Saturday, September 29, 2007

“I believe that the world will yield to biofuels”

Venezuela's Hugo Chavez and Luiz Lula da Silva, leader of Brazil (pictured above) are big supporters of biofuels. Both envision an international biofuels industry that their countries will play a major role in and benefit from.

Interestingly enough, this puts them at odds with their friend Fidel Castro. On a number of occasions, the recuperating Cuban leader has vociferously condemned the development of biofuels for environmental and socioeconomic reasons.

It remains to be seen if the world really will actually yield to biofuels as Mr. da Silva predicts, but I'd be willing to bet that Fidel Castro never will. (GW)

A Resilient Leader Trumpets Brazil’s Potential in Agriculture and Biofuels

The second deadly airplane crash in 10 months set off a crisis in Brazil’s aviation industry in July, with many critics saying government inaction was at the root of the problem.

Last month, the country’s Supreme Court ordered 40 members of the president’s political party to stand trial on corruption charges in a scandal that has netted some of his closest advisers, including his former chief of staff.

But as Mr. da Silva, now in his second term, sat down for a 75-minute interview here in the presidential palace, those worries hardly seemed to faze him. He was nothing but upbeat, and with good reason.

Despite the controversies, Mr. da Silva’s approval rating hovers above 60 percent. Brazil, Latin America’s largest economy, has grown by 3.5 percent a year, slower than China and India but a marked improvement over the 1990s. Debt levels and unemployment are down. Reserves are up. Inflation is one-third what it was five years ago.

“We are experiencing an auspicious moment in Brazil right now,” Mr. da Silva, 61, said in his first extended discussion with an American journalist since 2004. “Brazil is experiencing its best economic period.”

That boom combined with his broad popularity among Brazil’s working class has provided Mr. da Silva, a former metal worker with a sixth-grade education who worked in an auto plant, with remarkable political resilience.

“He is the Teflon president,” said David Fleischer, a political analyst here and an emeritus professor at the University of Brasília. “Nothing sticks to Lula.”

That includes the scandals that by now could have debilitated another presidency. But Mr. da Silva continued to deny knowing anything about the most recent one, in which members of the governing party are accused of paying congressional deputies more than $10,000 a month to vote for favored legislation.

He refused to say if anyone in particular had betrayed him. “There are hundreds of employees around me that I don’t have any idea what they are doing,” Mr. da Silva said.

One of them, apparently, was his former chief of staff, José Dirceu, whom many consider the architect of Mr. da Silva’s rise to power, and who has been charged with being the mastermind of the vote-buying scheme.

“I don’t believe that there is any evidence that Mr. Dirceu committed the crime that he is being charged with,” the president said. “He will be judged.”

Fresh from a trip to Europe, where he stirred interest in Brazil’s sugar-based ethanol fuel and won billions of dollars in investment pledges, Mr. da Silva was instead focused on the economy.

Exports of Brazil’s raw commodities like soybeans and iron ore are booming as a result of high global prices and insatiable demand from Asia. In one sign of Brazil’s economic health, as the subprime credit crisis was roiling the United States a few weeks ago, Brazil’s bonds were raised to just below investment grade.

He said that Latin America as a whole was at a critical moment, when it needed to seize the opportunity to shore up its economies, notorious for mismanagement and corruption.

At the same time, he shrugged off suggestions that he should seek to be a hemispheric force and a stronger counterweight to President Hugo Chávez of Venezuela, who has aggressively seized the spotlight in the region with his energy deal-making and political maneuvering in favor of left-wing candidates.

"We in Latin America are not trying to look for a leader,” Mr. da Silva said. “We don’t need a leader. What we need to do is build political harmony because South America and Latin America need to learn the lesson of the 20th century. We had the opportunity to grow, we had the opportunity to develop ourselves, and we lost that opportunity. So we still continue to be poor countries.

“What I want is to govern my country well.”

As Mr. da Silva heads to New York on Sunday for a United Nations meeting, he is relentlessly pitching Brazil’s agricultural potential and energy experience, especially in ethanol, which Brazil makes from sugar cane, a source more efficient than corn.

With ample arable land that is the envy of the world, and a 20-year head start on developing a biofuels industry, Brazil is the only country exporting ethanol in any significant quantities.

Mr. da Silva predicted that within 15 years a global biofuels industry would be developed, with the commodity being shipped around the world on tankers for a global price.

“I believe that the world will yield to biofuels,” he said.

He found a receptive audience recently in Sweden, where he rode in an all-ethanol-powered bus in Stockholm, one of 600 buses, he said, that the Swedish government had retrofitted for use with biofuels. Sweden wants every new car on the road to run on renewable fuels by 2020. The European Union has recommended its countries add 5.7 percent ethanol to the gasoline supply by 2010.

“We will democratize energy access,” he said. “Instead of 10 countries producing oil, we could have 120 countries producing biofuels.”

So far, however, a biofuels accord Mr. da Silva signed with President Bush this year has yet to yield concrete results. The two countries agreed to share technology and experience to develop technical standards.

An import tariff in the United States, supported by the powerful farm lobby, has prevented Brazil from competing for a share of the American market with corn-based ethanol.

Relations are generally warm with the United States. But Brazil’s relations with Venezuela have been strained at times with Mr. Chávez as Brazil has appeared to shy away from some of Mr. Chávez’s proposals for greater regional integration.

In the interview, however, Mr. da Silva offered tacit support for the creation of a “Bank of the South,” which could provide more money for development.

He also said that more than 50 experts from Petrobras, Brazil’s state oil company, and officials from Petróleos de Venezuela were still discussing a $15 billion natural gas pipeline project that would stretch 5,000 miles from Venezuela to Argentina.

A crucial question is whether enough gas exists to make it viable, Mr. da Silva said. Mr. Chávez on Thursday again blamed Petrobras for delays in approving the project, Reuters reported.

The economic focus was consistent with Mr. da Silva’s move to the center since he took office in January 2003.

Since then he extended many of the economic policies of his predecessor, Fernando Henrique Cardoso, while putting in place programs like Family Allowance, a welfare program devised to help the poor. Last year, the program offered monthly subsidies of about $50 to some 11 million families, representing 40 million to 50 million voters.

Mr. da Silva’s personal story has inspired millions of Brazilians: he grew up dirt poor in a small town and later worked as a lathe operator at an auto plant. He found his calling as a labor leader and politician.

Despite his modest education and sometimes questionable grammar, his personal warmth and colorful references to Brazilian soccer have captivated many.

When he steps down in 2010, Mr. da Silva said, he plans to head back home to São Bernardo do Campo, the hardscrabble industrial town near São Paulo where he got his start in politics with the metal workers’ union.

“I am not going to go on a graduate study program at Harvard University,” he said, in a dig at his predecessor, Mr. Cardoso, who regularly teaches at Brown.

“When I leave the presidency,” he said, “the one thing I want in life is to be treated as a friend by all of those who were my friends before I took office.”


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