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Page last updated at 23:33 GMT, Wednesday, 28 April 2010 00:33 UK

Can free market economics boost Amazonian land rights?

Yagua villagers
Economist Hernando de Soto has taken up the indigenous people's plight

By Linda Pressly
Crossing Continents, BBC Radio 4

Two small fish wrapped in banana leaves and six plantains. This is what Lorena has to feed her six youngest children.

Next to the open fire in her tidy wooden kitchen is a wooden receptacle. Lorena uses this for pounding cassava to make a drink called Masato. But it is scrubbed clean. There is no cassava. Lorena is struggling to feed her family.

Lorena

"We have a lot of problems with commercial fishermen who come here with their nets," she says.

"It means we can only find small fish. My husband's away hunting in the forest. He's been gone a month now.

"It's unusual for him to go for that long, but it's more difficult to find meat now."

The indigenous Yagua community of Santa Ursula lies on the Oroza river, a tributary of the Amazon in Peru's far north-east. It is four hours by fast boat from the nearest large town, Iquitos.

Violent clashes

Around 150 people live in Santa Ursula, but there is an absence of young faces. Many - like Lorena's older children - have left to try their luck in the towns.

To an outsider, life here looks idyllic. The people are warm and welcoming, children swing in hammocks and play with pet monkeys. But every so often the distinctive sound of a chainsaw or motorboat cuts through the stillness.

Slum scheme beneficiary Ernestina Ponce Panche shows off her improved house

It is the sound of the interlopers who come and take the wood, meat and fish from Yagua land. If the outsiders do trade with the Yagua, they always want to barter rather pay in hard cash.

Now the plight of the indigenous people of the Amazon has been taken up by Peru's most famous economist, Hernando de Soto.

He got involved after a bloody confrontation in Bagua last year between indigenous groups and the police.

It was sparked by fears that the government of President Alan Garcia would allow companies further access to the resources of the Amazon. More than 30 people were killed.

Economic benefits

Hernando de Soto believes modern property rights are the key to propelling communities like Santa Ursula out of poverty.

"They need what the rest of us have - clear property rights over what they own, so that they can get credit and capital, and so that there's no discussion over who owns what.

"And the second thing they need is organisation. You can do business with an organisation, you can't do business with a tribe."

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In Santa Ursula the Apu - the leader - carefully unfolds a photocopy of the community's land title. Attached is a map showing their demarcated territory.

It is a communal land title, issued according to the law that gave recognition to Native Communities in the Amazonian region.

But Hernando de Soto says this law has isolated them from the global economy.

"It doesn't make them part of the system. I'm sure the title was given to them with the best of intentions, but there are restrictions," he says. "It's communal, they aren't recognised as private individuals.

"It's like a telephone that only connects to one other telephone, while your telephone connects to 6bn other telephones."

Empowerment

Hernando de Soto is feted by the World Bank and by governments around the globe for his work on the economic benefits of property ownership.

It all began in Lima 20 years ago when he and his Institute for Liberty and Democracy persuaded the government to give formal property titles to poor people squatting in the barrios of the city.

Ernestina Ponce
Ernestina Ponce says getting the title to the land has changed her family's life

In the 1990s alone, 1.2m householders were given the title to their property. Ernestina Ponce is one of those who became a homeowner as a result of Hernando's scheme.

She lives in Villa El Salvador, and was one of the original migrants who came in the 1970s and pitched her makeshift shelter on then-unoccupied land.

"Getting the title for my home meant I could borrow money from the bank, so I could do more construction on the house, but also get credit to set up a business," she says.

But academics have challenged Hernando de Soto's supposition that property ownership brings development.

A study by Desco, a Peruvian think-tank, found that access to credit in titled households had not increased, and patterns of employment were broadly similar across titled and non-titled households.

"The most important areas of Lima were developed because of land security and the availability of water, not because the people who lived there were given land titles," says Desco researcher Gustavo Riofrio.

Control

Hernando de Soto is undeterred. His institute has already been in touch with more than half of some 1,500 indigenous communities. Many are interested - but not everyone is on side.

There is deep suspicion in some quarters, and fears that if people in the Amazon get individual property rights, big business will buy up their resource-rich land.

"Hernando de Soto wants to bring trans-national corporations and the capitalist world to the Amazon to take advantage of indigenous people.

"We do believe in development, but we want it on our own terms," argues Saul Puerta, national secretary of the indigenous organization Aidesep.

In Santa Ursula people say they want to be paid a fair price for their goods so they can spend that money on education, and western medicine.

"What's the point of owning the land if we can't control it?" asks Lorena.

The Yagua of Peru are unable to enforce the rights they already have. Could modern property rights change that? Hernando de Soto certainly thinks so.


Crossing Continents will be broadcast on BBC Radio 4 on Thursday, 29 April 2010 at 1100 BST.

You can also listen to Crossing Continents on the BBC iPlayer or subscribe to the podcast.



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