Relações de Bolsonaro com seus miltares - Brian Winter (Americas Quarterly)

“It’s Complicated”: Inside Bolsonaro’s Relationship with Brazil’s Military

BY Brian Winter | 
Americas Quarterly, December 17, 2019

This article is adapted from AQ's special report on Latin America's armed forces | Ler em português 

BRASÍLIA - In a military full of accomplished generals, Carlos Alberto dos Santos Cruz was considered one of the very finest.  

After an illustrious career in the Brazilian Army, the United Nations asked him in 2007 to lead its peacekeeping mission in Haiti. That went well enough that the UN turned to him again in 2013 with an even tougher assignment - command of 23,000 troops in the Democratic Republic of the Congo. Over the next two years, Santos Cruz led UN offensives against Congolese rebels while surviving multiple shootouts and an emergency helicopter landing. He proved such a clear-eyed strategist that the UN asked him to author a landmark report on how to better protect its troops. Its conclusion: That a “deficit of leadership” within the organization had directly resulted in higher fatalities in the field.

Given his experience and obvious backbone, many Brazilian politicians and investors sighed with relief in late 2018 when Jair Bolsonaro offered Santos Cruz a senior position in his incoming administration. The theory was that he, along with other retired officers in the government’s upper echelon including Vice President Hamilton Mourão, would offer administrative support to a president with few other allies - while also tempering Bolsonaro’s notoriously mercurial personality. “These guys are the best of the best,” a leading Brazilian investment banker told me at the time. “They’re a guarantee nothing crazy will happen in this government.”  

It didn’t last long. Just four months later, Santos Cruz was engulfed in a fusillade of friendly fire that, at least in its nastiness, rivaled anything he ever saw in Africa. Olavo de Carvalho, a Virginia-based philosopher and guru to the Bolsonaro family and their followers, called Santos Cruz a “piece of shit” and an “over-starched turd” on social media. Bolsonaro’s son Carlos also joined in the attacks, and the hashtag #foraSantosCruz (“get out Santos Cruz”) trended on Twitter. The specific cause of the fight is still disputed, but the bottom line was that a rupture had formed between the more pragmatic “military wing” of Bolsonaro’s government and “movement conservatives,” many of them evangelical Christians, who wanted more radical action on issues like gun laws and so-called gender ideology. In June 2019, Bolsonaro moved to please the second faction and fired Santos Cruz - plus two other retired generals who held government positions in the same week. 

By the time I spoke to Santos Cruz a few months later, he was in New York advising the UN again and seemed to have mostly moved on. But he did insist on one point: The notion that he or the other generals would control Bolsonaro was always “absurd.”

“You can’t even control a child after the age of 16. Good luck trying to control a 60-year-old president,” Santos Cruz told me. “This government is going to continue this way. It’s complicated.”

General Santos Cruz attends an event with President Bolsonaro before his departure from the administration.

Indeed, Santos Cruz’s story highlights the complex and ever-shifting relationship between Brazil’s armed forces and the Bolsonaro government after a year in power. On the one hand, the military remains more involved in politics than at any other point since the end of the 1964-85 dictatorship. It has recovered some of its historic role as a “moderating force” that sees itself as the enlightened guardians of Brazil’s long-term national interest, free of the self-serving needs of civilian politicians. Around a third of Bolsonaro’s Cabinet is composed of retired or active-duty military, with dozens more in key government positions elsewhere. They have exerted visible influence on policy issues including the management of recent fires in the Amazon and Brazil’s relations with China, the United States and the Middle East. 

But it’s also clear that the rift is real - and growing. Several others from the government’s “military wing” have been fired or otherwise marginalized in recent months. To report this story, I spoke to more than a dozen active-duty or retired members of the military, including six generals. Many expressed profound unease over Bolsonaro’s confrontational style and the constant sense of crisis that has characterized his government, even as Brazil’s economy starts to show signs of life. They also felt the military was in a clear Catch-22: While many of its representatives are being cast aside, the institution will still be held responsible if Bolsonaro ultimately fails. “We are always reminding the troops that this is not a military government,” one general told me. “But we also know that, if things don’t work out, it will be another 30 years before we participate in politics again.”

In and Out of Politics

The truth is that things between Bolsonaro and the military were always complicated - especially when he was a soldier himself.

An Army paratrooper from 1977-88, Bolsonaro did not rise beyond the rank of captain. In 1985, he gave an interview to Veja magazine denouncing low salaries for the military’s lower ranks; his commanders disliked the article enough that Bolsonaro spent 15 days in a penitentiary for insubordination. The following year, Veja published details of what it said were Bolsonaro’s plans to disrupt the water supply in Rio de Janeiro with explosives, again to protest low military wages. Bolsonaro was court-martialed but ultimately acquitted for lack of evidence. Soon thereafter General Ernesto Geisel, who led the dictatorship in the 1970s, publicly referred to Bolsonaro as a “bad soldier” and an “abnormal case” amid the military’s broader withdrawal from politics.   

