Enterra Insights

Biofuel from Algae

Talk of biofuel as an alternative to oil was all the rage when crude was skyrocketing towards $200/barrel. About the same time, the world was undergoing a food crisis. The diversion of agricultural acreage to produce biofuel crops exacerbated the crisis and increased tension between biofuel proponents and food security advocates. The most obvious way to reduce tensions between those promoting biofuels and those who believe that it's wrong to convert land used for food crops into biofuel acreage is to harvest a biofuel source that isn't used for food and can be grown where food crops can't be grown. Early last year, I wrote a blog about how algae could fit that bill [The Potential of Pond Scum]. That post focused on an article in BusinessWeek ["Here Comes Pond Scum Power," by Gail Edmondson, 3 December 2007] that claimed "algae farms don't require huge volumes of freshwater, nor do they tie up land that could be used for food crops. Algae flourish in saltwater or even wastewater and grow up to 40 times faster than other plants. Compared with current energy crops, algae have 'the potential to deliver 10 or 100 times more energy per acre,' says Ron C. Pate, a technical expert at Sandia National Labs." At the time I wrote "if that sounds too good to be true -- well ... it is. Edmondson admits algae biodiesel isn't practical yet. "Bringing down the cost of producing algae oil in commercial volumes—billions of gallons—is still a big challenge. 'The scale required to grow algae to a meaningful dimension is staggering,' says Bill Green, managing partner at VantagePoint Venture Partners."

Research into algae-based biofuels has continued apace and ExxonMobil has reported "that it will sink up to $600 million in an algae-to-fuel startup founded by genomics pioneer J. Craig Venter ["Exxon Funds Biofuels," edited by Michael Arndt & Cristina Linblad, BusinessWeek, 27 July 2009 print issue]. Exxon claims "that an internal study has found that algae is the only alternative that can be commercially successful." You might not want to tell Brazilian sugarcane growers that their efforts aren't successful; at least not until they are no longer making a profit. I suspect what Exxon's study found was that algae could be grown commercially in greater amounts in various geographies than other biofuel crops. The Economist provides a more detailed look into what Dr. Venter is doing and why Exxon Mobil is willing to invest in his efforts ["Craig's twist," 18 July 2009 print issue].

The article begins by noting that ExxonMobil's chief executive dismissed biofuels as "moonshine" just about the same time that British Petroleum (BP) was branding itself a "Beyond Petroleum" company. Now that the shine has worn off biofuels (because oil prices are down and the food shortage produced numerous critics), some companies are having second thoughts about expanding their biofuel efforts and "Exxon seems to be going the opposite way yet again."

"The beneficiary of this largesse is Synthetic Genomics, a firm based in San Diego that is the commercial vehicle of Craig Venter. Dr Venter may be familiar to readers as the former head of Celera Genomics, which ran a privately financed version of the human genome project during the late 1990s, and before that as the leader of the team which produced the first genetic sequence of a living organism (a bacterium called Haemophilus influenzae). In this case, though, the money will be thrown at neither people nor bacteria, but algae. At the moment, most biofuels are either ethanol, usually made from sugarcane or maize, or biodiesel, made from plant oils. But many people hope that will no longer be true in ten years’ time. By then, the expectation is, biofuels will chemically resemble the stuff that pours out of existing oil refineries—ie, hydrocarbons. The question is, how do you get there from here? Dr Venter thinks he knows the answer. He proposes the industrial-scale culturing (biomanufacturing, as he describes it, rather than farming) of single-celled algae that have been genetically engineered to turn out fuel-ready hydrocarbons. He is by no means the only person to be working on the idea of turning algae into biofuels, but he has one or two particular ideas about how to do it. The most important of these is to get the algae to secrete their products into the culture medium in which they are being raised. Many algae make oil, which they store as a foodstuff against an uncertain future. But they do not squirt it out of their bodies. That would be pointless."

Of course, we train animals to do all sorts of pointless things -- like roll over -- in order to get a reward. But single-celled algae aren't exactly the best subjects for training using the tried-and-true reward method. So Dr. Venter tried another approach.

"Dr Venter ... succeeded in engineering a secretion pathway from another organism into experimental algae. These algae now release their oil, which floats to the surface of the culture vessel. That is why he refers to the process as biomanufacturing. It is not farming, he reckons, because the algae themselves are never harvested (though it may be necessary to cull them if they become too abundant). The next trick, which Exxon’s money will help pay for, is to tweak the biochemical pathway that makes the algal oil (which is known, technically, as a triglyceride, and has oxygen atoms in it as well as carbon and hydrogen) so that the oxygen-containing parts of the molecules are snipped off and a pure hydrocarbon is left. After that, it will be a question of looking through the thousands of species of algae around to see which would make the best 'platform' for the new technology. The ideal species will be able to stand up to intense illumination (more light means faster photosynthesis) and heat (for the high levels of sunlight required will also warm things up). It will also need to be resistant to viruses, which will otherwise be a big threat to such a concentrated population of identical organisms. And if no suitable species exists, then Synthetic Genomics’s researchers will take the desirable characteristics from several and create what is, in effect, a new one."

There are more good things about producing biofuel from algae. The algae can help reduce greenhouse gasses as it grows.

"The other raw material for photosynthesis, carbon dioxide, will be supplied as the exhaust from industrial plants such as power stations, oil refineries and natural-gas processors. That this will be captured before it can get into the atmosphere and promote climate change will be a bonus. The process will not be truly carbon-neutral (for that, the CO₂ would have to come out of the atmosphere, and if the algae could use only the limited amount of the gas in natural air, they would not grow fast enough) but each carbon atom will have been made to do double duty in a fuel before it finally escapes. The result, if all goes well, will be a mixture of hydrocarbons that can be fed into the stage of the oil-refining process just before petrol and diesel emerge from the stills, and at a price that competes with the equivalent chemical mixture produced by traditional methods."

The greatest benefit of using algae as the base stock for biofuel is that it, as noted above, doesn't necessarily have to compete for agricultural acreage to be grown. Even if it did, Venter believes that "it should be possible to turn out ten times more fuel per hectare than can be garnered from maize." Of course, the article notes, algae production is more capital intensive because the plants must "be force-fed with CO₂." As long as the CO₂ is available, however, currently non-productive areas could be made productive. The article concludes:

"If the process really can be made to work, CO₂ would go from being a polluting waste product to a valuable raw material, and it might even become worthwhile building systems to capture it and pipelines to ship it around. That really would be ironic."

Don't expect to pump algae-based biofuel into your tanks in near future. There remain lots of challenges. ExxonMobil, however, is beginning to believe that there is potential for biofuel beyond its use as "moonshine."

Health Care and Development

Health care reform continues to make headlines in the United States. As president and CEO of a business, I am obviously following the debate because the outcome will affect both my company and my employees. Health care is a concern around the world. It is improving in some countries and remains woefully bad in others. In fact, health care in some developing countries has improved so much that those countries are now attracting "medical tourists." Mexico has become a destination of choice for many Americans, while others travel to places like India, Singapore, or Thailand. Often the reason that people seek medical care outside their own country is cost ["Overseas, Under the Knife," by Arnold Milstein, Mark D. Smith, and Jerome P. Kassirer, New York Times, 9 June 2009]. Milstein, Smith and Kassirer are all doctors. They write:

"One consequence of the high cost of medical care in the United States has been the rise of medical tourism. Every year, thousands of Americans undergo surgery in other countries because the allure of good care at half the price is too good to pass up. Average total fees at well-regarded hospitals like Apollo and Wockhardt in India are 60 percent to 90 percent lower than those of the average American hospital, according to a 2007 study by the consulting group Mercer Health and Benefits (where Dr. Milstein is affiliated). Even compared with low-cost American hospitals, the offshore fees are 20 percent to 50 percent lower."

They note that although many of the medical procedures being sought by medical tourists are cosmetic, "an increasing number have high-risk operations like heart surgery and joint replacement." They claim that many of the people seeking high-risk procedures do so because they "have either no health insurance or meager coverage. Though not poor enough to qualify for Medicaid, they cannot afford a good health plan." The doctors warn that the cost benefits of seeking medical care in developing countries should be weighed against the potential risks.

"People having surgery done halfway around the world are far from their regular doctors as well as friends and family. Consider, also, what happens if an American abroad falls victim to negligent care. Arranging transfer to another hospital may be difficult — and malpractice suits typically face longer odds and smaller payments than in the United States."

The authors aren't condemning overseas health care. In fact, they openly admit that "there is reason to think that the quality of care at some foreign hospitals may be comparable to quality in the United States." Sadly much of that excellent health care isn't available to the local population because they can't afford it. Some hospitals address this challenge by charging different fees for locals and foreigners. People living in the most impoverished countries can't even dream of having access to good medical care. Even worse, they are often victims of medical fraud that can be life threatening. One of the most serious problems is fake drugs. To meet this challenge, Dr. Facundo M. Fernández, a professor at the Georgia Institute of Technology, recommends using mass spectrometers to ferret out fake drugs ["Using Scientific Tools in an International War on Fake Drugs," by Thomas Fuller, New York Times, 20 July 2009].

