Monday, 1 August 2011

Brazil - How to Build a Great Country

In this exclusive interview, we speak to Celso Amorim (Foreign Minister of Brazil from 2003-2011, and current Minister of Defence), a man who has been described as having "...masterminded a transformation of Brazil's role in the world that is almost unprecedented in modern history..." We look at what it takes to build a great country exploring areas including economics, politics, society and culture.

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Vikas Shah, Thought Economics, August 2011


Brazil is an extraordinary country. Covering a territory of 3.29 million square miles (8.51 million square kilometres) Brazil is roughly the same size as the continent of Europe or- to use a different analogy- roughly 2.5 times the size of India and over 35 times the size of the United Kingdom. The country houses over 21,000 square miles (55,000 square kilometres) of water (almost twice the amount of water as Lake Baikal), the majority of the Amazon rainforest (which- alongside providing 20% of the Earth's Oxygen, is home to one in ten of all known species in the world, thousands of people who have yet to be contacted by modern civilisation, and potential cures for many of the diseases affecting our lives) .

Against this perpetual gamut of nature, Brazil's 191 million strong population have, within their lifetimes, seen their country exit the Great Depression of the 1930's only to end up with seemingly never-ending cycles of economic and political crises which led to a coup (in 1964), a twenty year military dictatorship and then a process of re-democratisation and rapid industrialisation (from 1985 to present-day). During this period, Brazil's GDP has grown from $15.1 billion in 1960 to almost $1.6 trillion today (making Brazil the world's seventh largest economy by purchasing power parity).

"This rapid socioeconomic transformation..." says Werner Baer in his book 'The Brazilian Economy: Growth and Development' "...can be illustrated with a few numbers. In 1940 only 30 percent of the country's population was urban; by 1970 this proportion had increased to 56 percent, and by 1999 to 78 percent. The contribution of agriculture to gross domestic product (GDP) declined from 28 percent in 1947 to about 10 percent in the late 1990's (measured in current prices), whereas that of industry rose from not quite 20 percent in 1947 to about 36 percent in the late 1990s. After four decades of intense industrialization, Brazil was producing 2 million motor vehicles in 1997, 26 million tonnes of steel in 1997, 39 million tonnes of cement in 1998, about 7.8 million television sets, and 3.7 million refrigerators in 1997. It had over 58,000 megawatts of installed electric power capacity in 1998, and over 60 percent of its exports consisted of manufactured products. Its paved road network increased from 36,000 kilometres in 196 to close to 150,000 kilometres in 1999." Recent history (since 2001) has seen more than ten percent of Brazil's population rise out of poverty- and the nation adopt a driving posture in global economics and foreign policy (having led UN peacekeeping in Haiti since 2004, and being central to missions in Liberia, the Central African republic, Cote d'Ivoire and East Timor).

Brazil's incredible economic and social transformation has been described by many commentators as a 'miracle' - but to attach metaphysical significance to this process under-values the importance of political, economic and social leadership in the story. So, how has Brazil transformed its role in the world?

In this exclusive interview, we speak to Celso Amorim (Foreign Minister of Brazil from 2003-2011, and current Minister of Defence), a man who has been described as having "...masterminded a transformation of Brazil's role in the world that is almost unprecedented in modern history...". We look at what it takes to build a great country exploring areas including economics, politics, society and culture.

Celso Amorim is an alumnus of the Rio Branco Institute (an undergraduate school of international relations run by the Ministry of External relations of Brazil) and the Diplomatic Academy of Vienna. He was a Portugese language professor at the Rio Branco Institute as well as political science and relations professor at the University of Brasília. He remains a permanent member of the Foreign Affairs Department of the University of São Paulo Institute of Advanced Studies.

Amorim began his government service as Secretary for International Affairs for the Ministry of Science and Technology in 1987, progressing to become the Director-General for Cultural Affairs in 1989, and Director General for Economic Affairs in 1990. He was then promoted to the position of Secretary General of the Brazilian foreign-affairs agency in 1993, serving as Foreign Minister under President Itamar Franco until 1995. He then served as Brazil's ambassador to the United Kingdom until his appointment as Foreign Minister of Brazil under President Luiz Inácio Lula da Silva from 2003-2011. He has been described (by David Rothkopf, Foreign Policy) as, "the world's most successful foreign minister."


