Analysis: Brazil rising

Luiz Inacio Lula da Silva, Der Spiegel, May 2008
(On Brazil's energy strategy and regional developments)

Analysis by Reese Neader. February 27, 2009
(Creative Commons photo, Reuters/petroleumworld.com)

The abiding global economic collapse has in many respects escalated the rising trend of a “multipolar” global system; a world dominated by mid-sized powers which structure regional peace and stability in the absence of decisive U.S. power projection. The instability of global financial markets has greatly legitimized the rising power of newly developed states, who at this point appear to be faring slightly better than their Northern counterparts. One of these new powers is Brazil.

While Northern economies flounder and the international financial system remains on life support, Brazil continues to manage a stable 4-6 percent annual growth rate. Having paid off its debts to the International Monetary Fund (IMF) and still profiting from international trade, the country has embarked on an ambitious program of social spending and infrastructure improvement without increasing the tax burden of its citizens. Brazilian President Luiz Inacio Lula da Silva has used his administration to demonstrate a measured “third way” of state economic policy that marries leftist ideology with liberal economic measures. The result has been the addition of 20 million citizens to the Brazilian middle class and the extension of access to college funding for an additional 400,000 university students.


German weekly Der Spiegel sat down with President “Lula” (as he is affectionately known in Latin America) to discuss the international role of a rising Brazil. Though the interview took place in 2008, it is a good reminder of Lula’s achievements (and shortcomings?) and appears to be particularly enlightening given Brazil’s coming electoral competition. During his interview, the president put forth his legacy, claiming that sweeping social programs were being implemented in major Brazilian favelas (slums) to combat the social and racial inequality which has caused high rates of violence, drug use, and frequent clashes with heavily armed police in those neighborhoods. “We have allocated $270 billion (€175) to spend on improving slums…We are providing… drinking water, energy, and sewage systems, schools, hospitals, and libraries.”

Lula has also devoted government funds towards, “modernizing…infrastructure such as ports, highways, railways, and airports --all without any new borrowing.” This is possible because Brazil maintains a highly diversified economy with a nascent technology sector and a complex agricultural industry that gives the country a very strong balance of trade.

Brazil became energy independent in 2006 and still is the world’s largest exporter of ethanol. Lula was asked by Der Spiegel about ethanol markets in Europe: “I have always told my European friends that it isn't worth restructuring their well-organized agricultural systems to produce biofuel. We, and the Africans, can do a much better job of it. The European Union should give the Third World a chance to produce biofuel.” In response to inquiries over whether the farming of biomass for fuel jeopardized world food production Lula responded that “this argument applies to neither Brazilian sugarcane nor our palm oil. The production of fuel from basic food commodities is, in fact, unjustifiable.” Adding to Brazilian dominance in new energy markets, the country has discovered “immense oil reserves… off the coast… We expect to start test-drilling in March and start producing oil in 2010. Then Brazil will become a major oil exporter. We want to join OPEC and try to make oil cheaper.”

Perhaps Brazil’s biggest goal is extending its peacemaking capabilities within Latin America. In response to a recent secession crisis in Bolivia, Lula said that “Brazil, together with Argentina and Colombia, has formed the Group of Friends of Bolivia to help the country. When comrade Evo is ready to negotiate, we'll be ready to broker talks.” Because Brazil is rising as a peacemaking, soft power, the chances of its greater influence being welcomed in the international community are much higher than that of many other emerging powers.