by Simon
Brazil has its share of growing pains and longstanding challenges. There are challenges of income and racial inequality, violent crime, rising inflation and vast infrastructural needs, as well as other social and economic challenges.
Still, Brazil is a country on the move and is vigorously addressing poverty through innovative income and social programmes. By some estimates 20 million people may have moved out of poverty in the past decade due to the country’s economic success.
Brazil overtook Spain, Canada and Italy, and according to the UK-based Centre for Economics and Business Research has now overtaken Britain and France to become the world’s sixth largest economy. Along with Russia, India, China and now South Africa, Brazil is a member of the BRICS group of “leading emerging economies”.
INDUSTRIAL
Brazil has one of the largest industrial sectors in the Americas with industries ranging from aircraft production -- think Embraer -- to automobiles, petrochemicals, cement, textiles, mining and space research. It has a vibrant and diverse services sector including financial services and tourism.
Brazil’s economic prowess, political stability, approximately 200 million-strong population and extraordinary potential have made it a regional power in the Americas and a major international player.
Both the United States and China court the former Portuguese colony, with China aggressively pursuing its economic interests in one of its main suppliers of various commodities. Brazil’s largest trading partner is not the US. It is China.
China’s 1.3 billion population is significantly larger than Brazil’s. But Brazilians enjoy greater purchasing power. There is another critical difference. Exports from China account for 40 per cent of its economy, with some obvious downsides during the current worldwide slowdown and also for the long term.
Exports account for approximately 13 to 14 per cent of Brazil’s economy. With such a vast and increasingly more prosperous domestic market, Brazil is less dependent on exports and better protected from global economic shocks.
Brazil arrived on the world stage some years ago. It’s hosting of the 2014 FIFA World Cup, and the 2016 Olympics in Rio de Janeiro will be less a coming out party than a recognition by the international community of Brazil’s status as a major world player.
It has flexed its economic and political muscles in a campaign to gain a permanent seat on the UN Security Council and has contributed military personnel to the UN peacekeeping mission in Haiti.
Brazil became a creditor to the International Monetary Fund. It bought billions of International Monetary Fund Drawing Rights, “the basket of world currencies used as a reserve hedge against currency fluctuation”.
MILITARY
Brazil is also boosting its military strength. It aims to become a major arms manufacturer and exporter. To project its military strength and guard its marine borders and deep water oil reserves it launched a naval submarine development programme which “will initially produce four conventional S-BR submarines using French technology”.
Bordering every South American country except Chile and Ecuador, Brazil has little doubt about its pre-eminence in Latin America. It has boosted trade and launched economic cooperation and assistance programmes with its continental and regional neighbours.
Once the seat of the Portuguese monarchy, Brazil enjoys good relations with governments from left to centre to right. This is due in large part to the pragmatic foreign policy and charisma of former President Luiz Inaco Lula da Silva who enjoyed warm relations with both former US President George W. Bush and former Cuban President Fidel Castro.
A member of the G-20 group of major economies, Brazil is quite active in regional and international economic and political groupings. Over the past decade the country significantly increased its global diplomatic presence opening many new embassies including one in Nassau.
In 2010, the first Caricom-Brazil Summit of Heads of State and Government was held in Brasilia, the Brazilian capital. The Summit produced “The Brasilia Declaration” outlining a framework for enhanced relations between Brazil and Caricom member states. Caricom heads have little doubt about the need for and benefits of good relations with Brazil.
And Brazil is not unmindful of the 15 votes of the Caricom bloc in international groupings such as the Organization of American States and the United Nations and its related agencies.
Even as Great Britain was consolidating its diplomatic presence in the Americas by closing some embassies and reducing staff levels in others, two emerging powers were boosting their diplomatic presence in the hemisphere.
This decade there will likely be three powers with embassies in just about every country in the Americas and the Caribbean: The United States, China and Brazil. The embassies will represent the ability of these countries to afford such a complex of diplomatic missions from Ottawa to Nassau to Tegucigalpa to Santiago. The embassies will also represent the political and economic reach of these countries.
“BACKYARD”
A new international and regional dynamic is emerging. The Americas, which a senior US foreign policy guru once dismissively labeled as “America’s backyard”, may be seen by Brazil and China less as someone else’s backyard and more as a field of competition.
It was in 2001 that Goldman Sachs economist Jim O’Neill coined the acronym BRIC. He forecast that in a few decades this grouping would surpass, in the words of Daniel Yergin, “the combined GDP of the US and the world’s five other largest economies”. O’Neill made that prediction just over a decade ago.
In 1975, the Group of Six, which grew to Seven, then Eight, was created as a forum for the world’s major economies. Its membership came to include: Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and Russia.
Some 37 years onward some BRIC nations have surpassed a number of G8 members in terms of economic size, and are rushing to overtake others.
Analysts studying the advances by China and Brazil in the Americas would be unwise to think in terms of either/or. Instead it is a matter of both/and. Both China and Brazil are boosting their presence in the region. Is it a coincidence that both China and Brazil, major international players, have embassies in little Nassau?
In significant ways, Brazil and China share a worldview in terms of the geopolitics and global political economy of the 21st century. Former Brazilian Foreign Minister and current Defence Minister Celso Amorim observed that the expanding relationship between his country and China might facilitate a “reconfiguration of the world’s commercial and diplomatic geography”. Might this include a new international financial architecture?
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