Foreshadowing a pattern that would repeat itself 30 years later when he ran for president, all this negative attention garnered Bolsonaro quite a few fans. He was elected to Rio’s city council and then the national Congress in 1991, where he became an advocate for better military salaries and a lonely voice of nostalgia for the dictatorship itself. This made him popular with the rank and file, but the generals were moving in the opposite direction. Society as a whole was still angry about the human rights abuses and economic mismanagement of the dictatorship years, leaving the military leadership feeling like “scalded cats,” retired General Alberto Mendes Cardoso told me. “The shine of the military was lessened. There was a feeling that politics wasn’t worth it, that we should stay where we are under the Constitution.”  

But over time, three events would lure the military back to the political arena. 

The first was the massive corruption and disarray of the final years of the Workers’ Party, or PT, which ran Brazil from 2003-16. PT rule culminated in the worst recession in Brazil’s history, but it was the scandals that seemed to anger the military’s law-and-order-minded leadership the most. In April 2018, the then-commander of the Army, General Eduardo Dias da Costa Villas Boas, tweeted that the military was “attentive to its institutional mission” and “repudiates impunity.” The meaning was lost on no one: The next day, the Supreme Court was to make a ruling that could have prevented former President Luiz Inácio Lula da Silva from going to prison on graft charges. While it’s doubtful Villas Boas’ words influenced the Court’s decision, Lula ultimately spent more than a year in jail. The tweet “was the moment that announced the military’s return to politics,” one mid-level officer told me. “It was unfortunate, but necessary.”

The second major factor was the military’s anger over the National Truth Commission, which Dilma Rousseff, another PT president, created in 2012 to investigate rights abuses during the dictatorship. This surprised me - I covered the commission extensively as a reporter, and the military was mostly silent in those years. Unlike in Argentina and Chile, there was no intent to jail its leaders for past crimes. But in interviews for this article, I repeatedly heard outrage over the commission - and the belief that the “insult to our honor,” as one general put it, would have contributed to the further deterioration of the military’s reputation, and possibly its budget, unless its leaders became more politically active again.

The final straw was a truckers’ strike in May 2018 that paralyzed delivery of food, fuel and medicine nationwide - and left commanders concerned the civilian leadership was losing control of power. In protests and outside several Army facilities, many Brazilians gathered to ask for the military to “save” the country; one poll showed 40% would have supported a coup. During the Cold War, the generals might have obliged. But polls were already showing a familiar face - Bolsonaro - leading the race for the presidential election that October. Bolsonaro emphasized his past in the military - the good parts, anyway - to shore up his credibility with voters. A deeper partnership began to take root, thanks in large part to General Augusto Heleno, another retired four-star general who had commanded the UN mission in Haiti. “There is an awareness among the public that the military can put this house in order,” Heleno said at the time. “We are fully aware a coup is not the way forward. The path will be the next election.”

There was not, and still is not, any formal role for the military in Bolsonaro’s government outside that specified by the democratic 1988 Constitution. But he did turn to numerous current and former members of the armed forces to fill key areas including education, infrastructure and more.

“There was a willingness to help because - modesty apart - we have good administrative ability,” retired General Marius Teixeira Neto, a former military commander of Brazil’s northeast region who is close to officers in Bolsonaro’s government, told me. “Our people don’t get corrupted, and we want what’s good for the country. We’re serious. And as everybody knows, you can’t govern alone.”

Allies - And Then a Rupture?

In the opening months of Bolsonaro’s government, the influence of the “military wing” was extremely clear. Its leaders did not act as a unified bloc, nor did they communicate regularly among themselves - “That’s a myth,” Santos Cruz said. But there was a convergence around key points, borne from teachings and ideological currents that have coursed through the institution for decades, namely an emphasis on Brazil’s national sovereignty and long-term interests over what they see as passing ideological fads. Meanwhile, some observers perceived an old dynamic: Even though Bolsonaro was president, some of the generals continued to treat him like a captain, unafraid of challenging him - even in public. 

During his first week as president, Bolsonaro floated the possibility of giving the U.S. military a base in Brazilian territory - but backpedaled following negative feedback from military leaders. Military officials also helped convince Bolsonaro not to withdraw from the Paris climate accord or immediately move Brazil’s Israeli embassy from Tel Aviv to Jerusalem, for fear both moves could alienate consumers of Brazil’s agribusiness exports. Vice President Mourão, another retired four-star general, openly contradicted the president on a number of issues - dismissing Bolsonaro’s tough talk on China as “campaign rhetoric” and insisting Brazil should leave anti-communist ideology aside when dealing with its biggest trading partner. 

In some cases - particularly on China - the military wing’s ideas seem to have endured. But as 2019 wore on, and Bolsonaro became more confident in power, he began to lash out more against those who sought to control him. This stance was encouraged by his three sons, who are closer to the base’s evangelical wing and feared Mourão in particular was not loyal. (In a strange twist, some close to the family encouraged Steve Bannon, Donald Trump’s former campaign manager, to criticize Mourão in the Brazilian press.) The military wing’s preference for gradual change also put it in increasing conflict with the other major power center in Bolsonaro’s government - the pro-market reformers led by Finance Minister Paulo Guedes.

