The evolution of Brazil‟s role in Latin America:
An emerging power leading the region? (1992-2010)
Master thesis
International Relations and International Organization Rijksuniversiteit Groningen
Marlou Janssens
Student number: 1560468
2
Table of Contents
Introduction 4
1. Framework for the analysis 8
1.1 The notion of regional power 8
1.2 Analytical framework for the examination of Brazil‟s position in
Latin America 11
2. Brazil, a regional power by resources? 18
2.1 Economic & demographic resources 18
2.1.1 The roots of Brazil‟s economic strength and its economic relations
with the region 18
2.1.2 Recovery after the crisis-period and broadening of trade relations 21
2.1.3 Brazil‟s economic power in perspective 25
2.2 Political organizational power resources 27
2.3 Military resources 27
2.4 Conclusion 29
3. Brazil’s regional policy. Successfully striving for leadership? 31 3.1 Isolation on the continent and a slow warming of relations with neighbors 31 3.2 The position of South America in Cardoso‟s foreign policy 34
The first South American presidential summit 35
Regional crisis management 37
3.3 Lula‟s attitude toward the region: the project of regional integration 38
From Mercosur to the South American Community of Nations 39
Involvement in regional crises under Lula 45
The Bank of the South 46
Limitations to Brazil’s leadership project 47
3.4 Brazil‟s policy toward the region in international forums 50
3
WTO negotiations 53
3.5 Expressions of Brazilian diplomats on the leadership theme 55
3.6 Conclusion 57
4. Acceptance of Brazil’s leadership 61
4.1 Extra-regional acceptance of Brazil‟s leadership 61
4.2 Neighboring countries‟ perceptions and reactions in relation to
Brazilian leadership 63
4.2.1 Neighboring countries‟ acceptance of Brazilian leadership
on the global scene 64
Reform of the United Nations Security Council 64
WTO negotiations 65
UN Stabilization mission in Haiti 66
Brazil’s bid for top jobs in international organizations 67 4.2.2 Followership of neighboring countries in regional affairs 69
Mercosur and Unasur 69
Free Trade Area of the Americas 71
4.3 The position of secondary powers 74
4
Introduction
The global financial crisis dispelled all remaining doubts that existed about Brazil‟s economic performance.1 Brazil endured the crisis better than most other countries and the steady economic growth rate of about 5 percent since the 1990s persisted.2 However, Brazilian politicians were already aware of the enormous potential of their country early in the twentieth century. As a result, Brazil has long aspired an influential role in world affairs based on its belief that such a position would naturally result from its status as a „big country‟.3
In order to be accepted as a major power at the world stage, the backing of other Latin American countries was perceived to be a prerequisite. Therefore, when Fernando Henrique Cardoso came to define foreign policy in 1992, integration of the country with the region gradually gained importance. In 2003 Luiz Inacio „Lula‟ da Silva took over presidency and made relations with neighboring countries the priority of his foreign policy and took various measures to promote cooperation in the region like the initiative to establish the South American Community of Nations (SACN).
The end of the Lula administration presents a good opportunity to draw up the balance of the success of these efforts and analyze Brazil‟s position in the region. The position of Brazil in the world clearly has altered significantly over the last decades. Brazil is now widely recognized as a major power at the global level. As a result of the tremendous economic growth that has lifted large amounts of Brazilians out of poverty, the country is considered one of the emerging economies and has already achieved an influential role in various global organizations. Yet, its position in the Latin American region remains less clear. Theories on regional powers present a good framework to study the dynamics of economically or militarily dominant states in their regions. Next to countries such as India and South-Africa, Brazil is often included in the list of regional powers. Although the concept „regional power‟ is highly contested, in general these states are assumed to take a leading role in the region. Based on these theories, the expectation is that Brazil can now be considered the leader of Latin America. However, various
1Joshua Goodman „Brazil. The global power looking for a backyard‟ SAIS Review vol. 29, no. 2 (2009): 3. 2
Joseph S. Nye „What‟s in a BRIC? Not as much as many observers imagine‟ The Daily Star 14 May 2010.
5 events demonstrate that Brazilian leadership in Latin America is disputed. For example, Brazil's global goals could not always count on regional support. This became painfully visible when Brazil was unable to convince a majority of South American countries to support its candidacy for the new director-general of the WTO. The country experienced the same difficulties in its bid for a permanent seat in the UN Security Council.4 On the other hand, scholars that are more positive about Brazilian leadership emphasize for example its decisive role in the negotiations of the Free Trade Area of the Americas (FTAA).5
The inconsistent conclusions about Brazil‟s leadership in the region require further scrutiny. What are the characteristics of a regional leader and does Brazil meet these criteria? Brazil is often classified as a regional power, yet no thorough study underlies that assumption. As a result, this thesis addresses the following question: From
a theories of regional power’s perspective, to what extent has Brazil developed into a regional power (1992-2010)? Given the tremendous economic growth, the increased
global recognition of Brazil as a major power and the priority of Latin American integration in Brazilian foreign policy in this period, the hypothesis is that Brazil has to a large extent developed into a regional power.
The period under study is from 1992 until 2010 and covers both the Cardoso era (1992-2003) and the Lula presidency (2003-2010). Although Cardoso only became president in 1995, he already determined Brazilian foreign policy as a Minister of Foreign Affairs in 1992-1993. Therefore, the starting point of the analysis is 1992. From that moment on Brazil‟s relations with the region received a prominent place on the political agenda. The end of Lula‟s second term, in December 2010, presents an appropriate moment to evaluate the regional policy. The two presidential periods will be studied separately since Cardoso and Lula followed clearly distinctive foreign policy strategies and therefore it is interesting to see how these policies influenced Brazil‟s position and possibly changed it over time.
4
6 The thesis is structured as follows. The first chapter outlines the theoretical framework. It contains a discussion of relevant concepts such as leadership and regional power. A number of definitions of regional power are combined to construct an appropriate framework to analyze Brazil‟s position in the region. By combining these definitions, I formulate four criteria that help gauge a possible regional leadership. The first criterion is power over resources, analyzed in chapter two. In other words, the country must have the
potential to lead the region. Chapter three examines the second criterion, a claim for
leadership expressed by the state. That means a country needs to show willingness to lead the region. This chapter simultaneously analyzes the third criterion, influence over outcomes. On several occasions the leadership policy must lead to successful outcomes. The last chapter discusses the fourth criterion, that is acceptance of leadership by other states. A state cannot be classified as a regional leader without the recognition of its neighboring countries. The realization of the criteria and the further elaboration in the subsequent chapters is extensively explained in the first chapter. Thereafter, a conclusion follows in which the different indicators will be weighed and an answer is formulated to the question to what extent Brazil has developed a leadership position in the period 1992-2010. Moreover, in the conclusion the theory will be reviewed with the knowledge of the Brazilian case. The study is based on literature. Secondary literature, speeches and official documents from the government and international organizations are drawn upon for the analysis. In addition, statistics from organizations as the World Bank and the Economic Commission for Latin America and the Caribbean (ECLAC) will be used.