"[Mass spectrometers] can instantly identify the chemical makeup of food, drugs and just about anything placed in front of their stainless-steel aperture. ... Dr. Fernández’s main focus is counterfeit pharmaceutical drugs, especially in poorer countries, where government regulation is weak. He is part of an informal group of researchers and government officials spanning Africa, Asia and the United States who have teamed up with Interpol, the international police agency, to use cutting-edge technology in tracking fake drugs that claim to treat malaria. Counterfeit malaria drugs are of particular concern because of the scale and severity of the disease — it kills more than 2,000 children a day in Africa alone — and fears that fake or substandard malaria drugs are aggravating a growing problem of drug resistance."

To learn more about the malaria problem and what's being done to address it, read my blogs entitled for example, News About Malaria Continues to Improve, Mapping Africa, The Rise of "Creative Capitalism": Tackling Malaria, and New Malaria Initiative Launched. Returning to Dr. Fernández’s fight against fake drugs, Fuller reports that the big breakthrough for using mass spectrometers came just a few years ago.

"A scientific breakthrough in 2005 added an 'ion gun' to the machines and allowed Dr. Fernández to check hundreds of pills a day. A technician simply holds the sample — a pill, dog food or a dollar bill, for example — up to the machine, which emits a jet of helium gas and captures a minute amount of the material, instantly identifying its component parts. Contrary to the common belief that counterfeit drugs are just sugar pills, Dr. Fernández said, most fakes have some level of active ingredient. Many contain the cheap and readily available pain reliever paracetamol, which might temporarily soothe some symptoms but will not fight the underlying disease. Sometimes researchers find harmful or very unexpected chemicals. Once, when analyzing what was suspected to be a counterfeit antimalarial pill, his team discovered traces of sildenafil, the main ingredient in the anti-impotency drug Viagra. ... The counterfeit drug business has become increasingly attractive for criminal syndicates; the profit potential is vast, yet the punishment for those caught is typically much less severe than for illegal drugs like cocaine, law enforcement officials say. This is especially true in Asia, where many countries impose the death penalty for trafficking heroin, Ecstasy or even marijuana but where combating counterfeit drugs is not a priority. Three years ago, the World Health Organization estimated that as many as one in four pharmaceutical drugs sold in the developing world were counterfeit. It is impossible to know the exact level, but there is general agreement that the level of fake drugs is 'unacceptably high,' in the words of the organization."

As I often stress in my discussions of Development-in-a-Box™, one of the preconditions of sustainable development is having a healthy workforce. When a workforce's health is being undermined by the pervasive availability of fake drugs, other developmental efforts are negatively impacted. According to Fuller, mass spectrometers aren't the only tools being used to uncover fake drugs.

"Counterfeiters have become more sophisticated in recent years, churning out pills and packaging that look like the real thing. But as the work of Dr. Fernández and others indicates, the sleuthing, too, is becoming more high-tech, relying on innovative forensic tools. Dallas C. Mildenhall, another scientist in the anti-counterfeit network, helps track fake drugs by analyzing the microscopic pollen grains embedded in the pills or packaging. Forensic investigators have used pollen grains for decades to help solve murders and other crimes, but Dr. Mildenhall pioneered using the tiny grains, which are ubiquitous in clothing, nostrils, hair, food and nearly everything exposed to air, to help combat counterfeiters. Because many plants are specific to certain parts of the world, pollen helps determine where the drugs were manufactured. ... Dr. Mildenhall’s work has helped establish that many counterfeits come from the border area between China and Vietnam as well as the general vicinity of the Golden Triangle, the area famous for heroin production where the borders of Laos, Myanmar and Thailand meet. ... Dr. Mildenhall is now involved in a project led by Paul N. Newton, the head of the Oxford University Center for Tropical Medicine in Laos, to determine whether counterfeit antimalarial drugs found in Africa were imported from Asia or manufactured locally."

All these places (i.e., Laos, Myanmar, and Thailand) are located within geographical areas that comprise what my colleague Tom Barnett calls the Seam. Seam states lie between desperately poor and disconnected countries in the Gap and the developed economies of the Core. Seam states are invariably poorly governed and are, therefore, corruptible. They are disconnected enough from most of the global economy to allow criminals to act without fear, but are connected just enough for criminals to get their products to market. Sustainable development requires good governance; but good governance eliminates wealth created by corruption. As a result, fight corruption and corruption fights back. Aline Plançon, head of Interpol’s counterfeit drug department, claims "the main obstacle to cracking down on fakes [is] a lack of political will and cooperation between countries." Fuller reports that the problem is spreading beyond counterfeit drugs to other "fake medical supplies like blood bags, syringes, bandages and contact lenses." Dr. Fernández would like to see a mass spectrometer in every pharmacy in the developing world, but at $150,000 a unit that dream remains out of reach. Inventing an effective mass spectrometer that could be manufactured for under $1,000 would be a great goal for an innovation prize contest (see my post entitled A New Approach to Innovation).

Technology can also be used to improve health care in ways other than tracking down fake medical supplies. It can also be used to track diseases and predict their spread ["Predicting Flu With the Aid of (George) Washington," by Donald G. McNeil, Jr., New York Times, 3 May 2009].

"In the past decade, the Internet has allowed health agencies to spot emerging viruses much sooner: local public health reports posted on the Web along with items from newspapers and radio stations are harvested by keyword-scanning programs. Now, in tandem with that, supercomputers are being enlisted to predict their spread."

I'm a big supporter of predictive models. The challenge, of course, is getting good information that can be used by computer models. Dirk Brockmann, an engineering professor who leads the epidemic-modeling team at the Northwestern Institute on Complex Systems, has created a global model that "can put out a simulation in two days." McNeil reports, "His model covers the globe, and it is based on air and land travel records for nearly the whole world. 'In Africa, predictions are less accurate, but we have truck traffic,' he said." Helping get developing nations more connected helps improve the business environment and will increasingly play an important role in improving health care as well. The developing world is already providing some methods that can be used in the developed world to keep down health costs. We need to continue to drive down costs so that better health practices become available to world's poorest populations.

The Temptation of Power

In late June, Honduran soldiers stormed the presidential palace in Tegucigalpa and forced President Manuel Zelaya into exile in Costa Rica. As The Economist reported, "It was a flashback to a nightmare that Latin Americans hoped they had awoken from for good" ["Lousy president, terrible precedent," 4 July 2009 print issue]. Yet there was something very different about the coup in Honduras -- it was a coup that had the support of the courts, the legislature, and most of the people. The reason that the ouster was so broadly supported was that Mr. Zelaya had taken a page from the playbook of Venezuelan president Hugo Chávez and had tried to organize "a referendum on convening a constituent assembly—the very device Mr Chávez used to establish an autocracy. Since such an exercise violated the constitution and both Congress and the courts were firmly opposed to it, this unleashed a conflict of powers." In other words, Mr. Zelaya wanted to change the Honduran constitution so that he could be president for life. One can only assume that coup leaders in Honduras anticipated wide international acceptance for their attempt to save democracy in their country. They must have been startled when the coup was met with almost unanimous disapproval. The reason, of course, is summed up well in The Economist's headline. Zelaya may have been a lousy president, but sanctioning a coup that had ousted a democratically-elected president would have set a terrible precedent.

Affairs of state, especially those dealing with regime change, are never easy and always complex. For years, some European states have been supporting the concept of humanitarian interventions that could be used to remove regimes promoting policies such as genocide. Most of the international community supported President Bush's intervention in Afghanistan that overthrew the Taliban. The Taliban had been committing unspeakable crimes against its people and had been crushing the aspirations of its women. The regime could also be directly tied, of course, to the terrorist attacks conducted in 2001. In a more recent case, the majority of the international community has backed the International Criminal Court's attempt to prosecute the Sudanese president, Omar Hassan Al-Bashir, for crimes against humanity, over the mass killings in Darfur; which would remove him from office. Mr. Zelaya has not been accused of crimes against humanity just a bald-faced grab for power. That's what makes his ouster unacceptable to most other countries. As noted above, Mr. Chávez has been manipulating his country's political environment for years, but the international hasn't called for an intervention to overthrow his regime.

Another leader that is making a grab for additional power is Niger's President Mamadou Tandja ["Niger Senses a Threat to Its Scrap of Democracy," by Adam Nossiter, New York Times, 13 July 2009]. Nossiter reports:

"Tens of thousands have taken to the streets to protest President Mamadou Tandja’s slow-moving coup d’état, as his critics call it: his plan to stay beyond the legal limit of two terms in his colonial-era palace, a gleaming oasis of whitewashed order amid dilapidated government buildings and mud-brick houses. In his push for a new constitution that would abolish term limits and give him more power after 10 years as president, Mr. Tandja dissolved a high court that ruled against his bid to remain in office; dismissed a fractious Parliament; took steps to muzzle the press, including shutting down a radio and television station; and arrested opposition leaders."

