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South America shows off its 'magical moment' at G8 summit - Feature

Posted : Tue, 24 Jun 2008 05:10:01 GMT
By : DPA
Category : America (World)
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Buenos Aires - Brazilian President Luiz Inacio Lula da Silva is an ambitious man, and he is clearly enjoying himself ahead of the G8 summit in Toyako, Japan. "South America is going through a magical moment," he boasted in May. "I do not recall having had in my whole political life such a reasonable combination of economic growth, macroeconomic stability and, at the same time, a strong policy of social inclusion."

Despite being officially only a guest at the summit from July 7-9, Lula is likely to take on a key role on the interrelated issues that currently worry the world community: agricultural subsidies, the price of food and oil, biofuels and climate change.

Indeed, he has been talking about many of these topics for a lot longer than most of his colleagues at the G8 meeting, often in juicy, graphic terms.

In Japan, Lula is again likely to attract criticism. Many complain that sugar cane and other crops to make biofuels use land where the rainforest once grew or that could be devoted to food production. The biofuels that Lula is so proud of damage the environment and push up the price of food, many claim.

But Lula will most likely have none of it.

"Don't come tell me that (food) is expensive because of biodiesel," Lula said in April. "It is expensive because the world was not ready to see millions of Chinese eat, millions of Indians, Brazilians and Latin Americans eat three times a day."

South American giant Brazil - the tenth-largest economy in the world and an exporter of agricultural products - is in relatively good shape to face the current crisis over the rising food prices.

It is a net importer of oil, but also has a well-developed and energy-efficient biofuels industry that it is keen to export. While biofuels raise important environmental concerns, the price of oil continues to rise and any alternative - even if non-politically- correct - is welcome, as was apparent in the recent visit to Brazil by German Chancellor Angela Merkel.

Former trade union leader Lula can talk about food scarcity with more authority than most of his peers, since he experienced poverty and deprivation until his adult years.

Many in international markets panicked when he reached the presidency in 2003. But he has presided over a period of stability and prosperity that gave the country investment-grade status, without losing his popularity at home.

Under Lula, Brazil has acquired political and diplomatic clout that puts it at the centre of demands on developed countries at the Doha Round and other platforms.

Lula insists on combatting "the arguments of those who, based on protectionist interests or geopolitical motivations, are annoyed by the growth of (South American) industry and of our agriculture," and he is not prepared to sell the region's cooperation cheap.

"When food scarcity threatens social peace in many parts of the world, it is to our region that many turn looking for answers. We are conscious of our global responsibilities, but we will not decline to exercise them in a sovereign way," he has warned.

In this context, when Lula talks about rising food prices he points accusing fingers away from biofuels and towards the "absurdly protectionist farm policies in rich countries," as he termed them at an United Nations Food and Agricultural Organisation (FAO) summit in June.

He is unlikely to change discourse in Japan, since he sits in the drivers' seat in political and economic terms.

"Latin America is much less vulnerable today," former Brazilian Central Bank director Alkimar Moura recently told Deutsche Presse- Agentur dpa. "The situation is good, you know."

Moura was talking about the region's balance of payments and its debt structure. While Brazil is as vulnerable as anyone else to international crises that affect all of its very diverse trade partners, it would not suffer much from slumps in any one country, notably the United States, he added.

There is, however, one vulnerable actor within Latin America: Mexico.

Unlike Brazil, the world's 14th-largest economy remains heavily dependent on the US, which gets over 80 per cent of Mexican exports and gives work to millions of Mexicans who send home crucial remittances.

Mexican President Felipe Calderon will also be a guest of the G8 summit, and while he is likely to play a more minor role than Lula he will have things to say on the key issues at stake too.

Mexico has been suffering for many months from the rise in the price of corn, a staple across all sectors of society. Calderon has called for a massive increase in food production worldwide and blamed food scarcity, among others, on the massive use of corn by the US to boost its ethanol production.

Like Lula, he has criticized agricultural subsidies by industrialized nations, which he has blamed partly for the fact that food production ceased to be profitable for many farmers in Mexico.

Calderon has proposed the creation of a global Green Fund which he intends to take to G8 leaders.

The fund would require 1 billion dollars to help less developed nations combat the effects of climate change, particularly heavy rains and extreme drought.

The proposal acknowledges the fact that many developing nations do not make significant emissions of greenhouse gases and yet suffer most from the destruction associated with climate change.

Copyright DPA

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