Foreign Policy Research Institute A Nation Must Think Before it Acts Catro’s Corn: Petroleum and Globalization

Catro’s Corn: Petroleum and Globalization

A major development has been taking place in Latin America over these early months of 2007. Cuba’s dictator has risen from the ashes. Fidel Castro has been writing (albeit not speaking at public gatherings) again. His subjects include the emerging U.S. biofuels policy, and the slow, pragmatic economic alliance being forged between the U.S. and Brazil, the most powerful nation in Latin America. It might well be that this alliance is the greatest and least anticipated diplomatic victory for democratic pluralism in the region. If the development has been poorly understood, or at least little discussed, in the American media, it has been fully absorbed throughout the hemisphere.

The various statements reported in Granma, the official organ of the Cuban Communist Party, have announced Castro’s return to the ideological battlefield against his implacable foe, the colossus of the North. The statements include enough political fire and brimstone to indicate that the Cuban dictator has indeed been restored to his normal, frenzied rhetorical state, if not to the pink of health. But there are several implications of these statements that deserve attention: First, there are signs of a widening split between a nationalist, social democratic left headed by Brazilian President Luiz Inacio Lula da Silva and the old guard ideological left headed by Castro, with the active support of Venezuela’s strong-arm ruler, Hugo Chavez, and Bolivian President Evo Morales.

For their part, the Brazilians have enlisted the active aid of the Ecuadorian government in biochemical policy and entered into agreements with the United States involving the conversion of food sources, especially corn, into fuels for automotive and related energy needs. This alliance is a diplomatic and policy event of great moment. While Castro’s statements are primarily an assault on the United States, characterizing its “worldwide plan” to develop ethanol from food sources as “the globalization of genocide,” the firm rebuke to Brazil for negotiating such an agricultural plan is the news behind the rhetoric. It suggests that Castro sees realization of the dreams of the Tri-Continental Movement of the 1960s in the twilight of his long-term struggle against U.S. policies.

In the series of articles, published in the last week of March, the first week of April, and appropriately enough, on May 1, the Cuban ruler ostensibly focuses on U.S. energy policy. Granma’s headline on March 30, doubtless approved if not written by the Comandante himself, reads “Condemned to Premature Death by Hunger and Thirst—More than three billion of the World.” Never one for understatement, the article itself claims that “the sinister idea of converting food into combustible materials was definitely established as the economic line of the foreign policy of the United States.” Castro’s reasoning is based on a zero-sum game: the more that corn is used to manufacture ethanol, the less the “hungry masses of the earth” can consume. But the heavy rhetoric of that Granma article was only a tune-up for what came a week later.

The second statement, published in the first week of April, provides an indication of how Castro intends to redeploy the ideological divide. He rhetorically asks:

“From where and who is going to furnish the more than 500 million tons of corn and other cereals that the United States, Europe and the rich countries need to produce the number of gallons of ethanol that the big companies from the United States and other countries need as compensation for their substantial investments? Where and who is going to produce the soy, the sunflower and ripe seeds whose essential oils those same rich countries are going to turn into fuel? The five principal producers of corn, barley, sorghum, rye, millet, and oats that Bush wants to turn into raw material for the production of ethanol furnish the world market, according to recent data, with 679 million tons. In turn, the five principal consumers, some of which are also producers of those grains, at present need 604 million tons per year. The available surplus is reduced to less than 80 million tons.”

In the third statement dedicated to this theme of oil, corn and globalism, Castro continues to beat the anti-American theme. He critiqued U.S.-Brazilian cooperation, offering the illusion of his presumed leadership of the fast evaporating Third World. “Insatiable in its demand, the empire has called on the world to produce bio-fuels to free the United States from dependence on imported oil.” The funding for this bio-fuel approach is US and European capital, and such capital could even give support to Brazil and Latin America.” Striking a note similar to that of Al Gore in the United States, the Cuban dictator speaks of “$140 billion every year without any concern whatsoever from the fallout in terms of climate change and hunger.” The plain fact is that oil-poor nations such as Japan and land-rich nations in much of Africa and Asia are in all likelihood going to be central players in the ethanol revolution. The imagery of development and underdevelopment is hardly credible under such circumstances. Of more intriguing consequences at the policy level is the potential for a formal split between Brazil and Cuba, or more realistically between an authentic national Left and seriously enfeebled internationalist extremism in Cuba.

