Windfall: The Booming Business of Global Warming (19 page)

Heilberg turned to the general’s son. Gabriel, wearing an Armani jacket and armed with three Nokia cell phones, looked to be in his twenties, but he was actually thirty-four, according to his Myspace page. Or maybe forty-two, as he later told me.

“Gabriel, do you have any cows here?” Heilberg asked. Cows were the way to a Nuer man’s heart.

“No, no cows here,” said Gabriel.

“You already moved them to Mayom? How many cattle do you have in Mayom?” Heilberg asked.

“Many,” said Gabriel.

The Nuer elders surrounding the general stood up, taking their chairs with them. A soldier brought us bottled water and cans of Coke. The general stayed slouched in his seat, his long arms draped over the back of the chair, and stared blankly into space. He was sixty-eight, ancient for South Sudan, a survivor of lifelong war, now suffering from diabetes and high blood pressure. Heilberg considered him one of the savviest men he’d ever met. “He’s a capitalist,” he told me. “All the other guys are Commies. He understands that if I put money in, I deserve to make a profit.” Heilberg claimed that in famously corrupt Juba, Matip was the rare leader who didn’t demand bribes.

“The south has got to give the general control of the purse,” Heilberg said, leaning in. “People have been approaching me. A private security firm—mercenaries—they want to come and train the troops. Even the Israelis, they want to sell weapons and training. They want to know if I’ll speak to the general on their behalf. Maybe they see something of interest, because the split is coming. Independence is coming soon. We all know that.” The general grunted.

“Now we have the momentum,” Heilberg continued as Gabriel translated. “We have to hold Salva accountable. If I could go see Salva with your dad—I would like him to honor his word by signing the papers. I would like to get that paper signed. I would like confirmation. Once we have confirmation of the deal from Salva and the agriculture minister, then nobody can say anything. It’s confirmed by the government of South Sudan. I would like Salva to sign, and we would then shut up everybody. Because then it’s not just your father, it’s the two most powerful men in the country. We’ll shut up everybody.”

“Okay, we will talk to the Israelis,” the general said when Heilberg was done. The promise of mercenaries had captured his attention. There was an uncomfortable pause.

“And we will make an appointment at Salva’s house and go and meet him,” Gabriel added.

 • • • 

“THE WORLD IS
like the universe—ever expanding,” Heilberg had told me before we left for South Sudan. “I focus on the pressure points.” We’d met one morning at New York’s Regency Hotel, on Park Avenue, close to where Heilberg lived with his wife, two sons, and a cockapoo named Cookie Dough. The hotel’s power breakfast—$9 cappuccinos, $28 bagels—attracted the Democratic elite, from Al Sharpton to Nancy Pelosi. This was where John Edwards first met Rielle Hunter. It was also where, thirty-two years earlier, Heilberg, son of a coffee trader, native of the Upper East Side, avowed libertarian, had his bar mitzvah. Everyone knew him by name.

His business model, Heilberg explained, was to find those countries about to break into pieces—to identify the future winners of Africa’s internecine conflicts and to be standing with them when it was over. South Sudan was his biggest project, but he was also busy befriending Darfuri rebels in London, oil-bunkering militants in Nigeria, and ethnic separatists in Somalia and Ethiopia, looking to cash in on any commodity—petroleum, uranium, whatever—that might come his way in the wake of independence. The strategy had come to him early in his career, when he was a trader at AIG. “I saw the Soviet Union split,” he said. “Saw it up close. I realized there was a lot of money to be made in breakups, and I vowed that the next time I’d be on the inside.”

Heilberg’s methods were always unconventional. In the 1990s, he would fly one month to Moscow with Hank Greenberg in AIG’s private jet, then alone another month to Tashkent, the capital of Uzbekistan, where he stayed in hotels so decrepit that he showered with his socks on and he cut gold deals with associates of the dictator Islam Karimov (“a nice guy personally”). He told me he once followed Hans Tietmeyer, the president of Germany’s central Bundesbank, into a public bathroom to catch him off guard. “I asked if they were going to lower interest rates or whatever,” he said, “just to see if he would tense up or pee on me or something like that.” It wasn’t until 2002, three years after Heilberg left AIG with enough money to start his own firm, Jarch Capital, and hire talent on four continents, that a friend told him about Sudan: Africa’s largest country, rich in oil, minerals, and land, on its way to splitting in two. Heilberg’s first contract in South Sudan, in 2003, had nothing to do with food or climate change: It was an oil deal with the Dinka leadership, who he said had wanted bribes he wouldn’t pay and had later ignored the contract entirely. The Jarch board was now populated by rival Nuer.