In recent months military criticism has become increasingly strong - and public. After a reform cut retirement benefits for Brazilian soldiers, with particularly onerous terms for lower ranks, protests broke out in Congress and memes calling Bolsonaro a “traitor” and “liar” swept military circles. “The president is only in politics because, when he was a captain, he defended better salaries for (lower ranks). Now he’s given us a fatal stab in the back,” the head of an association representing the military rank and file said, calling the relationship permanently “broken.” Maynard Santa Rosa, a retired general who resigned from a top government position in November, said the top brass was “losing hope” in Brazil’s recovery. “I’m rooting for this government to go well,” he told an interviewer, “but if that happens it will be by accident.”

However, talk of a deeper split with Bolsonaro - or some kind of move against him - also seems premature for now. Mourão was dispatched to the inauguration of Argentina’s new president in December, an important and diplomatically sensitive mission. Heleno remains one of Bolsonaro’s most loyal aides - and even joined Twitter in August, where his attacks on the press and “radical left” often rival the president’s in tone. Bolsonaro gave the military a critical role in subduing the fires in the Amazon that generated international attention in mid-2019, and also recently announced that acquisitions of key military hardware would be exempt from budget cuts in 2020. Meanwhile, the incipient economic recovery, a sharp decline in nationwide homicide rates, and a reduced number of corruption scandals have allowed Bolsonaro’s approval rating to stabilize in the low 40s. Brazil has so far been spared from the mass protests and unrest hitting other South American nations such as Colombia and Chile. 

Several officers told me that, for all of Bolsonaro’s faults, and the pervasive sense they are losing power as his government progresses, they were still relieved Brazil escaped an even deeper crisis. “We were repeatedly put to the test (as a nation), and we passed,” Villas Boas, the former Army commander who sent the infamous 2018 tweet, recently told O Globo newspaper. Even Santos Cruz expressed hope, in our conversation, of a somewhat happy ending. “The best way to get rid of corruption is (for Bolsonaro) to have a good government,” he said. “Yes, I still think there’s a chance.”    

Brian Winter is editor-in-chief of Americas Quarterly and the vice president for policy at Americas Society/Council of the Americas. A best-selling author, analyst and speaker, Brian has been living and breathing Latin American politics for the past 20 years.

Oliver Stuenkel: política externa de Bolsonaro provoca incertezas na AmSul

Como a política externa caótica de Bolsonaro preocupa o resto da América do Sul

Diplomatas na região começaram a considerar o Brasil uma fonte de instabilidade

Oliver Stuenkel, da Americas Quarterly

25/06/2019 - 09:51 / Atualizado em 25/06/2019 - 13:51

O presidente Jair Bolsonaro Foto: Daniel Marenco / Agência O Globo

Quando se trata de política externa, as ideias controversas do presidente Jair Bolsonaro e de seus conselheiros mais próximos, como os  riscos do “globalismo”, o ceticismo em relação a instituições multilaterais como as Nações Unidas e a convicção de que o aquecimento global não passa de um complô marxista, já deixavam apreensivos muitos diplomatas da região. Ademais, simplesmente transparecer qualquer possibilidade de apoio brasileiro a uma intervenção militar americana na Venezuela já disparou os alarmes dos Ministérios de Relações Exteriores  dos países vizinhos.

O que mais preocupa os diplomatas da América do Sul, no entanto, não são as ideias de Bolsonaro em si, mas o fato de que a política externa brasileira — e a diplomacia presidencial em particular — se tornou imprevisível. Há um consenso crescente, de Bogotá a Santiago, de que as decisões de Brasília são produto de disputas internas de poder em vez de cálculos estratégicos — uma situação preocupante para os latino-americanos, tendo em vista que a participação ativa do Brasil é crucial para o avanço de qualquer iniciativa na região.

Prestes a completar seis meses no cargo, o atual governante brasileiro parece não ter diretrizes claras quanto ao Mercosul, um diplomata uruguaio  declarou em off: com exceção de ocasionais dicas de Guedes que o Brasil está incomodado com o statu quo . A visita recente de Bolsonaro a Buenos Aires pareceu resumir a falta de coerência que se tornou a marca registrada das relações externas do Brasil desde janeiro. A visita aconteceu após uma série de gestos de desprezo à Argentina , algo sem precedentes desde a redemocratização da década de 1980: a primeira visita internacional de Bolsonaro foi a Santiago, não Buenos Aires, como era tradição na diplomacia brasileira .

Ainda assim, quando finalmente visitou a Argentina, o volátil presidente se mostrou subitamente animado com a ideia de uma moeda única entre os dois países , um projeto que, no cenário mais otimista, levaria décadas para ser implementado e exigiria um compromisso extremo de integração regional. Sem titubear, Bolsonaro pareceu apoiar uma integração no estilo da União Europeia,  ideia que vai  de encontro a tudo que seus conselheiros antiglobalistas mais próximos acreditam ser necessário para preservar a soberania e a autonomia do Brasil. Semanas antes, o ministro de Relações Exteriores, Ernesto Araújo, um  propagador de teorias conspiratórias, declarou publicamente que torcia pelo Brexit e pelo êxito dos candidatos nacionalistas de direita nas eleições do Parlamento Europeu.

“É difícil levar tudo isso a sério”, afirmou um cientista político argentino enquanto Bolsonaro embarcava de volta para Brasília.