The temptation for leaders to stay in power is almost irresistible. Only when institutional safeguards are stronger than the political power of a country's ruler is democracy safe. That's why Chávez, Zelaya, and Tandja want to remove institutional obstacles to their aspirations. As institutional safeguards assume more historical and deeper foundations, the safer a democracy becomes. The problem is that democracy in many countries around the world remaind in its infancy. Niger is one of them.

"Democracy is new here in one of the world’s poorest countries, barely a decade old in this vast land of about 14 million people, most of it desert, bigger in area than France, Spain and Portugal together. Uranium deposits, among the world’s largest, provide the government with revenue, but the citizens here do not have much. Most live on less than a dollar a day, and mortality rates for mothers and children are well above the African average — double in the case of women giving birth. The country ranks fifth from the bottom in the United Nations human development index, and persistent malnutrition stalks rural areas, aid workers say. In the capital, the hugely swollen limbs of insistent beggars testify to the effects of unchecked disease."

To read more about tensions in Niger that are being created by its uranium deposits, read my blog entitled Commodity Economics: Feast or Famine. Niger sits in the heart of what my colleague Tom Barnett calls "the non-integrating Gap." It has been trying to move away from that status, but it has not been easy and Tandja's power grab won't help.

"One thing the people have dearly acquired, though, after decades of coups, military strongmen and weak governments, is a political order that has resembled democracy, albeit with lapses: two successful presidential elections, defeated candidates who go home without causing turmoil, an outspoken opposition and an alert if beleaguered press. The citizens are manifestly unwilling to give up their shaky gains. The street protests have given way to strikes and daily banner headlines in the nongovernment press, like the one last week proclaiming 'The Dismantling of Democracy' in the leading opposition newspaper, Le Républicain."

One of the reasons that U.S. President Barack Obama made Ghana his first presidential visit in Africa was to honor the country for its commitment to democracy. By praising its efforts, the President hoped to deepen its commitment to democratic processes so that it could serve as example to other African nations (see yesterday's post entitled Hope in Ghana). One thing for sure, President Tandja has taken himself out of the running for prestigious Mo Ibrahim Prize for Achievement in African Leadership (to learn more about the prize, read my post entitled Leadership and Good Governance in Africa). There is no delusion as complete as self-delusion; and leaders like Chávez, Zelaya, and Tandja are masters of the art. Nossiter reports:

"In the presidential palace, an airy Moorish-style edifice built for the French governors and well hidden from the road, Mr. Tandja beamed and said he wanted to stay on only because the people were begging him to do so. 'The people demand it,' Mr. Tandja said. 'My obligation is to never betray the aspirations of the people. It’s the people who asked.' In the great hall outside his office, a giant mural depicted Mr. Tandja, arms raised, in the center of lush fields, surrounded by tiny citizens with arms reaching out to him. Ticking off what he said were his accomplishments — public works projects, improvements in education — the president said, 'When you look at all this, it’s normal that the people want to keep you as long as possible.'"

Tandja could just as well be chanting, "Hell, no, I won't go." The reason that I selected this topic for a post is that good governance is critical for sustainable development. Autocratic regimes inevitably find themselves snared in the tentacles of corruption and increasingly rely on force to mute opposition. As ethics decay, less effort is spent on planning for the future as more time is spent on planning to stay in power. Old regimes have a difficult time embracing fresh ideas. Everyone agrees that the future of Africa (or of any region for that matter) rests in the hands of the people living there. Unfortunately, too much power remains in the hands of too few people. Leaders like President Tandja are hurting efforts by other better-governed African nations to improve Africa's reputation and secure a brighter future.

Hope in Ghana

President Barack Obama's recent visit to Ghana placed that small country in the global spotlight. President Obama selected Ghana for his first presidential visit to Africa because it stands in such stark contrast to many other African states ["Ghana Visit Highlights Scarce Stability in Africa," by Adam Nossiter, New York Times, 10 July 2009]. In the region, however, people appeared more interested in talking about why other countries, like Kenya (his father's homeland) and Nigeria (Africa's most populous country), were snubbed rather than the positive message that a visit to Ghana could send.

"Mr. Obama says he chose Ghana to 'highlight' its adherence to democratic principles and institutions, ensuring the kind of stability that brings prosperity. 'This isn’t just some abstract notion that we’re trying to impose on Africa,' he told AllAfrica.com. He added: 'The African continent is a place of extraordinary promise as well as challenges. We’re not going to be able to fulfill those promises unless we see better governance.' With that as his objective, a harsh reality emerged: Mr. Obama did not have too many options. From one end of the continent to the other, the sort of peaceful, transparent election that Ghana held last December is still an exception rather than the norm, analysts said. The same is true for the country’s comparatively well-managed economy."

That many, if not most, African nations suffer a crisis of leadership is no surprise. To learn more about leadership and governance in Africa, read my post entitled Leadership and Good Governance in Africa. Other countries that Obama could have considered were "Botswana, Namibia and South Africa [that] have consistently received better-than-average global scores for their governance in recent years, according to rankings based on World Bank research." None of them, however, measures up to the progress made by Ghana. Nossiter continues:

"The list of exploding countries, unstable countries, corrupt countries, is long. Military coups still break out with regularity, as in Guinea and Mauritania within the last year. Journalists in a number of countries continue to be killed, jailed, tortured, forced into exile or otherwise muzzled. ... Mr. Obama seemed to acknowledge as much in his interview, saying that the democratic progress in recent years had been accompanied by 'some backsliding.' He even singled out Kenya as a worrisome example, noting the political paralysis that had plagued the country since its bout of postelection violence last year."

Africa as a whole remains a source of great frustration for many western governments.

"The gulf separating the West and many African leaders on fundamental issues like human rights was on display just last week. The African Union announced that it would refuse to cooperate with the International Criminal Court in its attempt to prosecute the Sudanese president, Omar Hassan Al-Bashir, for crimes against humanity, over the mass killings in Darfur. Even Mr. Atta-Mills [Ghana's president] was reported to back the refusal as 'best for Africa.' Human rights groups denounced the decision, as did some African leaders on Friday, when a smaller African Union panel headed by South Africa’s former president, Thabo Mbeki, backed the court’s indictment and called on the accused to appear in court, news agencies reported. Despite the various rejections of the court, Mr. Obama’s top adviser for Africa, Michelle Gavin, praised for the African Union, telling reporters that it 'has really been sort of forging ahead, commenting much more strongly than in the past on unconstitutional transfers of power.' Yet some of the recent evidence from the continent only partly supports Ms. Gavin’s point. African leaders, for instance, flocked to the funeral of the recently deceased president of Gabon, Omar Bongo, lavishing praise and benedictions on a long-ruling autocrat widely seen in the West as having stolen his country’s oil wealth on the way to becoming immensely rich himself, while his country remained impoverished."

That fact that many leaders still line their pockets with the wealth gained through the exploitation of natural resources is one of the reasons that many U.S. businesses remain hesitant to invest in Africa (for more on that subject, see my post entitled Investing in Africa]. Ahead of President Obama's trip to Ghana, rock star and activist Bono wrote an op-ed piece that stressed the importance of changing Africa's image ["Rebranding Africa," New York Times, 9 July 2009]. He praised the President's choice of Ghana as the first locale for a presidential visit.

"This is a country whose music of choice is jazz; a country that long ago invented a genre called highlife that spread across Africa — and, more recently, hiplife, which is what happens when hip-hop meets reggaetón meets rhythm and blues meets Ghanaian melody, if you’re keeping track (and you really should be). On a visit there, I met the minister for tourism and pitched the idea of marketing the country as the 'birthplace of cool.' (Just think, the music of Miles, the conversation of Kofi.) He demurred ... too cool, I guess. Quietly, modestly — but also heroically — Ghana’s going about the business of rebranding a continent. New face of America, meet the new face of Africa. Ghana is well governed. After a close election, power changed hands peacefully. Civil society is becoming stronger. The country’s economy was growing at a good clip even before oil was found off the coast a few years ago. Though it has been a little battered by the global economic meltdown, Ghana appears to be weathering the storm. I don’t normally give investment tips — sound the alarm at Times headquarters — but here is one: buy Ghanaian. So it’s not a coincidence that Ghana’s making steady progress toward achieving the Millennium Development Goals. Right now it’s one of the few African nations that has a shot at getting there by 2015."

Not everything, however, is rosy in Ghana. There is still poverty and some working conditions remain deplorable ["Scavenging Hazardous 'E-Waste' for a Few Redeemables," by Karin Brulliard, Washington Post, 16 July 2009]. Brulliard talks about an 11-year-old boy named Simon who "spends every day at ... a scrap yard at the impossibly teeming Agbogbloshie market in Ghana's capital, mining -- along with hundreds of men and boys -- for metal wires and parts that can be re-sold and burning the plastic that encases them." Most of the people scouring the scrap heap come from Ghana's impoverished north.

