Economic Informality and Gold Mining in Madre de Dios

Travelers exploring Peru are sure to be struck by its incredible diversity in every sense of the word. The coast, the Andes, and the Amazon vary greatly in their climates, cultures, and industries; however, their economic situation shares one major characteristic in common. Large swathes of the working population, about seventy-three percent according to one study, remain in the informal economy.[1] The informal economy represents roughly 19% of the nation’s GDP, and is projected to be a significant part of the nation’s economy until at least 2050. Despite Peru’s above average growth in GDP over the last decade, reductions in the size of its informal economy have not kept pace with other comparable Latin American countries. [2] This large informal sector is a significant problem for the nation not only for economic reasons, but also because it limits the ability of the Peruvian government to properly and effectively govern.

One example of the government’s inability to govern properly and effectively is in the area of illegal and informal gold mining.[3] Over the last ten years the Madre de Dios region of Peru has experienced a massive gold rush. Miners have immigrated to the area from all over Peru and from neighboring countries. Previously, Madre de Dios was largely undeveloped and mainly consisted of rainforest and small communities. Due to the increase in the global demand for gold and the large influx of miners to the region, mining has become an extremely lucrative sector of the Madre de Dios economy. However, since the overwhelming majority of miners in this region are either informal or illegal, most of this revenue is completely outside of the formal economy. Additionally, informal and illegal mining bring other businesses in their wake. Entire towns have sprung up around the gold mining industry. These towns exist outside the control of any government, but are quickly developing. For example, I recently traveled to La Pampa, which is one of the largest gold mining towns and is right off of the Interoceanic Highway between Brazil and Peru. As our group drove through the town, we were able to see dentist offices, doctors’ offices, drugstores, hotels, and churches, all within a few feet of the highway. Since these towns are outside the formal structure of Peru, many of these businesses likely are outside the formal economy as well.

One of the key reasons that the size and nature of Peru’s informal economy limits its ability to properly and effectively do its job is that the lack of government oversight of the informal economy allows other problems to emerge and flourish. While the mining industry and related businesses are lucrative sources of income and employment for the Peruvians involved in them, these ungoverned and unregulated towns are also home to serious social, environmental, and security problems. These towns are havens for sex trafficking and labor trafficking. In addition, mining is an incredibly hazardous occupation, and in these places, there are essentially no protections in place for workers. Environmentally, mining activity is destroying large sections of the Amazon rainforest, including in protected areas, and releasing harmful quantities of mercury into the rivers of the rainforest. These activities raise problems on the security side as well because these towns are ungoverned by the formal authorities and must resort to other means of settling disputes. This provides the potential for violent and dangerous activities such as inhumane executions and other forms of “justice.”

This lack of oversight is compounded by the potential tax revenue generated by the informal sector that is not collected by the government. Lack of resources is a critical problem for enforcement of existing laws against illegal mining, human trafficking, and environmental protections, particularly in the Madre de Dios region where large segments of the region are remote and difficult and expensive to access. This vicious cycle of lack of oversight leading to a lack of potential resources leading to an increased lack of oversight and an increased loss of potential resources appears likely to continue into the future of the Madre de Dios region.

In their 2014 review of the literature on informal economies, La Porta and Shleifer argue convincingly that “structural policies designed to promote formality should be introduced with caution.” They continue by saying that the value of these types of policies depends on “whether they encourage formalization, or discourage informal activity,” and reach the conclusion that the “cure for informality is economic growth” combined with “educated entrepreneurs.”[4] In the case of other parts of Peru’s informal economy, such as some forms of tourism, street vendors, etc., their advice should prove useful. However, given the complex set of problems in the area of informal and illegal gold mining, more creative policy approaches will be necessary.

By Nate Frierson


[1] CEPLAN. “The Informal Economy in Peru: Current Situation and Perspectives,” 1st ed. Lima, Peru. March 2016,

[2] CEPLAN. “The Informal Economy in Peru: Current Situation and Perspectives.”

