Economic Analysis of Planned Roads in Madre de Dios and Ucayali, Peru

Madre de Dios and Ucayali
Region & Country

Teeming with biodiversity and acting as the world's largest carbon sink, the Amazon is a vital, but increasingly fragile ecosystem. Madre de Dios and Ucayali, two tropical departments in Peru bordering Brazil and Bolivia, are made up almost entirely of low lying Amazon rainforest. However, decision makers in the area often pursue investment in new road infrastructure without analyzing the economic and socio-environmental consequences in detail.

In 2018, the Peruvian Congress approved Law 30723, which made road development and maintenance in Ucayali a national interest. Madre de Dios is also promoting a series of road projects to promote the region’s economic growth. However, an economic analysis has not yet demonstrated the feasibility of most of these projects, even though it is expected that their construction would affect protected areas and indigenous territories, promote deforestation for agricultural purposes, and facilitate the expansion of illegal mining and timber extraction, among others. 

CSF is conducting a cost-benefit analysis to assess the economic feasibility of a set of proposed roads in the Madre de Dios and Ucayali regions of Peru. This project builds on a similar analysis CSF conducted in 2018 evaluating other road projects in the Amazon. By using all available data on the proposed road projects and making estimations, CSF will identify project subsets that may cause economic losses while identifying others that may generate the highest economic returns.

Once the economic feasibility analysis has concluded, CSF will share our findings with the regional and central governments, as well as other relevant stakeholders. Here, we hope to better inform transportation development processes by increasing awareness of the potential economic consequences of poor planning, while promoting sustainable infrastructure in the Amazon rainforest.

This analysis is being conducted in partnership with and funded by the Frankfurt Zoological Society and the Gordon and Betty Moore Foundation.

Photo: Amazon rainforest
Photo Credit: Gustavo Frazao/