The thesis contributes to the academic debate in several ways. Although various scholars have touched upon the issue of Brazil's leadership in Latin America, no structural examination, based on theoretical findings, of the position in the region has taken place so far. This study aims to fill this gap by using an extensive framework and illuminating all aspects of a possible leadership position.
7 Indonesia, South Africa and Brazil. Goldman Sachs invented the BRIC acronym in 2001 to refer to Brazil, Russia, India and China as economies with profitable opportunities, the so called „emerging markets‟.6
Following initiatives such as the India-Brazil-South Africa policy dialogue have also contributed to the development of this field of study. The rise of regional powers has far-reaching consequences for political and economic relations in the world. Moreover, the way in which a state deals with regional affairs increasingly determines its global influence.7 This study contributes to the understanding of shifting power structures and the position of regional powers by examining the Brazilian case.
6 Jim O‟neill „Building better global economic BRICs‟ Goldman Sachs Economic Research Group global
economics paper no. 66 (30 November 2001).
8
1. Framework for the analysis
Various theoretical findings form the basis of the theoretical framework that guides the analysis in this thesis. This chapter discusses the concept of regional power, the most important theoretical findings in the debate and explains the construction of the theoretical framework.
1.1 The notion of regional power
The major rise of regional powers like India, China, South-Africa and Brazil, especially as a result of the end of bipolarity after the Cold War, has triggered a scholarly debate on the dynamics of these states. In spite of the increased interest in the role of regions and regional powers, efforts to construct instruments for the analysis of regional powers have been scarce and the notion of regional power remains highly contested.8 Notwithstanding the disagreements, a regional power is generally viewed as a leading state with a large influence on the integration process in the region.9
A number of scholars lead the debate on regional powers. In 1992 Øyvind Østerud made a first effort to conceptualize what he then called „regional great powers‟.10 He articulated four characteristics of these states, namely:
They are geographically part of a delineated region
They are able to stand up against any coalition of other states in the region
They are highly influential in regional affairs
They might, contrary to a middle power, also be a great power on the world scale in addition to its regional standing.
Another important scholar in the debate is Schoeman.11 In 2003 he named the following criteria for a regional power:
8 Daniel Flemes „Brazil‟s Strategic Options in a Multiregional World Order.‟ Paper presented at the
Conference ‘Ideas, Interests, Resources and Strategies of Regional Powers – Analytical Concepts in Comparative Perspective’, German Institute of Global and Area Studies, Hamburg, September 2008: 2.
9 Javier Vadell and Bárbara Lamas „The Brazilian leadership and the concentric circles of integration process. From South America to Latin America‟ Prepared for delivery at the 2010 Congress of the Latin
American Studies Association, Toronto, Canada, October 6-9, 2010: 5.
9
The internal dynamics should allow the state to play an influential role in the region.
The state should show willingness to lead the region.
The state should possess the capacity to assume the role of regional leader.
Acceptance of the regional power‟s leadership by other states is required. A third scholar, Stefan Schirm, proposed similar conditions12:
A claim for leadership
The potential to lead the region
Undertake activities to effectively lead the region
Acceptance of the leadership role by other states in the region and outside of the region
Influence over outcomes
Recently, a few other scholars, such as Detlef Nolte and Daniel Flemes, have formulated conceptualizations of regional powers, yet did not add new criteria and their variables always have their origin in the previous three definitions.13 Moreover, especially Nolte‟s framework is very detailed and he has subdivided the characteristics into ten variables that at times overlap and are too specific to be applicable in every case. As a result the framework does not offer a useful tool to study regional powers. Nevertheless, Nolte was the first who attempted to develop the accompanying indicators. Therefore, I will make use of Nolte‟s indicators when applicable to my framework and complement it with other theoretical findings.
Comparing these different efforts to conceptualize regional powers, it becomes clear that a few variables reappear in most definitions, even though in slightly different designations and descriptions. These variables are:
11 Maxi Schoeman „South Africa as an Emerging Middle Power: 1994-2003‟, in: Daniel, John/ Habib, Adam/Southall, Roger (eds.): State of the Nation: South Africa 2003-2004, (Cape Town 2003): 349-367 12 Stefan Schirm „Führungsindikatoren und Erklärungsvariablen für die neue internationale Politik Brasiliens‟ Lateinamerika Analysen no. 11 (2005): 107-130.
13
Detlef Nolte „How to compare regional powers. Analytical concepts and research topics‟ Review of
International Studies vol. 36 no. 4 (2010) and Daniel Flemes „Conceptualising regional power in
international relations. Lessons from the South African case‟ GIGA German institute of global and area
10
Power over resources (Østerud: able to stand up against any coalition of other states in the region, Schoeman: the internal dynamics should allow the state to play an influential role in the region & The state should possess the capacity to assume the role of regional leader, Schirm: The potential to lead the region)
A claim for leadership (Schoeman: The state should show willingness to lead the region, Schirm: A claim for leadership)
Influence over outcomes (Østerud: highly influential in regional affairs, Schirm:
Influence over outcomes)
Other states‟ acceptance of the leadership role (Schoeman: Acceptance of the regional power‟s leadership by other states is required, Schirm: Acceptance of the leadership role by other states in the region and outside of the region)
The four variables thus encompass the most important findings of the theoretical debate and therefore will form the basis of the analysis. With the selection of these four variables, I do not explicitly mention the condition that a state needs to be part of a clearly defined region to be classified as a regional power, which is mentioned by Østerud as a prerequisite for a regional power and later reproduced by Nolte is his framework. Since the goal of this study is to establish Brazil‟s leadership role in the region, the analysis follows the line of demarcation of the region that Brazil uses in its regional policy.
Furthermore, theories that are constructed to define regions not only deal with geographical demarcation. Theories of International Relations increasingly stress the importance of intraregional interaction to demarcate a region.14 In other words, a region is constructed from within, from a common sense of regionness among the countries.15 Although I will not exactly delimit the region, I do argue that it is important for the analysis to take a look at Brazil‟s economic interconnectedness with the region. Interconnectedness can be seen as a resource for Brazil. Just like a high GDP per capita ratio can be used to pursue a leadership strategy, interconnectedness, for instance dependency of neighboring countries on the Brazilian market likewise can be used as a
14
Barry Buzan „The Asia-Pacific: What sort of region in what sort of world?‟, in McGrew, Anthony/ Brook, Christopher (eds.): Asia-Pacific in the new world order (London 1998): 68-87.
11 tool in striving for a leadership position. Therefore, regional interconnectedness will be analyzed in the chapter on „power over resources‟.
