November 10th brought much attention to Brazil as a blackout in Rio de Janeiro and Sao Paulo shrouded Brazilians in darkness. The rest of the world on the other hand is starting to see Brazil in a new light as the BBC World Service reported the announcement of the first steps towards physically accessing massive oil reserves on Brazil’s coast. Brazil’s coastal reserves will possibly make it one of the largest oil fields to be developed globally in the last twenty years.
While signs of this oil find have been known since 2007, the positioning of Brazil as the third BRIC to become a significant economic power has become the focus of many economic success stories since the economic crisis began this time last year. The fifteen-minute blackout in Brazil’s two largest cities was nothing compared to the day long blackout of the Eastern US and Ontario Canada in 2003. While many weary Brazilian’s might see this as a sign of poor government control or a lack of proper infrastructure, the economic heart of the world has also blacked out for much longer periods of time and will remain strong despite electrical and economic issues in the past.
Brazil on the heels of the Olympic win might be able to claim a medal in the near future as the third BRIC to develop to its full economic potential. What is of more importance than being the third country of the four to grow into its own media hype, is the ability to stay in the running to become the most stable BRIC nation in the long run. Brazil is not a typical BRIC as its growth did not come about in the same fashion as Russia, India or China. Due to the resilience of its economy, diversity in its global position, and ever growing positive reputation outside of Brazil, the South American giant will likely become the next Super Economy.
Unlike the other BRIC nations, Brazil has grown to its current potential through a series of economic failures and lessons and has made diverse growth a part of its overall growth policy, in addition to a little luck. Politically, there have been many debates in the country and criticisms of policy and the new constitution since the 1990s, but the growth of the country from right of centre to left of centre governments have tried to maintain the same prudent growth strategy while addressing poverty reduction. Poverty reduction and community development combined with economic success has been a slow climb to bring Brazil into a position where its internal issues do not hinder its ability to position itself abroad.
In comparison to the other BRIC nations it must first be noted that the relation between the BRIC nations comes from some simple measures, mostly the physical and population size of the country, its relative economic weight, and political importance in its respective region. Success in these large developing economies could plausibly lead to another combination of four or more nations, which despite their size have little in common when considering growth and poverty reduction. Countries such as Mexico, Indonesia, Ukraine, Iran, Nigeria and Egypt could possibly become future BRICs, but have stronger similarities to a China or Brazil, Russia or India. In the future, the positive and negative growth trends of the original BRICs will likely become the typical measure for different developing countries that are large and emerging economically but have little in common with each other.
When referring to Brazil, it must be noted that its economic diversity and policies addressing poverty reduction outright is notably different than those growth policies in the other BRIC nations. Latin America only competes with Africa with regards to inequality between rich and poor, and this inequality is the historical and structural burden of every Latin American country and citizen. For this reason, when luck arrives in the form of a previously undiscovered oil field, the use of its revenues to grow the economy for the whole of society can be relatively balanced with equitable policy or the expectations of such revenues for Brazil as a whole. Structural problems in places like Nigeria or Iran simply turns its vast oil wealth into a source of wealth for few and is used as political leverage against its own citizens. Russia, one of the co-BRICs, also is a country with large amounts of oil and gas, but often it is used to leverage itself politically against its neighbours and maintain its own security position in the region. The lack of diversity in the Russian economy and its link to oil and gas as its main commodity might bring in a lot of economic successes in good times, but it can harm the Russian economy when oil or other commodities are hurt in poor times. Russia becomes a BRIC however as the potential of a diverse economy and a large population could make it into a large economic power as opposed to a significant country for solely security reasons and cultural influence. Brazil’s long term policies and diverse training and economy has been able to balance its resources with other economic leverages, oil simply supports the Brazilian economy, but is not the economy itself.
With regards to China and India, links to Europe and North America has played a large role in the rapid growth of both these economies. Chinese growth is completely linked with the US consumer and other Western consumers who purchase much of their lost cost items from factories in China. These factories sell directly to US and European companies who choose to move their manufacturing to China and delegate production to small manufacturing concerns in China. Quality and safety becomes an issue for many large multinationals as they can only monitor production by second hand means, and growth in China also becomes dependent on many workers with artificially low wages to grow the country. Legal measures and equality are limited for the sake of growth, and this medium term strategy may likely fail in the long term if wages do not rise or few Chinese are allowed to benefit in the long term. It is not to say that China’s growth is limited, but policy approaches to balance growth with benefits must be addressed to make China into what the pre-2008 media hype believes it to become.
India has tried to address policy concerns and poverty reduction to some degree and might become a more stable economy in the long term, due to its large labour force, basic legal development of employment concerns, and diversity of economic growth as seen in its diversity in production, services, and technological training. India also has strong ties to the UK traditionally and may become a source for UK wealth as the financial sector in the UK continues to finance and fund growth in India due to their close relationship. India’s influence economically is also strongly tied to security issues and concerns as its growth is challenged by China’s economy and Pakistan’s and Afghanistan’s internal security issues which often brings India into the debate.
Links between growth in India and China and its European and American counterparts is responsible for much of their rapid growth, and many of its challenges as well. Brazil’s economy has recently been linking to a greater degree with other BRIC nations, but has often has balanced links with the US, EU, Asia and the rest of the world. Links with the EU and US over the last 40 years often bounced between 25% to 40% of Brazil’s economy and maintained a diverse position economically. Focus on MERCOSUR and Latin America has given Brazil better leverage and has balanced its influence in the world economy. While the US has been slow to react to Brazil’s influence outside of Latin America, other nations in the Americas would do well to take advantage of Brazil’s emerging position. Countries like Canada that are diverse and share an economic position like Brazil as not being terminally damaged by the economic recession of 2008-2009 could benefit via ties with Brazil as Canada is based in the financial and resource industry. Canada could become Brazil’s key to financial opportunities worldwide if Wall Street is slow to create stronger ties with Brazil. While economic ties remain diverse, Brazil is becoming a source of political attraction for many who often have little links with Latin America. Recently competing envoys from Iran and Israel have been sent to Brazil due to its new position as a global power and have been welcomed as Brazil seeks to balance its relations between the US and Venezuela with their counterparts in the Middle East. China continues to seek partners in Latin America as the US loses its economic clout and discusses the future of “Buy America” with its nervous allies. Brazil and other Latin American economies have been creating fast paced economic ties over the last two years as the US decides whether or not to approach the Americas with an open hand.
