Ambassador Rengaraj Viswanathan
Brazil has been acknowledged as a “future power” given its inherent strength and potential. The critics, of course, joke that it has managed to remain and will always continue to be only as a “future” power. Expectations raised during economic booms had diminished during cyclical busts and disruption of democracy by dictatorships. The Brazilians had finally thought that they had “arrived” during the euphoric years of the Presidency of Lula in the period 2003-11. But they have been brought down to earth, yet again, since then. It is against this background that the question of “Brazil’s place in the world” is being raised and the Ditchley Foundation of UK organized a conference on the subject in April this year. In this context, it is important to note that Brazil has undergone a paradigm shift and a New Brazil has emerged in the last two decades. This New Brazil has many distinct advantages and stronger fundamentals in comparison to the existing global powers as well as the other emerging and reemerging powers. It is just a matter of time for this New Brazil to be given its due place among the world powers.
Golden years of Lula
Brazil’s global profile reached unprecedented new heights during the Presidency of Lula who pursued proactive and visionary foreign policies. During Lula’s term, the economy had high growth and at the same time poverty and inequality were reduced with successful Inclusive Development policies. The country had discovered enormous pre-salt oil reserves and was already a global pioneer in the use of sugar cane ethanol as fuel. In 2010, Petrobras raised an unprecedented amount of 70 billion dollars through issue of shares. President Lula was ecstatic when he said ¨It wasn’t in Frankfurt, it wasn’t in New York, it was in our Sao Paulo exchange that we carried out the biggest capitalization in the history of capitalism,”. Petrobras overtook Walmart and Microsoft to become the fourth largest company in the world in terms of market value.
Brazil had initiated the formation of regional groups such as UNASUR and CELAC as part of its regional leadership role besides strengthening Mercosur. It took over command of the delicate Chapter Seven UN Peacekeeping mission in Haiti in 2004 and spent over a billion dollars in humanitarian assistance and other expenditure. It co-founded IBSA alliance with India and South Africa in which the three aspiring democratic powers from the three continents agreed to work on common agenda. Brazil had joined India, Germany and Japan in the campaign for permanent membership of the UN Security Council. Brazil has also been an active member of BRICS, the non-western alliance. President Lula had even dared to take an initiative to mediate in the Iranian crisis along with his Turkish counterpart, although it was squashed ruthlessly by US. Brazil was an active player, mover and shaker in global trade and economic fora. There was a new confidence and optimism with which Brazil sought its place among the global powers.
But these days, the Brazilian economy has slowed down from the ” go go” growth period to the ” so so ” ( in the words of Financial Times) slow performance these days. The GDP growth has declined to 2.3 percent in 2013 and is projected to grow at 1.8% in 2014 and 2.7% in 2015 (according to IMF) ; inflation and interest rate have gone up: manufacturing has been losing competitiveness due to the high costs (called as “Custo Brasil”) of production and services; there is decline in demand and prices of commodities exported especially to China; Oil and ethanol production and investment have stagnated due to policy issues; Corruption scandals have hit the headlines; Standard and Poors downgraded the investment grade rating of the country to the lowest rung in March; Brazil, the government is reviving inward-looking trade protectionist barriers; and Mercosur in which Brazil is the leading member, is in disarray while its rival, the recently-formed Pacific Alliance is shining as a beacon of open trade and regional integration. Emblematic of the country’s fall from the days of glory, Eike Batista, the richest Brazilian worth about 32 billion dollars in 2010 has crashed spectacularly to be worth less than a billion dollars and is facing bankruptcy and charges of insider trading among others. The football world cup which was greeted as a jewel in the crown of the New Brazil is becoming a nightmare for the government. The mass protests, which started last year and is continuing, have shaken the political establishment and and challenged the authorities.
President Dilma has shown least interest in foreign policy and pays scant attention to Itamaraty, the foreign office. Nor is she keen on a global profile for Brazil or for herself. This has tied the hands of the Brazilian diplomats who have become defensive and admit that Brazil’s priorities, these days, are not so much on its global role.