His farmland venture was a more complex play—a kind of double bet on chaos, on national fragmentation plus international food crisis. The 2008 deal had been signed just as the dimensions of the global land rush had come into view, after food prices suddenly spiked worldwide: That spring, soybeans had doubled, corn and wheat tripled, rice quintupled, and the world’s grain stockpiles shrank to a two-month supply. The governments of Vietnam, Cambodia, India, and Brazil banned food exports; hungry rioters took to the streets in countries worldwide. The Murray-Darling basin, along with most of its rice and wheat exports, was decimated by drought. In China’s grain-growing north, fifty million acres and six million people suffered the worst water shortages in five years. At Costco and Sam’s Club, shoppers were limited to a few bags of rice each. “The world needs food,” Heilberg told me. “Thomas Malthus talked about the problem of finite land but infinite growth, and he’s been wrong to date—we can use technology to push out more food. But what happens when technology isn’t coming fast enough? I think people will panic, especially those who have no land to grow on.”

The panic was already beginning. By the time we had our tickets for Juba, China was pursuing land deals all over the globe: 3 million acres in the Philippines; more than 2 million in Kazakhstan; 25,000 in Cameroon; 200,000 in Russia; untold tens of thousands in Brazil. Korea, itself faced with water shortages, pursued 670,000 acres in Mongolia, nearly 2 million in Sudan, 3 million in Madagascar—a deal that failed after it helped spark a coup. India, with its population booming and monsoon beginning to shift, pursued 850,000 acres in Ethiopia. More than 1 million in Madagascar. More than 20,000 in Paraguay and Uruguay. Qatar sought 100,000 acres in Kenya. Kuwait, 300,000 in Cambodia. Saudi Arabia, 1.2 million acres in Indonesia, 1.2 million in Tanzania, 1.2 million in Ethiopia, and, in Sudan, the first 25,000 of 250,000 acres of wheat and corn. The United Arab Emirates leased 800,000 acres in Pakistan and as many as 250,000 in Ukraine, 125,000 in Romania, and a million in Sudan. Starting in 2009, thousands of Emirati sheep were landing at the Ho Chi Minh City airport; they were raised by Vietnamese farmers, then slaughtered and shipped back to Abu Dhabi.

“Too bad you weren’t here a week ago,” Heilberg said. At 7:30 a.m., the Regency’s dining room was already filling with men in suits and women in pantsuits. “I was here with Joe Wilson”—Ambassador Joseph Wilson, then the vice president of Jarch’s board—“and Sean Penn,” who would play Wilson in
Fair Game,
the movie about the Valerie Plame spy scandal. “I thought Sean was a great guy,” Heilberg said. “I like guys full of passion. The only problem is that it could snowball. He has a bit of a rebel, wild side to him. I could see myself connecting to that. If you start feeding off each other, it doesn’t end until something dangerous happens.” A waitress came by. Heilberg ordered a skim latte, an egg-white omelet, and a side of turkey bacon.

“Wall Street used to be a straight line,” he said. “It made people a lot of money. A lot of money! But the mundane bores me: so the interest rate on this is 6 percent, and you borrow at 3 percent, you know, and so you’ll make . . . anybody can do that. As an entrepreneur, it’s never a straight line. When you’re an entrepreneur, you have to create something.” His favorite author, he said, was Ayn Rand, who, like Heilberg himself, had believed that pursuing profit was itself a moral act, a kind of enlightened selfishness: Place yourself above all else; get in no one’s way, and let no one get in yours; give no charity, and expect none. “Her individualism is extreme—but anything in its purest form is more powerful,” he told me. “Howard Roark is the hero of
The Fountainhead
because he’s pure. He doesn’t care about what anyone else thinks—not about social norms, the right clubs, the right people. We all want a bit of Howard Roark in us.”

Heilberg was proud to be getting his hands dirty in Sudan. It felt pure. Big banks, Goldman Sachs in particular, would soon be accused of distorting commodities markets, overwhelming the grain exchanges of the American Midwest with speculation—winning paper profits from paper gains while producing nothing tangible. Prices were becoming volatile. “If food stocks are low, a small shortfall in production can cause a big jump in price,” explained Nicholas Minot, a senior fellow at the International Food Policy Research Institute. “Demand for food is inelastic. People will always pay to keep eating.” The world could say what it would about him and his generals, but Heilberg knew he was betting not on volatility, not on a bubble, but on something real: an actual food shortage. “We already have a commodities problem,” he said. “I would not be surprised if in a day or a week oil goes to $150 a barrel. Like that: Boom! We’re seeing the death knell of the financial instrument—of the paper world. We’re going to see the rise of the commodity. A bushel of corn can’t be $15.”