[3] NOTE: This terminology can get confusing when talking about the topic of the informal economy. The informal economy refers to unregistered economic activities that contribute to GDP and generate unreported income through the production of legal goods and services. In Peru, a distinction is made between informal and illegal mining. “Informal” mining is mining that is conducted without completing the proper government formalization process. “Illegal” mining is conducted without the government formalization process and is conducted in areas where mining is prohibited. Neither of these activities are part of the formal economy.

[4] Rafael La Porta and Andrei Shleifer, “Informality and Development,” Journal of Economic Perspectives, Volume 28, Number 3, Summer 2014, 109–126,


Gold Mining in Madre de Dios and the Cost of Doing Business

Most of us with a basic understanding of economics are familiar with the concept of a monopoly, a market failure where there is only one seller of a good. This market inefficiency leads, among other things, to prices that are too high due to total control of the supply of a good by the company that holds the monopoly. Less commonly known is the idea of the monopsony, a market failure where there is only one buyer of a good. A company operating as a monopsony enjoys many of the same benefits as a monopoly, to the detriment of those in its employ and the surrounding environment in which it operates.

The illegal gold mining market operating in the Madre de Dios region of Peru can lay claim to being a monopsony, in this case as the singular, or certainly most significant, purchaser of labor in the region. Gold mining, traditionally done in the surrounding mountains, has quickly overtaken the densely forested region, moving far quicker than any government regulators could possibly hope to manage. With the promise of wages exceeding what they could get in formal labor markets, workers arrive from the Andean highlands and elsewhere in droves. These workers operate at great risk to their personal health and safety, constantly exposed to dangerously high levels of mercury and subject to a “frontier justice” system that keeps them under control.

In many ways though, gold mining outposts also operate as local monopolies, with the same power structures that employ workers also providing their housing, equipment and food, for a cost. Small infractions of rules that may or may not have been explicitly communicated to the miners beforehand result in ever-growing fines with compounding interest to keep workers in a cycle of debt. Often, though, the cost is not simply financial. The enormous and ever growing business of illicit “prostibars” feeds on a steady supply of young, poorly educated women with little means of supporting families who, in turn, cannot support them.

The region’s weak and ineffective governance structure ensures that gold mining operators maintain little fear of actual threats to their business operations. There is little incentive to keep details of operations a secret. Indeed information about conditions and dangers of mining operations to the people working them and the greater environment is well-known. Evasion of law enforcement is as easy as maintaining contacts within the police, who alert mining operators well in advance of a raid. When the police arrive, they are met with a ghost town, an empty shell with all the signs of recent human habitation and hurried, thorough evacuation.

Thus the cost of doing business for illegal gold mining operators remains well below their profit margins. The abundance of cheap and easily controlled labor makes workers cheaper to discard than protect. Enforcement mechanisms are a mere formality and market demand, with the growing need for gold in electronic devices, continues to grow. In this way the monopsonistic and monopolistic traits of gold mining operations feed on each other like a snake eating its tail.

By Whitney Allen

The People of Infierno

Bienvenido a Infierno! For those who speak Spanish, an enthusiastic greeting of “Welcome to Hell!” may not be very appealing. One of the more common explanations of how this Amazonian community of Ese’eja (pronounced esse-ayha) indigenous peoples in Peru’s Madre de Dios region got their name is from outsiders’ expectations. A trip to the jungle may seem like a paradise where the sun always shines and natural resources are abundant, but when met with heat, humidity, snakes, mosquitos, and jaguars, outsiders are led to wonder if this is more like hell, or “infierno.” However, for the community that has assumed the Infierno name, ties to their Amazon rainforest land are a point of pride and a living symbol of the community’s resistance, resilience, heritage, and beliefs.

According to Ese’eja legend, this community was once made up of people who lived in the sky. With the help of animals including monkeys, cicadas, peccaries, and a giant armadillo, the Ese’eja learned to live here on earth. The animals throughout the Amazon are greatly respected, as Ese’eja believe that after death humans could be reincarnated in animal form. Plants are also held in high regard by the Ese’eja as integral features of their livelihoods. Plants are used to produce food, medicine, tools, homes, boats, and even colorful clothing, baskets, and jewelry. Spiritually, the grandeur and vastness of flora in the Amazon also lends itself to a religion that places a high value on plants as well. In particular, the ceiba (pronounced “say-ba”) tree is thought to be the heart and lungs of the entire rainforest. Local mythology says that within the ceiba tree trunk lives a princess that is being protected from the devil who seeks her. Hundreds of years old, several feet in diameter, and dozens of meters tall, these trees are home to countless species of insects and endangered birds. It serves as one of the strongest reminders to the Ese’eja and to outsiders alike that conservation of the Amazon in its natural state is paramount; even if one vows to replant after cutting down forests for economic use, most things cannot be easily replaced.

