Bolivia Decides On Its Lithium

Salar de Uyuni

In the March article (published on MojeOpinie.pl, for English version click here) on the subject of projected exploitation of the largest reserves of lithium in the world, located in the Bolivian salt flats Salar de Uyuni, I discussed their importance in the context of stimulation of the weakest economy in South America. I presented a number of paths that Bolivian president, Evo Morales, may choose to follow in order to find the most efficient way of translating the theoretical potential of the reserves into the welfare of his nation. Mr. Morales has now made his choice. It is therefore time to take another look at the matter.

On October 13 the Bolivian Ministry of Mining published a statement that reads:

Bolivian Minister of Mining, Mr. Luis Alberto Echazú, confirmed that all patents for extraction of lithium in Salar de Uyuni, department of Potosí, shall stay under Bolivian government’s control.

The situation today

This means, that Mr. Morales decided to take the riskiest of the presented paths – he will not allow for investment of foreign corporations interested in extraction and processing of lithium – metal necessary for production of lithium-ion batteries. His reasoning is extremely simple. Neither of those firms cares about building the batteries in Bolivia – they are interested solely in extraction and processing of the mineral, while the batteries should be produced elsewhere. This, however, is not enough for Mr. Morales, as he had expressed already on a number of occasions. He wants to build a processing plant and produce the batteries locally. During the September conference in Madrid he said:

Companies that respect Bolivian norms are welcome. We are looking for both private and state investment. We need partners – not owners of our natural resources.

Likewise, he does not exclude the possibility of producing electric (EV) and hybrid electric vehicles (HEV), although most certainly this would not occur in the nearest future.

Right now, there’s a pilot lithium processing plant being built in Uyuni. Its goal is to evaluate the reserves, define the most efficient way of processing the mineraland educate Bolivian specialists in the subject. Ministry’s press release claims that the plant is 70% ready, and the production should start next year. Meanwhile plans for a much larger facility have been announced, able to produce about 30.000 metric tons of lithium per year, which amounts to 30% of current supply. According to the plans it should be ready by 2013/2014 and is projected to cost about $250-300 million. Considering Bolivia’s shaky economy it is a rather large sum of money, now magnified by the additional S500 million that Mr. Morales must find in order to facilitate the modernization of infrastructure (mainly transport network), construction of a new gas pipeline and securing an adequate power supply. Plans for construction of a battery assembly plant would require additional $ 1 bn. Bolivia, with it’s current economy, can’t afford such a huge investment, therefore it would be seeking a loan. Is it worth it?

Importance of the reserves

At first glance it would appear, that absolutely yes. Such large reserves of the lightest metal would ensure continuous extraction for hundreds of years. However, deeper analysis of the subject throws a shadow of skepticism.

Although in yet another press release of the Bolivian Ministry of Mining we can read, that the brine from Sala de Uyuni contains as much lithium as in Chilean reserves of Salar de Atacama, and additionally it has been found there is several places, this data is not mirrored in other sources. UK-based consulting company Roskill Information Services claims, that magnesium to lithium ratio in the Uyuni brine is much higher than in that of Atacama or Argentinean reserves in Salar de Hombre Muerto – a factor that would result in higher extraction and processing costs. Higher altitude would also have a negative impact on the separation process, since the water evaporation would take longer (lithium is separated from brine in large outdoor ponds). Furthermore each year Salar de Uyuni is flooded, which additionally dilutes the brine.

Latest reports concerning the risk of depleting world lithium resources also seem to speak against Bolivia’s plans. While specialists are not unanimous, I tend to lean towards the opinion of geologists R. Keith Evans, who claims, that there is still plenty of lithium on Earth.

Charles Gassenheimer, CEO of Ener1 – producer of batteries for the Norwegian car manufacturer Think Global – presents an equally optimistic view:

I’ve seen some negative reports saying the world is in danger of running out, but I don’t think that’s a productive notion. The amount of lithium in a lithium-ion battery is very low when compared to other substances – it’s three to four percent of our costs for materials. When I look at all the things to worry about for battery cars, lithium supply does not make that list. There’s not likely to be a problem until 2020 at the earliest.

Meridian International Research, in its analysis entitled “The Trouble with Lithium”, presents a completely opposite point of view. Author William Tahil argues, that world lithium reserves, concentrated in Chile, Bolivia, Argentina and China amount to not more than 6.2 million metric tons. He came  to the conclusion that expansion of electronic industry (ie. mobile phones, laptops, video cameras, photographic devices or mp3 players), as well as the planned development of electric vehicles would lead to increase in lithium demand, and may result in diplomatic crisis between United States and South America:

The analysis shows, that world dependant on lithium as source of energy for its electric vehicles might soon face even more rigid limitations, than it does today with oil.

The pessimistic scenario favors Bolivia’s potentially strong position on international lithium markets, because sooner or later the world would have to knock on Mr. Morales’ doors. Meanwhile, three largest companies currently extracting the mineral – already known as “the lithium three” – SQM (Chile), FMC (Argentina) and Chemetall/Rockwood (USA/Chile) don’t show the slightest interest in Bolivian reserves. According to FMC’s Paul J. Norris they can still increase their production capacity, more significantly – at lower cost.

