A Note by the Director (Ditchley 2006/04)
7-9 April 2006
We gathered on a bright and breezy early spring weekend to examine the next in Ditchley’s series of emerging countries, Brazil. The question in front of us, whether Brazil was already making an impact on the global scene, gave participants some difficulty: should we be looking for signs of global influence now, or should we be assessing Brazil’s internal strengths and weaknesses and calculating long-term potential? The answer in the end was both, but we were conscious of studying a complex, moving picture with all kinds of uncertainties. This Note will touch on a number of themes but cannot do justice to a rich, multifaceted discussion which itself indicated that Brazil is already a global phenomenon.
Some elements of this status were clearer than others. We were in no doubt that Brazil was a powerful player in agri-business and as a world food producer; a leader in the technology associated with that and with the production of alternative fuels from the agricultural sector; a central actor in world trade negotiations; and the largest member of an important regional bloc. Brazil stood at the heart of important environmental questions, discussed with great vigour at this conference: the Amazon and its forest; the production and use of fresh water; biodiversity; and technology for carbon reduction. Brazil was also becoming an important contributor in certain niche areas, such as research into the treatment of HIV/AIDS. And the country’s role as a football icon was not to be underestimated in a world where soft power counted. Underlying all of this was Brazil’s positioning in its international diplomacy as a skilful multilateral actor, committed to the rule of law and to collective approaches to the problems of globalisation.
Set on the other side of the ledger were a number of problems and challenges. Brazil was to be congratulated for consolidating its democratic base and stablising its economic performance, with an increasingly powerful manufacturing sector. But the key to sustained economic growth had not yet been found; reform of state structures and of fiscal policy had not yet been undertaken; inflation control had succeeded but interest rates were still high; a coherent energy policy was lacking; and there were a number of areas of micro-economic policy where forward momentum was poor and a huge amount remained to be done. President Lula’s four years in office so far had achieved a good deal of consolidation and, unlike its predecessors, had begun to address crucial and challenging social issues as a package. But party politics sometimes outweighed the need for sharply focused attention to the more difficult areas such as poverty, inequality, unemployment and crime. The recent corruption scandals did not help the image (though it was noted that the institutional handling of them was effective). In particular, the conference came back again and again to the poor state of primary and secondary education in Brazil, where huge improvements and new resources would be needed to establish a real advance for the country, domestically and internationally, over the next generation.
It was pointed out that Brazil had, historically (and history was proving more significant than geography in most of the areas we discussed), gone through a series of cycles of hope and disappointment. The last decade had generated more of the first than the second and progress needed to be sustained by the next government after October’s elections. Government had recently tended to grow in size, when Brazil’s real requirement was for better, rather than more, government. We did not discuss election prospects in detail, though we noted that Lula was ahead in most opinion polls and that he would gain from continued stability in the economy and from his popularity amongst the working rather than the middle classes. If poorer Brazilians began to lose faith in his approach and the media turned increasingly against him in the coming months, then the opposition, if it remained united, might just have a chance.
Within the region, we noted Brazil’s undoubted influence, though it could not yet be interpreted as a position of leadership accepted by its neighbours. Most participants viewed the region as being South America rather than Latin America: a strong Brazilian partnership with Mexico might in theory be a powerful catalyst for an increase in Latin American influence globally, but it was unlikely to emerge from current politics and relationships. This was regarded by many as a pity. Brazil’s diplomacy in the region, sensitive to others’ reactions, was quiet, almost tentative. Some thought that if Brazil was committed globally to a rules-based approach to international issues, then that should be the basis of its regional approach. Mercosur was an important factor in the region, but was struggling to achieve significant progress. Brazil suffered from being too dominant a presence in it. Others thought that this was too churlish an interpretation: time would be needed to grow regional partnerships and to develop the benefits of free trade; and Brazil’s weight and diplomatic skilfulness would increasingly tell. Brazil’s most important influence at this stage was in being a success story as a consolidating democracy, avoiding on the whole the temptation to follow populist policies.
We were unfortunate in this debate in having no representation from the US Administration, whose participation fell away at the last minute. The United States was seen as paying too little attention to the potential benefits of a forward-looking partnership with Brazil, while Brazil itself was considered over-sensitive to the dictates of sovereignty and independence. This made Brazil more comfortable in the multilateral theatre than in consolidating particular bilateral relationships. An understanding partnership with the United States could be an outstanding asset for both sides. Her initiatives with India and South Africa, her good trading and political connections with the European Union and her awareness of the competition which China represented gave her other good opportunities to combine the multilateral and the bilateral with more vigour. We discussed whether Brazil’s role in the World Trade Organisation, leading up to the climax of the Doha Round at the end of 2006, might lead her to greater activism. There was no doubt that Brazil’s export potential and her well developed institutional diplomacy within the G20 were important assets. But others felt that determinants of the Doha Round outcome lay in the scope for flexibility, or otherwise, in protectionist governments elsewhere rather than with Brazil.