Ese’eja efforts to protect their land and their community were underway as early as the late 1800s when foreigners entered the Amazon in search of rubber trees. Outsiders exploited the forests and built roads through the land without regard for the communities living there, and even forced indigenous people to work in the rubber camps. Several Ese’eja were killed because of the labor conditions and a lack of immunity against foreign diseases brought by the newcomers. Despite these trials and the influence of religious missionaries who attempted to change their way of life, the people and their culture remained. In 1976, the Peruvian government officially recognized 14 Ese’eja families and 6 families that descended from the rubber era as the community of Infierno. Infierno is currently made up of over 500 people, constituting about 20% Ese’eja, 21% Andean immigrants, 23% local immigrants, and 34% mestizos. With this formal government recognition, the people of Infierno have established schools for their children and legal rights to their land.

Today, the Ese’eja and other persons in the Infierno community are actively protecting their land, their culture, and close to ten thousand hectares of the Amazon through their partnership with ecotourism company Rainforest Expeditions that began in 1996. In Rainforest Expedition lodges, staff and guides are primarily made up of local community members and other Peruvians. They provide insight both into the various flora and fauna of the Amazon and into the culture of the local community as a way to preserve both the environment and their people. Profits from the lodge are split between Rainforest Expeditions and families in the community. Community funds are distributed both as income and as investments toward improved education, elderly care, and health care. Incomes have dramatically increased from about USD 150 per household in 2001 to over USD 800 by 2007 because of the partnership. Eventually, the Infierno community plans to take over the management of the ecotourism lodge completely. Politically, they have advocated against the construction of the interoceanic highway in the Madre de Dios region, established strong partnerships with surrounding communities, and mobilized support for environmental biodiversity protections and civil rights for Amazonian peoples.

With the help of ecotourism, this community is taking steps to preserve their indigenous culture, share their history, protect the environment, and, overall, to make their Infierno community in the Amazon a paradise for foreign tourists, for the plants and animals of the rainforest, and for themselves a little more every day.

By Corinne Paul


Corcoran, Joseph et al. Ese’eja Native Community of Infierno, from “Equator Initiative Case Studies Local sustainable development solutions for people, nature, and resilient communities.” (2017).

Ese’eja community center & Rainforest Expeditions guides.

Stronza, Amanda. Commons management and ecotourism: ethnographic evidence from the Amazon. International Journal of the Commons. 4(1), pp.56-77 (2009).

Woodward, Catherine. The Ceiba Tree.

Why Is Posada Amazonas a Successful Ecotourism Business?

Posada Amazonas is one of the three Amazon jungle lodges built by Rainforest Expeditions, a Peruvian ecotourism company. Posada Amazonas, a joint venture between Rainforest Expeditions and the Native Community of Infierno, started to yield a profit in 2001. It has continued to bring benefits both in terms of economic development and environmental protection for the past two decades. As the closest lodge to Puerto Maldonado, Posada Amazonas is “perfect for your first taste of the Amazon’s natural wonders,” according to its website. Why has Posada Amazonas succeeded in ecotourism, considering the potential challenges of a joint venture between a local native community and a business from Lima?

First, Posada Amazonas’s success comes mainly from cooperation between the native community and the private company. The Infierno community and Rainforest Expeditions have common interests in developing ecotourism. The community wants to use their land sustainably and with low environmental impact, which both helps them improve their livelihood and protect the environment in which they live. At the same time, Rainforest Expeditions, as an ecotourism company, aims to transfer the rainforest’s natural value into a business product using its business strategies and experience in running lodges. With these overlapping visions, Rainforest Expeditions and Infierno signed the original 20-year contract in 1996 and extended it for another three years in 2016.