Bolivians spend around $400 million on their plant in Uyuni, while FMC, Chemetall or SQM can increase production for a fraction of this sum.

Credit Suisse’s John McNulty confirms these claims:

Each of the corporations that form “the lithium three” can increase production by 25% by investing around $40-50 million.

January 2009 marked the Lithium Supply and Markets Conference in Santiago de Chile. The world reserves of the mineral were estimated to be cca. 30 million metric tons, of which 7,6 million tons can be mined, and 17,6 million tons can be extracted from brines. The second method is much cheaper, and as such favors Bolivia in finding buyers for its material. On the other hand, however, I remind that Bolivia’s extraction and processing costs may be higher than that of its competition in Chile or Argentina. Mr. Morales must find a way to join the lithium race on competitive terms. If he fails to do that, he may well end up like the American companies mining lithium in the ‘90s, when dramatic decrease in price by SQM (from $4000 per ton to $1400) effectively drove new producers out of the market, as their extraction costs were much higher.

During the June Deutsche Bank Alternative Energy Conference Mr. Seifi Ghasemi, CEO of Chemetall/Rockwood, remarked:

Even if the American automotive market is 100% electrified, the lithium form Chile’s Salar de Atacama would be enough to supply the market for a 100 years. With 10% market penetration level, the resources would last for 216 years.

Demand for lithium for electric cars is estimated to be around 10.000 metric tons by 2015 (more or less the moment of completion of the Bolivian plant). However by 2020 it may rise sharply to reach 81.000 tons.

A few days after Bolivian ministry’s press release regarding the development of Salar de Uyuni resources without foreign investment, SQM declared its move to cut lithium carbonate and lithium hydroxide prices by 20%, as well as increase its production to 40.000 metric tons a year.

During the last year stock prices of this company (NYSE: SQM) rose from $18 to 40$.

This text has been published in Polish on MojeOpinie.pl. To retrieve the original version follow this link.

Heat on the Border – Venezuela vs. Colombia

Recent rocky relations between Venezuela and Colombia don’t seem to offer any substantial outlooks for improvement. It doesn’t mean that the region will suffer an armed conflict, however – as usual – coming to terms with Hugo Chavez is not an easy task. Yet again peacemakers must step in between the agitated counterparts – this time an attempt to dismantle the ticking time bomb will be made by the accustomed mediator in the region, Brazilian president Luiz Inacio Lula da Silva, aided by Spanish prime minister Luis Rodriguez Zapatero.

This is already the third large crisis between the two nations in last five years. Let’s recall then: in January 2005 Colombian agents kidnapped on Venezuelan soil one of the FARC commanders; March 2008 saw Colombian military bombing a FARC camp located in the territory of its western neighbor – Ecuador, where they managed to kill Raul Reyes. Venezuela stood firmly on Ecuador’s side and recalled its ambassador in Bogota. With these events still echoing in the relations of both countries, we are presented with yet another crisis, however this time the situation seems to be a bit more complex.

First sign of the approaching tremors manifested itself in the press release published by the Colombian government on July 27, where they claimed to have recovered Swedish anti-tank rocket launchers AT-4 during a strike on an insurgents’ camp. Serial numbers of those weapons led to conclusions that it had been purchased by Venezuelan army in 1988. Chavez, quite understandably, took it as an accusation of Venezuela’s support for FARC, subsequently ordered his ambassador in Bogota back home and threatened to break not only diplomatic but also trade relations (Venezuelan-Colombian Chamber of Economic Integration, Cavecol, estimates the annual trade between the neighbors to be about $5 billion worth). Chavez claims he would seek to substitute the goods imported from Colombia with those of other countries, however many analysts find it a rather difficult task, as Colombian export covers a third of Venezuelan market’s needs. Answering the insinuations of alleged financing and arming of FARC, Chavez claimed that the rocket launchers were stolen from a naval post some 14 years ago.

The main problem, however, lies elsewhere. During the afore mentioned incident Uribe’s government had already been preparing to close a controversial deal with the US, which grants American military access to Colombian bases (previously Americans were stationed in Manta, Ecuador, but president Correa chose not to prolong the deal that expired on July 17). Many South American countries fear that the treaty will convert Colombia into a bridgehead of American influence on the continent, however both USA and Colombia unanimously sustain that the American contingent’s aim is to support local forces in their battle against drug smugglers and FARC insurgents in the country, and would not interfere in internal matters of its neighbors. Both sides also point out, that in fact there would be no real change, because Americans have maintained a small military contingent in Colombia for many years as part of Plan Colombia (800 soldiers and 600 private defense contractors). Should Chavez stop screaming of converting Colombia into Israel of Latin America and sleep peacefully? Not quite.

The deal was closed on Friday, October 30 and signed by the American ambassador in Bogota and three Colombian ministers. The full text can be found here. The most important part of the deal talks about granting Americans access to seven Colombian military bases (previously there were talks of four). There’s a disconcerting question that comes up straight away: why a relatively small contingent of 1400 people needs as much as seven bases? Naturally it doesn’t mean that the Americans will quietly increase their strength right away, but at the same time declarations of non-expansion seem to be a little far fetched. It’s also important to note, that the deal was not given a “treaty” status, which allowed Uribe’s government to bypass a parliament debate on the subject.

