Paraguay is scrambling to finish construction of its portion of the Capricorn Bioceanic Corridor, a highway that will stretch from the Atlantic port of Santos, Brazil, to four Pacific ports in northern Chile—among them Iquique and Antofagasta.

Preparing the 2,200-kilometer (1,400-mile) route, expected to be operational in August 2026, has consisted largely of improving existing roadways in Argentina, Chile and Brazil. But Paraguay has had to build practically its entire 530-kilometer (330-mile) section from scratch.

This work is taking place mainly in Paraguay’s portion of the Gran Chaco region, a rugged, dry-forest expanse of 1.1 million square kilometers (425,000 sq. miles) that covers half of Paraguay and extends into southeast Bolivia, northern Argentina and southeast Brazil. Environmentalists worry the project will spur widespread land-clearing in the Chaco, which ranks second behind the Amazon rainforest as the largest wooded region in South America.

With some areas wet, others arid, and floods and wildfires commonplace, the rough region was called “the green hell” during the bloody Chaco War of 1932 to 1935. In that conflict, Paraguay defeated Bolivia at a cost of 36,000 Paraguayan and 53,000 Bolivian lives, the majority in both cases due to disease rather than combat.

It is this ruggedness, however, that has allowed the Chaco region to retain its considerable ecological value. The Chaco supports 4,500 plant species, 500 bird species, and 150 types of mammal. Some of the mammals—like the jaguar (Panthera onca), tapir (Tapirus terrestris) and the Chacoan peccary (Catagonus wagneri)—are in danger of extinction in the region.

Chaco woodlands are home to Indigenous communities including the Ayoreo, some of whom are believed to be the only South American Indigenous people outside the Amazon region who are living in voluntary isolation. The Ayoreo have demanded legal recognition and return of their traditional lands. Also inhabiting the Chaco are Mennonite ranching and farming communities established from 1927 to 1947. The Mennonites, coming first from Canada, then from Russia and Germany, settled on land that the Paraguayan government sold to them to generate public income in the wake of the Gran Chaco War.

Scientists, Indigenous organizations and green activists warn that development of the Bioceanic Corridor will do great harm to the Chaco region’s environment and native peoples, in part by accelerating land clearing and further fragmenting the Chaco woodland habitat. That process has already been causing alarm in the region as cattle ranching and other activities have changed the face of the land. The Indigenous-advocacy organization Survival International reported in 2021 that a group of Ayoreo had contacted some of their relatives who had stopped living in isolation and told them they feared that their surroundings were being destroyed. The group then returned to the wilderness.

“The isolation is precisely one of the reasons why this region’s natural attributes have been maintained,” says Miguel Lovera, coordinator of the nonprofit Iniciativa Amotocodie, an Asunción-based Indigenous-rights group. “But with the promise of making everything flow along a first-rate surface of asphalt, land prices are rising despite the objections and demands of Indigenous people and conservation groups.”

The Gran Chaco accounts for 62%, or 16 million hectares (40 million acres) of Paraguay’s land area and over 80% of the country’s forest cover. Only 2% of Paraguayans inhabit the region, which until now has only 1,500 kilometers (930 miles) of paved highway.

The Paraguayan government says the project is in the national interest because it will improve access to services for Chaco residents and will stimulate economic activity, creating jobs that will help slow migration to cities.

Of the four countries involved in the Bioceanic Highway project, Paraguay is the farthest along, now beginning work on the 220-kilometer (137-mile) third and final stage of its portion of the route. A dozen consortiums were awarded contracts to build different sections of the Paraguayan part of the roadway at a total cost of US$900 million.

Brazilian President Luiz Inácio Lula da Silva and Chilean President Gabriel Boric have confirmed their support for the project, with Boric last year calling it “a regional integration project of extremely high strategic value for Chile.”

On April 14, Boric unveiled a 22-project work plan for Chilean infrastructure improvements associated with the Bioceanic Corridor. Presenting the blueprint in the Moneda Palace, the seat of the presidency, he announced highway upgrades, new customs and police checkpoints, and improvements to port facilities in Iquique, Mejillones, and Antofagasta. Boric did not disclose the cost, but analysts estimate the projects will require US$90 million.

Though the bulk of the Bioceanic Corridor work involves construction of asphalt highway, the project also includes associated infrastructure such as toll stations, traffic circles, and truck scales. Some of the associated infrastructure is substantial—for example, a 1,300-meter suspension bridge being built by Brazil and Paraguay across the Paraguay River. The bridge, whose price tag is US$90 million, was 72% complete as of April.

And South America’s transcontinental transport efforts might eventually include more than a highway. China and Peru are conducting viability studies for a possible rail line linking Brazil with the Peruvian coast. This month a team of Chinese state railway engineers visited Brazil in connection with that exercise, which could speed the movement of mining exports.

“Brazil exports a total of US$350 billion annually, and over a third of that value corresponds to exports to China,” said Leonardo Ribeiro, the national rail-transport secretary of Brazil’s Transport Ministry. “Of what we export to the Chinese, 60% is iron minerals and soy, which are much more efficient to transport by rail, not only from the economic standpoint, but also in terms of the environment.”

Unlike the rail link, however, the Bioceanic Corridor has made it past the drawing board and is under construction. By lowering transport costs, the roadway is expected to make primary-goods exports that can be moved by truck—particularly soybeans—more competitive in Asia.

Crossroads role

Paraguay, for its part, has long viewed the route as an opportunity to position itself as a trade crossroads on par with the Panama Canal. On taking office in August 2023, Paraguayan President Santiago Peña said that with the Bioceanic Corridor in place, Paraguay could “abandon its image as an island surrounded by land.”