Looking at the macro-concept:


Q: What, in your view, does it take to build 'a great country' ?

[Celso Amorim] I don't think you can answer that in one single reply. I think several things make a big country and sometimes these things are different. Sometimes it may be technological developments such as weapons- sometimes also it can be, like it is for Brazil, that a country has a large territory, population and natural resources. These things are essential things also. In the case of Brazil, one of the most important things is the huge ethnic and cultural mixture which makes us a country with dynamism, vibrancy, and the ability to understand the psychology of other nations. We have problems, of course, but this is one of our huge strengths, and a huge foreign policy asset.


Brazil - history to present day:


Q: Can you tell us about the economic and social challenges (and solutions for them) which Brazil faced following the end of military rule in 1985?

[Celso Amorim] In a very simplified way, there were three basic things that allowed Brazil to become more self confident and- of course- to improve its self-esteem. First and foremost was the consolidation of democracy. Second was the stabilisation of the economy- you have to understand, for instance, that in my lifetime until I was fifty or so- I had not witnessed any period without inflation of twenty or thirty percent, and sometimes one hundred percent. Thirdly- and probably most importantly- was the ability of Brazil to deal with a problem we inherited from colonial times- inequality. I think this is what the Lula government, above all, did. He did, of course, build on the two other pillars- continuing to deepen democracy and retain the policies of growth and stability- but also he dealt with the question of inequality in a way that no previous government had done.

Looking at the austerity programme, international-debts and hyper-inflation (and parallels with Greece)- Brazil has many advantages over Greece I am afraid to say, and also some disadvantages- we are not in Europe, for example, and that means the rescue packages which came to Brazil were only a third or one-fourth of the size of the one that is coming to Greece- even though we are ten times as big, or more. On the other hand, of course, we have more natural resources- a bigger agricultural potential- and many other things that help. One thing that really helped us was NOT following the IMF prescription, and hence I think the fact that we insisted on having growth (alongside stability) was something that made for a big change in Brazil. I think this has really shown up in recent times- the past ten years or so.

Q: What have been the principal reasons for, and methods behind Brazil's economic and political growth since that period? And how would you describe Brazil, as a country, now?

[Celso Amorim] I would say that natural resources in themselves are not enough. We have had natural resources since the times of the colonies- and that didn't mean that we were making progress. Good polices are also very important. Just after the military government, we had the first president who was directly elected- who was then impeached! That was a big test for our democratic institutions. After that we had a succession of leaders- some of whom I agreed with more than others- but in any case- imagine that next we had a leader who was a respected intellectual, after that a metal worker, and now we have a woman who was a guerrilla fighter in her days. So all this shows that the democracy in Brazil is deepening- and for each different challenge that appears- we reply with more democracy. This, for my mind, has been the key factor in Brazil's political and economic development. It is this sense of democracy which empowers us, the people of Brazil, to elect someone like Lula who- in turn- uses that same democratic power to pursue policies to successfully combat inequality. This then reflects on the psychology of the people of our nation. If you see less poor people in the streets, and abandoned children, it makes you feel better- and that helps us to build a more independent attitude in foreign policy. That, again, has feedback in Brazil- making people more confident feeling that we don't always have to say yes to whatever is presented. I used to say that although we didn't create the wave, we were able to ride the wave- and even help a little bit when, for instance we didn't accept a negative WTO agreement in Cancun, when we didn't accept imbalanced negotiations in the free trade area of the Americas and so on... I think these things go together! When we decided to further integrate with South America, to open up to Africa and the Arab World, to India and so forth... These all came together and it is a fact that we would not have been able to take these initiatives before- and had to wait till we, as a country, were more self-confident. And these initiatives then further increased that confidence.

Q: What has been the impact of the global economic crisis on Brazil?

