Sinopsis - Human Development...
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Human Development Report The other frontier:
Alternative uses of naturales resources in Bolivia
Sinopsis
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THE CHALLENGE OF OUR GENERATION
Last year, the Bolivian economy grew by more than 4.5%, but the number of people living in poverty increased by more than 166,000
1. Boliviaistrappedinapatternofgrowingimpoverishment.Lastyearthecountry’seconomygrewbymorethan4.5%,butthenumberofpeople livingbelow thepoverty line increasedby166,869.Toachievetheeconomicgrowth,petroleumandnatu-ralgasandminingcontributedalmostUS$3billioninexports,andtheagriculturalfrontierwasexpandedby300,000ha.Asnormallyoccurswitheconomiesbasedonprimarynaturalre-sources,theBolivianeconomywasunabletotransformtheseresourcesintogoodqualityjobs.Withalonghistoryofdepen-denceonsilver,tin,rubberandhydrocarbons,thereisadevelop-mentpatternbasedon fewactors and sectors.Boliviahas anarrowlybasedeconomy.
2. However,thereisanalternativeeconomybeyondthefrontierofprimarynaturalresources,the other frontier,basedonenviron-mentalservices,ecotourism,forestdevelopment,naturalprod-uctstrade(biocommerce),andorganicagriculture,whichgen-erateemploymentpreservingtheenvironmentandimprovinglabourconditions.Thousandsofproducers,communitiesandassociationshavealreadybuiltthisotheragriculturalfrontierinthemostvariedplaces:coffee,Brazilnuts,andorganiccacaointhenorthernpartofLaPazandPando;quinoaandvicuñawoolproducersassociations in theHighPlateau (Altiplano); lizardleatherproducers inBeni; indigenouscommunities thatpre-ventthedeforestationoftheNoelKempffMercadoPark,pro-moteecotourismintheMadidiNationalPark,andleadsustain-ableforestmanagementinthenorthernAmazonandsoutheastforests.
3. Theaimofthisreportistoexplorepotentialitiesofthe other frontierinBolivia.Thosethousandsofproducersinthisalterna-tiveeconomycontributeaboutUS$300millioninexportsandgeneratetensofthousandsofnewjobs.Despiteitssmallsizeandterritorialfragmentation,theotherfrontierrepresentsthebasisofanalternativedevelopmentpattern.Itshighratesofreturn,itsaggressiveinsertionintointernationalmarkets,andascendingdemand inglobalmarketsgenerateanenormouspotential.Thefuturechallengeistoexpanditsimpactbydevel-opingsynergiesbetweensmallandlargeproducersandtojoinregionsusingadevelopmentpatternmoreproductiveandsus-tainable.Overtime,theotherfrontierhasthepotentialtodefineanewidentityfortheBolivianeconomy.
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Prices of oil and food constitute an additional challenge for the Bolivian economy
4. Forthefirsttimesincethe70s,theworldeconomyisfacingadoublecrisisdue to therise inhydrocarbonand foodprices.Analystsagreethatintermsofpovertyandwelfarethemostseriousproblemisthatoffoodprices.Atthegloballevel,be-tweenJune2006andJune2008thepriceofcerealsdoubled.Wheatpricesincreasedmorethan75%andvegetableoilpricesrose 60% during the same time period. The change in foodpricesfollowsdietarychangesinareasofrapidgrowthintheworld(especiallyChinaandIndia).Anotherreasonforfoodpriceincreasesisthechangeinsoilusepatterns,nowfavoringcorn,sugarcane,soy,andoilseedsforuseasbiofuels.
GRAPHIC 1Inflation: Consumer prices and food component, 2008
0 4 8 12 16 20 24 28 32 36 40 44 48 52
México
Brasil
Perú
Colombia
Uruguay
Chile
Argentina
El Salvador
Ecuador
Panamá
Rep. Dominicana
Honduras
Paraguay
Costa Rica
Guatemala
Bolivia
Nicaragua
Venezuela
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3251
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CPI Food CPI General
Source: CEPAL (2007-2008).
