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Electronic Theses, Treatises and Dissertations
The Graduate School
2012
Economic Relations Between Brazil and
Africa: A Brick in the Southern Bridge to
Multilateralism?
Klervia Kerloc’H
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THE FLORIDA STATE UNIVERSITY
COLLEGE OF SOCIAL SCIENCES AND PUBLIC POLICY
ECONOMIC RELATIONS BETWEEN BRAZIL AND AFRICA:
A BRICK IN THE SOUTHERN BRIDGE TO MULTILATERALISM?
By
KLERVIA KERLOC’H
A Thesis submitted to the
Department of International Affairs
in partial fulfillment of the
requirements for the degree of
Master of Science
Degree Awarded:
Summer Semester, 2012
Klervia Kerloc’h defended this thesis on June 19, 2012.
The members of the supervisory committee were:
Jim Cobbe
Professor Directing Thesis
Petra Doan
Committee Member
Alexander Aviña
Committee Member
The Graduate School has verified and approved the above-named committee members,
and certifies that the thesis has been approved in accordance with university
requirements.
ii
I dedicate this thesis to my parents, and to all the curious minds.
iii
ACKNOWLEDGEMENTS
I would like to acknowledge the thesis committee members, and scholars for their help and
guidance.
iv
TABLE OF CONTENTS
List of Tables ................................................................................................................................. vi
List of Figures .............................................................................................................................. vii
List of Abbreviations ................................................................................................................... viii
Abstract ............................................................................................................................................x
1. INTRODUCTION ...............................................................................................................1
2. BRAZIL ...............................................................................................................................5
2.1 Different Stages of Foreign Relations............................................................................6
2.2 Lula Da Silva and Africa ...............................................................................................9
2.3 Brazil as Representative of Emerging Countries in a Plurilateral Setting ...................10
3. AFRICA ..............................................................................................................................12
3.1 The Hopeful Continent ................................................................................................13
3.2 Scramble for Africa......................................................................................................16
3.3 Second Scramble for Africa .........................................................................................17
4. SOUTHERN INSTITUTIONAL BRIDGES BETWEEN BRAZIL AND AFRICA .........20
4.1 New Southern Engines of Growth and Economic Diplomacy ....................................21
4.2 Bilateralisms ................................................................................................................23
4.3 IBSA as Trilateralism ..................................................................................................24
4.4 BRICS as Plurilateralism .............................................................................................27
5. ENGINES FOR GROWING RELATION .........................................................................34
5.1 Free Trade Agreements ................................................................................................36
5.2 Foreign Direct Investment ...........................................................................................37
5.3 Trade ............................................................................................................................40
5.3.1 Trade Diversification ..........................................................................................41
5.3.2 Agriculture ..........................................................................................................44
5.3.3 Old and New Energies ........................................................................................44
5.4 Transfer of Knowledge and Technology .....................................................................46
6. FAILED MULTILATERALISM: A BRIDGE FOR BRAZIL’S REPAYMENT .............51
6.1 Who will be Africa’s Brazil? .......................................................................................51
6.2 A Bridge to Independence ...........................................................................................56
6.3 How is Brazil Repaying its Debt? ................................................................................58
6.4 A Southern Atlantic Bridge .........................................................................................59
6.5 Plurilateralism: A Bridge to Favorable Multilateralism ..............................................63
7. CONCLUSION ...................................................................................................................66
References ......................................................................................................................................68
Biographical Sketch .......................................................................................................................75
v
LIST OF TABLES
Table 1
Differences and Similarities between the Cardoso and Lula Foreign
Policies………………………………………………………………………….……. 8
Table 2
Shares (Percent) of Traditional and Emerging Partners in Africa’s Imports, Exports
and Total Trade (2000-2009) .......................................................................................34
Table 3
Comparative Figures for Brazil, Sub-Saharan Africa, and the BRICS (2010). ...........35
Table 4
Brazilian Trade with the World, Africa and Sub-Saharan Africa (2000-2010)
(Billion USD, rounded)……………………………………………………….…...... 41
Table 5
Number of Sectors in Which Emerging Partners have Significant Trade with
Africa (at least $53 million USD a year) (2009-2000) ................................................42
Table 6
Distribution (Percent) of Africa’s Exports by Type of Partners (2009) ..................... 43
Table 7
Brazil’s Oil Imports, Selected Years (1997-2001-2006). ............................................45
Table 8
Brazilian Firms in Africa: Industry and Country. ........................................................46
vi
LIST OF FIGURES
Figure 1
Annual Average Percent Change in African GDP (2007-2011) ................................12
Figure 2
Share of Africa’s Total Trade Accounted for by Selected Partners (1980-2008) ......16
Figure 3
GDP of the BRICs Nations Compared to the G6 (2011) ...........................................28
Figure 4
Current Account Balance Projections (Percent of GDP) (2010-2013) ......................29
Figure 5
Distribution of Africa’s Total Trade with Emerging Partners (2009) ........................40
vii
LIST OF ABBREVIATIONS
ABC
Brazilian Agency of Cooperation (Agência Brasileira de Cooperação)
APEX
Brazilian Trade and Investment Promotion Agency (Agência Brasileira de
Promoção de Exportação e Investimentos)
BNDES
Brazilian National Economic and Social Development Bank (Banco Nacional
de Desenvolvimento Econômico e Social)
BRICS
Brazil, Russia, India, China, South Africa
CIA
Central Intelligence Agency
CPLP
Community of Portuguese-Speaking Countries
ECOWAS
Economic Community of West African States
EMBRAPA
Brazilian Agricultural Research Corporation (Empresa Brasileira de Pesquisa
Agropecuária)
FAO
Food and Agriculture Organization
FDI
Foreign Direct Investment
FTA
Free Trade Area of the Americas
GDP
Gross Domestic Product
IBSA
India, Brazil, South Africa
IBRD
International Bank for Reconstruction and Development
IDA
International Development Association
IMF
International Monetary Fund
IPEA
Brazilian Institute of Applied Economic Research (Instituto de Pesquisa
Econômica Aplicada)
MIGA
Multilateral Investment Guarantee Agency
MERCOSUR
Common Market of the South
NEPAD
New Partnership for Africa’s Development
NIEO
New International Economic Order
OECD
Organization for Economic Co-operation and Development
PALOP
Group of Portuguese-speaking African Countries (Países Africanos de
Língua Oficial Portuguesa)
RENAI
National Network of Investment Information (Rede Nacionak de Informações
sobre o Investimento
viii
SACU
Southern African Customs Union
SADC
Southern African Development Community
SAP
Structural Adjustment Programs
SENAR
National Rural Learning Services (Servicio Nacional de Aprendizagem Rural)
UNCTAD
United Nations Conference on Trade and Development
UNILAB
University of International Integration of Afro-Brazilian Lusophoni
USSR
Union of Soviet Socialist Republics
WB
World Bank
WTO
World Trade Organization
ix
ABSTRACT
Globalization has been associated with the hegemony of traditional Western economic powers.
However, the twenty-first century announced the emergence of new economic powers. The
financial crisis crippling the West has not been as detrimental to these “Southern” economies and
could introduce a new international balance of power. It also demonstrated that economic
activities should serve humanity. While the BRICS club (Brazil, Russia, India, China, and South
Africa) constitutes a plurilateral - because of its selectiveness - challenge and strength to
multilateralist Western institutions, developing economies are attracting growing attention,
especially Africa in the past decade. Similarly, Brazil’s social and political efforts have been
considerably ameliorating, thus distinguishing it from the other emerging powers. The SouthSouth bridge between Africa and Brazil could then announce a new international economic and
diplomatic order. A presentation of Brazil and Africa will lead to the description of the levels of
governance interactions between the two regions and their economic exchanges. Finally, the
socio-economic prospects of such relation and their consequences in the multilateral globalized
world will be presented. I will then argue the possibility for the Brazil-Africa relationship, a
mainly plurilateralist one, to initiate a new form of multilateralism, one uniting economic and
social development.
x
CHAPTER ONE
INTRODUCTION
The diplomatic twenty-first century started on September 11th, 2001, when the Western
world, headed by the United States, saw a new security and political threat in the countries of the
East and South (UN, 2004, p. 11). The terms used in this sentence to describe the different actors
still perpetuate the influence of a dichotomic perception of international relations, inherited from
the Cold War. It is in this context that other countries, considered as “emerging”, also threatened
the West on a stage gaining growing importance: the economic one. The BRIC, acronym coined
in 2001 by Goldman Sachs’ Jim O’Neill for Brazil, Russia, India, and China, regroup these
countries rising on the international trade scene. Their economic strength and influence are
becoming more relevant with the unfolding of the financial crisis of 2008 that has been
debilitating Western economies and societies. The capitalization of economies has led to the
supremacy of private groups such as banks and their establishment of economic structures and
relations favorable to their own gains and expansions. The exultation of individualistic
behaviors, made possible by the liberal model, also contributed to socio-economic problems
among the populations. Meanwhile, the impact of the international financial crisis on other parts
of the world, in Africa or Latin America for example, is perceptible, yet not as drastic, making it
a Northern crisis and allowing the South to gain international power.
In this context of globalization, relations between states themselves are more complex
and require a new form of interaction. More countries need to be represented and their
independences on the international scene need to be secured. Two main schools of thought
prevail in the discussion of the current situation. While liberalism could refer to Ball’s wish to
“give full rein to the productive potentialities of the multinational corporation” (Gilpin, 1975, p.
265), economic structuralism embodies Levitt’s argument that “a powerful nationalism […]
could counterbalance American corporate domination” (Gilpin, 1975, p. 266). Even though
economic structuralism has been criticized, mostly by Western scholars, it has gained great
recognition in the developing world, especially Latin America and it could represent a better
suited alternative to failing liberalism. The members of the BRICS do not adhere to one single
unifying economic doctrine; nevertheless, they are in the process of imposing a new type of
1
relation among themselves, with other countries and with the private sectors; one that could
replace or at least be more relevant than the current one.
While globalization introduced the notion of multilateralism in the relations between
different international institutions and countries, the concept of plurilateralism, for the purpose of
this paper, is a more adapted vision, as it emphasizes the selective aspect of the interaction, a
small yet increasingly relevant nuance. The BRICS club and the other structures developed by its
members, might they be trilateral (as IBSA: India, Brazil, South Africa) or bilateral (between
two countries), represent plurilateral forms of institutional relations. On the other hand,
structures such as the International Monetary Fund or the World Bank established by the United
States and Europe in order to coordinate the efforts of the international community perpetuate a
multilateralist approach, incorporating all countries. The critics of the IMF and the WB,
especially in their handling of the African continent, hint at the necessity for more adapted
institutions. While most analysts refer to a multipolar world or a multilateralist order, the choice
of the term plurilateralism for this paper is also motivated by the necessity to incorporate the idea
of inter-regional interactions, more representative and aware of each actor’s own interests. The
globalized and capitalized world has exacerbated the sentiment of selectiveness and grouping
centered on shared interests and values regardless of geographical position or past political
ideology. I will suggest that plurilateralism is the best base structure in order to attain structured
interregionalism, by allowing for intraregional developments and exchanges
Africa’s influence and representation on the international scene has been limited for the
past century. After decolonization gave independence to most countries, they had to face the lack
of structures and means, as well as the legacy of European powers in their organizational and
political structures. The IMF and the WB, multilateral institutions, contributed to the weakening
of the continent by imposing maladapted economic policies such as the Structural Adjustment
Programs. The African continent has been regarded as a single entity in an often lumpy
economic conception of a similar strategy, without always addressing the needs of individual
countries. Even though the continent still records the lowest levels of development, the economic
progress achieved in most countries for the past decade has been tremendous. Analysts who
voiced their pessimism at the turn of the century now praise the improvements that do not only
concern one geographic or sectorial area. While the richest black person in the world switched
from Oprah Winfrey to “Aliko Dangote, the Nigerian cement king” (The Economist, 2011), the
2
continent has also been able to reduce the proportion of people living below poverty line from
47% in 19990 to 40% in 2008 (AFDBG, 2012). However, redistribution of economic growth
requires “inclusive growth and long term productive employment” (AFDBG, 2012). Political
and social problems do remain, however economic dynamism is of good omen. Yet, an enduring
concern is the possibility for the region to change its international image in order to acquire
credibility and independence from centuries of exploitive international relations. The
international community tends to reduce its relations with the continent either to humanitarian
activities or to the perpetuation of a resource extracting imperialism, without always being able
to conciliate the economic and social aspects of development. The general position adopted
towards Africa constitutes a “Second Scramble for Africa” (Schoeman, 2011, p. 36).
Even though the emerging countries do partake in this scramble, the possibility of a more
beneficial relation with the continent is perceived. The BRICS’ decision to include South Africa
in the group in 2010 demonstrates the wish to represent the continent among emerging nations
and to recognize Africa’s potential to occupy a relevant role in the international economy.
In the search:
For a country that could serve as a “model” of success, as a user’s manual for their
[African countries] decisions […] nobody commands more respect than Brazil – a vast
country that, in about one generation, harnessed its natural wealth into a diversified
economy with growing social inclusion and a role in global leadership. (Giugale, 2012)
In 2011, Brazil had the sixth largest GDP in the world (IMF, 2012). Nonetheless, Brazil
is only the fourth emerging trading partner of the African continent, constituting 7, 1 percent of
Africa’s total trade with its emerging partners behind China, India and South Korea (African
Economic Outlook, 2011). The three major African partners of Brazil (Angola, South Africa and
Nigeria) taken together only account for less than 3 percent of Brazil’s total exports (Baumann,
2009). These numbers might not be impressive, but this paper clarifies the necessity to
concentrate on the relationship between the two regions in the light of the international relations
context.
I then evaluate Brazil’s success in reconciling social development, diplomatic and trade
relations with Africa. While there are cultural and historical motivations between such affinities
– its relation with the lusophone countries has been among the longest - the trading interests and
the diplomatic strategy, coupled with humanitarian and development projects, demonstrate that
3
Brazil could be the least of four evils among the BRICS countries. I will then assess the
possibility for a country to serve the social interests of other countries, while promoting
economic development and trade. Brazil-Africa relations also present a new pattern of
partnership, departing from the Western neo-colonialist position. This idea of South-South
cooperation is deepened by the relations built with other emerging powers, such as India, in the
trilateral context of IBSA. Could the relation across the pond be shifted South of what it has been
so far in a more encompassing international order?
National motivations balanced by plurilateralistic relations can provide a propitious
context for the parties involved. In order to evaluate the capacities of the African-Brazilian
relation to sustain a favorable international situation, I will study the possibility of a “win-win”
relation between the two regions as prophesized in the World Bank’s 2011 report, “Bridging the
Atlantic: Brazil and Sub-Saharan Africa: South-South Partnering for Growth”. This report,
established in partnership with IPEA1, provides advices for the World Bank to be the third
winner of this partnership. Can it be considered that the relevance of multilateral organizations
and the World Bank itself as frameworks for this relation is limited and that the appearance of
new “southern engines of global growth” (Santos-Paulino & Wan, 2010) demands new
institutional propellers?
Focusing on the last ten years of relations, this paper will assess the potentiality for Brazil
and African countries to play a significant role in the establishment of a new multilateral
diplomatic and economic order through plurilateralist institutions. This would illustrate a
prospective globalization, one that would give a more egalitarian representation for emerging
and developing countries and their human development. In order to examine these prospects, the
current situation of Brazil as international power will first be presented.
1
Instituto de Pesquisa Econômica Aplicada: Brazilian Institute of Applied Economic Research.
4
CHAPTER TWO
BRAZIL
Brazil’s physical size (8,514,877 sq. km) and population (205,716,890 as estimated for
July 2012) make it the fifth biggest country in the world (CIA, 2012). In 2011, while its GDP
(current US dollars) was the sixth in the world ($2,492.91 billion), its GDP per capita (current
US dollars) was only the fifty-fourth largest ($12,788.56) (IMF, 2012). Brazil’s economic
performance therefore has to be rescaled to the size of its population, a characteristic of BRICS.
Moreover, the Gini Index measuring inequalities among a country’s population places the
country at the thirteenth position as most unequal society. However, Brazil is the strongest
economy in South America and its growth prospects are promising. In 2008, the country
“became a net external creditor and two ratings agencies awarded investment grade status to its
debt” (CIA, 2012). For the past decade, the government has been active in the reduction of
inequalities between groups within the population. It has also been developing programs for the
poorest and promoting the creation of humanitarian agencies with international scope, in a
combination of private and public efforts.
While the global financial crisis weakened the country and its economy, Brazil “was one
of the first emerging markets to begin a recovery” (CIA, 2012). “In 2010, consumer and investor
confidence revived and GDP growth reached 7.5%, the highest growth rate in the past 25 years”
(CIA, 2012). In 2011, its imports were estimated at US$219.6 billion (twenty-second in the
world) and its exports at US$250.8 billion (twenty-fourth in the world) giving it a trade surplus,
vector of economic growth (CIA, 2012). Brazil’s main exports are agricultural products,
transport equipment, and iron ores. Its main exports’ destination is China (15.2 percent) while it
imports the most from the US (15 percent).The discussion of traded goods and commodities will
be further developed during the description of the trading relations between Africa and Brazil.
