For the past 15 years, Paraguay’s leaders have been working to reduce poverty, democratize the country’s resources and social framework and eliminate corruption. They’ve been improving government transparency and stimulate the economy. There is much remains to be done. But now, in the wake of Horacio Cartes’s recent five-year term as president, Paraguay is poised for unprecedented growth on the domestic, regional, and world fronts. With a stable, positive growth rate, a stable price index and exchange rate, a relatively low public debt at 22% of the GDP, and a risk rating expected to reach investment grade in the near future, Paraguay is attracting the attention of global investors.
Economy vs. forests
But some of the country’s economic success has brought its equivalent share of problems. Paraguay’s primary economic focus for decades has been large-scale agricultural exports. For this, the forests have paid the greatest price. According to the DLR Earth Observation Center, the country has lost 90% of its eastern forest over the past 68 years. The eastern region, still 55% forest as late as the 1940s now has about 7.5% left of its forest cover. A 2016 report by the NASA Earth Observatory shows western Paraguay’s Gran Chaco forest as having lost almost 44,000 square kilometers from 1987 to 2012, primarily to large-scale ranching.
The Atlantic Forest and The Gran Chaco: Biodiversity under threat
Paraguay’s two great forested areas are the Atlantic Forests rainforest in the east and the Gran Chaco dry forest in the west, both of which are spread across several countries. Next to the Amazon, the Gran Chaco is the largest native forest in Latin America. It is home to thousands of plant and bird species and hundreds of animal and reptile species. As a whole, it has lost 20% of its cover since 1985, with 142,000 square kilometers replaced by cattle ranches in the ten years from 2006 and 2016. According to NASA, the rate of deforestation there is one of the highest in the world.
Among the Atlantic Forests’ fifteen ecoregions is the Upper Parana Atlantic Forest of Paraguay. In that place, one hectare plays host to 450 native tree species. Like the Gran Chaco, the Upper Parana Atlantic Forest is home to species found nowhere else in the world. Yet this forest has seen massive destruction, with a 91% loss of its cover. The 2003 report “A Biodiversity Vision for the Upper Paraná Atlantic Forest ecoregion” states, that the Atlantic Forests “have been ranked as one of the most biologically diverse forests of the world”. The forest as a whole is “one of the most endangered rainforests on earth”, with a “highly fragmented landscape” that threatens the natural biodiversity of the region.
The problem: Economy vs. environment
Since agriculture, ranching, and hydroelectricity have historically been Paraguay’s economic mainstays, the question becomes: How to create a sustainable economy while preserving the country’s forests? Cartes’s administration has addressed this to some extent by diversifying the economy and shifting the balance in favor of the services and manufacturing sectors. The economy has not only undergone fluctuations in the export market but also looks at potential agriculture problems created by climate change. In addition to stabilizing it against these factors, improving other sectors lessens the pressure on agriculture. It also allows the development of resources that can improve the economy and the environment.
Still, the fact remains that Paraguay plans on tripling its agricultural exports and improving its logistical infrastructure. Both can have a negative impact on the environment if approached without adequate thought. At the same time, both are critical to bringing the nation into the modern age and creating a viable economy that can hold its own on the world market. The bottom line is that there has to be a balance between development, reforestation, and conservation if the country is to avoid the ultimate destruction of the environment and the economy.
The need for a new understanding and new opportunities
A 2017 study published by MDPI again cited agriculture and cattle ranching as well as illegal logging as the primary factors behind the deforestation. With that, they are highlighting once more the need for a more sustainable approach to economic development. One of the study’s main points was that the smaller, poor, uneducated farmers lack an understanding of the impact of the forest on the environment. With few government regulations in place to control deforestation and insufficient education in the opposite direction, these small farmers see more value in agriculture than in conservation. Without comparable economic opportunities, instead of choosing to preserve the native forest, they lease their land to large-scale agricultural growers of soy and corn. Nor do they view forest products as having the same value as agricultural products.
South America: A growing green awareness
In spite of the situation with these poor, uneducated farmers, South America as a whole is acutely aware of the importance of the environment and the critical role of its ecosystems in maintaining a healthy regional and worldwide climate. A leader in renewable energy resources such as wind and solar power, the continent is taking an increasing number of measures to save the environment and combat global warming. Brazil has already begun to fulfill its pledge to reforest the Amazon with 73,000,000 trees. Also, they have been working for some time on developing sustainable agriculture practices. Paraguay itself has long been a major provider of hydroelectric power. The Itaipu Dam project planted 44 million trees and created a conservation area and wildlife refuge that covers 100,000 hectares.
A regional and global problem
We can no longer view the world’s forests as isolated local phenomena, as the loss of the forest cover is one of the major causes of global warming. In Ecuador, Peru, and Bolivia, the rising temperature has caused the rapid melting of the Andean glaciers. The scary thing: in some cases, they have already disappeared. In their turn, melting glaciers create a host of problems. For example the disruption of the north-south rainfall cycle, with its negative impact on agriculture and hydroelectric power. Additionally, problems such as flooding, landslides, and soil erosion are also possible. The preservation of the world’s rainforests takes on a more immediate significance.
