MANAGUA – Brazilian leader Luiz Inacio Lula da Silva traveled to Managua for the first time as President to visit with Nicaraguan counterpart Daniel Ortega and discuss how Latin America's largest economy can help one of hemisphere's poorest.

Meeting with Ortega Aug. 6, Lula said that he would “sign as many accords as needed to contribute to growth, development and social justice in Nicaragua.”

By the next day, the two leaders had hashed out 19 separate accords, including plans to build a 68-megawatt hydroelectric plant that will be financed by Brazil.

Yet President Ortega ultimately rejected the Brazilian leader's offer to produce ethanol here, a fuel source that Lula touts as a safe and inexpensive way to power both vehicles and homes.

As part of his five-country tour to promote alternatives to oil, Lula said that Brazil's 30-year experience in manufacturing sugarcane-based ethanol could help put an end to Nicaragua's chronic blackouts.

“Every country has an energy problem,” Lula said at an Aug. 7 press conference. “If all countries have that technology (for ethanol), they will know how to dig a 30-centimeter hole and plant a seed that will produce the ‘oil' that they are going to need.”

United Effort: President Daniel Ortega (left) and Brazilian counterpart Luiz Inacio Lula (right) focused on common goals.

Mario López | EFE

Sandinista officials, however, told reporters that producing ethanol would be technically unfeasible here and that Nicaragua's sugarcane is already slated for use in Flor de Caña rum.

Ortega in the past has criticized ethanol, arguing that it wastes productive land to fuel SUVs when it should be used to produce ood for the hungry. Mexico has also rejected a similar offer from Brazil.

Still, many suspect that Ortega is deferring to President Hugo Chávez of Venezuela, a prominent ethanol critic who has quickly become Nicaragua's biggest aid donor.

Despite the setback in producing biofuels, Lula vowed to continue cooperation. Brazil has one the largest economies in the region, with an annual gross domestic product of $966.8 billion, compared to Nicaragua's $4.9 billion.

Before leaving Managua for visits to Panama and Jamaica, Lula offered to cancel Nicaragua's $5.9 million debt with Brazil and promised to finance several social programs in addition to the hydroelectric plant.

Touring with Lula were 30 Brazilian business leaders, who expressed an interest in investing in Nicaragua.

Expanding Ties

The day-long visit by Lula is the latest effort by the Sandinista government to broaden commercial ties with as many countries as possible. Ortega, who relied mainly on Cuba and Soviet support in the 1980s, has signed agreements with more than a dozen countries to fund social programs and alleviate Nicaragua's $3.7 billion foreign debt.

Spain was among the most recent, canceling the $31 million Nicaragua owed and contributing $5.5 million for the country's health care. The former revolutionary government has also established ties with North Korea, Venezuela and Iran, provoking concerns in the United States, Nicaragua's largest trading partner (NT, Aug. 17).

U.S. government officials and potential foreign investors say they hope the Brazilian President will prove a moderating counterweight to Chávez's influence.

Brazil is an “example of a leftist government that is responsible and democratic,” U.S. Ambassador Paul Trivelli told reporters at a recent stop in Bluefields.

Historic Visit

This is Lula's first visit to Nicaragua as head of state, and the first time ever that a Brazilian President has visited here. Lula met with Ortega in 1980, when he headed the socialist Workers' Party under a military dictatorship and Ortega was Nicaragua's revolutionary leader.

“I am very happy, not just because I have returned to Nicaragua, but because Daniel Ortega has returned to the presidency of Nicaragua,” Lula said.

Nevertheless, Brazil's promotion of ethanol is at odds with other leftwing leaders, including Fidel Castro of Cuba, who recently wrote that using food crops for fuel could lead to hunger and “genocide.” At the July 20 inauguration of the Bolivarian oil refinery near León, both Ortega and Chávez lambasted the alternative fuel (NT, July 27).

With Lula at his side Aug. 7, Ortega attempted to clarify his position by saying that he was critical only of U.S. President George W. Bush's plans to use corn-based ethanol.

“Some media have been speculating that we are going to fight and confront the president of Brazil on the subject of ethanol, which is absurd,” Ortega said.

Ortega's apparent waffling on the ethanol issue led the opposition daily La Prensa to criticize him in the Aug. 12 headline by implying that he was lost in a “labyrinth of rhetoric.”

Both Ortega and Lula say they share broad similar goals, namely in fighting poverty. The ambitious “Zero Hunger” initiative started here is modeled after a similar program in Brazil, called “Fome Zero.”

The two leaders also jointly criticized the U.S. embargo against Cuba and called for dialogue to end the war in Iraq.

But Lula's trip was less jovial and fiery than Chávez's three visits to Nicaragua this year. The Venezuelan leader often mentions old Sandinista battles against “ U.S. imperialism and the back and forth speeches with Ortega can go on for hours as the two leaders add to each others points.

During a Managua ceremony attended by a few hundred Sandinista supporters Aug. 7, Lula's most impassioned moments were talking about soccer, Brazil's national pastime. Lula listened politely to Ortega, but looked at his watch several times before leaving to catch a plane to Jamaica.

As one of Latin America's most diverse and fastest-growing economies, however, Brazil offers some different selling points than neighboring Venezuela, experts say.

“You have to export something to have a trade zone,” said Riordan Roett, director of Latin American studies at the Johns Hopkins University School of Advanced International Studies in Washington. “And all Venezuela has is oil.”