1.2 Analytical framework for the examination of Brazil’s position in Latin America
Most theories on regional powers do not distinguish between different types of leadership. Nevertheless, I argue that different strategies make different regional powers and consequently require dissimilar frameworks to establish the extent to which these states have succeeded in their leadership project. The thesis is based on the assumption that Brazil is a consensual power rather than a coercive power, which is mainly derived from two findings. Firstly, the academic literature shows that most regional powers pursue a strategy of cooperation and follow a multilateral approach in which international institutions play an important role.16 A theory that is often associated with regional powers is Pedersen‟s co-operative hegemony. It stresses the importance of regional institutions for regional powers to exert their power. The level of regional influence depends on the leader‟s ability to determine the cooperation agenda.17
Pedersen‟s theory of cooperative hegemony is in contrast with traditional scholarly thinking about power politics that in general emphasize coercion as a tool to exercise leadership. Secondly, studies of the foreign policy agenda of Brazil under both Cardoso and Lula show that the plans of integration within the region were supposed to be achieved through cooperation rather than coercion. For example, Sean W. Burges, a scholar who did extensive research on Brazil‟s relation with countries in the region, concludes that Brazil‟s foreign policy was based on consensus seeking.18 Therefore, the analysis is based on the assumption that Brazil is a consensual power.
The assumption that Brazil is a consensual power has consequences for the focus of the analysis, which will be on diplomacy rather than power politics. If a leadership claim exists, it will be of a consensual nature. Likewise, a potential leadership role will be exercised in a consensual way. That is to say, a consensual power leads the region by
16 Detlef Nolte „How to compare regional powers. Analytical concepts and research topics‟ Review of
International Studies vol. 36 no. 4 (2010): 12.
17
Daniel Flemes „Conceptualising regional power in international relations. Lessons from the South African case‟ GIGA German institute of global and area studies working papers no. 53 (June 2007): 15. 18 Sean W. Burges „Consensual hegemony. Theorizing Brazilian Foreign Policy after the Cold War‟
12 proposing ideas, leading the discussion and always seeking consensus.19 So, in order to gauge the country‟s influence in the region, its influence in cooperation processes will be examined. Furthermore, acceptance of the leadership by other states is a very important, though not always necessary, precondition for the attainment of consensus.
Taking a look at major occasions that played a role in regional politics over the last two decades, it becomes clear that military issues hardly played a role and that most topics were of an economic nature. Consequently, the analysis for the most part consists of economic matters.
As noted, the four variables that are subsequently dealt with in separate chapters are: (1) power over resources (2) leadership claim (3) influence over outcomes and (4) acceptance. How do we examine whether a state fulfills these criteria? In other words, what do these criteria exactly imply? The indicators used in this thesis to assess the four variables are based on the framework that Nolte constructed, on the findings of Burges on Brazil‟s strategy and on additional factors that are often named by scholars as signs of regional leadership.
The first condition for a regional power is a relative sufficiency of resources, put differently „power over resources‟. As argued before, next to the possession of economic, political-organizational and military resources, this also includes economic interconnectedness with the region. Since relationships with other countries in the region are primarily economically oriented, the emphasis is on economic resources (GDP, GDP per capita and R&D as % of GDP) and economic interconnectedness (trade and investment flows). However, demographic power resources (population) and political-organizational resources (stability of political institutions) are also dealt with as these are generally understood as conditions for a regional power. Military resources have long been insignificant in the region as territorial disputes were settled early. However, internal conflicts have occurred, for instance in Venezuela and Colombia, and threaten the stability in the region. Therefore, the leading regional state should be able to intervene to be a credible regional power. Moreover, the participation in international military missions adds to the regional power‟s international standing. As a result, military power
13 resources (the size and strength of the armed forces, equipment and participation in international military missions in the region and the rest of the world) gain importance in the region and will also shortly be assessed.20
The second criterion, a leadership claim, is named by both Schoeman and Schirm as a condition. Although neither of them explicitly specifies what a leadership claim entails, some observations can be deduced from their explanations. Schoeman states that a state should „indicate and demonstrate its willingness… to assume the role of regional leader‟.21
Schirm‟s condition requires that the state who desires international influence formulates this claim both to himself and to other actors.22 Schoeman‟s definition suggests that a country can show its willingness by certain actions, for instance by adopting a foreign policy that focuses on leading the region or by simply assuming the role of regional leader in both regional and world affairs. The definition of Schirm more specifically asks for an articulated claim, which presumes that politicians literally claim a leadership role, in speeches or in official documents. In this thesis I combine the two interpretations and thus take a look at the foreign policy toward the region, can a leadership strategy be found? Simultaneously, I examine official documents and speeches to see whether Brazilian politicians have explicitly claimed a leadership role. Chapter three therefore examines Brazil‟s regional policy and analyzes whether its attitude toward the region shows a leadership claim. This analysis focuses on Brazil‟s actions in the most important occurrences in regional affairs under Cardoso‟s and Lula‟s presidency and in the most significant negotiations in the international context, since a claim for regional leadership is generally understood to be made in both a regional and global context. In addition, this chapter analyzes official documents and speeches of Brazilian diplomats to see whether and how they expressed themselves regarding a potential leadership role.
The chapter on a leadership claim simultaneously deals with the third variable influence over outcomes. A few indicators are established that gauge the country‟s influence in regional affairs. On the basis of the assumption that cooperative mechanisms and economic initiatives are most important in Brazil‟s foreign policy, the focus is on
20 Indicators to measure these variables come from the framework that Nolte constructed, as he gives a complete overview of the relevant resources, based on common understandings in the literature. 21 Maxi Schoeman „South Africa as an Emerging Middle Power: 1994-2003‟: 353.
14 influence through regional institutions and on economic affairs. In order to determine Brazil‟s influence, the central query is the extent to which the country is successful in its strategy of consensus creation, that is to what extent it persuades other states into its projects and ideas. This sort of influence is visible in the acceptance of ideas proposed by the regional power and thus its leading of the discussions.23 Another way is its role in determining the cooperation agenda.24 With regard to regional organizations, the presence of the regional power‟s discourse in regional charters also point to its successful pressure. More generally, of importance is the regional power‟s role in the determination of the shape, both scope and content, of regional organizations. Obviously, it is sometimes hard to determine the extent to which Brazil brought about certain outcomes and to what extent outcomes were the result of other factors. For instance, neighboring countries may already have the same interest as Brazil and therefore „follow‟ its lead. Nonetheless, as influence over outcomes is an indispensable condition to gauge the country‟s possible leadership role, this uncertainty and the subsequent limitations of the analysis will be taken into account when analyzing influence over outcomes.