"Hour after hour, their clanking tools pound apart computers and video game consoles that were discarded in the United States and Europe and shipped here to rot. Agbogbloshie is one hotspot in a growing mountain of hazardous electronic waste, according to environmentalists, who have adopted the issue as a clarion call for the information age. The site is also a stark example of the West's continued abuse of Africa, critics say: The rich world not only extracts resources from the continent, it also uses it as a trash bin."

There are ways to deal safely with refuse, but modern methods are hard to find in developing countries. That's one reason that I began thinking about how best practices and world standards could be used to help emerging market regions develop more quickly and safely. Those thoughts eventually led to the creation of Enterra Solutions' Development-in-a-Box™ offering. Ghana is moving in the right direction and the attention it received as a result of President Obama's visit and rock star Bono's endorsement should encourage it to remain on course. Staying the course for most African countries, however, has been an enormous challenge.

Big Brother meets Animal Farm

Perhaps nothing is more important to humankind that ensuring that its food and water supplies are safe and secure. The occasional flare-ups of "mad cow disease" that have caused panic and have halted of cross-border sales of meat have resulted in efforts to tag animals so that they can be traced through the food chain. These efforts have caused concern both in the United States and in Europe. Ranchers in America's west have always been known for their individualism and it is no surprise that they are resisting any attempts by the government to look over their shoulders ["Rebellion on the Range Over a Cattle ID Plan," by Erik Eckholm, New York Times, 27 June 2009]. Eckholm writes:

"Wranglers at the Platt ranch were marking calves the old-fashioned way last week, roping them from horseback and burning a brand onto their haunches. What they were emphatically not doing, said Jay Platt, the third-generation proprietor of the ranch, was abiding by a federally recommended livestock identification plan, intended to speed the tracing of animal diseases, that has caused an uproar among ranchers. They were not attaching the recommended tags with microchips that would allow the computerized recording of livestock movements from birth to the slaughterhouse. 'This plan is expensive, it’s intrusive, and there’s no need for it,' Mr. Platt said."

Expenses are always a concern for those involved in agricultural. The vagaries of the commodity market are well known and keeping costs down is essential for ranchers, farmers, and consumers. The cost per animal for the electronic tags is about $2/head. I suspect, however, that it is intrusiveness as much as cost that is putting a bur under the saddles of ranchers. The government believed the plan was fairly straight forward and would be welcomed because it could reduce unnecessary testing on some animals.

"The plan, which is still being ironed out, might have seemed simple enough. With the ever-present threat of animal epidemics, why not modernize the system for identifying livestock? Why not keep computer records of movements so that when a cow is discovered with bovine tuberculosis or mad cow disease, its prior contacts can be swiftly traced? The disease source and the herds needing to be quarantined can be determined faster, officials said. 'Now, when there’s an outbreak, we can’t trace prior movements quickly, and we end up testing a lot more animals than necessary,' said Neil Hammerschmidt, director of the identification program for the federal Agriculture Department. 'We want to put in place the infrastructure prior an outbreak.'"

The fact that the program originates from a Democratic administration doesn't sit well in Republican country.

"Mr. Platt expresses his opposition in more measured terms than many. Web sites analyze every official statement with suspicion, and angry farmers have packed the 'listening sessions' held around the country this spring by the Obama administration’s new agriculture secretary. Rumors have swirled, and farmers are asking whether the government will really require tags on every baby chick and catfish fingerling or a computer report when a pet pony trots onto a neighbor’s land. Underlying the opposition is the fragile economics of ranches and small farms, which are already disappearing. The extra cost of radio tags, scanners and filing reports when animals change premises would be crushing, some smaller producers say."

To be fair, good arguments can be mounted by both sides; but the potential costs for so-called "family farmers" could well drive them out of business. The problem is not the cost of RFID tags, but the personnel costs to install the devices and then take care of all the data entry requirements. Most people, I believe, would like to save a place in the future for family farmers. Some small farmers, Eckholm reports, believe that the tagging program was designed by large agri-corporations to drive small farms and ranches out of business. Conspiracy theorists believe that animals are only the first step. Some ranchers' trucks sport bumper stickers that read "Tracking cattle now, tracking you soon." The government insists that many of the concerns are exaggerated, but the program is likely to run into continued opposition.

Politicians in Europe are facing similar challenges; especially in the United Kingdom ["Shepherd's warning," The Economist, 4 July 2009 print issue].

"The British government found out in the 2001 outbreak of foot and mouth disease (FMD) among cattle, tracing the origins of an epidemic can be tough. To make disease control easier, the European Union decided that all sheep, which also get FMD, should have identity cards in the form of electronic ear tags. That way they can be monitored, just as supermarkets use radio-frequency identification microchips in packaging to track their stock. Tracing infected animals back to their home farms is crucial for disease control. It seems a good idea. It should also make controlling scrapie, a nasty sheep disease that can remain undetected for years before symptoms show, much easier."

Interestingly enough, the article points out that the EU used the U.S. as an example of how effective monitoring can be.

"America started using the same technology in 2001 and stepped up an animal-testing programme to wipe out scrapie. The disease turned out to be more widespread than was first thought but, since 2005, the number of flocks testing positive has fallen by about 77%."

Effective or not, "British farmers, with 33m sheep or 24% of the EU’s total flock, don’t want to be herded down that route." The arguments used by British shepherds are the same ones used by U.S. cattle ranchers. The costs of the tags, readers, and data entry are simply too onerous. "Such is the uproar that the EU’s sheep-taggers have agreed to postpone making the scheme compulsory until the beginning of 2010." In an "I told you so" moment" for the conspiracy theorists, the article reports that "given how hard it is proving to mandate ID tags for sheep, it is perhaps unsurprising that the [British] government is rethinking ID cards for people."

There will always be a tension between food safety and food costs. Inspecting agricultural products and the plants that process them is not cheap; but the public rightfully expects its food supply to be safe. Information age technologies permit us to tag and track items and provide information that could be potentially beneficial in times of crisis. The question is whether the risk of not doing so is greater than the expense of implementing a tracking system. It's not just the farmers and ranchers that have a stake in the cost-benefit analysis. The eventual consumer should also have a say. Unfortunately, too often the consumer insists on safety but whines about the rising cost of food. Even reluctant family farmers have eventually learned that new technologies can help them improve efficiency and lower costs. It will probably take decades to understand whether electronic tagging is one of them.

Living in a "Nano" World

When people hear the term nanotechnology, they either think of a brighter future helped along through the introduction of new materials or a gloomy one in which molecular manufacturing (MM) destroys the world. Worries about the latter scenario are expressed on the website of the Center for Responsible Nanotechnology:

"Molecular manufacturing (MM) will be a significant breakthrough, comparable perhaps to the Industrial Revolution—but compressed into a few years. This has the potential to disrupt many aspects of society and politics. The power of the technology may cause two competing nations to enter a disruptive and unstable arms race. Weapons and surveillance devices could be made small, cheap, powerful, and very numerous. Cheap manufacturing and duplication of designs could lead to economic upheaval. Overuse of inexpensive products could cause widespread damage. Attempts to control these and other risks may lead to abusive restrictions, or create demand for a black market that would be very risky and almost impossible to stop; small nanofactories will be very easy to smuggle, and fully dangerous. There are numerous severe risks—including several different kinds of risk—that cannot all be prevented with the same approach. Simple, one-track solutions cannot work. The right answer is unlikely to evolve without careful planning."

The Center also admits that "the potential benefits of molecular manufacturing are immense." Not all nanotechnology involves the creation of machines. As noted above, some nanotechnology involves the creation of new materials that could help solve some of the vexing problems currently facing society ["The power of being made very small," The Economist, 4 July 2009 print issue].

"Big improvements in the production of energy, especially from renewable sources, are expected over the coming years. Safer nuclear-power stations, highly efficient solar cells and the ability to extract more energy from the wind and the sea are among the things promised. But important breakthroughs will be needed for these advances to happen, mostly because they require extraordinary new materials. The way researchers will construct these materials is now becoming clear. They will engineer them at the nanoscale, where things are measured in billionths of a metre. At such a small size materials can have unique properties. And sometimes these properties can be used to provide desirable features, especially when substances are formed into a composite structure that combines a number of abilities. A series of recent developments shows how great that potential might be."

The article goes on to discuss the work of Michael Demkowicz of the Massachusetts Institute of Technology, whose approach to nanotechnology involves specifying "a set of desired properties and then trying to predict the nanostructures needed to deliver them." He is currently working with the Los Alamos National Laboratory to develop a material that could replace the stainless steel liners currently used in nuclear reactors.