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5. WhatistheimpactonBoliviaoftheincreaseinfoodprices?Sig-nalsoffoodinsecurityhavebeendetectedinsomeregionsandespeciallyinsomehouseholdgroupsinthecountry.Inthelast30years,therapidprocessofurbanizationhasledtoachangeinfoodconsumptionpatterns.ArecentstudyoftheInternationalFood Policy Research Institute (IFPRI) and Von Braun (2007)showsthatfoodpurchasesinBolivia’spooresthouseholds–-netconsumers-–arefivetimeshigherthanthevalueofsalesofpoorhouseholds-–netproducers.Therefore,theincreaseinfoodpric-eshashadanetnegativeeffectonthewell-beingofpoorhouse-holdsinBolivia,bothinurbanandruralareas.TheIvanic-Martinstudy(2008)fortheWorldBankandtheCEPALstudy(2008)showthatfoodpriceincreaseswilltendtoraisepoverty2to3%indevelopingcountries.
6. Theothersideofthecoinisthat,totheextentthatdemandandpricesincrease,notonlyofbasiccerealsbutalsooforganicandagroindustrialproducts,aseamofopportunitiesfortheBolivianfoodindustryopensup.Thegrowingdemandforcerealsandoils will probably translate into opportunities for expansionamongnationalproducers.Thepotential for foodproductioncanbedeveloped through competitive advantages generatedduringthelasttwodecadesinsuchvariedareasassoy,cereals,andvegetables.However,achangeinthemodelofnaturalre-sourcesuseisrequiredinorderforthemtoentermarketsofgrowingaddedvalue.
7. Arecentstudyprojectsworldpricesforoilseedsandcerealsfortheperiod2008-2015.Thestudyfindsthatmanycerealswillshowapricetrajectorysimilartoaninverted“U”forthatperiod.Itisestimatedthatbaseprices,insomecases,particularlysoyandsoyoil,willbelowerin2015thanin2008.Thisisinpartbecausetherateofconversionofsoyintoabiofuelislow.Ac-cordingtoaWorldBankstudy,itisfourtimeslower(inUS$pergallon)thancornorsugarcaneethanol.Forthisreason,foodandbiofuelexpansionopportunitiesshouldbesubjecttocarefulandspecificanalysistoguidedecision-making.
Our generation’s challenge is to build an economy not based on cheap labour and primary natural resources
8. Thisisapropitioustimetoanalyzethepotentialitiesofalterna-tiveusesofnaturalresourcesinBolivia.TheTropicalAndescon-stitutetheepicentreoftheWesternHemisphere’sgreatestbiodi-versity.ItisestimatedthattheAndesareahostsfrom15to17%ofallthevascularplantspeciesoftheworldononly0.84%ofitstotalterrestrialsurface.AlargepartofBolivianterritoryisin-cludedinthisarea,meaningthatBoliviaisoneof15countrieswiththegreatestbiodiversityintheworld.TheAmboro-Madidiconservation corridor possesses the highest levels of speciesrichnessandendemismintheworld.
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9. Boliviaisamongthe11countriesintheworldwiththehighestnumberofvascularplantspeciesandalsoamongthe10coun-triesrichestinbirdspecies.Forestsurfacesurpasses53millionhectares, equal to 48% of the national territory and 10% oftropicalforestinallofSouthAmerica.Thisforestrichnessplacesusasthecountryintheworldwiththesixthgreatestquantityofnaturaltropicalforestintheworld.
MAP 1Species Diversity(average of the ecoregional percentages of diversity)
Source: Own elaboration, based on Ibisch y Mérida (2003).
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From market niches to market pockets: No. 25 in natural gas but No. 1 in certified forest
10.Boliviaistheworldleaderincertificationofnaturaltropicalforestandisoneof12countrieswiththemostorganicagri-culture,bysurfacearea,intheworld.Boliviarankstoday,withitstinyexportsofspecificproducts,amongthetenmajorex-portersoforganiccoffeeandcacao,thefivemajorexportersofcertifiedtropicaltimber,andthethreemajorexportersofBrazilnuts.
11. Thesizeofalternativetrademarketshasinactualityshownac-celeratedgrowth.Thosebornasnicheshavenowbeentrans-formedintomarketswithconsiderabletransactionvolume.In2006,thevalueoforganictradeworldwidereachedUS$40bil-lion,fourtimesthesizeoftheBolivianeconomyregisteredforthat year. The International Federation of Organic Agriculture Movements (IFOAM)has689membersdistributedin108coun-triesaroundtheworld.Theexpansionofthismarketbetween2005and2006impliedagrowthofUS$5billion,equivalenttothetotalvalueofBolivianexportsin2006.Theexpansionoftheorganicmarketregistersanannualaveragegrowthrateof16%andapricethatexceedsbyabout20%thatintheconventionalmarket.TheBolivianAssociationofEcologicProducers(Asocia-ciondeProductoresEcologicosdeBolivia)(AOPEB)calculatesthatthevalueofBolivianorganicexportscouldreachUS$450millionin2016.