Lastly, a dominant state requires acceptance by other states, both inside and outside of the region, to gain the status of regional power. This condition is based on the constructivist view that power hierarchies are based on shared understandings.25 Moreover, leaders need followers to be able to exercise influence. The acceptance by the secondary powers in the region is generally understood to be of special importance. As a result of their political, economic or military strength these states have influence over regional affairs and the regional powers need to take their opinions into account before taking diplomatic actions.26 This analysis therefore focuses on Venezuela, Chile and Argentina as these states are generally seen as the most important and influential in the region, next to Brazil. Acceptation can be deduced from their reactions to major incidents
23 Burges „Consensual hegemony. Theorizing Brazilian Foreign Policy after the Cold War‟: 77. 24 Daniel Flemes „Brazil‟s Strategic Options in a Multiregional World Order.‟ Paper presented at the
Conference ‘Ideas, Interests, Resources and Strategies of Regional Powers – Analytical Concepts in Comparative Perspective’, German Institute of Global and Area Studies, Hamburg, September 2008: 14.
25 Andrew Hurrell „Some Reflections on the Role of Intermediate Powers in International Institutions‟, in: Andrew Hurrell et al (eds.): Paths to Power: Foreign Policy Strategies of Intermediate States, Latin American Program, Woodrow Wilson International Centre, Working Paper no. 244 (Washington D.C. 2000): 23-41.
15 where Brazil acted as a leader. Presidential speeches and official documents also serve as a source for acceptance. Moreover, a more indirect way for neighboring countries to express acceptance is by supporting Brazil‟s international goals. Therefore, I also examine the most important global ambitions that Brazil has tried to achieve, like the reforming of the United Nations Security Council (UNSC) and obtaining a permanent seat therein and its aspiration to fill the position of director-general of the World Trade Organization (WTO). Acceptance of the regional leadership position by countries outside the region is needed to be able to fulfill the role as representative of the region in negotiations on the global scene. In addition, acceptance by other regional powers is important to be able to build coalitions and gain power at the global scene.
Schematically the analysis is structured as follows:
Chapter Variable Indicators
2 Power over resources
Demographic resources
Economic resources & interconnectedness
Political organizational power resources
Military resources
population
GDP, GDP per capita, R&D as % of GDP
trade statistics and investment flows
stability of political institutions
size and strength of the armed forces, equipment and participation in international military missions in the region and the rest of the world
3 Claim for leadership leadership strategy in regional affairs
16
a leadership claim in speeches and official documents
Influence over outcomes Influence in regional organizations and negotiating processes (South American presidential summits, Mercosur & Unasur, regional crisis management, the Bank of the South, FTAA and WTO
negotiations)
determining the cooperation agenda and initiating negotiations
influence over decisions: adoption of Brazilian proposals in negotiations, guiding of the discussions
determining the shape of regional organizations: inclusion/exclusion of members, Brazilian discourse in regional charters
4 Acceptance of leadership Acceptance of Brazilian leadership inside and outside of the region
explicit recognition by other states: official documents, speeches, reactions, setting up of contra claims for leadership etc.
support of neighboring countries to the international goals of Brazil (UNSC reform, WTO negotiations, UN mission Haiti, candidacy for the Inter-American development bank and WTO*)
acceptance of neighboring countries in regional affairs
Sources: Detlef Nolte „How to compare regional powers. Analytical concepts and research topics‟
Review of International Studies vol. 36 no. 4 (2010): 16 and 17, Stefan A. Schirm,
17 Lateinamerika Analysen no. 11, (2005): 107-130, Daniel Flemes „Conceptualising regional power
in international relations. Lessons from the South African case‟ GIGA German institute of global
and area studies Working papers no. 53 (June 2007).
*1 These negotiations and regional organizations are the most important ones in Brazilian regional policy in the period 1992-2010.
18
2. Brazil, a regional power by resources?
This chapter assesses Brazil‟s resources and thus its potential to be a regional power. As stated before, as a result of the absence of interstate conflict in the region, Brazil‟s foreign policy toward the region mainly focuses on economic relations. Consequently, this chapter prioritizes economic resources, particularly Brazil‟s economic position relative to other Latin American countries.27 Nevertheless, also demographic, political organizational and military resources will be dealt with. As the analysis in this thesis covers the period 1992-2010, this chapter likewise studies the development of Brazil‟s resources over that period.
2.1 Economic & demographic resources
Both in terms of territory and population Brazil has an enormous supremacy on the continent. Brazil is the fifth largest country in the world and its territory covers more than half of South America.28 According to data of the World Trade Organization, Brazil‟s population counted 154.582.103 in 1992 and 194.946.470 in 2010.29 Comparing these numbers with the South American total, it can be concluded that over the entire period of study, more than half of the population on the South-American continent lived in Brazil. Comparing these numbers with the wider region of Latin America and the Caribbean, Brazil‟s territory and population correspond to over a third of the Latin American total.30
2.1.1 The roots of Brazil’s economic strength and its economic relations with the region
Just like its population, Brazil‟s economy in 2010 represents over 50% of South American total GDP and over a third of Latin American GDP.31 Brazil‟s economic strength is the result of decades of high growth rates and particularly sound
27 Robert Kappel „On the economics of regional powers. Comparing China, India, Brazil and South Africa‟ GIGA German institute of global and area studies working papers no. 145 (September 2010): 7.
28 Matias Spektor „Brazil. The underlying Ideas of Regional Policies‟ in Daniel Flemes (ed.), „Regional Leadership in the Global System. Ideas, Interests and Strategies of Regional Powers‟ (Aldershot: Ashgate 2010): 192.
29 World Development Indicators (World Bank, accessed at April 26, 2011).
19 macroeconomic policies over the last 15 years.32 Especially between 1930 and 1980 Brazil‟s growth rates were exceptionally high in a range of 6% to 10% and as such were amongst the highest in the world. In these decades Brazil‟s trade policy was guided by the import-substitution and industrialization strategy (ISI).33 After this period of continuously high growth rates, the foreign debt crisis of the mid-80s and the second oil shock in 1979-1980 strongly affected the economy. As a result, growth rates reverted to a 2% to 3% range. The disappointing economic performance and ongoing macroeconomic crisis in the 1980s made politicians lose confidence in the state directed policy and eventually led to a shift in economic policy.34 At the beginning of the 1990s Brazil radically liberalized its economy.35 A neo-liberal approach replaced the inward-oriented ISI strategy.36 Guided by this new strategy, that became known as „open regionalism‟, Brazil opened its market to the world and shifted to a market-led strategy.37 The liberalization process in Brazil was part of a wider trend in Latin America in which various countries opened up their economies.38
Until the 1990s Brazil‟s economic interconnectedness with the region was of marginal importance. South America only played a minor role in Brazil‟s external trade relations.39 However, the strategy of „open regionalism‟ and liberalization in the region cleared the way for closer economic cooperation and the establishment of the Mercosur pact in 1991. The free trade area between Brazil, Argentina, Paraguay and Uruguay significantly affected intra-regional trade. In particular during the first half of the 1990s
32
Paulo Sotero „Brazil‟s Rising Ambition in a Shifting Global Balance of Power‟ Politics vol. 30 (2010): 72.
