Peri da Silva
This chapter investigates the current as well as the potential degree of cooperation among the BRIC (Brazil, Russia, India, and China) economies. It shows that the increasing degree of economic interdependency among these economies is not a result of cooperative measures implemented by this group of nations. Moreover, the chapter suggests that the potential degree of cooperation among the BRICs is limited due to the presence of several economic asymmetries among these countries. The chapter concludes that the Brazilian diplomatic efforts to use the BRICs as a platform to pursue the national interests of Brazil has not yet generated concrete results.
Donald V. Coes
This chapter reviews some of the major trends in Brazilian trade and international economic policy, including its reaction to international commodity market and capital market shocks in recent decades and the politically driven emphasis on preferential trade. It also examines the question of how “open” the Brazilian economy is, even after some moves toward greater linkages to world markets. The chapter then considers some of the major anti-globalization trends in Brazil’s principal economic partners, and attempts to identify some of their causes. It argues that Brazil’s links to other economies through capital and labor markets are at least as important as are its commodity trade links. Trends in these markets may help explain some of the anti-globalization attitudes it may face in the future. With the half-century consensus in support of internationally open trade, capital, and labor markets seemingly under siege, the way ahead for Brazil is far from clear.
Breno Augusto da Silva e Silva
This chapter analyzes the evolution of inward foreign direct investment (FDI) over the long term in Brazil. It identifies the key drivers of flows and provides a statistical summary of key trends. Importantly, the chapter highlights the role of inward flows in reinforcing the trend toward Brazil’s increased relative reliance on primary commodity production in the international division of labor. Much of the FDI arriving in Brazil has cleaved to the country’s natural comparative advantage in the primary sector, since the government has not directed investment to sectors with a higher technological level, and has been unable to provide more qualified labor, or an environment apt to attract investment to more dynamic sectors.
Following an overview of relevant theoretical considerations centering on Mathews’s view of the potential sources of emerging market multinational corporation (MNC) advantage, this chapter presents a brief survey of statistical trends surrounding Brazilian outward foreign direct investment (FDI) over the past 15 years or so. The chapter characterizes the sectoral orientation of Brazilian MNCs, pointing out the significant natural-resource base (NRB) focus of many of the largest enterprises. It also considers the broad policy-related factors that have helped propel the recent surge in outward investment. The chapter concludes by considering the challenges currently facing Brazilian MNCs. Not the least of these is the current wave of corruption scandals surrounding key MNCs in the energy and construction sectors. It is argued that these partly underlie a process of consolidation and divestment that is taking place in many of Brazil’s largest MNCs.
Under President Lula (2003–2010), Brazil’s foreign aid program expanded significantly into the area of South-South cooperation. This included the “soft power” fields of social protection, food security, agricultural research, and humanitarian assistance, among others, with a particular emphasis on supporting Sub-Saharan Africa, notably but not exclusively Portuguese-speaking countries. Much of this aid was provided with the support of technical assistance from UN agencies such as UNDP and FAO and bilateral aid bodies, via trilateral agreements, under the coordination of Brazil’s International Cooperation Agency (ABC). South-South collaboration is considered to be morally superior to conventional aid arrangements, being supposedly demand-driven and “non-exploitative,” thus empowering recipients in the process. Brazilian policymakers sought to transfer national anti-poverty initiatives to Africa. This was based initially on the Bolsa Família conditional cash transfer (CCT) program, but other nutritional food security initiatives followed, such as boosting small farmer production as well as supporting agribusiness.