The successive, center-left Worker’s Party, governments of Luiz Inácio Lula da Silva elected in 2003 - and Dilma Rousseff - first woman elected president in January 2011- have been
committed to “inflation targeting by the central bank, a floating exchange rate, and fiscal
restraint” (CIA, 2012). While Brazil’s high interest rate makes it attractive to foreign investors, it
still needs to overcome its “Brazil Cost” which tends to dissuade foreign trade and investors, and
5
to develop its FDI attraction potential in the sector of Research and Development. The “Brazil
Cost” is partially due to the devaluation of the Real, Brazil’s currency, but also to the
underdeveloped infrastructure of the country – as will be explained. In order to revive economic
growth, President Rousseff is planning to promote protectionist policies privileging national
companies. While this policy is adopted by several countries in reaction to the economic crisis, it
should only be temporary in order to really benefit long-term economic growth. Brazilian
presidents have each demarcated themselves through their policies. Thus, Rousseff has to live up
to the legacy of Lula da Silva, and his national and international influence and overall positive
image.
2.1
Different Stages of Foreign Relations
Brazil became a federal constitutional republic, with democratic principles, in 1988 when
the Constitution was ratified and the military dictatorship ended. Since then, the governments
have been actively developing international relations, while promoting internal economic and
social development. Alden and Vieira, in their analysis of The New Diplomacy of the South,
define Brazilian’s diplomacy as “paradigmatic resilience” (2005, p. 1085); “foreign policy
paradigms that were defined and first implemented in the past are still influencing the mind-set
and world-view of Brazilian decision makers” (2005, p. 1085). For example, while Lula’s
position towards Africa marked a rupture from the relative detachment that reigned during the
previous presidencies, it was also able to build on the past relations established with the cultural
and linguistic partners such as Mozambique. This concept will be particularly relevant in the
discussion of Brazil’s path to diplomatic autonomy, as presented by Vigevani, and its plausible
reproducibility on the African continent. Because of its history of slavery, Brazil now is the
country with the world’s second biggest black population after Nigeria (Harsch, 2004). Its
demography and culture illustrates this influence, although the discussion of race in its case is
peculiar due to the multitude of populations and cultures that have been integrated in the society.
Brazil is the country in Latin America that holds the most economic and cultural relations
with Africa, followed by Cuba and Venezuela. Its peculiarity resides in the fact that it adopts a
position of intermediary between developed and developing nations, and of leader of the
developing nations on the international scene in terms of socio-economic and diplomatic
representation. While Latin American politicians representing the new left - with Hugo Chávez
6
as their leader - have voiced their opposition to United States and other capitalistic economies,
twenty-first century Brazil adopted a more conciliatory position. It has managed to present a
leftist approach to social economy and diplomacy, while promoting growth in international trade
at levels challenging traditional powers. The support for the creation of the G20 exemplifies such
commitment. Flynn considers that “Brazil has been instrumental in blocking further
liberalization by the World Trade Organization until the demands of developing countries have
been taken into consideration” (Flynn, 2007, p. 21). However, Brazil’s growing power and
influence among the G20 and the WTO gives it the possibility to abuse the decision making
progress and to promote its own advantages and interests, as has been the case in the agricultural
subsidies debates. One could then consider that forums such as BRICS and IBSA are necessary
to moderate the behaviors of their members.
Nowadays, a characteristic of the Brazilian foreign policy is the creation of several stateowned agencies that have managed to conciliate private and public sectors in a fruitful
collaboration with specific purposes and goals for the Brazilian society as well as other
countries. Thus, ABC2 (the Brazilian Agency of Cooperation) and the BNDES3 (Brazilian
National Economic and Social Development Bank) concentrate mostly on social development.
EMBRAPA 4(Brazilian Agricultural Research Corporation) contributes to the transfer of
knowledge and development in the agricultural domain; APEX5 (Brazilian Trade and Investment
Promotion Agency) focuses on economic relations. These agencies are particularly active in the
development of the relations with Africa and have been empowered by President Lula. During
Lula’s terms, Brazilian embassies in Africa doubled (thirty-seven out of fifty-four countries)
(World Bank & IPEA, 2011, p. 3).
Table 1 presents the main differences in the foreign policies of President Cardoso (19952002) and President Lula (2003-2010). It demonstrates Lula’s inclination towards the
development of diplomatic relations with Africa, and the promotion of Brazil’s position as leader
on the South-South and international scenes.
2
Agência Brasileira de Cooperação.
Banco Nacional de Desenvolvimento Econômico e Social.
4
Empresa Brasileira de Pesquisa Agropecuária.
5
Agência Brasileira de Promoção de Exportação e Investimentos.
3
7
Table 1: Differences and Similarities between the Cardoso and Lula Foreign Policies.
Reproduced (extracts) from Vigevani (2010, p. 97).
Brazilian
Foreign
Policy Agenda
1.FTAA
2.Fighting
World
Hunger
3.UN Security
Council
4.South-South
Cooperation
7.Brazilian
Leadership
6
Cardoso Administration
Lula Administration
Despite not considering it a priority for
Brazil, the government did demonstrate
a favorable posture. The strategy was to
delay negotiations and only sign the
agreement if it were favorable to the
country.
Not present on the Brazilian agenda
during the Cardoso administration.
Wanted a permanent seat on the UN
Security Council, but not enough effort
was put into this objective by Brazilian
diplomacy. Cardoso got to the point of
declaring that he would prefer
deepening regional integration and
having a seat on the G-7.
The Cardoso administration prioritized
relations with developed countries,
mainly the European Union and the
United States. The proximity to large
southern countries sought material
benefits, principally in the field of
trade. At the end of his second term, the
government focused on improving
relations with China, India, Russia and
South Africa. In the case of the
pharmaceutical patent dispute with the
United States, Brazil became closer to
India and South Africa, but did not
institutionalize this partnership.
The Cardoso administration believed
that leadership is not proclaimed, but
exercised. In this sense, the issue of
Brazilian leadership did not receive
much attention.
Began negotiating in more demanding fashion,
with the argument that negotiations would only
move forward if Brazilian demands were met.
Gained the spotlight in Lula’s international
statements, especially in the beginning of his term,
but did continue. Attempted to formally introduce
it onto the international agenda, with dubious
results.
Minister Celso Amorim firmly expressed the
country’s wish to obtain a permanent seat on the
Security Council. The efforts put into this
objective have been considerable. Brazil’s mission
to Haiti is an attempt to prove to the international
community that the country is ready to be a
permanent Council member.
The proximity with the countries of the South has
been given much emphasis in the Lula
administration. Attention is paid to a more lasting
relationship with developing countries. This was
brought about by the worldview and ideological
roots of the PT6, partly in consonance with a
tendency already in existence among some of the
diplomatic corps. A partnership between Brazil,
India and South Africa was institutionalized,
covering themes such as security, trade and
technological exchanges. The results are still
uncertain. The G-20, a group of developing
countries seeking the liberalization of the
agricultural trade and open markets for
manufactured goods in developed countries, has
gained visibility during the Lula administration.
Such a coalition has a purpose: the reduction of
economic and power asymmetries.
The Lula administration has put the theme up for
political debate, though not ostensibly. The wish to
obtain a distinguished role among developing
countries was introduced. On the other hand,
certain South American countries, like Bolivia and
Paraguay, are demanding much more from Brazil.
PT (Partido dos Trabalhadores): Worker’s Party, Lula’s party.
8
2.2
Lula Da Silva and Africa
The relation between Brazil and Africa intensified during Lula’s two terms (2003 to
2010). While Bourne considers Lula’s “African dimension to be the most idealistic, for it offered
little short-term economic gain” (2008, p154), this paper suggests that, on the contrary, it
contributed to the economic development of both parties, and that the emphasis on long-term
development might be preferred. Moreover, Lula’s African dimension introduced the importance
of social and human exchanges, contributing to the socio-economic development of the
continent. “As a latecomer to development, Brazil has found that the quickest way to become
competitive is to find a niche that others have ignored and exploit it aggressively” (Rohter, 2012,
p. 154). I will however show that, among the other BRICS members or even the developed
nations, Brazil’s position in Africa constitutes an opportunity for the continent to develop its
human capital while increasing its trade potential. Lula also highlighted the importance of SouthSouth cooperation, which frames the relationship with Africa, while reinforcing regional
integration and “the reduction of economic and power asymmetries” (Table 1) at the
international level. The reduction of social and economic inequalities has also been successfully
promoted in the Brazilian society while Western countries have seen the widening of these
differences among their populations. Brazil, under Lula’s terms in office, saw the creation of the
Department for Africa at the Itimaraty Palace, its Foreign Relations Ministry.
Because of his internal and international policies, Lula has been designated Person of the
Year in 2012 by Science Po and Chatham House, two prestigious Western European
international relations institutions. In 2008, Newsweek had ranked him eighteenth among the
most powerful people on the planet. His potential candidacy to the presidency of the World Bank
was considered one of the most significant evolutions of the institution, traditionally headed by
Americans. However, his health situation prevented him from entering the race to the position.
Current President Rousseff, elected in October 2010, maintains the South-South and
African policy. She initiated the “Africa Group” led by the Minister of Trade and Industry
(Grudgings, 2011). As the Minister explains, because of the financial crisis in Europe, “there will
be a dispute for economic space in Africa, and Brazil has to be positioned there” (Grudgings,
2011). Although her strict view on government spending (on pensions for example) has led
critics to compare her to Margaret Thatcher, her position towards promoting trade and
integration among southern economies perpetuates the efforts initiated by Lula.
9
2.3
Brazil as Representative of Emerging Countries in a Plurilateral Setting
“The main paradox faced by the country’s international presence is, indeed, how to
pursue international integration without its internal structure disintegrating, yet let us not forget
that Brazil was ‘born’ integrated in the capitalist world” (De Freitas Barbosa, 2009, p. 61). Brazil
has been greatly ameliorating its internal situation, with the reduction of inequalities, the
development of new technologies, education and research. From being the most unequal country
in Latin America a decade ago, Brazil has reduced this gap at a fast pace. “Between 2001 and
2009, the income growth rate of the poorest ten % of the population was 7% per year, while that
of the richest 10% was 1.7%” (World Bank, 2012).The efforts achieved in the social field are
encouraging, and it is a domain in which the country could export its experience to other
emerging and developing countries. Analysts, such as De Freitas Barbosa, doubt the capacity of
the country to develop sustainably exterior relations because of its national economic stagnation
and social ambitions. The country could indeed be following the usual pattern of booming
economic development, with no real long-term perspectives. It is forgetting that the country has
been able to overcome the recent financial crises better than most developed nations, while
reducing inequalities. “The country was one of the last to fall into recession in 2008 and among
the first to resume growth in 2009” (World Bank, 2012). The fact that Brazil has been
positioning itself in plurilateral institutions such as BRICS and IBSA proves that its latest
governments have recognized the importance of taking advantage of globalization and its
promising South-South partnership opportunities.
Brazil took an active role in the creation of the G20 in order to defend developing
nations’ interests in front of the developed ones. However, its position has been changing with its
interests, and Brazil has been trying to promote its own trade gains, disregarding the interest of
the greatest number. Thus, during the 2003 WTO talks in Cancun, Brazil and India played an
influential role and destabilized the WTO, as well as developing nations, by signing an
agreement for the elimination of agricultural export subsidies by the year 2013. In acting in such
an unpredicted way, Brazil ignored the desire of the other developing nations which, through the
G20, had advocated for the application of this agreement before 2010 at the latest. Brazil and
India thus privileged their own large-scale producers. The agreement also meant that Brazil
“ignored demands critical to small rural producers, above all the issue of controlling access to
their strategic products.” (IRC, 2006) With the Doha round, WTO had been trying to reconcile
10
trade liberalization with development. Nevertheless, the Cancun talks proved that the emerging
powers could make their own interest prevail to the detriment of the developing ones. The two
countries therefore adopted a form of protectionism used mostly by industrialized countries,
adding to difficulty of their small farmers and of developing nations in Africa. This incident
proves that there is a need for a supervising institution in order to moderate these agreements,
since the WTO is unable to occupy such position. The consolidation of plurilateral and regional
institutions would help respect the interest of developing countries, in a scheme of devaluation of
representation: the regions’ interests would be given a voice at the forum level.
The disagreement during the Agricultural Framework Agreement of the WTO exemplifies the
discordance that can arise between the interests of Brazil and the interests of the rest of the
developing world, constituted in great part of African countries. An analysis of the African
continent can help identify its needs and the limitations it has been facing so far in the
international context. The inability of international institutions to encourage its sustainable
development will also be presented. It will then be confirmed that Brazil’s position towards the
continent has not been always as negative as the one shown during the Cancun talks.
11
CHAPTER THREE
AFRICA
Figure 1: Annual Average Percent Change in African GDP (2007-2011).
From The Economist (December, 3rd 2011).
12
In the context of the financial crises initiated in 2008, Africa seems to be the least
affected region. “When the world economy – and its commodity prices – tanked in 2008, African
growth rates barely budged” (The Economist, 2011). Mthuli Ncube, chief economist of the
African Development Bank, therefore considers that “a structural change has taken place” (The
Economist, 2011). However, these changes need to be also brought to the institutional level.
While giving an overall assessment of the economic situation of Africa as a continent would
provide a skewed image of its countries, general trends can be extracted.
Africa has been experiencing a tremendous growth rate for the past few years, surpassing
most other continents. This signifies a new position for the continent, which had been dependent
on other actors thus far. Figure 1 presents the estimations of average percent change in GDP on
the continent, as well as the GDP per person (numbers in parenthesis). While countries such as
Ethiopia or Angola, which fifteen years ago were still crippled by civil wars, are presenting very
high prospect of economic growth, it is important to notice the GDP per person: Ethiopia’s
average GDP per person in 2011 still is among the lowest ($400 per person). The disparity
between these figures is still a concern for the continent, as the effects of economic growth do
not necessarily benefit the populations in general. The discrepancy between the results recorded
by the different countries also proves that they require different objectives and approaches.
Besides dependency still being a problem, the potential for autonomy from foreign countries developed and emerging - is now perceived, when the continent had been deemed doomed for
the past century.
3.1
The Hopeful Continent
Since The Economist titled its May 2000 report “Africa: The Hopeless Continent”, the
economic progress achieved in the past ten years is impressive. The newspaper itself, in a
December 2011 article, seems to repent this estimation: “since The Economist regrettably
labeled Africa “the hopeless continent” a decade ago, a profound change has taken hold” (The
Economist, 2011). One could still deplore the political instability of most African countries especially in 2012 when several controversial presidential elections are taking place – but the
economic situation of the continent is benefiting a larger part of the population, not solely the
elite, due to the evolution of societies and the contribution of external actors.
13
An example of the peculiar position of the continent, its access to globalization and
economic power is the spreading of cellular phone use among its population. In 2011, about
“half of Africa’s one billion population has a mobile phone”7 (Fox, 2011). The peculiarity of this
situation is the socio-economic potentials that it brings, most households acquiring a cellphone
without having had a landline beforehand. Indeed, cell phones are used for mobile banking, for
access to agricultural information, as well as other functions contributing to socio-economic
development. Farmers are relying on phones and their provision of internet access to get data on
prices and weather conditions. Another consequence of the use of cellphones is that it pushes the
communities and international organizations to improve other sectors of development. For
example, because of the persistence of problems such as the lack of electricity or illiteracy, the
Grameen Foundation, among other international groups, has been developing microfinance
projects to address these limitations. Cell phones also increase the feeling of community through
“community knowledge workers”, persons designated to share the information received (Fox,
2011). Considering this phenomenon as an incompatible contradiction to the poverty level of the
continent seems to be a western-centrist point of view. Indeed, this example of technology
promoting social development proves that Africa and the development of other countries can
take a different path than the one taken by developed areas.
At the macroeconomic level, labor productivity is growing by, “on average, 2.7% a
year”; trade between Africa and the rest of the world has increased by 200% since 2000”.
“Inflation dropped from 22% in the 1990s to 8% in the past decade. Foreign debts declined by a
quarter, budget deficits by two-thirds”. “In eight of the past ten years, according to the World
Bank, Sub-Saharan growth has been faster than East Asia’s (though that does include Japan)”
(The Economist, 2011). One can then witness the capacity of the continent and understand the
interest it generates.
However, the continent still maintains a high level of dependency due to the lack of
infrastructure and human development; a pattern that was initiated during the colonial era and
continued through the Structural Adjustment Programs of the IMF and WB, launched in the
1980s. These conditional loans have been vilified for worsening the state of dependence of
developing countries, especially in Africa (Rono, 2002). The imposition of inappropriate
economically liberal policies is believed to have contributed to the economic stagnation of the
7
See Table 3.
14
continent until the beginning of the twenty-first century. While it would be dangerous to fall into
a conspiracist vision of the matter – the countries are eventually overcoming their economic
problems - the SAPs created or allowed the endurance of more problems than it solved,
especially at the micro and socio-economic levels. Africa is crippled by disparities and political
instability.
It is in the context of international interactions, and the influence of emerging
economies, that most of the determining decisions will be taken and the future of the continent
will be shaped. Figure 2 presents the share of Africa’s total trade by selected partners from 1980
to 2008. While the shares of the United States and Europe are stagnating or plummeting for the
latter, the rise of developing nations and of non-African developing countries is significant and
growing. In 2008, the share of all developing nations was similar to the one of the European
Union, at approximately 37 percent.
