Chile: Can Growing Wealth Help Development
3/3/97
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Headline: Chile: Can Growing Wealth Help Development
Source: Earth Times News Service
Date: 3/3/97
Author: Paula Diperna
Copyright c 1996 The Earth Times
ANTIAGO, Chile--From miles away, the slate and
glass building dominates, a sliver of sheen
against the brown lusterless mountains that edge the
city. Santiago de Chile now stands out more than ever on
the plain, its new urban landmark a monument to
gadgetry, an office tower that houses the Chilean
National Telephone Company built in the form of a giant
cellular telephone. The mammoth stands virtually ready
to ring across the sky, a symbol of Chile's long-arm
grasp of the future.
This is an evocative land, so narrow and lengthy in
coast, its map can barely be contained on a page of the
average school book. Chile's slender finger stretches
down the Pacific flank of South America, from arid
unforgiving deserts to the despairing wilds of Patagonia
and the vast gleaming ice sheets of Antarctica.
The mountain atmosphere in northern Chile is said to be
so clear, there are more perfect nights for star-gazing
than anywhere else in the southern hemisphere. Yet, this
same nation now admits to some of the worst urban air
pollution in the world.
Thus, the question at hand is not whether Chile's
thriving economy can justify more real estate sprawl and
skyscrapers in who knows what fantastic forms, but
whether this dynamic nation can be clear-eyed enough to
use its gifts of economic growth to forge a truly
working model of sound environmental and social balance.
For if a nation like Chile- relatively free of crushing
poverty, committed to broad income distribution,
offering stable conditions for foreign investment, and
enjoying literacy, discipline, health and pride among
its people--cannot achieve such balance, what struggling
nation can? If Chile cannot capture the energy of a free
market in favor of implementing Agenda 21, the historic
agreement reached at the Earth Summit in Rio de Janeiro
in 1992, then that energy cannot be captured.
Chile won independence from Spain in 1820, and has
endured pendulum swings in its political history ever
since. World attention focused on Chile in 1970 when Dr.
Salvador Allende, a physician and avowed socialist,
narrowly won election as President, only to see
Allende's government forced from office by a military
coup in 1973 in which about 1,000 Chileans were killed.
Allende committed suicide, reportedly, in his office at
La Moneda palace as tanks rolled through Santiago, and
power was seized by General Augusto Pinochet. Pinochet
commanded a brutal dictatorship which lasted until l989
when years of citizen resistance finally pushed Pinochet
from office in a peaceful "no confidence" plebiscite
vote.
In return for surrendering power, Pinochet received
official assurances he would not face prosecutions in
connection with the infamous "disappearance" of roughly
2,000 Chileans who had opposed his government. He
remains as head of the army, though due to step down
this year, and the Constitution and other laws he
tailored remain in force.
To woo international economic support, Pinochet had also
instituted liberal foreign investment policies and
greatly intensified export promotion, particularly wood
and copper.
Today, Chile advertises itself as "a country open to the
world" and its exports have quadrupled from US $4.2
billion in 1986 to $16 billion in 1995, mostly natural
resources such as copper, minerals, fish, wood, wine and
foodstuffs. The country's economic growth rates draw
true envy, averaging 7 percent annually, with GDP
jumping from 28 billion in 1980 to $52 billion in 1994.
There is little foreign debt and inflation and
unemployment are running at about 6 percent.
With about 15 million people, Chile has managed some of
the broadest distribution ever achieved of comparable
quick growth, increasing GDP per capita from $1438 in
l986 to nearly $5000 in 1995, projected to reach nearly
$7000 by the year 2000. Rated "high middle income" by
the World Bank, Chile also rates high in human
development by the United Nations Development Programme,
thanks to its life expectancy, literacy rates, public
health level, educational achievement and other indices;
in Latin America, only Costa Rica and Argentina rank
higher. Chile, not coincidentally, also cut its military
spending by half from l985 to l992, both as a percent of
GDP and per capita.