Países de menor porte, como o Uruguai, estão sem saber como reagir ao que fica cada vez mais aparente: Bolsonaro e Araújo carecem de qualquer tipo de visão coerente sobre o que eles esperam ver na região — além do desejo de que partidos de direita vençam as eleições pelo continente. Mas ao repetidamente alertar os argentinos sobre os perigos do retorno ao poder do movimento da ex-presidente Cristina Kirchner nas eleições de outubro, Bolsonaro cometeu um erro de principiante. Não só sua retórica foi de pouca ajuda para o presidente Macri — cujas esperanças de reeleição dependem de sua habilidade em atrair eleitores moderados, que veem Bolsonaro com maus olhos — como também pode criar um problema para o Brasil caso o kirchnerismo retorne de fato, afetando negativamente a mais importante relação bilateral na América do Sul. Enquanto os interesses em integração regional forem baseados em alinhamentos ideológicos temporários, não há muita esperança para um debate construtivo de longo prazo sobre o futuro da região.

Outra mudança de diretriz de último minuto pegou de surpresa até membros da alta cúpula do governo brasileiro. Bolsonaro reconheceu formalmente María Belandria, enviada da oposição venezuelana, como embaixadora no Brasil, após se recusar a fazê-lo dias antes. A decisão foi uma derrota para a ala militar de seu governo, que já o tinha convencido contra a decisão. Os conselheiros militares de Bolsonaro argumentaram que reconhecer formalmente Belandria era uma provocação desnecessária, que poderia atrapalhar as tentativas do país de normalizar a situação na fronteira reaberta havia poucos dias, após meses fechada. A mudança abrupta aumentou as preocupações de governos da região sobre a previsibilidade da política externa de Bolsonaro — e como um diplomata europeu delicadamente comentou, Bolsonaro era um “parceiro difícil”.

A economia  cambaleante do Brasil e sua instabilidade política devem aumentar as chances de que 2019 seja um ano perdido para a política externa do país, já que reduzem a capacidade do governo de articular e implementar um projeto internacional coeso. Um olhar sobre a política externa do Brasil desde a redemocratização sugere que ativismo internacional só é possível se as coisas estiverem em ordem dentro de casa — como foi o caso (com alguns tropeços) entre 1995 e 2013. Só quando a hiperinflação foi superada o presidente Fernando Henrique Cardoso teve tempo e credibilidade para desenhar uma estratégia internacional, e o Brasil se manteve como um ator importante por quase duas décadas. Ainda assim, desde os protestos de 2013, nenhum presidente brasileiro teve tranquilidade e aprovação popular para ter impacto no exterior, com efeitos na vizinhança.

Muitos fatos sugerem que, em 2019 — e possivelmente depois —, Bolsonaro estará  bastante ocupado com desafios domésticos para seguir com seu ativismo na política externa. Nesse sentido, a política brasileira é diferente da americana, em que presidentes impopulares às vezes reforçam seu ativismo externo, haja vista o fato de a política exterior ser a única área  onde podem atuar livremente. A política externa brasileira, em contraste, só é significativa quando os presidentes são populares internamente, o que não parece ser o caso de Bolsonaro. As consequências são graves. Um Brasil com o olhar voltado para dentro deve limitar drasticamente a capacidade de a América do Sul articular e implementar uma estratégia clara para seus muitos desafios em comum e lidar em conjunto com um cenário político global cada vez mais imprevisível.

Abolir o cargo de vice-presidente? - Brian Winter (Americas Quarterly)

Americas Quarterly, Washington DC – 8.2.2019

Should Brazil Just Abolish the Vice Presidency?

Tensions between Jair Bolsonaro and Hamilton Mourão reveal a deeper battle for the new government’s soul.

Brian Winter

In 1829, Chile’s legislature named José Joaquín Vicuña as the country’s new vice president. While this may sound like the start of the world’s most boring history lesson, Vicuña was a sufficiently objectionable figure that his appointment triggered a coup - and then a two-year-long civil war that left some 2,000 people dead.

The experience was traumatic enough that Chile’s Constitution of 1833 eliminated the role of the vice presidency entirely - and the country has not had one since, leaving the interior minister first in the line of succession. Somewhat similar dynamics led Mexico to abolish the vice presidency in the wake of the Mexican Revolution, after the last person to hold the job was assassinated. These are the exceptions in today’s Latin America, but here’s one more little-known fact: As recently as the 1940s, only about a third of the region’s countries had a vice president, and they seemed to get along just fine.

I was reminded of this obscure history this week, as Jair Bolsonaro struggled to fulfill his presidential duties from a hospital bed in São Paulo. Following a traumatic, nine-hour surgery to remove a colostomy bag he had worn since an assassination attempt last September, Brazil’s president was back at work just 48 hours later, holding video conferences with ministers and signing documents from his hospital bed while shirtless and covered with medical monitors.

This appears to have been ill-advised. Over the weekend, Bolsonaro’s doctors reportedly reprimanded him for talking too much, warning it could lead excess gas to collect in his abdomen and prevent scarring. They also recommended he stop following congressional proceedings on television. Then, on Monday, a major setback: The president would be in the hospital for at least another week, and was temporarily banned from speaking at all.    