From the outset, the company and community agreed on a 40-60 benefit-sharing plan respectively. The lodge brings job opportunities and helps local people improve their livelihoods to a great degree. For example, the guides working in the lodges earn $6000-$8000 per year (at least ten years ago), making them among the wealthiest members of their community.(1) In addition, joint decision-making is an important feature of the partnership.

Second, Posada Amazonas provides outstanding services on the basis of understanding its customers’ needs. Rainforest Expeditions accumulated plenty of experiences and visitors’ feedback when operating Tambopata Research Center before starting Posada Amazonas. It learned from the guests that contact with the jungle is a big attraction. As a result, one of the signature features of today’s Posada Amazonas is only three walls with the fourth directly open to the forest. Although this openness is a big challenge in terms of keeping the rooms clean, the lodge still surprises me because there are not that many insects. Also, the lodge provides good Peruvian food sometimes mixed with Asian flavors.

 Figure 1. A clean room at Posada Amazonas

Figure 2. Good food at Posada Amazonas

The highlights in Posada Amazons are the ample activities it provides, including hiking to look for wildlife such as macaws and monkeys, a spectacular view from the 30-meter scaffolding canopy tower, a catamaran tour to look for giant river otters on Tres Chimbadas Lake, a farm visit to learn about local agriculture and fishing, and a community visit to experience the history and culture of the Ese’Eja people.

Figure 3. Spectacular view from the canopy tower

Figure 4. Footprints of a jaguar we saw when hiking at Tambopata Research Center

In short, Posada Amazonas is such an excellent ecotourism business because Rainforest Expeditions and the Ese’Eja native community seek to minimize conflicts and gain more business opportunities, and because it fulfills guests’ needs through lodge management and activities development. Of course, Rainforest Expeditions also uses other business strategies such as hiring marketing consultants to help local people improve products and gain profitability and creating a website to advertise and help guests plan their travel. Its successful experiences are no doubt good examples to study for other ecotourism projects.

By Ye Guo


1) Jamal, T., & Stronza, A. (2008). `Dwelling’ with ecotourism in the Peruvian Amazon: Cultural relationships in local—global spaces. Tourist Studies8(3), 313–335.

2) Website of Rainforest Expeditions: history/

Tambopata Research Center Macaw Project

Deep in the Peruvian Amazon sits the Tambopata Research Center (TRC). The center is not only home to a beautiful lodge used for ecotourism, UMD’s main reason for visiting, but a site for macaw research. Shannon, one of the research volunteers working on the project, gave a presentation after dinner one night telling us about the Tambopata Macaw Project.

Macaws belong to the parrot family with a distribution range from Mexico to Argentina. There are sixteen existing species, six of which are found at TRC (scarlet, red and green, blue and yellow, chestnut fronted, red-bellied, and blue headed). Macaws are in trouble because of habitat loss and forest degradation from logging and gold mining and because of hunting and poaching of the birds for pets. The exotic pet trade, including macaws, is the third largest illegal industry in the world behind drugs and guns. The Tambopata Macaw Project (TMP) was started in 1989 under the direction of Eduardo Nycander and went until 1993 until there was a break because of inconsistent scientific data collection. The project was started again in 1999 by Donald Brightsmith at Texas A&M University.[1] There are three core areas under study: clay lick use, nest availability and breeding, and chick development.

The TRC clay lick is around 500m wide, one of the largest in the Amazon. By studying the clay licks, researchers are trying to answer why birds descend to the clay licks to ingest clay. They figure it must be vitally important given the threat of birds of prey and other predators while macaws are on the ground, although the existence of predators has an effect on the time of day that the macaws and parrots use the lick and on the social interaction of different species when using the lick. Macaws use clay licks for the sodium content in the clay and because nutrients are low in the forest soil and otherwise taken up quickly by trees and other plants. They ingest the clay for its minerals that provide protection from dietary toxins, and for sodium supplementation. The sodium content of the TRC clay lick is forty times higher than in the soils of the surrounding environment.[2]

Shannon went on to break down the hypothesis for us regarding the importance of the clay lick. Use is very high from October through February during the wet season. Birds with chicks go to the clay licks more often to bring the nutrients back to the chicks, during the first 20-40 days of their lives. What the center’s research has found is that the primary reason macaws go to the clay licks is for sodium supplementation. The sodium is important for the birds’ brain and muscle development.