12.AccordingtothelatestreportofFairtrade Labelling Organization International (2007),thevalueofglobalfairtradereached2.3billionEuros,equivalenttoUS$3.39billion.In2007,fairtradealmostdoubledwithanexpansionof47%ofthevaluerecordedattheendof2006.Theactorswhobenefitfromthismarket-–farmersandproducers-–nowtotal1.5million,and thedirectbeneficiariesareestimatedat7.5millioninover58developingcountriesgroupedinto632organizations.
13.Thechallengeoffindinganewplaceintheglobaleconomyinthecomingdecadesisaddedtothechallengeoftranscendingthegrowthofimpoverishmentandtakingadvantageofbiologi-calmegadiversity.Thedynamiceffectsofglobalchangemakemoredifficultthetaskofpromotingeconomicgrowth,generat-ingemployment,andreducingpovertyineconomiesbasedonprimarynaturalresources.Atthesametime,theymakeitmoreurgenttothinkaboutstrategiestoarticulatesmalleconomiesintotheglobaleconomy.Boliviarequiresaninternationalinser-tionnotbasedonabundantnaturalresourcesorcheaplabourresources.
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THE CHALLENGE OF THE FIRST LINK
The wealth of the natural resources is not in the first link of the chain
14.Inthisreportweconcentratieattentiononthefirstlinkintheeconomicchain,theplacewheresoil,land,water,forest,andbiodiversityuseisdefined.Despiteitsstrategicimportance,thisisnottheplacewheregreatestvaluefortheeconomyisgener-ated.Let’sthinkaboutthecaseofspecializedcoffee.Thehun-dredsoffamilieswhopickcoffeebeansreceiveapproximatelyUS$0.33perkg.UnprocessedcoffeehasapriceofUS$0.75perkg;usuallythisisalocalprocess.Asvalueisaddedthroughpro-cessingandtransformation,thepriceincreasestoUS$1.63perkgforpergaminocoffee,US$1.98forgoldencoffee(infactory)andUS$2.64forthesamecoffeeuponexport.FromthatpointthepricerisestolevelsaroundUS$10perkgforinternationalwholesalersandUS$17inEuropeanandNorthAmericansuper-markets.HowcanwegeneratemoreaggregatevalueandatthesametimeretainmorevalueinBolivia?Thisisthechallengeofthefirstlinkintheeconomychain.
15.Themostvisibleresultofanextractivevisionofthefirstlinkistheongoingconflictovernaturalresourcesownershipandcontroland the targetingofpoliticalandmediadebateon this issue.However,beyondthis,accesstonaturalresourcesshouldbeun-derstoodastherightofpossession,use,andexploitationoftheseresources inrelation to thefirst link-–theearth–-butverticallylinkedtothenextlinksuntilthelastone,wheregreatestbenefitsfromearthrichnessarecaptured.Hencetheterm“access”shouldbeunderstoodasaconceptbroaderthan“property”.
16.Thepossessionofnaturalresourcesmustbeanalyzedwithintheframeworkofabroaderdebatelinkedtotheprocessoftrans-formingproductionstructuresasawhole.Thechallengeistoarticulatethesenewproductionstructuresorthisnewsocietythatgoesbeyondtherural,withthousandsofsmallandmediumactorsfromthepopulareconomyandcompetitiveactorsoftheneweconomyexternallycoordinated.Theideaistoredistributeratherthanarticulate,butnowthechallengeistothinkofanagrarianreformcoordinatedtothepopularurbaneconomyandtheinternationaleconomy,inordertochainthefirstlinktothenextinthechain.Theultimategoalisthatpeasantandindige-nousfamiliesgeneratesurplusesintheireconomicactivity.
The model of the other frontier revalues alternative uses of natural resources
17.InBoliviathecurrentconfigurationofsoilandnaturalresourc-esuseresultedfromexpandingtheagricultural,miningandhydrocarbonfrontier throughoutthe20thcentury.There isa
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procedure, a “frontier model” behind the expansion of thenatural resources frontier.Thismodeldescribes theprocessthat resulted in current uses and exploitation of natural re-sources.Themodelemergesfromthedemographic,techno-logical,andeconomicchangesthatmarkedchanginglanduseinthelastcentury.
