Looking towards a global ethanol market
A great nugget from Barnett’s comments brings up the issue of FDI for ethanol. For a while now, I’ve been assuming that this is how ethanol dynamics would play out - though looking back through the blog it doesn’t look like I’ve ever posted on it. This represents yet another argument against throwing federal money into domestic farming subsidies, in order to better allow nations like Brazil and Cuba to start leverage their climate and argicultural advantage to produce ethanol more efficiently than we can domestically. With a more level playing field, equitorial gap nations might begin to be able to produce ethanol feedstock, get in on the action, providing a new FDI flow into their undeveloped economies. Marry those FDI flows with a valid strategic vision (to try to avoid the short-sighted “buy everyone off but make no systemic change” approach nations like Saudi Arabia pursued with their windfalls) and you start seeing the flywheel gaining momentum.
FDI flows from the Core to the New Core and Gap, ethanol flows from New Core and Gap to the Core. A new FDI target joins the existing manufacturing and technical services outsourcing dynamics.
So, I suppose the question is: how long until we see a tanker carrying ethanol? Or is that approach even appropriate for ethanol?
Some excellent details, from someone far more informed than I, about the feasibility of Gap contries using sugarcane for ethanol production as an economic niche have been posted here:
http://www.thomaspmbarnett.com/weblog/2007/02/more_on_ethanol.html
Comment by Wiggins — February 9, 2007 @ 1:08 pm
Tom around the web
+ Integral Options Cafe linked Why the yin disconnects from the yang. + So did tdaxp . + NonParty Politics says Hugh’s interviews of Tom are must listening. + Opposed Systems Design linked Comment upgrade: ethanol FDI. + MountainRunner linked…
Trackback by Thomas P.M. Barnett :: Weblog — February 11, 2007 @ 9:14 pm