The researchers also look at nest availability and breeding to see why the macaws choose the nests they choose and why this is important. They want to understand nest ownership length and territoriality, whether being territorial can have an impact on chick development, and nest preferences. There are three nest types around TRC. Wooden nests (10 in number) and PVC nests (15) are set up by researchers; there are also natural nests (19), which the red and green macaws prefer.[3] Understanding nesting and reproduction is a large part of the project and important for evaluating different methods to increase reproductive success of macaws since the birds naturally have a low reproductive rate. Previous TMP researchers have shown that the low reproductive rates are because: “1) there are not enough suitable nest sites, 2) only about 60% of nests fledge young, 3) many natural nest sites suffer higher failure rates because they are either too shallow or wet and 4) successful nests usually fledge only one or two young.”[4]

The third aspect that TMP examines is chick development to see why some live and why some don’t. Macaws typically lay two to four eggs but only one or two fledge successfully, as mentioned previously. TMP researchers wonder if this has to do with sibling competition and/or parental selection. When more than two eggs hatch, the third and fourth chicks usually experience death by starvation. The researchers placed cameras in the nests to study this and found that the mothers push the third and fourth chicks to the side during feeding time. In other words, parental selection appears to be the main reason only one or two chicks fledge. At TRC researchers are investigating whether chick translocations will help the survival of chicks. They want to see if moving them to another nest will save chicks from starvation and test adult acceptance of chicks that are not their own. [5]

I was very fortunate to have the opportunity to visit TRC with UMD and learn about the Tambopata Macaw Project. I am grateful to Shannon for teaching us more about the research and how ecotourism can impact macaws.

By Chloe Mazzone


Most information is based directly on Shannon’s presentation at the Tambopata Research Center.

[1] Shannon. “Tambopata Macaw Project.” Tambopata Research Center, 19 March 2018. Lecture.

[2] Shannon. “Tambopata Macaw Project.” Tambopata Research Center, 19 March 2018. Lecture.

[3] Shannon. “Tambopata Macaw Project.” Tambopata Research Center, 19 March 2018. Lecture.

[4] “Project in Details.” Project in Details – Tambopata Macaw Project,

[5] Shannon. “Tambopata Macaw Project.” Tambopata Research Center, 19 March 2018. Lecture.

Agricultural Practice in the Peruvian Amazon 

In the Peruvian Amazon rainforest, the local indigenous communities can grow and harvest many fruits and vegetables. In the Native Community of Infierno, the produce first feeds the Ese’eja families and then goes to Puerto Maldonado and the ecolodges in the region. The Ese’eja prefer to farm in easily accessible areas and to plant fast-growing crops. The primary crops are rice and banana. The current agricultural practice includes what’s known as “slash and burn” agriculture. The process includes cutting down half to a whole hectare. This is done during the rainy season, which typically begins in September or October. After the trees are cut, the area is burned to get rid of weeds and fertilize the soil. When it rains, the soil gives tons of nutrients to the forest.

On our first night at Posada Amazonas, our guide (and the Native Community of Infierno Vice President) Oscar, described how they would like to find better sustainable agricultural practices. The slash and burn process does not work well over the longer term. It depletes the forest and it can be difficult to manage the fires. The community is currently working with NGOs to develop new farming techniques that can help improve the farming business in Amazonian Peru. I wonder what other countries or regions have similar vegetation and landscapes such that there might be lessons learned for agriculture. Guatemala or Bolivia? Are there organic farms elsewhere in South America or in Asia that the community could learn from? Agroforestry was even discussed, as a farming technique that combines crops with forest.

We discussed rubber and bamboo as viable exports. Bamboo grows fast and could complement the existing rainforest environment. The goal is to have a continuously revenue-producing product that can be distributed nationally and overseas (as an export) which can turn into a profitable business for the Infierno community. The challenge is that the community does not have the infrastructure to develop and sustain a mass market business. Government support is needed to provide further concessions for agricultural land and the structural capacity to grow, package, and deliver produce to the surrounding areas and main cities, namely Cusco and Lima. It appears imperative that the Peruvian government be involved in helping to develop sustainable practices that would benefit the people living in the Amazon.

