As I listen to Professor Mangabeira Unger, a Brazilian who has spent most of his life in the US, at Harvard, I am cognizant of the collective weight Brazilians have amassed on understanding of the global economy.
And it is not only at the individual level. As a country, if Brazil’s leadership and rightful place among the top emerging economies was problematic back when the term BRIC was coined by Goldman Sachs circa 2002/2003, these doubts have, I believe, been banished. The G20 meeting in Pittsburg was the watershed.
The developed countries – i.e. G7, conceded that their annual powwow had become a less than adequate space for the discussion of economic and financial issues. The official forum for these conversations is now the G20. The other major victory was the commitment to change the governance of the international financial institutions. Although the transfer of at least 5% of the IMF (voting power) and 3% of the World Bank quotas falls short of the 7% and 6% the BRICs countries were asking for, if it actually happens, it will be a great victory. These changes in the IFIs will translate into more equitable global financial governance.
That would be a much needed development.
Professor Unger – or Mangabeira as he is called in Brazil – talked about redistribution of wealth and income in both the micro and macro levels. He also mentioned the rise of “national” projects. It is on these issues that I think Brazil is rising in the global scene.
Domestically, for the first time in history, Brazil is redistributing wealth. Moving education up in the agenda, focusing on the strength of its own market, and institutionalizing the participation of civil society in the Conselho de Desenvolvimento Economico and Social – a body of approximately 80 people who represent all sectors in society and meets regularly with the president and its ministers.
Internationally, Brazil is taking a leadership role among the BRICs. Take the case of the discussions over architectural global governance that occurred behind the scenes at Pittsburgh. The issue was the need for European countries to transfer some of its quotas to the BRICs. The Americans, particularly Timothy Geithner, US Secretary of the Treasury, would not take a European no for an answer. When it appeared that the impasse could not be solved, and even the presidents were told that there would be no changes to the World Bank governance, Geithner devised a negotiating strategy that sent everyone back to the bargaining table. European countries were sequestered in one room and the BRIC countries in another. The Americans acted as brokers shuttling back and forth between the two caucuses. That is how the compromise was reached.
According to one of Brazil’s top negotiators, the negotiation inside the BRICs reflected each country’s own concerns. China was aggressive on the financial reforms, defensive on climate change, and cooperative on all other issues. Russia was aggressive on reform of the IMF, defensive on the World Bank, and cooperative on the rest. Brazil was aggressive on all issues except regulations and India, well… it is hard to define its position. The fact that as countries reconvened to negotiate the final details India sent a 4th echelon negotiator while the head of the team was missing in action is telling.
As we examine what the future will bring it seems that the BRIC countries have established a foothold in the governance of global affairs. And in this world, while most are not paying attention, Brazil is quietly leading the way.