"[The new material] would extend the reactor’s working life and allow it to be operated more efficiently by burning a higher percentage of nuclear fuel. At present, says Dr Demkowicz, reactors burn only around 1% of their fuel, so even a modest increase in fuel burn would leave less radioactive waste. The reason why the linings of nuclear reactors degrade is that metals can become brittle and weak when they are exposed to radiation. This weakness is caused by defects forming in their crystal-lattice structure, which in turn are caused by high-energy particles such as neutrons bumping into individual atoms and knocking them out of place. When these displaced atoms collide with other atoms, the damage spreads. The result is holes, or 'vacancies', and 'interstitials', where additional atoms have squeezed into the structure. Dr Demkowicz says it is possible to design nanocomposites with a structure that resists radiation damage. This is because they can be made to exhibit a sort of healing effect in the areas between their different layers. The thinner these layers are, the more important these interfaces become because they make up more of the total volume of the material. Depending on how the nanocomposites are constructed, both the vacancies and the interstitials get trapped at the interfaces. This means there is a greater chance of their meeting one another, allowing an extra atom to fill a hole and restore the crystal structure. In some conditions the effect can appear to show no radiation damage at all, he adds. The ideal nanocomposite would not only resist radiation damage. It would also not itself become radioactive by absorbing neutrons."

Material for nuclear reactors is not the only way that new materials could help improve the energy sector. The article notes that "nano-engineered materials will also play an important role in a more efficient generation of solar cells."

"The desired effects are obtained by using combinations of material produced at extremely small sizes. In this case, they are used to make 'multi-junction' solar cells, in which each layer captures energy from a particular colour in the spectrum of sunlight. Overall, this is more efficient than a conventional solar cell which converts energy from only part of the spectrum. Whereas conventional solar cells might turn 20% or so of the energy in sunlight into electricity, multi-junction solar cells already have an efficiency of just over 40% and within a decade that could reach 50%."

Like many cutting-edge technologies, however, the cost of producing some of these new materials is currently too high to make them commercially feasible. In some cases, the strength and durability of some new materials will help offset some of their initial costs but probably not all of them. The article continues:

"The nanostructure of composites can also provide great mechanical strength in relatively light materials. Composites such as fibreglass and carbon fibre bonded in a plastic resin are already widely used to replace metal in making, for instance, cars and aircraft. But by controlling the direction and the tension of the fibres during their construction it is possible to produce a morphing composite, which adjusts its shape under certain conditions. The change can be instigated by an external control or it can be automatic, for instance in response to variations in heat, pressure or velocity. These morphing composites could be used to produce more efficient turbine blades in wind and tidal generators."

In an accompanying article, The Economist noted that sometimes it's difficult to do better than nature ["Plumage power"]. Scientists, for example, have been researching ways to create a material that will efficiently store hydrogen, which will be critical if we ever move to a hydrogen economy.

"Hydrogen is difficult to store because it is the lightest element. Filling a typical fuel tank of 75 litres—about 20 American gallons—with hydrogen at room temperature and pressure will take a hydrogen-powered car only about a kilometre or so. The gas can be compressed to take up less space, but that can be dangerous. It also uses energy, which removes some of the benefits. ... [One solution to this problem is] to put something inside the tank which increases the total internal surface area to which the molecules of the gas can cling. This means more hydrogen can then be packed into a smaller volume. There has been some progress with materials that can do this, including specially engineered carbon nanotubes. But carbon nanotubes are very expensive to make, especially in large quantities. Richard Wool, a chemical engineer at the University of Delaware, estimates the cost of fitting a single car with a tank full of carbon nanotubes to be $5.5m. Other materials might do, but they could still end up costing over $20,000 a car."

Enter the lowly chicken. Dr. Wool believes that the cost of creating an automobile hydrogen storage tank could be reduced to about $200 by stuffing the tank with chicken feathers.

"The fibres in feathers are almost entirely composed of keratin, a protein also found in hair and nails. When heated in the absence of oxygen (a process called pyrolysis), keratin forms hollow tubular structures six millionths of a metre across and riddled with microscopic pores, much like carbon nanotubes."

Because the feathers need to be strengthened and heated, you just can't pluck a chicken and then stuff untreated feathers in a tank. Besides having to use treated chicken feathers, a feather-filled tank has other challenges as well -- one of which is size.

"[A treated feather is] capable of holding 1.5% of its weight in hydrogen. Since about 4.5kg of the gas is needed to cover 480km (about 300 miles), the typical range of a petrol-powered car, this would translate into a rather large 284-litre tank stuffed with some 300kg of carbonised chicken feathers, according to Mr Senöz. This still falls short of the 6% hydrogen-storage target which has been set by America’s Department of Energy to encourage innovation with alternative fuels. But the researchers think they can improve their material further by making it even more porous. And unlike rival technologies theirs is well on the way to meeting the department’s cost criteria of a hydrogen system that costs $4 per kilowatt hour stored and less than $700 for installing it. Moreover, it could also help with another environmental problem: reducing the mountains of chicken feathers that the poultry industry has to dispose of every year."

Treated chicken feathers, of course, aren't the answer to every challenge that could be solved using new materials created by nanotechnology. Whether you welcome or fear the future nanotechnology, new materials are going to emerge. Like other technologies, we won't really know how they will be used until they get into the hands of creative people. New materials will be put to uses that their creators never dreamed of. There has to be continued research on the potential environmental effects of nanoparticles. We really don't know what having new nanoparticles floating around in the air could do plants, animals, or us. On the whole, however, I suspect that new materials will be a good thing.

Kurd-Arab Tensions Raise Concerns and Debate

Earlier in the week I posted a blog entitled Rising Tensions Between Kurds and Arabs. In that blog, I observed that "there have been calls made by some observers for the United States to negotiate something like the Dayton Accord that helped stop conflict in the Bosnia region of the Balkans. Without such outside intervention, it looks like the two sides are hell-bent on confrontation." A former member of the Bush administration, Meghan L. O'Sullivan, who is now a professor at Harvard University's Kennedy School of Government, believes that it's not the negotiation framework that is important it is the substance of such efforts ["Issues Before Identity in Iraq," Washington Post, 21 July 2009]. She begins her op-ed piece by asserting that the Obama administration looks like it wants to address past historical wrongs rather than current pressing issues. I agree with O'Sullivan that substance not history is what needs to be negotiated. In the post mentioned above, I wrote: "My hope for Iraq has been that improved economic conditions would convince Kurd and Arab leaders that a better and more prosperous future requires cooperation not conflict. In order to cooperate fully, however, both sides must be willing to put the past behind them." In other words, Kurds and Arabs both need to reach for the future instead of cling to the past. O'Sullivan writes:

"Recent comments by Vice President Biden suggest that U.S. officials' mind-set toward Iraq could do as much harm as good. While visiting Iraq this month, Biden spoke of a need to broker a grand bargain between Sunnis, Shiites and Kurds, and to resolve disputes between 'the different confessional groups.' He made clear that he -- and, presumably, the United States -- saw Iraq's challenges and solutions largely in terms of sectarian or ethnic groups. Discussing Iraq's problems in such terms pushes Iraqis back toward the boxes they have been trying to leave behind -- and undermines incipient movement away from the dominance of sectarian political identities toward issues-based politics."

O'Sullivan goes on to explain why concentrating on issues rather than past historical injustices is important for moving forward. She believes that the most important issue that needs addressing is the very nature of political relationships within Iraq.

"Encouraging this movement toward issues-based politics is arguably the most important component of a strategy to help Iraqis solve their most intractable problems. Too often, differences among Iraqis are portrayed as feuds between primordial rivals, grounded in irrational and emotional stances. ... The current tensions between Baghdad and the Kurdistan Regional Government are frequently presented simplistically as manifestations of historical animosities between Arabs and Kurds. Certainly, cultural factors do matter, and Iraq's long history -- including, of course, Saddam Hussein's brutal efforts to eradicate the Kurds -- shapes the nature of the problems and the lens through which they are viewed. But the reality is that Iraq's most difficult problems are primarily about substantive issues. Iraqis and their leaders are divided on fundamental questions about the nature of the state -- specifically, whether the locus of power should be in Baghdad or in the provinces. Should Iraq be a more traditional Arab state, where power is centralized in the capital? Or should the regions and the provinces -- i.e., the KRG -- have substantial authorities and autonomy? This debate is at the heart of what many describe as a Kurdish-Arab conflict. For example, conflicts about the elusive oil law -- which Biden will use as a benchmark for gauging progress toward reconciliation -- are not really about whether the Shiite government shares Iraq's wealth with its Sunni and Kurdish minorities. The problems stem from conflicting views about who has the right to develop Iraq's natural resources -- Baghdad, or the regions and provinces? Who has the right to set the terms for international investment and sign contracts to develop Iraq's oil fields -- Baghdad, or the regions and provinces? The disputed territories of Kirkuk and the surrounding areas add another dimension to 'Kurd-Arab' tensions, but even those disputes would be easier to resolve were there more clarity over the appropriate roles and future of regional security forces and the Iraqi army."