A reasonable outsider might ask: What was the big rush? Why not just let the vice president handle his duties for a few extra days, as the Constitution allows, and focus on a proper recovery? But the answer was clear. Barely a month into his presidency, Bolsonaro has a severely strained and possibly broken relationship with his number two, retired general Hamilton Mourão. Earlier in January, when Mourão assumed presidential duties during Bolsonaro’s week-long trip to Davos, he gave multiple interviews and statements conspicuously at odds with his boss’ views on everything from loosening gun controls (pointless, he said) to moving Brazil’s embassy in Israel to Jerusalem (might not happen, he told Arab diplomats). In perhaps the ultimate diss, Mourão even took to Twitter to compliment the press - which Bolsonaro frequently rages against as “fake news” - for their “dedication, enthusiasm and professional spirit.” No wonder Bolsonaro was so hesitant to hand power back again.

On one level, Mourão’s rhetoric illustrates a very real ideological split within Bolsonaro’s government. There is the so-called anti-globalist wing, led by Foreign Minister Ernesto Araújo and Bolsonaro’s own son Eduardo, that is keen to remake Brazil’s foreign policy to bring it closer to Washington, Donald Trump and nations with “Christian values” - and take distance from China and the Arab world. Mourão represents a powerful faction made up largely of former military officials, who account for about a third of Bolsonaro’s cabinet. They are not a monolith, but they generally favor a more pragmatic approach to foreign policy, noting for example that China is Brazil’s biggest trading partner. Many couldn’t care less about the social issues - “gender ideology,” “cultural Marxism” and so on - that tend to animate Bolsonaro’s hard core base.

This has led to an unusual dynamic in which moderate-minded Brazilians are counting on the military to prevent a more radical turn. The most glaring example was when Jean Wyllys, Brazil’s most prominent LGBT congressman and longtime antagonist of Bolsonaro’s, declared last month that he was resigning his seat and fleeing the country after receiving numerous threats. Bolsonaro posted celebratory messages on Twitter (“It’s a great day!”), while Mourão somberly noted that “anyone who threatens a congressman is committing a crime against democracy.” This prompted an outpouring of I-can’t-believe-I’m-praising-Mourão messages on Twitter and elsewhere. One friend from the São Paulo academic world texted me: “It’s incredible, but this could be the man who saves Brazilian democracy.”

Perhaps, but there may also be a deeper, worrying trend at work. Since Brazil’s last dictatorship ended in 1985, three of five vice presidents have ascended to the top job - because of one fatal illness and two impeachments. That’s a stunning 60 percent, for those keeping score at home. In the most recent case, Michel Temer openly schemed against Dilma Rousseff, complaining in a letter that she had made him a “decorative vice president” - and then leading the effort to impeach her in 2016. In this context, some wonder whether Mourão is driven by genuine policy differences - or if he is already openly auditioning for his boss’ job. “He’s a traitor,” one person close to the government told me this week. The split is so public that even Steve Bannon, the American nationalist leader who is close to the Bolsonaro family, weighed in in an interview published on Wednesday, calling Mourão “not useful” and “a guy who steps outside of his lane.”

Which leads to the question of whether Brazil can handle having a vice president at all. Maybe the position itself is inherently destabilizing, especially in a country with a patchwork of several dozen political parties that forces odd and ultimately brittle coalitions. Don’t laugh - this was precisely the conclusion of a recent paper by Leiv Marsteintredet and Fredrik Uggla, two Scandinavian academics, in what they billed as the first major study of the Latin American vice presidency. They found that Latin American countries in which presidential candidates are compelled to nominate a running mate from outside their party are “almost three times as likely to suffer interruptions such as coups and impeachments” than those in which the ticket is more homogenous. The authors leave open whether the vice presidency is the cause, or a symptom, of this instability. But in the context of Brazil’s record, it sure raises a few eyebrows.

Do recent events in Brazil approach the trauma of Chile in 1829, or Mexico in 1913? Maybe not. And of course, trying to make any structural changes in the current political climate would be even more destabilizing. But it’s worth wondering if Brazil might be better served in the future by a model that provides less incentive for intrigue and rebellion. In his infamous letter to Rousseff, Temer himself complained: “I’ve always been aware of the absolute distrust you and your team have shown me … a distrust that is incompatible with what we’ve done to maintain the personal and party support for your government.” But maybe it wasn’t the Rousseff-Temer partnership that was incompatible; maybe it was the whole model.

Brian Winter is editor-in-chief of Americas Quarterly magazine and the vice president for policy at Americas Society/Council of the Americas. A best-selling author and columnist, Brian is a leading expert on Latin America and a frequent speaker for international media and events.

Guide to Alba - Joel Hirst (Americas Quarterly)

Bem, continuando a fazer o tour do nosso fantasma, este acadêmico americano, que leva a coisa a sério, traça a anatomia do bloco movido a petrodólares chavistas...

A Guide to ALBA
by Joel D. Hirst
Americas Quaerterly (link)

What is the Bolivarian Alternative to the Americas and What Does It Do?

“…all who served the revolution have plowed the sea.”
Simón Bolívar, 1830

A little over a year after taking office under his new Bolivarian Constitution, at a conference of Caribbean states on the Island of Margarita in 2001, President Hugo Chávez announced his intention to follow through on Bolívar’s political dream of creating an integrated nation-state in South America. “We from Caracas continue promoting the Bolivarian idea of achieving the political integration of our states and our republics. A Confederation of Latin American and Caribbean states, why not?"1 After several years of domestic instability, on December 14, 2004, Venezuelan President Hugo Chávez and Cuban President Fidel Castro signed into law the creation of the Alianza Bolivariana para los Pueblos de Nuestra América – Tratado de Comercio de los Pueblos (Bolivarian Alternative of the Americas—ALBA).

