The Manaus Free Trade Zone and deforestation in the State of Amazonas

Tropical deforestation has gained worldwide attention because of the rapid pace at which it is happening. Continued destruction of tropical forests has been pointed out as an important cause of global warming. Tropical deforestation also affects preservation of indigenous populations, richness of biodiversity and supply of ecological services as a whole for present and future generations.;Brazil has the largest continuous tropical rain forest in the planet. The country has been charged with destroying its forests, especially the Amazonian rain forest. This destruction was said to be happening due to myopic government policies that promote massive migration to Amazonia and unplanned and inadequate land use.;This study looked at one Brazilian policy to promote economic growth in the Manaus Free Zone, which is located in the State of Amazonas. A theoretical dynamic model is developed and tested empirically using OLS regressions for 1980 and 1985. The results showed that the policy contributed to economic growth of the State and that this growth had relatively low impact on deforestation.