Another possibility that needs further study is to grow agricultural crops in areas deforested due to illegal gold mining. During our trip, we visited a deforested gold mining area in the Madre de Dios region. Due to the area’s proximity to the standing forest, there were signs of renewal and wildlife coming back to the land. It was a sign of hope that there is potential for the forest to regenerate itself. The challenge would be creating viable crops, since mercury has been used for illegal gold mining and may remain in the soil. In Puerto Maldonado, we spoke with a researcher from Centro de Innovación Científica Amazónica (CINCIA). I asked about the mercury levels in the soil. He stated that through his testing, the mercury levels were low. There is still more research needed to confirm the effects of mercury in the soil, including mercury testing in health centers to test mercury levels in people living in affected areas.

Finding viable farming solutions in the Amazon rainforest has proven to be an ongoing issue. When thinking of solutions, I believe it would be a good research project to have Amazon farmers work with an agricultural program with a US or South American university to test different options or to partner with an organic farming company to develop a business model in which they grow produce and export the product, supporting the local community. I’ve seen more and more US “for profit” businesses developing relationships with indigenous communities to market their local specialties and products. The Peruvian Amazon is one of the most biodiverse places in the world. The goal is to preserve the environment and provide a positive business model for local communities.

By Dakia Kelly-Adams


Agriculture – Infierno community center

Indigenous Use of the Amazonian Ecosystem

The Amazon rainforest spans many countries in South America. In our case, Peru was the target country for a focus on indigenous uses of the Amazonian ecosystem; more specifically, uses of the Amazon rainforest in the Madre de Dios region.

The Amazon rainforest, sometimes referred to as “the lungs of the planet,” has been threatened by mining, logging, and ranching. The reckless exploitation of the Peruvian rainforest directly harms the environment through deforestation, mercury pollution used in illegal gold mining, and other impacts. This indirectly impacts the well-being of local communities as well the resilience of the Amazonian rainforest. With little conservation assistance from the Peruvian government, local communities such as the Native Community of Infierno try to make wise use of the Amazonian ecosystem through ecotourism and agroforestry.

The Native Community of Infierno and the ecotourism company, Rainforest Expeditions, signed a 20-year contract in the mid-1990s to develop ecotourism in the Amazon rainforest through the lodge, Posada Amazonas. Rainforest Expeditions has three ecotourism projects in the rainforest: Tambopata Research Center (TRC), Refugio Amazonas, and Posada Amazonas. In these ecotourism programs, after enjoying the tropical scenery along the Tambopata river, tourists are delivered to the eco-friendly lodges, which are designed to embrace nature. During their stay in the rainforest, customers can participate in different activities, enjoying the beauty of nature and local traditional culture.

As the old environmental adage goes, “Take only pictures, leave only footprints.” In order to propagate ecotourism as well as mitigate the impact of human activities on the ecosystem, the establishment and operation of ecotourism lodges follow principles and practices of sustainable development down to the use of biodegradable toiletries at the lodges. As a result of sustainable ecotourism, many studies find that deforestation rates in areas of indigenous and community-managed forest are comparable or even lower than those in state-managed protected areas[1]. Javier Gordillo, a researcher and consultant on ecotourism who worked with Rainforest Expeditions for many years, told us that the rainforest environment has been improving, and one example is that wild animals are less concerned about the presence of human beings and come closer to the lodges. Apart from the positive environmental impact of ecotourism, Gordillo admitted that there are negative environmental impacts. He said that food waste from the lodges can attract rodents, which can be disruptive to the ecosystem. Beyond Rainforest Expeditions, many people have understood that ecotourism can bring benefits and some have simulated the Rainforest Expeditions ecotourism model and built their own lodges to attract tourists interested in the Amazon forest. Without the professional knowledge of Rainforest Expeditions, however, I suspect that some of the ecotourism in the Amazon rainforest could have negative effects on the forest.