[Celso Amorim] I would not say we were unaffected. Some industries such as aerospace- for instance- are geared to export and so there was some effect. On the whole, Brazil was much less affected than most industrial countries or semi-industrial countries. One reason was that because of the policies of combating poverty- we augmented and expanded our internal markets, so a lot of our production was able to pick-up based on internal demand. Another reason, which is supported by our foreign policy, is that we had a much more diversified pattern of foreign trade. When we got into government- we had 25% of our exports directed to the United States and 25% directed towards Europe. Now? it's less than 11% to the United States with Latin America and the Caribbean being the biggest markets. Our biggest trade-surplus is with the Arab world. This was a sea-change which was only made-possible because the Brazilian industry responded to changing demand patters, for instance, from China- and also because our foreign policy worked in a way that avoided too much dependence on one single market. It is the opposite of what would have happened had we, for instance, signed the FTA agreement in the way it was being proposed.

Q: From the point of view of a perceived 'developing world' economy, has globalisation worked? what have been the benefits? are what are the challenges? What is the influence of multinational corporations from US, EU and other areas on Brazil?

[Celso Amorim] Globalisation is here to stay. You cannot, however, look at it as a natural phenomenon on which you have no influence- it's not like a typhoon or a cyclone. It's a process- and a process on which you can have influence. When, for instance, Brazil decided it would establish new links with South Africa and India- creating the so-called 'INSA'- or when we decided to emphasise integrating with South America- or when we decided to open up to the Arab World and China? All of those decisions were part of globalisation- but not globalisation the way it was proceeding should we have not done anything. It was globalisation with the help of agents! We are part of the class of 'agents'- we are not merely an 'object' of the process, we are the 'subject' also. There are, of course, some trends we cannot control- but there are things we can influence, and we have done the maximum we can to do that.

Looking at the role of corporations... Brazil has been rather open in some areas, but we have also taken-care that our banks (both private and public) continue to play an important role. Our public banking system is actually one of the reasons why the crisis didn't hit us so much, and even our private banks were well-preserved. As it relates to development policy, for instance, our development bank is crucial- this is the 'Bank of Brazil' which deals with Agriculture and small-business. I would not say that we have 'closed' ourselves to foreign banking- you can look around and see a lot of HSBC and Santander agencies which bought some Brazilian banks! but you also see a lot of Brazilian banks- both private and public. I would stress the role of public banking in Brazil- especially in the area of development and long-term investment. These were the banks that were lending when nobody else was lending. In the case of pharmaceutical industries, for example- whenever we have to take decisions that were not easy like, for instance, compulsory license for HIV/AIDS medicines- we did! Also, when we had chose whether to buy product from India to deal with the problem of high-blood pressure [rather than a western company]? we did!

We are, of course, happy to have investment but we want them to play by our rules and investors have largely understood that. I am not saying that everything is marvelous, we still have a lot to do- but I think this balance between foreign investment and strong instruments- financial and normative, together with state and mixed public-private companies as we have seen in Oil- is fundamental. I want to stress also the role of diversification in our foreign relations. When we started with our policy for Africa, it sounded like a purely sentimental exercise which, of course, is a good thing- sentiments is a part of policy... but now our trade with Africa has multiplied five-times and every day we get new demands for investment, technical-assistance (particularly in agriculture) and so on... This was, of course, accompanied by a very independent foreign policy in relation to problems around the world.

Q: How has Brazil tackled social issues such as human rights, mass-urbanisation, poverty and high levels of inequality, unemployment, organised crime, health etc? What role has Culture (art, music, sport, film, literature, cuisine) played in Brazil's story?

[Celso Amorim] This is really part of our struggle against dictatorship for such a long time... So the awareness of issues such as human-rights, human-dignity and so forth are very strong and in many areas we have been really in the lead. Looking, for example, at the rights of Women. There are, of course, still big problems such as the situation of children in Brazil and even the racial situation... In the latter case, while problems may not 'openly' be caused by racism, in reality- they are- but actions are being taken in terms of affirmative action and so on. If we look at the issue of violence against women, we have many police stations now which are dedicated to those who have been affected by that- which has had a strong impact.

I do, of course, have a great respect for human rights- but I like to speak of human dignity. I think dignity is an encompassing concept that involves all aspects of human rights. The division of human-rights, as if each aspect was a different thing, does not allow us to understand the whole- which includes civil liberties, freedom of speech (which in Brazil is absolute- nobody can ever complain of a lack of freedom of speech in Brazil)- but also the attention given to hunger, poverty, those who are discriminated against and more. Discrimination is often a very subtle thing- it's not like Apartheid- but it does happen in Brazil, as it does everywhere. These are things which have changed for the better in Brazil. The situation is far from being ideal, but we are making progress. Just in my last month in office, I promoted the first career-diplomat who was of African origin. The fact that it took this long is a shame for a country that prides itself on being a racial democracy, but it was done- and we are evolving.