The food crisis could be blamed on a host of factors—climate change, soaring oil prices that jacked up the cost of fertilizer, China’s growing appetite for meat, a global population racing toward nine billion—but Heilberg didn’t spend much time thinking about which was which. Insofar as he believed in climate change, he believed in the effects, not the causes: the desertification and droughts and fights over water and land that only made his farmland investment smarter.

Partway through our breakfast, he waved the waitress over: “Is there a way to make it a little cooler in here? I’m dying. It’s hot, right? Isn’t it? It’s hot in here.” He caught me looking over his shoulder. Al Gore, wearing a black blazer, had sat down at a nearby table. “Oh, Al Gore,” Heilberg said dismissively. “He comes here a lot.”

 • • • 

IN JUBA, HEILBERG’S HOTEL
of choice was a collection of well-appointed shipping containers known as the Sahara Resort. Prefab containers—modular offices, modular housing—were all over the city, popular because they were portable. They had been driven in by mostly foreign entrepreneurs after the end of Sudan’s civil war. If fighting reached Juba again, they could be driven back out. Off the paved road, Juba’s dirt streets were yellow and rutted, and they were jammed, most days, with SUVs: the Land Cruisers and Pajeros of aid workers, the Humvees of corrupt officials. The SUVs were otherwise parked at the containers, and the containers were ringed with guards and concertina wire, and when night fell and it was cool enough to sit outside, an air of palace intrigue was everywhere.

“Those two men over there, they are spies,” Gabriel whispered one evening at the hotel. “Which ones?” Heilberg asked loudly. “Let’s go over and say hi.” The men were Arabs in slacks and button-up shirts, one with a mustache and one without. They glanced occasionally across the courtyard in our direction. “It’s not like I’m trying to hide,” Heilberg said. Round, tall, voluble, he was hard to miss. “This is silly. I’m going over there.” Gabriel cringed—not in fear, but at the breach in protocol: “No, Philippe . . .” Heilberg stood up and strolled slowly by the spies’ table, just for sport, nodding politely at them as he passed.

The 2011 referendum on southern independence, promised by the north-south peace accord, was ever closer on the horizon. But what paralyzed Sudan this week was an imminent decision by a European arbitration court on who—the Arab-led, mostly Muslim northern government in Khartoum or the African-led, mostly Christian government in Juba—could claim the contentious Abyei region, a flash point on the de facto border. The year before our visit, ethnic clashes in Abyei had burned entire towns to the ground, the worst fighting since the civil war, and now both sides were mobilizing again in advance of the decision.

The spies could have been agents of Khartoum, where the president and indicted war criminal, Omar Bashir, feared losing the southern oil fields—some in Abyei, some in neighboring South Kordofan and Matip’s home state of Unity—that constituted 95 percent of Sudan’s petroleum production and 65 percent of its national budget. Or they could equally have been agents of Egypt, which had spies in Juba because it viewed the 2011 referendum as a threat to its own national security: An independent South Sudan meant an independent straw in the overstretched Nile, more dams, more upstream agriculture. A third of Egypt’s population worked on farms, and the country, promised 75 percent of the Nile’s flows under the colonial-era Nile Waters Agreement, already used more water than was being naturally replenished. Before the Arab Spring, Cairo had done an assessment of Egypt’s vulnerability to climate change: Even if its population didn’t grow, even if there were no new dams, it would run out of water before the century was up.

The farmland grab was in many ways a water grab. Pre-partition Sudan, Africa’s largest country and second-largest recipient of annual food aid, after Ethiopia, was also its richest in water. This was notoriously not the case in Darfur or Abyei, where, as the scenario planner Peter Schwartz had pointed out, shifting precipitation fueled battles between Arab herders and African farmers. But the Nile basin itself was filled with streams, dotted with swamps. The government in Khartoum, where the two forks of the Nile meet, had turned over nearly two million acres to Saudi Arabia, Egypt, Jordan, Kuwait, and the United Arab Emirates, hoping to make the northern region the breadbasket of the Arab world. South Sudan was on the White Nile. Up the other fork, the Blue Nile, Ethiopia announced plans to build one of the world’s biggest dams, the 6,000-megawatt Grand Ethiopian Renaissance Dam—which it claimed was only for hydropower, not irrigation. Experts suspected otherwise: Ethiopia is, along with Sudan, one of the major targets in the global farmland rush.