33 Lael Brainard and Leonardo Martinez-Diaz ed. „Brazil as an economic superpower? Understanding Brazil‟s changing role in the global economy‟ (Washington 2009): 196.
34 Juan Blyde, Armando Castelar Pinheiro, Chritian Daude, Eduardo Fernández-Arias „Competitiveness and growth in Brazil‟ Inter-American Development Bank (March 2010): 2.
35 Pedro da Motta Veiga „Brazil‟s Trade Policy. Moving Away from Old Paradigms?‟ in Lael Brainard and Leonardo Martinez-Diaz ed. „Brazil as an economic superpower? Understanding Brazil‟s changing role in the global economy (Washington 2009): 113.
36 Christensen, Steen Fryba. „South American Regional Integration in Brazil‟s Development Strategy‟ in: Steen Fryba Christensen, Vibeke Andersson ed., Proceedings from the conference. New Latin American development strategies in a changing international economic and political context Research Center on
Development and International Relations (DIR), Development Research Series, Occasional paper no. 7
(Aalborg University, 2008): 120.
37 Da Motta Veiga „Brazil‟s Trade Policy. Moving Away from Old Paradigms?‟: 117. 38
Andy Klom „Mercosur and Brazil. A European perspective‟ International Affairs vol. 79, no. 2 (2003): 354.
39 Wilhelm Hofmeister „Brasil y sus vecinos. En búsqueda del liderazgo regional en américa del sur‟
20 Mercosur got ahead and economic interdependence in the region increased expressively. Trade between the member countries increased from US$ 4,127 million in 1990 to US$ 20,584 million in 1997.40 As a result, Brazil‟s economy in this period increasingly got interconnected with the economies of Argentina, Uruguay and Paraguay which increased Brazil‟s power position. The new strategy of market-led policies and outward focus resulted in an immense increase in export and FDI in the 1990s in Brazil.41
However, the success of the „open regionalism‟ and consequent increasing trade between the members of Mercosur was severely interrupted at the end of the 1990s when a series of financial crises hit the region. These crises were caused by several factors, yet the most important were the growing trade deficits and high current account deficits. The member countries all reacted with measures to protect their national interests. In January 1999 Brazil decided to devaluate its Real in response to the problems provoked by external vulnerability. The devaluation turned out well for Brazil, yet in turn led to frictions with the other Mercosur countries that felt badly done by Brazil‟s unilateral action.42 Between 1998 and 2002 intra-Mercosur trade reduced significantly as a result of the various crises in the member countries and the devaluation of the Real.43 Intra-regional trade fell from US$ 20.322 billion in 1998 to US$ 15.162 billion in 1999 and further decreased to US$ 10.197 billion in 2002, the lowest point since 1993.44
In particular, Argentina, Paraguay and Uruguay were affected by the decreased intra-regional trade as a result of their dependency on the Brazilian market. Especially Brazil‟s trade relations with neighboring country Argentina deteriorated. The devaluation of the Real provoked several trade conflicts between the neighboring countries in the 1999-2001 period and negatively affected trade in both directions, that is to say exports from and to Brazil. Argentina‟s exports to Brazil dropped by nearly 30% in 1999 in comparison to 1998 and in 2002 Brazil exported only 3.6% to Argentina, whereas in
40 Christensen „South American Regional Integration in Brazil‟s Development Strategy‟: 120. 41
Christensen „South American Regional Integration in Brazil‟s Development Strategy‟: 119. Although disagreement exists among scholars about the exact influence of the liberalization process on the Brazilian economy, most scholars agree that it led to a huge increase in export and FDI numbers.
42
21 2000 11.31% of its exports went to Argentina.45 The decrease of Brazilian exports to Argentina was the result of retaliatory action that Argentina took and more importantly, the bankruptcy of its economy in 2001. As a result, Argentinean imports decreased drastically. Simultaneously, Brazil‟s exports to the other member countries also reduced sharply. In 1998, 17.3% of total Brazilian exports went to Mercosur countries, in 2002 that percentage had fallen to 5.76. South America as a whole had reached a share of 21,8% of Brazilian exports by 1998, yet as a result of the crisis this percentage also declined to 13% in 2003.46
Simultaneously, the Real devaluation and subsequent improved international competitiveness enabled Brazil to diversify its export markets across Africa, Asia, Latin America and the Middle East and reduce its dependence on developed countries.47 As a consequence of this combination of the devaluation of the Real and the increasingly diversifying economy, Brazil was the only Mercosur country that did not experience an economic decline. In contrast to its neighbors, Brazil‟s economy continued to grow.48
Thanks to the liberalization process and in spite of the crises, Brazil was thus economically superior to the countries in the region and also got increasingly interconnected especially with the Mercosur member countries, yet also with the world in general. The impact of the economic crises in the neighboring countries proved their increased dependency on Brazil‟s economy.
2.1.2 Recovery after the crisis-period and broadening of trade relations
Relations between the two neighboring countries started to ameliorate again when Eduardo Duhalde took office in Argentina and rapprochement with its neighbor gained an important place on the country‟s foreign policy agenda.49
This reinforcement of trade relations manifested in a general increase of intra-Mercosur trade. Between 2002 and 2005 trade between the Mercosur countries more than doubled. Obviously it should be
45 Klom „Mercosur and Brazil. A European perspective‟: 366. 46
Wilhelm Hofmeister „Brazil‟s approach to regional politics. Constructing a new CASA or just another castle in the air for South American integration?‟ Conference Paper GIGA Conference ‘Regional Powers in
Asia, Africa, Latin America, the Near and Middle East (Hamburg, December 2006): 13.
47
Christensen „South American Regional Integration in Brazil‟s Development Strategy‟: 127 and Da Motta Veiga „Brazil‟s Trade Policy. Moving Away from Old Paradigms?‟: 125.
