Brazil’s global standing in turbulent times

guilherme.casaroes@fgv.brGuilherme Casarões, Professor at FGV/EAESP, shares his insights into Brazil’s foreign policy: from great expectations to turbulent times

How does the current crisis affect Brazil’s global standing? The obvious and easy answer is that the combination of corruption scandals, growing political instability and poor economic results undermines the country’s credibility. As investments wane and trade declines, Brazil gets isolated and the crisis deepens. On top of it, a weak government, whose president is facing an impeachment process, seems incapable of living up to challenges of an emerging power in an ever more complex world.

But this is just part of the story. The international side of the Brazilian crisis can be traced back to Dilma Rousseff’s early days in office. It has a global and a domestic component. Globally, Brazil has suffered the late effects of the global financial recession. Signs of economic slowdown since 2012 were indicative of the limits of the expansionist policies that had made Brazil go unscathed through the initial turbulence. Moreover, growing tensions in the Middle East, Ukraine, and Venezuela undermined the erstwhile successful strategy of South-South-cooperation.

Domestically, the tripod that had sustained President Lula da Silva’s vibrant foreign policy – the president, the Workers’ Party (PT), and the Ministry of Foreign Affairs (also known as Itamaraty) – was lost. Unlike her predecessor, Ms. Rousseff was not interested in doing diplomacy, nor was she willing to wait for the diplomatic long run to get things done. Itamaraty was put on the sidelines, with much fewer resources and prerogatives, as other ministries, particularly those led by PT, scrambled for specific foreign policy agendas. The combination of those factors led to poor foreign policy results throughout Dilma Rousseff’s first term.

Brazil’s regional leadership against the wall

460283737Brazil’s leadership in South America was inherited from the Lula administration but faced several challenges in the last years. The single most divisive issue in Mercosur was whether to let a conflict-ridden Venezuela join the bloc – and what to do with it once it got in. Venezuelan President Hugo Chávez had signed the accession protocol in 2005 and it was pending approval by the Paraguayan senate. In June 2012, the ousting of the president of Paraguay, Fernando Lugo, prompted Brazil and Argentina to suspend the country on the grounds that a coup d’état had taken place and – contrary to Itamaraty’s recommendations – to immediately let Venezuela in.

The swift move was not consensual and exposed internal divisions within Mercosur along ideological lines, as well as a rift between Itamaraty and PT. Originally conceived as a free-trade area, the bloc was bogged down in politics, unable to deliver sound economic results or to sustain Brazil’s regional standing. Trade between Brazil and Mercosur partners plummeted from USD 53 billion in 2011 to USD 34 billion in 2015. Meantime, the same “democratic clause” that was used to keep Paraguay at bay was not enough to prevent Venezuela to be dragged into an unprecedented political and economic crisis that followed Chavez’s death in early 2013.

More broadly, Brazil’s relations with Latin America were also put to the test. The establishment of the Pacific Alliance in 2012, composed by Chile, Colombia, Mexico and Peru, came as a blow to Brazil’s economic ambitions across the hemisphere. Trade with Latin America and the Caribbean dropped to 2007 levels, from USD 95 billion in to USD 66 billion in the last five years. The major initiative of the Rousseff administration in the region, the billion-dollar Mariel Port in Cuba, is still waiting for the Cuban-American rapprochement to show concrete results.

Caught between the great powers

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The BRICS have fallen down, But we will rebuild them with small stones…

On the global stage, the Lula and Dilma administrations presented Brazil as an emerging power, ready to have a greater say in world affairs. One of the most ambitious initiatives launched during this period was the BRICS group (Brazil, Russia, India, China and South Africa as of 2011). When it was formed, in 2006, it was described as a “club of equals”, around whom a new multi-polar order would be built. Many argued that emerging power-politics posed a challenge to the United States, particularly after the global financial crisis of 2008.