While poverty exists in Chile--roughly 15% of the
population has an annual income of less than $2000 per
year--the government has projected this lowest strata
will be reduced to 2% by the year 2015, with the middle
to upper middle class strata accounting for about 60% of
the population by the same time.
Every indicator is optimistic for ongoing expansion of
the Chilean economy and shifts to service industries.
But for a nation still dependent on natural resources
for its export base, the question does inescapably
emerge: how to incorporate new environmental
consciousness into economic planning.
The issue bubbled over as this new year began, when in
early January the Chilean Congress called an
unprecedented national seminar on "Institutional
Challenges and Environmental Policy," drawing 300
academics, activists and elected officials for two days
of discussion and debate.
The Minister of the Presidency and coordinator of
national environmental policy, Juan Villarzu, gave a
keynote address. He declared that the government of
President Eduardo Frei considered environmental action
to be a "moral and ethical imperative of Chilean
society," and "recognized that environmental
deterioration and exhaustion or contamination of natural
resources would undermine Chile's production,
competitiveness on the world scene and its international
image."
Yet, the same week, when President Frei himself spoke to
a national forum of his political party, the Christian
Democrats, about the need to maintain Chile's economic
strength and modernization, he never once mentioned any
looming environmental constraints. Indeed, five years
after Rio, environmentalism still seems to come and go
from the political screen, depending on the audience.
Still, at the time of the Earth Summit in 1992,
environmental protection was even less visible in Chile.
Then President Patricio Aylwin could cite only the
planting of tree plantations--to replace native forest
that had been widely razed either for agriculture or
wood exploitation--as tangible environmental action in
his nation. He announced at Rio that Chile would "soon
propose a framework law on the environment." This law
was indeed finalized in 1994, to be administered by the
young National Commission on the Environment (CONAMA).
But at this point, Chile may have missed a major policy
opportunity, having failed then and there to infuse
CONAMA with high-level political autonomy. The
Commission has impressive technical expertise, but no
Ministerial standing, and its statutory powers of
enforcement and decision-making are subject to ongoing
legal challenge and interpretation.
CONAMA's gracious white marble building buzzes with
activity, most of it devoted to monitoring and measuring
the extent of Chile's most salient air and water
problems, while its elevator is packed with business
executives, many foreign, coming and going through the
phases of the environmental assessment CONAMA requires.
But is all the "assessment" actually able to quell
problems in the face of Chile's economic juggernaut?
Today, the Executive Director of CONAMA is an economist
by training, Vivianne Blanlot, who understands this
crossroads acutely, noting that "if you have any
tendency to be creative, the environmental area is going
to interest you." She has also felt the hot seat: "There
are many forces that are in a kind of fight with each
other. We are trying to reach an equilibrium, but it
isn't easy."
She adds, "our law was very focused on assessment and
standard setting, rather than prevention...and our
President has said we have to assure that projects are
done, but according to rules that insure sustainable
development. To be honest, I think it would be very
difficult to reject any projects fully or finally."
Not that rejection should be a goal in itself, of
course, but while Chile is busy using state-of-the-art
equipment from Japan to take precise measurements of its
urban smog level, breathing in Santiago is like inhaling
from inside a dirty plastic bag.
In fact, according to Blanlot, of the roughly 140
industrial and other development projects that have come
before CONAMA for evaluation, only 6 have been rejected
outright. The rest, she says, have been modified in some
way to allow them to go forward. She maintains that the
environmental standards are strict, and that "the
private sector knows clearly in advance" that these
standards apply. But, mainly, Blanlot explains,
environmental policy in today's Chile is concerned with
attempting to pay back its own "environmental debt,"
i.e., cleaning up and redressing decades of unattended
environmental degradation, including rehabilitating
terrain long-since ravaged by copper mining. Also, for
example, the city of Santiago has been declared a
"saturated zone" for near-ground ozone and particulate
matter air pollution. The nation has only recently begun
to switch to unleaded gasoline.