Does this change from the euphoric times of Lula to the downbeat days of Dilma mean a repeat of the previous cycles? Certainly not. The current slowdown after the high growth of the last decade is different from the past cycles of boom and bust in the last century. Brazil has undergone a paradigm shift in the last two decades. The twenty first century Brazil is fundamentally different from what it was in the twentieth century when it was going from one extreme to another. Hyperinflation, excessive external debt and volatile exchange rate/change of currencies, the three curses of the past, are not likely to repeat. Inflation has been tamed and kept in single digit. Brazil’s external debt is within manageable limit and it has become a net creditor to IMF after having prematurely paid off its debt. The currency and exchange rates have become stable and predictable. The macroeconomic fundamentals are solid and strong. The Brazilian policy makers, having learnt lessons from the past mistakes of adventures and experiments, are now prudent, pragmatic and transparent in approach. The Brazilian economy has become more resilient and better prepared to absorb external shocks. This was evident from the way in which Brazil had weathered the storm of the financial crisis which devastated US and Europe. Not a single Brazilian bank or financial institution collapsed.
The New Brazil has a solid democratic foundation with a political consensus on the future direction of the country. The economic and political agenda of the country is no longer driven by the barracks or the mansions of the oligarchs but by the masses who elect their rulers and hold them accountable. If the leaders do not deliver, the protesters are on the streets. The growing middle class, with its street power along with the voting right, is good for reining in the political leaders. With these new fundamentals, the Brazilian democracy has become stronger, inclusive and vibrant.
So the current slide in growth and optimism should be seen in the larger perspective of Brazil’s fundamental transformation which augurs well for pursuit of the global ambitions of the country.
A deeper analysis, going beyond the current issues, reveals the following intrinsic and acquired strengths of Brazil vis-a vis the P-5 in UNSC and the and the other emerging and reemerging powers:
Brazil is the fifth biggest country in area and population and the seventh largest economy in the world. It has a large and diverse base of agriculture, manufacturing, mineral wealth, services and exports. Its survival is not dependent upon any single commodity or just exports. Brazil is a global leader in research and production in fuel ethanol, agriculture, medium-size aircrafts (Embraer) and deep-sea drilling among others.
Brazil has the world’s largest forest cover in Amazon, which contributes twenty percent of earth´s oxygen and has become the lungs of our planet.
Brazil is blessed with twenty percent of the fresh water reserves of the world. The rainfall is reasonable and most of the agriculture is rain-fed unlike India which depends on irrigation and pumping of ground water. Both China and India have long term water problems.
Brazilian companies such JBS (world’s largest meat company), Brazil Foods, Petrobras, Vale and Embraer are among the global leaders in their areas of operation. Petrobras’s ongoing investment plan of 220 billion dollars in the period 2014-18 is among the largest corporate investments in the world.
Brazil is blessed with mineral wealth and has large reserves of iron ore, tin , copper, bauxite, manganese and gold.
Brazil enjoys a moderate and agreeable climate and does not suffer from extreme heat or cold. It has some of the best beaches in the world. Brazil is not vulnerable to extreme natural calamities like Japan, for example.
Food and energy security
Brazil is an agricultural super power. It is not only self reliant in food security but have surplus to export and be a global player. Brazil is the world´s largest exporter of beef, chicken, sugar, soya, orange juice and coffee besides being a significant exporter of soya, maize, cotton, tobacco, bananas, pork and ethanol. Brazil can increase production and exports and feed a few hundred more million people of the world. They have the largest surplus land which could be brought under agriculture and have abundant water resources. With its advanced research and development, Brazil has brought under cultivation millions of hectares of arid land in Matto Grosso. The Brazilian climate and regional variations make it possible to grow crops throughout the year.
Brazil is also emerging as a global player in energy. By 2020, Brazil is expected to produce 5 million barrels per day of crude oil and become a significant exporter. With its leadership position in deep sea drilling technology, Brazil will be able to exploit the large pre-salt reserves discovered in recent years.
