Case Study: Development in the Tropics

The Katakana Tropical Forest in Guyana lies 50 kilometers (30 miles) from the Pacific Ocean at an altitude of about 100 meters (325 feet). It covers an area of about 50,000 kilometers (30,000 square miles) and is thought to be one of the most productive forest areas in all of South America. A desperately poor nation, Guyana is now considering the development of a large agricultural station in the Katakana. Government officials hope that farms and range areas established here would increase the nation's food supply by as much as 35 percent.

At present six small primitive tribes live in the Katakana. They survive by hunting in the forest and fishing in the Mbatku River that runs through the forest. None of the tribes appears likely to survive very long anyway. Since they were first discovered a century ago, their total population has dropped from about 12,000 to less than 1,000 today.

Biologists of other nations have expressed some concern about the loss of certain species of plants and animals that are found only in the Katakana. The Guyanan government acknowledges this possibility, but the government feels it is a price that must be paid to increase the quality of life among the human population of Guyana.

The Guyanan government has limited financial resources and will not be able to provide the $200 million needed to begin this project. It has, therefore, submitted a request for a grant and loan for this amount to the International Bank, They are requesting a developmental grant of $50 million and a loan of $150 million at 4.37 percent per year.

As a member of the board of directors of the International Bank,

how would you respond to this request? Choose any one of the nations listed below to represent and then hold a board meeting with other members of the class representing other nations.

Japan (two members)

Tanzania (one member)

Iraq (one member)

France (one member)

United States (four members)

Saudi Arabia (two members)

Venezuela (one member)

1. If Guyana cuts down part of the Katakana forest, what would they put in its place?

2. Why do they want to do this?

3. Who lives in the forest at this time?

4. How does the Guyanan government feel about the plants and animals in the Katakana?

5. How much would this project cost?

6. How will it be paid for?

Question: You are the member of the board of directors for the International Bank. How would you respond to the request of the Guyanan government for the $50 million grant and the $150 million loan?

Write a long paragraph or two explaining your position about this issue, from the point of view of a boardmember. Explain the request briefly, explain how you will vote, and then explain why you will vote that way.

1. The Guyanan government has secretly decided to go to a private developer if the bank refuses its requests. Three major multinational corporations have already expressed interest in helping with this project. In this case the developer would have the right to use 25 percent of the new agricultural land for the planting of coffee trees. Income from the export of the coffee would provide a financial return to the developer for its initial investment in the project. If you had known about this arrangement, would you have decided differently with respect to the bank's involvement? Why or why not?
   
2. As a member of the Guyanan government, what reasons might you have for opposing this project?
   
3. Explain why the soil in a tropical rain forest is usually not very productive for agricultural use after trees are cut down.

created by: Debbie Anholt, anholt@lclark.edu
updated: May 9, 2000