As time went on, however, the BRICS revealed itself to be an excessively pragmatic arrangement led by China, whose foremost agenda was to push for reforms in global financial governance. The two major initiatives of the bloc came from the Chinese government in 2014: the New Development Bank and the Contingent Reserve Arrangement. They complement broader and more ambitious actions, such as the China-led Asian Infrastructure Investment Bank (AIIB).

By the end of Dilma Rousseff’s first term, the growing asymmetry between China and Brazil had transformed the relationship into one of dependence – in which Brazil was the weakest link. The estrangement between the Dilma and Obama administrations, triggered by the leak of Edward Snowden’s NSA files that revealed that the United States was spying on Brazilian authorities and public companies, made it difficult for Brazil to lean towards the US as a form of compensation. As a result, Brazil lost much of its leverage in the shaping of the upcoming world order.

The elusiveness of strategic partnerships

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Global strategy on the defensive

All those factors led Brazil to tone down its global strategy. Shying away from the all-around strategy of the Lula years, president Rousseff was more selective regarding Brazil’s strategic partners. The Arab spring and its outcomes in the Middle East pushed trade towards the stable Gulf monarchies and Turkey, albeit for a short time. In Africa, relations based on a narrative of solidarity and on technical cooperation projects were replaced by a pragmatic approach guided by the national civil construction, oil and mining giants.

Aside from trade, partnerships under Dilma were basically built around the issues of science and technology. That explains Brazil’s desire to get closer to Germany, France and the United Kingdom, key destinations of the Science without Borders program, as well as stakeholders in the negotiations of the Mercosur-European Union agreement. Ties with tech-savvy Japan also got stronger and were elevated to the level of Global Strategic Partnership in 2014.

None of those relations, however, has brought tangible results so far. Science without Borders was terminated in late 2015. The Mercosur-UE agreement has been stalled for the past 20 years, with no sign of concessions on Europe’s part. The takeoff of the Brazilian-Japanese relationship is still waiting for a presidential trip to Tokyo that never took place, having been cancelled twice in 2013 and 2015 in what some analysts considered diplomatic disrespect on Dilma’s part. Her personal lack of interest has also led to estranged relations with countries such as Vietnam and Indonesia. Finally, anti-corruption operation “Carwash” has thwarted most of Brazil’s businesses in Africa.

Final remarks

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Of goal-setting and reconciliation, Brazilian style

In economic and political terms, the last eighteen months were ones to forget. To break the deadlock that followed her re-election, the government even attempted a “diplomatic offensive” in 2015, resting on the alignment between Itamaraty and the Ministry of Industry, Development and Foreign Trade. Six investment agreements were signed with key partners in Latin America (Mexico, Colombia, Chile) and Africa (Angola, Mozambique, Malawi). Presidential trips to Washington, Stockholm and Helsinki were also attempts to put the Brazilian economy back on track. This new approach was appropriately dubbed “diplomacy of results”.

Short-term gains, however, must not hamper Brazil’s broader multilateral agenda in other areas, such as the environment, human rights and international security. All in all, the Rousseff administration has fared poorly in dealing with most of those issues. While Brazil has done well in opening the country’s borders to Haitians and to Syrian refugees, it has largely kept silent about violations perpetrated by Bashar al-Assad, Vladimir Putin or Nicolás Maduro. Likewise, Brazil’s efforts in brokering a climate deal at COP-21 in Paris have been overshadowed by environmental setbacks at home, as in the cases of Belo Monte and Mariana.

As the political crisis deepens and the country is stuck in the impeachment quagmire, foreign policy has become part of the government’s survival toolkit. Some weeks ago, President Rousseff convened foreign ambassadors to warn them that a coup was being carried out against her government. She has also placed her bets on Brazil’s neighbors, through Mercosur and Unasur, coming to the rescue if she gets impeached. But maybe it is too late to give diplomacy a chance. Reconciliation with Itamaraty will hardly come, and it will probably be up to the next president – whenever he or she comes – to rethink Brazil’s global strategy once and for all.

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