18.Themodelofthecurrentfrontierreproducesatraditionallandusepatternoflowreturnsoninvestmentsandlowproductivity.Wecanobservethreemoments:thefirstisthatoffrontierex-pansiondrivenbypopulationpressures and technological oreconomicchangesthatmakeexpandingthefrontierprofitable.Thesecondmomentemergesduetosoilproductivityloss.Insomecases,theintensiveuseoffertilizersandpesticideshelpextendapieceofland’slifeuntilfallingproductivitycreatesnewincentivesforexpansion.Thethirdmomentrelatestothenewexpansionofthefrontierandaviciousgrowthcyclewithlittlevalueadded.
19.Theotherfrontierisalsobasedonathree-momentmodel.Thefirstmomentistheeconomicvaluationof landuse.Inordertochangelanduseatlocal,municipal,regionalorde-partmentallevels,economicincentivesaimedatpatternsofsustainableuseshouldbeinplace.Onlyiftheprofitabilityofproducingcertified timberororganicBrazilnuts is greaterthanthatofproducingrice,cattlemeat,orsugarwillanewfrontiermodelbesustainable.Thesecondmomentisthatofvalueaggregationinglobalproductionchains.Thevalueadd-edofhigh-profitproductsemergesfromqualitiesofthepro-ductiveprocess(labourandenvironmentalstandards,amongothers)andfromintangibleandsymbolicqualitiesincorpo-ratedduringthemarketingprocess(certificationsandlabel-ling,amongothers).Thethirdmomentinvolvesmedium-andlong-termsustainabilitywithhigherlabourandenvironmen-talstandards.
GRAPHIC 1Three-moment model of the other frontier
Source: Own.
Revalorizationof Soil Use
Changesin Soil Use
Enhancement of:Labour Standards,Environmental Standards
Moment 1 Moment 2 Moment 3
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The value of the intangible or symbolic allows skipping stages in development
20.Animportanttrendinthemicroanalysisofnaturalresourceval-uechainsistodistinguishbetweenthetangibleormaterialde-terminantsofthevalueforaproductorservice-–suchastastequalityorsanitarycontrols--andtheintangibleorsymbolicde-terminantsofthevalueoftheseproducts--forexample,iftheyareproducedwithoutchildlabouroriftheypreservetropicalfor-est.Revaluationofthefirstlinkrequiresquestioningofhowtocapture more value added. The literature is concentrated onthreeareasthatdetermineagreaterredistributionofintangibleorsymbolicvalue.Thefirstisrelatedtocertificationprocessesthatarecriticalforpricediscriminationaccordingtolabourandenvironmentalstandardsandnativespeciesorplaceoforigin.Thesecondaspectisrelatedtointellectualpropertyandthepo-tentialtoconfirmdenominationsoforiginatthelocalorregion-allevel.Finally,thethirdaspectisrelatedtothedevelopmentofappropriateinformationaboutthedistributionofvalueaddedinglobalvaluechains.
21.Countriesinthefirststageofdevelopmentbasetheircompeti-tivenessontheendowmentofproductionfactors,unskilledla-bour,andnaturalresourceexploitation.Boliviabelongstothisgroup,alongwith41othernationaleconomies.Inthesecondstageofdevelopment,theeconomy’scompetitivenessisbasedonefficientuseofitsfactors.Countriesmovetothisstagewhenthey need to develop efficient production processes and im-provethequalityoftheirproducts.Inthethirdstageofdevelop-ment,innovationistheengineoftheeconomyandthepromoterof competitiveness. Sophisticatedproductionprocesses allowthesustainabilityofhighincomeassociatedwithstandardsofliving,whenevertheseproductsareabletocompetewithnewanduniqueproducts.
22.Whycan’tweimagineaBolivianeconomywithinternationallabourandenvironmentalstandardsby2025?ThesmallsizeoftheBolivianeconomymakesitpossibletothinkabout“skippingstages”,thankstothevastintangiblevalueofasmalleconomythatdoesnotplunderitsenvironmentorexploititsworkforce.Thisdoesnotmeanturningitsbacktotheworld,nortosectors,fields,oractorsthattheBolivianeconomyalreadypossesses.Rather,itmeanstostrengthencompetitivenesswithnewkindsofexports--productsthatwillbeabletoattractsociallyrespon-sibleinvestmentcapitalthatneverusedtocometoBoliviaandthegreenandfairinitiativesthatneversucceededbecausestan-dardswereverylow.
