www.alertnet.org NEWSDESK   27 Jan 2003 02:02

By Alister Doyle

KIRKENES, Norway, Jan 27 (Reuters) - The shrinking Arctic icecap may open a fabled passage for ships between the Atlantic and Pacific Oceans within a decade, transforming an icy graveyard into a short-cut trade route.

Ship owners may be among the few to benefit from global warming in the extreme north, where the giant thaw is threatening traditional habitats for indigenous peoples and wildlife ranging from polar bears to caribou.

U.N. studies project that the Arctic may be free of ice in summertime by 2080. The polar passage, clogged by ice throughout seafaring history, may come to challenge the Panama and Suez canals.

"In the next 10 years I believe we will solve the problems of round-the-year goods transport through the Northern Sea Route," said Alexander Medvedev, general director of Russia's Murmansk Shipping Company.

"You can save at least 10-15 days on the voyage from Japan to Europe, especially in summertime," he told Reuters during a visit to Kirkenes on the Arctic tip of Norway.

The company now runs two or three ice-breaker-led voyages a year from Europe to Japan and back, hugging the Russian coast, and reckons the route can be opened year-round if Moscow makes big new investments.

On the other side of the Arctic, the Northwest Passage past Alaska and through a maze of islands off Canada is likely to take longer to be ice-free because it is further north. It also passes through straits that get blocked more easily by ice.

"For the Northwest Passage it will take another 20 years after conditions for the Northern Sea Route are favourable," said Peter Wadhams, professor of Ocean Physics at Cambridge University in England. "I'm sure it's going to happen -- the ice is retreating."

INSURERS WARY

Yet insurance companies are likely to stay wary of both polar routes. High premiums, a need for ice-resistant hulls for ships and ice-breaker escorts may well wipe out the advantages of lower costs due to the shorter distance.

Mariners searched in vain for centuries for a short-cut from Europe to the Far East -- Columbus ran into North America in 1492 when he sailed west from Europe hoping to reach Japan.

The search for passages cost the lives of explorers including Dutchman Wilhelm Barents and Englishman Henry Hudson -- after whom the Barents Sea and Hudson Bay are named. Barents' ship ran aground in 1596 and Hudson died after a 1611 mutiny.

Other explorers were victims of cold or scurvy before a Finnish-Swedish expedition navigated the Northern Sea Route in 1878. The Norwegian Roald Amundsen was first to get through the Northwest Passage in 1906.

Even as the ice shrinks, it may take billions of dollars to open sea routes. Ports in northern Russia have deteriorated since the end of the Cold War when nuclear powered ice-breakers led warships between the Atlantic and Pacific.

"The obstacles are more economic and political -- you have to have a lot of infrastructure: navigational aids, search and rescue teams, the ability to clean up pollution," Wadhams said.

And environmentalists want safeguards to protect indigenous peoples in some of the world's largest wildernesses and to prevent a get-rich-quick rush for resources ranging from oil and gas to timber and minerals.

"Melting of the ice will make access far easier to northern Siberia and other wildernesses," said Svein Tveitdal, managing director of the U.N. Environment Programme's polar centre.

"There has to be a strategy for sustainable development of the Arctic. It mustn't become a sort of new Africa, where colonialists exploited the resources." About four million people live around the Arctic.

U.N. studies show that the Arctic ice has shrunk by about three percent a decade since the 1970s and that air temperatures have risen by about five degrees Celsius (41 degrees Fahrenheit) in the past century.

The exploration of oil and gas fields will increase the risk of pollution such as the Exxon Valdez tanker spill off Alaska in 1989. Norway plans to open its first gas field in the Barents Sea in 2006.

The polar regions are most vulnerable to global warming, caused by burning fossil fuels like oil. Scientists say the emissions are blanketing the planet and pushing up temperatures.

In the Arctic, melting ice and snow exposes darker soil and rocks that trap heat. The sun's heat bounces back into space more readily at the equator than near the poles, where low slanting rays have to pass through thicker layers of atmosphere.

ICE RECEDES

New polar routes will save about 4,000 nautical miles (7,400 km) on some routes from Europe to the Far East compared to southerly routes through Panama or Suez. Shipments could include cargoes like grains, frozen fish, oil and gas or cars.

