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Central America Betting on Future of Ethanol

December 14, 2007
MIAMI – The production of ethanol from sugarcane can be an engine for economic growth in Central America given the lack of other energy resources there, a group of experts said last week at the 31st Miami Conference on the Caribbean Basin.
Alternative energy in Central America was one of the main themes at the forum entitled “A Region Prepared for Growth” on the second day of the three-day gathering organized by Washington-based business advocacy group Caribbean-Central American Action.
“We Central Americans are at a disadvantage (compared with South America) because we have no petroleum, natural gas or coal,” said Nicaragua’s Ambassador to the United States Arturo Cruz.
He said he had more confidence in the possibilities of sugar-based ethanol than other alternatives such as wind power.
Earlier this year, the United States and Brazil, the world leader in ethanol, signed an accord to promote production of biofuels in the Americas.
Pierre Dulin, of the Latin American Export Bank, said that ethanol is an “obvious” option because of Central America’s important position in sugarcane production.
“The countries of the Caribbean and some in Central America have a very great dependence on petroleum and so they should work on other sources of energy,” he added.
Even so, Dulin said that the region had benefited after the signing of the Petrocaribe accord, an initiative of the Venezuelan government by which it supplies crude to member states under favorable payment conditions.
Countries receiving oil from Venezuela under the plan are: Antigua and Barbuda, the Bahamas, Belize, Dominica, Granada, Guyana, Jamaica, Nicaragua, the Dominican Republic, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname and Haiti.
Ernesto Stein, an economist with the Inter-American Development Bank, expressed optimism over Central America’s economic growth over the past year, which in the case of the Dominican Republic exceeded 10%.
He attributed those figures, among other  things, to the signing of the Central American Free-Trade Agreement with the United States (CAFTA).
“CAFTA, more than a trade opening, was a defensive measure,” said Nicaragua’s Cruz, who said he believed that the aim of the accord was to maintain trade relations with the United States so as to have a competitive advantage over China.
In the ambassador’s opinion, the region’s economic growth has been “modest” and has had virtually no impact on the income of citizens of countries like Nicaragua, where he said that 80% of the people live on less than $1 a day.
“The citizen’s expectations keep growing and the state doesn’t have the physical capacity to respond, which creates frustration,” Cruz said.
 

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