Nature as an engine of recovery in a post-Coronavirus world

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Innovation in fishery and aquaculture in Peru
Innovation in fishery and aquaculture in Peru. Flore de Preneuf/World Bank.

As most of us spend this Earth Day sheltering at home to flatten the COVID-19 curve, our hearts and thanks go out to all the people on the frontlines of this battle – the healthcare workers and the grocery shop stockers, those making deliveries, the pharmacists, the farmers, and the fishers. And our hearts go out to the people who are standing on the precipice of a steep economic contraction, with their jobs and livelihoods in jeopardy, if not already lost.

What matters today is how we flatten the curve.  What will matter tomorrow is how we stimulate economic recovery, bringing back better jobs and more of them to ensure that today’s investment in recovering economies sets the stage for longer-term green, clean, and resilient growth … one that builds a path out of poverty into the middle class.  In Latin America and the Caribbean (LAC), we can’t do this without thinking about how to put natural capital to work for its people.

The region is rich in natural capital and it already plays a major role in the livelihoods of many, with 49% of the total area of LAC covered by forests.  That’s 935 million hectares, representing approximately 22% of the forest area existing in the world, and almost half the land area of Latin America.

From our land and our seas

Almost 40 million people live in these forests and depend on them entirely for their livelihoods, mostly in the Amazon. But forests are important for more than just Latin America’s forest peoples. Globally, the formal timber sector employs more than 13 million people, 1.3 million of whom work in LAC, amounting to one-half of 1% of LAC’s entire workforce. The formal contribution of the forest sector to LAC’s economy amounted to almost $50 billion (at 2011 prices). But the timber sector’s economic contribution is much larger – the sector is mainly informal and its value remains largely unreported.  

In LAC, more than 73 million people live in houses that use forest products as the main building material, accounting for 12% of the total number of households. So, if we want a steep recovery that positions the region where domestic and global demand is growing, forests are a great place to invest.

And it’s not just forests. Fish are aplenty in the LAC region as well. By 2030, the region is expected to see a 24% growth in fish production from fisheries and aquaculture – from almost 13 million tonnes to 16 million tonnes per year. Almost 4 million people work in aquaculture in the region. But there is room to expand this to meet growing global demand. Aquaculture is the world's fastest-growing food industry, at 7% per year, accounting for more than 50% of fish for human consumption. In order to maintain current per capita fish consumption, by 2030 aquaculture must produce 28.8 million more tonnes per year than at present.

By 2018, with more than 2.5 million tonnes of aquaculture produced, LAC still only accounts for less than 5% of global production. While Chile, Brazil, Ecuador, and Mexico account for more than 80% of the regional aquaculture volume, this activity is carried out on various scales in virtually all countries of the region, contributing significantly to food security, employment, and foreign currency generation. So, there is a lot more opportunity here, too, for aligning recovery objectives with global, green, and blue market opportunities.

But fisheries isn’t just aquaculture. There are at least 2,500 small-scale fishing communities dotted across the region who produce food for domestic consumption and earn important income doing so. In the Brazilian Amazon, for example, households obtain 30% of their income from fishing. FAO expects to see fish consumption increase in the region alone by 22 % between now and 2025. This is a market opportunity waiting to be taken.

Freshwater ecosystems are also important sources of jobs. In at least 11 countries in the region, 20% or more of the people working in capture fisheries work in inland fisheries, although these constitute only 3% of catches in the region. The impact of these catches vary across countries. In Brazil, for example, the national average consumption of freshwater fish (from inland capture fisheries and freshwater aquaculture) is rather low at just fewer than 4 kg per capita per year in 2013, but in the flood plains of the Amazon, per capita inland captured fish consumption by riverine communities is closer to 150 kg per capita per year.

This shows that natural capital and its importance to the recovery isn’t just about jobs, but about food, too. We already know how important the region is for agriculture. After all, the region has 12% of the world's total arable land. During the last 50 years (1961 - 2011), the agricultural surface in the region increased significantly, from 561 to 741 million hectares, with the largest expansion in South America from 441 to 607 million hectares. This means jobs and food. But food for the region comes from more than just that arable land – annual per capita consumption of edible forest products is estimated at 9.4 kg.

Tourism as a road to recovery

And we couldn’t end a story about the importance of natural capital to the LAC region’s recovery from COVID-19 without mentioning tourism.  Prior to COVID-19, the worldwide travel and tourism sector was going strong, outpacing the growth of global GDP in 2018 for the eighth year in a row. Travel and tourism grew almost 4% last year, above global GDP growth of 3.2%, and contributing a record $8.8 trillion and 319 million jobs to the world economy.

Unsurprisingly, tourism, including adventure tourism, was growing across the region, prior to COVID-19. Nature, from pristine beaches to incredible forests, is a large attraction. Since 2006, tourism’s direct contribution to GDP in the region has grown by 7% in real terms – employing almost 6 million people directly, and another 15 million indirectly. Tourism is one of the Caribbean's major economic sectors, with 25 million visitors contributing $49 billion towards the area's gross domestic product in 2013, which represented 14% of its total GDP.

Adventure tourism has been one of the fastest growing sectors of the tourism sector, attracting high-value customers, supporting local economies, and encouraging sustainable practices. It’s where the future of tourism is; and it’s where the link to natural capital is. Increased tourism spending means more jobs. And although tourism has taken a beating during the battle to flatten the spread of COVID-19, it will come back. Investments now to prepare for capturing more of the growing market, especially in adventure tourism, will pay off in the long term.  

Thinking beyond COVID-19

LAC’s rich natural capital stands ready to underpin a recovery across the region.  Unlocking nature as an engine of recovery will take a robust regulatory environment that encourages only the sustainable use of public assets for private gain and long-term public health and economic strength , a credible set of institutions who can regulate this use and ensure that the stock of natural capital keeps growing, access to thoughtful capital that incentives sustainable natural resource management, and an infrastructure roadmap that doesn’t open up pristine areas. It also includes the important role that Indigenous Peoples can play in the post-COVID recovery as protectors of the environment, particularly of the Amazon.

Countries need to invest today in:

  • Policies that strengthen their environmental regulation and bring credibility to their regulatory agencies.
  • Establish sustainable offtake quotas for timber, non-timber and fish products in different sectors.
  • Develop domestic markets that price natural capital transparently.
  • Help the financial sector price risk and think about natural capital differently to seed entrepreneurialism in the sector.
  • Make real investment in labor intensive jobs that will inventory natural capital.
  • Replant degraded areas and clean-up degraded environments – both on land and at the coast.

Countries can also immediately make stimulus investment in the climate-smart and resilient infrastructure needed to get natural capital to market , including the processing infrastructure that can make sure natural capital is not just hunted and gathered in the region but transformed domestically to move jobs up the value chain and connect the region’s rich resources to the world’s richest markets.

With abundant natural capital available to help accelerate a recovery in LAC, and growing global demand for all nature has to offer, now is the time to put nature back to work for the people across the region. With sustainability as the watchword, nature can power a long-term, resilient economy full of good jobs stretching across sectors and across nations, bringing prosperity to rural and coastal communities and city retailers alike, for decades to come.

Authors

Valerie Hickey

Practice Manager for Environment, Natural Resources and Blue Economy in Latin America and the Caribbean, World Bank.

Anna Wellenstein

Regional Director, Latin America and the Caribbean, Sustainable Development Practice Group

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krishitool
April 28, 2020

Thanks for sharing this great piece of content.. wonderful Blog..Keep it up....