuador takes over.
Figure 9. Crude Oil Reserves in Ecuador.
Figure 10. Arable and Permanent Cropland.
In addition, the government has made some efforts to ameliorate
environmental damage caused by oil production. For example, companies
exploring for oil must now pay a $100,000 tax to cover environmental clean
ups, (MIEB, 1994), in addition to conducting environmental impact studies
prior to drilling and seismic tests. (Goering, 1996). The government has
also developed environmental operating guidelines for these companies.
For example, recently the government announced that a new oil field
franchise in the Amazon would be required to build facilities to safely
process contaminated water and to bury the 165 kilometer pipeline that
would be required to transport the oil out of the pristine region.
(American Political Network, 1996). The regulations increase operating
costs substantially, discouraging some companies from becoming involved.
It remains to be seen whether the government will vigorously enforce
environmental regulations, but its past record makes it seem doubtful. If
enforcement does occur, it is likely to be linked to a company's failure
to share its proceeds with the Ecuadorian government, i.e., Petroecuador;
Ecuador has banned Maxus from operating in one area of the Amazon because
it failed to share its revenues with Petroecuador. (Reuters, 1996a).
One of the risks that Ecuador faces when it demands a high level
of environmental protection from multinationals is that of driving away
potentially good companies because of the high costs and political
pressures (externally and internally applied). For example, Conoco, a
multinational oil company with an excellent environmental record relative
to others in the industry, withdrew its plans to develop oil in Ecuador's
Amazon because of strong environmentalist opposition, potentially low
economic returns, and high environmental protection costs. (Haines,
1996). Shortly after the contract was awarded to a multinational with a
spottier environmental record -- Maxus. Maxus has promised to enact
environmental protection measures. Time will reveal the extent of their
Although more land has continued to be cleared for agriculture in
Ecuador, productivity has not significantly increased because of the
inefficiency of current farming methods. As a result, the agricultural
transition has stalled. Net gains from land clearing seem to be slim.
The causes for this stagnation are discussed below.
Agriculture has declined in importance as an export commodity
because it has been replaced largely by oil exports that are far more
profitable. In 1970 food exports comprised 94% of exports. By 1985 food
exports plummeted to only 28%. Nonetheless, in the 1990's food exports
are rebounding and have reached 50%. (Gonzalez, G., 1996). Agriculture
makes up a substantial portion of Ecuador's land uses and it has increased
substantially in the last few decades. (See Figure 11 and Table 3).
Deforestation is the main cause of this increase in agricultural land.
However, arable cropland and permanent cropland have been increasing at a
more moderate pace recently. (See Figure 10).
Agricultural Land Use Trends in Ecuador (Hectares)
1965-67 1984-85 Change
Tropical crop land* 1,205,000 1,360,000 +155,000
Sierra 899,000 1,917,000 +1,018,000
Costa 516,000 2,005,000 +1,489,000
Oriente 226,000 484,000 +259,000
Source: M. Whitaker and J. Alzamora, "Production Agriculture: Nature and
Characteristics," in Agriculture and Economic Survival: The Role of
Agriculture in Ecuador's Economic Development, ed. M. Whitaker and D.
Colyer (Boulder, Colo. Westview, 1990).
* Defined as the area planted to bananas, cacao, cassava, castor oil,
coffee, cotton, fruits, hard corn, manila hemp, oil palm, plantains, rice,
soybeans, and sugar cane.
Undervaluation of agricultural inputs causes further damage to the
environment because farmers have no incentives to conserve land, water,
forests, and wildlife. (Southgate & Whitaker, 1992). Under pricing
inputs such as pesticide can lead to excess application and pollution of
the environment as the chemicals run off. Former President Duran-Ballen's
economic reforms may reduce this waste because the reforms ended a large
number of subsidies. Land will continue to be undervalued as long as the
free access and title-for-clearing policies continue. With cheap land,
there is no incentive to invest in agricultural research to improve
farming productivity on the fragile lands; thus, more land is deforested
as the cleared land becomes less productive. (Southgate & Whitaker,
Agricultural development in the Oriente is unlikely to raise the
status of most poor settlers because of the way that the land tenure laws
are designed. Even if a peasant is able to clear an area of forest and
begin farming or ranching, obtaining title to the land is difficult. To
obtain permanent title the peasant must pay for the land based on a price
scale established by the government that is based on the land's location
and characteristics. (Pichon, 1992; 670). The price is amortized over a
25 year period but this is of little help since most settlers barely break
even in their agricultural production. (Pichon, 1992). Little is left
over to pay on the amortized amount. In addition, the settlers cannot
obtain their title until the amount is paid in full; so they cannot even
sell the property and retain the value of their investment. All is lost
if they fail to complete the payments. Without proper title, the settlers
cannot obtain credit either. Thus, the system is not favorable to poor
settlers and may even widen the gap in wealth distribution between the
rich and poor. (Pichon, 1992).