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There are successful examples of Bolivian alternative products and services that have reached global markets
23.Howcanalternativeproductsandservicesbedescribed?Let’sthinkforamomentaboutatypologyofproductsandservicesbasedonsupplyanddemandcharacteristics.Graph2showshowtheBolivianeconomylookswhensupplyanddemandchar-acteristicsintersect.Wecanobservefourquadrants,oneofthem(thatoftheotherfrontier)showingincipientbutencouragingandhighlycompetitivemarkets.Itincludesproductsandser-vicesthatarehighlyprofitableandnoteasilysubstitutedininter-nationalmarkets.Dependingonthesizeofthefinalmarket,itdescribesmarketnichesorveins.Withoutadoubt,theBolivianeconomycannotdependonlyontheseproducts,becauseamongitscurrentcomparativeadvantagesareprimarynaturalresourc-es(gas,mines,extensiveagriculture,livestock)andmanufactur-ing (agroindustry, textiles, jewelry, leatherprocessing,amongothers).However,itcanexpandsupplyandtheimpactonem-ploymentandincomegeneratedbythealternativeuseofnatu-ralresources.
24.Whatfeaturesarecommontotheproductsandservicesfromsuccessfulexperiencesof theother frontier?Thereare three.First,thattheircompetitivenessisbasedmoreonthequalityoftheproductionprocessthanonthefinalqualityofeachproduct.Highqualityiscriticaltoenterintotheinternationalmarkets,especiallyforsomeexports,suchasquinoa,coffee,andreptileleather,butmostoftheirpricemarkupderivesfromthequalityofprocessing:theseproductsdonotusechemicaladditives,areenvironmentallysustainable,anddonotusechildlabour,amongotherfeatures.Therefore,theiraggregatevalueincreasesmorefrom labour and environmental standards certification thanfromproductivityincrease,technologyadoption,orproductin-novation.
25.Second, many products have demand characteristics thatmakethemandtheirsubstitutesrelativelyimpervioustopricechanges.Theinelasticityofdemandmeanstwothingsforafirst-link producer. On the one hand, he or she can betternavigatetheupsanddownsofinternationalconsumermar-ketsbecausetheproducthasahighbranddifferentiation.Ontheotherhand,duetotheproduct’swideprofitabilitymargin,the producer can improve labour and environmental stan-dards,which,inturn,willpositiontheproductinmarketswithhighereconomicreturn.Theproducerisinavirtuouscirclewhereheorshecompetes“upward”becauseoftheproduct’sdemandcharacteristics.
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26.Third,mostproductsfromtheotherfrontierhavesupplycharac-teristicsthatinthelongterminvolvechangesinlanduse.Ex-pandingsupplyoftheseproductsandservicesisnotbasedonexpansionoftheagriculturalfrontierbutoncapacitytoimprovethevalueoftheeconomy’sfirstlink.Thismeansbetterenviron-mentalconservationandsustainablelanduse.Together,theseattributesdescribea“mosaic”policyofsustainableconserva-tion.Totheextentthatthefirstlinkofthelargereconomyismorehighlyvalued,thereturnontheotherlinkswillbehigher,providedthatthereisaninsertionintomarketswithhighenvi-ronmentalandlabourstandards.Therefore,amodelforstop-pingtheplunderingoftheenvironmentanddegradationofthefrontierhasgreateconomicimportance.
THE CHALLENGE OF SPREADING SUCCESSFUL EXPERIENCES
27.Howcouldtheimpactbeexpandedbeyondafewlocalpocketsofalternativeproductioninruralareas?Howcouldtheimpactofthesepocketsaddedtogetherbespreadonanationallevel?And,towhatextentareweanticipatinganationalagendaofpolicieson natural resources, manufacturing, and international com-merce?ThesethreequestionsareinterrelatedandposeagreatchallengeforthefutureofalternativeusesofnaturalresourcesinBolivia.
GRAPHIC 2Typology of products for export
Jewelry items
Cotton shirtsfor men
Wood furniture
Wood seats
Soy oil
Wood Windowsand frames
Wood veneer
Alimentos
Palm heartsEthylic alcoholSoy flour
Cane sugar
Milk, creamand others
Cotton threads
Other seeds
Quinoa
Not roasted coffee
Brasil nuts
Other bovine leathers
Tanned ovine skins
Wood
Sesameseeds Llama and alpaca fine hair
Ovine leathers and skins
Leathers and skinsof other animals
Beans and legumes
Chemically pure saccharose
White refined sugar
Sawed wood
Sunflower flour
Other sawed woods
Soy flour
Fresh plantains and bananas
Soy beans
Natural gasZinc andits concentrates
Crudepetroleum oils
Gold inunwrought form
Unwrought tin
Silver andits concentrates
Other oils
Tungsten
Other fuels
Fuel oils
Antimony trioxide
Copper
Unwroughtsilver
Antimony and its concentrates
Aluminum
Ad
ded
Value
Elasticity of Demand
Fuente: Own elaboration, based on IBCE (2008).
