Interoceanic rail may boost Latin American trade

Subject

Interoceanic railway plans.

Significance

The project to create a rail link between the Brazilian port of Santos on the Atlantic and Ilo in Peru on the Pacific is gaining momentum. The economic benefits that would accrue are potentially large, although the technical and financial obstacles are also substantial. Given its parlous fiscal situation, the Brazilian government has so far been reluctant to give the scheme its wholehearted backing, even though its soya farmers and mining companies would be among its main beneficiaries.

Impacts

• The multinational nature of the scheme presupposes that all countries remain supportive.
• The railway would act as a further stimulus to soya production in Brazil, Bolivia and Paraguay, with attendant environmental problems.
• Reduced reliance of Bolivia on the port of Arica could improve Bolivia-Chile relations.