The good professor might be correct; however, groups, like the Kurds, that have been targets of genocide don't set aside the past that easily. They want to be able to control their future, including the riches of their land and the security of their people. With such strongly held views, federalism appears to be the only way forward. On this subject, O'Sullivan remarks:

"Federalism is still the 'F-word' in Iraq, even among those who lobby for more authority, resources and responsibilities for the provincial councils. Only within a political system where substance has some hope of being separated from identities are such conflicts likely to be resolved over time."

Dan Senor, who also served under the Bush administration and is now serving as an adjunct senior fellow at the Council on Foreign Relations, believes the two most critical factors driving Kurd-Arab relations are oil and politics ["The Kurdish Issue Flares Up in Iraq," Wall Street Journal, 21 July 2009]. He writes:

"Two factors will drive the Kurdish-Arab issue to a boiling point over the next six months unless the Obama administration heads them off. First, oil. There is still no federal Iraqi hydrocarbons law. The KRG and the Iraqi government rely on different interpretations of Article 111 of the Iraqi Constitution, which declares that 'oil and gas are the property of all the Iraqi people in all the regions and governorates.' Kirkuk’s oil is a big issue for the national government in Baghdad. When Mr. Maliki’s government wrote its federal budget for 2009, oil prices were hovering around $150 per barrel. And while the Iraqi government had wisely forecast prices to fall to $80 per barrel—and made budget projections accordingly—oil prices were still 50% below their projections by mid-year. This has caused panic at Iraq’s Oil and Finance Ministries. From the Kurds’ standpoint, oil is part of a broader KRG strategy to draw international pressure on Baghdad to grant further Kurdish autonomy. It is no coincidence that on the eve of Mr. Maliki’s visit to Washington, the KRG’s Ministry of National Resources released an embarrassing document contrasting its success in attracting foreign energy investors with the national government’s approach, which has been stalled. Second, politics. On Saturday, the Kurds vote on a new parliament and president. While polls show that President Massoud Barzani and the two largest Kurdish parliamentary parties will be re-elected, the dynamic of this election is making Kurdish leaders nervous. Historically, Kurdish elections turned on the KRG’s power struggle with the national government. But in this election, the Iraqi Kurds seem to be more preoccupied with local governance issues such as KRG corruption. This may be prompting KRG officials to foment tension with Baghdad in the hope that the perception of external threats will strengthen their position at the polls."

Senor is correct that KRG leaders are concerned about corruption. Earlier this month, Prime Minister Nechirvan Barzani launched "a government project which aims to promote good governance, transparency, and integrity in ... government operations and practices" ["Prime Minister’s speech at launch of KRG Strategy on Good Governance and Transparency," 12 July 2009]. During his speech announcing the program, the Prime Minister said:

"We need a national discussion about good governance, about corruption, about improvements of services, and about the best solutions to go forward and achieve our aspirations. When I say discussion, I mean an open discussion with our people, civil society organizations, intellectuals, religious leaders – to address corruption and what it means to our society. We need to understand that corruption is not simply an issue of government; it is an issue of society. It affects us all, and holds us back in the progress toward a better future."

With the program being launched so close to regional elections, the Prime Minister admitted that it would likely appear to be a simple political ploy to gain votes. He insisted, however, that the program had been in work for over a year. Only time will tell if the program helps improve governance and transparency. Michael E. O'Hanlon, from the left-leaning Brookings Institution, adds revanchist claims to the unstable mix of oil and politics in Iraq ["Iraq's Northern Problem," Washington Examiner, 21 July 2009]. He writes:

"The basic situation is this. Kurds make up about 4 million of Iraq's 25 million population and govern themselves in the Kurdistan region of northern Iraq. They have been more or less autonomous since Operation Desert Storm in 1991; that status was codified by the Iraqi Constitution in 2005. They get a fixed share of national oil revenue, maintain their own military known as the peshmerga, and represent an admirable democratic minisystem within the broader county. This is a workable model, but for one problem: Kurds want land from Iraq's other 15 provinces to be incorporated within Iraqi Kurdistan. That includes the historic city of Kirkuk, the oil fields around Kirkuk, and much of the other land just south of Kurdistan. In principle, Article 140 of the Iraqi Constitution entitles them to a referendum on redrawing the 'green line' separating Kurdistan from the rest of Iraq. The referendum was supposed to have been held by the end of 2007, but has been seen as so incendiary as to be postponed."

O'Hanlon, like O'Sullivan and me, believes that international involvement is necessary to resolve ongoing issues. He goes on to propose a solution for dealing with the Kurd's revanchist claims.

"While it is a delicate matter for foreign countries to suggest a solution here, the alternative of waiting for Iraqis to solve it is not working. As such, I will hazard a recommendation. Kirkuk should be a city with special status under international supervision. Mosul should remain in the main part of Iraq. A multisectarian panel aided by U.N. advisers should negotiate a new 'green line' in other, more rural parts of the country and explain why this new border between Kurdistan and Iraq proper is fair, if not ideal for anyone. Then a referendum should be held in which all major political figures call for approval. The goal should be to achieve rapid and overwhelming public support – ideally within the next year, while U.S. troops still provide a reassuring and neutral presence. Other approaches could work too, of course. But benign neglect, our strategy so far, probably will not."

Avoidance of conflict is certainly desirable, but as a goal it is too narrow and as a vision it's uninspiring. Political leaders in Iraq need to have a grand vision and strategy to match that can help bring their people peace and prosperity. They need to swallow their pride and admit that outside help is probably needed to help them achieve their goals. O'Hanlon believes that time is the enemy in this case and I agree. The longer that issues between Kurds and Arabs go unresolved, the more intractable they could become. Ripeness is always an issue when it comes to negotiations and I believe the time is ripe for international community to sit down with Iraqi leaders and help carve out a better future for their people. During this week's visit to Washington, DC, Iraqi Prime Minister Nuri Kamal al-Maliki stressed the need for economic development in his country ["Iraq Premier and Obama Emphasize the Positive," by Jeff Zeleny, New York Times, 22 July 2009]. "Mr. Maliki said Iraq needed to build upon a 'strategic relationship on the economic front.' He said Iraq planned to convene an investment conference in October for companies eager to look for business opportunities in the country." Companies will only be "eager" to do business in Iraq if the security situation remains stable. Let's hope that cool heads prevail and that an agreement can be worked out that allows all the people of Iraq to look forward to a brighter future.

Food Crisis and Recession

In 2007 and the beginning of 2008 (before the global recession began grabbing all of the headlines), the global crisis most discussed involved a shortage of food and the resulting high food prices. During that time I wrote a number of posts on the subject that discussed everything from how biofuels were exacerbating the crisis to how rich countries like Saudi Arabia were buying farms in more fertile countries to supply them with food. The Economist reports that the food crisis is creeping back into the news even though crops have been substantial this past year ["Whatever happened to the food crisis?" 4 July 2009 print issue]. The article reports:

"World food prices soared in 2007-08, pushing hundreds of millions into poverty. But—said people at the time—there was a silver lining: high prices would be good for farmers, especially smallholders in poor countries. ... Higher returns would suck money into farming, leading to higher yields, bigger harvests and stable or falling food prices. Eventually, the argument ran, farmers and consumers would all be better off. This happy state of affairs seemed to be coming to pass in the second half of 2008. Ethiopia reported a record cereals harvest this January, up 10% on the previous year. Across the world, the picture was similar. After the price spike in the first half of 2008, farmers harvested 2.3 billion tonnes of cereals in 2008/09, the biggest crop ever seen. Big exporters began lifting the trade bans they had imposed to keep local prices from rising, so more food became available to world markets. The sharp fall in the price of oil, which occurred at the same time, increased food supplies further because, by making oil cheaper than ethanol, it encouraged farmers to sell for feed the maize they would otherwise have turned into biofuels. As food supplies surged (and demand, hit by the global recession, stagnated), prices plummeted. Between its peak in July and a trough in December 2008, The Economist’s index of food prices fell by 40%. All that seems fairly rational and hopeful."

The wide availability of cheaper food hardly seems like cause for alarm. The article goes on to note, however, that the happy state of affairs found at the end of 2008 changed in a puzzling way in 2009.

"Between December and mid-June, the food index rebounded by a third, even though this year’s total cereals crop is expected to be another bumper (2.2 billion tonnes, says the Food and Agriculture Organisation, second only to 2008/09. Meanwhile, soyabean and sugar prices have risen by nearly half from trough to peak—see chart below—and the index of 'non-food agriculturals' (plants such as cotton or rubber) also rose by a quarter between December and mid-June. Prices have been increasing at a time of plenty. If this was happening during a boom, it might be understandable. But recession would normally dampen down price rises. So what explains the return of food-price inflation? And does it mean that the so-called world food crisis is returning?"

It doesn't take a Nostradamus to predict that higher food prices during a recession are going to create desperate times for the world's poorest people. That's one reason that despite the many challenges facing world leaders, one of the issues they concentrated on during the latest G-8 Summit was food security ["World leaders take fresh approach on global hunger," by Alessandra Rizzo, Kansas City Star, 10 July 2009]. In a post entitled Development and the Future of Afghanistan, I mentioned a conversation that one developer had with an Afghani farmer. He wanted to know why the farmer grew opium poppies instead of a more socially-productive crop. The farmer answered, "What else can I do? We don't have the seeds. We don't have the fertilizer. We don't have anyone to sell to." Addressing those conditions, Rizzo reports, is at the heart of the new global approach.