Chile has infamous water pollution as well, such as the
Bays of San Vincente and Concepcion near the industrial
center of Talcahuano. These water bodies are virtually
dead, void of oxygen and marine life, due to direct
dumping of industrial and other waste including chemical
waste and untreated sewage. (In fact, Chile treats only
18% of its domestic household wastes, one of the lowest
rates in Latin America, though the goal is to reach 100%
treatment by the year 2004, which naturally implies in
turn a huge investment in water treatment
infrastructure.)
Desertification in Chile is legendary, due to
overgrazing, overcultivation, excessive water
withdrawals and soil degradation. Deserts are advancing
at a rate that, left unchecked, would engulf Santiago
itself in a "hyper arid" zone within forty
years--entirely untenable for a city of its size already
in the grip of drought and possible water rationing.
Chile is only just beginning to confront these daunting
problems and undertake "environmental recuperation."
Moreoever, there seems to be little political argument
about the need to do so, with general agreement that the
nation's environmental problems have resulted from fast
and indifferent economic growth. However, preventing
future environmental problems is quite another matter,
with no institution in place yet that is up to the job.
And there is no resource dilemma more sensitive in the
public eye that the ongoing exploitation of native
forests. According to Ramon Lopez, an economist at the
University of Chile and the University of Maryland, "The
opening up of the economy generated significant
opportunities for exporting native forests in the form
of chips mainly to the Japanese market.
These opportunities have been fully used, with the
consequence of a very rapid rate of native forest loss.
(There are no reliable data on the true rate of native
forest losses...and the few estimates existing have been
a source of great controversy...However, for any one
visiting the forest regions in southern Chile and
talking to a large number of residents, as I did, the
clear signs of large recent native forest clearing are
fully corroborated)...This forest loss has occurred
almost entirely on privately owned lands with no
problems of property rights enforcement whatsoever."
In fact, Chile has laws to protect certain native
species, but one projection suggests that if present
cutting rates continue, Chile will have lost all its
native forest cover within 30 years. In an attempt to
stem this tide, the Central Bank of Chile and other
government entities have begun to try to quantify the
value to the GNP of standing unexploited forests, the
now well-known "natural capital" approach to evaluating
national wealth and assets and keeping national
accounts. However, industry moves much faster than
statisticians.
A highly controversial forestry project proposed for
Chile's southern tip at Tierra del Fuego epitomizes
Chile's contemporary environmental, institutional and
political conflicts and is putting its nascent
environmental procedures to the test. Bayside Ltd., a
new U.S-based forestry corporation, wants to "manage"
roughly a quarter million hectares of virgin old-growth
forest it owns to exploit lenga, a fine southern beech
species unique to the Patagonian regions of Chile and
Argentina. The tree can take a century to reach
maturity, and can live for centuries more.
The project also epitomizes economic globalization and
trans-national capital, since Bayside is owned by the
Beacon Group, a $1 billion consortium with investors
from all over the world, and the Trillium Corporation, a
logging operation based in Washington state that,
according to the Seattle Times, was so critized for its
clear-cutting operations in the Pacific Northwest of the
US, "no logging company in the state had a worse
reputation."
Nevertheless, Bayside--which has never itself yet
undertaken a forestry operation--claims it will use only
methods that are state-of-the art sustainable, including
establishing "buffer zones" of untouched trees. The
project would remove old but valuable wood, and plant
new lenga, and the developers claim this culling will
allow younger trees to grow more robust. Local
environmental groups, supported by some international
organizations as well, argue there would be more
economic value accrued if the forest were left alone and
used for eco-tourism, another of Chile's boom
industries.
They charge that CONAMA caved in to political pressure
to approve the project despite reservations among
CONAMA's own technical experts as to the true
"sustainability" of the proposed cutting schedule where
such slow-growing trees are involved. Blanlot counters
that CONAMA forced major improvements in the project,
and has only approved a "pilot phase" to see if Bayside
can manage the trees as predicted. Blanlot says CONAMA
has retained its right to cancel the project if results
are environmentally unacceptable.