To understand the nature of the Bolivarian Alliance of the Americas (ALBA) we must travel back to the dawn of South American independence. It is there, in the grand visions and hard-fought battles of South America’s founding fathers, that we find the seed of the ALBA. It grew from the idea of Simón Bolívar to establish Gran Colombia from what today are Venezuela, Colombia and Ecuador. In this, Bolívar envisioned one powerful Latin American nation, subordinate to the will of one maximum caudillo and steadfast in its opposition to the United States. It was, Bolívar believed, the only way South America would be able to stand up and prosper in the face of what he could see, even at that early moment, would be a powerful giant and rival to the north. In a last-ditch effort to save his political project, Bolívar assumed the role of dictator over the unruly body, resigning a short time later—living long enough only to see the Gran Colombia and the Congress of Panama collapse.

Yet almost two hundred years after Bolívar’s death and since the great post-independence wars shattered his grand vision, his words and ideas still reverberate around an exhausted continent. And again they have bred disorder under the imperial ambitions of another powerful, controversial Venezuelan leader.

GROWTH
Since its founding in Cuba in 2004, ALBA has grown from two to eight members with three observer countries: Haiti, Iran and Syria. Honduras briefly became a member under President Manuel Zelaya, but after the June 2009 coup d’état, the de facto government withdrew. Despite the growth, ALBA represents only a small fraction of the Latin America and Caribbean region’s economic share, population and land mass.

Current Members

IDEAS
There are three overarching ideas that guide the ALBA:

1) Conflict—ALBA seeks to institutionalize radical conflict (internal and external) which its member countries believe is necessary to rebuild “Gran Colombia”.2 According to Fernando Bossi, former president of the Bolivarian Congress of the Nations and member of the ALBA Social Movements (the operationalization of the Forum of São Paulo whose members serve as the “foot soldiers” of the ALBA), the alliance is the next phase of the “ancient and permanent confrontation between the Latin American and Caribbean peoples and imperialism.”3 In this new phase, countries are required to choose sides, between the ALBA and socialism or the United States and free market capitalism.4 This conflict has seen itself expressed in the almost constant conflagrations such as the police protest in Ecuador, the ongoing violence and political turmoil in Venezuela and the regional violence in Bolivia. Internationally, this has meant conflicts between neighbors such as Ecuador and Venezuela with Colombia, Venezuela with most neighbors (at one moment or another), Nicaragua with Costa Rica, and all of them with the United States.

2) 21st Century Socialism—The economic model espoused by ALBA member states is based loosely on a Trotskyite version of communism outlined by the Mexican academic Heinz Dieterich (who literally wrote the book on 21st Century Socialism). The model includes the now famous, “participatory and protagonist democracy” which involves the eventual elimination of representative democracy—and its institutional and civil-rights based approach to governance—in favor of local participation linked to a strong caudillo executive. In Venezuela this is done through the Popular Power, which establishes communes at the local level that report directly to President Chávez. In Nicaragua it is the Citizen Power, local committees organized and reporting to Rosario Murillo, President Ortega’s wife. Similar mechanisms exist in Cuba with the Committees for the Defense of the Revolution (but without the popular participation evidenced in other ALBA countries). In Bolivia this is done at the grass roots through empowering local indigenous organizations. This non-institutional approach to governance increases executive power. Not coincidentally, the constitutional reforms in Bolivia, Ecuador, Venezuela, and now in Nicaragua have extended presidential mandates and authority. As Luisa Estela Morales, President of Venezuela’s Supreme Court stated in 2009, “We cannot continue to think about the separation of powers because it is a principle which weakens the state.”

3) International Revolution—ALBA is largely a regional infrastructure designed to support the radical revolutionary processes inside member countries. As Bossi stated, “ALBA is one chapter of a global revolution.” This has brought ALBA member countries into contact and cooperation with other revolutionaries the world over—the principal of these being Iran but also including Hezbollah, Fuerzas Armadas Revolucionarias Colombianas (FARC), the Spanish Basque terrorist group Euskadi Ta Askatasuna (ETA), and the Colombian Ejercito de Liberación Nacional (ELN) among others. The purpose of this international revolution is, as President Chávez has stated, “the creation of a new world order.” According to ALBA foreign policy, the current institutional order must be brought to its knees in order to allow a new “multi-polar world” to emerge. Essential to this is the collapse of the United States as a global superpower.

COMPETING VISIONS: FTAA VERSUS ALBA
From the very beginning of his presidency, Chávez devised the Bolivarian Alliance as the ultimate expression of his foreign policy. The “alternative” was initially planned as a substitute to the Free Trade Area of the Americas (FTAA)—a plan developed by the administration of U.S. President Bill Clinton to create a free trade zone from Canada to Argentina—and to combat western style economic integration with a new economic and political model: 21st Century Socialism.5 Consistent with the changing nature of Latin American politics, the “alternative” has rapidly morphed to reflect the realities of the region and its member countries into a flexible ideological alliance.