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28.Thecasesdescribedinthisreportshowthatseedsofthealterna-tiveeconomyalreadyexist.Thesecasesmakevisiblehalfamil-lionproducerswhogenerateUS$300millioninexportsandhavethepotentialtobasetheircompetitivenessonhigherlabourandenvironmentalstandards.ThecentralchallengeforpublicpolicyinBoliviaistospreadthisimpactbeyondpockets,marketniches,andpilotexperiences.Therehasbeennobetteropportunityinrecenteconomichistoryfordoingsothannow.Highpricesforoilandfoodcreateaneconomicincentivetoswitchsourcesofem-ploymentandincomegeneration,andclimatechangecreatesanincentiveforstructuralchangeindevelopmentpatterns.
Bolivia can be a global leader in policies for the reduction of carbon emissions through deforestation
29.DeforestationinBoliviaproceedsatarateofaround300,000haperyear.Themainreasonsforthisdeforestationarelandusechangesforagricultureandlivestock,forestfires,illegallogging,andnewsettlements.Thischangeinlanduserepresentsanin-tangiblevalueofUS$1,500perhectareofbiodiversitywithatangiblevalueofUS$200-500perhectareforcattle,soy,orcocaleaves.Itistimetogiveaneconomicvaluetotheintangibleandthusinitiateashiftinthepatternofeconomicdevelopment.Thisisnotaboutsavingtheforestonlytoremaininpovertybuttoreducepovertytosavetheforest.Thesuccessfulexperiencesofdeforestationavoided inMatoGrosso(Brazil),Nicaragua,andtheBolivianNoelKempffMercadoNationalParksuggestnotonlythatthisispossiblebutalsothattherearefinancialandin-stitutionalinstrumentscapableofmakingthechange.
30.Howcanwetakethefirststep?TheBoliviangovernmentcanunilaterallymoveforwardbycreatingafundforthereductionofemissionsfromdeforestationanddegradation.Thefundwouldfocusitsfirstactionsintheareasmostvulnerabletofrontierad-vance--theMadidiAmboro corridor andvulnerable forestsofAmazonandChaco.Theexpectedimpactisdouble:first,induceagradualchangeinrelativepricesoflandsothatthevalueofahectareofbiodiversityforestwouldbehigherthanthatofahec-tareofcattleorsoy;second,spreadaprotectiveeconomicum-brellaover45.3millionhectaresidentifiedbytheNationalPro-gram on Climate Change as potential carbon sequestration,resultinginannualpaymentstocommunitiesandindigenouspeoplewhousetheforestinasustainableway.
31.Howmuchwould it cost to induceagradual change in landprices,andwhataretheinstitutionalchannelsforaccomplishingthis?AccordingtotheNationalProgramforClimateChange,thepotentialsurfaceforimplementingafforestationandreforesta-tionprojectsintheframeworkofcleandevelopmentis45.3mil-lionhectares.IfBoliviancarboncertificateswerecommercial-izedinthenewemergingmarket,usingtheaveragepriceoftheEuropeancarbonmarketin2007,thepriceofonemetrictonof
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carbonwouldbearound$20.ThisisequivalenttoalmostUS$550millionperyearexpressedincurrentnetvalue.Inordertomoveforwardwiththisagenda,itwillbenecessary,first,toestablishafundthatwillhavevalueoninternationalmarkets;second,todevelopaninternationalprogramtocertifycarbonemissionre-ductionbydeforestationavoided;andthird,createanationalfundtoadministerpaymentstocommunitiesthatarepartofthisplanforavoideddeforestation.
32.Maps2and3,simulatedfor2026,showasignificantchangeintheprofitabilityofdifferentusesofbiodiversityatanationallevel.Map2showsanorderofprofitabilitythatrespondstothetraditionaluseofnaturalresources.Bysuperimposingprofitabilityestimateson
MAP 2Conversion of soil by 2026 by erratic expansion of the agricultural frontier.