I think culture has played a role too. I, myself, was very involved in the film industry in the past- and I feel that literature, film and music have been important. Music in Brazil has a very large audience, and cuts across all classes. Songs have praised equality, praised our African roots and more- all this helps to change a country. Alongside this, an awareness of the fact that problems continue to exist is very importance. I speak a lot on race only because I feel it is one of the lingering problems in Brazil because, for a long time, we have been more or less 'comfortable' with the fact that we were a racial democracy because there was no legal obstacle (since the abolition of slavery) for a black man, or a black woman to go up in society. The obstacles very often, though, are more subtle. This is also changing now, and is a great evolution for us.

Culture certainly plays a very important role. You can, for example, have a society which has great singers who are black- but still has discrimination. Just look at the USA? I think the good thing, in Brazil, is that cultures have evolved together- culture and real-life have not become separated.

Q: What has been the role of technology (such as telecommunications, IT and the Internet) on Brazil's economic and social story?

[Celso Amorim] The internet is widespread in Brazil. We are among the biggest users of cell-phones, the internet and similar technologies. I think this has a big impact on people's participation in life. Since we don't have a problem of lack-of-openness similar to that which is common elsewhere... technology has not played a revolutionary role such as in the Middle-East. Certainly, though, technology plays a big role with everyone participating in democracy.


Looking at Foreign Policy & Global Issues:


Q: How does economic protectionism affect emerging economies? What are your views on the role of developing nations in the Doha Round?

[Celso Amorim] The most vicious form of protectionism is subsidies. Agricultural subsidies in particular. Subsidies perpetuate poverty in many countries. In the case of Brazil, we are already in the intermediate stage of development- and our agricultural sector is rather more advanced. Even if, for example, we are affected by the agricultural subsidies within the United States and Europe- we are able to manage... But if you take countries in West Africa- for example, the cotton producers... What's the good in giving them half a billion dollars when you are taking away more than that in the subsidies that you pay to your own farmers? I think this is the most vicious form of protectionism. I know that some countries are, however, trying to change. Even in Europe, for instance, we were trying to develop a programme with Sweden in which Sweden would buy ethanol from African countries, produced by African-Brazilian firms- with some Swedish financing. This is the kind of tri-lateral deal co-operation which would be of great effect. Even that was hindered to some extent by high taxes and the charges placed on ethanol by the European Union- which were designed to protect their uncompetitive and unproductive ethanol sector (producing from Beetroot and seed-oils). So... there are all these correct claims that Africa needs more support, but on the other hand you have protectionist policies that do the exact opposite... Subsidies are a problem for Brazil- but they are an even bigger problem for poorer countries in Africa, Central America, Caribbean, Asia... and so on.

Q: What are the key objectives of Brazil's international diplomatic missions, mediations and foreign aid? Why has Brazil maintained a position of being 'weapon of mass destruction' free? How are global threats such as terrorism affecting Brazil?

[Celso Amorim] We have been free of weapons of mass destruction for several reasons. One of them is that we have very good relations with our neighbours. In the past, although we didn't ever openly military nuclear programme- there was the idea that a nuclear programme could be used for military purposes. The same happened to Argentina.

I can, of course, understand the differences relating to geographic position or political problems- but I don't believe that weapons of mass destruction make you safer. They make you, in a way, more vulnerable- and I think this is how we behave. That doesn't mean that Brazil can be un-armed! We have a lot of riches to protect- and areas such as the Amazon with huge biodiversity and water- water will be a big resource in the future... Now, of course, we also have apparently huge oil reserves offshore which also must be protected. I do not mean, in any way to be demeaning- but we cannot afford to be just a 'big Costa-Rica'- we have to have our own defences. Brazil is a big country with big natural resources! I am, though, convinced that we do not need weapons of mass destruction. What I would love to see is a world free of weapons of mass-destruction and that has been one of the main thrusts of our diplomacy.