Africa has been experiencing “the paradox of plenty, or “resource curse”, [it] is mineralrich, but the poorest and most conflicted continent in the world” (Carmody, 2011, p. 15). Indeed,
“Africa has about 30 percent of the world’s mineral reserves, including 90 percent of the world’s
platinum and 40 percent of its gold” but “these resources have typically only benefited elites in
Africa in partnership with foreign interests and external powers” (Carmody, 2011, p. 15). In
order to understand this politic of extraction that has contributed, in part, to the economic
difficulties of Africa, it is important to look at the different phases of the scramble for Africa.
15
Figure 2: Share of Africa’s Total Trade Accounted for by Selected Partners (1980-2008).
From UNCTAD’s Economic Development in Africa Report (2010).
3.2
Scramble for Africa
The first scramble for Africa refers to the imperialistic attitude of European countries at
the end of the nineteenth century (epitomized by the Berlin Conference of 1884-5), when the
continent was divided into five parts for France, Britain, Germany, Italy and Portugal (Spain to a
lesser extend) surrounding Leopold II, King of the Belgians’ personal territory in the Congo. As
the conflicts between European countries would be pursued in Africa, the general attitude was
one of colonial economic exploitation, taking a more paternalistic behavior from the French and
the illusion of a more organizational independence of the local population from the British. The
attitude of Britain and France soon evolved into scramble and “the introduction of its doctrine of
possession by effective occupation” (Southall, 2009, p. 9). In between the World Wars, the two
main European powers passed legislations in order to recognize the value and rights of the
colonies. However, the acts - such as the United Kingdom Colonial Development Act of 1929
that initiated the movement towards more recognition of the colonies’ welfare - still created a
situation of dependency on the colonizers and the promotion of their own interests. While the act
16
received acclamation in the country as well as in Africa, the conclusion was that development in
Africa was to serve the interest of the United Kingdom. The turmoil engendered by the Second
World War in Europe eclipsed the situation in Africa, although battles were fought on the
continent (mostly in the North and East) and African soldiers were sent to the combat zones in
Europe. After the Second World War, France and the United Kingdom started to “think
diffidently about colonial welfare and development, […] and the mounting political, military and
psychological costs of containing African nationalism encouraged them to evacuate their empires
earlier than they had anticipated” (Southall, 2009, p. 9).
In parallel, the feeling of inequality (Algeria was a French department but the citizens did
not have the right to vote) and the lack of recognition of the war effort the African soldiers
experienced fed nationalism and rebellion against the colonial powers. The process of
decolonization was accelerated by the United States, main creditor of post-war European
countries and pseudo-partisan of independence of countries (Monroe Doctrine in Latin America),
who foresaw its own interest in the mining resources and investment possibilities in Africa
(Southall, 2009, p. 9).
During the Cold War, the idea of a third world emerged with the polarization of the
Communist and Capitalist worlds. It described the intermediate position of most newly
independent African and Asian countries towards which the West and the USSR acted in a neocolonialist way, using them as pawns and satellites. In the 1960s and 70s, the process of
decolonization of Africa had left diplomatic and bureaucratic structures not always fitted for the
local populations. The legacy of colonialism is still present today, as the political instability
ravaging countries like Ivory Coast or Mali can attest. The partition of the African countries
initiated during the Berlin Conference did not take into consideration the different populations or
favored certain groups, and therefore led to ethnic tensions (Rwandan Genocide). Since then, the
attitude of the West has mostly been one of neocolonialism, with the exploitation of resources to
the advantage of the richest.
3.3
Second Scramble for Africa
In the beginning of the 1990’s, the United States and its capitalistic model were seen as
the winners of the Cold War. Their Western ideology developed into a hegemonic diplomatic
and economic power, which remained unchallenged until 9/11 and the 2008 financial crisis,
17
potential symbols of failed individualistic capitalism. Several critics, becoming more caustic
with grassroots movements such as the Arab Springs or Occupy Wall Street, have pointed at the
by-products of capitalism and liberalism. Internationally, the victims of these abuses are often
the poorest; and when these tensions are represented at the continental level, the African
continent is not spared.
Southall has introduced the concept of Second Scramble for Africa, in order to
encompass the behavior of developed and emerging nations towards Africa. Analysts, such as
Warren (1980) cited by Southall, had denounced the “illusion of underdevelopment” (Southall,
2009, p. 406), and advocated the beneficial effects of the second scramble for Africa on the
amelioration of the economic situation of the continent. Warren’s capitalistic approach to
development has however proven inefficient, especially in the case of Africa. His idea that “as
Third World capitalism grows, imperialism (as a system of domination by advanced over lessdeveloped capitalist states) declines and that as Third World capitalism develops, the working
class is destined to play its classic revolutionary role” (Southall, 2009, p. 407) still has not
occurred in Africa. Indeed, Southall answers that “the Third World is overwhelmingly Asian and
Latin American” (2009, p. 408).
In his conclusion, Southall does not pretend to find an answer to the scramble for Africa
and the lack of political representation of the continent. However, he estimates that the
responsibility of the actors inside and outside of the continent should be engaged:
A major challenge of the twenty-first century will be to strengthen and reform the
institutions, rules and customs by which nations and peoples complement the global
market with collective management of the problems, including persistent and unjust
inequality, which global markets alone will not resolve. (Southall, 2009, p. 425)
While this statement might appear utopian, it is indeed – as I intend to demonstrate - in the
reform of the existing multilateral institutions or the creation of new ones that a more democratic
and representative international order might be achievable.
Whether it is called a new scramble or a “new frontier” according to the World Bank, the
African continent’s resources and opportunities are now recognized by all international actors,
who are eager to follow the daring path China initiated in the new Africa. Yet, the representation
of the continent in international contexts remains limited. Regional organizations such as
18
SADC8, ECOWAS9 or the African Union try to represent proactively the interests of the
continent at the international level, but lack power. Carmody considers that the second scramble
for Africa “is in any event an outcome of the policies of economic liberalization and
globalization promoted by Western governments and the institutions they largely control: the
World Bank, the International Monetary Fund and, to a lesser extent, the World Trade
Organization” (2011, p. 193). Because these institutions pressured them to “liberalize their
economies in exchange for loans” (SAPs), the now-emerging countries had a “massively
increased demand for natural resources” (Carmody, 2011, p. 193) which were found in Africa.
In 2010, O’Neill expressed his doubts on South Africa joining the BRIC club: “For
South Africa to be treated as part of BRIC does not make any sense [. . .] but South Africa as a
representative of the African continent is a different story” (Hervieu, 2011). The reticence to
consider South Africa’s joining the BRIC is another manifestation of the skepticism that
surrounds Africa’s representation in international forums, despite its economic achievements. Its
acceptance in the group could then represent a first step to the emergence of the continent on the
international relations institutional level.
According to Ewelukwa, “many accepted conditions for solid and sustained economic
growth are lacking in Africa” (2011, p. 579). Africa is a rich continent and it has a great
economic potential of growth. Yet, the economic inequality and the social limitations often
create a state of despair that could only be breeding ground for more social and political conflicts
when coupled with globalization challenges. The continent is in need of a form of development
that will ensure its independence and assert its influence on the international scene, while
developing its human and social capacities. If it were for sheer numbers and volumes of trade
with the continent, China would undoubtedly concentrate the attentions and debates; in fact, the
economic literature usually focuses on the relations between Africa and China or India because
of the more asserted economic power of the Asian actors. However, Brazil’s own national
experience in ameliorating its society could help the economic development of the continent. I
now introduce the international context that justifies the focus on the Brazil-Africa relationship.
8
9
Southern African Development Community.
Economic Community of West African States.
19
CHAPTER FOUR
SOUTHERN INSTITUTIONAL BRIDGES BETWEEN BRAZIL
AND AFRICA
“New Southern engines of growth” is an expression used by Santos-Paulino and Wan
(2010) to describe the BRICS, as well as other emerging countries such as South Korea, Turkey
or Mexico. This paper proposes that other “developing” countries, especially in Africa, could
sooner rather than later be considered emerging countries and would therefore prompt the
establishment of new terminologies in order to render this new diversity. Analysts’ choices of
terms used to describe the southern, third world, or developing countries are not uniform and
could be a reflection of the difficulty to categorize these countries. Although it is the word that I
choose in this paper, the “South” as it is called in an effort to disregard its developing stage or its
third world position - only relevant during the Cold War and its dual vision of the world – is a
geographically biased term. It is not necessarily appropriate in the globalization era of easier
communications and transportation, and reduced importance of physical proximity. Besides, only
Brazil and South Africa, among the BRICS, can be geographically considered “Southern”
countries, as they are located south of the Equator.
“The South represents a future engine of growth and dynamism” (Ewelukwa, 2011, p.
523). There is, then, “a new trade geography, [….] in which South-South trade would play a
growing role” (Ewelukwa, 2011, p. 515). However, the South is still under-represented in
traditional Western institutions. As a result, these emerging countries establish relations and
cooperation between themselves, concentrating economic activity, and strengthening their
position against the “North” or “West”. The risk of another dichotomic world order therefore has
to be prevented. Thus, the position of Brazil as an intermediary between the South and the North
is pertinent, since the current financial and social crisis in the West calls for a system less
inclined to perceive a dual or zero-sum game world of politics and economics.
20
4.1
New Southern Engines of Growth and Economic Diplomacy
This paper presents the connections between Brazil and Africa in the current international
context of traditional North, still dominating diplomatically and militarily despite its economic
decline, and emerging South. The outcomes of such economic and diplomatic interactions might
foreshadow a new form of coexistence more adapted to the international order. During the
second half of the 1970s, developing countries established the idea of a New International
Economic Order (NIEO) in the United Nations, presenting propositions and concepts as a
response to the inefficiency of the Bretton-Woods system. As I argue in the paper, in the twentyfirst century, the advent of new emerging actors, mostly at the plurilateral level, is happening at
the expense of the traditional western powers and their hegemony and could represent a viable
New International Economic and Diplomatic Order, as I argue in this paper. The five levels of
economic diplomacy - unilateralism, bilateralism, regionalism, plurilateralism, and
multilateralism - presented by Bayne and Woolcock (2011) in The New Economic Diplomacy:
Decision-Making and Negotiation in International Economic Relations will help frame and
understand the stakes of the relations between Africa and Brazil in this international context. It
first seems important to note that the often-used reference to a multipolar order is made at a
structural level and not at a governance one like the terms plurilateral or multilateral; it is
therefore not included in the discussion of this paper which concentrates on the governance level
of relations (Hettne, 2006).
Unilateralism “does not involve negotiation” and therefore “is a domestic policy
decision” (Bayne & Woolcock, 2011, p. 8). One could consider that the United States
demonstrated unilateral behavior during the Iraq war, as it acted without the consent of NATO
and disagreeing nations, such as France. The European Parliament, in its resolution on the
situation in Iraq, “expresse[d] its opposition to any unilateral military action and believe[d] that a
pre-emptive strike would not be in accordance with international law and the UN Charter”
(European Parliament, 2003). The dangers of unilateral decisions are the risks of retaliation or
imitation by the other nations.
Bilateralism, still widely spread and simple to implement, tends to give “advantage to the
strongest partner and can easily become confrontational” (Bayne & Woolcock, 2011, p. 8).
Bilateral relations usually are conducive to the development of regional and global relations.
Brazil’s interaction with Angola or Mozambique can be regarded as bilateral, motivated by
21
linguistic and cultural similarities. While trilateralism could be associated with bilateralism, I
choose to assimilate it to plurilateralism, as it demonstrates the will to surpass simple
bilateralism. Moreover, the distinction between trilateralism and plurilateralism is not a
definitive one, as they both are based on the exclusivity of the relation. This is especially true in
the case of South-South interactions, which diverge from the hegemony of the West.
Regionalism is believed to be an essential step to the development of Africa, possibly
because it “offers a more rapid way of opening markets” than a multilateral system does (Bayne
& Woolcock, 2011, p. 8). While Africa should not be treated as an indistinctive region, the
development of its regionalism could bring a “pooling of sovereignty” (Bayne & Woolcock,
2011, p. 8) which would be beneficial for the countries that have been underrepresented so far.
Moreover, regionalism would be a way for the continent to gain international recognition and
weight. IBSA, through the promotion of inter-regionalisms, reinforces the consolidation of intraregionalism.
Plurilateralism serves “two important purposes in economic diplomacy” (Bayne &
Woolcock, 2011, p. 9). Plurilateral settings can “provide a forum where national governments
seek to reconcile domestic and international economic objectives by a process of voluntary
cooperation” and they can also “enable like-minded governments to develop agreed positions
which they can then advance in wider multilateral contexts” (Bayne & Woolcock, 2011, p. 9).
Even though the effects of plurilateralism are laudable, this paper demonstrates that it should be
a step towards a more holistic multilateral interaction. However, the current multilateral order,
orchestrated by the WB and the IMF is biased towards the West’s interests. Until more
consideration is given not only to emerging powers but also to developing nations, as well as to a
better balanced interaction between governments, international institutions, and private sector,
this idealistic situation will not be achievable.
Multilateralism - involving all countries - would be the most favorable to the
international order and equality among populations if it did not lead to abuses. Indeed,
multilateralism coupled with capitalism and liberalization has been a fertile ground for the
emergence of undemocratic and disadvantageous situations enabling the hegemony of the West.
“While the prizes are high in successful multilateral economic diplomacy, the risks are high
also” (Bayne & Woolcock, 2011, p. 9).
22
The discussion on economic diplomacy provokes debates, as well as diverging
conclusions and forecasts for international balances of power. Examples of Brazilian-African
bilateralism, trilateralism and plurilateralism will show the emergence of levels of interaction,
which could be more fruitful and adapted than failing multilateralism. These groupings do not
exclude the evolution, in the long run, to a fairer multilateralism; they could even be conducive
of such order.
4.2
Bilateralisms
The relations that Brazil maintains with African countries are rooted in different interests
and connections, but the mention of cultural and linguistic ties is important. Indeed, the longest
relations have been, since the 1970s, with Mozambique and Angola, two of the five lusophone
countries of Africa, also known as PALOP10 - the group of Portuguese-speaking African
countries. The other former Portuguese colonies - Cape Verde, Guinea Bissau and Sao Tome are less strategically interesting for the country, although humanitarian aid has been provided and
Brazil constitutes one of their main trade partners. Mozambique and Angola attracted several
Brazilian companies in the first years of their independence because of linguistic ties but also
because of their natural resources (aluminum for Mozambique, and oil and diamonds for
Angola).
In 1972, Brazil’s Foreign Minister Barbosa, “went on a mission to nine African countries
on the Atlantic coast”, disagreeing with the strategy proposed by Petrobrás (the state-controlled
oil company) and the Minister of Finance to “invest in Africa through Portugal” (De Freitas
Barbosa, 2009, p. 62). This venture decision could be seen as a prolepsis of Brazil’s position as
an alternative power to the West. It is mainly during the administration of President Cardoso
(1995-2002), and especially during Lula’s mandates that the trading and the diplomatic fields
were reunited in the formation of partnerships with Africa (table 1). Business leaders
accompanied Lula on his numerous African tours, organizing parallel business forums to
negotiate contracts. Trade relations with Nigeria, South Africa and Angola are now among the
most fruitful and create a diverse geographic disposition across the continent. However, West
Africa still accounts for most of Brazil’s imports, due to the production of oil.
10
Países Africanos de Língua Oficial Portuguesa: Angola, Cape Verde, Guinea Bissau, Mozambique and São Tomé
and Príncipe.
23
The economic relations developed between individual African countries and Brazil are
examples of bilateralism rather than unilateralism, in the sense that they do not impose the
interests of a specific actor. While the aid provided to Africa through the IMF and the WB can be
considered as unilateral because there is little “negotiation” possible for the continent, the
“Brazilian cooperation for development involves humanitarian aid and bilateral or multilateral
interventions” (World Bank, 2011, p. ix). Brazil being involved in selective systems of
cooperation in the context of IBSA, it is more appropriate to consider its humanitarian aid
provision as plurilateral rather than multilateral.
Despite these different bilateral ties, South Africa prevails in the institutionalized
relations with Brazil. Indeed, the creation of IBSA in 2003 (India, Brazil, and South Africa) even
before the integration of South Africa in the BRICS proves the domination of the country as
representative of the continent on the international economic scene. This prevalence is not
necessarily justified by the economic figures but by the political stability and the administrative
structure of the country.
4.3
IBSA as Trilateralism
“Although South-South economic cooperation remains primarily intraregional, interregional trade and investment is on the rise as well” (Ewelukwa, 2011, p.515). The trilateral
group IBSA (India, Brazil, and South Africa) could be considered as the epitome of interregional South-South cooperation, which “presents developing countries with several
opportunities in terms of trade, […] reducing dependency on the markets of developed
countries.” (CUTS-CITEE, 2005) The creation of IBSA in 2003 preceded the membership of
South Africa to the BRICS, as the country was only invited by the group in December 2010 and
joined in April 2011. IBSA is sometimes referred to as the G3 in the same pattern as the G8 or
G20, proving its legitimacy and potency.