Brazil is a pioneer and global leader in the use of sugar cane ethanol. Most of the new vehicles in Brazil have flexifuel engines. Brazil is working with US and a number of Latin American countries to standardize fuel ethanol production, use and trading globally. Sugar cane ethanol is more fuel efficient and environment-friendly than the corn ethanol used in US.
It is important to note that Brazil gets most of its energy from renewable sources, particularly hydroelectricity and ethanol.
Unlike Brazil, the other emerging powers namely China and India will find their foreign policy constrained by their food and energy security concerns and their dependence on imports. Germany and Japan, who are also dependent upon energy imports, have to factor this in their foreign policy. This was evident in the German discomfort in supporting US policy in Ukraine.
Free from threats
Despite having border with ten out of the twelve South American countries, Brazil does not have any territorial disputes with neighbours. They do not face a hostile or unstable neighborhood like what India is burdened with. China and Japan too face threats from neighbourhood.
Brazil is lucky that it is very far from the global hotspots of tensions and problems. In the 2014 Havana Summit declaration, the CELAC leaders pledged to continue working to consolidate Latin America and the Caribbean as a Peace Zone. The region is free from nuclear arms, terrorism and threat of wars unlike in some parts of Asia, Africa and Eastern Europe.
Brazil does not face any threat from terrorism. In contrast, the western powers are vulnerable and going to be even more so in future, given the destabilization in countries such as Afghanistan, Iraq, Libya, Egypt and Syria and the growth of fundamentalist forces such as Taliban and Al Queda. Russia, China and India also have suffered due to terrorism and continue to face the risk of terrorist strikes.
Brazilians speak one language and follow one religion and the country does not face any internal threat from fundamentalism or ethnic, linguistic or religious conflicts unlike China, India and Russia. Even France, UK, US and Germany have to be on their guard against rising fundamentalism within their own countries.
Brazilians are so much attached to the Brazilian way of life and feel so self-reliant and confident that they stay in Brazil itself. In contrast, India and China suffer from Brain Drain since many scientists and high-tech experts emigrate to US and other developed countries for better professional prospects.
Brazil is a country of predominantly young population and does not have the problems of ageing and decline in skilled human resources faced by countries such as Germany and Japan.
With their blend of “coffee with milk” (café com leite) complexion and free mix of people of European, African (the largest outside Africa), Japanese (the largest outside Japan) and Arab origin, Brazil is a true melting pot. The Brazilians fit in easily with people around the world and get along happily with others. Brazil has an enviable soft power with its benign image of happy-go-lucky beach-going spirit, football, samba and Carnival.
The Brazilians did not even have to fight for their independence. The king himself declared independence from his own mother country Portugal and simply changed his title to King of Brazil. So the Brazilians do not have any bitterness or rancour against Portugal. They do not have to recall any fight for independence for national pride.
Many countries in the world have Father of the Nation who liberated the country or fought for independence such as Simon Bolivar for Andean countries and San Martin for Argentina. But Brazil has no such father of the nation nor is there any hero worship in the society. This makes the Brazilians pragmatic and open in their outlook.
Truly Independent foreign policy
Unlike all the other major powers of the world, Brazil does not have any historical baggage. The victors of the second world war and those who lost (Germany and Japan) have the burden of historical memory which influences their foreign policy and global view. But Brazil does not have any scores to settle with other countries nor does it have an agenda considered adversarial by others. Their rise as power will not be seen as a threat by any other country, although countries like Argentina and Mexico are jealous because of rivalry, which is understandable.
Brazil has given comfort to other countries in the region through its active initiatives and participation in sub regional and regional groups such as Mercosur, Unasur and Celac.
The Brazilians are in an enviable position of not being able to identify ” enemies” in their Strategic Defense Policy. In the absence of enemies, their defense doctrine is based only on perceived ” vulnerabilities”. Brazil has had no wars in the last one hundred and fifty years. Nor is Brazil perceived as an enemy by any other country.