In Castro’s imagination, it becomes a short hop from “the annual consumption of their [U.S.] voracious automobiles” to President Bush’s “intention to apply this formula on a worldwide scale, which means nothing less than the internationalization of genocide.” It is an even briefer distance to celebrating his imagined friends: “China would never use a single ton of cereals or leguminous plants to produce ethanol. It is a nation with a prosperous economy that sets records of growth, where no citizen fails to receive the income necessary for his basic consumer goods, despite the fact that 48 percent of the population, which exceeds 1.3 billion people, works in agriculture.” Never has Castro been more effusive in praise of capitalism! “China is intent on achieving considerable savings of energy by eliminating thousands of factories that consume unacceptable amounts of electricity and hydrocarbons. Many of the foods mentioned above [China] imports from all corners of the world, transporting them thousands of kilometers.”

Castro assures us that “the worst may be still to come: a new war to ensure the supplies of gas and crude oil that will place the human species on the brink of a total holocaust.” Castro, that great believer in “facts,” cites anonymous “Russian press agencies, crediting intelligence sources” reporting that the United States prepared to go to war “more than three years ago.” It supposedly started on “the day the government of the United States decided to totally occupy Iraq, unleashing an interminable and odious civil war.” Further, with an oblique reference to the nuclear bomb developments in Iran, “to demolish every single Iranian factory is a technical task that is relatively easy for a power like the United States.” The difficult part may come later, planning “a new war launched against another Islamic belief that deserves our total respect, as well as the other religions of the peoples of the Near, Middle or Far East, prior or subsequent to Christianity.” Castro has his own vision of Armageddon.

But even if we discount the hysteria that underwrites Castro’s claims, the devil must be given his due. The emergence of alternative energy sources predicated on the use of food crops does increase inflationary pressures. It is expected that crop demand may have just such a short-term outcome, but it does not seem to have had more than a marginal impact to date. To start with, ethanol demands lead to the cultivation of new lands for easy-to-harvest crops, especially in places with currently uncultivated or poorly cultivated areas such as China, India, and Brazil. It might well be that ethanol production can actually have a leveling effect on those economies, in which the gap between urban and agrarian sectors remain dangerously high. In addition, ethanol production provides a fiscal cap on natural fuels, thus reducing the price at the pump for automobile consumption. It is estimated, for example, that grain production dedicated to ethanol will roughly double in the United States alone (from 16 percent in 2006 to 30 percent in 2008); at current rates of consumption this can well result in deflationary rather than inflationary outcomes in a relatively brief period. Of course, that is predicated on a variety of factors working in concert: the increased use of smaller, more fuel-efficient passenger vehicles, improvements in public transportation, and a conclusion to conflicts that drain normal petroleum supplies. The use of ethanol is one component in providing the basis for a new global economic equilibrium.

At its deepest level, beyond Castro’s dubious claims that the conversion of food into fuel represents some atrocious genocide and his declared opposition to any effort to use food supplies to generate new modes of fuel reserves, ethanol production represents an increasingly prominent coalition of the hard Left with forces of environmental control. Such forces of environmental reform are currently linked to the war against global warming on one side, in contrast to relatively open Western democracies, especially the larger and more powerful nations of the world (in which Brazil must increasingly be identified as a significant player), for whom issues of social development remain the driving forces in economic advancement. There is a growing realization that nations such as Brazil, South Africa, and Australia, along with Canada, Japan, China, and India, are powers to be reckoned with. These new global powers, no less than the Big Eight, are the primary battleground of the struggle to reach a new equilibrium between the appropriate costs to be incurred in achieving development while recognizing risks to the environment in forging new energy and farm policies.