48 Klom „Mercosur and Brazil. A European perspective‟: 366 and 367.
22 remembered that intra-Mercosur trade had decreased sharply from 1998 on and the increase of trade numbers were merely a recovery of anterior levels. By 2005 the pre-crisis levels of intra-Mercosur exports had been recovered. Likewise, the intra-Mercosur exports made up an increasingly large part of total Mercosur exports. Although these numbers say something about interconnectedness in the region, it does not yet become clear what Brazil‟s role was in trade within Mercosur. It is important to note that in general Brazil and Argentina have significant trade surpluses, while Uruguay and Paraguay have trade deficits. However, with regard to intra-Mercosur trade Brazil is the only country with a trade surplus. Brazil‟s preferential position also becomes clear when looking at the importance of exports to Mercosur for the four member countries. In 2006 Brazil exported just over 10% of its total exports to Mercosur, Argentina exported roughly 19,5%, Uruguay nearly 25% and in Paraguay around 48% of total exports went to Mercosur. These ratios show the unevenness of interdependence between the countries. For Brazil the exports to Mercosur are considerably less important than the exports are for the other three members which gives Brazil a powerful position in the region. Moreover, before the crises, 17,3% of Brazilian exports were destined for Mercosur markets, while in 2006 that percentage had thus fallen to 10%.50 In real numbers Brazil‟s trade relations with Argentina and the other Mercosur countries improved though after the crisis period. Furthermore, Brazil‟s exports in general increased significantly after 2002. Total exports grew from US$ 66 billion in mid-2003 to US$ 169 billion in mid-2010 and thus almost tripled.51
Although Mercosur as an export market for Brazil never regained its pre-crisis position, the relative importance of the region as a whole as an export market for Brazil has increased since Lula took office in 2003. After the crisis period, exports to South America increased faster than to other parts of the world and in 2006 Brazil‟s export levels to South America as a whole exceeded those to the United States.52 This is also the result of the general policy to diversify export markets and decrease the country‟s dependence on developed countries. In 2007 already 55% of Brazil‟s exports went to the
50
Christensen „South American Regional Integration. Two Moments in Mercosur‟s Integration Trajectory‟: 20.
51 Sotero „Brazil‟s Rising Ambition in a Shifting Global Balance of Power‟: 72.
23 developing countries and this illustrated its strategy to trade „horizontally‟, that is to say with other developing countries in South America and the rest of the world.53 Moreover, the South American market is of special importance to Brazil since the country primarily imports raw materials from the region while exporting processed products. For a long time, Brazil depended greatly on the energy supplies of mainly its neighbors Venezuela and Bolivia. However, the discovery of huge offshore oil fields in 2007 turned Brazil into a net exporter in 2011 and took away Brazil‟s dependency on its neighbors.54
In the period after the crises, the rest of Latin America and the Caribbean became even more important to Brazil than the Mercosur countries. In 2006, 22.8% of Brazil‟s total exports went to the countries of the Latin American Integration Association (LAIA consists of all members of Mercosur and the Andes Community, Cuba, Chile and Mexico). That number consists of 10.1% exports that went to Mercosur members and 12,7% that was exported to the other LAIA members. As such, LAIA is Brazil‟s largest export market and it received more Brazilian exports than both the EU and the United States.55 Just as with the Mercosur countries, Brazil had a trade surplus with the Andean countries in the Andes Community (Ecuador, Peru, Venezuela, Bolivia, Colombia). Brazil‟s export surplus with these countries increased dramatically between 1999 and 2005.56
Another illustration of Brazil‟s increased economic interconnectedness with the world and in particular its own region is the increase of inward and outward foreign direct investment (FDI) in the last decade.57 Outward FDI flows increased from US$ 12,937 million in 2002 to US$ 45,151 million in 2007.58 Especially since 2004 Brazilian companies increasingly invested abroad. The South American region received a large part of Brazilian FDI, yet Brazilian FDI also went to Europe, China, and North America.59 Already in 2005, more than 40% of the largest firms in South America were from
53 Christensen „South American Regional Integration in Brazil‟s Development Strategy‟: 126, 127 and 128. 54 Hofmeister „Brazil‟s approach to regional politics‟: 13.
55
Christensen „South American Regional Integration. Two Moments in Mercosur‟s Integration Trajectory‟: 20.
56 Christensen „South American Regional Integration in Brazil‟s Development Strategy‟: 129. 57
Da Motta Veiga „Brazil‟s Trade Policy. Moving Away from Old Paradigms?‟: 124.
58 Brainard and Martinez-Diaz ed. „Brazil as an economic superpower? Understanding Brazil‟s changing role in the global economy‟: 191.
24 Brazil.60 In 2006 outward FDI for the first time even exceeded inward FDI.61 Also within Mercosur Brazil‟s investments strongly gained importance. For instance, Brazil‟s investments in Argentina in the period from 2002 to mid-2007 almost multiplied by four compared to the investment levels in the 1990s. Brazilian companies also strongly invested in Uruguay, while Paraguay remained less important. In spite of Brazil‟s success in attracting FDI from countries around the world, FDI in Brazil that originates from Mercosur countries is still negligible.62
Although theory suggests that increased economic interconnectedness with the region potentially strengthens a regional power‟s leadership, the reality shows that Brazil‟s interconnectedness with the region not only adds to its leadership capacity, it also undermines it. The immense increase of Brazilian outward FDI means an enlarged presence of Brazilian firms and investments in the region. This has caused tensions in the region and feelings of suppression and neo-imperialism and consequently undermines Brazil‟s leadership position.63
The same holds for the unevenness of Brazil‟s trade relations with neighboring countries. The analysis makes clear that in the region, other countries are economically more dependent on Brazil than vice versa. The asymmetry is reflected in Brazil‟s trade surpluses with most countries in the region, yet also in the composition of exports. Brazil mostly exports manufactured goods to the region, while the imports are predominantly natural resource based.64 These characteristics of trade relations in the region make Brazil a powerful country in the region. However, this unevenness also causes frustration and even opposition in the countries in the region as they see the asymmetries as a sign of domination and unequal distribution of the advantages of trade in the region.65
60 Brainard and Martinez-Diaz ed. „Brazil as an economic superpower? Understanding Brazil‟s changing role in the global economy‟: 173.
61 Brainard and Martinez-Diaz ed. „Brazil as an economic superpower? Understanding Brazil‟s changing role in the global economy‟: 177.
62
Christensen „South American Regional Integration in Brazil‟s Development Strategy‟: 129. 63 Goodman „Brazil. The global power looking for a backyard‟: 8.