A report issued on April 10 by the Organization for Economic Cooperation and Development (OECD) takes a similar view. Among the report’s “key findings” is that the project offers Paraguay the opportunity to become “a logistics hub with increased participation in foreign trade, territorial integration, and job creation.”

Experts agree that by providing a reliable highway link between the Atlantic and Pacific Oceans, Paraguay and its three other partners in the project could significantly speed trade, making it less costly.

Compared to the current routes, a shipment of soybeans sent from Brazil to China by way of the Bioceanic Corridor would on average spend an additional one-and-a-half days in truck transit. That’s because it would be hauled across the continent to a port in Chile, rather than to a port in Brazil. But the soybeans would then spend 12 to 15 fewer days aboard ship, since the sea voyage to China is quicker across the Pacific from Chile than on either of the current maritime routes—from Brazil through the Panama Canal or around Cape Horn.

The reduction in transport time means lower costs, which could help South American goods become more competitive in Asian markets. When it comes to container traffic, analysts estimate the corridor could save US$1,000 per Asia-bound container, or some 20% to 30% of the transport expense.

Similar advantages would accrue in the case of exports sent from northern Argentina and Chile to Europe or the eastern United States through Brazilian ports. Currently, eastern-U.S. and European-bound products from Chile are shipped up the Pacific Coast and into Atlantic waters through the Panama Canal, while exports from northern Argentina typically are carried south on the Paraná River for export from Buenos Aires.

Lovera, an agronomist who has spearheaded opposition to transgenic soy and corn cultivation in Paraguay, says the corridor, while beneficial to grain exporters, will undermine socio-environmental protection of Paraguay’s neediest local and Indigenous communities. He says mention of such impacts in studies prepared by project organizers are superficial at best.

“The project does not aim to improve the quality of life of Paraguayans—much less the Ayoreo, who have been nearly exterminated,” Lovera says. “... It’s a monstrous project that impacts historically isolated territories with infrastructure development and economic activities taking precedence over the demands of the local population.”

Taguide Picanerai, an Ayoreo leader studying law at Asunción National University, argues a particularly worrisome impact will be fragmentation of the Chaco’s natural habitat. “The new highway will mean more cattle ranching, which leads to extensive biodiversity loss in territory that is vital to us,” says Picanerai.

For observers like biologist Andrea Weiler, a National University of Asunción researcher who specializes in wildlife management, completion of the Bioceanic Corridor roadway is a virtual certainty. “The project won’t stop,” she says. “Its impact is already being felt. Our worry at this point has more to do with mitigation steps since we don’t see appropriate measures to [protect] biodiversity.”

Pressure on wildlife

Weiler forecasts that when it comes to wildlife, the greatest impact will be felt by relatively large Chaco mammals such as the jaguar, South American tapir, and two types of peccary—Chacoan peccary and white-lipped peccary (Tayassu pecari). Says Weiler: “[The project] will cause more forest fragmentation. And to the extent there are more settlements, there will be more conflicts.”

Written descriptions developed by organizers of the project state that the highway in Paraguay will include 15 wildlife crossings, an average of one every 35 kilometers (22 miles).

“Though the [project] design met basic standards, and a good team sampled biodiversity, good intentions are not accompanied by substantive work in infrastructure,” Weiler says.

The wildlife crossings, she points out, wound up being culverts under the roadway, not all of them suitable for sizable animals. “In some cases they are a meter wide,” Weiler says. “Animals avoid them; and for animals that move in herds, like peccaries, they are useless.”

Deforestation unleashed by the corridor project is another concern. The latest report from Paraguay’s National Forest Institute (Infona) shows Paraguay’s forest cover from 2020 to 2022 shrank from 39.9% of the country’s land area to 36.6%, with a loss of 660,000 hectares (1.6 million acres) of woodland in the Chaco alone.

An estimated 78% of the land-use change that occurred in the Chaco—mainly clearing done in connection with ranching and other types of agriculture—was carried out in compliance within the bounds of existing government land-use regulations.

The remaining 22% of the region’s land-use change—affecting some 145,000 hectares (358,000 acres)—was illegal, according to the Infona report. Infona said that although the rate of deforestation has diminished in recent years, land clearing remains a major concern.

Experts also cite potential alterations to riverine ecosystems due to corridor-related infrastructure such as the new bridge spanning the Paraguay River. These, they say, could diminish fishing resources relied on by subsistence communities and, in turn, encourage more deforestation as families turn more intensively to agriculture.

Picanerai says that the importance of conserving the Chaco’s biodiversity goes beyond preserving the lifestyle of his people, because the region is the natural patrimony of all Paraguayans. But in particular for the Ayoreo and other Indigenous people in the Chaco, he argues, far different activity is needed than the development of export infrastructure.

“What would benefit the Ayoreo and state sovereignty is the titling of Indigenous lands so [Indigenous communities] can live peacefully on their lands and not be exposed to foreign investments that deforest and fail to generate jobs,” Picanerai says.

The April 10 OECD report acknowledges that the corridor project poses environmental and social challenges, “particularly in ecologically sensitive areas like the Gran Chaco.” Notes the report’s executive summary: “Expansion could accelerate deforestation and biodiversity loss, raising concerns about road safety and environmental degradation.”

It adds: “The corridor must also address socioeconomic challenges, particularly for indigenous and local communities. Land displacement, loss of traditional livelihoods, and economic marginalization require policies focused on social equity.”