Figure 11. Land Use; pie chart in landscape
Ecuador's current approach to agriculture, land tenure and oil
exploration spells trouble for a growing population. Ecuador's population
is expected to double by 2020-30, reaching approximately 20 million
people. (Pichon, 1992). Without sustainable development and a reduction
of the current deforestation rates, Ecuador will not be able to provide
for such a large population. Agricultural production cannot expand to
support this demand unless more research is done to develop more efficient
practices. In addition, deforestation must slow because the forest soil
is being destroyed. Farming without fallowing the land leads to eventual
infertility. Deforestation in unsuitable areas, i.e., those with unstable
soils and steep slopes, causes heavy erosion that further undermines
agricultural production. (Pichon, 1992).
Much of the land that is being cleared has limited fertility, high
erodibility, and/or poor drainage making it unsuitable for agricultural
production. Chopping down the rain forest to convert it to agricultural
land has further ramifications than loss of wildlife. It also results in
increasing carbon-dioxide and other greenhouse gases. Cattle production
exacerbates the problem by contributing to increased methane levels.
(Southgate & Whitaker, 1992). Forest clearing also leads to erosion and
pollution of the water supply because of sedimentation and runoff. This
is an inefficient result. Clearly, Ecuador has a need for productive
agricultural land. The best result would require limited land clearing in
the areas most suitable for agriculture combined with proper soil
conservation measures. Then productivity would remain high and more of
the country's natural resources would be preserved.
V. The Indigenous People of the Ecuadorian Amazon
As with the Homesteading laws in the United States, the Ecuadorian
land tenure and colonization laws paid little attention to the notion that
there were already indigenous people living in the region that should have
a claim to the land themselves. The "unoccupied" lands were considered
property of the state. "According to the terms of [the land tenure laws],
'unoccupied' lands are those that (a) as part of the nation's territory
have no other owner; (b) have been returned to the State due to any legal
cause; or (c) have been uncultivated for more than 10 years." (Pichon,
1992; 669 (citing Hicks et al, 1990)). This last element strongly
encouraged intense land clearing and discouraged fallowing of land to
preserve the soil. Consequently, when settlers arrived and land tenure
was based on land clearing, many indigenous people began to clear as well
in an effort to protect their rights to the land. In addition, like the
reservations established in the United States for Native Americans, the
Ecuadorian government threw the indigenous people a few crumbs under the
Law of Amazon Colonization, providing for the selection of certain areas
to be set aside for the use of indigenous people. (Pichon, 1992). It is
doubtful that the government enforced the boundaries of such reserves.
Fortunately, Ecuador's native people have become a strong force in
Ecuador. Although they come from a variety of cultures, the indigenous
groups have organized into a powerful coalition, known as the CONFENIAE,
that has become a force to be reckoned with. The coalition is aided by
the support of non-governmental organizations (NGOs) from the community
development and environmental conservation arenas. In 1992, the coalition
succeeded in obtaining land rights to more than three million acres. The
Indians were able to accomplish this through a variety of measures. First
they threatened to boycott the presidential elections if their demands
were not met. Also, they staged an "uprising" in which "[t]hey paralyzed
the country by blocking the main highways, cutoff food supplies to the
capital, and [took] over private land." (Farah, 1992). This evoked fear
in non-Indians living in the region that the Indians were demanding title
to and aroused dismay in the military who feared that felt it would
endanger national security to leave such a large block of land near the
Peru-Ecuador border unsettled. The government soothed these fears by
requiring that current non-Indian settlers in the area be allowed to stay
and by requiring that the military continue to have unrestricted access.
(Farah, 1992). In the land grant, the government stipulated that title
was granted to the groups and not individuals and that the land could not
be sold. (Farah, 1992). Another important caveat: the government
retains title to subterranean products, i.e., oil and has access to
explore for oil on the land ceded to the Indians in consultation with the
affected communities to minimize environmental damage. (Farah, 1992).
The Quicha and the Shuar were the main indigenous groups
responsible for the land rights reform. (MIEB, 1994). The smaller groups
in the northern Amazon have lost a very large percentage of their
populations since the introduction of westerners and oil companies to the
region. (See Table 4). Pollution and introduced disease has lead to the
death of many Indians. (MIEB, 1994). The most vulnerable groups are
those that rely extensively on forest resources. Logging and oil spills
have drastically reduced such resources.