25
2.1.3 Brazil’s economic power in perspective
In terms of economic size, Brazil clearly possesses the resources to be a regional power. The huge increase of Brazil‟s trade numbers coincided with a strong growth of its economy. The global financial crisis in 2009 once more confirmed Brazil‟s economic strength. The crisis clearly caused less damage to Brazil‟s economy than it did to most other countries in the world. Another sign of the immense economic growth the country experienced is that prior to the crisis, Brazil was a net debtor to the International Monetary Fund. In 2009 the country became a net creditor.66 Furthermore, the discovery of the oil fields in 2007 which can make the country one of the biggest oil exporters in the world boosted confidence in the country‟s economic strength.67
In terms of R&D as percentage of GDP, Brazil also is the largest on the continent. Although Brazil‟s R&D as a percentage of GDP with an average of 1% over the last ten years is relatively low compared to the OECD world, in the region Brazil is responsible for about half of the total estimated R&D expenditures.68
Nevertheless, there are also limitations. Despite the size of Brazil‟s economy, its growth rates are limited. Between 1980 and 2000 the average GDP growth in Brazil was below the Latin American average.69 From 2000 to 2006 Brazil‟s GDP growth was just over 3 percent, while the economies of several of its neighbors such as Chile and since 2004 Argentina, grew more rapidly.70 The growth rate of 2,8% in 2006 was not only lower than that of its neighbors, yet the other BRIC economies also performed better.71 Various scholars argue that these disappointing growth rates result from the incomplete liberalization. The first half of the 1990s showed an impressive and promising liberalization process. However, a small reversion took place thereafter and protection levels are now still relatively high. It is argued that economic growth could be much higher when more tariffs and protection measures would be abandoned.72 However, as
66 Goodman „Brazil. The global power looking for a backyard‟: 3.
67 Sotero „Brazil‟s Rising Ambition in a Shifting Global Balance of Power‟: 72.
68 Kappel „On the economics of regional powers. Comparing China, India, Brazil and South Africa‟: 22. 69
Kappel „On the economics of regional powers. Comparing China, India, Brazil and South Africa‟: 19. 70 Paulo Sotero and Leslie Elliott Armijo „Brazil. To be or not to be a BRIC?‟ Asian perspective vol. 31, no. 4 (2007): 47.
71
Susanne Gratius „Brazil in the Americas. A regional peace broker?‟ Fundación para las Relaciones
Internacionales y el Diálogo Exterior (FRIDE) Working Paper no. 35 (April 2007): 9.
26 other scholars rightly argue, Brazil‟s economy is still almost two times the size of Mexico‟s economy, the second economy in the region. Moreover, as the prominent economist Antonio Barros de Castro argues, the comparison with other BRIC countries is not totally appropriate since in Brazil the transition from a primary to an industrialized economy was completed in 1980, much earlier than the other BRICs.73
Another limitation to Brazil‟s potential is its social performance. Until 2003 Brazil was the most unequal country in the Americas in terms of income and land distribution. Ever since Cardoso took office more means were employed to combat inequality and those policies were strengthened under Lula‟s administration. Although the country has made progress, it still has a very high level of income inequality. Moreover, the money that the state spends on the promotion of equality, restricts the amount of resources available for foreign policy and makes Brazil unable to pay the financial costs of regional leadership. In addition, the poverty level of 36,5% of the population makes it impossible for Brazil to be a model of development for countries in the region and to guide other countries in the region in their strategies to confront the main causes of state fragility in Latin America: poverty and social exclusion.74 On the other hand, because of the success of this social policy so far, there are now an additional tens of millions of Brazilians who share in the benefits of the growing economy and join an expanding domestic market. This improvement strengthens Brazil‟s economy.75
Further, Brazil is the largest economy of the continent, yet not the richest. In terms of GDP per capita and human development, neighboring countries such as Chile, Uruguay and Argentina perform much better. Over the period 1990-2008 the growth rate per capita in Brazil was 1,17%, while the Latin American average was 1,74%.76 That makes it almost impossible for Brazil to bear the costs of a regional leadership since it would be hard to sell to its inhabitants that they would have to pay for a regional project that benefits richer neighbors. Nevertheless, since Brazil can be characterized as a soft power striving for consensus, this does not necessarily undermine its potential as a regional leader. In other words, although Brazil is the largest economic power in the
73
Sotero and Armijo „Brazil. To be or not to be a BRIC?‟: 47.
74 Gratius „Brazil in the Americas. A regional peace broker?‟: 9 and 10.
75 Sotero „Brazil‟s Rising Ambition in a Shifting Global Balance of Power‟: 68 and 73.
27 region, the social inequality prevents it from being able to employ financial means for the benefit of the regional project. Nevertheless, since Brazil is a consensual power, it is questionable to what extent it needs to „buy‟ its way to regional leadership as it focuses on the creation of consensus by proposing ideas and guiding the discussions.77
2.2 Political organizational power resources
In 1985 Brazil left behind its military dictatorship and became one of the largest democracies in the world. In contrast to many of its neighbors, Brazil has not faced political institutional crises ever since and that makes it one of the most stable countries in the region.78 Brazil‟s political institutions are stable and democracy strengthens in the country.79 The stability of the country‟s democracy can be explained by a number of factors and is especially the result of Brazil‟s political system. Firstly, the country‟s federal system provides for much negotiation and the division of power between the federal government and the decentralized units. Furthermore, the political system has a high degree of checks and balances. A relatively powerful congress poses a limit to the powers of the head of state and its government. Also, the political landscape is made up of many political parties which prevents the dominant position of one party. That is something most other Latin American countries lack.80 Lula‟s immense popularity also reinforced stability.81 Although the Lula presidency suffered from corruption scandals, this never endangered the democracy as the structure has remained stable.
2.3 Military resources
Compared to other countries in the world, Brazil‟s military spending is negligible. Military issues have had a low priority for Brazil as the country has not faced war with its neighbors for over a century now.82 Since Latin America is a region with no inter-state conflicts, Brazil‟s military power is not of much importance to the country‟s potential to
77
Malamud „A leader without followers?‟: 5.
78 Gratius „Brazil in the Americas. A regional peace broker?‟: 11.
79 Hirst and Soares de Lima. „Brazil as an intermediate state and regional power. Action, choice and responsibilities‟: 39.
28 lead the region. Also, Latin America as a whole is one of the world‟s regions that spends the least on militaries.
Nevertheless, in absolute numbers the country has already for a long time been by far the largest military power in Latin America and the Caribbean.83 Brazil‟s military consisted of 314.000 troops in 2006, which is clearly the largest number in the region. The country‟s defense budget makes up a third of Latin America‟s total defense budget.84 The second largest military power in the region has a much smaller budget than Brazil. For instance, Brazil‟s budget is three times larger than that of Colombia, it is four times the size of Mexico‟s budget and more than seven times that of Argentina or Venezuela.85 As such, Brazil is the largest military power on the continent in terms of defense budget and number of troops. Moreover, Brazil has increasingly participated in international military actions, especially within the framework of the Organization of American States (OAS) and in United Nations peace missions.86
Nonetheless, a few years ago Brazil‟s position as the leading military power was under pressure since for instance Chile‟s military, although smaller in numbers, was the most modern and well-trained on the continent. Brazil reacted with raising the military budget and modernizing the military as it became conscious of the possibility to lose its position as leading military power in the region. In addition, scholars have named other motives for the increased attention to the military during Lula‟s second term. According to one scholar, a number of security concerns have come to the fore such as the increase of organized crime, the intensification of native nationalism in Bolivia, the consolidation of Chavez‟ position in Venezuela and the increased American intervention in Colombia and other countries. Other scholars point to the increasing tensions in the Amazon and Andean regions in general as the main reasons for the reviving Brazilian interest in the military.87 Between 2001 and 2010 the country‟s military expenditures increased with 30%. Military spending in Brazil showed an immense increase of 9,3% in 2010. As a result, military expenditures of the region as a whole grew with 5,8% in 2010, the largest
83
Hofmeister „Brazil‟s approach to regional politics.‟: 4 and Gratius „Brazil in the Americas. A regional peace broker?‟: 8.
