For those who arrive by ship to what some describe as the most beautiful city in the world, landfall can be disappointing. The first thing one is confronted with after setting foot in Rio de Janeiro and going through customs, is an elevated highway running along the coast, blocking views both ways. But there is good news. That highway, an urban monstrosity if there ever was one, will be one of the first things to go as Rio gets a facelift for the 2014 FIFA World Cup and the 2016 Olympics. The underground burial of this monument to the “cult of the car” in 20th century cities, is part and parcel of Brazil’s massive infrastructure spending program as it gears up for hosting the world’s two leading sports events.
The multi-billion dollar price tag for this major engineering project is only a fraction of the hundreds of billions of dollars the government of President Dilma Rousseff is spending and planning to spend on upgrading Brazil’s infrastructure, including a high-speed rail service between Sao Paulo and Rio. Welcome to the new Brazil, an emerging heavyweight in world affairs and one of the key countries to watch in the 21st century.
In some ways this should not be surprising. With the fifth largest land mass in the world (8.5 million square kilometres), the fifth largest population (200 million plus) and the eighth largest economy (more than $2 trillion), Brazil should be a natural at the high table of world politics. Yet that has by no means been the case until now. Until a few years ago, the standard phrase about Brazil was that it was the country of the future . . . and always would be.
What happened? What produced this turnaround in what Brazilians, with only slight exaggeration describe as “o pais maps grande do mundo” (“the biggest country in the world”)? What made it possible to switch from its past chronic condition as an economic basket case, plagued by hyperinflation and low growth, to its present situation, in which the IMF’s Christine Lagarde comes begging for Brazilian support to bail out Europe? As recently as 2002, the election of president Luiz Inacio Lula da Silva provoked jitters in financial markets and a run on the real. The 2010 election of President Dilma Rousseff, a former urban guerrilla, on the other hand, was greeted by an even greater FDI flow into the country and steady appreciation of the real, to such a degree that Rio is today the most expensive city in the Americas. How come?
The answer is straightforward: presidential leadership.
Few countries embody such clear-cut examples of the difference that the right men or women at the top can make. For much of the second half of the previous century, Brazil was led by obscure politicians or even more nondescript generals who were unable to pull together the many strands of this continent-sized, diverse and highly decentralized country. Brazilian foreign policy and its diplomatic arm, Itamaraty, as the foreign ministry is known for the building it used to be housed in, has always stood out for its bold vision and capacity to project the country’s interests abroad. But, most of the time, it did not have behind it the strong economy, stable government and steady presidential leadership needed to translate its foreign policy into sustained achievements.
Then, from 1994 to 2010, Brazil was blessed with two outstanding presidents in a row — Fernando Henrique Cardoso (1994-2002) and Luiz Inacio Lula da Silva (2003-2011). Cardoso, a scholar-statesman who was one of the world’s leading sociologists before turning to politics, and who in an earlier incarnation as finance minister, had tamed inflation through his real plan, stabilized the country and put it on the right path. He opened up and deregulated the highly protected Brazilian economy, ended the profligate spending of the states and put the federal government’s house in order.
His successor, trade union leader Lula da Silva, a factory worker who lost a finger on the factory floor, kept the commitment to orthodox fiscal policies, but also expanded social programs like the Bolsa de Familia and launched Fome Zero, to fight hunger and malnutrition, especially in Brazil’s impoverished northeast. And his government applied a vigorous industrial policy through BNDES, a bank that lends more money than the World Bank, and promotes the country’s industrial champions like Vale do Rio Doce and Petrobras.
Brazil’s upsurge was such that in 2009 it was one of the last countries to be hit by the Great Recession and one of the first to get out. It grew 7.5 per cent in 2010. The 2006 discovery of the Tupi oilfields off its southern coast, with potential recoverable reserves of 50 billion to 80 billion barrels, can turn Brazil into one of the world’s major oil producers.
A standard phrase a few years ago was that “there are only two BRICs in the wall” — meaning that of the four BRICs countries (Brazil, Russia, India and China), only China and India had the necessary demographic size to have a major impact on the world economy and world affairs. But Brazil has shown that effective government can enable nations to punch way above their weight. The country’s nimble, highly professional diplomacy is backed up by Planalto, Brasilia’s presidential palace, and the finance ministry. At a time when many foreign ministries, including Canada’s, are closing missions and cutting budgets, Brazil has done the opposite. From 2003 to 2008, it opened 32 new embassies, for a total of 134 (the United States has 164). In Africa alone, Brazil opened 16 new embassies, for a total of 34 — more than Britain.
Such is the stuff of which great powers are made. Twenty years from now, we can expect to see Brazil as a permanent member of the United Nations Security Council, as the prime leader of a South America that will have become one of the most vigorous and prosperous regions of the world, and as a key international player, a “hinge” between North and South and East and West. Those who ignore the giant of the Amazon and what it is up to do so at their peril.
Jorge Heine holds the CIGI Chair in Global Governance at the Balsillie School of International Affairs, Wilfrid Laurier University. His book (with Andrew Cooper) Which Way Latin America? Hemispheric Politics Meets Globalization, is published by United Nations University Press.