Photo Jonathan Blair

Wednesday, May 29, 2013

Brazil's rough patch

Dilma Rousseff came to power three years ago as the heiress of Brazil's most popular president ever and in the wake of a decade that truly stands as a golden age for Brazil. She remains extremely popular, surpassing in fact the numbers of her mentor at a similar point in his first mandate, and she will most probably win the next elections. And yet, neither her government nor Brazil itself is doing very well right now. In fact, one is left wondering if the past decade will stand as another one-time "miracle" from which the country, in spite of its huge size and tremendous potential, will go back to the mediocre routine that has been the hallmark of most of its XXth Century history.

Rousseff's Workers' Party (PT) remains rattled by the condemnation of Lula's closest advisers in the "mensalão"  scandal, which saw Congress members receive regular payments in exchange for their support for the government's legislative agenda. The fact that those most severely sanctioned--who also happen to be closest to Lula himself--could still escape prison terms feeds a growing disenchantment with the sole major party that truly stood apart from old-style corrupt and clientelistic politics. Current electoral manoeuvering does not help as Rousseff gets ever closer to the old political establishment to contain the threat represented on the left by widely respected--and ex-PT--Marina Silva and by the increasingly credible governor of Pernambuco, Eduardo Campos.

The state of the economy doesn't help. Brazil, which essentially escaped the throes of the global financial crisis, grew by a meager 0.12% in 2012 while inflation, at 6.7%, was higher than even the soft target set by the government allowed. In spite of government efforts, the country's deindustrialization continues apace and the country's export matrix, increasingly dominated by primary goods, is slowly going back to what it was before the big industrial push of the second half of the XXth century. To make things worse, the awful state of Brazil's infrastructure, particularly its ports, is proving to be a major obstacle to the expansion of its extremely productive agricultural sector. Public insecurity remains a major concern, as progress in Rio de Janeiro, Recife and São Paulo (where violence is increasing again) is perversely compensated by an explosion of violence, particularly in the Northeast of the country: what must stand as the major stain in Brazil's recent record--more than 500,000 people have been murdered since the beginning of the century--continues to defeat government efforts, harming the poor above all.

To make things worse, the forthcoming World Cup (2014) and Olympic Games (2016), both meant to showcase the country's new status as a global powerhouse, are shaping up as major challenges: the reversal is epitomized by the fate of the renovated Maracanã, Rio's famous soccer stadium, which stood in limbo as major structural weaknesses were found and, for a while, felt to be beyond repairs. Under massive government pressure and with no--financial--holds bared, things were patched up in the end and Dilma--as she is called by the public and media alike--herself presided over a star-studded symbolic inauguration game. With construction behind schedule in a number of sites, this kind of last-minute firefighting could well become the model for much of the infrastructure needed for both events, turning them into massively expensive public relations stunts.

Things look no better on the foreign policy front, which, thanks to Lula's marvelously engaging personality and hyperactive travel agenda, contributed immensely to the country's emergence as a global player on most international issues. Rousseff has neither the charisma of her predecessor nor his interest for world issues or, let's be frank, personal stardom. More fundamentally, Brazil is reaping little results from Lula's activism: a permanent seat at the UN Security Council is as far-fetched as it was ten years ago and the BRICs--with Russia India and China--or IBAS--with India and South Africa--as "South-South" groupings in which Brazil has invested heavily, are proving to be either most unreliable "alliances" or marginal vehicles for the country's ambitions. Brazil's foray into global nuclear diplomacy, around Iran's "civilian" program, has not been particularly glorious, and its continuing--and effective--veto on global trade liberalization is being circumvented by new regional and trans-regional schemes, from the Trans-Pacific Partnership to the Latin America's Pacific Alliance.

The formal launch of the latter, in Colombia last week (May 24), is probably most damaging for Brazil's foreign policy outlook. Just as the threat to the country's regional prominence that Hugo Chavez' ALBA represented was fading with the death of its founder and its messy follow-up in Venezuela, the consolidation of the Pacific Alliance emerges as a credible challenge to Brazil's dominance of the region's integration dynamics. The prominence in the Alliance of perennial regional outsider Mexico and of heretofore largely isolated Colombia represent the PA's most troubling aspect from Brazil's standpoint. The facts, moreover, that the Alliance brings together the continent's most dynamic economies, that all of its members have free trade agreements with the United States--and Canada--and that all of them, unlike Brazil, have no qualm whatsoever with engaging Asia, make the challenge to Brazil's regional stature even more powerful. The expanded Mercosur, which is absorbing ALBA's South American remnants, looks by contrast like a club of troubled losers, with Argentina and Venezuela in the throes of economic crisis and both of them, along with Bolivia, confronting massive public discontent. Ecuador's Rafael Correa, who is about to start his third presidential term, stands as an exception, with substantial support and an economy that is doing rather well, but Ecuador is a tiny thing and the man has stature and a mind of himself and, as a result, he is the most unwieldy ally. Little Mercosur member Uruguay's joining the Pacific Alliance launch as an observer, finally, adds insult to injury for a country that still sees Mercosur as the foundation of its regional prominence.

In this context, and rather pathetically for a budding world power, Brazil must content itself with the election of one of its diplomats as Director General of the World Trade Organization. It doesn't mean much in practice, however, and in fact, it should not: the director-general of the WTO is a facilitator, expected to help countries reach agreement on the rules that govern global trade. His personal views must not really matter and he certainly cannot be seen to favour his own country. And yet, the Brazilian government had invested heavily in his election, taking him around the world over the last five months and involving President Dilma Rousseff in heavy lobbying in his favour. Defeating a Mexican candidate that had the support of Colombia, moreover, emphasizes the depth of the continent's division that is embodied in the emergence of the Pacific Alliance. Paradoxically, in other words, this "triumph" gives the measure of Brazil's current predicament, getting little more than crumbs for all its diplomatic activism.

Now, this rather bleak portrait should not be read as a dismissal of Brazil's place and role in the world. More than any country of the region except the United States, Brazil has the means to be self-centred, slow moving, and to play gingerly the globalization card. Its population and economy will remain among the planet's largest. It will remain an agricultural and mining superpower as well as a tremendously creative society, and its "gentle giant" attitude towards its neighbours will keep providing the region with an anchor of stability. Slower growth and sometimes nauseating political compromise may be the price to be paid for less volatile economic and social conditions and for the slow and pacific consolidation of its democracy: compared to Brazil's cautious game, the Pacific Alliance's bet on globalization looks a lot like, well, a bet, and one whose ultimate fate is largely unknown. The current undoing of Brazil's regional strategy may also just be what the country's diplomacy needs to put a cross on all those half-baked, unwieldy, poorly-institutionalized and ultimately feckless integration schemes. In spite of its roaring integrationist rhetoric and while never completely dismissive of the continent, Brazil has always turned its back to it and its leaders should perhaps recognize that the world, not South America, is really its playground: leading the likes of Maduro's Venezuela's, the Castros' Cuba or Kirchner's Argentina is not only fiendishly difficult and unrewarding, but also utterly useless.

(This piece was first published on under the title "Off Its Game")