84 Gratius „Brazil in the Americas. A regional peace broker?‟: 8. 85
Sotero and Armijo „Brazil. To be or not to be a BRIC?‟: 45. 86 Gratius „Brazil in the Americas. A regional peace broker?‟: 8.
29 growth in the world. Brazil spent 1,6% of its GDP on the military, whereas Colombia spent 3,7% and Chile 3,5%.88
Although military issues continue to have a subordinate role in the region, it is of importance to a regional power to possess military resources in order to sustain an image of credibility and power. Moreover, more significant security issues have arisen in the region that need attention. The preceding analysis shows that Brazil still is by far the largest military power in the region and the country is taking measures to modernize its military.
2.4 Conclusion
Brazil‟s economic and demographic preponderance on the continent are unquestionable and despite some limitations to its economy, it can reasonably be argued that the country can be characterized as a regional power based on these resources. Nevertheless, the country‟s relatively low GDP per capita and high inequality constitute a limitation to its potential as a regional power. In terms of economic interconnectedness with the region, the country has experienced major changes over the last two decades. After the establishment of Mercosur, trade with Argentina, Paraguay and Uruguay increased rapidly during the 1990s. A temporary deterioration of relations took place in 1999-2002, yet was followed by a renewal of trade. During Lula‟s presidency, the rest of Latin America became relatively more important to the Brazilian economy than the Mercosur countries. Brazil‟s interconnectedness with the region gives the country power since it primarily imports raw materials and exports processed products. An equally uneven relation is visible with regard to FDI. Brazilian outward FDI to the region has increased impressively during the last decade, while Brazil still does not receive much FDI from the region. The drawback of the increased economic engagement with the region is that it causes tensions and feelings of frustration since neighboring countries perceive it as domination. In that regard, Brazil‟s interconnectedness possibly undermines its potential as a consensual leader. With regard to political organizational resources Brazil can be characterized as a stable country, especially compared to other countries in the region. In
30 terms of military resources, the country is also still the largest power on the continent. Next to the large number of troops and defense budget, Brazil has also increasingly participated in international military missions.
31
3. Brazil’s regional policy. Successfully striving for leadership?
This chapter assesses the variables „claim for leadership‟ and „influence over outcomes‟. To examine Brazil‟s willingness to lead the region, the subsequent analysis firstly goes into the country‟s approach toward the region and examines whether its policy can be seen as a pursuit of regional leadership. A clear desire to lead the region needs to be expressed in regional affairs and outside of the region in international forums and negotiations. The analysis starts off with a short introduction of Brazil‟s relations with the region before Cardoso‟s presidency. This background information helps to understand the internal relations in the region in the period under study. The subsequent analysis is split up into two parts; first the Cardoso era and next Lula‟s presidency. This subdivision is made since the two presidents have a very different political background. Cardoso was a politician from the center-left Social Democratic Party (PSDB). Lula was the leader of the Workers‟ Party and clearly a president from the Left. Because of Brazil‟s presidential system the president leaves his stamp very clearly on the foreign policy. Both sections start with an analysis of Brazil‟s policy toward the region. Thereafter, follows an examination of documents, of speeches and of interviews with politicians to see whether they have explicitly claimed a leadership role in the region. The next section goes into the country‟s position toward the region within the international context. The last section discusses expressions by Brazilian diplomats. This chapter simultaneously examines the extent to which Brazil‟s strategy of consensus creation and region building was successful under Cardoso‟s and Lula‟s presidency. In order to assess Brazil‟s influence over outcomes, the analysis focuses on the country‟s role in agenda setting and the initiation of negotiations, influence over decisions and its role in the determination of the shape of regional organizations.
3.1 Isolation on the continent and a slow warming of relations with neighbors
32 was fairly negative because of its use of slavery and role in several border issues in the La Plata basin. Countries in the region viewed Brazil with distrust.89
Nevertheless, border disputes in the region were resolved remarkably early. The last war with Paraguay was settled in 1870 and Brazil has lived in peace with its neighbors ever since.90 South America is a region where tensions between countries are rare. Consequently, military aspects have played a marginal role in Brazil‟s foreign policy.91 Instead, foreign policy has focused mostly on economic factors. The absence of interstate conflicts after 1870 did not rapidly lead to closer cooperation in the region though. On the contrary, Brazil‟s close relationship with the United States at that time caused feelings of distrust on the part of other South American countries.92
This picture gradually started to change in the 1970s and early 1980s when Brazil adopted a more open attitude to the region. Historically, Itamaraty (the shorthand name of Brazil‟s foreign ministry) has defined foreign policy with a large autonomy and its relative independence only allowed for small changes in focus over time.93 However, from the early 1990s on, Itamaraty has lost influence. This was mainly the result of the increased importance of „presidential diplomacy‟ since the Cardoso years and a growing number of actors that sought to influence foreign policy making.94 A growing aspiration to attain an influential role in world affairs finally caused Brazilian politics to depart from its domestic orientation. Under Brazilian politicians the awareness rose that the country would need the support of neighboring countries in order to exploit the enormous potential of the country and to be accepted as a major power at the world stage.95
With this consciousness in mind, a slowly warming of relations with countries in the region took place in the 1970s and 1980s. This rapprochement primarily occurred in
89 Hofmeister „Brazil‟s approach to regional politics. Constructing a new CASA or just another castle in the air for South American integration?‟: 4.
90
Hofmeister „Brasil y sus vecinos. En búsqueda del liderazgo regional en américa del sur‟: 10.
91 Hofmeister „Brazil‟s approach to regional politics. Constructing a new CASA or just another castle in the air for South American integration?‟: 3 and 4 and Hirst and de Lima „Brazil as an intermediate state and regional power. Action, choice and responsibilities‟: 22.
92
Hofmeister „Brasil y sus vecinos. En búsqueda del liderazgo regional en américa del sur‟: 13. 93 Hofmeister „Brasil y sus vecinos. En búsqueda del liderazgo regional en américa del sur‟: 11.
94 Jeffrey W. Cason and Timothy J. Power. „Presidentialization, pluralization, and the rollback of Itamaraty. Explaining change in Brazilian foreign policy making in the Cardoso-Lula era‟ International Policies
Science Review vol. 30, no. 2 (2009): 118.