In June 2003, the three Foreign Ministers of India, Brazil and South Africa held a
meeting which led to the Brasilia Declaration, with the goal “to hold regular political
consultations on international agenda items, as well as to exchange information on areas of
mutual cooperation in order to coordinate their positions on issues of common interest” (Lechini,
2007, p. 29). “Specific issues that the group addresses include foreign trade, international
security, technological cooperation, and incentives for tourism” (Doelling, 2008, p.7). IBSA is
24
then more than an economic gathering, with the idea of developing socio-economic and cultural
relations. The economic achievement of the three countries is however imposing; “trilateral trade
is already close to 20 billion dollars, having closed the target set for 2012 three years earlier than
envisaged” (Mercopress, 2011).
Rüland and Bechle (2010) considers that IBSA, “with three members, fits Keohane’s
minimalist nominal definition of multilateralism” (2010, p. 162). However, in the light of this
paper, it seems more appropriate to consider it a interregional plurilateral organization; or a
trilateral organization, as a possible subcategory of plurilateralism. While Mantzikos believes
IBSA constitutes a form of shallow multilateralism, defined as “a form of multiculturalism where
only the institutional shell remains, but where the normative substance was lost” (2010, p. 9),
this paper asserts that it is, instead, a strong form of plurilateralism. Indeed, “the prospects of
counter hegemony lie very largely in the future developments of state structures in the Third
World” (Alden & Vieira, 2005, p. 1091).
Moreover, Mantzikos considers that Brazil and South Africa in the context of IBSA are
the “good multilateralists”, unlike India, because of their promotion of inter and intra-regional
partnerships and the “defense of democracy” (2010, p. 14). The fact that the three members
“have repeatedly declared their intention to transform globalization into a process with a human
face” (Rüland, 2010, p.162) asserts the concern with a more equitable process of globalization.
Doelling shares this optimistic view of IBSA and its effects on Brazil and the African continent
as a whole: “thus, both Brazil and Africa recognize the symbiotic value of their relationship by
helping to solve each other’s problems and augmenting their status within the asymmetric power
structure of the international system” (2008, p. 9). Alden and Vieira, discussing the possibility
for IBSA -as a trilateral organization - to lead to the formation of “an axis of the south”,
conclude: “trilateral co-operation still operates within the shadow of the failure of the NIEO11”
(Alden & Vieira, 2005, p. 1091). However, the point made in this paper calls for the application
of a new international economic and diplomatic order, one that has learnt from the failure of the
NIEO as well as of the Bretton Woods institutions. The counter hegemony that represents IBSA
coupled with BRICS is indeed challenging at the market level but not only; as the members also
address the issues of development and social equality. The simple opposition to Western
institutions is not the motivation of IBSA. “Defining their (the emerging powers) behavior as
11
New International Economic Order.
25
either passive –sub-imperialist – or as one of an emerging power reshaping the world order may
furnish a somewhat biased picture” (De Freitas Barbosa, 2009, p.61).
For Rüland, IBSA reduces multilateralism “to a policy of institutional balancing and the
formation of short-lived, shallow bargaining coalitions” (2010, p. 171). Eventually, “the role of
Washington in conferring legitimacy upon the IBSA states as emerging regional powers remains
a crucial aspect of the trilateral initiative” (Alden & Vieira, 2005, p. 1091). The concord of the
international community is then necessary in order to create a pragmatic context for the
emergence of the developing nations whose populations are still lagging in human development
and opportunities. This would exemplify the capacity of globalization to be the promoter of
equal prospects for individuals, reducing disparities between populations, in a nationalboundaries transcending force.
Hettne considers that “interregionalism can be seen as one of the more regulated forms
that globalization may be taking.” (2006, p. 145) Soderbaum presents three forms of
interregionalism. Third generation regionalism constitutes “institutionalized relations between
world regions”, eventually reinforcing the regions themselves (Ndayi, 2009, p. 376). However,
Soderbaum considers that “interregionalism legitimizes and enhances liberalization,
deregulation, privatization and access (i.e. economic goals)” (Ndayi, 2009, p. 376). IBSA, with
its objective to promote human development, demonstrates its intention to avoid such abuses.
Indeed, “given the current complexities of multilateral negotiations, a shared interest among a
limited number of governments brings these together for interconnection” (Chenoy, 2010, p.1).
Tsardanidis classifies IBSA and BRICS to a lesser extent, in the category of hybrid
interregionalism, as “institutional arrangement between major representatives of two or more
regions which claim regional leadership” (2010, p.221). Tsardanidis also introduces the debate
on the structural changes and differentiation between globalization and interregionalisation.
Whether interregionalism is a manifestation of globalization, or whether they are two processes
“bouncing towards one another, globalization being the challenge of economic and cultural
homogenization of the world, and interregionalism being a social and political reaction”
(Tsardanidis, 2010, p. 223), interregionalism presents valuable solutions to the development of
trade and social advancement for Africa.
Unlike China, the most economically efficient country among the BRICS, Brazil and
India cultivate their social and political relation with South Africa in the context of IBSA. Kahn
26
considers South Africa as a “gateway to Africa” for the BRICs (2011). What differentiates IBSA
from BRICS is that it was “conceived to be a framework for coordinated action among the three
emerging economies, which would have a major role in the contemporary world order” (World
Bank & IPEA, p. 109), while BRICS was a concept created by Jim O’Neill, a Westerner, without
the impulse of the countries themselves. IBSA is also attached to social development and
democratization. In 2012, among the five countries, China and Russia were listed as non-free by
Freedom House, while the members of IBSA were free according to the same standards.
However, as being the epitome of emerging powers, BRICS is gaining more and more influence
on the international scene.
4.4
BRICS as Plurilateralism
Since the beginning of the 21st century, while the United States and Western European
countries dedicated most of their attention to the Middle East, fighting terrorism in a Manichean
battle and trying to secure their energy resources, the “middle” countries, because of their
economic performances, were slowly becoming the center of attention of economic analysts.
Among them, Jim O’Neill, then chief economist for Goldman Sachs, coined the acronym of
BRICs, focusing on Brazil, Russia, India and China as “in 2001 and 2002, real GDP growth in
large emerging market economies [would] exceed that of the G7” (O’Neill, 2001, p.1). Since
then, the four countries have been fulfilling the expectations O’Neill had described. Besides,
South Africa has been added to the acronym at the beginning of 2011, making BRICS a more
diverse and encompassing entity.
27
Figure 3: GDP of the BRICs Nations Compared to the G6 (2011).
From Ugalde (2011).
The predictions presented in figure 3 render the prospects of growth of the BRICS
members. While the BRICS’ GDPs per capita are still low, they are expected to be over half as
large by 2025, and to overtake by 2040 the GDPs of the G6 (France, Germany, Italy, Japan, UK,
US). China, Brazil and Russia were already among the 10 largest GDPs in 2011. This outburst of
GDP growth is impressive. It will require changes, not only in the economic diplomacy area, but
also in the internal affairs of the countries themselves. The infrastructure and populations in the
BRICS will have to adapt rapidly, as will the populations in the other countries. When
westerners are learning Mandarin or Portuguese, the BRICS are developing educational
partnerships in other emerging or developing countries, reinforcing South-South cooperation and
exchanges.
The position of Russia in the BRICS is debatable, particularly in its relation with Africa.
Firstly, Russia is not a southern state geographically, culturally or historically. The country has
not been colonized by European powers; and it has played an active role in the shaping of the
West. Mostly, its position during the Cold War sets it apart from the other members. At the end
of the Second World War, when most of the European countries were drained physically and
economically, the United States and the Soviet Union polarized the world, thus provoking the
rise of the “Third World” to describe the countries not engaged into this dual order but still
suffering from the consequences, by proxy. The two counterparts armed and supported civil wars
in Angola and Congo, among others, to gain supports and resources. One could then say that
Russia partook into the first scramble for Africa before the other BRICS members. Moreover,
28
Russia is part of the G8 and does not present the same surge of economic development that the
other members have experienced in the past 20 years. It is therefore not an emerging country per
se. Its large territory and population, as well as its economic development –although mostly
powered by the accession to capitalism at the end of the Cold War – are justifications for its
belonging to the BRICS.
6
Brazil Current account
balance (% of GDP)
4
Sub-Saharan Africa Current
account balance (% of GDP)
2
South Africa Current account
balance (% of GDP)
0
2010
2011
2012
2013
China Current account
balance (% of GDP)
India Current account
balance (% of GDP)
-2
Russian Federation Current
account balance (% of GDP)
BRICs Current account
balance (% of GDP)
-4
-6
Figure 4: Current Account Balance Projections (Percent of GDP) (2010-2013).
Computed from World Bank Data Bank (2012).
Figure 4 presents the estimations for 2010-2013 of the BRICS’ and Sub-Saharan’s
current account balances in percent of the GDP. While the BRICS (entity), China, and Russia are
in surplus, they are decreasing. Only India and Sub-Saharan Africa, while still net debtors, are
saving more than they are investing. Brazil’s current account balance became negative in 2008, a
consequence of the financial crisis. Figure 4 proves that the relationship between the BRICS and
Africa can develop in the long-run, and become lucrative; it illustrates the prospects of Sub29
Saharan Africa and the necessity to prepare for its possible accession among emerging powers.
The geostrategic position of South Africa is then evident for the BRICS club, whose members
covet the continent’s abundant primary natural resources (minerals, oil, gas), because of the
recurrent international oil and commodity price fluctuations.
As evoked here above, South Africa joining the BRICS was a debatable process. Indeed,
other countries on the continent (Nigeria, Egypt…) have better growth projections and are in
better economic positions. South Africa’s political and social stability make it a valid partner.
The recent metamorphosis of the South African society and political, its efforts out of Apartheid
and toward a pluri-ethnic, tolerant political and social order, despite residual inequalities, were
motivations to include the country in the BRICS. Another justification, maybe a cynical one,
would be the particularism of the South African society and its historical and cultural ties to
European countries (UK, Netherlands) and India (considerable India population in Durban).
Brazil and South Africa share the same recent history of development and democratization;
South Africa ended its racial Apartheid at the beginning of the 1990s and Brazil has been trying
to eradicate its social Apartheid since its access to democracy in 1988. The attachment to social
and democratic ideals was then exemplified in this nomination, although remaining a persistent
problem in China or Russia.
While Kahn considers South Africa as a “gateway to Africa” for the BRICs (2011), this
position creates criticism from other African countries considering that South Africa presents
itself as representative of the continent when privileging its own interests. According to
Buhlungu, discordance between South Africa and other African countries, especially Angola,
could undermine trade relations between the new BRICS member and the continent, and
therefore play in favor of the other BRICS, “like China, Brazil and India.” (2007, p.519) Melber
considers that South Africa and Nigeria:
Emerged (with active, if at times intermittent, support from other major continental
players such as Senegal, Algeria and Egypt) as new figureheads representing the
collective interests of the South and, in particular Africa, vis-à-vis the industrialized
West. (2009, p. 57)
Their concern, still according to Melber, shifts from debt cancellation discussions to “seek[ing]
new forms of interaction based on the acknowledged socio-economic premises defined by the
WTO” (2009, p. 57). In a December 2011 interview to the BBC entitled determinately “Nigeria
30
could ‘very soon’ be the next African BRIC”, Ngozi Okonjo-Iweala, Nigeria’s Finance Minister,
discusses the case of Nigeria possibly joining the BRICS with Pravin Gordhan, her South
African counterpart. Her confidence regarding the eventual adhesion of Nigeria to the BRICS
transcribes the optimism that accompanies the developing nations of Africa. While economically
strong because of its oil reserves, Nigeria’s relations with other countries on the continent still
create resentment and distrust. Okonjo-Iweala, Managing Director at the World Bank from 2007
to 2011 (Okonjo, 2010), also was a candidate for the Presidency of the World Bank, announced
on April, 16th 2012. In the discussion of the decline of the West, it is important to note that all
three main candidates were from emerging countries (José Antonio Ocampo was Colombia’s
former Finance Minister). Jim Yong Kim, the candidate-elected chosen by President Obama and
considered a “development professional” (Lowrey, 2012), was born in Seoul. It also seems
ironically pertinent to quote Vigevani who, in 2009, wrote that Lula “is considered a possible
candidate for president of the World Bank after leaving the Presidency of the Republic.” (2009,
p.133) The nomination and the debate it created on the role of the World Bank, which some
rename the “World Development Agency” (Washington Post, 2012), is certainly relevant to the
changing role of the multilateral Western institutions and the rise of emerging markets. Ms.
Okonjo-Iweala “won around 18 percent of the vote from seven of the twenty-five World Bank
executive directors” - Nigeria, Angola, South Africa, Russia, China, India and Brazil . She
declared that the process “will never be the same again, […] we have won a big victory […] we
have shown we can contest this thing and Africa can produce people capable of running the
entire architecture” (Harding, 2012). Rogério Studart, executive director of the World Bank
representing Brazil, declared, “the whole process so far has been very enriching for the
institution because for the first time we have had a discussion about change” (Harding, 2012).
However, African countries such as Ghana or Uganda preferred backing Dr. Kim, proving their
independence and discordance with the Nigerian.
While there still is some skepticism regarding the reputation of BRICS on the
international scene, its economic stability and its potential for future growth is asserted. The
recent economic quagmire in the Eurozone has pushed the IMF to solicit the help of the BRICS.
This request augurs the probable lingering of the crisis for western powers. The Financial Times
reported on March, 29th 2012, that the IMF was seeking bail-out loans of as much as US$500
billion with its eyes mostly turned towards the BRICS (Fontanella-Khan, 2012). The five
31
countries account for more than half of the world’s population and the reliance of aging western
economies on the resources of the BRICS members is constantly growing. However, their
representation on the international diplomatic and decision scene still is inferior to their
demographic and economic size. For example, in the membership quota system of the IMF,
China’s voting right is at 1.8 percent when Belgium holds 4 percent (Reuters, 2012). While the
pure injection of money should not be the sole deciding factor in the attribution of voting rights,
the size of the population and economy also tilts the balance in the BRICS’ favor.
Dilma Rousseff “accused western countries of causing a ‘monetary tsunami’ by adopting
aggressive expansionist policies such as low interest rates, which are making emerging
economies less competitive globally” (Fontanella-Khan, 2012). During the New Delhi Summit
of the end of March 2012, the BRICS therefore considered creating their own Development
Bank, although the process is only at the consultation phase, led by the respective Ministers of
Finance of the five countries. The financial crisis handicapping the West /North, traditional
economic and diplomatic powers of the twenty-first century, has been created by those same
powers. The solicitation of the BRICS and their assets by the North proves that the crisis, by
being mostly a Northern one, is tilting the new international balance of power. The multilateral
Bretton Woods institutions – IMF and WB - fail to address the new context. The acerbic
criticism made by several western newspapers regarding the BRICS, for example, could be a
demonstration of the frustration of western countries with their economic problems and growing
reliance on emerging powers.
In order to affirm their diplomatic and economic independence, one major necessity for
the group is to be able to create a decision-making setting of their own and take initiatives.
During the summit, the members re-mentioned the possibility to switch the international
monetary system from the US dollar to local currencies. Indian Prime Minister Manmohan Singh
therefore declared that “the agreements signed today by development banks of BRICS countries
will boost trade by offering credit in our local currency” (The Indian Express, 2012). After the
March 2012 summit, analysts recommended that the group organize as a “rival to the World
Bank” (Yardley, 2012).
Mantzikos considers that the BRICS are better described as a multilateral order; but it
seems that for the purpose of this paper, the term of plurilateralism is better adapted. Indeed, “as
opposed to regionalism, [plurilateralism] is inter-continental; unlike multilateralism, it is
32
selective” (Ndayi, 2009, p. 377). The distinction might seem minor but the implications are
noteworthy. In the context of globalization, the creation of forums and organizations has proven
that the interactions transcend purely regional agreements. Intraregional groups are still relevant
and necessary to create cohesion and a sense of unitary representation for countries that would
otherwise be disregarded because of seemingly economic or geographic irrelevance. However,
the gathering of countries through their similar economic perspectives or position in the
international context is more adapted to the web-like structure of relations. Thus, plurilateralism
is gaining more relevance in order to analyze international interactions among the BRICS.
Plurilateralism is criticized as “informal, and fragmenting and thus [as] disruptive process with
the larger multilateral process” (Ndayi, 2009, p. 377). However,
Plurilateralism used by groups like IBSA could add value to multilateralism if they can
connect the largely excluded countries of the South to the blocs of the North and if it goes
beyond the interests of capital and assists in creating people centered development
paradigm. (Chenoy, 2010, p. 7)
I have argued that IBSA and BRICS have been able to establish this connection. Indeed,
while these formations need consolidation as they have been in existence no more than ten years,
they are challenging multilateral organizations’ hegemony, such as the WB or the IMF. I will
then demonstrate that the relationship between Brazil and Africa “goes beyond the interest of
capital and assists in creating people centered development paradigm.” It is first pertinent to
examine the economic ties that link Brazil and Africa that are able to fuel this relationship.
33
CHAPTER FIVE
ENGINES FOR GROWING RELATION
Table 2: Shares (Percent) of Traditional and Emerging Partners in Africa’s Imports,
Exports and Total Trade (2000-2009).
