The Belt, the Road, and Latin America

Image courtesy of Cancillería del Ecuador/Flickr. (CC BY-SA 2.0)

This article was originally published by the Foreign Policy Research Institute (FPRI) in January 2019. 

China’s One Belt One Road (OBOR) project was late in coming to Latin America and the Caribbean (LAC). First announced by President Xi Jinping in 2013, OBOR, later renamed the Belt and Road Initiative (BRI), did not arrive in the LAC until 2018, when, at a meeting of the China-CELAC (Community of Latin America and the Caribbean) Chinese Foreign Minister Wang Yi claimed that BRI would “inject new energy into the China-CELAC comprehensive cooperative partnership and open up new prospects.” Given the impressive rise of the People’s Republic of China to the world’s second largest economy—first, by some measures—and the difficulties that many LAC countries were experiencing, it is hardly surprising that Wang’s offer was greeted with enthusiasm. If brought to completion, the integration of the LAC region into BRI would comprise 65 percent of the world’s population and 40 percent of global GDP.

The Truth will Set You Free

Lie Detecting Politics. photo: PearlsofJannah/flickr

Explosive claims about guerrilla bribes, narco-trafficking and vote tampering have rocked Ecuador’s president, Rafael Correa, just days after he appeared to triumph in a national referendum. Today, prosecutors in Ecuador have finally decided to investigate allegations that President Rafael Correa’s election campaign accepted funds from Colombian rebels back in 2006.

It all began last week, when the London-based International Institute for Strategic Studies (IISS) published a report which claims that the Revolutionary Armed Forces of Colombia (Farc) helped to fund Mr Correa’s 2006 presidential election campaign. The 240-page oeuvre cites evidence that a $100,000 payment was delivered by the Revolutionary Armed Forces of Colombia to Correo’s election coffers and goes on to claim that for the Colombian guerrillas, this was a “climax” of years of efforts to infiltrate Ecuador. The report is based on a two-year study of e-mails and documents recovered during a raid by Colombian forces on a Farc camp in Ecuador in March 2008 and testimony provided by a former rebel who later defected.

Meanwhile, at a news conference in Ecuador’s capital Quito, President Correa denied ever meeting the Farc or a representative thereof. “I’ll take a lie detector test to prove I never received funds from the Farc,” he proclaimed. Yet the sense of alarm in Quito deepened even further when Jay Bergman, the US Drug Enforcement Administration’s Andean region director, stated that Ecuador was slowly turning into a “United Nations” of organized crime, with drug traffickers from Albania to China using it as a staging ground for Andean cocaine.

Almost Perfect Yasuni Deal

Promotion video of Ecuador’s Yasuni Ishpingo Tambococha Tiputini (ITT) initiative

In May, Jonas Rey reported about a plan by the government of Ecuador to forgo the extraction of oil in its Yasuni region in exchange for money. The goal is to prevent the emission of 407 million metric tons of CO2 and at the same time protect a piece of tropical rainforest, which is considered to be the most biologically diverse place on earth.

The plan developed by the economist Alberto Acosta was first met with skepticism by Ecuador’s President Rafael Correa, who thought it inappropriate for his former energy minister to come up with such an idea. Finally endorsed by the president, it began to materialize when on the 4 August Ecuador agreed with the UN Development Programme (UNDP) to establish a trust fund, which would manage financial contributions by donors.

The UNDP has experience in managing such funds through its Multi Donor Trust Fund Office, which already administers more than 30 funds covering 74 countries. The balance sheet of the Ecuador Yasuni ITT Trust Fund is still at zero, but according to Swiss Radio DRS, Germany, France and Spain are considering payment to the fund, of which Ecuador will only receive the interest. The capital is kept as security, in case Ecuador changes its mind and drills oil in the region after all.

What looks like an innovative and promising scheme to link climate policy, environmental protection and sustainable development, also has its disadvantages. The initiative is intended, according to its proponents, to protect two tribes of the Huaorani indigenous people, which renounce any contact with modern civilization. According to a local expert, who talked to Swiss Radio DRS, however, the tribes do not live in the area protected by the scheme but in an area designated by the Ecuadorian government for crude oil extraction. The protected area supposedly consists of swamps not inhabitable by people.

For potential donors far away it’s difficult to judge what the effects of this initiative will ultimately be. However, as the broadcast points out, the protection of the environment should not come at the expense of human beings and vice versa. People and their environment need to be considered together. I encourage countries, companies and individuals to contribute money to the fund. Yet, it’s not too late to change the plan to better respect the indigenous people.

Find an evaluation of the Ecuadorian proposal in our Digital Library.

Responsibility in Practice

Oil rig in a forest, courtesy of DW from the peg/flickr

Last December in Copenhagen, the Northern and Southern Hemispheres were at odds over how climate protection and economic development should be linked.

To make it short, the North argued that southern countries should develop themselves in a sustainable and ecological way. The South replied vehemently by claiming their right to development and their right to do it the same way the North did.

Apparently, Ecuador got a head start in understanding the concerns of the West and decided to put responsibility in practice. The country started the project Yasuni ITT in 2007. This project implies a conceptual break in the understanding of development and climate change.

The idea is pretty simple. Ecuador will not exploit the 850 millions of oil barrels that lie below the Yasuni forest for the sake of world heritage and climate change.

The rest of the world, mostly western countries, should in exchange contribute financially to a fund that will be internationally monitored and that will allow Ecuador to diversify its energy sources. The fund will amount to half of the benefits that Ecuador could make if it decided to exploit the oil, which is approximately €6 billion.

The project is supported by various Nobel Prize Laureates such as Mohammed Yunus, Desmond Tutu and Al Gore. Prominent environmental personalities are also on board.

This initiative is revolutionary for more than one reason.

  • It acknowledges the notion of ecological world heritage. The Yasuni forest not only benefits Ecuador. It’s also a reserve of biodiversity for the whole planet.
  • The project forces western countries to face up to their responsibilities. European and North American countries need to join the project if they want to remain credible. Unfortunately, only a few European countries, Germany, Norway, Spain and Switzerland, support the initiative.
  • It creates an example for the southern hemisphere. By renouncing oil exploitation, Ecuador acknowledges the responsibility of southern countries in the fight for climate change. It sets an example of ecological development that other countries could use. Being host of the most natural resources, the southern hemisphere has surely something to learn from the Ecuadorian experiment.
  • The project proposes to add a third generation of carbon bonds that could be traded on the ‘carbon market.’ This new generation (G3) of bonds would be given to countries that avoid or prevent environmental pollution of the atmosphere. This new concept challenges the previous understanding of carbon bonds that so far were only available for countries or companies that reduce  their level of pollution. By rewarding countries and companies that prevent pollution, this new system would move away from the “license to pollute” that has been created by the Kyoto Protocol and would ensure a more positive understanding of the carbon market.

So, why has such an alternative project not been given a greater public attention worldwide? Why only a few European countries are supporting it?

I think it is time for the West to put responsibility in practice.