Development & Aid, Economy & Trade, Environment, Headlines, Latin America & the Caribbean

ECUADOR-BRAZIL: &#39Big Brother&#39 Geopolitics

Kintto Lucas

QUITO, May 7 2007 (IPS) - The first few months of Ecuadorian President Rafael Correa&#39s administration have been marked by a strengthening of relations with Brazil, as well as his already clearly stated ties with the government of Venezuelan President Hugo Chávez.

A series of joint projects with the Brazilian government, which were initially agreed under the Ecuadorian government of Lucio Gutiérrez (2003-2005), have been taken up again with greater determination since the U.S.-educated Correa took office in January.

The main project is the Manta-Manaus "multimodal" transport route, which will link Ecuador&#39s Pacific port of Manta with Manaus, the biggest Amazon jungle city in Brazil, thus creating a transport corridor consisting of rivers, highways and railways reaching all the way from the Pacific to the Atlantic Ocean.

The route will be financed by Brazil&#39s state National Bank for Economic and Social Development and built largely by Brazilian construction companies.

In addition, hydroelectric complexes are being planned, as is an airport in the city of Tena, in the northeastern Ecuadorian province of Napo, near the Colombian border.

Another initiative that has received priority treatment is the joint production of ethanol and biodiesel. Ecuador will join the growing biofuel craze with the cultivation of 50,000 hectares of sugar cane and a commitment to increase that area and incorporate other kinds of crops.

Correa, who made an official visit to Brasilia on Apr. 3, said the agreement reached between the two nations for the production of biofuels will bolster the recovery of agriculture in Ecuador.

Brazil&#39s leftist President Luiz Inácio Lula da Silva announced over one billion dollars in investment in Ecuador.

"We wish you all the luck in the world for the changes you are bringing about," Lula told Correa. "You can count on Brazil," he said, stressing his support for Ecuador&#39s new centre-left government in its "just struggle for social development."

The accords signed by the two countries are "one more step in the integration between Brazil and Ecuador, but also one more step towards Latin American integration as a whole," he added.

The Ecuadorian president said the accords formed part of "a new model of integration" based on solidarity rather than "trade-driven competition," and aimed at forming "citizens instead of consumers."

Lula and Correa also discussed speeding up the process to upgrade Ecuador&#39s membership status in the Mercosur (Southern Common Market) trade bloc – comprised of Argentina, Brazil, Paraguay, Uruguay and Venezuela – from associate to full member.

Correa, meanwhile, called for greater trade openness on the part of Brazil, in order to balance trade between the two countries, which is currently tipped in Brazil&#39s favour.

But the Ecuadorian leader may face hurdles from within the government itself. Energy Minister Alberto Acosta, one of the most influential and popular members of the cabinet, has criticised the memorandum of understanding between the two countries&#39 state-run oil companies, Petroecuador and Petrobras.

The agreement involves the exploitation, by Petrobras in alliance with Chile&#39s Enap and China&#39s Sinopec, of Ecuador&#39s Ishpingo-Tiputini-Tambococha (ITT) oil fields, located in theYasuni National Park in eastern Ecuador. The oil fields have an estimated 900 million barrels of crude in reserves.

Acosta wants to exhaust all efforts to seek aid from other countries and from non-governmental organisations to help Ecuador avoid drilling for oil in the protected jungle area.

That initiative emerged from environmental groups like Ecological Action, and has the support of former ministers, local and foreign personalities, and Vice President Lenin Moreno himself.

According to press reports, the agreement between Petroecuador and Petrobras prompted Acosta to hand in his resignation, which was rejected by Correa, who promised to study the question more closely.

Acosta, one of Ecuador&#39s most prestigious leftist economists and one of the president&#39s closest advisers, is supported on this question by the powerful Confederation of Indigenous Nationalities of Ecuador (CONAIE) and other social and environmental movements.

If international aid to preserve the national park is not obtained, the second option would be for the ITT oil fields to be exploited by Petroecuador in alliance with one or more state-owned oil companies from other countries.

During the April energy summit of South American leaders in Venezuela, host President Chávez expressed an interest in an agreement through which Venezuela would drill for oil in the ITT fields while Ecuador extracts crude in Venezuela&#39s southeastern Orinoco Belt.

Such an agreement would come on top of the exchange of Venezuelan fuel for Ecuadorian crude, which got underway two months ago, and the future construction of a refinery, which could become hurdles to the alliance with Petrobras.

The president of Petroecuador, Carlos Pareja, who signed the memorandum of understanding with Petrobras, is pushing instead for an international tender for the exploitation of the ITT oil fields, in which private companies would also be able to participate.

The controversy picked up steam when Correa himself stated on several occasions that he was sending "a message to the world" for industrialised countries to economically compensate Ecuador with at least 350 million dollars a year in exchange for preserving the Amazon jungle and generating oxygen for the planet instead of exploiting the oil in the ITT fields.

He also downplayed the agreement with Petrobras, Enap and Sinopec, saying it was merely to enable them to present "an offer for exploiting the ITT oil fields," which would mean an investment of five billion dollars and annual revenues of 700 million dollars over two decades.

Through his strategy of forging closer ties to Ecuador and other neighbours and consolidating Brazil&#39s leadership role in Latin America, Lula has been putting in practice what General Golbery do Couto e Silva (1911-1987) described in his classic text "Geopolitics of Brazil", in which he stated that "a route to the Pacific (Ocean) is an urgent Brazilian need."

Exercising control over the Amazon jungle region is also part of Brazil&#39s geopolitical strategy, which is not a policy of this or any previous government, but a policy of state, which at times runs counter to and confronts the interests of the United States in the region, according to experts.