Looking at terrorism- I would liken it to the financial crisis. Nobody can say they are totally isolated, we are taking all the precautions we have to take in respect to the World Cup and Olympic Games.... Brazil is not particularly a target, though, because of our political behaviour- the multiplicity of ethnic origins co-existing with each other- and many other factors. That cannot be seen as an absolute protection, but we have- thank god- not been a special target. You cannot, though, be in-attentive to that and for these big events- attention is rightly given.

Q: What are your views on the topic of climate change - and the responsibilities of international actors, and Brazil?

[Celso Amorim] I think Brazil has been very active in climate and environmental discussions. We played a very constructive role at Copenhagen- and if Copenhagen 'failed' it was certainly not attributable to Brazil. You may attribute it to the United States or China to some extent- more to the united States. Even the Europeans were disappointing. I was very involved in the preparations for Copenhagen and we calculated what we could do in terms of diminishing our emissions of CO2, in relation to what would be 'business as usual'- that's a kind of obligation for developing countries. We calculated what would be possible, and that was our commitment. This was not only our commitment in relation to the world, but we enacted it as law. That didn't mean that difficulties would not appear in implementation- but we are dealing with those. I was very disappointed to listen to some European leaders who said that if others can do their part, we will be able to come to 30%- otherwise we will come to 20%. This is NOT a tariff negotiation... this is not bargaining for market access! If you can do 30% you must do it! The United States- who along with China are the biggest polluters- are behaving as if they are a developing country. They want to be treated like developing countries! I think even China has changed a little bit, and so did India. I am confident that we will be able to find solutions- but we have to be quick. This is not something we can leave for ten years like the Doha round. If CO2 continues to be thrown into the atmosphere... even if we have good decisions ten years from now? it may be too late. I hope that before the Rio +20, we will be able to make some movement.

Q: In your view, and experience, have international bodies such as the United Nations, ICC, IMF and others been effective in their duties? are they truly driven by a spirit of co-operation?

[Celso Amorim] I think the biggest flaw you can see with international actions is the absolute use of double-standards. I am asking myself sometimes who will be the next dictator? I have been a diplomat and ambassador for over twenty years... and looking, for example at Ben Ali in Tunisia... he was not seen as a dictator! I never heard one word of criticism in all my time in diplomacy against Ben Ali... Of course, now we know he is a dictator. There are many more, for example- in Africa. Many of these are criticised- such as in Zimbabwe- but many are totally cleared such as in Rwanda, Uganda and so forth. The existence of double-standards is one of the worst things which takes place in foreign policy.

It is these double-standards that makes it difficult for you, for us, to act in questions like human rights. Take a country like Iran, for example- of course the human rights situation there is not the one that we would like to see but I know of other countries where the situation is much worse- in many respects including the treatment of women, the use of torture and so forth... and we do not seem bothered about these countries at all! So... the question relating to international actions is... where is the sincerity? and where is the self-interest?

It's not simple to act... There are many geopolitical factors and aspects of caution because sometimes the medicine may be worse than the disease. This is, apparently, what is happening in Libya. I am not defending Gaddafi, but probably more people are dying now as a result of war than otherwise. The two things are bad, and it is difficult to say which is worse. We now see situations evolving in Syria without foreign intervention...

What makes it difficult for the international community to act- and makes it very difficult to have real co-operation- is the double standards. It's totally hypocritical to say "we have to act here because we cannot stand such immoral behaviour..." while on other matters we remain silent because, "..this guy is an S.O.B, but he's OUR S.O.B..."

One of the important movements in the world now- including Europe.. is the movement of indignation. I think this is very interesting because it links-up with dignity as a synthesis for human rights. People have to feel that they are dignified and treated as dignified-people. That may relate to economics, civil-liberties, social differences or many other things- but this is a big change that is taking place and I hope it is for the better.

You will never be able to do anything positive while you continue to use double-standards... When these double-standards become clear, the decisions of the security-council become less legitimate, less respected and that is one of the reasons I think we must reform the security council. Not just to please India, Brazil and so on.. but also to have more diversified views represented- and the fact that you have more diversified views may lead to a more balanced set of decisions.


