Lula Da Silva’s resources and ambition
Brazil wants to broker international diplomacy, host presidential missions and ignore the US. It now has serious economic sway in South America, and it is aiming for much more and much wider influence
by Lamia Oualalou
“It is embarrassing that Brazil is receiving the head of a repressive dictatorial regime. It is one thing to have diplomatic relations with dictatorships; it is quite another to welcome their leaders to Brazil” (1), wrote José Serra, the governor of São Paulo state and one of President Luiz Inácio Lula da Silva’s main political opponents. He was commenting on the visit of Iran’s president Mahmoud Ahmadinejad, on 23 November 2009. Serra is rarely so vehement in his attacks on “Lula”, who enjoys an impressive level of popularity.
Apart from social programmes, foreign policy is the area in which Lula, the leader of the Workers’ Party has made the greatest changes. Lula may have abandoned part of his economic agenda under pressure from the financial sector (although he has partially revived it during his second term) but he has parted ways with the political elite, which had aligned itself with the United States in the struggle against communism.
This change of direction should not be mistaken for a clear ideological position on Lula’s part, even if his two principal collaborators, Celso Amorim, the minister of foreign affairs, and Marco Aurélio García, the president’s special foreign policy adviser, have unequivocally declared themselves to be leftwing. At the most, it indicates robust economical pragmatism, a preference for popular governments, a conviction that Brazil has a historic debt to Africa (because of the role of slavery in its past) and a belief that the country needs to lose its inferiority complex.
At his investiture in January 2003, Lula reserved his warmest welcome for Cuba’s president, Fidel Castro. He then appeared to establish a frank and open relationship with the US president, George W Bush, to the despair of Workers’ Party militants. The Brazilian president is, first and foremost, a trade unionist who firmly believes it is important to talk to everyone and that a sound agreement requires that both parties be satisfied, even when that agreement comes at the end of a long struggle. And that, as in the 1970s, there is really no reason why he should not enjoy a whisky with the boss between bouts of industrial action.
For the outside world, it all began in September 2003 when Brazil upset the routine of the World Trade Organisation summit in Cancún by leading a revolt of 20 emerging economies (the G20). For the first time, these insisted that the rich nations (the G8) give them something in return for opening up their markets. “When someone wants to buy something, Brazil should be on hand to sell it to them,” said Lula.
The Elizabeth Arden circuit
Since the beginning of his first term, Lula has spent 399 days on overseas visits (2), usually accompanied by a large number of business people. His itinerary has taken in Latin America (his number one priority) and the larger emerging economies (including South Africa, India, China and Russia) but also areas of the world traditionally scorned by the economic elite, such as Central America, Africa and the Middle East. In May 2005 Brazil hosted the first ever Latin American-Arab summit from which the US was excluded (it had wanted to attend as an observer). And in 2006, Brazil attended the Africa-Latin America summit at Abuja, in Nigeria.
At first, Brazil’s foreign ministry was at a loss. Politically conservative and mostly from privileged backgrounds, its diplomats preferred the glamour of what is referred to in Brazil as “the Elizabeth Arden circuit”: Rome, Paris, London, Washington. But Brazil’s business leaders were delighted: the policy has brought growth for its multinationals. The state controlled oil company Petrobras, mining giant Vale, civil engineering groups Odebrecht and Camargo Corrêa, beef giant JBS-Friboi, chicken giant BRF, aircraft manufacturer Embraer and the private bank Itaú, as well as hundreds of ethanol and soy bean producers, have all seen their exports and foreign investments explode. The discovery of substantial oil deposits off the Brazilian coast has made the country even more export-orientated. China has loaned $10bn to Petrobras in a bid to guarantee its future access to Brazilian oil. This year China has for the first time supplanted the US as Brazil’s largest export market.
In Latin America politics and business go hand in hand. Brazil has been the first to benefit from the explosion of demand in neighbouring Venezuela. Venezuela’s poorest citizens are becoming consumers (of meat, milk, small electrical appliances) but it lacks any real agriculture or industry and has had to rely on imports from Colombia, then, as relations with Bogotá have deteriorated, from Brazil. In Argentina, the Brazilian beverage company AmBev is keeping quiet about its takeover of the Argentine brewery Quilmes. Argentina’s largest meat producers have all been taken over by Brazilian companies and the situation is similar in Uruguay, where most rice production is under Brazilian control. In Bolivia, Brazilian firms control more than one-fifth of the economy, in the form of soybeans and natural gas. In Paraguay, the fertile farmlands of the departments of Alto Paraná, San Pedro, Concepción, Amambay and Canindeyú are planted with Brazilian soybeans.
Everywhere Brazilian enterprises go they are accompanied by loans from the Brazilian Development Bank (BNDES) (3). Matias Spektor, assistant professor in international relations at the Getúlio Vargas Foundation in Rio de Janeiro, says that Brazil’s trade policy is not merely about making the nation wealthier, but also about making it more powerful.
This has created tensions. Brazil is used to presenting itself as a “gentle giant” but is now being accused of imperialism – by Argentina, which complains it is being flooded with industrial products; by Ecuador, which has accused Odebrecht of shoddy workmanship; and by Bolivia, where the big Brazilian landowners in the east of the country make no secret of their alliance with political parties opposing the government of Evo Morales. Anxious to reconcile business interests with good neighbourliness, Lula has frequently had to intervene. In most cases, he has invoked regional integration, forbidding his government from taking the kind of retaliatory action the press has been demanding.