Another matter that can be rather unsettling for Mr. Chavez – but not only to him – is the fact, that many FARC rebels, members of paramilitary groups and drug smugglers chose the border regions of Colombia for their hideouts – a fact perfectly known to the intelligence services of all interested parties. This location has been chosen very consciously – both the FARC and drug smugglers have long come to the conclusion that border areas offer them a number of tactical, if not strategic, advantages, as the Colombian government will have to thoroughly analyze the consequences of any action undertaken against them. Mr. Uribe cannot ignore the possibility of a couple of bombs or missiles flying over to Venezuela and igniting another crisis or, perhaps, an armed conflict – especially when his opponent is someone as hot headed as Mr. Chavez. The latter scenario would mostly convene the FARC and drug smugglers.

Although at the time being no one (except perhaps Mr. Chavez himself, but who knows…)takes the possibility of armed conflict seriously, both countries waste no time and quietly yet consequently arm themselves – Colombians by gaining a powerful ally in Mr. Obama, and Chavez by sending ever so often signals to Moscow (common naval war games, recognition of independence of Southern Ossetia).

Such a conflict would most probably end with Mr. Chavez’s loss, since Colombians dispose of supremely trained army, which – last, but not least – has been conducting military actions against the insurgents for the last 45 years. It is however noteworthy, that Mr. Chavez has recently bought 24 modern Russian fighter planes Su-30 (and is in talks of buying the latest Su-35) and has just placed an order for a 100 Russian tanks. Colombian military has neither.

This, however, is the last resort, that today no one ponders seriously. Even Chavez has other problems on his mind, as he battles shortages of water and electricity that may have a negative impact on his polls. Therefore the most common explanation for him ordering 15.000 troops to the Colombian border, as well as calling his nation to prepare for war, is a simple distraction from other matters. Other theory points out that Mr. Chavez may want to impose a more strict, military control on the areas, that support his political opposition.

Mr. Uribe has just announced, that it would take Venezuela’s war threats to UN Security Council and the OEA (Organization of American States).

This article has been published on MojeOpinie.pl. To retrieve the original Polish version please follow this link.

I recommend that Polish readers get acquainted with this blog.

Bolivia, The Saudi Arabia of Lithium?

One day at the end of August, 2008, I stood among deserted mining equipment of the state-run silver mine on the hillside of Cerro Rico, Potosi, Bolivia, and the tour guide with whom we were about to decent into one of the active shafts, combining basic English with Spanish tried to explain the history of his country. ‘All the world is so sorry that we’re so poor’ he said chewing on a rather impressive ball of coca leaves, ‘but look around! Bolivia is not the poorest country of Latin America… It’s one of the wealthiest! We’ve got everything!’ I remember listening to this discourse rather sceptically, but at the same time the world stared at the white stain of Salar de Uyuni, the biggest salt flats in the world.

I visited Salar de Uyuni a couple weeks before my trip to Potosi. The landscape is truly impressive, but apart from it, the omnipresent salt and altitude sickness there is nothing else an untrained eye could see. The town of Uyuni is nothing but a dozen streets, few tens of hastily erected, unfinished buildings and a gnawing climate. Practically all the citizens live off tourism, taking full advantage of the fact that western visitors are ready to pay considerable amounts of money for a few days long trip to the salt desert. Industry, if ever existed, is just as dead as the rusty hulls of locomotives standing nearby. It’s all quite likely to change soon. But first things first…

It’s not much of a secret that for years many American politicians and scientists have been racking their brains how to end United States’ dependence on external sources of energy, oil being their primary concern. The Energy Dependence and Security Act, passed in 2007, contains preliminary guidelines that should finally push the country into the arms of renewable sources of energy, and more importantly includes a project for transport electrification. No need to remind that the current president, Barack Obama, is a great supporter of this policy.

Li-Ion battery

Reacting to the recent changes in the world energy politics, the automotive industry is trying to look into the future too. The first car with hybrid drive was unveiled by Toyota in 1997; it was called Prius. Since then Prius has undergone a modernization and today we can encounter its second generation. The third generation of hybrid drive vehicles will sport one major difference: the nickel-metal hydride (NiMH) battery will be replaced by the more energy efficient lithium ion (Li-Ion). The General Motors’ new car, dubbed Volt, that should hit the market in 2011, will be equipped with such kind of energy storage unit. Practically all major car manufacturers are to some extent involved in works to create vehicles powered by such batteries. It’s enough to mention the new, electric versions of Mini (BMW) and Smart (Daimler). It’s a widely accepted theory that in the near future the lithium ion batteries will become a standard power supply for the new, ecological cars.

And this brings us to the crux of the matter: in order to build these units one needs lithium – the lightest known metal, which is not without importance when building batteries, but it’s the efficiency that’s essential here (lithium ion batteries are up to eight time more efficient that then nickel-metal hydride ones). Nowadays two countries are primary exporters of lithium: Chile (61%) and Argentina (36%). According to estimates, Chile has about 3 million tons of this element, while Argentinean resources amount to 400 thousands tons. However, these numbers grow pale compared to the amounts of lithium buried under the Bolivian salt flats in Uyuni – 5.4 million tons, which quite frankly is almost half of the known world reserves. Could it be that Bolivia, Latin America’s poorest country, should become the Saudi Arabia of lithium? Perhaps. Even this seemingly superficial comparison is much more true that one would think.

