The Rainforest Economy
Ever since the Europeans came to the Amazon basin its natural resources have been exploded. The first European settlers grew crops and traded them. The first economic exploitation of the region came in the 1890’s with the increased worldwide demand for rubber. The rubber boom made people come to the Amazon region and many made a fortune but suddenly in 1920 it all ended, the seeds have been taken to the Far East where the rubber was easier and cheaper to collect and to transport.
Trade and industry in the Amazon has been based on extracting natural resources and transform it somewhere else. One of the largest contributors to the region’s economy is the export of timber. Trees are a treasure of the Peruvian jungle; mahogany, teak, chestnut, walnut, rosewood and ebony are valued for their beauty and hardness. Agriculture represents an important part of the economy of the region, products including bananas, soy beans, cacao, coffee and maize are produced in land that has been cleared and most of it is produced for exportation.
Oil extraction brings in wealth but also destroys the rainforest
Mining and oil extraction are very controversial economic activities as they bring wealth and economic development but pollute the environment. Oil and gas are extracted from the ground and a pipeline transports the oil across the Andes to refineries on the coast.
The Amazon River is the main transportation system for most exports of natural resources. There are no roads because of the dense vegetation. Companies are building roads and pipelines to transport the oil and gas out for commercialization.
Tourism is an important component of the region’s economy. Tourists spend millions of dollars a year in lodging, food and local products and services.
Opportunities for trade improve as transportation in the Amazon basin progresses. The biggest challenge has been to build reliable roads that will not get washed away by rain. There are no bridges on the Amazon River or its tributaries so vehicles have to be transported by ferries making trade more expensive. The Amazon river is vital for transportation of residents and goods. Some cities deep in the forest have been successful due to their closeness to the Amazon River since ships can sail from the Atlantic Ocean.
In the Peruvian Amazon, Iquitos and Pucallpa are the main city and town respectively. The city of Iquitos is Peru’s fifth largest city and has a population of 400,000. It stands in the north of the deep jungle on the Amazon River, from Lima it can only be reached by air because of the difficulty of building roads surrounding the dense forest.
The nearest large town is Pucallpa on the Ucayali River south of Iquitos. It is connected to Lima by the trans-Andean road and to Iquitos by river boat. A trip from Pucallpa to Iquitos can take from three to seven days depending on the tide of the river; sometimes during the dry season navigation is almost impossible. The lack of reliable transportation and good roads has delayed the economic development of this area.
The city Iquitos was developed during the rubber boom at the beginning of the 19th century and today it is the center for foreign and local companies exploring the area for commodities. Investment is bringing prosperity to the local population but also endangering its natural resources polluting water, air and land.
Cacao is produced in the Amazon rainforest and exported all over the world.
More than three quarters of the Peruvian territory lies east of the Andes. The jungle or Selva has two parts, the high and the low Selva.
In terms of volume, the Amazon is the largest river in the world, it contains one fifth of the earth’s fresh water.
Between 1890 and 1920 the economy of the region suffer a boom due to the demand for its rubber.
The Amazon river is home to many species of animals and many of them are in danger of extinction. Some of them are the pink dolphin, the Amazonian manatee and the giant river otter.
Economic development is taking its toll among native Indians, many of them have fled deep inside the jungle, some have died of starvation and others have adapted to modern live.