And a route north of Canada, for instance, might save 6,000-8,000 nautical miles for a super tanker from Venezuela to Japan. Vessels too big to pass through the Panama Canal have to go round all of South America.

Japan has also expressed interest in transporting nuclear waste to Europe through the Arctic, a plan denounced by environmentalists who say it could get trapped in ice.

Rob Huebert, associate director for the Centre for Military and Strategic Studies at the University of Calgary in Canada, said one odd spin-off of global warming is that some regions are getting colder, complicating any shipping plans.

"In some areas the ice is getting thicker as it breaks up elsewhere," he said.

Willy Oestreng, a Norwegian professor of international affairs who led a global study of the Northern Sea Route in the 1990s, said Russia was ahead of Canada because of factors including more ports, albeit dilapidated, and ice-breakers.

"The differences are striking. The Northern Sea Route is more developed," he said. He noted that nickel had been shipped from northwest Russia year-round since the 1970s.

rutlandherald.nybor.com January 26, 2003 (from the Business section)
By DANIEL SHOER-ROTH Knight Ridder Newspapers

Can the churro displace the doughnut and the cinnamon roll in the United States?

What began five years ago as a family business in an eastern coastal town in Venezuela has become a transnational franchise with more than 50 outlets. Now, its owners are betting that they will be able to turn a modern version of the traditional Spanish pastry into the most innovative dessert sold in Florida malls.

“We have rescued the churro; we have reinvented it to compete with any other kind of fast food,” said Ariel Acosta Rubio, president of Churromania, the Venezuelan franchise with international headquarters in Miami.

Just as Burger King, McDonald’s and Pizza Hut have exported the U.S. fast-food culture to Latin America, Latin American fast-food franchises are slowly bringing the flavors of their countries to U.S. taste buds.

As the United States’ Hispanic population and its purchasing power grow, the major metropolitan areas are ready to absorb the new Latin American fast-food offerings, said Marcel Portman, vice president for global development with the International Association of Franchises, a commercial group in Washington, D.C.

Eighteen months after opening at Miami’s Dolphin Mall, Churromania has added a store at the International Mall and is planning to open stores at Bayside and at Westland Mall, all in Miami.

And the chain, which has two stores in San Juan, Puerto Rico, and one in Orlando, Fla., plans to open outlets in Tampa, St. Petersburg, Clearwater, Brandon and Bradenton (all in Florida) and a second one in Orlando, Acosta said.

Plus, it’s on the waiting list at the Dadeland and Aventura malls in Florida and is negotiating franchises in Atlanta and Texas.

This year, the franchise has generated $12 million in sales by selling its sticks of extruded dough, deep fried and sugared, in five countries.

And Churromania has expanded upon the basic churro, offering various sizes and textures as well as a glazed version and some stuffed with dulce de leche, caramel, chocolate, guava and other fillings.

Churromania owns five establishments. The rest are franchises, with a start-up fee of $20,000. Investors must pay between $80,000 and $300,000 to build the shops — depending on the shop’s size — and pay Churromania an 8 percent monthly royalty on gross sales, Acosta said.

Churromania is one of more than 1,000 domestic and foreign-owned franchises created in the last decade in Latin America. Last year, those businesses generated $30 billion in the region, according to America Economia magazine.

“Some franchises in the region are consolidating locally and have decided to go abroad and conquer markets like the U.S., which is very desirable,” Portman said. “Depending on the product, they can compete here.”

South Florida is a favorite target of these companies. Don Pan, the Venezuelan baked-goods franchise, for example, has grown to more than 25 outlets. Other businesses ready to penetrate the South Florida market, according to restaurant consultants, include Bon Ice Cream of the Dominican Republic and the Juan Valdez coffee shops of Colombia.

And Miami is not alone. El Pollo Campero, a Guatemalan chain, has settled successfully in California and Texas, and La Fabula Pizza of Mexico began operations in Denver.

Meanwhile, Churromania, which also operates in Brazil and Spain, believes it can fill a vacuum in malls with heavy walk-in traffic by offering the churro as an alternative to doughnuts, cinnamon rolls, cookies and ice cream.