"Leaders of rich and developing countries launched a new approach to global hunger, ... saying they wanted to spend $20 billion on seeds, fertilizers, tools and other aid for small farmers over the next three years so poor nations could feed themselves. The initiative announced at the end of a Group of Eight summit marked a new emphasis on helping farmers in the developing world boost production over the long term, moving away from an emphasis on emergency food aid for people suffering from drought and famine. ... For farmers in poor countries in Africa and elsewhere, any new money would help buying seeds, fertilizers and tools, said Adrian Lovett, a spokesman for Save the Children. There was expected to be a focus on ensuring property rights for poor farmers, who often cannot invest in their small farms because they don't hold legal title to the land."

Just as importantly as helping farmers work their land is upgrading the infrastructure to get their products to market. The promised money will also help address those challenges.

"The money would also likely go to building infrastructure such as roads between fields and markets, giving farmers better access to clean water by drilling wells and building pipelines and allowing them to store their products so they don't have to be sold immediately, experts said."

The G-8 leaders understand that "emergency food aid for people affected by drought, floods or conflict" is still going to be required, but the new approach was widely welcomed by both humanitarian aid and development groups. They also recognized that the 2007-2008 food crisis is not over.

"Food security, or ensuring adequate access to food, jumped high on the political agenda after high prices last year led to food riots in some countries. Prices have receded but remain high and the U.N. Food and Agriculture Organization said recently that the number of hungry people this year had hit a record 1 billion."

The Economist article explains why food prices remain high, even during a recession:

"There are two clusters of explanation: cyclical factors—features of the farm cycle and world economy that fluctuate from season to season—and secular, long-term factors. Cyclical influences include re-stocking: cereal stocks were run down as prices spiked and need to be replenished. In 2006 and 2007, stocks fell below 450m tonnes, about 20% of consumption; now they are back up over 520m, or 23%. That is one source of new demand. Another comes from ethanol. As oil prices rise, ethanol starts to be competitive again (as a rule of thumb, ethanol is profitable when petrol costs $3 a gallon in America, a level it has just reached in California). The fall in the dollar and in freight rates has also kept the local-currency costs of importing a tonne of cereals lower than dollar-denominated world prices. This has encouraged many countries to buy more. Lastly, it is possible that the widespread hunger brought about by soaring prices—the FAO says a billion people will go hungry this year—may have reached a peak and the poor may be back in the market for grain again. This may sound unlikely, as traditionally poor consumers have had little influence over world food prices, but economic growth has continued in the largest emerging markets (notably China and India) and governments in much of the developing world have been expanding aid programmes for the poor, such as conditional cash-transfer schemes. That may be boosting demand; it would explain why prices of grain, which everyone eats, have been rising this year while prices of meat—the food of the rich and aspiring middle classes—have continued to fall."

The article goes on to explain that these two factors alone don't capture the entire picture. They may explain the current rise in food prices, but there are other long-term factors that are also applying pressure and causing food prices to rise.

"The world food crisis of 2007-08 showed that food prices are not influenced solely, or even mainly, by cyclical factors. They soared in large part because of slow, irreversible trends: population growth; urbanisation; shifting appetites from grain to meat in developing countries. There is no sign that these trends are abating. At the moment, the world’s population is 6.7 billion and 750m people are born each year. Though the rate of increase is declining, inertia means the total will go on rising until 2050, when the population will reach 9 billion. In Ethiopia, for example, 18m children are born every year, rising to 24m a year by 2040. That will double its headcount from 80m to 160m. The FAO reckons that, to keep pace, the amount of food available in developing countries will have to double by 2050, equivalent to a 70% rise in world food production. If that does not happen, fears Joachim von Braun, the head of the International Food Policy Research Institute in Washington, DC, there could be a return to the food conflicts of 2007-08 which caused riots in more than 60 countries and set off a controversial worldwide land grab—a rush by rich food-importers to buy swathes of Africa and South-East Asia on which to grow food. Even if the rise in output comes about but in the 'wrong' way, there could be problems, since water in some areas is growing scarce and increasing food output will make it scarcer."

The "wrong way" apparently means increasing output by clearing more land using inefficient methods to grow more food.

"The right way, argues Alexander Mueller of the FAO, is for farmers in poor countries to boost their yields. This would be better for the countries themselves, since it would make them richer. And it would be better for the world, too, because the potential for higher yields should be greatest where they are now low, especially in Africa. At the moment, cereal yields in Africa are around one tonne per hectare, compared with three-to-four tonnes in Europe and rich Asia. It should be easier to get an extra tonne per hectare by increasing African yields to two tonnes a hectare than by boosting already-fecund European or north-east Asian yields even further (water is more abundant in parts of Africa, too). Hence the hope that high prices in 2007-08 would goad farmers in poor countries to respond by increasing yields. Alas, there is little sign of that happening so far."

Back in 2006, I posted a blog entitled Gates & Rockefeller Foundations Tackle Food Security in Africa. In that post, I concluded:

"This initiative is taking a very Development-in-a-Box-like approach to the problem of hunger in Africa. First, it is looking at the problem holistically -- considering everything from irrigation to seeds to harvesting to transporting to marketing crops. Second, it is taking a standards-based approach that builds on best practices. Finally, it's generating a powerful community of practice to ensure that the effort is sustainable. ... This is a very promising start and one worth watching. If successful, this program will have made an enormous contribution to shrinking the Gap."

Apparently, not much has changed between then and now. That's a bit discouraging. What's encouraging is that people haven't given up. The initiative announced at the end of the G-8 Summit complements the efforts of the Gates and Rockefeller Foundations. Promoting agricultural excellence is also an area that my company is exploring. The Economist is correct -- if we can get it right we can generate a win-win situation for developing countries and the world. More importantly, we can help eliminate the wrenching hunger that affects too many people around the world.

Morocco's Example

Last September in a post entitled Making Money in the Med I discussed Tanger Med, a large Moroccan port that had opened earlier in the year. The port can handle 3.5m containers a year. Over the next decade Tanger Med's annual capacity is expected to rise to 8.5m containers (that's if the global economy recovers). If it achieves that capacity Tanger Med will be the largest container port in the Mediterranean. In a more recent post, entitled The Emergence of North Africa, I noted that Morocco was attracting significant foreign direct investment. The country has made noticeable progress under the leadership of its 45-year-old king, Mohammed VI, even though corruption, nepotism, and petty jealousies can be found. Nevertheless, Washington Post columnist, Anne Applebaum, says that the contrast between the political situation in Iran and Morocco is stark ["In Morocco, an Alternative to Iran," 30 June 2009]. She writes:

"If you want an antidote to the photographs of police officers beating demonstrators and girls dying on the streets of the Iranian capital, take a drive through the streets of the Moroccan capital. You might see demonstrators, but not under attack: On the day I visited, a group of people politely waving signs stood outside the parliament. You might see girls, but they will not be sniper targets, and they will not all look like their Iranian counterparts: Though there is clearly a fashion for long, flowing headscarves and blue jeans, many women would not look out of place in New York or Paris."

The differences don't stop there. Applebaum continues:

"Unlike Turkey, Morocco is not a secular state: The king claims direct descent from the prophet Mohammed. Nor does Morocco aspire to be European: Though French is still the language of business and higher education, the country is linguistically and culturally part of the Arabic-speaking world. But unlike most of its Arab neighbors, the country has over the past decade undergone a slow but profound transformation from traditional monarchy to constitutional monarchy, acquiring along the way real political parties, a relatively free press, new political leaders -- the mayor of Marrakesh is a 33-year-old woman -- and a set of family laws that strive to be compatible both with sharia and international conventions on human rights."

Although Applebaum lauds the changes, she is not blind to the challenges that remain.

"One human rights activist painted for me a byzantine portrait of electoral corruption, involving 'mediators' who 'organize' votes on behalf of candidates. Others point out that if the demonstrators I saw at the parliament had been Islamic radicals or Western Saharan guerrilla leaders, rather than trade unionists, the police might not have been quite so blasé. Though women have legal rights, cultural restraints remain. A tiny fraction of the population reads newspapers, even fewer have Internet access, and somewhere between 40 and 50 percent of the country is illiterate; as a result, election turnout is very low. Political posters feature symbols, not words."

One of the most remarkable things that has happened in Morocco is that the current king has admitted that political crimes were committed during his father's reign -- although he stops short of allowing anyone to actually accuse his father of wrongdoing. That concession was not easy for a man who was raised to believe that the king is all powerful, if not infallible. To make sure that the crimes were completely uncovered, Mohammed VI established a Truth Commission. Although, as noted earlier, the Truth Commission was forbidden from mentioning the former king directly, it did help soothe feelings in the country.