A quick glance at the last 80 years of Saudi Arabian history allows us to learn that before the largest reserves of oil in the world were discovered there, it was one of the poorest countries in the region. In 1932, when Standard Oil of California discovered oil, Saudis didn’t even have sufficient resources to invest in drilling. Today the Saudi black gold falls under control of the state-run Saudi Aramco, and the Bolivian president, Evo Morales, should without delays schedule consultations. He finds himself in a very similar situation.

Potentially, Bolivia has found a hen that lays golden eggs. Japanese corporation Mitsubishi has quite recently conducted a series of market research, which claims that if the Bolivian resources are not tackled soon, in ten years time demand for lithium will surpass supply. Eichi Maeyama, the president of the corporations branch in La Paz, warns that in the next couple of years demand for lithium will not double, but increase five-folds. This is why Mitsubishi, accompanied by corporations Sumimoto (owner of Mazda and NEC) and the French Bolloré (the company will introduce their hybrid drive vehicle called Pininfarina B0 next year), is already in talks with Mr. Morales about possibility of extraction of the metal. Unfortunately (or luckily, depending how we look on the matter at hand), it looks like the time of incompetent governments, characteristic for the 70’s and the 80’s, has passed irretrievably, and Mr. Morales will not sell the ticket to prosperity of his nation cheaply.

Apart from the fact, that in order to create new workplaces Mr. Morales wants not only to extract lithium, but also to produce batteries (there are also talks about possibility of producing electric vehicles), the president has honestly warned each and any potential investor, that if they want a piece of the lithium business, they should be aware that 60% of the income will fall under governmental control. Although Mr. Morales declared his readiness to invest some $200 million in exploitation, such move can effectively deter foreign capital, and that would be very unfortunate for Bolivia, since it doesn’t have an adequate industrial infrastructure, transport network, or knowledge required by complicated process of lithium extraction, processing and assembly of the batteries. What will the Bolivian president do? The most common belief is that Mr. Morales can call for any of the following three solutions.

First of all, he could nationalize the resources and award the contract for their extraction to a state-run company, however this scenario comes with a considerable risk of having practically no experience in such complicated operations. The Bolivian treasury will be forced to carry huge expenses, linked not exclusively to the cost of the enterprise itself, but above all to investment in modernization of roads (which at the moment consist primarily of narrow and dangerous dirt roads) and industry. Evident lack of adequately trained specialists is another problem. It seems, however, that Mr. Morales will not go down this path.

Bolivia can also follow the footsteps of Saudi Arabia, i.e. to allow investment of foreign companies that have both the necessary capital for the modernization of technologies and the required know-how. Similarly to the case of the Saudis, it doesn’t close the option of eventual nationalization of the sector. Taking advantage of the new source of taxes Bolivia could gradually take over control of the company, although this process would naturally extend beyond Mr. Morales’ term in office, even the next one. It’s also worth noting, that due to historical reasons Bolivia is presently oversensitive about handing over its natural resources to foreigners. No wonder – foreign powers have been ripping out its most precious treasures for centuries, giving nothing in return. Nevertheless, the Bolivian ministry of mining, Luis Alberto Echazu, claims that that his country would allow for the development of the sector by foreign companies provided they absolutely respected Bolivia’s new regulations.

The third alternative is a mix of the previous two; green light to the investment of foreign capital, while simultaneously controlling 51% of the new company. This compromise seems the most likely at the moment.

This, however, is not the end of Bolivia’s problems. Mr. Morales will have to find a solution to the environmental challenges, as lithium extraction inevitably raises the risk of pollution with sulphur dioxide. In order to take full advantage of the mineral, he will also have to smoothen the not-so-friendly diplomatic relations with the United States, that have recently found themselves overshadowed by a rift between the two countries concerning American war against drugs. Coca plantations are legal in Bolivia and seems quite unlikely that Mr. Morales, himself a ‘cocalero’, would change something about it. It is also vital to prepare a scheme for adequate distribution of the newfound wealth, but equal distribution is not very probable. Some commentators also point to the importance of tightening co-operation with other countries that extract lithium: Argentina and Chile. It will be exceptionally difficult in the latter case, as Bolivia to this day unsuccessfully lobbies for the return of territories annexed by Chile after the War of Pacific (1879-1884), especially the remarkably rich in copper Atacama Desert. Foreign relations between the two countries are quite tense.

Whatever Mr. Morales decides, it is unquestionable that he has found himself in possession of a very strong ace, which – if played right – can drastically change the face of Bolivian economy in years to come. One thing is sure: news from this country will reach us much more often from now on.