The world battle concerning the advantages and disadvantages of globalization have been moving in this direction through the first decade of the new century. Interest in finding alternatives to oil has achieved additional muscle, less through any empirical evidence of the shortcomings of globalization than as fear of the oil-rich Middle East nations grows. It is recognized that the element that gives the Middle East such great economic strength is a pot of liquid gold, but one that is exhaustible and subject to being sideswiped by new synthetic fuels. Even a projected drop in oil usage by 20 percent as a result of ethanol use over the next several years would put a serious damper on conducting Middle East politics by petroleum means. It is little wonder that Fidel Castro’s blast at the new accords between Brazil and the United States elicited flowing words of praise from Castro’s main Middle East ally, Iran. The two nations have established strong bonds at the diplomatic as well as ideological level.

In this war of crowded words, the position of Brazil should not be overlooked. Marco Aurelia Garcia, the foreign affairs advisor to President Lula da Silva, noted that Castro did not understand bio-fuels, which cause no problems for food production. “The world’s problem is not a shortage of food but income.” Lula himself, after signing the accords with Ecuador, said that “our countries are determined to promote this revolution of clean and renewable energy, which creates jobs and preserves our forests.” And this position was reinforced by Brazilian foreign minister Celso Amorim, who simply and accurately added a postscript: “Chavez has oil, we have ethanol.” Ecuador’s president, Rafael Correa, added that “for us ethanol is a great opportunity.” The political tone of the democratic left has been cool and respectful, but the implications for the western hemisphere are profound and wide ranging.

The strange union of a Marxist dictator and Iranian demagogues indicates that Castro’s ambitions for a world role have not diminished. We are looking at a new coalition of forces defined less by traditional images of Left and Right, than by a belief in a world wide fusion against the Western alliance – in particular North America and Europe – as such. Castro’s strategy is driven by three possibilities. First, there is the deep-seated fear that the oil bubble could burst, leaving in its wake a shambles of so-called Third World alliances to whom Castro would be entirely dependent for survival. Second, there is the question of how large nations function as economic barometers in contrast to how small communist nations are political vanguards of revolution in the Middle East, Africa, Asia, and of course Latin America. Third, there is the transformation of the struggle over globalization and its consequences for the economy and the culture. This new phase is one in which a struggle takes place between authentic nationalisms with democratic impulses, and a variety of religious and ideological internationalisms dedicated to the liquidation of the democratic option.

Designing scenarios is a two-way game. While U.S. policy toward Cuba may be rooted in a desire for a neighboring society free of dynastic dictatorship and hoary dogma, the policies of Cuban communism are predicated on a new grand alliance, one that not only chains Venezuela and Bolivia to the Castro brothers’ chariot, but also links up with a worldwide struggle against the democratic west. Even at the risk of losing Brazil as an ally, no small factor in hemispheric political economy, Castro sees an alliance that enlists an expanded third world and engages the forces of China, Iran, and other diverse nations to reduce the United States from a world power to a cowering pygmy. Such an outcome is one that Premier Castro not only dreams about but can now taste.

The choice of issues Castro selected from his sick bed is neither random nor idiosyncratic. They are rooted in unresolved issues of the free market and free elections that surfaced as critical pivots in hemispheric politics during the last century. The ethanol issue and the question of alternative energy sources in general are linked to the latest “-ism” craze of environmentalism, with its possibility of driving a wedge among Western nations and pushing the West to the abyss by causing it to doubt development and democracy as twin goals. But to juxtapose technology as a threat to peasant survival is not only a weak card, but one that runs counter to the long-held Marxist belief in science as a magic carpet to social progress. Castro’s two statements indicate an awareness of this dilemma, but offer no policy to reconcile such ideological differences.

A major ideological difficulty for Castro and his oil allies is that ethanol has, in the past, been an option embraced by the Greens the world over. Still, it would be dangerous for those engaged in the bitter struggle between environmental and developmental premises to dismiss the terms of debate and discourse selected by Castro, or to see this latest rift in the hemisphere as anything less than a struggle to define the terms of a new century–both its alliances and its ambitions. For leaders of the totalitarian left to raise the issue of ethanol as a hallmark of those who would embrace genocidal prospects may seem bizarre, coming as it does from those who deny or cast doubt on real holocausts from Europe to Asia and Africa, but these are the terms of the larger debate. It is a debate that the West can ill afford to lose.