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Using the only form of transportation he has to cross a small river during rainy season, a cowboy on a ranch in Brazil's Pantanal poles a dugout canoe. For 150 years, ranches and livestock have adapted to the region's cyclical floodding. Now a proposed inland waterway called the Hidrovia could act as a siphon on this vast, wildlife-rick marsh.
A the edge of Pocone, a tidy cattle town in the heart of western Brazilian backcountry, cobblestone streets give way to a dirt-top road carving into a horizon of low bush. Rains have turned it red and unctuous, like a fresh wound sutured by tread marks. This 200-kilometer (125-mi.) road, pocked by craters and punctuated by 114 precarious wooden bridges, is the Transpantaneira, the "highway" into South America's greatest wetlands region, the Pantanal. For 20 years, this thoroughfare has been vital for moving goods in the Brazilian state of Mato Gross between bustling urban centers to the north and the scattered ranches and farms of the Pantanal to the south--especially during the mayhem that is the rainy season.
About 100 kilometers (60 mi.) to the west of Pocone is another gateway into the Pantanal and beyond: the port town of Caceres on the Paraguay River. For centuries, river travel was the only reliable way--though slow and limited during the dry season--into the Pantanal. But in the middle of this century, Brazil roused to the rhythms of the industrial era, and soon roads were slicing through the farthest reaches of this demicontinent. The Transpantaneira was one of the road builders' crowning achievements.
Now development-minded Latin American businesses and politicians want more and better transportation, and they are again eyeing the region's rivers. If they have their way, a proposed inland waterway called the Hidrovia would become the primary artery of commerce not just in Mato Grosso but through the hearts of five South American nations. In February, the InterAmerican Development Bank (IDB) and the United Nations Development Program launched engineering and environmental-impact studies of the project. Depending in part on results of those studies, which will cost $10 million over 18 months, the IDB could decide to finance a major part of the vast undertaking.
But critics warn that the Hidrovia could pull the plug on the Pantanal, draining …