Reproduced from the OECD Development Center (2011).
Total Traditional partners
EU 25
Other TPs
United States
Total Emerging Partners
China
India
Korea
Brazil
Turkey
Thailand
Russian Federation
Chinese Taipei
UAE
Singapore
Malaysia
Indonesia
Argentina
Saudi Arabia
Other Countries (58)
Total
Total Value (Billion USD)
Trade
63.5
44.3
6.1
13.1
36.5
13.9
5.1
2.6
2.5
2.4
1.1
1
0.9
0.9
0.8
0.7
0.7
0.5
0.4
3
100
673.4
2009
Exports
67.6
43
6.1
18.4
32.4
13.1
6
1.3
2.4
1.6
0.4
0.5
1.1
1.3
0.2
0.5
0.6
0.1
0.7
2.6
100
350.8
Imports
59
45.6
6.1
7.3
41
14.7
4
4
2.7
3.1
2
1.6
0.7
0.5
1.4
1
0.8
0.9
0
3.5
100
322.5
Trade
77
53.5
7.5
16.1
23
4.7
2.3
2.6
1.7
1.6
0.8
0.6
1.9
0.2
1
0.5
0.8
0.6
0.4
3.3
100
246.4
2000
Exports
78.3
51.3
6.6
20.4
21.7
4.6
2.4
2.2
2
1.9
0.6
0.3
2.3
0.2
0.5
0.3
0.6
0.3
0.6
2.9
100
142.4
Imports
75.4
56.4
8.8
10.1
24.6
4.9
2.1
3.1
1.3
1.3
1.2
1
1.3
0.1
1.7
0.7
1
1
0
3.8
100
104
Table 2 shows that while the share of traditional partners (Europe and the United States)
of Africa’s total trade has decreased from 2000 to 2009 (from 77 % to 63.5%); the share of
emerging partners has been increasing (from 23% to 36.5%). Brazil’s went from 1.7 percent to
2.5 percent, placing it at the fourth position among emerging partners, after China, India, and
Korea. One also notices that the balance of trade between African exports to and imports from
Brazil, although a deficit one, is relatively equilibrated, at respectively 2.4 percent for exports
and 2.7 percent for imports in 2009, thus forecasting a productive trade relation, with
opportunities for both sides. It is also pertinent to notice that Africa has a trade surplus with its
34
traditional partners while it has a trade deficit with its emerging partners, illustrating, in part, the
sequels of the first scramble for Africa mentioned earlier.
Table 3 reports different economic figures for Brazil, Sub-Saharan Africa, and the BRICS
as of 2010. Brazil has the highest GDP per capita (US$10,710) and Sub-Saharan Africa the
lowest (US$1315), proving the economic potential of Brazil. The shares of exports and imports
in percent of the GDP are lower in Brazil than they are in the other emerging countries and in
Sub-Saharan Africa, illustrating a high level of economic self-reliance. Levels of net inflows of
FDI in Brazil and Sub-Saharan Africa are comparable (respectively 2.31 and 2.29 percent of
GDP); both regions need to develop this area. On the African continent, human development
indexes are however still low, with life expectancy at birth being 54 years in Sub-Saharan Africa
and 52 in South Africa, demonstrating the need for social, health and human development.
As expressed previously, the new international economic and diplomatic order requires
the strengthening of inter and intra relations, the creation of Free-Trade Agreements contributes
to this reinforcement.
Table 3: Comparative Figures for Brazil, Sub-Saharan Africa, and the BRICS (2010).
Computed from the World Bank Data Bank (2012).
Brazil
195
Sub-Saharan
Africa
854
South
Africa
50
China
1338
India
1225
Russian
Federation
142
Surface area (sq. km
thousand)
GDP (current US$, billions)
8 514
24 270
1 219
9 600
3 287
17 098
2 088
1 124
364
5 927
1 727
1 480
GDP per capita (current US$)
Inflation, Consumer Price
(annual %)
FDI, net inflows (% of GDP)
10 710
5.04
1315
N/A
7279
4.27
4428
3.31
1410
11.99
10 439
6.86
2.32
2.29
0.34
3.12
1.40
2.93
Exports of goods and services
(% of GDP)
Imports of goods and services
(% of GDP)
Mobile cellular subscriptions
(per 100 people)
Life expectancy at birth, total
(years)
11.15
31.15
27.31
29.57
21.54
30.04
12.15
33.60
27.51
25.66
24.78
21.70
104
45
101
64
61
168
73
54
52
73
65
69
Population, total (million)
35
5.1
Free-Trade Agreements
Page explained that regional integration is crucial for Africa’s industrial and trade growth
(2010, p. 26). Several regional organizations have been created to represent African countries
and confederate neighboring countries. There is now a need for a coordinated action to promote
trade. Rob Davies, South African Minister of Trade and Industry, expressed the need for a Free
Trade plan “in the next three years” (Ensor, 2011). In order to strengthen regional integration and
commerce, partnerships with other southern and emerging powers is beneficial.
The development of an FTA between MERCOSUR12 and SACU13 was preceded by the
agreement on the creation of a free-trade area between MERCOSUR and South Africa in 2000.
While one could perceive the creation of an FTA between the two regional groups as a promising
and relevant decision, little has been done in order to honor this agreement. Sandrey et al., using
GTAP database (Global Trade Analysis Project), consider the effects of a Free Trade Agreement
between SACU and MERCOSUR on South Africa in the context of IBSA. There would be a
welfare and trade gain due to a “better use of land, labor and capital”, as well as an “increased
net investment increasing the amount of capital employed in the economy, […] and labor
employment” (Sandrey et al., 2011, p. 1). Nevertheless, Sandrey predicts that “these gains
[would be] negated somewhat by terms of trade that go against South Africa” (Sandrey et al.,
2011, p. 1). Indeed, the agriculture sector would be particularly hurt because of the increase in
imports of agricultural products from other countries, and from the control that Brazil and India
have over decision making in the G20. Export gains would remain low and would come from
“trade creation rather than diversion” (Sandrey et al., 2011, p. 1).
Alden and Vieira tend to be pessimistic about the effects of trilateral trade relations
among IBSA members on their neighboring countries and the African continent as a whole.
Indeed, the consequences of a potential Free Trade Agreement on the African continent would be
negative as “there is little demonstrable commitment to representing regional interests
collectively in a multilateral negotiating forum” (Alden & Vieira, 2005, p. 1092). This point is
corroborated by Lechini who considers that the members eventually could use bilateral
agreements to “disrupt the process of regional integration” of their partners instead of coming “to
an agreement on a free trade area linking Brazil and its African allies” (2007, p. 31).
12
13
Common Market of the South: Argentina, Brazil, Paraguay, Uruguay.
Southern African Customs Union: Botswana, Lesotho, Namibia, South Africa and Swaziland.
36
Morin summarizes the situation by saying that the BRICS, and Brazil among them, “sign
substantially fewer FTAs than most developed countries, but their contents are largely similar.
This lost opportunity illustrates the incoherence between large developing countries’ multilateral
discourses and their actual trade liberalization programs at the bilateral level” (2008, p.7). IBSA
therefore needs to enable Brazil to promote actively Free Trade Agreements with Africa, thus
developing regional integration on the continent.
5.2
Foreign Direct Investment
Then Managing Director at the World Bank, Okonjo-Iweala presented in 2010 the
requirements for African countries to be part of the BRIC. One necessity was the “deepening
efforts to manage volatility” (Okonjo-Iweala, 2010). The development of Foreign Direct
Investment (FDI) between Brazil and Africa could address this concern. FDI is deemed
important in the economic development of the Southern economic powers, even though SantosPaulino warns about the “ambiguous” effects of FDI on the host country” (2010, p.3). Among
these effects, diversification and regional integration are the two most concerning limitations for
Africa.
About three fourths of Africa’s total FDI is invested in oil exporting countries (OECD,
2011, p.10). Kofi Annan, when UN secretary general, noted, in 2006, that “foreign investment in
Africa had increased by 200% in the last five years, but lament[ed] that it was still focused on
extracting natural resources rather than developing local economies” (Southall, 2009, p.10). By
promoting trade diversification, powerful Brazilian companies, such as Odebrecht (table8) - a
construction, chemicals and engineering company - could be beneficial to the economic
blossoming of the continent. The Brazilian mega-company is “the largest private sector employer
in Angola” (White, 2010, p. 231) and the company has been present in the country since 1987
(Brainard, 2009, p. 213).
In “Who will be Africa’s Brazil?” (2012), Giugale presented the necessity for Africa to
promote and treat equally local and foreign direct investors, in the same way as Brazil had done.
FDI needs to promote regional integration and not be concentrated in certain countries. Regional
organizations are trying to attract foreign investors. While promoting trade liberalization and FDI
37
in SADC14 (Southern African Development Community), for example, could be beneficial for
the region, but more attention needs to be given to the neighboring effects of political instability
(Bezuidenhout & Naudé, 2008). Indeed, the political turmoil in Madagascar or Zimbabwe has
negative repercussions on the promotion of FDI at the Community level. At the continent scale,
Melber believes that the strategy that has been developed by NEPAD15, the African Union’s
economic development program, to promote FDI in Africa is not adapted to the context. “An
emphasis on promoting international competitiveness as the key to attracting investment and
hence development comes at the expense of the self-sustainability of local economies and
people” (2009, p. 60). Melber then criticizes the purpose of NEPAD that “seems increasingly to
have become little more than an agency to channel aid funds into development projects”
(Melber, 2009, p. 59). Because of these limitations, BRICS and IBSA, through their promotion
of interregional integration and South-South trade, could become valid promoters of FDI and of
regional trade, necessary for the development of the continent. According to Kimenyi and Lewis,
“one of the most important dimensions of this burgeoning relationship [BRIC and Africa] is
Foreign Direct Investment” (2011, p.19). Santos-Paulino argues, “Brazilian initiatives to promote
FDI are quite timid and uncoordinated” (2010, p. 254).
In Brazil, the government created two agencies to promote FDI from and into Brazil.
APEX 16 - “the Brazilian Trade and Investment Promotion Agency, […] is oriented mainly
towards the promotion of exports” (Santos Paulino, 2010, p. 254) - and RENAI17 - the National
Network of Investment Information – […] works as an information vehicle about investment
opportunities in Brazil and about how to accomplish them” (Santos Paulino, 2010, p. 254).
However, FDI is concentrated mostly in Latin America. While Brazilian FDI has been overall
increasing and while the government has been trying to promote FDI in Africa, the Sub-Saharan
continent is not the main destination for Brazilian FDI ($124 million in 2009) and it is still
concentrated mainly in Angola, Nigeria and South Africa, safer countries (World Bank & IPEA,
2011, p. 82). Moreover, FDI does not undergo the same increase as trade between Brazil and
Africa does, and it is concentrated in the energy and mineral industry. According to the report
14
15 members: Angola, Botswana, DRC, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania,
Zambia, Zimbabwe, South Africa, Seychelles, (Madagascar currently suspended after coup d’Etat).
15
The New Partnership for Africa’s Development.
16
Agencia Brasileira de Promoção de Exportações e Investimentos.
17
Rede Nacional de Informações sobre o Investimento.
38
Bridging the Atlantic, the BNDES18 - the Brazilian Development Bank , created in order to
“launch measures for furthering trade between the two regions on the basis of Brazilian loans”
(2011, p. 5), initiated in 2008 a stimulus program for Brazilian companies active in Africa
(Program Integration with Africa). It “resulted in the disbursement of approximately US$265
million, a sum that jumped to approximately US$360.5 million the following year” (World Bank
& IPEA, 2011, p. 5).
“The bulk of South FDI in Africa (especially in stocks) flow from Asia, with Singapore
as the biggest investor, followed by China, Hong Kong, Malaysia and India; Brazil is in 11th
place, lagging behind Pakistan and Chile” (Schoeman, 2011, p. 40). Table 3 above presents
different measures for Brazil, South Africa and Sub-Saharan Africa and the other BRICS.
Foreign Direct Investment in Brazil and in Sub-Saharan Africa is relatively similar and much
higher than in South Africa, proving the position of Brazil as both a contributor and receiver in
investment and economic development.
South Africa’s level of investment in Africa is one of the most important, and, “in
general, South African FDI most closely matches that of FDI from the North” (Henley, 2008, p.
230) in terms of activities and volumes. These are favorable results, especially since the South
African investors have usually been active for a shorter time than most Westerners have. A
distinctive feature is the long-term investments made by South African subsidiaries, by
employing locals or offering substantial salaries, for example (Henley, 2008, p. 230). These
South African efforts are in concordance with the necessity to develop intraregional relations in
order to gain power at the international level, as has been suggested earlier. South Africa could
also facilitate the FDI from Brazil to Africa in the context of IBSA.
When it comes to portfolio investment, investors are already looking further than the
emerging powers. “To truly internationalize and balance your portfolio, you need to move
beyond the BRICS strategy to find robust growth in smaller, overlooked countries” (Wasik,
2012). Countries regarded as potential investments bastions are, for example, Kenya, Nigeria,
Mexico, or Vietnam. Wasik’s comment illustrates the rapidly changing economic context;
countries considered as developing are now given more attention and growth projects and need
to be acknowledged to the same extend as the BRICS by the traditional powers.
18
Banco Nacional de Desenvolvimento Economico e Social.
39
As a conclusion, “South-South capital flows are progressively critical for international
development, but international trade remains the strongest and most direct channel through
which southern leading economies impact on other countries” (Santos-Paulino, 2010, p.4).
5.3
Trade
Other countries (26.7%)
China (38.5%)
India (14.1%)
Korea (7.2%)
Brazil (7.1%)
Turkey (6.5%)
Figure 5: Distribution of Africa’s Total Trade with Emerging Partners (2009).
Reproduced from OECD Development Center (2011).
One of the characteristics of the BRICS is the fact that they do not rely on exports as
much as developed countries do, and choose instead to develop domestic investment in order to
provide the impetus for their economic growth. “In Brazil and India, exports accounted for less
than 15 percent of their GDP in 2008, but the economy still grew six percent by the first half of
2009” (Ugalde, 2011).
Figure 5 shows that, in 2009, Brazil constituted 7, 1 percent of Africa’s total trade with
emerging partners, although this number has now grown through the continuing efforts of
President Rousseff. After describing the opportunities and requirements of both Africa and
Brazil, the international order in which this relationship takes place, and the financial context, it
seems pertinent to focus on the products and services being traded between the two regions.
40
Brazil’s trade with Africa has climbed from around US$4 billion in 2000 to US$ 20, 5
billion in 2010, an increase comparatively more important than the one in Brazil’s trade with the
rest of the world (table 4). In 2008 - record year in quantitative terms - trade with Africa
accounted for 6.98 percent of Brazil’s world trade. The share for Africa did decrease from 2008
to 2010, explained by the “political disturbances in countries in North Africa” as well as “the fall
in commodity prices” due to the international financial climate (World Bank & IPEA, 2011,
p.89).
Table 4: Brazilian Trade with the World, Africa and Sub-Saharan Africa (2000-2010)
(Billion USD, rounded). Reproduced (extracts) from World Bank & IPEA (2011, p. 80).
2000
2002
2004
2006
2008
2010
World
111
108
159
229
371
384
Africa
4
5
10
16
26
20,5
Sub-Saharan Africa
2
3
6
10
17
12
5.3.1 Trade Diversification
“The most important African exports to Brazil include oil, minerals, and agricultural
products, while Brazil’s principal exports to Africa are sugar and its derivatives, meats, and
manufactured goods” (Lechini, 2007, p.31).
However, a distinguishing fact about Brazil, as compared to other emerging nations
trading with Africa, is the diversity of sectors traded. As table 5 shows, in 2009, Brazil had the
highest number of African import sectors of at least $53 million USD a year, with a total of 9.
“In this reconfiguration of the global economy, Brazil has promoted a policy of diversification in
its international integration, engaging with developing countries in Latin America, South East
Asia and Africa” (World Bank & IPEA, 2011, p. ix). “284 treaties link Brazil with 37 of the 54
African nations (in technological cooperation, cultural exchanges, health, and agriculture)”
(Lechini, 2007, p.31). Between December 2002 and December 2006, 112 treaties were signed.
President Rousseff is perpetuating these efforts and actively promoting trade diversification.
Economists have emphasized the importance of trade diversification in order to promote
41
economic growth and trade creation. The abundance of resources of Africa and the possibility for
the countries to expand and specialize in technologies promoting production could lead to the
opportunity to develop diversification of exports and boost trade relations. The resource
abundance in Africa could therefore become a beneficial asset for the continent, if the countries
manage to profit from the exploitation of these resources and diversify their partners. “The
export diversification index for the region improved slightly from 0.61 in 1995 to 0.58 in 2009”
(UNCTAD, 2011, p. 4).
Table 5: Number of Sector in Which Emerging Partners have Significant Trade with
Africa (at least $53 million USD a year) (2009-2000).
Reproduced from OECD Development Center (2011).