Comparing and Contrasting on the Issues

ACTIVITIES
Operationally, the ALBA has expanded the undertaking of “Grand-National Projects,” social projects implemented between two or more member states. These state-run endeavors are operated by state-to-state Grand-National Companies (created in opposition to transnational companies). Currently there are twelve grand-national projects in various stages of development (most with corresponding companies).

The projects themselves are being developed with varying degrees of success. The education program, with support from Cuba’s Sí, Se Puede (“Yes We Can”) literacy program has reduced illiteracy across the region. Nicaragua has implemented the Programa Hambre Cero (Zero Hunger Program) to reduce global acute malnutrition by up to 4 percent. The telecommunications project has purchased a Chinese satellite, has run a fiber-optic cable between Cuba and Venezuela (and eventually Jamaica and Nicaragua) and has established dozens of TV stations (including TeleSUR, the ALBA’s international news channel) as well as wire services for facilitation of documentaries, videos, movies, interviews and news. For its culture activities, ALBA has organized literary fairs, fellowships, literature prizes, movie showings, and has even held Olympic style games in Havana on three different occasions (every other year). And ALBA health has facilitated millions of consultations, operations and visits by Cuba-trained community health workers. Some programs are atrophied due to mismanagement, such as ALBA agriculture. Still others exist only in name. While ALBA claims to centrally plan these activities, more often than not they arise spontaneously from the recommendations of social movements6 or member states and are subsequently brought within the overarching framework of the ALBA’s integrationist imperatives.7 President Chávez uses Venezuela’s windfall oil profits to fund these projects and significant logistical support and knowhow for the implementation of the ALBA infrastructure comes from the well trained agents of the Cuban government.

Grand National Projects

THE BANK OF ALBA AND FUNDING
To fund these projects, the ALBA has created a Bank with offices in Venezuela and Cuba, and an initial $1 billion in resources, as well as a regional trade currency called the Sistema Único de Compensación Regional or SUCRE. “Enough with the dictatorship of the dollar, long live the SUCRE” said President Chávez in 2009 upon approving the legislation that established the SUCRE. The SUCRE entered into use a year later and is used for government-to-government exchanges.

Currently pegged at $1.25 per one SUCRE, the value of the SUCRE will eventually float based on a basket of member country currencies (the bank and SUCRE will serve to house member countries currency reserves). The Bank of ALBA has its offices in Caracas and its president, Nicolas Maduro, is also currently Venezuela’s Foreign Minister.

Beyond funding from the ALBA Bank, financial support for projects has come through Petro-Caribe and the Petro-Caribe Fund¬—an energy agreement linking Caribbean and Central American nations to Venezuelan’s energy infrastructure and reserves. This organization serves as a gateway organization to the ALBA.

In addition, Venezuela has provided substantial off-budget financial support. Due to the mercurial nature of Venezuela’s financial management, a full accounting of Chávez’ support for the ALBA may never be known. However, analysis by the Centro de Investigaciones Económicas (CIECA), a Venezuelan think tank, and by the intelligence unit of Venezuelan political party Primero Justicia, has put the gifts at above $30 billion. By the Venezuelan government’s own public reports, preferential oil deals alone have cost as much as $20 billion over the last five years.

The ALBA Economies

POLITICS
Politically, the ALBA has been extraordinarily active. Only in their first six years of existence, they have held sixteen ordinary and extraordinary summits. At each of these summits, agreements for projects and cooperation are reached and ALBA continues to take shape and direction.

ALBA members use their regular summits to define ALBA positions within international organizations where they usually vote as a block. Through their powerful lobby and financial largesse, they have assumed marginal political control over the Organization of American States (OAS). This has allowed them to deflect accusations of violations to the Inter-American Democratic Charter. They have also participated in international events with some success, including congealing the effort against the Copenhagen climate accords in 2009.

Summit Breakdown

Finally, there is a nascent military component to the ALBA. During the 7th ALBA Summit in Bolivia in 2009 there was discussion of a mutual defense pact, though it was never officially ratified in the summit’s declaration. At the Summit, Bolivian President Evo Morales stated boldly, “The proposal of my government will be to approve a Regional Defense School with our own doctrine.” Despite the lack of ratification, ALBA has quietly moved toward implementation of this idea establishing the Regional Defense School in Santa Cruz, Bolivia. The military has always had an important role in President Chávez’ political project—something the Bolivarian president has expressed as the “civic-military” alliance.

The defense theory emerges from the writings of Spanish radical philosopher Jorge Verstrynge. In his book “Peripheral War and Revolutionary Islam”—which President Chávez distributed to all members of the Venezuelan army, Verstrynge lays out the doctrine of asymmetric warfare, as practiced by Islamic insurgents over the years. This, according to President Chávez and his military, is the only technique by which ALBA will be able to withstand what they are convinced will be an inevitable attack from the United States.

President Chávez and his ALBA followers are betting their collective futures on the creation of a resource wealthy, energy-rich, revolutionary South American bloc in which their stated desire is to disrupt the international order and facilitate the creation of a “new world order”—and use the ensuing chaos to rebuild Bolívar’s vision of a Gran Colombia. Will this new expression of Bolívar’s Latin American revolution may be better plowed with an oil tanker?

