Both Sides Say Project Is Pivotal Issue for Brazil

PORTO VELHO, Brazil — The eternal tension between Brazil’s need for economic growth and the damage that can cause to the environment are nowhere more visible than here in this corner of the western Amazon region.
More than one-quarter of this rugged frontier state, Rondônia, has been deforested, the highest rate in the Amazon. Over the years, ranchers, miners and loggers have routinely invaded nature reserves and Indian reservations.

Now a proposal to build an $11 billion hydroelectric project here on a river that may have the world’s most diverse fish stocks has set off a new controversy.

How that dispute is resolved, advocates on both sides say, could determine nothing less than Brazil’s vision of its future at a moment when it is simultaneously facing energy and environmental pressures and casting envious glances at faster-growing developing countries, like India and China.

Unhappy with Brazil’s anemic rate of growth, President Luiz Inácio Lula da Silva has made the economy the top priority of his second term, which began in January. Large public works projects, including the dams here on the Madeira River, are envisioned as one of the best ways to stimulate growth.

“Who dumped this catfish in my lap?” was the president’s irate complaint when he learned recently that the government’s environmental agency had refused to license the dam projects, according to Brazilian news reports.

But the proposal is far from dead, and continues to have Mr. da Silva’s support. Additional environmental impact studies are under way, but the dispute now raging in Rondônia appears to have more to do with politics and economics than science and nature.

“My impression is that some environmental groups see the authorization of construction as opening the door to unrestricted entry to the Amazon,” said Antônio Alves da Silva Marrocos, a leader of the Pro-Dam Committee, financed by business groups and the state government.
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