Rank
China
India
Korea
Brazil
Turkey
Thailand
Russian Federation
Chinese Taipei
UAE
Singapore
Malaysia
Indonesia
Argentina
Saudi Arabia
Other Countries (58)
2009
1
6
10
12
13
16
17
19
20
22
23
24
27
29
-
Number of African Export Sectors
2000
8
7
6
4
6
4
2
4
1
4
2
4
1
4
0.2
2009
9
7
4
6
7
4
4
3
6
4
4
3
0
4
0.4
Number of African Import
Sectors
2000
2009
6
7
5
8
4
6
6
9
5
7
5
6
4
8
4
4
0
6
5
7
4
7
5
6
3
4
0.3
0.6
Table 6 shows that, in 2009, the exports from Africa to Brazil were considerably more
important in the West of the continent (6.8%) than in the Southern part (0.6%). These results,
which could seem contradictory with the emergence of South Africa as a BRICS, or the SACUMERCOSUR Free-Trade initiative, can actually be explained by the important oil import from
Nigeria to Brazil but also the production of agricultural products from other West African
countries, such as Senegal. In return, Nigeria constituted 17.5 percent of Brazilian exports to
Africa in 2007, placed in second position after South Africa (20.5 percent) (De Freitas, 2009,
42
p.79). While oil is in great part responsible for these trade patterns, “in Nigeria, Africa’s biggest
resource economy, the much-expanded service sector, if taken together with agriculture now
almost matches oil output” (The Economist, 2011). This development of diversification of
production in certain African countries provides more representation for these countries. The
growing importance of Nigeria in international institutions exemplifies this empowerment. The
emergence of service sector activities proves the accession to a higher level of economic
development and promising prospects of growth for the continent.
Table 6: Distribution (Percent) of Africa’s Exports by Type of Partners (2009).
Reproduced from OECD Development Center (2011).
Total
traditional
partners
EU 25
Other
Traditional
Partners
United
States
Total
Emerging
Partners
China
India
Korea
Brazil
Turkey
Other
Emerging
Partners
IntraAfrican
Total Value
(Billion
USD)
Eastern
Africa
45.9
Middle
Africa
52.1
Exports (distribution by partners)
Northern
Southern
Western
Total
Africa
Africa
Africa
Africa
73.6
50
65.6
62
Non-Oil
Group
57
Oil
Group
62.8
36.8
3.6
19.9
3.9
57.5
4.9
29.6
11.5
33.1
3.2
39.5
5.6
45.9
4.7
38.4
5.8
5.5
28.3
11.2
8.9
29.3
16.9
6.4
18.6
34.7
44.2
22.5
31.8
27
29.8
29.7
29.8
11.5
3.4
2.2
0.1
0.9
16.7
29
6.3
1.8
0.6
0.1
6.4
7.2
2.9
0.9
1.9
2.5
7.1
14.1
6.6
1.6
0.6
1.4
7.5
3.3
9.4
0.5
6.8
1.1
5.9
12
5.5
1.2
2.2
1.5
7.3
9.4
4.6
1.3
0.7
1
12.6
12.4
5.7
1.1
2.5
1.6
6.5
19.4
3.7
3.9
18.2
7.4
8.2
13.3
7.4
20.4
68.7
144.7
76.9
71.7
382.2
52.7
329.8
43
5.3.2 Agriculture
As Nayyar points out, “Brazil and Africa are important suppliers of natural resourcebased manufactures, especially agricultural” (2008, p. 15). They are implicated in inter and intraregional economic activities, therefore providing options and possibilities of comparative
advantage for agricultural products. This strategy brings more stability and possible economic
growth for both parties (Nayyar, 2008, p. 24). According to Schoeman, “a significant portion of
South FDI in Africa focuses on the continent’s agricultural sector” (2011, p. 41).
“Africa’s need and potential in agriculture –especially in terms of food security and
employment – mean new partners such as Brazil are well placed to help the continent move
forward” (OECD, 2011, p. 105). Therefore, a transfer of technology and expertise in the agroalimentary sector from Brazil to Africa could be a positive externality of trade and would
guarantee the auto-sufficiency and broader self-reliance of the African continent. According to
the same source, while “China has a perceived comparative advantage in infrastructure
development, India in learning skill-intensive areas and services, Brazil [has one] in agriculture
and agro-processing” (OECD, 2011, p. 105). The Food and Agriculture Organization (FAO)
emphasizes the knowledge transfer taking place from Brazil to Africa on small-scale irrigation,
conservation agriculture and rainwater harvesting (FAO, 2010). The geography of the Brazilian
Cerrado, tropical savanna, being similar to areas in Eastern Africa, the technology is easily
adapted. In order to promote these transfers, Brazil has participated in discussions led by
NEPAD (NEPAD, 2011), and this cooperation could be an eventual solution to the famines that
have crippled Africa. Eventually, Brainard considers that Brazil “will be one of the greatest
beneficiaries of the liberalization of world agricultural markets” (2009, p72). However, this
position conferred an active yet controversial role to Brazil during the Doha rounds of the WTO,
as has already been mentioned.
5.3.3 Old and New Energies
Brazil is the seventeenth largest country in the world in proven oil reserves; important
offshore reserves have also been discovered recently. As has been mentioned, Nigeria is Brazil’s
biggest African provider of oil. Angola, one of the few countries in which the oil reserves did not
shrink lately (Brainard, 2009, p. 32), is Brazil’s third most important overall trade partner on the
continent (White, 2010, p.224) as well as its third most important oil provider.
44
Table 7: Brazil’s Oil Imports, Selected Years (1997-2001-2006).
Reproduced from Brainard (2009, p. 35).
Millions of Barrels
1997
North America
South America
Argentina
Venezuela
Middle Orient
Saudi Arabia
Iraq
Africa
Angola
Algeria
Nigeria
Total Imports
0
81,917
46,518
34,481
64,779
38,123
0
55,353
1,918
21,401
31,091
202,049
2001
2,076
35,039
20,634
10,828
27,666
24,921
1,441
85,658
5,988
29,349
45,215
152,481
2006
3,445
3,943
664
0
32,669
22,906
9,764
90,890
6,890
21,830
52,575
131,942
From table 7, one can see the increase in oil imports by Brazil (almost double) from
Africa from 1997 to 2006 while imports from the Middle East and South America plummeted.
This proves the growing implication of Brazil on the continent for oil, in parallel to the
development of its national oil resources. “Propelled by Brazil's own demand for raw materials,
trade has grown rapidly, […] Nigeria and Algeria - as well as Angola - are key sources of
imported oil” (Lapper, 2010). According to UNCTAD, Africa “now accounts for over 73 percent
of [Brazil’s] imports of crude oil” which makes Carmody note that “in contrast to other large
powers, the Brazilian economy would not function without Africa” (2011, p. 108). Petrobrás has
been actively developing its knowledge in “deep-water drilling” along the coast of Brazil, and
has expanded this technology in West Africa (Rohter, 2012, p.175), especially in Nigeria.
Moreover, as global warming now seems to be an inevitable consequence of industrial
activity, “warmer weather could reduce the amount of cultivable land at home, [and Brazilian]
food and ethanol producers could become more interested in expanding into Africa, especially
countries such as Angola, where land is plentiful” (Lapper,2010, p. 2). Bourne notes that IBSA is
not only concerned with the development of trade, “but also energy cooperation, in which Brazil
was strong in ethanol, South Africa in synthetic coal-based fuel, and India in wind and solar
power” (2008, p. 164). As the geography of certain parts of Africa is similar to the one of Brazil,
the development of ethanol production is possible, with the eventual development of intraindustry trade or the creation of new forms of biofuels. The development of intra-industry trade
45
could result in positive effects on the terms of trade of both countries, thus benefiting the
consumers and society. Efforts have already been engaged; “the Ghanaian Parliament has
approved the building of an ethanol plant by the Sao Paulo-based company Ethanol Trading”, for
example (Carmody, 2011, p. 109).
However, the development of biofuels, although beneficial to the environment, raises the
price of products from which it is derived, such as corn or sugar cane, thus threatening food
security and the human food stocks in Africa, which greatly relies on food imports (Black, 2010).
It is then necessary for Brazil to consider these consequences, and contribute to the long-term
development of Africa. This leads to the following discussion on technology transfer from Brazil
to Africa.
5.4
Transfer of Knowledge and Technology
Table 8: Brazilian Firms in Africa: Industry and Country.
Reproduced from De Freitas Barbosa (2009).
Company
Adeco Agropecuaria
Aquamec Equipamentos
Ltda.
Camargo Correa
Vale
Marcopolo S.A
Medabil
Odebrecht
Industry
Sugar and Ethanol
Water Treatment
Petrobras S.A
Oil and Gas
Symnetics
Weg S.A
Management Consultancy
Electro Mechanical
Country
Mozambique
Algeria, Angola, Cameroon, Equatorial Guinea,
Libya, Mauritania, DRC
Angola
Angola, Morocco, Guinea, Moz., SA
Angola, Guinea, Mozambique, SA
Egypt, SA
Angola, Botswana, Djibouti, Guinea, Gabon,
Liberia, Libya, Moz., DRC, SA
Algeria, Angola, Equatorial Guinea, Libya,
Madagascar, Mozambique, Nigeria, Senegal,
Tanzania
Angola
Algeria, Angola, Botswana, Cameroon, Cote
d’Ivoire, DRC, Ghana, Guinea, Kenya, Mauritania,
Morroco, Moz. Namibia, Niger, Nigeria, SA, Togo,
Tunisia, Zambia, Zimbabwe
Construction
Mining and Metals
Bus Manufacturing
Construction Materials
Diversity of Industries
46
Table 8 presents the different Brazilian firms present in Africa and their domain of
industry in different countries. The presence of Angola, Mozambique and South Africa illustrates
the discussion here above, while the different industries illustrate the diversification potential.
Among the three requirements for Africa to join the BRICS, Okonjo-Iweala identifies the
need for “a major expansion in skills coupled with the ability to absorb global knowledge on an
economy-wide scale, […] a ‘Big Push’ on infrastructure to achieve scale economies” (2010).
During one of his visits to Africa, Lula declared that he was not just seeking new markets
for Brazilian products like other countries do, but that “conditions must be built to ensure the
transfer of technology to Africa, so that you can be able to produce what we are producing”
(Agaie, 2010). With the same idea, President Rousseff stressed the importance of Brazilian
legacy to Africa, “in the form of technology transfer, manpower training and social programs”
(World Bank & IPEA, 2011, p. ix). According to Bridging the Atlantic, “almost 60 percent of
Brazilian technical cooperation resources went to African countries in 2010” (2011, p. x).
Sub-Saharan Africa has been seeking Brazil’s cooperation in five key areas: tropical
agriculture, tropical medicine, vocational training (to support the industrial sector), energy, and
social protection (World Bank & IPEA, 2011, p. 4). As seen with the development of ethanol
production, the geophysical similarities of the two regions seem to be conducive to Brazilian
technologies adaptable to “many African nations” (World Bank & IPEA, 2011, p. 3). However,
while it is true that technologies could be imported from Brazil to some African countries, it
cannot be considered that Brazil has solutions for each country on the continent, which presents
eight different climates. Since 1998, EMBRAPA (Brazilian Agricultural Research Corporation)
encourages trade investments in Africa by providing credits to Brazilian firms willing to develop
in Africa (especially for construction, agriculture, and biofuels) (White, 2010, p. 231). The
agency opened an office in Accra, Ghana, in 2008 to “help transfer Brazilian technology and
methods to countries that have savannahs with soil and rain conditions similar to the Cerrado and
would like to duplicate Brazil’s success” (Rohter, 2012, p. 154). Rohter considers that this
initiative could create “in the long term [. . .] commercial possibilities and royalties” (2012, p.
154) for Brazil. Dr. Norman Borlaug, “father of the so-called Green Revolution and winner of
the Nobel Price” considers such transfer as “one of the greatest achievements of agricultural
science in the twentieth century” (Rohter, 2012, p. 154). However, while Africa’s green
revolution is at its dawn, it has to learn the lessons from the Brazilian experience, and avoid its
47
mistakes, in order to preserve its natural resources and minimize global warming and pollution.
Indeed, the mismanagement of the deforestation problem in the Amazonian forest leads to
virulent criticism of the Brazilian environmental policy, despite Brazil’s diplomatic efforts such
as hosting the Rio+20 United Nations Conference on Sustainable Development of June 2012.
Brazil is not an exception among the BRICS, which have to embrace their environmental
responsibility. During the BRICS New Delhi summit of March 2012, the countries prepared for
the Rio+20 Conference, which they call “a unique opportunity for the international community to
renew its commitment to supporting sustainable development” (ICTSD, 2012). However, the
BRICS affirmed that they “resist the introduction of trade and investment barriers in any form on
the grounds of developing green economy” (ICTSD, 2012). The conformity of all countries to
the principles of limited pollution in industry still needs to be strengthened, as developed and
emerging countries have been able to circumvent conformity in this field.
Also contributing to pollution, transportation in Africa and in Brazil remains problematic,
because of the size of the regions and lack of infrastructure. According to Loxley, Africa “might
[…] open up new export possibilities to the world, provided the required harmonization of trade
rules and a much improved transportation infrastructure are achieved” (2003, p. 122). Similarly,
poor transportation in Brazil is one of the dissuading factors leading to the “Brazil Cost”.
However, transportation between Brazil and Africa is getting better. Indeed, “flying from Brazil
to Africa usually takes 30 hours connecting through Europe. A direct flight from Dakar to Recife
in the north of Brazil would take three hours and five to Rio de Janeiro” (Carrillo, 2011). There
are some direct flights, however the traffic needs to be expanded. The extension of Dakar airport,
scheduled to open in 2012, as an international hub has already prompted direct flights to Sao
Paulo and Rio. Flights between Johannesburg and Sao Paulo are also direct, as Johannesburg
airport expanded for the 2010 World Cup. The long-term benefits of hosting the World Cup on
emerging economies can be widespread and steady, if planned properly. Indeed, foreign
investment has to be channeled in order to increase and secure the World Cup Effect on the
economy. After the 2010 edition, South Africa did benefit from the development of
transportation and infrastructure. For the 2014 hosting, Brazil should however learn a lesson; the
infrastructure put in place in South Africa, now, either benefits the richest population - as
Johannesburg’s Gautrain railway system - or constitutes touristic architectural attractions, like
Soccer City. However, socially, soccer confederates Africa and Latin America, as it is a sport
48
widely played and watched on the two continents. It also emphasizes the sense of community, as
a whole group often watches the games on a single television. Indeed, communication is an
important aspect of development, as has been seen in the discussion on the use of cellular phones
in Africa. Carrillo therefore announced that “in 2013, a submarine cable of approximately 12,800
gigabytes will connect the south of Africa with the north of Brazil” (Carrillo, 2011), contributing
to the improvement of internet connections and business transactions.
The limited capacity of educational and professional development infrastructures in
Africa poses a problem. Africa’s level of illiteracy is among the highest and it suffers from brain
drain, as its elite youth tends to leave the continent to receive education and decide to stay
abroad, attracted by political and employment stability. The transfer of knowledge should
therefore include the development of educational institutions in order to form the leaders and
businesspersons on the ground. IBSA, because of India’s promotion of education, has been
developing programs geared towards this strategy. Education constituted 11 percent of Brazil’s
involvement in South-South Cooperative arrangements in 2009 (World Bank & IPEA, 2011, p.
4). As mentioned in this analysis, Brazilian national programs are transferred to Africa. Thus, the
SENAR’s (Brazil’s National Rural Learning Service19) program aims at promoting continuing
education in agriculture and preventing unnecessary rural exodus. Since 2010, “seventy African
technicians from 35 African countries have been in these programs” (World Bank & IPEA, 2011,
p.61). The opening of the Afro-Brazilian University of Integration, UNILAB20, in 2010,
symbolizes the efforts made by Brazil to reinforce the cultural and linguistic ties with the
community of Portuguese-Speaking countries (CPLP). The location of the campus in the city of
Redenção (Portuguese for “redemption”) in Northeastern Brazil demonstrates the desire to
compensate for the extractive behavior of Brazil during the slave trade. UNILAB’s programs
emphasize the development of agronomic and bioenergy research through the formations
proposed to students. It also offers classes in lusophone literature and culture. The program,
nonetheless, is reserved for the elite of the countries; one could hope that the development of
other campuses in Africa will make it more accessible and democratic. Student exchanges
between Brazil and Africa are not a new form of cooperation; indeed, as a form of support for
the newly independent African states, “some of the first Atlantic crossings of the 1960s were
19
20
Servicio Nacional de Aprendizagem Rural
University of International Integration of Afro Brazilian Lusophoni
49
made by African students receiving scholarships” (Davila, 2010, p. 61). Even then, “together the
trips marked the cornerstones of Brazilian self-representation: African roots and industrial
development” (Davila, 2010, p. 61), a prolepsis of Brazil’s strategy of uniting human and trade
development. The African heritage of Brazil was also emphasized when the Lula’s government
in 2003 imposed a law (10.639) to “require the teaching of themes related to race, the history of
Africa and of afro-Brazilians” (Emerson dos Santos, 2010, p. 2).
This peculiar link between Brazil’s economic ties, cultural links, and social endeavors
with Africa distinguishes their relation, and presents an alternative to the existing multilateral
socioeconomic diplomacy.
50
CHAPTER SIX
FAILED MULTILATERALISM: A BRIDGE FOR BRAZIL’S
REPAYMENT
200 million years ago, Africa and Brazil were parts of the same continent, Gondwana.
