Americas Quarterly - Summer 2009

engineering, creative financing and international cooperation. Only time will tell whether the road is an optimal investment of public resources, for there was little economic analysis put forward by IIRSA, Odebrecht or the governments of Brazil and Peru.

The financing scheme calls for construction costs to be paid through bonds sold into international markets. In theory, the bonds are to be paid down over time from tolls collected by Odebrecht as the concession operator. In fact, all parties concede there will not be sufficient traffic for tolls to repay the construction outlays. So to achieve a bond rating sufficient for the markets, the bonds are guaranteed by the Peruvian government. This means that, in the end, the road is being paid for by the Peruvian government.

MORE TO COME?

Why such an elaborate financing mechanism, when it is understood by all participants that he bonds are essentially drawing on the public purse of Peru? The likely answer is that by structuring the financing through an intermediary, IIRSA and its private-sector partners have been able to circumvent the Peruvian planning process and the constraints of that country’s national budget.

However lacking in transparency and national accountability, and whatever the human and environmental costs and lack of economic logic, the Interoceanica was probably inevitable. The Andes could not serve forever as a Great Wall holding back Brazilian expansion.

What’s more surprising is that

IIRSA plans on building more roads. According to public documents, IIRSA believes that one road is not nearly enough. The Interoceanica is just the beginning. IIRSA plans call for at least two more transportation corridors across the western Amazon: IIRSA Central and IIRSA Norte.

IIRSA’s bold ambition raises a number of questions about the costs: economic and environmental. Is one highway corridor, whose economic rationale is still to be proven, across the western Amazon and over the Andes sufficient? Is there any reason for additional road corridors that put forests at risk and threaten the existence of native forest communities? Rather than build new roads, what is sorely needed is an international plan to conserve and protect the remaining western Amazon headwaters. But that doesn’t seem to be in IIRSA’s plan.

The IIRSA Central will roughly parallel the Interoceanica, much as the east-west interstate highways run in parallel corridors across the United States. It will branch off from the Interoceanica in Rio Branco, the capital of the Brazilian state of Acre. From Rio Branco the road corridor will run west across the international border to the Peruvian city of Pucallpa, connecting from there to existing road corridors down to the Pacific.

On the Brazilian side, the IIRSA Central corridor will cut a swath through the forests of Serra do Divisor National Park, renowned for its diversity of local species that have evolved along divergent paths in the isolated foothill elevations of the Andean region. The area is so isolated and so little known that bird species new to science are still being discovered and described. Ironically, even as IIRSA

planners, with Brazilian leadership, are readying to invade the park, the Brazilian government has nominated Serra do Divisor Park for the UNESCO register of World Heritage Sites.

Across the border in Peru, IIRSA Central will slice through and open up a reserve established to protect the largest remaining sanctuary of uncontacted indigenous groups on the planet who live in voluntary isolation from contemporary society.

How such a redundant and destructive plan for a second transportation corridor across the Amazon headwaters and over the Andes can take form with a minimum of discussion reveals much about the IIRSA process, or rather, lack of process. IIRSA projects have been designed and imposed from the top down, given air cover by presidential endorsements and validation by the Interamerican Development Bank (IDB) and other international agencies.

The cross-border section of IIRSA Central, through the Serra do Divisor, has not yet gone out to bid, and there may yet be significant opposition within Brazil to the destruction of a great national park, as well as protest from increasingly vocal indigenous rights groups within Peru.

The third transportation corridor in this Amazon-Pacific integration plan, IIRSA Norte, embodies a novel concept, possibly reflecting some latent IIRSA capacity for enlightened planning. It is a bimodal land-water transportation corridor extending up Amazon River tributaries from Iquitos to the Peruvian city of Yurimaguas where vessels would disembark passengers and payloads to continue via a modern highway over the Andes and down to the Pacific coast.