Talking With The Executioner

For almost twenty years Europe has been trying to build a strategic partnership with Latin America. In many ways it is a practical representation of the theory, which claims that political, social and economical stability in every corner of the world translates into much more measurable gains than exploitation and submission of the weak – it stimulates, at least theoretically, harmony and prosperity. Therefore Europe’s actions are not an echo of the remorseful exclamation “mea culpa!”  for all the suffering caused, but rather a cold calculation of crowds of geopolitical analysts, economists, strategists and diplomats. Europe needs new markets for its products and grieves at the decrease in exports to Latin America (from 6.48% in 2000 to 4.95% in 2004), however at the same time, Europe continues to occupy top places as the primary importer of South American goods.  European Union needs stability that would guarantee safe trade. Reaching this goal would mean economical growth of the region, in other words – full wallets and bellies of the Europeans. Let’s not be overly picky then, let’s not try to find the hidden agenda in this politics. Let us concentrate on identification of the factors that would present an obstacle on Europe’s path.

Natural born losers

In 1971 one of the most acclaimed analysts of South American issues, the Uruguayan writer Eduardo Galeano, published his most famous book to date: “The open veins of Latin America”. It opens with the following passage:

“The international distribution of work consists of some countries specializing in winning and others in losing. Our corner of the world, known today as Latin America, has specialized in losing from the times when Europeans of Renaissance crossed the sea that divided us, and sunk their teeth in its throat. Centuries have passed and Latin America perfected its functions”.

Exploitation of South American people and massive extraction of the natural treasures of the continent began practically when Christopher Columbus set his feet on the sandy beaches of the Bahamas. Soon news about “paradise on Earth”, rich not only in thousands of species of plants, fruits and animals, but also in what has always been a traditional prelude to blood shed (gold, silver, precious stones), started reaching Europe. To Europeans, the discovery of America was almost equivalent to setting foot on the doorstep of the eternal kingdom, and exclusive rights to govern this land had been awarded to queen Isabella I of Castille by pope Alexander VI (who, by the way, originated from Valencia, Spain). Under the pretext of converting the indigenous people of the new land to the only correct and true faith, the conquistadors set about to plundering everything that represented any value to them.

“If you don’t do it (convert to Christianity), or will maliciously delay it, by this you certify that with God’s help I have the right to step among you, and do you war in all parts and according to my own judgement, and I will take you in shackles and I will force you to obedience to the Church and His Majesty, and I will take your women and children and turn them into slaves, and as such I will sell them and I will dispose of them how His Majesty orders, and I will confiscate your goods and do you all evil and harm that I possibly can…”

In 1534 ships with the loot called at Seville: a chamber full of gold and two other ones filled with silver, that Francisco Pizarro received as ransom from the Incan ruler Atahualpa, before he killed him. In 1546 on the highlands of today’s Bolivia the Spanish established a mining city called Potosi. Mountain Cerro Rico, situated nearby, is to this day exceptionally rich in silver. Just twenty-eight years later 120 thousand people inhabited Potosi, a population equal to that of London, the biggest city of the time. Splendour of Potosi sometimes assumed absurd dimensions – in 1658, during the celebration of Corpus Christi, all the streets leading to Recoletos church were paved with silver bars. According to some estimates, the amount of this precious ore extracted there over the centuries would be enough to construct a silver bridge connecting Spain with South America. Today the city if whipped by cold wind and rain – nothing but a couple of impressive houses if left from the years of prosperity, accompanied by 8 million bodies of forced indigenous workers, who from the moment they entered the depths of Cerro Rico until their premature death would never again see the sunlight. On the main square in Potosi appeared a small plaque with official apologies from the government of Spain, placed just a couple years ago… More than 4 thousand shafts are still busy. During my last visit in Potosi, 15 thousand miners worked there, including women and children. The average life expectancy of a miner in Cerro Rico is 40 years.

“<< The City, that has given the most to the world, and has the least >> as one old woman told me in Potosi, enwrapped in a kilometre long lama shawl, when we chatted in front of the Andalusian patio of her 200-years old house. This city, condemned to nostalgia and tortured by suffering and cold, is still an open wound, inflicted by the colonial system of South America: an accusation. The world should begin with asking it for forgiveness.” – writes Galeano in his book, and although he wrote it more than 40 years ago, not much has changed since then. There are only more tourists wanting to descend into Cerro Rico. An attraction…

Northeast coast of Brazil, Cuba and other islands of the Caribbean cultivated sugarcane, that supplied Europe with sugar, but at the same time continuously turned once fertile and productive land into sterile desert, where today nothing grows anymore. Coffee and cacao plantation is Ecuador and Colombia looked similarly.

“Cuba (…) exports sugar to import candies” – said a young Cuban lawyer and revolutionist in 1954. After the Cuban Revolution Fidel Castro set about to rebuild his country, destroyed by hundreds of years of European rule and, later, puppet governments dependent of United States’ imperial politics. Before Castro reformed education and health sector, illiteracy in Cuba was going through the roof. In the 70’s Cuba was proud to show the smallest percentage of illiterate population, and the biggest percentage of youth enrolled in schools from all the countries of Latin America. Unfortunately the cost of reforms and incompetent administration forced Castro to abandon his dreams of diversification of the Cuban export and his motherland once again became a slave of sugar.