However, most historic and cultural ties between the two areas date back to the transatlantic
slave trade initiated in the sixteenth century. As former Brazilian president Lula, fervent
promulgator of the relationship with Africa, put it during one of his several visits to the
continent:
There is no way to pay back our historical debts to Africa. We are debtors in our ways of
being, our culture, our arts, Brazil would not have been what it is today without the
efforts of millions of Africans. (Harsch, 2004)
Incidentally, one could appreciate the irony of Lula’s comment, as the African debt and its
cancellation is a persistent subject. Concretely, Sub-Saharan Africa’s total debt has been
decreasing. While in 1990, it constituted 5.8 percent of the GDP (excluding South Africa), in
2009, it accounted for 1.5 percent (IBRD, 2011, p.42). Brazil contributes to this amelioration, as
“Brazilian debt relief to the continent exceed[s] US$1billion” (World Bank & IPEA, 2011, p.99).
However, Brazil still relies on US, European and Chinese manufacturing exports (De Freitas
Barbosa, 2009, p. 83). In which ways is Brazil repaying this debt and how can the southern
bridge built between Africa and Brazil tilt the multilateral international order?
6.1
Who will be Africa’s Brazil?
In a 2012 article to the Huffington Post, World Bank’s Director of Economic Policy and
Poverty Reduction Programs for Africa, Marcelo Giugale, compares the situation and recent
successful evolution of Brazil and its potential application on the African continent. While the
question posed in his title, “Who will be Africa’s Brazil?” does not actually find an answer,
Giugale presents six of Brazil’s national achievements that could be adopted by the continent to
follow the same successful progress from developing country to sixth world economy.
The first necessity is a “stable macroeconomic framework with limited spending and
borrowing, and the independence of the central banks” (Giugale, 2012). Brazil achieved this step
51
after “decades of rampant inflation and financial crises” (Giugale, 2012). While not as
detrimental as for the West, “the economic and social costs of the triple crises in Africa have
been quite substantial” (UNCTAD, 2011, p. 3). The “three very serious and interrelated external
shocks, namely hikes in food prices, increases in energy prices and the global financial and
economic crisis triggered by events in the United States housing market in the fall of 2007”
(UNCTAD, 2011, p. 3) have shown that Africa needs to diversify its activities. As already
mentioned, the continent registers the lowest level of diversification of exports. The
diversification of industry and activities, which necessitates structural changes, would help the
continent maintain a sustainable economic growth. The Brazilian government, in cooperation
with the private sector, has been a promoter of trade development on the continent. The missions
of private companies, which accompanied Lula and Rousseff on their trips to Africa, embody
this new type of private/public sectors relationship that has been successful in Brazil and that
could answer Africa’s needs for diversification and economic sustainability.
The second point of Giugale’s focus is the development of local and foreign investors and
their fair treatment, regardless of their sizes. In contradiction with the liberal pull of the West and
the belief in the self-regulation of markets, which led to different abuses and to the current
economic crisis, there is a need for “smart government action […] smart, as in ‘don’t-scareinvestors-away’” (Giugale, 2012). The creation of NEPAD, through the African Union, was
intended to promote democracy and better governance and “to render the continent more
competitive and attractive to international investment using a heavy mix of liberalization, export
orientation, infrastructural development, regional collaboration and good governance” (Melber,
2009, p.57). However, NEPAD has “become little more than a veneer obscuring a pact among
elites in the African South and the G7/8 North” (Melber, 2009, p. 59). The World Bank report
considers that “aid remains one of the main sources of development support in several countries
on the continent, and transfers and exchanges of knowledge are still urgently needed” (World
Bank & IPEA, 2011, p.2). Brazil has been active in the transfer of knowledge and technologies
towards Africa.
Thirdly, countries have to stay open to foreign competition and create trading relations
with neighbors, thus developing regionalism. Melber quotes Bond estimating that “integration in
Africa should as a priority meet the socio-economic and environmental needs of its citizenries
instead of seeking to create a more efficient export platform” (2009, p. 134). This argument
52
seems to advocate an economic isolationist position, which could be detrimental in the
international context. While western countries, such as Greece or Italy, have decided to refocus
their economic efforts on internal development, the building of trade relations could help Africa
acquire independence through transfer of knowledge, and the development of its human
potential. However, the cohesiveness of the continent is a necessity that the majority of analysts
advocate, as it could eventually lead to the creation of a Sub-Saharan economic union. Custom
unions and free trade agreements have been created on the continent (SADC, ECOWAS…),
however, trade in these intraregional organizations is still underdeveloped and “the region
remains highly fragmented” (Melber, 2009, p. 134). The Economist is more optimistic, “intraAfrican trade has gone from 6% to 13% of the total volume from a generation ago” (The
Economist, 2011). Free Trade Agreements developed through IBSA – such as the trade
agreement between SACU and MERCOSUR - could contribute to this inter and intra-regional
integration pattern.
“In the ‘African Brazil’, agriculture will need to undergo a new revolution – one driven
by knowledge and commercialization” (Giugale, 2012). Giugale references EMBRAPA – the
Brazilian Enterprise for Agricultural Research – and its partnerships in Africa in order to
illustrate the public agency’s initiatives to develop technologies to cultivate soils deemed
unpropitious, which eventually attracted private investment. While Giugale considers that the
absorption of small plot-holders by large corporate producers was beneficial because it “may
have led to less employment in agriculture, and some migration toward cities, but it raised the
income of rural families” (2012), one could be skeptical regarding the increase in rural exodus
and its effect on social stagnation and urban planning. However, transfer of technologies and
agro-business knowledge from Brazil to Africa is blossoming and could nurture reliable
resources and infrastructures for the continent.
The fifth measure that Brazil achieved and that Africa should copy is political
sustainability and share of economic progress. Social and health programs developed in Brazil
are already being adopted in Africa. While Brazil establishes programs with Cuba, considered a
rogue state by several western countries, it also partners with the United States. The Joint Action
Plan to Promote Racial and Ethnic Equality was agreed upon in 2008 when then Secretary of
State Condoleezza Rice visited Brazil. In this plan’s framework, “there has been cooperation on
trilateral development programs in Mozambique, in the health sector and food security, with
53
plans or programs extending this cooperation to additional countries in Africa, Haiti, and El
Salvador” (U.S Department of State, 2011). In the field of biotechnologies, Brazil has been
active in the development of partnerships and research with Cuba to provide more affordable
medicine to African countries, such as meningitis vaccines (Saenz et al., 2010). The Brazilian
national pension model could also be adopted by African countries. The social welfare program,
Bolsa Família, could be valuable in alleviating poverty in Africa and encouraging the schooling
of children. Launched in 2005 by the Brazilian government, it transfers cash to the poorest
populations of Brazil on the conditions that parents would send their children to school and
vaccinate them. Although “the program costs just 0.5% of GDP”, its effects on poverty reduction
have been impressive. The Gini index “fell from 0.58 to 0.54” from 2003 to 2010, mainly
because of “the rise in bottom-level wages” as the program reached approximately a quarter of
the population (The Economist, 2010). While criticized as creating a situation of dependence or
as having a rural bias, the Bolsa Família is numerically impressive; it managed to reduce
inequalities and lift the poorest populations. The adoption of this program in Latin America
(Mexico) but also in developed countries - “New York’s Opportunity NYC is partly based on it”
(The Economist, 2010) - proves that it is a valuable initiative, especially for developing or
emerging societies. In a 2009 report, the OECD argues that, in Africa, “there is a vital need for
reform of existing pension systems in the region, the cost of which is often crowding out
spending on other key areas (such as health and education)” (Stewart, 2009, p. 2). While there
are exceptions (South Africa), the coverage in most countries is low (under five or ten percent of
the population) and restricted to formal workers, which limits the beneficiaries because of the
commonness of informal employment. This type of program has to be integrated into the
government spending, and often risks being one of the first to disappear in case of economic
hardship. Indeed, President Rousseff has mentioned the possibility to reduce pensions to limit
government spending (The Economist, 2010). Social programs then necessitate a steady and
reliable form of government, a deficient condition in several African countries.
Ultimately, political steadiness and democratic reliance lack in Africa. Even South
Africa, thought to be politically stable, is experiencing possible political instability with the
aggressive discourses of Julius Malema from the African National Congress Youth League. This
is why Giugale explains that “Brazil achieved its socio-economic success in a democracy”
(2012). “Political alternation – read presidents that leave office peacefully and with dignity when
54
their terms end” (Giugale, 2012) is a rare feature on the continent. The recent troubles in Mali
and in Senegal, among others (Cote d’Ivoire, Sudan…), proved that even relatively steady
countries could experience instability. While outgoing President Wade eventually accepted
defeat and his successor in Senegal, the Islamist rebellion in Mali is still virulent. Giugale
advocates the “decentralization of decision-making to those who are closer to the voter” (2012)
as is the case in Brazil. However, one could consider that this type of political organization
implies a federal structure, which is especially suited for larger countries. This could explain why
“that has so far been a tough assignment for the average African country to complete” (Giugale,
2012). Moreover, corruption is still widespread in Africa, “with 27 […] African countries
classified as having ‘rampant corruption’” (OECD, p. 14). As the African Economic Outlook
2011 exposes, smuggling and trafficking greatly impede the functioning of affairs and dissuades
foreign investors. Africa could learn from the policies adopted in Brazil in the 1990s to eradicate,
or at least lower, these problems of corruption and instability in its own economy and society. In
April 2012, Brazil hosted the international meeting of the Open Government Partnership (OGP),
with President Rousseff as its leader and therefore proved its efforts towards transparency and
eradicating corruption. However, diplomatically, Brazil and South Africa’s continuing economic
relations with Zimbabwe, despite Mugabe’s disrespect of international rules should be
sanctioned. Carmody also believes that “President Dos Santos of Angola, who has been in power
for thirty years, because of his overseas assets is thought to be the sixth-richest person in Brazil”
(2011, p. 121). Brazil and IBSA need to harmonize their internal actions and diplomatic
relations.
According to current South African President, Jacob Zuma, elected in 2009, “Africa can’t
eat democracy [. . .] however; the benefits of democracy must lead to economic development and
help reduce poverty to improve the quality of life of ordinary people” (Schoeman, 2011, p. 43).
The fact that Brazil has been able to narrow the gap between its richest and poorest population
while being able to maintain international economic growth is an exemplary achievement. The
political system imposed on Africa by the European powers during colonization bears
consequences that could be described as “indirect scramble for Africa”, as the external powers
are able to take advantage of the political instability to benefit from cheap trading partners.
While the physical capacity of Africa to feed itself and other continents is asserted, this paper
shows that Brazil can feed the human and infrastructure capacity of the continent, in the short55
run, in order to achieve this long-term goal. Transfer of knowledge, successful agricultural
techniques as well as expansion of social and welfare programs can lead the way to a fruitful
development contributing to the independence and rise of Africa on the international scene. The
Africa-Brazil Cooperation Program on Social Development, whose purpose is to “promote
international technical cooperation between developing countries to foster social protection
policies” (International Policy Center, 2009), is framed by UNDP, a western-based multinational
institution. Thus, the BRICS and particularly IBSA, plurilateral organizations, have to contribute
to these policies in order to strengthen their social focus. IBSA grew out of the common will of
the three members, India, Brazil and South Africa - considered democracies unlike China and
Russia - to promote socio-economic and diplomatic policies.
In the light of Giugale’s argument, I suggest that not one single country should become
“Africa’s Brazil”, but the whole continent could achieve Brazil’s recent socio-economic
progress, in the context of a propitious international order.
6.2
A Bridge to Independence
Vigevani (2009) evaluated the different stages of Brazil’s diplomatic and economic
autonomy in the last century. I decide to apply his concept of autonomy through distance,
autonomy through participation, and autonomy through diversification to Africa’s diplomatic
position.
While the different types of autonomy are not incompatible and are, in fact,
interchangeable, Brazil first experienced autonomy through distance and evolved to autonomy
through diversification. In the current international context and as has been demonstrated in this
paper, autonomy through diversification is the most productive way to approach international
relations and diplomacy, although the path taken by Brazil through the different phases has
strengthened its current position. According to Vigevani, autonomy in the Latin American
context is different from the concept of autonomy developed by most western-influenced
international relations authors. Indeed, Vigevani defines autonomy “as a country’s capacity to
practice a foreign policy free from external constraints placed upon it by powerful countries such
as the United States, for example” (Vigevani, 2009, p. 8).
There are then three main ways to attain autonomy, through distance (main idea adopted
from the 1930s to the mid-80s), through participation (prevailing during President Cardoso’s
56
terms from 1995 to 2002), and through diversification (mainly during Lula’s terms from 2003 to
2010). However, these “instruments are never found as pure forms in the real world” (Vigevani,
2009, p. 129).
In the case of Brazil, Vigevani defines autonomy through distance as “based on
economic development geared to expanding the domestic market, on protectionist practices and
on a relative distancing from the major international issues and hegemonic regimes, and
endeavors to strengthen South-South alliances” (Vigevani, 2009, p. 130). This position also
implies the criticism and distrust of organizations such as the International Monetary Fund, or
the World Bank, as well as powers such as the United States.
Autonomy through participation concentrates on the “adherence to international regimes,
including those of a liberal slant (such as the WTO), without losing the capacity to manage
foreign policy” (Vigevani, 2009, p. 130).
Eventually, autonomy through diversification “implies an approximation to the Southern
countries in order to obtain greater involvement in international regimes (even liberal ones,
whilst betting on multilateral solutions and condemning the unilateral policies practiced by
powerful countries, particularly the United States” (Vigevani, 2009, p. 130). Still according to
Vigevani, autonomy through diversification is achievable through South-South alliances and
associations with “non-traditional partners” such as China, Asia-Pacific, Africa and other
emerging countries since the “aim is to reduce asymmetries and increase the country’s
international bargaining capacity in its relation with more powerful countries, such as the USA
and the European Union” (Vigevani, 2009, p. 7).
Vigevani considers that “it is hard to say for sure what direction Brazilian foreign policy
will take over the next few years, but there will probably be a reasonable level of continuity”
(Vigevani, 2009, p. 132). While the analysis of Brazilian economy and diplomacy suggests that
the country will strengthen its power and acquire a stable position on the international diplomatic
and economic scene, it is now primordial that it expands its lessons from these three routes and
leads Africa to autonomy. Indeed, “focusing on certain strategies helps countries have a clearer
roadmap for their future actions (which is good for policy makers) and a clearer analysis of their
past positions (which is advantageous for academics)” (Vigevani, 2009, p. 134). By exporting its
model of diplomatic strengthening to Africa, Brazil could acquire a legacy and aura on the
international scene.
57
Brazil’s capacity to present itself as autonomous between developed and developing
country, coupled with its socio-economic programs, provides a trustworthy image on the
continent. While Africa has been engaged in autonomy through participation with its link to the
Western institutions, Brazil’s own autonomy through diversification, as instigator of relations
with the continent, and of international recognition, could lead the way to Africa’s autonomy.
6.3
How is Brazil repaying its Debt?
According to De Freitas Barbosa, “an important feature of the new approach in Brazilian
diplomacy is the attempt to link diplomatic agreements with business missions supported by
Brazilian government agencies and enterprises” (2009, p. 66). However, “what is missing in
Brazil is a dynamic structural change that would bring about a sustainable new generation of
transnational firms, coming from different sectors” (De Freitas Barbosa, 2009, p. 71). Brazil
would then have to “combine political and economic interests” (De Freitas Barbosa, 2009, p. 83).
The discussion on trade arrangements between Brazil and Africa has actually demonstrated that,
even though inferior to the amount traded with China or the developed partners, the diversity of
sectors traded between the two regions is among the highest. De Freitas Barbosa also questioned
the capacity of the country to sustain economic growth and international diplomacy and trade
relations. Vigevani considers that Brazil’s focus on regional integration among the MERCOSUR
group would lead to a “loss of sovereignty and international autonomy” (2009, p. 133).
However, while the international crisis has been crippling the North Atlantic economies, Brazil
still manages to develop its own model of social and economic development internally and
internationally. Indeed, what differentiates Brazil from the other countries present in Africa is
that it is:
Generally well received, […] a middle ground approach between the Chinese-style of
engagement, which is highly political and supported by the weight of the state-run
machinery behind investments and development initiatives, and the Indian approach –
which is characterized more by private sector investments and entrepreneurial activities
across the continent. (White, 2010, p. 229)
Brazil’s position in foreign relations as “middle-ground” between China and India is
influenced by the fact that it is “simultaneously a developed country and a developing country”
(Seibert, 2010, p. 13). Indeed, Brazil, in its relation with Africa, has been successful in
58
harmonizing the three aspects of its international relations - political diplomacy, trade and
investment, and development co-operation (White, 2010). Brazil also stands from the other
BRICS as being an example of “soft power” in IBSA’s “plan to develop a strong negotiating
power through a “soft balancing strategy” (Doelling, 2011, p.7), especially towards Africa.
While such position is partially motivated by the race to a position in the UN Security Council,
or by the securing of economic partners, it has shown beneficial consequences to Africa,
particularly in the promotion of socio-economic growth.
