The Devil's Curve: Faustian Bargains in the Amazon

Bagua Grande, Peru—Daylight had not yet broken on a remote road outside this small city in the heart of the Amazonian rainforest of northern Peru. But along the narrow strip of highway—known to locals as the Devil's Curve—thousands of protesters were huddled. Most were members of indigenous tribes. It was June 5, 2009, and they had been blocking the highway for two months.

The tribes and the environmental activists allied with them were demanding the repeal of two legislative decrees that had opened the rainforest to oil exploration, mining and large-scale agricultural development. The Amazon natives feared new exploration would force them out, and felt slighted after the government set a plan in action without consulting them. Their confrontation with Peru's president, Alan Garcia, had reached a fever pitch.

Protesters built makeshift tents of plastic sheeting on the highway and used tree trunks and rocks to block passage to a lucrative oil pipeline and the road to Peru's northern ports. Helicopters swarmed over the crowd. Officers from the national police force trained their automatic weapons on the protesters gathered below.

The sense of crisis had spread all the way to the capital, Lima. Just a day earlier, Ollanta Humala, the head of the Peruvian Nationalist Party and a rival of Garcia, had called on Congress to set up an extraordinary session to repeal one of the decrees. His plea went unheeded. On June 5, Garcia ordered security forces to clear the highway. The siege began around 5:30 in the morning. Some 500 security officers flooded the road, firing tear gas into the crowd. As the violence continued throughout the day, 34 people died by gunfire, including 23 police officers.

"The number of people injured is unimaginable," reported Carlos Flores, a journalist for Radio La Voz de Bagua. "They're strewn all over the highway. Please, we need help to make the violence stop."

Journalists later reported seeing police dump bodies into the nearby Utcu-bamba River, and human-rights groups condemned the siege as a state-orchestrated massacre. Townspeople sympathetic to the indigenous protesters contributed to the melee, burning down a police station. Each side accused the other of responsibility for the brutal attacks. The political fallout began with the resignation of the prime minister several weeks after the siege. Eighteen months later, five indigenous leaders accused of inciting the tribes to violence in the protests leading up to Bagua were convicted of treason and sentenced to four years in prison. At least 250 other government complaints have been lodged against protesters, according to the indigenous-rights advocacy group Amazon Watch.

The incident at Bagua—the Baguazo, as it became known in Peru, using a local idiom to express the size of the event—attracted little international attention. But it serves as a stark reminder of the potentially high costs, both human and political, faced by developing countries hoping to spur economic growth by taking advantage of natural resources in environmentally vulnerable areas. It's a tempting path. But it comes with serious built-in risks and trade-offs—social and political, as well as economic—as Peru's leaders and citizens are discovering.

A Model for Balance?

As commodity prices soar on growing demand from China and other large markets, Peru might emerge as a proving ground for Latin American approaches to balancing economic growth with human rights, environmental concerns, and a respect for the way of life—or, in some cases, the very survival—of indigenous people.

The tension between these competing aims is roiling the entire Amazonian region and posing major challenges to its political leaders. In Ecuador, President Rafael Correa has pledged to refrain from drilling for oil in the Yasuni National Park, a 10,000-hectare, species-rich area of the Amazon that sits above nearly 20 percent of the country's oil reserves, forfeiting $3.6 billion in revenue. In Bolivia, environmental activists are waging a crusade to protect Madidi National Park, a 1.9 million-hectare nature preserve in the upper Amazon River basin where the Bolivian...