Eaten with hot chocolate or cafe con leche, the churro is a tradition inherited from Spain. In Miami, they are sold in Cuban coffee shops, from food carts and at outlets that specialize in pastries.

They do well among those Hispanics who are familiar with them, but the challenge facing Churromania in its expansion plans will be to convince Hispanics not familiar with the churro and non-Hispanics of its attractiveness, analysts say.

“The company will have to invest a lot of resources to develop the brand and change the eating habits of buyers,” said William Lesante, a restaurant consultant in Miami. “And that process is neither immediate nor guaranteed.”

Acosta is conscious of the challenge.

“The road is not easy,” he said. “But we have broken the rules: We have been bold.”

www.ctv.ca Associated Press

CARACAS — Venezuelans awaited details of probable strict new currency controls Sunday and President Hugo Chavez warned of price controls to ease their effects.

"So that these (currency) controls do not hurt the poor, we will also institute price controls," Chavez told an assembly in Porto Alegre, Brazil, where he was attending the World Social Forum.

Chavez gave no specifics about what products could face price controls or when they might be put into place. Exchange controls, which Chavez suggested could be part of a long-term plan, are expected to be announced this week.

Oil production, meanwhile, continued to creep up.

Production and Commerce Minister Ramon Rosales told El Nacional newspaper importers and exporters who don't back a crippling strike that began Dec. 2 will have priority for access to U.S. dollars.

"The party's over," Rosales told "coup-mongering businessmen" who oppose Chavez.

That would drive many businessmen to a new but flourishing black market for the U.S. currency, sending already-rising prices even higher.

Rosales said dollars will be guaranteed for food, health, education and raw materials for agriculture.

Chavez suspended foreign-currency dealings for five business days last Wednesday and said he will announce new currency controls to halt the rush of nervous Venezuelans trading in their currency, the bolivar, for dollars. But exactly what the new controls will involve or when they will be announced is the subject of speculation.

On Sunday, Chavez he said he will soon propose a tax on all financial transactions in Venezuela, saying it would be "a kind of Tobin tax." Tobin taxes, named after Yale University economist and Nobel-laureate James Tobin, are designed to tame currency market volatility.

Chavez did not provide more details but said Venezuela's dollar-based reserves dropped by $3 billion US in December and January.

Economists estimate capital flight -- money sent out of Venezuela for safekeeping -- at $1.8 billion US since the strike began. The rush to dump bolivars is blamed for at least part of the currency's loss of 30 per cent of its value this month alone.

The 56-day-old strike has hobbled oil production in Venezuela, the world's fifth-largest exporter and a major supplier to the United States.

Chavez said Sunday production has risen to 1.32 million barrels a day. But dissident oil executives put the figure at about 957,000 barrels, up from 855,000 barrels Friday. Pre-strike production was about 3.2 million barrels, and fell as low as 150,000 barrels early in the strike.

Ali Rodriguez, president of the state oil monopoly, was quoted Sunday saying production is "well over" one million barrels.

Venezuela admits to having lost some $4 billion US in oil revenue since the strike began.

Oil accounts for 80 per cent of the country's foreign exchange and one-third of its gross domestic product.

Dollars are needed to buy food -- about one-half of which is imported -- medicine and other essentials, some of which already are in short supply.

Venezuela is having to import gasoline.

Opponents of Chavez blame him for hurting business and scaring off foreign investment. They tried to schedule a non-binding referendum on his presidency Feb. 2, hoping the results would embarrass him so much he would step down.

But last week, the Supreme Court cancelled the February vote on a technicality.

The constitution allows a binding referendum only midway through Chavez's six-year term, which will be in August.

Members of the opposition circulated petitions at an anti-Chavez rally Sunday seeking to cut the presidential term from six years to four.

A defiant Chavez arrived at Porto Alegre, Brazil, on Sunday for a two-day visit to the World Social Forum, called to protest against global capitalism. He repeated he has no intention of stepping down.

"Our struggle against the terrorists and fascists has further strengthened the will of the Venezuelan people," Chavez said.

"It is one thing is try to get rid of me and another thing to succeed. I have the popularity to remain in power."

Although he had not formally been invited to the forum, which generally excludes heads of state, he received a warm welcome from many of the 100,000 people attending.