But the effects of global warming and deforestation go far beyond the regional, with tropical deforestation potentially causing rainfall pattern changes on the other side of the world. Changes in rainfall mean changes in agricultural yields, which in turn impact the global economy. And the effects of global warming are well known: rising temperatures and sea levels, an increase in tropical storms, melting ice, changes in the patterns of animals and plants. All this points to one unavoidable fact: to invest in reforestation, no matter how distant from our own location, is ultimately to invest in ourselves.
Paraguay’s new paradigm: Economy and environment hand in hand
Like the rest of the world, Paraguay is aware of its need to balance economic growth with the need to save its forests. REDIEX, an agency under Paraguay’s Ministry of Culture and Industry, seeks to improve the country’s socio-economic climate through intelligent planning and promotion of investment and exports. With this in mind, it has pinpointed the following four items as areas for development:
- global food exports
- factory construction
- capitalizing on Paraguay’s central location, including its extensive network of rivers, to make it a regional logistics hub
- supporting forestry and renewable energy
Especially the fourth item is the key to the country’s healthy development. In their 2016 article “Paraguay’s Path to Responsible Land Use”, Ryan Sarsfield and Yan Speranza recommend the following tools as a means to grow the economy while saving the country’s forests:
- deforestation-free commitments
- cooperation between the private economic sector and active, competent civil pro-conservation groups that can advise on best practices
- constructive discussion and problem solving between private, civil, and government sectors on issues regarding sustainable agricultural development and the impact of forests
- use of data and technical tools such as satellite analysis for monitoring and responding to changes in forest conditions
- government commitment to combatting global warming and replenishing and maintaining the forests, as reflected in Paraguay’s National Development Plan 2030, which seeks to “control … deforestation,” increase forest cover and biomass, support reforestation, and reduce “loss and degradation of native forests.”
As the authors conclude, “The conditions and capacity in Paraguay afford it a tremendous opportunity to stimulate sustainable economic development, mitigate climate change and protect forests … Getting past the unproductive and short-sighted ‘development vs. environment’ paradigm and fostering collaborative partnerships between the private sector, civil society and government will put Paraguay on a path toward a balanced approach to production and protection.”
Putting it into practice: The seeds of change
Sarsfield and Speranza’s article describes what actually happened in January of 2016. By then Victor Yambay and his colleagues at Paraguay’s National Forestry Institute, with the help of the United Nations Development Programme, began working with various public and private organizations to clarify and close the loopholes in the Forest Law. The goal was to prevent opportunistic misinterpretation and encourage reforestation. In 2017, Paraguay’s revised Forest Law went into effect, giving new hope for the forests and providing a clear structure for multinational corporations with deforestation-free commitments already in place.
How does TreeCoin fit into all this?
TreeCoin’s mission is to reforest vast areas of Paraguay using TREEs and TreeCoins as currency. Our expert local partners have been experimenting for years to find the perfect hybrid tree. This tree produces high-quality wood and is fast-growing, easy to manage, and resistant to disease. The project itself has been ongoing for 10 years; way before TreeCoin was established. With the help of our local partners, we were able to develop and cultivate over 1000 hectares of land, save and reforest the remaining forest areas, and plant over 1 million trees. With TreeCoin, we are now able to take the next big step. TreeCoin Project has created a value system consisting of two digital currencies. A security token (TREE), with the right to profit from the harvest yields, and a payment token (TreeCoin), a currency for use within this ecosystem and created especially for this purpose.
Paraguay: The perfect environment and workforce
As an emerging nation with a young workforce and an openness to innovation, Paraguay presents the perfect opportunity for this type of project. Although only 1.3 out of its 7 million inhabitants possess bank accounts. But 76% of the population owns a smartphone. Many of the country’s people also live in remote rural areas, which makes traditional banking more difficult. So cryptocurrency presents a viable payment option.
A complete approach: Benefits on multiple fronts
Here, TreeCoin can create opportunities and solve several problems all at once by
- helping to restore the country’s forests
- afforesting fallow land
- improving the economy by encouraging sustainable, forestry-related products, especially those that service the growing the demand for wood and its various uses, such uses as pulp, paper, and wood for furniture and construction
- improving land cultivation and the hospitality sector for the benefit of investors, tourists, and locals interested in the project
- creating related jobs for Paraguay’s youthful, energetic workforce
- facilitating payment for Paraguay’s citizens in remote areas and for the many citizens without bank accounts
- giving investors a chance to profit financially and be a part of the global movement to save the planet
The key is to balance economic improvement with sustainable forestry and agroforestry practices that, instead of destroying the forests, will maximize the beneficial effects of trees. And Paraguay and its people are ripe for the opportunity.