Ecotourism provides a supplemental income to many local rainforest communities. The income for most Amazonian communities, however, comes from agricultural products. As the awareness of the importance of environmental protection and recognition of the benefits of ecotourism grow as a result of ecotourism development, traditional agriculture is turning to ecosystem friendly agroforestry systems. The main products of the local communities are papaya, banana, sustainably harvested timber woods, and palm (not for palm oil), as well as Brazil nuts. Our guide Uriel in particular introduced us to how the local people harvest Brazil nuts in the forest without interrupting the ecosystem. Local people also construct fish farms to supplement agroforestry. Fish farms provide a solution to the mercury contamination of rivers, and thus fish, by informal and illegal gold mining.

It is easy to draw the conclusion that agroforestry is a more sustainable way of agriculture in Amazonian rainforest. However, some may argue that ecotourism can lead to damage to environment. I think any use of the rainforest will bring some form of disruption to the local ecosystem. I believe ecotourism and agroforestry are better solutions to the tension between economic development and environmental conservation than the traditional exploitation of nature resources. In my opinion, it would be ridiculous forAmazon communities to have to embrace the beautiful rainforest while facing malnutrition and under-education. If one simply bans all exploitation of the rainforest because of potential damage to the environment without any alternative livelihood opportunities for local indigenous people, the outcome of such a rough approach to governance could be immigration or, even more severe, revolution. Peru is a developing country with limited funding, knowledge, and technology and with ineffective governance. Given limited help from the government, local self-regulation, which in this case is wise use of the ecosystem, can not only bring more opportunities and profit, but mostly important, empower the local people to believe in the potential of the people and the rainforest.

By Xinye Zheng


[1] Yale School of Forestry and Environmental Study, Indigenous Reserves and Community Forests, retrieved on March 25, 2018 from

Community Development Oriented Ecotourism in the Amazon

The Posada Amazonas Lodge in the Madre de Dios region of Peru is a unique model of community development oriented ecotourism. Located in the Native Community of Infierno, which is home to Peru’s Ese’eja people, the lodge is partially managed and owned by the community and has provided millions of dollars of profits to the residents since opening in 1998. The key components of the Posada Amazonas model that differentiate it from most ecotourism projects is that it uses community land and encourages conservation efforts in the indigenous community; its ownership and profits are shared with the community; and its organizational charter includes a plan for eventual transition to full community ownership and management. Twenty years in, the project has experienced both successes and setbacks, and in 2018 finds itself faced with several challenges it must confront head-on to ensure continued growth and prosperity in the Infierno community.

Posada Amazonas began as a joint venture in 1996 between leaders in the Ese’eja community and the Peruvian tourism company Rainforest Expeditions. Rainforest Expeditions already owned and managed the Tambopata Research Center and lodge, six hours further up the Tambopata River from the site of Posada Amazonas.  Several members of the Infierno community saw the rapidly developing ecotourism industry in the area as an opportunity to bring prosperity to their remote village and sought a partnership with Rainforest Expeditions to leverage their marketing and lodge management expertise. After two years of work to secure approval from the entire Infierno community and a license from the Peruvian government, Posada Amazonas opened in 1998 to its first paying customers. The lodge’s profit-sharing agreement provided for an initial 60-40 split between the Native Community of Infierno and Rainforest Expeditions, and after twenty years ownership and management would completely transition to Infierno.

Every ecotourism project claims a benefit to the local community, but that often does not extend beyond hiring local staff for low- and mid-level positions at lodges and restaurants. The Posada Amazonas model is fundamentally different, providing significant economic benefits and long-term growth potential to the Ese’eja community. The lodge earned a profit within five years of opening and by 2010 provided over two million dollars back to the Infierno community through profit sharing and wages paid to staff.[1] Community members provided the labor to build the lodge and are involved in every facet of running the project, continuously developing their abilities to manage the project on their own in the future. The Ese’eja have placed additional land under conservation protections since beginning the project to ensure the continued biological diversity of the area around the lodge.