“Today, in the eyes of the world, America is nothing more than United States: we live in sub-America, America of second sort and of blurry identity. This is Latin America – the land of open veins.“

Talking with the executioner

Rapprochement between Latin America and Europe was initiated at the end of the 90’s within the framework of ‘Latin America, the Caribbean and the European Union Summit’, which took place in 1999 in Rio de Janeiro, and since then has been called every two years in various cities of Latin America and Europe. During the first summit the representatives of the EU member states and the states of Latin America laid foundations under the future strategic partnership between the two regions. Main areas of co-operation were identified, such as politics (inter-institutional dialogue, democratic values, human rights, international peace and security), economy (multilateral trade system, regionalization, intensification and liberalization of trade, prioritization of investment in countries with weaker economy), education (universal access), and culture (protection and promotion of cultural values).

The dialogue is not an easy one, if not to say unilateral. Announcements published after each summit often disappoint with lack of any substantial commitments, are full of general statements and wishful thinking. It seems that the main force behind the rapprochement is European Union, while the Latin American states appear on the summits propelled by their aspiration to ratify Free Trade Agreements with EU, even though it already guarantees them preferential access to the European market, mainly within the framework of the Generalized System of Preferences initiative, Mexico and Chile being the only exceptions as these states have already signed their FTA’s.

Within this scheme EU selects the least developed countries and offers them exclusion from the Most Favoured Nation principle, adopted by all the member states of WTO, which guarantees equal treatment in trade relations. As a result, all the countries participating in the GSP programme are treated in privileged way – the most common products are not subject to customs tax, while the so-called “sensitive” products are subject to reduced tariffs. It means that for example in the case of Colombia 90 per cent of exported products are not taxed, nor subject to any additional tariffs. GSP exists in a couple of versions, including: GSP+, focusing on countries not classified by the World Bank as high-income countries (for example Peru, Ecuador, Colombia, Bolivia) and EBA (Everything But Arms), which includes 49 countries from the LDC list (Least Developed Countries) and guarantees preferential access to European market for all products except armament. The last GSP agreement expires on December 31, 2011.

In its relations with Latin America, EU particularly accents its drive for stabilisation in the region, both in the aspect of social cohesion and regional integration. The last available data (2005) distinctly shows the abyss that separates the poorest from the richest in Latin America: 200 million people live below the poverty threshold and 88 million in absolute poverty. 10% of the population controls 50% of the continent’s wealth.

Above all, then, the goal is to level the differences between the South American countries, to create a unified market, and to standardize the immigration system. Free flow of goods and workforce translates into increased dynamics of economic growth. Part of these postulates is currently in implementation, the best proof of which is the creation of the Union of South American Nations (UNASUR) in May last year, however the organization (modelled on EU) has yet to undertake any decisive action and operates within the existing structures (MERCOSUR – Argentina, Brazil, Paraguay, Uruguay and Venezuela; Andean Community of Nations – Bolivia, Peru, Ecuador and Colombia). Representatives of the organization estimate that UNASUR will achieve operating capacity similar to that of EU in the year 2019.

In the meantime, EU does all in its power to help its South American brothers to embark on the path of progress. Three main areas of co-operation have been identified, enforced by a handful of educational programmes, experience interchange forums and research centres. These are:

1)    URB-AL / EUROsociAL: reduction of poverty, promotion of equality of rights, public administration, combating drug trafficking. (Budget 2001-09: 80 million euro)

2)    AL-INVEST / @LIS / Euro-Solar: regional integration, economic co-operation, and sustainable energy. (Budget 2002-10: 133.5 million euro)

3)    ALFA / ALBAN / ERASMUS MUNDUS: education and promotion of mutual understanding between the regions. (Budget 2000-10: 140.5 million euro)

Albeit the amount of designated resources looks quite pale when compared to over $6 billion that, over similar period of time, the US government has spent on coca leaf eradication in Colombia alone, the EU approach to this problem seems much more rational. Apart from the fact that these resources are available to all the countries of the continent (as opposed to United States’ focus on Colombia, Peru and Bolivia), the EU strategy essentially comes down to reduction of demand for drugs on its own turf, not to supplying arms and equipment or destroying plantations with highly toxic herbicides.

These programmes are intended to cover everything from urban planning, through stimulation of experience exchange between companies, educational programmes, scholarships, reforms of legislation, sustainable energy for isolated settlements, to disaster relief programmes.

These are not just empty words. I have personally participated in an expedition organised by the Ecuadorian Ministry of Natural Environment to the jungle in the Yasuni National Park, where I spent three days travelling by boat between indigenous settlements, installing solar panels and CB radios. In this region, and don’t forget it’s a national park, various oil companies operate, and illegal deforestation is conducted. It’s not without importance that this region is habited by two groups of the Tagaeri tribe, that have no wish to maintain any contact with modern civilization, and are able to manifest it in a rather brutal way (last case took place in March, 2008, when a body of illegal lumberjack was discovered in the jungle, pierced with a dozen spears.)

The eye of the beholder

Regretfully, the EU projects clearly lack exposure in the everyday life of Latin American people. Many people that I have talked to didn’t have a slightest idea about them; even mainstream media lacks information. It makes it difficult for the EU to have adequate impact on the way people of this continent see European efforts, and without this crucial element Latin America’s attitude is still largely formed by centuries of exploitation and enslavement.
We all know the saying: “the truth is in the eye of the beholder”. Personally I think there’s something my father once told me that compliments it nicely: “one can very quickly and easily turn his good name in a pile of rumble, but it takes years and years of hard work to rebuild it”. Both truths have never been more actual that today, in relations EU-Latin America.