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Globalisation has turned the world into a single collective nation with individual countries adopting anthropomorphic traits similar to the dimensions within themselves- thus on the world stage you have huge inequality between the rich (USA, Europe, etc) and the poor (Africa, Latin America, etc), you have conflicting (political) personalities (China vs. USA), and you have a clear class struggle between developing and developed nations.

As much as we see countries as pseudo-metaphysical entities, existing as 'things' in their own right- we have to understand that they are truly cognitive entities. Notwithstanding geological events, countries do not just 'behave' on their own accord- 'they' are the product of the collective will of the population at all levels from leadership, to the lowest rung in society and even the diasporas globally.

Mr. Amorim describes above how Brazil more "self confident" and had to improve its "self esteem". He also describes how Brazil is a "country with dynamism, vibrancy, and the ability to understand the psychology of other nations. ...this is one of our huge strengths, and a huge foreign policy asset." It is this self-confidence, and self-esteem that has allowed Brazil to grow. The nation was able to adopt a less subservient posture at negotiation tables for critical issues such as trade, aid and defence- and was able to use its huge ethnic and cultural mix to bring a sense of unity to the population, making them feel- genuinely- that there were better times ahead.

"some individuals.." wrote Lauren Duncan and Abigail Stewart (in their paper 'Personal Political Salience: The Role of Personality in Collective Identity and Action') "... feel a deep connection to their time and place in history, feel that they are “handcuffed to history.” More than their peers, they feel that they are products of large social events and processes and that events in their personal lives are understood best by reference to social forces and movements. Stewart and Healy (1989) argued that some generations offer more opportunities for this linkage of the personal and the social—generations that come of age when there is a high level of social turbulence, like wars or mass social movements. They pointed to the generations that came of age during WorldWar I, the Great Depression, the Second World War, and the sixties as exemplars of this process."

This 'handcuffing to history' can go in a number of directions. You can adopt a hugely defensive posture (feeling weakened by historical precedent; as you see with many African nations post-colonialism), you can adopt a hugely aggressive posture (feeling the need for retrospective retribution; as you see in the struggle between Israel and Palestine), or you can see history as an act of collective struggle."We are united because we had to struggle..." as one Brazilian favela resident was quoted as saying (interviewed by Camille Goirand in her 2003 paper 'Citizenship and Poverty in Brazil'), "...As soon as there is a struggle, people unite with a common goal, because they need this unity, because we had to struggle to get electricity, to get water, to obtain legal rights to the land. If we don't get together, if we don't unite, we are not likely to bring pressure on the authorities."

This is the story of Brazil, a country which became united, after years of struggle, by the common goal to become a great nation. This is a country which is open about its problems- ranging from massive economic inequality, to racism and other forms of discrimination- and a country which, against the odds, has fought against 'global authorities' such as the USA and Europe on trade and tariff negotiations, and taken a leading stance on climate-change and peace (being one of the only members of the top-10 global economies to be free of weapons of mass destruction, and relatively free from terrorist threat). This is a country which has lifted tens of millions of its own citizens out of poverty, while doing the same abroad. Brazil recognised- early in its industrialisation- that it was not technically marginalised but was, instead, integrated into a global-economy, albeit in a manner detrimental to its own interests (Perlman, 2007 - Marginality: From Myth to Reality in the Favelas of Rio de Janeiro).

Juan Somavía (Ambassador and Permanent Representative of Chile to the United Nations) said, in 1995, "Now, as in the past, social development will depend on the energy and dynamism of people with the courage to ask fundamental questions and propose unusual solutions. We must never forget that the quality of a society is really measured by its capacity to integrate the excluded. It is the ultimate test of our values."

For our 'developing' global economy, it would be trite to quote rhetoric on inclusion and development as, frankly, there are billions of people without food or clean water and hundreds of millions who are forcibly excluded from the global economy. This is not the measure of a 'quality' society. We must, therefore, learn from the actions of countries like Brazil who are taking a stance on their own exclusion- and becoming model participants on the global stage- reclaiming their (rather human) characteristics of confidence, self-respect and dignity.

"Brazil..." as President Lula da Silva once said, "...has rediscovered itself."


2 comments:

spiceclubmanchester.com said...

Such an insightful piece! Great work.

Sliconomics said...

I love how you bring reputation and knowledge into this blog. Using experts provide a better insight into our economy today