Denise Gregory is executive director of the Centro Brasileiro de Relacoes Internacionais (CEBRI).

Tomas Zinner is vice-president of the Board of Trustees of Centro Brasileiro de Relacoes Internacionais (CEBRI).

Economic Interests

In Brazil, initially the government took a very optimistic position towards the financial crisis, forecasting a 4 percent growth rate in 2009 and a small impact of the crisis on the economy. But now Brazil's economy is suffering. The contraction in commodity exports and the crunch both in domestic and international credit, together with the problem of very large losses in the exchange derivatives, rising unemployment rates and slowing industrial production, generated a chain reaction that made economists revise downward their growth forecast and urge the government to take a more realistic position. The most efficient counter-cyclical instrument available to the Brazilian government is monetary policy. Compared to developed economies, there is limited room for fiscal stimulus in Brazil.

Brazil has been an active member of the G20 since its foundation and held its chair in 2008.

The G20 London meeting results were well above expectations. The announcement that a consensus had been reached on important topics, such as tax-haven regulations, support for additional fiscal stimulus and for the financial system reform, as well as pledges to "not repeat the historic mistakes of protectionism of previous recessions" was extremely important to rebuild trust in the financial system. The final communiqué received an optimistic but cautious welcome in the editorial opinions in Brazil. The media celebrated the summit´s decision to strengthen the IMF to help developing countries caught in the international financial crisis. Also, the fact that those countries had finally been given more power in the decision process and norm-setting. "The era in which seven rich countries thought they decided everything for the planet is over." (Editorial O Globo). President Lula praised the democratic character of the meeting and affirmed that Brazil was considering contributing to the IMF.

There was also widespread sympathy with the announcement of more transparent rules and control over tax havens.

Brazil´s concern with increasing world trade protectionism in the communiqué was seen as a sign of success, but we have to wait to see how it will be translated into practical initiatives.

Political Interests

There was a high perception that Brazil emerged from the London Summit with more stature and power. The O Globo newspaper front-page headline declared that "the Summit has modified geopolitics, giving more weight to Brasil and China."  They referred to a document of the British Foreign Ministry that grouped G20 countries in two categories according to their importance for the UK. Brazil, China and India were placed in the first rank together with the US, Japan, France and Germany. Brazilian media and television highlighted the leadership of Obama and his good relations with Lula, who was referred by Obama as the most popular politician on earth.

International Interests

The summit has portrayed Brazil and the other emerging economies as having a central role in the global community of nations and the G20 was consolidated as the core centre for deliberations on economic and financial issues. Lula himself called the summit "historic," which reflected a shift in world power. He also stressed the fact that the global economic crisis stemmed originally from the rich countries and that any action taken from now on would have to be multilateral. And he used the meeting to repeatedly call for measures to fight protectionism.

Small coverage was given to other major issues such as climate change and investment programs in infrastructure with environment concerns.

Global Leadership

The final communiqué was welcomed as an important step to restore confidence and a call for tighter control and greater cooperation. The countries showed unity and great ability to work together. The decisions taken were perceived as correct and in the right direction. The emerging economies influenced the final outcome. The G20 that emerged from the London meeting is much more in line with the present global geopolitical and economic order. The world had come together in a way that was unprecedented. The G20 has been transformed into a high-level forum with heads of state and government replacing G8 and being perceived as capable of guiding the necessary reforms in multilateral organizations and avoid future crisis.

Rio de Janeiro