Media impressions of Super Economies are often done via a lens of paranoia that the US, the EU or Western countries will become the underdeveloped nations of the future. The likely outcome is that the US and EU will remain as strong economies as they have links abroad and are large and influential and will remain so for a long time. BRICs nations often do not involve themselves in other regions beyond a trading relationship or the need for resources. Brazil is balanced economically and resource wise to maintain its influence in Latin America, yet not come in conflict with other BRICs or Western Economies. While the Eastern US may not become an economic blackout in the long run, trends and policy concerns should create strong ties among strong neighbours economically and create decisive and strong coalitions between current or future BRICs and Western powers if economic hubs will grow or remain at their current levels of importance. Brazil is likely not going to be limited by 15 minutes of fame or of darkness, but will grow slowly and surely over the next few years.
FPA Latin America blog is proud to bring you Sean Murphy from the
This upcoming week and month will bring attention from the FPA towards Latin America. In addition, Fareed Zakaria interviewed Alvaro Uribe, President of Colombia last week and the interview was aired this past Sunday. Brazil and Rio de Janeiro has also won their bid to host the first Olympics for Brazil and South America as a whole, but issues abound as developing countries will always be seen in the light of the negative and positive aspects of the last Olympics in China, a fellow BRICs nation where order and progress might not include all Carioca in this celebrated event.
First to address the return of Zelaya to Honduras, mind you within the legal jurisdiction of Brazil.
The first one I was able to see was the one with Hugo Chavez. It was an interesting interview, but no new information came out of it that Chavez did not speak about in length whenever he had the opportunity.
Around the world the way to deal with the aftermath of past violence and police states has yet to come to a definitive closure or method to resolve crimes of the past. Often the ruling class in one era of a society remains in the next era, whether it be a peaceful one or a continuation of state rule. Whether it be in Rwanda and Kosovo in the last few years or currently in places like Iran and North Korea, the dialogue on the past and search for resolution starts with those who have been affected personally, and often leads to at best a national dialogue on the issues of former rulers and regimes. Much of this opening of society started in the 1980s after the fall of police states in Chile and Argentina and has formed the framework for dealing with such atrocities worldwide. Documented cases of those missing have only been produced quite recently, as writers, journalists, lawyers, and activists make public crimes of the past.
Whatever people may think about Fidel Castro, he is likely one of the luckiest and most challenging leaders towards his opponents in the last three generations of world history. While his actions towards the surviving opposition, journalists and opposing leaders in Cuba is less than civil, and Raul Castro himself was responsible for executing much of their opposition at gunpoint, current leaders who wish to emulate Fidel and fight against Obama’s America might not be as lucky or as intelligent as Fidel Castro, and might find themselves on the wrong side of history as Western powers move towards a greater consensus and middle powers start to ally themselves with the West, China and other states which prefer to control their own destiny.
Fans of Castro or those who seem to believe they have as much luck and intelligence often are those leaders who have a substantial amount of oil or somehow have been able to gain weapons technology and have a population which is controlled and oppressed so that no information leaves or enters the nation. This latter example is that of North Korea, who seems to be forgotten on the world stage, at least outside of Northern Asia when they are not kidnapping Japanese or Korean neighbours or
Iran’s popular uprising is slowly degrading Iran’s leadership and the legitimacy of the government to justify any legitimate justice in society through a government which is habitually hiding its abuses and justifying its nuclear ambitions despite any evidence of the latter. The regime will likely come to and end at the footsteps of its infamous Evin prison as its leaders seeks to murder more and more of its citizens in order to keep itself in power. Consensus on Iran will likely reach the point where Western journalists, citizens and others will be kidnapped or killed for having contact with the country and its regime, or the regime will play its last card like North Korea by claiming nuclear capabilities, but unlike North Korea who is surrounded by a weaponised China and Japan, Western powers and their political allies who have lost many in Iraq, Afghanistan and Pakistan would likely come to brutal terms with Iran, especially since Iran’s Diaspora and locals have made a strong point to show the illegitimacy of their government and its lack of support. As well, the will of many in Iran to fight a full scale war to support a leadership who is illegitimate and likely will begin a war in order to regain legitimacy will be difficult.
On August 24th HBO will present a new documentary titled “Which Way Home”. This film follows a number of children, as young as 9-years old, on their perilous journey from Central America into the United States. While seeking to enter the US illegally, they dream of building better lives.
The
The last month of economic news has been as diverse as the last 10 months of the same forecasts. With the start of July, the drop in recent markets worldwide and predictions of further problems in large economies such as the UK and Japan set to bring the recession further attention, but by mid month the result was that some US banks were making some profits, even paying back small sums of money to Mr. Obama and some auto manufacturers were not destined to be completely eliminated as stability slowly crept back into market forecasts. While these announcements will likely change in the next few weeks as SME’s continue to wind up their companies, the biggest market change seems to be coming from China and India. While many believe that only 8% growth in China may be the limit in order to stave off mass discontent among its population,
Not all US policy experts agree with Buy America, and some even have been making attempts to approach Brazil as the next India or China. Mind month, the publication and discussion of the new book: 
