Growing the Pie in Panama

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NPR recently did a story on Panama’s impressive growth, but also the inequitable distribution of that increasing wealth. Since we first started working in Panama in 2003, we’ve seen the country transform significantly. There is a lot more wealth than there was ten years ago, but that wealth is largely contained in the city among the country’s elite and politically connected. As the post points out, a third of Panama’s 3.5 million still live in poverty.

A view of the Trump Tower sun deck in PanamaAs for-profit business, we believe that everyone can benefit by participating in capital markets. We’re not calling for the redistribution of Panama’s wealth to the urban and rural poor. Rather, we’re working to grow the proverbial pie through profitable, sustainable forestry, while ensuring that our community forestry partners, as an essential part of our business, benefit from that overall increase in wealth creation.

While this may seem altruistic, it’s not. What our sustainable forestry model does is consider the long-term economic, social and environmental impacts of empowering those who are critical to our business. Attracting increased foreign investment and including more local stakeholders as economic winners makes business sense. Higher wages reduce our labor turnover and increase productivity. Profit sharing reduces our political risk. We are ensuring that we have continued access to necessary, and increasingly costly, plantation inputs such as land and labor.

Panama will continue to grow, and holders of our Forest Investment should be glad to see this. But Panama also needs to consider the potential of those who are currently excluded from the economic process. Until they become stakeholders in the growing wealth of the country, Panama will continue to have the road blocks and strikes that point to this economic disparity. In the meantime, we wouldn't feel too bad if all the luxury SUVs in Panama City were made to suffer the wait.

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Growing Demand for Cocobolo Wood

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A Cocobolo tree on the side of the Inter-American Highway in Darien, PanamaA Cocobolo tree on the side of the Inter-American Highway in Darien, PanamaCocobolo, (Dalbergia retusa) or Rosewood as it is commonly known, is one of the world’s most desired tropical hardwoods. Demand for the timber has reached record levels as of late, particularly in Asia, where it is so valuable that it’s sold in weight instead of the normal board feet measurement. This increasing demand is fueling illegal logging of virgin stands of Cocobolo in Central America, and even as far away as Madagascar.

Logging of Cocobolo has reached a feverish pitch in Panama, where loggers are encroaching illegally onto Indigenous Peoples’ land to extract the wood. As with most logging, the “poachers” are not discriminate when they harvest the Rosewood - they destroy significant amounts of forest to reach the one tree they want to harvest. The wood is culturally important to the indigenous, who use it medicinally and to create artisanry.

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Land Conflicts and Indigenous Lands

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Photo of Leaders of Arimae point out deforestation in the community's reservationLeaders of Arimae point out deforestation in the community's reservationThe Panamanian newspaper La Prensa recently ran an article about the Embera/Wounaan closing the Pan-American highway in the Darien. The block was a reaction to the Panamananian government’s failure to evict squatters from the reservation of our indigenous partner community Arimae.
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Conservation Refugees

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Members of Arimae's agricultural association looking at a map of the community's reservationTwo weeks ago the New York Times published an article featuring an Oxfam report on the forced and violent eviction of more than 20,000 Ugandans from their homes. In an effort to access the United Nation’s Clean Development Mechanism, in 2005 the Ugandan government granted the New Forests Company (NFC) a 50-year license to grow eucalyptus and pine for carbon credits. As seen by big financial supporters of the NFC such as the World Bank, European Investment Bank and HSBC (as well as many conservationists) this would help protect land, grow trees, capture carbon, provide needed jobs and generate almost $2 million in revenues. Everyone wins, right?

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Economic Development vs. Conservation

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Indigenous girls in Arimae perform a traditional danceIndigenous girls from Arimae perform a traditional dance"Don’t you think you’re ruining the traditional values and culture of this community by introducing technology into it?”

A young tourist posed that question to me during her recent visit to our indigenous partner community Arimae. She opposed the idea of teaching computer classes in what was supposed to be an authentic indigenous village (She did, however, take advantage of the computers to check her email).

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