[VIEWPOINT]Investment needed in bio-energyIt is said that the supply of fossil energy resources will not last beyond 30 years from now. The uneasy situation in the Middle East and the OPEC countries’ policy of using oil as a strategic weapon pose a serious threat to countries like South Korea that rely on imported oil as their source of energy almost 100 percent.
Nowadays, the importance of diplomacy for securing natural resources is being emphasized more than ever. President Roh Moo-hun visited Nigeria early last month and secured oil development rights in that country. Last year, Posco and Dongkuk Steel completed factories in India and Brazil, the world’s largest iron ore producing countries, thus establishing a bridge between the import of core industrial resources and the export of Korea’s products.
I visited Brazil twice last year and was briefed on an ethanol project, including the production of ethanol from raw sugar and the successful development of hybrid engines for both ethanol and gasoline, that the country is promoting ambitiously. Since ethanol produces only 15 percent of the amount of air pollution caused by gasoline, it came into the spotlight after the Kyoto Protocol to the UN Framework Convention on Climate Change was signed in 1997. Moreover, as it is forecast that high oil prices of more than $55 per barrel will continue, each country has started to accelerate the development of alternate energy.
The most promising grain for producing ethanol, considering the international price of grain, is corn. Raw sugar is also effective and is about 10 percent less expensive than corn.
President George W. Bush of the United States emphasized the economic importance of the development of bio-energy utilizing corn in his New Year’s press conference this year. Not only the United States, but other countries such as China, France, Canada and Japan have also started to study and actively examine the economic profitability of raw sugar cultivation for use in the production of ethanol.
Production of ethanol from grain is likely to develop into policies by countries of using foodstuffs as a strategic weapon. The prices of grain on the international market have started to skyrocket recently, posing yet another threat to Korea. In the case of grain, however, unlike oil, it can be reproduced annually. It is a sustainable resource. As the production cost of grain can be maintained at a certain level thanks to the development of farming technology and science, ethanol production will be a desirable policy for securing energy on a permanent basis, if we invest in its production.
In view of this, the middle and eastern areas of Brazil, where the central government promotes its policy of producing ethanol for export, and the plains in the Heilungjang province of China emerge as promising places for investment as these areas have good conditions for cultivating corn and soybeans on a large scale.
The governments of South Korea and Brazil have already expanded their scope of understanding through the exchange visits by President Roh and President Luiz Inacio Lula da Silva of Brazil, and through exchanges of information between concerned government ministries and diplomatic missions. In addition, the government of Brazil has been actively recommending our government promote investment in Brazil.
Of the 851 million hectares of Brazil’s land, only 61 million hectares are under cultivation and some 90 million hectares will be available for cultivation very soon. Since an additional 60 million hectares of land can be developed for agricultural purposes, Brazil is a country where investment by Korean businesses under government support can achieve the most. Considering the fact that Brazil has accumulated the technological know-how for ethanol production for 30 years, has been producing it for practical use for 25 years and has developed the agricultural experience and technology for producing sugar over the past 500 years, it is one of only a few resource-rich countries where we can invest safely.
Since the beginning of this year, the Korean economy has started to suffer from elements that endanger the competitiveness of our businesses, such as the soaring value of the won, skyrocketing raw material prices on the international market, various economic demands from citizens due to the elections scheduled this year and next, and rising public utility charges and salaries.
The government and the private sector should join hands in an effort to enhance our international competitiveness and build a welfare country by strengthening the diplomatic effort for securing natural resources.
* The writer is an ambassador in charge of economy and trade affairs at the Ministry of Foreign Affairs and Trade.
by Park Sang-eun