In short, we found ourselves painting a picture of a Brazil displaying a justified degree of ambition in regional and global affairs, but not yet possessing all the necessary capabilities. The good news was that foreign policy was a vibrant area, with the connections between domestic and international well recognised and with Brazil already established on the global map, going well beyond issues of international trade. Less good was that this had awakened a perception in the region of Brazilian presumptuousness, not least over its bid for a permanent seat at the UN Security Council. Brazil appeared to recognise that there was a price to be paid for a strong collective approach to international affairs, but had not yet geared itself to pay that price when in most respects it had to be political.
The conference much enjoyed hearing a good briefing on environmental issues. In its ownership of the Amazon forest, Brazil possessed a world resource which gave it huge environmental status but also an obligation to establish domestic and international structures to preserve it. We understood Brazil’s frustration in being subjected to environmentalist lectures from outside and we accepted that it was the role of other governments and international NGOs to contribute resources to the right Brazilian programmes. In the end, preservation of the Amazon forest would be Brazil’s achievement or no-one’s and others would have to fall in behind Brazil’s policy decisions in this area. There was an undeniable urgency in getting this right.
In our conclusions, we came back to the question of what was the real Brazilian brand. The elements which impressed us were its cultural richness, its soft power strengths, its diplomatic affability and its status as the fourth largest democracy in the world and the largest country in South America. Those characteristics on their own were sufficient for membership of an enlarged Security Council. Yet it was still a picture with blurred edges. The keys to economic growth and a good education system had not yet been found and too few Brazilian products yet made a real impact on global markets, literally or metaphorically. In the end we tended to conclude that Brazil needed time. It was still an adolescent as an emerging power; and world trends, not least the diffusion of power away from the west and towards a larger number of global players, were sending things Brazil’s way. If her strengthening relationships in the southern hemisphere and with the other emerging nations could be sustained without an equal and opposite cost in the developed world, then Brazil would claim, and retain, a top table place for a long time to come.
Our conference was unlucky in losing its intended Chairman, the Brazilian Foreign Minister, Celso Amorim, who was diverted to more important duties at the last minute. But we were immensely fortunate in having a first-class replacement, who guided our discussions with an expertise and a lightness of touch which made the debate flow dynamically down all the right channels. Ditchley was also grateful that such a varied range of Brazilian voices could be heard. We all went away at the end of the weekend with a more accurate sense of the butterfly emerging from the Brazilian chrysalis.
This Note reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression
Chairman : The Rt Hon The Lord Garel-Jones
Managing Director, UBS Ltd. Formerly: Member of Parliament, Conservative, Watford (1979-97); Minister of State, Foreign and Commonwealth Office (1990-93).
Professor Monica Hirst
Professor, International Affairs Program, Universidad Torcuato Di Tella, Argentina. Formerly: Executive Director, Fundacíon Centro de Estudos Brasileiros, Buenos Aires, Argentina (1985-2005).
HE Mr José Bustani
Ambassador of Brazil to the United Kingdom (2003-); Brazilian Foreign Service (1965-). Formerly: Director-General, Organisation for Prohibition of Chemical Weapons (1997-2002); Director-General, Department for International Organisations (1993-97). A Governor, The Ditchley Foundation.
Mr Rodrigo Godinho
Second Secretary, Economic Section, Brazilian Embassy to the Court of St James.
Mr Raul Juste Lores
World Affairs Special Reporter, Folha de Sao Paulo (2006-). Formerly: Adviser to the Mayor of Sao Paulo.
Mr Cláudio Marinho
Secretary of State, Science, Technology and the Environment, Province of Pernambuco.
Professor Silvio Meira
Chief Scientist, Recife Centre for Advanced Studies and Systems; Professor of Software Engineering, Informatics Center, Federal University of Pernambuco, Recife; Chairman, PorotDigital Urban Technology Park, Recife.
Professor Paulo Nogueira-Batista Jr
Professor, Department of Economics, Getúlio Vargas Foundation, Sao Paulo (1989-); Economics Columnist, Floha de Sao Paulo (1995-). Formerly: Head, Center for Monetary and International Economic Studies, Getúlio Vargas Foundation, Rio de Janeiro (1986-89); Advisor to the Minister of Finance on External Debt, Ministry of Finance (1986-87).
Ambassador Antonio Patriota
Under-Secretary-General for Political Affairs, Ministry of External Relations (2005-). Formerly: Chief of Staff, Office of the Minister of External Relations (2004); Deputy Representative, World Trade Organization, Geneva (2001-2002); Political Counsellor, Brazilian Mission to the UN, New York (1994‑99); Deputy Diplomatic Advisor to the President of the Republic of Brazil (1992-94).
BRAZIL/UNITED STATES OF AMERICA
Mr Norman Gall
Executive Director, Fernand Braudel Institute of World Economics, Sao Paulo (1987-)
Mr Anthony Cooper
Vice-President and Regional Manager, Latin America, Europe and the Middle East, International Advisory Group, RBC Financial Group (2000-). Formerly: National Vice Chairman, The Canadian Council for the Americas (1990-98).
Mr Tiff Macklem
Deputy Governor, Bank of Canada (2004-). Formerly: Adviser to the Governor, Bank of Canada (2003‑04).
