Fausta's Blog

American and Latin American Politics, Society, and Culture

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Brazil, up and coming in today’s Blog Talk Radio

Because of the latest version of the Iranian hostage crisis, Pres. Lula’s visit to the USA went mostly ignored. However, this was a very significant event.

I have stated several times on this blog that am certain that, once Brazil gets its economic act together, it will bring about a new era of prosperity to Latin America. Brazil is a leader in Latin America: when Brazil did away with its military dictatorship, the countries in Latin America followed.

Brazil has every potential to become an economic superstar: The country has the land mass and the population, it participates in the international banking system, it has manufacturing, natural resources, and entrepeneurship. And it’s making the right kind of economic reforms.

Look at this:

The good news on the Brazilian economy have gone mostly ignored, but they are very important: Brazil’s economy: Bigger than thought
An underestimated pay-off from economic reform

There are other reasons to think that Brazil is better off than generally realised. In a recent paper*, two IMF economists argue that official data “grossly underestimate” the growth of household income. Brazil’s economic opening in the early 1990s lowered prices and improved the quality and availability of goods, changes that were largely missed by the consumer-price index. Using data about what people actually consumed, the economists estimate that income per head grew 4 1/2%a year between 1987 and 2002 compared with the official figure of 1 1/2%, with the poor benefiting most. That makes Brazil look better; it makes economic reform look better, too.

As I mentioned in my conversation with The Gathering Storm that it is strategically important to have democratic, prosperous countries sorrounding declining countries like Venezuela.

Brazil and the USA share much in common, as this post in Publius Pundit explains,

The implications of this will be amazing. Huge Brazil and huge America are united in a common purpose to halt the rising and arrogant power of Hugo Chavez, whose oil fueled earnings are being used to intimidate other nations. Now Hugo is encircled by two big clouds, Brazil to his south and the U.S. to his north, both of whom are determined to develop their ethanol industries to reduce Chavez’s monopoly on energy. Ethanol is not a cure-all and won’t replace oil as an energy source, but it will widen the pool of available energies, and that’s important because right now, China’s and India’s rises have narrowed the margin of excess, making every drop that Chavez produces a critical one because there isn’t any extra. Hence. Chavez’s monopoly and power.

We have a threshold of opportunity to create free markets, and create wealth, by abolishing all farm subsidies and trade barriers with Latin American countries that are willing to provide property rights, democracy and the rule of law for their citizens.

The current trend in Washington is likely to approve serious barriers to expanding trade. This is a grievous mistake that will resonate not only in trade, but in national security, terrorism, immigration policy, and corruption in the USA.

Today at noon my Blog Talk Radio guest is Monica Showalter of Investor’s Business Daily. We’ll be talking about the UK and the Falklands, Brazil, Venezuela and Latin America.
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Look who’s green with ethanol envy:

Castro hits out at US biofuel use

Cuban President Fidel Castro has strongly criticised the use of biofuels by the US, in his first article since undergoing surgery last year.

He said George W Bush’s support for the use of food crops in fuel production would cause 3bn deaths from hunger.

The article in the Granma newspaper did not mention Mr Castro’s health.

As the AP’s Anita Snow puts it,

The article is written in the same kind of apocalyptic style Castro typically adopts when discussing the impact of U.S. international policies on developing nations.

(Anita also added, “and there was no reason to doubt he was the author.” Val might disagree. But I digress.)

‘Fidel’ now tells us ethanol is sinister. Will the Left be repeating his line? You betcha.

For starters, Fidel is factually wrong:

As more and more corn grain is diverted to make ethanol, there have been public concerns about food shortages. However, ethanol made from cellulosic materials instead of corn grain, renders the food vs. fuel debate moot, according to research by a Michigan State University ethanol expert.

The findings, which are being presented by Bruce Dale today at the ACS meeting in Chicago show that,

“The evidence indicates that large-scale biofuel production will increase, not decrease, world food supplies by making animal feed production much more efficient,” Dale said.

But never mind that.

The real reason Fidel thinks ethanol is sinister is because it is a threat to his Communist Revolucion, be it in Cuba, in Venezuela, or elsewhere. As a Cuban minister recently said, “in order for the revolution to survive, it needs the poor”.

An ethanol boom in Latin America will create great wealth and prosperity, and is already attracting investment and trade in Central and South America and the Caribbean. As I mentioned in a recent post,

  • Sugarcane is grown in many countries throughout the region
  • Countries that do not produce sugarcane but have ethanol processing facilities are benefiting from being exempt of the onerous ethanol tariffs.
  • “An ethanol boom in Latin America would also attract investment to rural areas and create lots of jobs.That might help to reduce the steady northward stream of illegal immigrants. It would certainly burnish America’s image, and stem support for anti-American tub-thumpers such as Venezuela’s Hugo Chávez. He has won friends throughout the region by selling oil cheaply. By sharing technology and promoting investment in ethanol, America would also be reducing Latin America’s fuel bill. If it bought lots of ethanol from its neighbours, it would be providing them with a lucrative export of their own.”

And that wealth won’t be limited to Latin America: Just this week the World Bank is helping Brazil export ethanol technology to African countries such as Ghana, Angola (where Fidel tried to export his revolution by sending troops), and Mozambique.

On a more personal note, I’m sure Fidel must be particularly incensed that sugarcane is bringing wealth to the region, after he ruined the Cuban sugar industry.

As Fidel himself said,

The sinister idea of converting food into combustibles was definitively established as the economic line of foreign policy of the United States

And let’s do it right, by abolishing all farm subsidies and tariffs.

Previous post on here.

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In a somewhat related topic, Alvaro Vargas Llosa explains
Why Perfect Totalitarianism Is Impossible:

The lesson of our time, a decade and a half after the fall of communism in Europe, is that the slow, almost geological, accumulation of little bits of heroism throughout society can bring down a totalitarian giant over time. These acts of heroism, both inside and outside the structure of power, constitute the best hope for countries in which governments continue to enslave millions of people today.

But even if these acts of silent heroism are not enough to cause all despots to come tumbling down, they are at least enough to keep the human spirit alive. That is a comforting thought.

Via Dr. Sanity, who today explores the economic interaction of humans.

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