It took only (and as much as) 50 years for Germany to erase the bitter taste World War 2 left in the mouths of European citizens. Today, apart from occasional clashes in the context of atonement for the caused damage, Germany is a widely accepted and respected member of the European Union, serious trade partner, wielding important vote in matters of our corner of the world. Besides a small group of radicals, no one is surprised by the way things are now.

Unfortunately the same cannot be said about Europe’s relations with Latin America. It’s true that the local media here don’t announce yet another crisis in diplomatic relations between the old and the new world, however five hundred years of harm inflicted by Europe still remain a thorn in the hearts and the memory of people living here. However good the intentions and the hard work invested, the representatives of EU should perhaps first ask for forgiveness. I haven’t found it in a single official document on this subject, and the ever so stressed years of common history and cultural values are, in this case, a reason for shame, not pride.

Originally written in Polish and published on MojeOpinie.pl (follow the link to retrieve the original version)

Barrow

If the popular TV series “Northern Exposure” was set in the Alaskan town of Barrow, we probably would have polar bears and reindeers as its main cast. Barrow, the northernmost settlement of the United States is famous for a couple of interesting things.

Modern day archaeological excavations executed around Barrow suggest that first settlements in this area date as far back as 500 AD. People who lived here were Inuit-related Inupiaqs. In their language the area was called Ugpiagvik, meaning “the place where we hunt owls”. Sources claim that the first person to arrive here was the French adventurer Ernest Barreau, hired by the Russian Tsar in order to collect information about the northern peripheries of Alaska. In spite of the prosperous times of whale-oil trade (monopolized by the Russians), few people lived here. However, with the transfer of Alaskan territories to the United States in 1867, and with the discovery of gold and later oil, the population began growing steadily. Subsequently many Canadian and American adventurers arrived in the town, which resulted in the change of its name to Barrow. Another theory suggests that the name has its roots in the nearby Cape Barrow, discovered in 1825 by Sir John Barrow – an officer of British admiralty.

It must be noted that Barrow is located in a hostile land – 500 km beyond the polar circle and affected by arctic climate. Flora consists of plants typical for tundra – small bushes, grasses and moss that fight for survival on a layer of permafrost reaching 400 m in depth. There is little time for them to enjoy favourable weather and sunlight. There are only two seasons beyond the polar circle and summer barely lasts 5 months – from May to October. During its winter Barrow registers the lowest temperatures in Alaska. However, its proximity to the Arctic Ocean and lack of natural barriers prevents the cold air from moving away, saving Barrow from the extreme cold of the Alaskan mainland. February is the coldest month, with temperatures reaching an average of -30˚C. The warmest month is July when one can enjoy the comfort of 8˚C. There are freezing temperatures on an average of 324 days per year.

On 18th or 19th of November Barrow bids farewell to sunlight for the next 65 days. Sun will reappear only on 22nd or 23rd of January. By the end of December even the transitional period of twilight lasts only 3 hours. On the other hand, patience is rewarded in May when polar day, an opposite phenomenon, occurs and the sun doesn’t set for the next 82 or 83 days.

Barrow’s population has grown drastically for many years. In the 1940s there were only 400 inhabitants, but by the 1960s the population had tripled and in the 1980s it amounted to 2,200. The 2008 census registered 4,429 residents.

The main source of income for the local population lies within the nearby oil fields in addition to various governmental agencies. Due to the breathtaking phenomenon of auroras Barrow has also become an important tourist destination and a source of inspiration for many artists. 2007 witnessed the release of 30 Days of Night – a horror movie based on a comic by the same title.

It is interesting to note the absolute prohibition on alcohol products. Theoretically this measure is to prevent the state of depression that residents of Barrow experience during the dark winter months. Paradoxically, import, possession and consumption is allowed.

Budapest Museums

It is typical for a city of the size and historical importance as that of Budapest to offer a wide choice of cultural institutions such as museums, galleries, theatres and concert halls. In total Budapest boasts 223 museums and galleries – a number that should satisfy even the most sophisticated tastes. The accumulated collections cover an impressive range of exhibits from fine arts, culture, science, natural science and, of course, Hungarian history. The following are just a couple of good examples.

Hungarian National Museum

The Hungarian National Museum is located in the 8th district, on Múzeum krt, about 3 minutes walk from the “Astoria” metro station (red line) and about the same distance from the “Kálvin tér“ station (blue metro line). It was established in 1802 as only the third institution of this kind to appear in Europe (the first being The British Museum). Its first collection was donated by Count Ferenc Széchényi, and was comprised of several thousand documents, manuscripts, maps, line engravings, coins and other antiques. For many years to come the collection did not have it’s own building. However, in 1807 the Hungarian National Assembly announced the museum a national property, which first sparked a nationwide donation of antique items, and, in 1836, led to the establishment of a new home, sponsored by the Hungarian government. The building was completed in 1847, and only a year later became an important symbol of the 1848-1849 revolution. It was here, on the steps of the National Museum, where on March 15, 1848 the Hungarian poet Sándor Petőfi, sang the famous “National Song“ (Nemzeti Dal). During the very same year the building also served as home to the upper house of the National Assembly. It is, therefore, not only an invaluable cultural institution, but also an extremely important symbol of the Hungarian struggle for independence.