Indigenous groups have also been successful in bargaining with oil
companies planning to operate in their territories. For example, Arco
negotiated with the Indians to build a pipeline through their communities
in exchange for payment for socio-environmental damage, development of job
training programs, and creation of a fund for environmental and cultural
restoration. (Gonzalez, M., 1996b.). Essentially, Ecuador's indigenous
people are some of the best organized and politically powerful in the
world. They have representation in government and real clout. Currently,
the indigenous groups hold eight seats out of eighty-two seats in
Parliament. (Gonzalez, M., 1996b.). Partly as a result of support from
this contingent a law was passed recently that would increase protection
of biodiversity. (Gonzalez, M., 1996b.). Thus, their political force
promises to make a real difference in the protection of Ecuador's natural
Indigenous People of the Oriente
Native Group Population
The northern Amazon
Source: Management Institute for Environment and Business (MIEB),
Beckenstein, Alan R., Frederick J. Long, Matthew B. Arnold and Thomas N.
Gladwin (eds.). "Rain forest Negotiation Exercise", Stakeholder
Negotiations: Exercises in Sustainable Development, 1995.
The Indians have also successfully flexed their muscles in the
United States oil and legal communities. In Maria Aguinda v. Texaco, poor
Ecuadorian indigenous groups filed suit against Texaco in U.S. District
Court to seek civil damages for Texaco's alleged pollution of the rain
forest and subsequent poisoning of the local indigenous population.
Unlike many similar cases against multinationals, the Aguinda case
survived the initial stages of litigation. Usually, these cases are
thrown out for improper forum. Texaco sought dismissal not on the grounds
that it did not do what was alleged, but on the grounds that it obeyed the
laws of the country during its operations. (Millman, 1996). Of course
these laws resulted in operations that were far less environmentally
friendly than its U.S. operating practices. Texaco also argued that its
foreign subsidiary created the mess (in compliance with Ecuadorian
operating standards), not the parent, so the case should continue in
Ecuador not the U.S. The foreign subsidiary is far less solvent than its
U.S. parent. Texaco also argues that Ecuador's national oil firm,
Petroecuador, owned 60% of the project while Texaco was involved and has
been operating since. (Millman, 1996). Texaco asserts that the
government monitored all of its operations and decisions, and it asserts
that it cannot be shown that the pollution existing now was caused by
Texaco's presence 10 years ago and not Petroecuador's operations there in
the meantime. Thus far, it appears that Ecuador is supporting Texaco's
position. If Texaco should lose, Ecuadorian officials fear that other
multinational oil companies developing oil in the region will pull out.
(Goering, 1996). Most in the government find this to be more frightening
than cleaning up Texaco's mess. It is unlikely that the Aguinda case will
actually go to trial. The legal hurdles are considerable. Nonetheless,
the case may force multinational oil companies to raise their
environmental standards for operation in Ecuador even when local
enforcement is weak.
VI. Management and Protection
Reforms in Ecuador must be carried out carefully. Too often,
well-meaning policy makers and NGO's push for broad sweeping changes that
wind up having a severe impact on the most vulnerable members of society,
those without a safety net, the rural and urban poor. The poor should
not be an afterthought. Reforms should focus on reducing the need for the
poor to clear land.
The first step is land tenure policy reform. The current system
discourages improvement of cleared land and encourages excessive clearing.
Reform would make titles secure faster to encourage investment in the
land; clearing of land should not be required to obtain title. However,
such title-granting must be limited to a certain extent to retain much of
the forest in its pristine state. The trick will be finding the proper
balance where citizens can make a living and where the forests are
protected to the maximum extent.
The second step is investment in agricultural research and
informing poor settlers of effective land management techniques. Greater
efficiency will reduce the need to clear more land while also increasing
productivity levels to provide for a growing population. (Southgate &
Whitaker, 1992; Pichon, 1992). NGO's can assist in this effort by
bringing in techniques developed in other rain forest countries and
teaching the techniques to local farmers. Research should also focus on
identifying crops appropriate for Ecuador's soil, climate, topography and
population. NGO's, such as the United Nations, can assist in this
endeavor as well.
The third step in striking a balance between environmental
protection and providing for the people of Ecuador should be greater
reliance on market forces, i.e., no more subsidies and price controls.
(Southgate & Whitaker, 1992). These undermine resource conservation
because people have no incentive to produce efficiently or conserve
resources. For example, elimination of agricultural product subsidies
would reduce waste of items such as pesticides and fertilizer. However,
these reforms must be combined with educational programs to teach farmers
how to use the products more efficiently. Otherwise, removal of the
agricultural subsidies could have a terrible impact on subsistence
farmers. Petroleum subsidies should be the primary target for
elimination. The subsidies should be phased out slowly to reduce the
impact on the poor and to allow technological adjustments. Reducing
domestic reliance on petroleum will prolong the economic benefit of oil
exports, where profits tend to be higher. Former President Duran-Ballen
moved Ecuador in the direction of the market. This trend should continue
provided there are adequate efforts to preserve resources.