Attracting an influx of money and growth opportunities can be challenging for a rural community, and Infierno is not immune to this problem. The community works to invest its capital in ways that promote longer-term growth, including in schools and infrastructure, but is still heavily dependent on the ecotourism project for its livelihood. In 2017, the Ese’eja community of Infierno elected to extend its partnership with Rainforest Expeditions instead of taking over the lodge itself, a decision born out of its concerns about the responsibility of marketing and managing the project entirely on its own. The community is equally concerned about environmental degradation of the Tambopata River and its surrounding ecosystems from increased illegal gold mining in the Madre de Dios region. Finally, the community’s first generation of ecotourism leaders are nearing retirement, and thus far the younger generations of Ese’eja have not sought out the higher-level positions such as guides and guest managers, possibly due to the advanced schooling required to attain such positions. These problems are no secret in the community, but they will require all of the Ese’eja people’s characteristic ingenuity and perseverance to overcome.

By Nat Kaine


[1] Stronza, Amanda Lee. “Commons Management and Ecotourism: Ethnographic Evidence from the Amazon.” International Journal of the Commons, vol. 4, no. 1, Feb. 2010.

Indigenous people’s rights and land tenure

Peru has unique geographic and demographic features. Located on the western coast of South America, Peru is the fourth largest area of tropical forest in the world after Brazil, Congo, and Indonesia. Among its land territory, almost 60% of Peru is located within the Amazon Basin region.[1] With such a massive rainforest, Peru has some of the highest biodiversity in the world. Peru is also a multi-ethnic country with a large variety of indigenous communities. Indigenous people represent 45% of Peru’s 32 million population.[2] In the Amazonian region alone there are more than 65 ethnic groups classified into 16 language families.[3]

Peru faces several ecological challenges, especially deforestation. In the Peruvian Amazon, the rainforest has been shrinking due to small-scale agriculture, commercial mining and related road construction, and illegal logging and other activities. The rainforest plays a crucial role in global climate change. The Peruvian government has granted local communities legal titles to forests, which better protect the rainforests and combats climate change. The government also gives management rights to communities through forest concessions.[4] Recent research shows that almost a third of forests in developing countries are managed by indigenous communities and local families and that granting indigenous property and management forest rights may be the most effective way to protect the Amazon rainforest.[5]

During our trip to the the Amazon rainforest region, we observed firsthand indigenous protection of the rainforest. With legal rights, local indigenous people can receive advice from the government regarding forest preservation and other services. Through communication and education, community members have a clear view of how vital the long-term conservation strategies are to their wellbeing and actively share the responsibilities to protect wildlife habitat in the rainforest.

We visited the Ese’eja community in the Tambopata area of Peru. These people maintain distinct cultural identities and practices, and they are devoted to protecting the rainforest and supporting sustainable development. The community has been actively participating in rainforest conservation through their projects.

According to Oscar, our guide and the vice-president of the Native Community of Infierno, the community’s land comprises an area of 10,000 hectares (ha) in one land title. The community members own the land collectively. They decide how to use the land through meetings and consultations among the community members. Among the 10,000 ha, the community devoted 3,000 ha as conservation land to do conservation and ecotourism activities such as Posada Amazonas. The government also signed a three-year contract with the community to conserve another 6,000 ha with a payment of 60,000 soles. The community maintains the remaining 1,000 ha for agricultural activities. The community has also signed a 40-year concession with the government for an extra 1,600 ha for 600,000 soles. These concessions and land rights incentivize community members to improve their livelihoods sustainably. They are more likely to do activities such as ecotourism and organic agriculture rather than to sell or use their land  for gold mining, logging, and other ecologically destructive activities.

Through the co-action of the government and the indigenous people, people have learned the importance of the rainforest to their long-term livelihoods and devoted themselves to its protection.

By Jin Wang



[2] Scanlon, Jenna Rose. “Indigenous Communities in Peru and the Peruvian Nation State.” Honors College Thesis, Pace University (2012).

[3] Foller, Maj-Lis. “Ethnic groups and the globalization process – Reflections on the Amazonian groups of Peru from a human ecological perspective.” In TiiaRiitta Granfelt, ed. Managing the Globalized Environment: Local Strategies to Secure Livelihoods. Practical Action Publishing, 1999.

[4] Großheim, Christian. “Forest Concessions in Peru.” In Günter et al. Silviculture in the Tropics, pp. 53-60. Springer, 2011.

[5] Arsenault, Chris. “How to protect Peru’s rainforest? Indigenous land titles, researchers say.” Thomson Reuters Foundation News (3 April 2017).