Fuente: Own elaboration, based on Andersen (2006).
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MAP 3Change in use of soil by alternative use of natural resources.
Fuente: Own elaboration, based on Andersen (2006).
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landusetendencies,themaphighlightserraticfrontierexpansiontoecosystemsnotsuitableforagriculture.Map3showsagradualchangeintheorderofprofitability.Itinvolvesthreechangesinthecurrentmap:thefirst,anemergingmarketforconservationusesinareasofforestfrontier(paymentsforenvironmentalservicesandavoideddeforestation);thesecond,amarketforcleandevel-opmentmechanismsandorganic,forest,andfairtradecertifica-tionforagriculturalfrontierareas,includingurbanareas;andthethirdisaconservationcorridorstrategyinmosaicareasthatcom-bineshighconservationprofitabilitywithopportunitiesforeco-nomicdevelopment.
Bolivia can also be a leader in the certification of organic, forest, and fair trade standards
33.Theimpactofsettingupafundforavoideddeforestationdoesnotlieintheforestitself.Itisonlythefirststephelpingtogener-ateanew“orderofprices”forthefirstlinkoftheBolivianecono-my.Thesecondstepistoextendcertificationfororganic,forest,andfairtradestandardstoplaceswheretheagriculturalfrontierhasalreadyadvanced,potentiallyallthesuitableagroforestterri-toryofthecountry.Inthisway,theexistingproductsofagricul-turecanenternewmarketsdemandingenvironmental,organic,specialized,andfairstandards.Inthisregard,theBoliviangov-ernmentalsohasthepotentialtobealeaderinLatinAmerica.
34.Toachievesuccess,thecertificationprogramsshouldbevolun-taryaswellasprofitable.Theestimatedcostofcertifyingallthepeasanteconomicorganizations(OECA)inthecountry-–about775atthenationallevel–-isUS$1,360,000peryear.Thecertifi-cationcostisverysmallcomparedtothepotentialbenefitofat-tracting investments with high environmental standards andwithahigherpricedifferential.Forinstance,thepriceofcoffeeinfairandorganictrademarketsisUS$3,090perton,whichisthepriceobtainedbycoffeecooperativesassociatedwiththeBolivia Federation of Coffee Producers (FECAFEB); the profitobtainedisUS$1,682perhectare,farabovetheprofitobtainedwithconventionaluncertifiedcoffee,US$1,440perhectare.
35.Acomprehensiveagendaforcertificationwillneedtoincludechangesinthecurrentsystemofcertification,onethatmovesforwardbybitsandpieces,onesometimesopposingtheother.Howwill itbepossible tocapturegreatervalueadded in thehomecountriesoforganic, fairorspecializedtrade?Thefirstaspectisrelatedtocertificationprocessesprovidingthekeytopricediscriminationaccordingtolaborandenvironmentalstan-dards,aswell as speciesendemismandplaceoforigin.Thecountriesoforiginneedtoachievegreaterharmonizationandcontrolofproceduresinvolvedininternationalcertification.Thesecondaspectisrelatedtointellectualpropertyandthepotentialtoestablishdenominationsoforiginatthelocalorregionallevel.
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Thisisacriticalsubjectinthenegotiationofinternationaltraderules.Therehasbeenprogressinbilateralagreementsbutthereisstillmuchtoachieveinthemultilateralagenda.Thethirdas-pectisrelatedtogenerationofappropriateinformationonval-ue-addeddistributioninglobalvaluechains.Inmanycountries,both generation of primary information and its distributionamongproducers,traders,andfinancialentitieshavecharacter-isticsofpublicbenefit.Government support is frequently re-quiredforthegenerationofreliableandaccessibleinformationinrealtimefordecision-making.
We can retain greater added value by betting on “fair trade zones”
36.TheobjectiveofpromotingalternativeusesofnaturalresourcesistoraiselivingstandardsoftheBolivianpopulation.Forincentivesgeneratedinthefirstlinktoproduceprofits,itisnecessaryalsotogenerateeconomicincentivesintheindustrialandtradelinksofthevaluechain.Toclosethecircleofeconomicincentives,wecanlearnfromdozensofsuccessfulexperiencesofindustrialclusters,manufacturingparks,andtradeareaswithatwist:raiseenviron-mentaland laborstandards insteadof lowering them.Raisingstandardshastwodesiredeffects:first,generatingincentivestogetoutofmarketnichesbasedoncheaplaborandprimarynatu-ralresourcesand,second,generatingincentivestoattractnewinvestmentsinsociallyresponsibleandgreenportfolios.
