South America logistical giant: Since the inception of Western colonization in South America, development has primarily occurred along the coastal areas and the hinterlands. However, there has been a lack of substantial attempts to connect and develop the interior regions.
An area which holds a lot of potential and can turn into a logistical giant. How? Through its water bodies.
South America is a continent with vast natural resources, including its water bodies. From the mighty Amazon River to the Andean glaciers, South America water resources are a critical asset that can be leveraged to create a logistical giant. By systematically using its water bodies, South America can unlock significant economic potential and become a global trade powerhouse.
Before the 1950s, South America’s economy relied on exporting primary products that were primarily transported through river and rail networks. However, the onset of industrialization in the latter half of the twentieth century led to a shift in public planning towards road development, resulting in neglect of railroads, especially in heavy industry and mineral extraction. Consequently, by the turn of the century, the most expensive mode of transport for cargo freight after air transport was the road highway network, which carried most of the cargo in South America.
However, inland waterway transport, which is the most cost-effective mode of transporting goods within the continent, has been overlooked, despite it being the most energy-efficient. It has the lowest CO2 emissions per cargo transport, making it an essential contributor to regional economic growth.
A recent study demonstrates that for transportation of goods, using inland waterway as a mode of transportation becomes economically feasible and cost-effective compared to road transportation when the distance of transportation is equal or greater than 195 kilometres.
Additionally, inland water transport has a lesser impact on its surrounding areas compared to roads and railways. Europe, China, India, Bangladesh, Nigeria, Canada, Brazil, and Myanmar have successfully implemented inland water transport and are expanding their use.
South America possesses significant potential for waterways due to its extensive water availability and relatively even topography, making it one of the world’s top contenders. Nonetheless, the waterways in South America have yet to reach their full potential. Despite having valuable water transport potential, the majority of hydroelectric dams in the region were constructed without locks. This pattern continues with the latest dams being developed in the Amazon basin, specifically in the Xingu, Madeira, and Tapajos rivers.
There have been several proposals to create a South America Waterway System (SWAS), linking the Orinoco, Amazon, and La Plata basins. The idea was first suggested in 1808 and has been supported by various country leaders and organizations over the years. Two Venezuelan brothers proved the technical feasibility of the project by navigating the three river systems for two years.
The majority of the SWAS, which is over 10,000 km, can already be navigated by boats eight months out of the year, with only three portages of 680 kms impeding the connection of the three basins.
The Development Bank of Latin America and the South American Regional Infrastructure Integration Initiative (IIRSA) in the last few years have supported the idea of the South America Waterway System to facilitate trade, travel, and cultural exchange while protecting the environment and local traditions. The Paraguay-Parana waterway has already improved integration within South America, and connecting the various river basins has historically been an effective way to boost economic growth and wellbeing. Currently, each basin under consideration for the project already has functioning waterways.
In 1987, the estimated cost for the South America Waterway System was 1.4 billion USD, which would be equivalent to 3.6 billion USD in 2023 adjusted for inflation.
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The main works required for the project are: (i) connecting the Paraguay and Guapore rivers; (ii) canalizing the Casiquiare; (iii) removing rapids and waterfalls on the Madeira and Mamore rivers between Guajara Mirim and Porto Velho; (iv) removing rapids and waterfalls in Sao Gabriel; (v) removing rapids and waterfalls on the Orinoco; (vi) accounting for the significant water level variation, particularly in the Amazon basin; and (vii) creating large water storage reservoirs to reduce the impacts of flood and drought events on the waterway’s operation.
The technical feasibility of interconnecting the three major river basins of South America is considered to be a much less costly and challenging endeavor compared to the construction of the Panama Canal and the Mississippi-Missouri-Ohio river system in the United States.
South America has great potential for creating a sustainable logistical giant by utilizing its vast network of waterways. The SAWS project is a step towards achieving this goal but requires careful planning and management schemes to overcome its challenges. By implementing an integrated logistics system, South America can turn its water bodies into a valuable asset for economic growth while preserving its natural resources for future generations. Nothing can integrate the continent like the waterways.
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