Brazil as a problem

In recent days, two prestigious left wing economists coincided in pointing the finger at the government of Luiz Inacio Lula da Silva for its responsibility in holding up the launch of Bancosur (Bank of the South). In doing so they uncovered the fact that, behind all the declarations in favour of regional integration, interests linked to multinationals that are blocking the best intentions of Venezuela and Ecuador supported by most of South America, play an important role.

In his article “Brazil versus Bancosur” Peru‘s Oscar Ugarteche very clearly indicated that the only thing lacking is political will since all the technical problems are resolved and the bank already has its statutes : “The Brazilian government’s main resistance to the regional architecture is that it wanted Bancosur to fund the South American Regional Infrastructure Initiative (IIRSA)”. Lula’s government has put that series of infrastructure works, which are aimed at fomenting inter-oceanic trade between the Pacific and the Atlantic, at the centre of its regional policy so as to place natural resources in first world markets more cheaply and more quickly.

Really Brazil has no need of a regional bank that works as a development agency since it already has its own bank, the National Social and Economic Development Bank  that has more resources to invest in the region than the Inter-American Development Bank and the World Bank. For that reason, as Ugarteche points out, Brazil dug in its heels to slow down the launch of Bancosur, scheduled for July in Venezuela. In the end, according to this economist, “opposing a South American financial architecture serves the status quo, the United States Treasury and Washington’s weakened, discredited financial institutions.”

The Belgian Eric Toussaint, president of the Committee for the Annulment of Third World Debt, argued in an interview, “Brazil does not support the Bancosur initiative because it has no need of it for its economically powerful projects.” However, Lula’s government does participate formally in the initiative, “since, if this bank is set up, Brazil cannot be left out because it could lose some of its dominance.” Toussaint concludes that while the governments of Hugo Chavez, Rafael Correa and Evo Morales want to accelerate the setting up of Bancosur, “Brazil tries to slow it down”.

The issue is of some importance and depends on long term strategies rather than on personal wills. Brazil wants to be South America‘s global power and for that it needs to secure regional leadership. IIRSA is one of the tools, since the principal regional beneficiary will be the Sao Paulo bourgeoisie, in two ways : it will assure rapid transit of traded goods north and also the bulk of the construction companies for these gigantic works will be Brazilian. However IIRSA is not Lula’s creation but that of the previous government under Fernando Henrique Cardoso. Lula restricts himelf to continuing it and deepening it.

So it is necessary then to understand Brazil‘s strategy. In a recent book (1), Samuel Pinheiro Guimaraes, Brazil’s Foreign Ministry number two explains his country’s long term objectives., “Brazil’s ascent to great power status should not be thought of as utopian, but rather as a necessary national objective. Not to realize it would mean failure to confront the challenges ahead and therefore accelerate entry into a period of great instability (and eventual internal conflict).” One of the principal challenges is related to distribution of wealth, since Brazil is regarded as the “world champion of inequality”. He adds that South America “is the key region and base for Brazil’s world strategy.”

The diplomat’s clarity makes it possible to understand the type of integration Brazil is looking for. The Brazilian bourgeoisie is operating in the same way it did at the dawn of imperialism : so as not to be forced to redistribute wealth, it had to expand into the poorest regions where it could obtain supplementary profits. Is that not what the Brazilian elites are doing now when their companies already dominate important parts of the productive capacity and natural resources of Bolivia, Uruguay, Paraguay, Ecuador and Argentina?

It is the case, as Ugarteche says, that now is Brazil’s opportunity, when the government of George W. Bush is weak and unable to oppose an autonomous South American integration in the dollar zone. It would not be the first time a nation in this continent has played along with the super-power. But it would be the first time that a government describing itself as “left wing”  will have contributed to consolidating the ties of dependency. For that reason open debate is a priority. The region’s governments, for elementary diplomatic reasons, cannot point the finger at the leaders of other countries. But the rest of us cannot and should not dissemble the existence of two opposed and contradictory paths.

Certainly the situation of Brazil is very difficult, above all for the movements that are really the only left in existence. The ethanol option taken on by Lula when he received Bush last March is equivalent to clearing the path for multinationals to advance on the Amazon and on family based agriculture.  For that reason it is interesting that European intellectuals like Toni Negri, on a tour of various countries in the region, maintain the surprising argument that all the progressive governments are heading in the same direction since they all strnegthen multilateralism. That’s true, but it presupposes a eurocentric gaze. Right now in this continent real multilateralism is to be reached by promoting an integration able to challenge United States hegemony, not reinforcing it.

translation copyleft Tortilla con Sal

1. “Desafios brasileiros na era dos gigantes”, Contraponto, 2006  

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