Brazil has one of the best diplomatic services in the world, admired for its professionalism and commitment. The Brazilian diplomats in UN, WTO and multilateral fora are known for their proactive roles. They have the freedom to judge many issues based on pure merit unlike the Indian diplomats who need to be constantly aware of potential implication of any UN resolution on Kashmir and other domestic issues of India as well as its mischievous neighbours. Even the Chinese are always on their guard on issues of human rights, democracy and minorities. The Brazilians are neither on the side of agenda-pushing western powers nor have to be defensive like India and China. They have the luxury of independent approach on many global issues without fear or other constraints.
Brazil has avoided a potential arms race and nuclear rivalry with Argentina by embracing them in Mercosur. The two countries have a thriving trade, investment, free movement of population as well as defense cooperation and joint projects and transparent and open interaction on defense issues.
While taking positions on regional and global issues, the Indian foreign policy has to take into account many external and internal vulnerabilities and constraints such as the remittances and oil imports from middle east, US tilt to Pakistan, Chinese and Pakistani threats as well as internal factors such as large Muslim population, Kashmir issue and Tamil sensitivities on Sri Lanka. Brazil has no such serious vulnerabilities or internal compulsions and therefore can take bold and fearless stand on global issues. There are no foreign policy lobbies within Brazil similar to the lobbies of Israel and Cuban emigrants which have distorted the US foreign policy and global strategy.
The Brazilians fit naturally in the camp of the west. With a large number of people of European origin, Brazilians are basically rooted in western values. They also get along culturally with US which has similar history and forward-looking. This fact gives comfort to the western powers who see India, China and Japan whose cultures, histories and mindset are totally different from the western ones.
At the same time, Brazil is part of the developing world with its problems of poverty and developmental issues. This makes Brazil to feel as part of the South and pursue South- South cooperation and solidarity. As an emerging power, it seeks change in the status quo of the global political and economic power equations. It resents the unilateralism of US and the domination of the western powers.
Given their Western roots and Southern profile the Brazilians are comfortable in both the camps. They are happy in the Indian-style arranged marriage of BRICS; in the IBSA partnership which originated out of pure love and romance; as well as in the marriage of convenience in G-20; besides their membership of regional groups such as Mercosur, Unasur and CELAC.
Brazil is not particularly dependent upon one country or region for its trade. The Brazilian trade is well diversified between EU, US, China and Mercosur. The only dependence to some extent is on China which is their largest trading partner accounting for 19% of Brazil’s exports and 15.5% of imports.
Brazil as a role model
Brazil has successfully reduced poverty and inequality through its pioneering Inclusive Development policies such as Bolsa Familia. This has become an inspiration for many other countries with similar challenges.
Brazil has become a role model for other developing countries with its indigenous development and political model called as “Brasilia Consensus” ( also known as “Lulaism”) which means pragmatic and balanced mix of pro-poor and -pro–business policies. In the past, Brazil and many other countries in Latin America have suffered due to ideological polarization and some countries such as Venezuela still suffer even now. Even US is paying a high price for the irreconcilable ideological extremism between the Republicans and the Democrats. Brasilia Consensus/Lulaism is an indigenous model unlike imported ideologies such as Marxism, and Washington Consensus which have caused political and economic problems and divided many countries and the region in the past. The fact that Lulaism is winning the heart and mind of leaders and people in the region is attested by the following cases. Olanta Humala lost the previous election in Peru after being labelled as the Chavez of Peru. But in the last elections he rebranded himself as the Lula of Peru and won. True to his promise he follows pragmatic policies and is in good terms with both Washington DC and Caracas. When Mujica, the ex-guerilla leader who had spent 14 years in prison stood for elections in 2009, people had apprehension that he might pursue outdated and extreme leftist agenda. But he announced that he would follow the model of Lula and won the elections easily. There have been similar other cases of leftist candidates promising to be the Lula of their countries.
Brazilian democracy has taken strong roots and has become institutionalized firmly. There is a general consensus among the Brazilian political leaders of all the major parties on the strategic direction of the country. Brazil will not fare worse or change direction drastically if any of the two opposition candidates win the October elections instead of Dilma, who has inherited Lulaism. This cannot be said of other powers such as India, Russia and US where the opposition can completely change the internal and external policies practiced by the ruling parties. The maturity of the Brazilian democracy is attested by the rise of Lula, a lathe worker and Dilma an ex-guerilla fighter to become Presidents. This has reinforced the confidence of the Brazilians in their democracy and has inspired them.