Meanwhile, the Chilean-North American Chamber of
Commerce has weighed in heavily in support of the
project, its President calling the standing forest "old
and decrepit." Taking a page from the advocates of
adding value locally to raw materials, he notes that
Bayside will not ship raw logs but rather provide wood
to be made into fine furniture and window frames, all
produced locally.
President Frei himself visited the site to vouch for the
forestry proposal. The Chilean government has offered
tax relief and other subsidies to support employment
creation and infrastructure, like roads.
Meanwhile, the project is halted, while the Chilean
Supreme Court hears appeals by the project's opponents
on several lawsuits previously filed.
This puts the nation's foremost legal entity in an
unprecedented role of reckoning technical, ecological
and economic variables a la King Solomon, because no
other institution has either authority or credibility to
distill the common good from so many disparate voices
and competing truths.
This use of civil courts is only likely to intensify as
all nations seek formal closure on the debate and
trade-offs that sustainable development inherently
triggers.
In Chile, environmental issues in particular are
regalvanizing public participation in national
discussions. One of the legacies of the centralized
Pinochet regime is unease between the Congress, the
Executive Branch and the Courts, but perhaps worse, is a
lingering social disquietude about openly expressing
opinions, for nearly a full generation, if it wasn't
being tortured, killed or forced into exile, learned not
to speak out.
Slowly, these civic voices are stirring again, including
even an environmental consumer movement, ironically
emboldened by Chile's new visibility as a major player
on the world economic stage and its potential to use its
economic growth to strengthen environmental protection
and social development.
And concomitant with re-emerging democratic force is
inarguable environmental reality. Prof. Osvaldo Sunkel,
a Chilean development economist, has observed the
evolution closely. He helped start the environment and
development division of the UN Economic Commission of
Latin America in l978. He says "We collected a
substantial amount of important material showing the
relationship between development and environment in
Latin America, but I gave up that field in l985 because
nobody was paying any attention to us." Sunkel now
directs the program for sustainable development at the
University of Chile, and edited the touchstone volume,
"The Environmental Sustainability of Chile's Economic
Growth."
He says that, increasingly, environmental degradation is
being understood as a potentially truly limiting factor
in Chile--"we could just plain run out of water; what
would our industries do then?"
In fact, Chile has the potential to hit upon a wholly
new formula for environmental governance. In addition to
elevating CONAMA to Ministerial level--which some
advocate, and which is the structural approach used
elsewhere but which still leaves an Environmental
Minister weak compared to, say, a Finance
Minister--Chile could establish a Ministry of
Sustainable Development, or Environmental and Economic
Management?
These would be firsts in the world, and they would not
simply coordinate sectoral policies, but deliberately
formulate and implement inter sectoral policies.
Eventually, they might even obviate departments of
planning, trade and economy. After all, in a post-Rio
world supposedly tuned to policy integration, can such
portfolios remain efficiently or meaningfully separate?
Chile has it in its power to take such bold steps. But
for now, it seems fixated on retooling the basic law it
promulgated in 1994, today maligned for overlap and
inconsistency. And, of course, a nation that so recently
had its civic life paralyzed by military rule clearly
needs to insure its new laws and institutions are
workable. However, the need to "fix" a law can also be
an excuse for not enforcing it.
The over-riding test will be whether Chile's
environmental policies can mature fast enough to stay
ahead of new environmental problems, whether the
environmental debt can actually be "recuperated"
technologically, and whether Chile can maintain its
powerhouse economic growth without becoming even more
environmentally indebted.
Five years after Rio, Chile is at the earliest stages of
examining the relationship between its economic growth
and environmental health. It is, however, ideally
situated to experiment and fashion model solutions to
share with other nations five years from now.
If building designs predict anything, Chile has no
shortage of imagination. If the cellular phone is to be
the emblem of modern Chile, let it at least carry the
news of a nation that did not miss its chance to be a
new beacon for the world.