37.“Competingupwards”alsomeanstostimulateinternationalin-sertionnotbasedonabundantnaturalresourcesoroninexpen-sivelabor.TheexperiencesofCostaRicainenvironmentalstan-dards and of Cambodia in labor standards show a range ofpossibilitiesforcountrieswillingtoeffectmarketchange.Fromtheinternalpointofviewthetransformationofanarrowlybasedeconomy,withfewactorsandfewsectors,intoonewidelybasedcontinues tobea fundamentalchallengeof theBolivianeco-nomicagenda.Thecoordinationofsmall-andmedium-sizedproducerswithruralandindigenouscommunitiesandwithas-sociationsofproducersandcooperativesshouldbecentraltothecurrentagendaandcouldstimulateapatternchangeinnatu-ral resource use. International experience shows that the so-called“curseofnaturalresources”isnotfatalforcountriesthatintendtodiversifytheirproductivebasis,beinsertedintotheglobaleconomywithaddedvalue,andcreate institutions formedium-andlong-termdevelopment.
38.Boliviahaspotentialtobeamongthetopcountriesintheworldwithaneconomyoflaborstandards,fairtrade,andsustainableenvironmentalstandards.That’swhyactionissourgent.Con-structionoftheotherfrontierbeginswithvisibilityoftheactors,developmentoftheinstruments,andestablishmentofterritorialagreements.Thegreatestobstacle,however,liesinconnecting
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alternativeusesofnaturalresourcestoanagendaforbetterliv-ingconditions,humandevelopment,andwell-beingofthepop-ulation.ThethousandsofBrazilnut,organiccoffee,andcacaoproducers,thehundredsofcommunitiesandpeoplemanagingforests,andthedozensoforganizationsthatprovideenviron-mentalservicesinBoliviasuggestthatweareonschedule.
The institutional challenge is multileveled:It is necessary to develop “packages” of pubic policies appropriate for each municipality, region, and prefecture.39.Thenewpackagesofpublicpolicyshouldbebasedonfeasibility
studies,investmentandpre-investmentprofiles,andsocialandenvironmentalimpactassessmentsforeachregioninBolivia.The“packages”willbringnewpublic-privateinstrumentstotheregionsandwillbeadaptedtospecificneedsofproducersandofemergingcategoriesineachterritorialspace.Leadershipinthedevelopmentanddisseminationofpublicpolicypackageswillbetheresponsibilityofthegovernmentandofthesocialandproductionactorslinkedtotheregions.Overtime,eachregionwillnotonlyacquireaprivate“productiveidentity”butwillalsogeneratelocalknowledge.
40.Decentralizedagendaswillfacilitateestablishmentofregionalpro-ductionagreements.Aroundhalfamillionproducersconstitutethecriticalmassoftraditionalandalternativeproductionsectorsinfourpolesofterritorialdevelopmentinthecountry.Theseagendasincludearound300exporters,hundredsofruralandindigenouscommunities,andthousandsofsmallproducersineachregion.Theyalsohaveanindirectimpactonthousandsofproductiveac-torslinkedtotrade,transportation,andmanufactureinthemaincitiesofthecountry.Theseactorsaretheheartofadifferentdevel-opmentpattern,withthepotentialtoproducewithhigherlaborandenvironmentalstandardsandtogenerateagreaterdistribu-tiveimpactatthebaseofthepyramid.Eachpoleofterritorialde-velopmentrequiresanewproductionpactbasedongoalsandobjectives.Thisisthefirsttaskrequiredtomakethousandsofac-torsvisibleanddevelopanewtypeofrelationshipbetweenthegovernmentandproductionandsocialactorsintheregions.
41.Theotherfrontierdescribessuccessfulexperiencesofenviron-mentalservicesmanagement,sustainableforestmanagement,useofcleandevelopmentmechanisms,biocommerce,andor-ganictrade.Isolated,theytellfragmentedstoriesofcommunity,business,orgovernmentalsuccess.Together,theycandepicttheheartofanalternativedevelopmentpattern.Theyshowthatitispossibletoconstructaneconomynotbasedontheuseofprimarynaturalresourcesandprovethatthereisaplaceforhigh-valueBolivianproductsintheglobaleconomy.Theygiveauniqueiden-titytotheBolivianeconomy,anchoredinthemulticulturalismofitssocietyandthemegadiversityofitsnaturalresources.