"Although this acknowledgement of wrongdoing was made possible by a generational change, it did not require a regime change. There was no revolution, no violence. The king is still the king, and he still has his collection of antique cars. ... Not everybody likes the monarchy, but even its opponents concede that the break with the past is real: If nothing else, people feel it's safe to speak openly, safe to form civil rights groups, safe to criticize the electoral process, even safe to complain about the king. Saadia Belmir -- a Moroccan judge and the first female Muslim member of the U.N. Committee on Torture -- told me that despite obstacles, "we can now build the future on the basis of our good understanding of the past." Controversially, perpetrators were allowed to fade into the background. But the crosscurrents of anger and revenge that might otherwise have marked the young king's reign have subsided."

Moroccans knew that things were going to be somewhat different when Mohommend VI ascended to the throne. Shortly his coronation, he addressed his subjects on television, promising to fight poverty and corruption, while creating jobs and improving Morocco's human rights record. Just as surprising, the King married a commoner and permitted her picture to be published -- a first in Morocco. According to Wikipedia:

"Princess Lalla Salma of Morocco [was] born Salma Bennani on May 10, 1978. ... [She] the first wife of a Moroccan ruler to have been publicly acknowledged and given a royal title. Salma was born in Fes, Morocco, to a primary school teacher father. Her mother died when she was three years old; from then on she was raised by her maternal grandmother. ... She was educated in private and public schools in Rabat. Upon completing her primary education, she qualified for an honors program that was initiated by the Ministry of National Education, which resulted in her obtaining a baccalaureate in 1995 with excellent grades in mathematics and sciences at Lycée Hassan II. Following the successful completion of a preparatory course at Lycée Moulay Youssef, Salma graduated in 2000 from the Ecole Nationale Supérieure d'Informatique et d'Analyse des Systèmes. She received a degree in computer science and was her class valedictorian. After graduation, she worked in Casablanca as an information services engineer at the ONA Group, the country's largest private holding company, which is controlled by the Moroccan Royal Family."

The Princess, who is a striking redhead, has undoubtedly played a significant role in fostering change in her country. Applebaum concludes:

"Watching the extraordinary range of clothing and skin colors on the Moroccan streets, one takes away at least one thought: Transformation from authoritarianism to democracy is possible, even in an avowedly Islamic state, even with an ethnically mixed population, even with the presence of a jihadist fringe. More importantly: It is possible to acknowledge and discuss human rights violations in this culture, just as they can be discussed elsewhere. Just because much of the Arab world lacks the political will to change doesn't mean that change is always and forever impossible."

In another sign of change, new political parties are rising in Morocco ["The king's friend," The Economist, 4 July 2009 print issue]. The article reports:

"A new political force is emerging in Moroccan politics. The Authenticity and Modernity Party, known by its French acronym, PAM, with a centrist non-ideological platform open to all comers, has been in existence for less than a year. Yet it already seems destined to win the general election in 2012."

The party was founded by Fouad Ali El Himma, who "resigned from his job as deputy interior minister and announced his intention to run as an independent in the parliamentary election that year. Where a few saw a fall from royal grace—he was known to be a close political adviser to King Muhammad VI—others sensed the beginning of a reconfiguration of monarchist parties." El Himma began his political transformation by forming an "an anti-Islamist group, the Movement of All Democrats," to signal his desire to form a more secular government. He has been very successful in recruiting some of the best and brightest leaders from politics and civil society.

"Mr El Himma has left the official leadership of PAM to Muhammad Sheikh Biadillah, a former health minister from the disputed Western Sahara province; he is more comfortable working in the background. The Moroccan press refers to Mr El Himma as 'the king’s friend'. Like all the most important royal advisers, he is a former classmate of King Muhammad, and his success depends largely on having (or being perceived as having) the monarch’s ear."

King's friend or not El Himma's reform-minded agenda supports Applebaum's modest hopes for Morocco's future. North Africa is likely to become an important economic engine once the current recession ends and Morocco is positioning itself to take advantage of that opportunity.

Rising Tensions Between Kurds and Arabs

Regular readers of this blog know that my company, Enterra Solutions, conducts an increasing amount of business in Iraq -- mostly in the northern Kurdish region. Our aim is to help Iraqi businesses become more connected with each other and with the rest of the world. One way we have done this is through our business-to-business trading exchange [Enterra One World Shop Iraq]. We recently announced signing of the 1,000th business as a member of the exchange (to learn more read my announcement). My hope for Iraq has been that improved economic conditions would convince Kurd and Arab leaders that a better and more prosperous future requires cooperation not conflict. In order to cooperate fully, however, both sides must be willing to put the past behind them. Unfortunately, that has not occurred and tensions continue to rise along with mistrust between Arabs and Kurds ["Kurdish Leaders Warn Of Strains With Maliki," by Anthony Shadid, Washington Post, 17 July 2009]. Shadid reports that "Iraq's autonomous Kurdish region and the Iraqi government are closer to war than at any time since the U.S.-led invasion in 2003."

There are lots of reasons that civil war between the Kurds and Arabs would be disastrous not the least of which is that scarce resources needed for development would be diverted to non-productive activities. Conflict would not just delay economic progress it could easily undo much of the progress that has already been made. Civil war, coming on the heels of the insurgency, is not the outcome the U.S. Government hoped for. Shadid continues:

"In separate interviews, Prime Minister Nechirvan Barzani and the region's president, Massoud Barzani, described a stalemate in attempts to resolve long-standing disputes with Iraqi Prime Minister Nouri al-Maliki's emboldened government. Had it not been for the presence of the U.S. military in northern Iraq, Nechirvan Barzani said, fighting might have started in the most volatile regions."

The "volatile regions" are those noted by the red & white stripes in the attached image. These are regions that Kurds claim as traditional homeland but now are home to a majority Arab population thanks to Saddam Hussein's "Arabification" program of those regions. The area around Kirkuk is especially volatile because it is rich in oil and an acceptable oil-sharing plan has yet to be worked out. If outstanding issues can't be resolved through negotiation, the future of the region could be negatively affected for years if not decades. Shadid continues:

"U.S. officials have warned that the ethnic conflict pitting Kurds against Arabs, or more precisely the Kurdish regional government against Maliki's federal government in Baghdad, poses the greatest threat to Iraq's stability and could persist for years."

To read more about the underlying issues, read my posts entitled The Challenge of Kirkuk and Nastiness in Nineveh. Shadid sums up the situation this way:

"The conflict between the government and the Kurdish region is so explosive because it intersects with the most critical disputes that still endanger the country's stability. They include debate over a hydrocarbon law to share revenue and manage Iraq's enormous oil reserves, some of which are located in areas claimed by the Kurdish government; talks to delineate the border between the Kurdish and Arab regions; and efforts to resolve the fate of Kirkuk, an oil-rich city shared by Kurds, Arabs and Turkmens. Complicating the landscape is the bad blood between two of the key players -- Massoud Barzani, the Kurdish president, and Maliki, whose stature has grown dramatically amid the restoration of a semblance of calm and his Dawa party's success in provincial elections in January. Although two delegations from Maliki's party have visited Irbil, the Kurdish capital, since the spring, the two men have not spoken in a year, Barzani said. 'Everything is frozen,' said Prime Minister Barzani, a nephew of the president. 'Nothing is moving.' He warned that the deadlock was untenable. 'If the problems are not solved and we're not sitting down together, then the risk of military confrontation will emerge,' he said. Both have blamed the other side for provocations, often with justification. Kurdish officials see in Maliki's actions a recurrence of what they believe is arrogance from Baghdad stretching back generations. Maliki's allies accuse Kurdish leaders of overreaching in their territorial ambitions and stubbornness in talks."

The situation between the Kurds and Arabs is one where each side seems willing to "cut off their nose to spite their face." There have been calls made by some observers for the United States to negotiate something like the Dayton Accord that helped stop conflict in the Bosnia region of the Balkans. Without such outside intervention, it looks like the two sides are hell-bent on confrontation. Yet there remains a glimmer of hope. It was just over a month ago that Kurdistan Region President Masoud Barzani, spoke the following words at a ceremony celebrating the first exports of oil from the Kurdistan Region of Iraq through an Iraqi pipeline:

"'We must stress tolerance between Arabs and Kurds – we have had a sense of brotherhood and this will remain.' He added, 'This is an historic event, not only for the Kurdish people but for all Iraqis.' President Barzani said, 'We have proven in a clear, proper way that we are committed to the Constitution of Iraq. I congratulate everyone on this achievement, which will benefit all Iraqis.' He added, 'I wish much success for all the people of Iraq and of the Kurdistan Region; that we may live in prosperity and peace.'"

The "brotherhood" of which President Barzani speaks and his wish for "prosperity and peace" need to become motivating drivers as Kurds and Arabs move forward in Iraq. If conflict breaks out, Kurds and Arabs will both suffer and economic goals could be set back a generation.