A recommendation for Brazil in its conduct of relations with Africa is to adopt a more
political and ethical behavior, leading to the ability to condemn and denounce some of the human
and social ignominies committed on the continent. Brazil, having partially achieved its process
of internal cleansing, should be able to export its experience in this domain. The BRICS should
also consider the possibility to sanction, through economic measures, countries that do not
respect human rights. Indeed, as is presented in this paper, the emphasis on the human aspect of
economic development is primordial, as the abuses of individualism led to the weakening of the
traditional western institutions. Even the World Bank acknowledges the importance of human
interactions and prevalence over economic gains, as is presented in its the Bridging the Atlantic
report.
6.4
A Southern Atlantic Bridge
“The World Bank’s strategy for Africa has two pillars and a foundation”, the pillars are
“competitiveness and employment as well as “vulnerability and resilience” and “the foundation
of the strategy is governance and public sector capacity” (IBRD, 2011, p. 130). The World Bank
plans to emphasize partnerships rather than finance in order to address the long-term
development of the continent. Therefore, the institution understands the necessity to privilege
human reliance rather than profit. As I have shown, Brazil is the emerging partner promoting the
most this aspect in its foreign relations; it is then pertinent to analyze the position of the World
Bank in this scheme. The report Bridging the Atlantic is envisaged as “crucial in providing the
knowledge base that will enable us [the WB], African governments and the Brazilian
government to continue to forge concrete partnerships that generate win-win outcomes for the
two regions” (World Bank & IPEA, 2011, p. vii). The World Bank then presents lessons and
59
guidance for its subordinate institutions to retain their relevance and promote the relationship
developed between Brazil and Africa. I argue their perspicacity.
One of the arguments presented by the World Bank is that, due to its history and global
perspective, it has been able to assert a presence over the African continent. “In Africa, it [the
WB] has a far greater presence (in number of countries it is in and number of professionals in
those countries) than Brazil does” (World Bank & IPEA, 2011, p. 101). The World Bank was
created in 1944 and has therefore had the time and the capacity to develop such presence, unlike
the plurilateral institutions framing the Brazil-Africa relation.
While the World Bank recognizes that its role is “under challenge from China and other
emerging markets, particularly in Africa” (World Bank & IPEA, 2011, p. 102), it claims that its
involvement and solicitation from Brazilian and Africa actors has been growing recently. Thus,
“the World Bank office in Brasilia has received more than 50 requests for support for SouthSouth cooperation projects between Brazil and countries across Africa” (World Bank & IPEA,
2011, p.102). The Bank recognizes itself that “there is still a large gap between the strategies
outlined on paper and those put in practice” (World Bank & IPEA, 2011, p.103). Indeed, as has
been mentioned before, the World Bank did not focus on the regional integration of countries,
therefore, “the structure of the Bank, particularly with respect to the regions, is an issue” (World
Bank & IPEA, 2011, p. 103) and consequently the links between the two regions are hard to
establish and coordinate, eventually requiring the intervention of the multilateral organization.
The development of the Free Trade area between MERCOSUR and SACU, as well as the Fund
for Alleviation of Poverty and Hunger created by IBSA, could consequently gain influence,
because they take into consideration the importance of regional integration.
Another issue considered by the World Bank introduces a more conceptual approach to
the situation. Indeed, in order to maintain its relevance the Bank needs to determine what
differentiates “South-South cooperation from North-South cooperation” (World Bank & IPEA,
2011, p. 103). While the Bank might be perspicacious in considering that “much South-South
cooperation is performed in ways identical to traditional development support”, it seems that the
“new approach” of the South –“which stresses respect for sovereignty, noninterference in
domestic affairs, rejection of tied aid, and an emphasis on technical cooperation” is more adapted
(p. 103). Particularly, it seems that the relative same historical background of Brazil and Africa
creates a more equal context and relation than with North-South cooperation, which is still laden
60
with neocolonialist resonance. Eventually, Brazil has asserted its position as intermediary
between North and South.
The World Bank has created subordinate plurilateral institutions to decentralize its
programs and actions. It then gives considerable importance to International Development
Association (IDA) – the “World Bank’s Fund for the Poorest” - and its role in South-South
development (World Bank & IPEA, 2011, p. 104). However, the IDA perpetuates the pattern of
lending agency, which contradicts the idea of developing Africa through a combination of trade
and socio-economic programs which has been proven to be more beneficial for long-term
development and autonomy.
The private sector is given attention, even though, “private sector development,
especially investment and trade, is probably the most neglected area of South-South cooperation
in the Bank’s new approach” (p. 104). The report advises to promote “the participation of
companies from emerging markets in World Bank procurement, particularly in Africa” (p. 104).
However, Brazil’s government has already been conciliating private and public ventures in its
interactions with Africa, proving that government regulation of the private sector could be
beneficial.
Concerning the promotion of investment, the International Finance Corporation, a
member of the Bank “has developed a specific initiative – funding of US$1 Million for SouthSouth cooperation focused on investment in Africa” (IFC, 2012). MIGA, the Multilateral
Investment Guarantee Agency, another plurilateral branch of the World Bank, was created to
“promote Foreign Direct Investment (FDI) into developing countries to help support economic
growth, reduce poverty, and improve people’ lives” (MIGA, 2012). The report stipulates that
MIGA “has incorporated the issuance of guarantees – namely political risk insurance – for
South-South investments as one of its key strategic targets” (World Bank & IPEA, 2011, p. 105).
However, because of it not being a “provider of finance”, of its location in Washington, DC and
its lack of coordination with regional and local World Bank offices, growth has been “held back
in this important segment” (World Bank & IPEA, 2011, p. 105). FDI between Brazil and Africa
requires more coordination and incentives from international institutions.
“The bank will therefore have to overcome internal and external obstacles, real and
perceived, which it can best do by consulting its own shareholders from emerging markets and
developing nations” (World Bank & IPEA, 2011, p.108). BRICS and IBSA, as well as other
61
institutions articulating South-South relations and the Brazil-Africa one should draw lessons
from the experience of multilateral institutions such as the WB and the IMF. The lessons drawn
by the report Bridging the Atlantic demonstrate that the dispersion of means and foci has
depleted the efforts to promote socio-economic development. Indeed, IBSA needs to strengthen
its position of conciliator and regulator for trade in between its three members. A recent case of
discordance between South Africa and Brazil is an example of this requirement. In February
2011, South African poultry companies accused Brazilian counterparts of dumping, IBSA did
not mediate the disagreement and the WTO was the eventual successful supervisor (Business
Week, 2011).
At the social level, IBSA’s Fund for Alleviation of Poverty and Hunger, established in
2004, plays an important role in the coordination of developmental efforts on the African
continent. The World Bank report qualifies this Fund as a “new multilateral South-South tool”
and considers that it is, “in effect, sidestepping established mechanisms and organizations
(including the World Bank), in part because the traditional institutions are perceived to be
dominated by developed countries’ interests” (World Bank & IPEA, 2011, p. 98). However, the
report suggests that the World Bank would still have its relevance as it could “leverage its unique
position by supporting sustainable South-South investment and trade with Africa” (p. 98). One
could say that the position of the World Bank has indeed been relatively biased towards the
interests of the Western powers. Consequently, establishing it as a judge of arguments between
developing or emerging countries could be detrimental to the accession of these countries to
development and relevance in the international economic and diplomatic order.
The relevance of the World Bank as a multilateralistic entity is challenged by the
emergence of plurilateralistic fora, born from the common interests and experiences of
disregarded emerging actors. It has also been shown, especially through the analysis of Bayne
and Woolcock, that multilateralist organizations lose their relevance and points of focus in the
current international context. In its Bridging the Atlantic report, the World Bank disregards the
importance of regional, bilateral and plurilateral relations, when they have been proven central to
twenty-first century relations. The World Bank also argues that “the Bank itself is changing” and
that “the potential for the Bank to play a significant role in supporting and leveraging SouthSouth cooperation is immense” (World Bank & IPEA, 2011, p. 101). I argue that this claim
illustrates the archaism and inaptness of the World Bank in dealing with regions it had been
62
disregarding for the benefit of its most preeminent actors. Indeed, the South-South cooperation
has already been unfolding, when the Bretton Woods institutions were still concentrating on their
interests. Now that Western economies cannot sustain themselves, they turn to emerging and
developing countries, trying to argue their own significance.
6.5
Plurilateralism: A Bridge to Favorable Multilateralism
The weakening of Western powers’ and the Bretton Woods institutions’ influences by the
financial crisis initiated in 2008 calls for a new point of view. While the IMF‘s “mission of
providing relief to countries in trouble is an essential part of the international economy”, it needs
to deviate from its “Euro and US-centric” stance (Ugalde, 2011, p. 53), especially when it
solicits the BRICS assets without giving them more weight in decision-making. This justifies my
decision to concentrate on the alternatives created by Brazil and other emerging powers, such as
IBSA and BRICS.
While Bayne and Woolcock deem that bilateralism and regionalism have gained
considerable preference in the conduct of international relations, plurilateralism still is relevant
as the summits organized at this level become more appropriate than the ones at the multilateral
level (2011, p. 367) and as it is also able to promote inter- and intra-regionalism. The World
Bank considers itself “in an excellent position to facilitate an annual global South–South
development summit, preferably in an emerging or developing country” (World Bank & IPEA,
2011, p. 108), however it seems to forget that such successful fora, such as the March 2012 New
Delhi summit, are already organized by the BRICS.
Hettne stipulates that “a plurilateral grouping of actors is exclusive, whereas multilateral
by definition implies inclusion, provided the rules of the game are accepted by all parties” (2006,
p. 147). However, “the rules of the game” have been dictated, so far, by the Western powers in
an exclusive decision-making. Bretton Woods institutions are demonstrations of multilateralism.
They should thus be apparatuses to promote and regulate relations between regions. However,
the head of the IMF has always been from Europe, and the one of the World Bank from the
United States. The OECD, which contrarily to IMF and World Bank is an organization
promoting plurilateralism as it is selective, does not include any of the members of the BRICS,
nor a single African country. In Latin America, only Chile and Mexico are represented at the
OECD. One could therefore consider that the actions taken by the emerging powers, which
63
should now be considered as an intermediate between developing and developed nations, should
be given more recognition by the current multilateral organizations. It has not been the case. The
New Delhi Summit of March 2012, during which the BRICS voiced their desire for more
decision-power, while the European Union and the United States clang to their control over the
Bretton Woods institutions, proves this incoherence. It is pertinent to agree with Rüland when he
explains that the emerging powers, and especially India, Brazil and South Africa, would like to
change the international institution order from a unipolar to a “genuinely multipolar international
system”(2010, p. 162). Indeed, the consequences of such position could introduce positive
consequences to the countries that have been disregarded by a system controlled by the West.
Rozhankovsky thus considers that “not only the BRICS need time to mature, but the Old World
itself needs time to realize that changes are imminent” (Reuters, 2012).
More so than a question of terminology, the point that this paper argued between
multilateralism and plurilateralism relies on the vision and perception of relations. The way in
which plurilateralism was defined allows countries to be actors of their own development with
the help of other countries. Some analysts use multilateralism and plurilateralism
interchangeably. However, the difference between the two concepts for the purpose of this paper
is the “power”: the selective decision process that is now accessible for the “developing
countries” in the plurilateralistic context, as they are facing the multilateralistic all-encompassing
perception of relations that the Western institutions have been perpetuating. Therefore, to
flourish, a plurilateralistic context requires institutions such as the ones created by the emerging
countries. Plurilateralism can become a strength for the countries mentioned in order to be better
fitted for the multilateral context. The role of the traditional multilateral institutions such as the
WB and the IMF might still be relevant to harmonize relations, especially in order to funnel the
means to redress the financial situation of Western Europe. Yet, globalization has shown that the
partition of the world is not in the hands of the west anymore, as the vision of relations becomes
more and more individualized and serving self-interest.
I would therefore postulate that the growth of emerging and developing economies
should eventually lead to the creation of pluriregionalist institutions, selective and transcending
geographic and historic boundaries. The Brazil-Africa relation is especially pertinent in this
context, as the main difference between the South American power and the other emerging
economic powers lays in the fact that it attaches more importance to the development of its
64
internal policies in terms of social and developmental activities, and has been successful in the
rapid application of efficient reforms. Therefore, the Brazilian government needs to stay attached
to its ideology of “developmental diplomacy which could be defined as the continuation of its
internal policy by other mean” (De Freitas Barbosa, 2009, p. 61). For Brazil to excel in the
contemporary context, internal policies such as the Bolsa Familial, as well as balanced relations
between the private and public sector, should be advocated and exported to Africa and other
developing areas, to favor their development and competitiveness at the international level.
While the Bridging the Atlantic report of the World Bank produces valuable information
on the economic and social relations between the two regions, its main concern is the continuing
importance of its activities and purpose in this context. The arguments that I have presented
prove the minimization of the role of the World Bank and other Bretton-Woods organizations.
Indeed, it seems that the plurilateral fora – a term that encompasses an idea of communication
and progression different from the stiffness and institutionalization of an organization – that were
born in the context of South-South and Brazil-Africa relations are more adapted to the new
economic diplomatic and social order of the twenty-first century.
65
CHAPTER SEVEN
CONCLUSION
A major challenge of the twenty-first century will be to strengthen and reform the
institutions, rules and customs by which nations and peoples complement the global
market with collective management of the problems, including persistent and unjust
inequality, which global markets alone will not resolve. (Southall, 2009, p. 425)
Although the West and other emerging countries have more active and productive
economic relations with the African continent, I have demonstrated that Brazil’s attitude towards
the continent distinguishes itself for its socio-economic aspects. The projections of economic
development in Brazil and in Africa are promising and could palliate the two main points De
Freitas Barbosa estimates Brazil should address, i.e. “to diversify its export structure and the
productive base from which its foreign investments are made” (2009, p. 84). It is, to a certain
extent, true that Brazil’s strategy, in which “vectors of aid (or concessional loans) are linked with
trade and investment, in a pattern reminiscent of the colonial period”, works in the economic and
diplomatic interest of Brazil and “African governing elites’ advantage” (Carmody, 2011, p. 109).
However, this paper argued that despite the financial crises, Brazil has built long-term
normative relations with Africa and has been able to export its internal model of social and
human development to the continent, while helping its own population. Its transfer of technology
in industries and its private investment in Africa, its participation or initiation of development
and educational projects, coupled with the cultural and historic ties between the two regions,
have proven its position as one of the most accountable and sustainable partners in the new
economic and diplomatic order. Giugale’s analysis of potential new Brazils in Africa proves that
the continent could achieve the level of economic and diplomatic autonomy De Freitas Barbosa
presented, thus attaining more power among waning western multilateralism and rising southern
plurilateralism.
The synthesis of these incentives needs to be regulated by international institutions
reflecting these structural changes. The plurilateral - because selective - framework proposed by
BRICS or IBSA would be more pertinent than the de jure multilateral IMF and WB, which have
66
been, de facto, maintaining exclusive - hence plurilateralist - decisions for their own interest.
This paper has shown that while there is a necessity to formalize the institutions of the South,
their relevance as plurilateral organs is a valuable step towards the equalization of international
multilateral organizations. IBSA and BRICS still have to assert the relevance they gained
through economic performances on the international scene, especially in the democratization of
their actions. Indeed, China, Russia, and India to a lesser extent, have not attained the same
socio-economic amelioration as Brazil and South Africa have, hence Brazil’s significance. For
Rüland, IBSA constitutes a shallow multilateralism which “shows little interest in investing in
the strengthening of institutions and pooling sovereignty in order to solve global problems”
(2010, p. 171). Strengthening institutions such as the WB and the IMF will not solve global
problems; a restructuration is needed. However, for the relationship between Africa and the
South to lead to the application of a more adapted multilateral interaction, the traditional West
needs to give more institutional responsibility to the emerging and developing countries, which,
in turn, need to be accountable and play the game fairly.
The research behind this paper and its reliance on western multilateral sources of
information, such as the World Bank, also proves that even if analysts from emerging countries
are formulating valuable information and critics, the Bretton-Woods institutions are still
extremely reliable for their provision of information. Multilateral organizations should be the
ultimate guardians of equality of treatment and relations, a role that they have been failing to
fulfill in the twenty-first century.
A new multilateralism, a pluriregonalism, should rely on the democratic and socioeconomic egalitarian ideology that it was initially and normatively meant to promote, with the
hope to resolve the “persistent and unjust inequality” that prompted its own failure.
Pluriregionalism would retain its exclusive process while remaining open to the strengthening of
regions and institutions. Globalization giving rise to communities of choice, Brazil has
judiciously chosen to reinforce its sense of community with Africa. Its plurilateral relations with
the continent, based not only on economic but also human interactions, prove that the advent of a
new multilateral order is possible.
67
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BIOGRAPHICAL SKETCH
Klervia KERLOC’H was born on March, 12th 1986 in Nantes, France. After graduating
in English and American Literature and Civilization from Université de Nantes in 2007, she
studied abroad at Georgia Southern University, where she graduated with a Bachelor of Arts in
International Studies (Modernization, Development, and Environment) in 2010. She obtained her
Master of Science in International Affairs (concentration in Economics) from Florida State
University in 2012. Her research interests include South-South relations, socio-economic
development, cultural diversity, West Africa, urban planning in LDCs, and ethology.
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