On the other hand China which has already emerged as a global power remains isolated from the mainstream world of democracies. While the world admires its economic growth, no country wants to follow the communist dictatorship model of China.
Brazil as an agenda setter
Brazil has played the role of agenda setter in regional as well as global stages. In South America it has driven regional integration and cooperation through UNASUR and in Latin America through CELAC. It attaches importance to democracy and has gone to its defense when it was threatened in Paraguay, Bolivia, Venezuela, Honduras and Ecuador in recent years.
Brazil has set agendas in some UN and WTO issues such as “responsibility while protecting” to regulate humanitarian intervention, Doha Round and most recently on the global governance of internet.
Brazil’s Amazon has a critical role in the global environment scenario. The world needs the cooperation of Brazil to deal with the issues of climate change.
Brazil has many serious challenges such as poverty, inequality, insecurity, drug trafficking, corruption, infrastructure, health care and education. A closer look at these issues makes Brazil look definitely as a developing country. Brazilian civil society organizations are, understandably, critical of the government’s global aspirations and demand that the focus should be on domestic developmental issues. They also question the reason for increasing military expenditure saying that the Brazilian military has killed more Brazilians than enemy soldiers.
But the problems of Brazil are solvable in the medium term unlike some of the serious long term developmental problems of huge magnitude faced by India and the democracy issue in China. India has the most challenging problem of providing food, education, healthcare and infrastructure for the 15 million additional population every year. Most of India’s energy is wasted in firefighting on the day to day issues of conflicts between communities and other such problems arising from the vast diversity of the country with 22 official languages. Besides the large population, China has an even more fundamental problem on democracy. No one has a clue as to how China is going to come out of its anachronistic communist dictatorship and become a normal democracy and be part of the contemporary civilized world.
Although race is not an issue in Brazil, it is a fact that most of the poor, less educated and most disadvantaged in Brazil are the Afro-Brazilians. There are very few blacks who are cabinet ministers, business leaders, civil servants or diplomats. The Afro-Brazilians are invariably in the role of domestic servants in the stories of most Brazilian soap operas. Only now some universities have started affirmative action programmes. But Brazil does not face any major racial tension or issues unlike in the case of US.
The Brazilians are aware that economic strength alone will not get UNSC permanent membership as Germany and Japan have found out. The Permanent members of the UNSC who are all nuclear powers, have respect only for the hard power. Brazil regrets having signed away its nuclear power option, although they do not admit it publicly. But it is too late now to change. The Brazilians put on their best smile on the subject joking that if they have a nuclear bomb they would not know against whom to throw it.
Brazil is misaligned with the world by its protectionist and introverted trade policies while most other economic powers are forming, expanding and joining ever more alliances and signing FTAs. The Pacific Alliance shines as an open, dynamic and forward looking trade group in contrast to the inward looking Mercosur struggling with many internal issues. Mercosur’s PTA with India and SACU countries are just paperwork without being able to give any significant meaningful stimulation for trade growth. The Brazilians need to do much work so that they do not to miss out on the opportunities created by economic grouping and FTAs.
Brazil is behind other major powers in development assistance. Conscious of this past negligence, Brazil has started providing technical, financial and developmental assistance to the less developed countries especially in Africa. They have written off the debts owed to them by some poor countries. They have opened more embassies in Africa and provided technical assistance for agricultural development in some countries.
The Brazilian protests have come up as a wake up call for the Brazilian authorities. The protests reflect the frustrations of the middle class at the poor governance, corruption, education, healthcare and infrastructure as well as omissions and commissions. A glaring omission in the development model of Brazil is the fact that Brazil does not have proper, extensive and affordable railways for mass travel. The car companies had lobbied the politicians to kill the railway system built by the British and got subsidies and support to build cars. On the other hand India and China have extensive and inexpensive railways for the masses to travel.