Opening hours: Tuesday to Sunday: 10 am – 6 pm.

Hungarian National Gallery

In 1957, in order to contain the growing collection of Hungarian art, a new museum was established – the Hungarian National Gallery. Initially the collection consisted of about 6 000 paintings, 2 100 sculptures, 3 100 coins, 11 000 drawings and 5 000 prints, separated from the collection of the Museum of Fine Arts. Today the gallery exhibits masterpieces of Hungarian art from the Middle Ages, Renaissance, Baroque, 19th and 20th century paintings and sculptures, as well as modern art, such as expressionism, constructivism, surrealism, abstract expressionism, hiperrealism, pop art, surnaturalism, and transavantgarde. It is located in the Buda Castle. Make sure to check the temporal exhibitions as the National Gallery often hosts works of such acclaimed international artists as Dali, Miró, Klimt, Capa, Schiele, or Kokoschka.

Opening hours: Tuesday to Sunday: 10 am – 6 pm.

Budapest Museum of Fine Arts

This museum is located on the Heroes Square (Hősök tere, accessible by metro yellow line) and is part of the collective art relic that the square represents together with surrounding monuments. It features a large collection of fine arts (except Hungarian) and focuses on almost every artistic tendency in European visual arts. The collection boasts more than 100 000 works from some of the most famous European artists. The building which serves as home to this collection was designed by the famous Hungarian architect Albert Schickendanz.

Opening hours: Tuesday to Sunday: 10 am – 5 pm; every second Thursday (uneven weeks) open until 10 pm.

Museum of Applied Arts

Located in the 9th district, on Üllői street 33-37, this museum offers large collections of exhibits ranging from porcelain, carpets, various styles of furniture, glass works, and many others. It is interesting to note that the world-famous Zsolnay porcelain decorates the dome of this museum.

Opening hours: Tue: 2 pm – 6 pm; Wed / Fri / Sat / Sun: 10 am – 6 pm; Thu: 10 am – 10 pm.

Budapest Parliament

Once you have climbed the Gellért hill, turn slightly to your left and you will see an astonishing construction sitting majestically on the Danube’s east bank. It is the seat of the Hungarian parliament, one of the most recognizable structures in the city.

“The homeland has no home:” with these words Mihály Vörösmarty, one of the most celebrated Hungarian poets of 19th century, expressed his discontent with the fact that the Hungarian government had no permanent seat in Budapest. This, in fact, had never been considered a problem before. Traditionally, laws had been established in various places, such as Szeged, Sopron and even Bratislava–today the capital of Slovakia. However, during the turbulent period of reform, and a struggle for independence that shook the country in the 19th century, a lack of a clearly visible symbol of Hungarian unity was becoming increasingly apparent. It wasn’t until 1881, though, that Hungarians finally decided to pass a law that would lay ground for its current establishment.

By 1883, four designs were submitted which proposed visions of four different approaches to architecture. Otto Wagner came up with a neo-renaissance design; Lajos Hauszmann’s project implemented predominantly neo-baroque and neoclassical elements; a proposal put forward by Albert Schickedanz and Vilmos Freund called for classical architecture; and Imre Steindl envisioned the structure in a Gothic Revival style. Historians claim that Gothic Revival had always been important, both in Budapest and in Vienna where it was regarded as a proud symbol of idyllic times of peace. So, no one was surprised when Steindl emerged as the winner of the competition.

In reality, the design combines two different styles. The building’s layout and its majestic magnitude take their inspiration from the Baroque, whereas the detail is decidedly Gothic Revival. Experts also make note of a visible influence of works by the Viennese master architect Friedrich von Schmidt, whose Fünfhaus cathedral had been a great inspiration to Steidl. The structure is deservedly considered to be one of the biggest accomplishments of European architecture around the turn of the 20th century.

Construction commenced in 1885, lasting some nineteen years and completed in 1904, unfortunately, some time after Steindl’s death on August 31, 1902.

It had been decided that, where possible, only local materials were to be used. One thousand men contributed their skills and work in order to lay 40 million bricks and decorate the interior with 40 kg of 22-carat gold, numerous statues, beautiful frescos and paintings donated by such acclaimed Hungarian artists as: painters Mihály Munkácsy and Károly Lotz and sculptors Alajos Stróbl, Gyula Bezerédy and Barnabás Holló. The resulting construction is 268 m long, 123 m wide and 95 m tall. Its overall surface is 17 745 square meters.

Among must-see attractions of the parliament are the breathtaking dome hall (Kupolacsarnok) surrounded by statues of the seventeen Hungarian rulers, the impressive main stairway (Díszlépcső) that leads to it, and, of course, the marvelous house of representatives. All feature some of the most intricate decorative work seen in Europe, as well as numerous invaluable works of art, including the 800-year-old “Holy Crown” (Szent korona), one of the most popular tourist attractions.

The parliament is located on Kossuth Lajos square. The easiest way to get there is to take the red metro line and get off on the “Kossuth tér“ station.