Mr Andrew Spence
Chief Economist and Director, Asset Mix and Risk, Ontario Teachers Plan (2004-). Formerly: Special Adviser to the Governor of Bank of Canada (2002-03).
Ms Annette Hester
Special Research Fellow, Centre for International Governance Innovation, Waterloo, Ontario. Formerly: Executive Director, Latin American Research Centre, University of Calgary.
Dr Jérôme Sgard
Senior Economist, Centre de’Etudes Prospectives et d’Information Internationales (CEPII). Formerly: Economist, The French Planning Agency (1991-93); Economist, Société Générale (1987-91).
Professor Alfredo Valladao
Professor, Institut d’Études Politiques de Paris; Director, Mercosur Chair; Coordinator, Working Group on EU-Mercosur Negotiations and the International Conference of Forte Copacabana on ‘Defense and Security European-South American Dialogue’.
Mr Victor do Prado
Deputy Head of Cabinet, Office of the Director-General, World Trade Organisation (2005-). Formerly: Counsellor, Rules Division, World Trade Organisation (2002-05); Head, Press Sector, Ministry of External Relations, Brazilian Embassy, Berlin (2001-02); Trade and Economic Assistant to the Minister of External Relations, Brasilia (1997-2001).
Professor Leslie Bethell
Director, Centre for Brazilian Studies, University of Oxford (1997-)
Sir Roger Bone KCMG
President, Boeing UK (2005-). Formerly: HM Diplomatic Service (1996-2004); Ambassador to Brazil (1999-2004); Chairman, Anglo-Latin American Foundation (2005-); Council Member, Brazilian Chamber of Commerce, UK (2005-); Trustee, Maria Nobrega Foundation (2005-).
Ms Christine Bradley
Senior Research Officer, Americas Research Group, Research Analysts, Foreign and Commonwealth Office, London (1996-)
Mr Peter Bunyard
Freelance Writer. Formerly: Co-Founder, The Ecologist.
Dr Peter Collecott CMG
HM Diplomatic Service (1977-); Ambassador to Brazil (2004-).
Sir Peter Heap KCMG
Chairman, Brazilian Chamber of Commerce in the UK. Formerly: Chairman, Brazil Britain Business Advisory Group (1998-2004); Member, Executive Committee of the Latin American Trade Advisory Group (1998-2001); HM Diplomatic Service (1959-1995); UK Ambassador to Brazil (1992-95).
Dr John Hemming CMG
Chairman, Hemming Group Ltd (1976-). Formerly: Director, Royal Geographical Society (1975-96).
Dr Andrew Hurrell
Director, Centre for International Studies, University of Oxford.
Dr Fiona Macaulay
Lecturer in Development Studies, Department of Peace Studies, University of Bradford. Formerly: Lecturer, Institute for the Study of the Americas, University of London.
Mr Andrew Mitchell
Executive Director, Global Canopy Programme (2001-); Research Associate, Department of Zoology, University of Oxford (2001-). Formerly: Rufford Fellow in Environmental Understanding, Green College, Oxford (2002-05); Vice President, Programme Development and International Relations, Earthwatch Institute, Boston, USA (1997-2001).
Viscount Montgomery of Alamein
Elected Hereditary Peer, Crossbench, House of Lords (2005-). Formerly: Chairman, Baring Puma Fund (1991-2002); President, Hispanic and Luso Brazilian Council (1987-94); Chairman, Brazilian Chamber of Commerce in GB (1980-82); Honorary Consul, Republic of El Salvador (1973-77).
Mr Hylton Murray-Philipson
Founder, Wingate Ventures (1991-); Trustee, Rainforest Concern; Trustee, Global Canopy Programme; Established, Morgan Grenfell, Brazil (1982).
Professor Sir Ghillean Prance FRS
Scientific Director, Eden Project (1999-). Formerly: Director, Royal Botanic Gardens, Kew (1988-99); Senior Vice-President for Science, The New York Botanical Garden (1981-88).
Mr Michael Reid
Americas Editor, The Economist (1999-). Formerly: Bureau Chief, Sao Paulo (1996-99).
Dr Celia Szusterman
Senior Lecturer in Spanish, University of Westminster (2001-). Formerly: Director, Argentine Studies Programme, Latin American Centre, University of Oxford (1999-2001).
Mr Volker Schultz
Vice-President, Portfolio, Refining and Marketing, BP.
Dr Mahrukh Doctor
Lecturer In Political Economy, Department of Politics and International Studies, University of Hull (2006-). Formerly: Lecturer in International Political Economy, University Reading (2003-05); Research Fellow, Centre for Brazilian Studies, University of Oxford (2000-03).
UNITED KINGDOM/UNITED STATES OF AMERICA
Ms Fields Wicker-Miurin
Co-Founder and Partner, Leaders’ Quest (2002-); Independent Member, Executive and Strategy Boards, Department of Trade and Industry; Chairman, Trade and Industry Investment Committee.
UNITED STATES OF AMERICA/ARGENTINA
Ms Ana Eiras
Senior Policy Analyst, International Economics, Center for International Trade and Economics, The Heritage Foundation (2003-)