Criticism of Brazilian foreign policy
The western powers have been accusing Brazil of not standing up (code word for not siding with them) on the issues of Syria, Ukraine and Venezuela. But the Brazilians do not agree with the prescriptive and interventionist policies of the west which has lead to disastrous results in some cases as Iraq and Libya. Brazil maintains its right to take independent positions based on its own judgement.
There is western criticism that Brazil did not do enough to uphold democracy and human rights in Venezuela, which is part of Mercosur. But the truth is that Brazil has to be cautious and do not want to see the overthrow of the legitimately elected government of Maduro by some Venezuelan right wing opposition elements who use the protests for regime change. It has happened in the past. The Venezuelans have to find their own internal solution by dialogue between the opposition and the government. There cannot be any externally imposed solution as the Western powers had done in the cases of Iraq and Libya. This is the reason why Brazil has been promoting and facilitating dialogue between the Venezuelan government and opposition through the mediation of UNASUR and some quiet diplomacy.
Some critics also question the wisdom of Brazil in incorporating the unstable Venezuela in Mercosur adding to the troubles already faced in the regional group. But the reality is that Venezuela as an isolated country (especially after Chavez took it out of Andean Community) with a radical regime and polarized society would become dangerous internally and externally. Venezuela and the region are better off with the country as part of Mercosur, which would be able to moderate the Caracas regime towards stable and sensible policies. In this context it may be noted that Brazil had defended democracy successfully when there was threat of coup or regime change in Paraguay, Bolivia, Ecuador and even in Venezuela during the Chavez time. Brazil had used the fora of Mercosur and Unasur to mediate in these cases in a non-prescriptive way and complementing this with discrete bilateral dialogues.
Brazil is prepared to wait for its time
It is clear that Brazil has many distinct advantages over the other major powers and well qualified to be a global power. It is just a matter of time for the world to recognize and give Brazil its due place in the international stage. The Brazilian diplomats are not in a hurry at the moment to raise their flag in view of the low priority given to foreign affairs by President Dilma Rouseff . They are willing to wait for the inevitable invitation to join the high table. Till then, they will continue to work through all available channels and fora of South–South and South –North and global organizations.
With its profile as a peaceful and benign power, without past sins or future threats, open and pragmatic approach in a non-prescriptive and non-polarising way and firm belief in a multipolar world and multilateralism, Brazil could make the UN better and the world safer as a global power and permanent member of the UN Security Council.
Brazil – seen as global partner by India
India views Brazil, with the above credentials, as an ideal global partner. The two countries describe their bilateral relationship as ” strategic partnership”. They have common worldview and aspirations and face similar challenges. Both of them are role models for democracy in their respective regions. They have coopted South Africa, another example of democracy in the unique tricontinental IBSA partnership. Over the years, India and Brazil have built up rapport in working together in many global fora and multilateral negotiations. They had taken initiatives for UNSC reforms and presented their candidatures to permanent membership along with Germany and Japan.
The Indian foreign policy, which was passive in the last decade, is going to be assertive under the new Prime Minister Narendra Modi. The visionary Modi is expected to raise the global profile of India with his robust and proactive approach. He would certainly revive the pursuit of UNSC permanent membership and make the voice of India heard in global fora. The BRICS summit in Brazil in July will give the first platform for Mr Modi to make a difference in Indian diplomacy. Pity, Lula is no longer the President of Brazil. Modi and Lula would have been an unbeatable Dream Team. Given the minimal interest of President Dilma Rouseff in foreign policy, the Indians hope that Modi could inspire her and reinvigorate the India-Brazil partnership in the pursuit of the common global agenda of the two emerging powers.
Ambassador Rengaraj Viswanathan is a Distinguished Fellow, Latin America Studies, Gateway House, Indian Council on Global relations. He was India’s ambassador to Venezuela, Argentina, Uruguay and Paraguay, Consul General in Sao Paulo and Head of the Latin America Division in the Ministry of External Affairs.