What to Watch at the BRICS Summit in Brazil

July 15, 2014

Molly Elgin-Cossart – Center for American Progress, 7/14/2014

While the drama and sportsmanship of the World Cup has captured the world’s attention for several weeks, an international gathering of a different kind is set to begin in Fortaleza, Brazil, on July 15. After attending the final soccer match at the invitation of Brazilian President Dilma Rousseff, the leaders of Brazil, Russia, India, China, and South Africa, or the BRICS countries, will meet for their sixth summit.

The summit is likely to be more show than substance—but never underestimate the power of a good show. For a group that began as a mere Goldman Sachs acronym, the BRICS has slowly asserted itself as an economic entity. During this week’s summit, the group is likely to announce its own BRICS development bank with starting capital of at least $50 billion, and it is also cautiously wading into political territory.

What is the BRICS?

The BRICS began as BRICs—or Brazil, Russia, India, and China—an acronym coined by Goldman Sachs economist Jim O’Neill as shorthand for the developing economies with high projected growth. The countries took this constructed association seriously and began meeting formally in 2006. South Africa joined the club in 2010.

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Brazil-China: a growing alliance

July 29, 2013

Charles Tang – World Policy, 07/25/2013

As the Obama administration is preparing its “Pivot to the Pacific,” China is continuing to build its long-standing commercial alliance with Latin America and the Caribbean by charming the region with trade and investments.

Between 2000 and 2012, trade between China and Latin America grew by 2,550 percent from little over $10 billion to $255.5 billion. Trade between Brazil, the region’s giant and fellow BRICS member, and China, leaped from $6.5 billion in 2003 to $77 billion by the end of 2011 and $75 billion in 2012.

China became Brazil’s largest export destination in 2009 and in 2010 was Brazil’s most important source of imports and its main direct foreign investor. Chinese investments in Brazilian assets surpassed $20 billion in 2010 from a negligible accumulated sum of $292 million only one year before.

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Agriculture and food security: Brazil’s chance to assume leadership among the BRICS?

June 11, 2013

Oliver Stuenkel – Post-Western World, 06/09/2013

The stark differences between Brazil’s and India’s agricultural productivity and their differing positions during trade negotiations in the past years are an often used argument of why South-South cooperation will always be an elusive dream. And indeed, India has often been accused of being a nay-sayer in the realm of agriculture, even by its fellow emerging powers.

It may then come as a surprise that agriculture and food security are among the first topics that emerged when the BRIC grouping began to discuss ways to cooperate. In fact, during the first BRIC Leaders Summit in 2009 in Yekaterinburg, a separate declaration on food security was issued, underlining the importance of the matter.

In the document, the BRICs professed to be “committed to opposing protectionism, establishing a just and reasonable international trade regime for agricultural products, and giving farmers from developing countries incentives to engage in agricultural production.” The 2-page document argues that “the developed and developing countries should address the food security issue according to the principle of common but differentiated responsibility”, a concept that would become a trademark of future BRICS declarations, particularly in the field climate change. Finally, the BRICs signaled their interest in cooperating by “sharing the best practices of operating successful public distribution programmes.”

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Brazil prepares for World Cup as criticism mounts over cost

June 10, 2013

Jonathan Watts – The Guardian, 06/09/2013

When the heart of the Amazon was among the richest places on Earth, local rubber barons flaunted their incredible wealth by building a spectacular opera house in Manaus with British steel, French glass and Italian marble.

At great expense, they shipped construction materials across the Atlantic and down the Rio Negro, then filled their new venue in the forest with the world’s leading musicians and conductors.

Even by the standards of the late 19th-century Belle Epoque, some considered this an extravagant folly. But those behind the scheme saw themselves as pushing back the boundaries of their civilisation.

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Argentines hope Lula will pull of miracle on Vale potash mine

June 3, 2013

Samantha Pearson – Financial Times, 06/02/2013

It was an unnerving sight for Vale’s investors. Dressed in a traditional Andean poncho, Brazil’s former president Luiz Inácio Lula da Silva was pictured in Argentina in May discussing the future of the miner’s suspended potash project.