Since the demise of the Free Trade Area of the Americas, one of Washington’s pet projects, Latin American integration has become a pillar of Brazilian policy. Lula repeats that Brazil has every interest in ensuring that its neighbours are robust and are not impoverished or weakened by social and political crises. He demonstrated his commitment to this position in May 2006 by calling Evo Morales’ decision to nationalise Bolivia’s gas fields (which were being exploited by Petrobras) “sovereign”, while some were demanding that Brazilian troops be sent in as a response to “the stupidity of the Bolivian government” (4).
Last July Brazil also ended a long-running dispute with Paraguay, its other fragile neighbour, by agreeing to revise the terms (very unfavourable to Paraguay) of their agreement on the exploitation of Itaipú, the gigantic bi-national hydroelectric power station on the border between the two countries. This gesture proved vital to the stability of the government of Fernando Lugo, who was able to claim a victory over his powerful neighbour.
Lugo and Morales irritate both the Brazilian elite and Washington, but not as much as Venezuela’s president Hugo Chávez, with whom Lula has established a solid alliance. The two have refused to let themselves become embroiled in the rhetoric of the “two left wings” – the modern and responsible left, which is anxious to maintain financial stability, led by Brazil and including Chile and Uruguay; and the radical, populist, anti-American left, led by Venezuela and Cuba and including Bolivia, Ecuador and Nicaragua. When the press play on the differences between their countries, Lula and Chávez are quick to organise a meeting for the inauguration of a bridge or the laying of the foundation stone of a factory, a pretext to be seen embracing on camera. When Chávez was accused of authoritarianism, Brazil responded by backing Venezuela’s application to join Mercosur (the Southern Common Market).
The alliance between the two countries is the keystone of the major Latin American institutions established in the past few years. The most important of these is Unasur (Union of South American Nations), established at Brasília in May 2008, which includes 12 South American countries and aims to replace the Organisation of American States – which has its seat in Washington DC, a sign of its dependence on the White House. Unasur has a defence council and although the organisation is as yet fragile, it managed to ease tensions between Ecuador and Columbia (5). And in September 2008 it blocked an attempt to destabilise the Bolivian government (orchestrated by opposition parties) by reaffirming the legitimacy of the Morales administration. In both cases, it managed without intervention by the US.
Brazil also used Unasur to oppose the establishment of seven US military bases in Columbia. Brazil feels that any conflicts in the region should be settled without outside intervention. For the same reason, Lula denounced the reactivation in 2008 of the US Fourth Fleet, whose mission is to patrol South American and Caribbean waters.
But it is over Honduras that Brazil and the US are most clearly at odds. Immediately after the coup of 28 June 2009, Unasur insisted that President Manuel Zelaya should be reinstated and allowed to complete his term of office. On 21 September, with the deposed head of state ensconced in the Brazilian embassy, Lula found himself in the front line again. Foreign minister García was furious: “Brazil has used all the sanctions and pressures it can bring to bear, but that isn’t much compared with what the US could have done. If we’d had the kind of instruments they have at their disposal, we would have used them.”
The irritation increased in November, when President Obama wrote to his Brazilian counterpart to explain his decision to recognise the elections organised by the putschist government on 29 November and his positions on the WTO negotiations and the Copenhagen summit, which Brazil had openly criticised. Sent on the eve of Ahmadinejad’s visit to Brazil, this letter also reminded the Brazilian president of Iran’s violations of human rights and the dangers inherent in its nuclear programme.
Part of the club
Lula is irritated by what he calls the hypocrisy of the nuclear-armed nations. Last December he said that to have the moral authority to demand that others should not have the bomb, they would have to give it up themselves. He also pointed out that Brazil’s constitution explicitly prohibits the development of nuclear weapons. Sources close to the president feel it is important that Iran be allowed to develop civil nuclear technology: from Brazil’s viewpoint a ban would be a dangerous precedent.
Lula is obsessed with making his country a permanent member of the UN Security Council, just as he is with reforming the International Monetary Fund. (The larger emerging economies make a substantial contribution to the IMF but enjoy only a small percentage of voting rights.) In 2004 this obsession prompted Lula to agree that Brazil should lead the military side of the UN peace mission to Haiti after the expulsion of President Jean-Bertrand Aristide, so gaining admission to the club of “grown-up” nations.
The UN has been pressing Lula to send more troops on other UN peace missions. But without a reform of the institution that would really allow them to make their voice heard, Brazil’s military are refusing to get involved in missions such as those to Darfur or the Congo, over which they have no control.
Lula’s latest venture is participation in the Middle East peace talks. In November 2009, he received not only Ahmedinejad, but also Israel’s president Shimon Peres and the head of the Palestinian Authority, Mahmoud Abbas. Thomas Trebat, executive director of the Institute of Latin American Studies at Columbia University, says: “By not being too closely aligned with the United States, [Brazil] can still be seen as an honest broker.” Once again Lula, the seducer, hopes that his skills as a negotiator will open up new opportunities for Brazil to become a world power.
Lamia Oualalou is a journalist based in Rio de Janeiro
(1) José Serra, “Visita indesejável”, Folha de São Paulo, 23 November 2009.
(2) “Como o Brasil é visto lá fora”, Zero Hora, November 2009.
(3) A bank linked to the ministry of development, industry and foreign trade.
(4) Two Brazilian papers, Estado de São Paulo and Veja, in May 2006 carried cartoons showing Lula with a bootprint on the seat of his trousers.
(5) In March 2008 Colombia infringed Ecuador’s sovereignty by attacking a guerrilla camp on Ecuadorian soil.