The focus for forest policy reforms should be identification of
high priority regions, i.e., areas with especially high levels of
biodiversity and indigenous populations that rely on their natural
resources. No doubt all of the Amazon should be protected, but at this
stage that does not seem feasible because of economic pressures and the
demands of a growing population. Thus, careful planning can allow for
more efficient land uses that maximize the number of areas that are
protected by increasing the productivity of those that are not. For
example, if agricultural techniques improve such that land cultivation is
sustainable, the need to clear more land will subside. NGO's can play a
key role in this planning process, but they must act quickly. NGO's can
help develop the priority list that incorporates several key factors:
biodiversity levels, indigenous populations, soil stability,
accessibility, and oil development potential.
The next step is greater investment in forest research and
management. Better silvicultural methods could lead to increased
reforestation and less damaging tree-removal methods. If settlers learn
to manage their forests for selected logging and long term sustainability
of its biodiversity, the need to clear indiscriminately will decrease.
This research should be combined with careful forest planning so that the
areas that are of lower priority for preservation purposes and that have a
higher value for agricultural purposes become the focus of forestry
efforts, leaving the remainder in tact for less consumptive forest
practices and biological protection.
NGOs and governmental environmental organizations must keep a
sharp eye on loggers entering the Amazon region to harvest. Improved
logging technology is a real threat to South America's forests. For
example, Chinese logging companies recently purchased large tracts of rain
forest land and built state-of-the-art processing plants for high level
wood production in Brazil's Amazon. (NPR, 1996). This new technology
allows faster destruction of the forests, leaving them no time to
regenerate. Logging rates will continue to rise in an effort to keep the
factories at full capacity. Like Ecuador, Brazil has good environmental
laws in place but they have only meager enforcement. Probably the most
effective way to keep these international loggers in check is through
media exposure to inform the public of their misadventures. Although the
Amazon is no longer being written about on the cover of TIME like it was
in the 1980's, it may still be able to attract public attention and,
hopefully, some public outrage. NGOs can mobilize the international
community to put pressure on the governments to control the logging rates.
However, external funding will be needed to improve enforcement of
logging laws to have any real impact.
"Nonconsumptive" uses of the rain forests present a potential
avenue for economic expansion while preserving the forests. These uses
include the harvesting of plants for pharmaceutical research, harvesting
of forest products such as nuts for sale to general public, and the
opening of the forest to ecotourism. However, thus far, these
nonconsumptive uses have not been that effective. For example, in the
first case the pharmaceutical harvesting has lead to very little revenue
for the rain forest country itself. In most cases the pharmaceutical
companies pay a small price for the plants; the plants are then taken to a
developed country where they are cloned into a new miracle drug that makes
millions of dollars for the pharmaceutical company. Ecuador and other
rain forest countries need to establish more beneficial contracts with
these companies, requiring the companies to hand over a good portion of
their royalties from successful products. In the second case, the forest
product market has not been too successful because such harvesting is
uneconomic in comparison to the broad scale production that occurs outside
of the forest. This was the case for rubber production. Finally, in the
third case of ecotourism there is real potential for economic development.
However, ecotourism projects have often had ill effects on indigenous
populations and the environment because they have not been sensitive to
either. Ecotourism in the Amazon must be monitored closely to ensure that
tourist capacity does not rise to the level where it destroys the natural
areas that the tourists come to see. Ecotours should be well planned so
that they avoid more sensitive areas and avoid exploitation of indigenous
At the international level, Ecuador's large foreign debt must be
dealt with to reduce the pressure on the government to develop its natural
resources without regard to long term impacts. Debt-for-nature swaps are
one possibility, but definitely not a sufficient solution. Through
debt-for-nature swaps, environmental groups buy up Ecuador's foreign debt
at a discounted rate and then forgive the debt in exchange for the
establishment of nature preserves in Ecuador. It is a good idea, but has
limitations. First, the swaps have been known to cause inflation because
of increased domestic spending. (U.S. News & World Report, 1989).
Second, the preserves will not make a difference if the government does
not effectively curb destruction within it. As long as there are large
numbers of poor people, they will continue to clear the land, preserve or
no preserve. However, reducing the foreign debt would, hopefully,
minimize the incentive for the government to develop oil in pristine
regions to pay on the debts.
Laws to protect natural resources will continue to fail until the
need for the poor to clear land is reduced. No one would choose to save a
tree if it meant her family would starve. The problems of the poor must
be addressed before environmental protection will succeed.
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