“We are trying to make the venture viable and he seemed open to the idea,” Francisco Pérez, the governor of Argentina’s Mendoza province where the mine is based, said after their meeting.

The visit came less than a month after President Dilma Rousseff also flew to Argentina to discuss the matter, raising concerns that Vale, the world’s second-biggest miner by volumes, is facing growing political pressure to maintain the cash-draining project.

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Brazil posts smallest May trade surplus in 11 years

June 3, 2013

Reuters, 06/03/2013

Brazil’s trade surplus shrank to $760 million in May, down 74 percent from a year ago and the smallest surplus for that month in 11 years, Trade Ministry data showed on Monday.

The result was far below market expectations of a $1.8 billion surplus, according to the median forecast of 16 analysts surveyed by Reuters.

A fall in the prices of key commodities such as soy and crude oil have hampered Brazilian exports while the country’s imports are booming.

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Rousseff aims $2.5 billion at energy research: corporate Brazil

June 3, 2013

Stephen Nielsen – Bloomberg, 06/03/2013

Brazil will pour 6.1 billion reais ($2.85 billion) to fund renewable-power and biofuel technology research, accelerating its efforts to modernize its energy industry and shift away from a commodity-export based economy.

The country plans to triple funds for companies including Bunge Ltd. (BG) and Petroleo Brasileiro SA that are developing processes to turn sugar cane into high-margin chemicals and boost ethanol output, said Alexandre Tanaka, an official with Brazil’s research-financing agency Finep.

Brazil’s ambition is to lead development of the next generation of biofuels after a decade of hyperinflation stymied research budgets. The country is seeking to become a supplier of fuel-production technology and processes rather than purchasing them from other countries, Tanaka said. Its position as the world’s top producer of sugar cane may help it succeed with an approach some U.S. companies have abandoned.

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Philippines, Brazil agree on new flights

May 22, 2013

Paolo G. Montecillo – Philippine Daily Inquirer, 05/22/2013

Daily flights between the Philippines and Brazil, South America’s largest country, may start soon following the approval of new air rights between the two countries this week.

The  on Wednesday announced that the Philippine and Brazilian governments had signed an air agreement.

Under the accord signed by the Philippine air panel this week, a total of seven flights a week are now allowed between Manila and any point in Brazil. The agreement also includes an unlimited number of flights between any point outside of Manila to any point in Brazil.

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President Gauck praises Brazil ties in Rousseff meeting

May 14, 2013

DW/AFP, 05/14/2013

German President Joachim Gauck is in Brazil seeking to strengthen trade ties with a key German partner; he and President Dilma Rousseff have officially opened a special Germany-themed year in Brazil.

German President Joachim Gauck and Brazil’s Dilma Rousseff started Brazil’s “Deutschland-Jahr” year-long schedule that incorporates as many as 400 cultural, economic and scientific appointments in the coming months.

Gauck and Rousseff appeared at the opening of a German-Brazilian trade conference in Sao Paolo late on Monday.

The German president praised long-standing and stable bilateral trade ties. Gauck said that Volkswagen’s partnership with Brazil had proved so successful over the years that many in Brazil considered VW a “domestic legacy brand.” He also lamented that too few Germans knew that author Thomas Mann should dedicate “his artistic streak to his mother who was born in Brazil.”

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Brazil’s service sector picks up steam in April

May 6, 2013

Silvio Cascione – Reuters, 05/06/2013

Growth in Brazil’s service sector accelerated slightly in April after a surprise slowdown in the previous month, according to data released on Monday, stoking hopes of a gradual recovery in Latin America’s largest economy.

HSBC’s Purchasing Managers Index for the Brazilian services sector rose to 51.3 in April from 50.3 in March on a seasonally adjusted basis, signaling activity at service providers expanded at a slightly faster pace than in the previous month. Readings above 50.0 indicate expansion.

“Following the very weak increase in activity reported by firms in March, the April results seem more consistent with the modest recovery we believe the Brazilian economy is experiencing,” said Andre Loes, chief Brazil economist at HSBC.

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