Joel D. Hirst is an International Affairs Fellow in Residence at the Council on Foreign Relations.

Endnotes
1. Hugo Chávez, III Conference of Caribbean States, 2001.
2. United Nations University – Comparative Regional Integration Studies, Working Paper W/2008-4, p33.
3. Cuadernos de Emancipacion, N35, ISSN 0328-0179, Fernando Bossi, p21.
4. Cronica de una Crisis Anunciada – FLACSO, p7.
5. Cronica de una Crisis Anunciada – FLACSO, p6.
6. Construyendo el ALBA: Nuestro Norte es el Sur, Rafael Correa May 2005
7. United Nations University – Comparative Regional Integration Studies, Working Paper W/2008-4, p33.
8. Foreign Affairs LatinoAmerica, Volumen 10, Numero 3, Julio-Septiembre 2010. Josette Altmann, p3.

Brazil-China: What’s Next After Rousseff’s Visit? - Matías Spektor (Americas Quarterly, web)

WEB EXCLUSIVES
Brazil-China: What’s Next After Rousseff’s Visit?
April 25, 2011
by Matías Spektor

The author of a forthcoming AQ article on Brazilian foreign policy assesses President Rousseff’s mid-April trip to China and what needs to happen to increase mutually beneficial bilateral cooperation.

Matías Spektor will have a feature article in the Spring 2011 issue of Americas Quarterly, to be released May 2, titled "One Foot in the Region; Eyes on the Global Prize."

President Dilma Rousseff’s five-day trip to China in mid-April yielded modest but palpable progress in a trade relationship that is now Brazil’s most important and quickly expanding. But challenges lurk in the short to medium term.

During the visit China agreed to let Brazil’s Embraer sell up to $1.4 billion worth of regional jets and assemble a luxury aircraft line (but there was no progress on the divisive issues of procurement and intellectual property). China also granted licenses to three Brazilian suppliers to sell pork; this while turning down 10 other Brazilian applicants.

The Chinese government also announced that China-based Foxconn has plans to invest some $12 billion in Brazil for a new iPad assembly plant in São Paulo that might eventually develop components as well. If this materializes, then thousands of Brazilian engineers and about 100,000 workers would benefit. Yet the initial excitement quickly wore off once commentators recalled similar Chinese announcements in the past that never materialized. Others pointed out Brazil lacks the human resources to make the plan happen even if the monies are forthcoming.

Politically, the two sides agreed to disagree. The Chinese did not endorse Brazil’s bid for a permanent seat in a reformed UN Security Council, while the Brazilians did not recognize China as a market economy. Hot issues like currency warfare, the future of Doha and Copenhagen, and human rights were kept firmly on the side.

Despite some of the successes, the President’s trip reinforced the challenges of Brazil lacking a China policy. In the past, it could afford to live without one. But with increasing ties, a real need has emerged to develop an operational framework to make sense of China and to build the tools to implement it. A rising China has pulled Brazil into its orbit in powerful ways that are hard to resist or reverse.

The predicament that results is clear: either Brazil develops the skills to influence the overall direction of China’s pull—securing some degree of choice—or it is overcome by the sweeping force of structural change. Here is an opportunity for Brazil to learn to take advantage of the global power transition currently benefiting China; if not, its leaders will become hostage to the growing influence of vocal domestic fearmongers.

A Policy Wanted
From a Brazilian perspective China matters for two major reasons. First, trade is bringing the two together fast, but it is equally resulting in a widening gap and a vastly unequal economic interdependence. So far, with a strong Chinese economy, the trend has paid off for Brazil. But many fear ever deeper dependence on China (and its whims) and warn of disaster should Chinese economic growth stall.

Second, many in Brazil believe a rising China is paving the way for a better, fairer, more multipolar world where China will help to mitigate U.S. arrogance. China’s success might equally help reopen the debate about state-society relations that the Washington Consensus and the “end of history” thesis had hoped to shut down.

At the same time, China on the rise will force the issue of global institutional reform onto the agendas of the powerful states of the industrialized North that cling to the structures developed post-World War II. Without China ascending, Brazil would not be a member of clubs like the BRICS (Brazil, Russia, India, China) or the G20 in which to enjoy its newfound status.

The challenge now is to develop policy tools so that Brasilia can navigate and manipulate Beijing to its own advantage. The onus here is on Brazil. If unsuccessful, Brazil may find itself in the awkward position of pining for the global configurations of the past.

Four Hurdles
Brazil’s China policy faces four major hurdles: unequal power, clashing interests, diverging visions of global order, and the voice of fearmongers at home.

Power relations between China and Brazil are a tale of inequality. Both are rising, but China is going much faster. China can do things to Brazil that Brazil cannot do to China. Yes, interdependence means the two become more dependent on one another. But the trend here is uneven. Bilateral negotiations highlight how Brazil is putting forward demands that China can afford to ignore or only partially accept while doing so at a pace of its own choosing. This is compounded by an asymmetry of attention: Brazilians worry about China with reason while China can afford by and large to simply ignore Brazil.

National interests have taken their own separate directions. Consider international trade, finance, nuclear nonproliferation, human rights, institutional reform or climate change: China and Brazil simply find it hard to agree. They even have had trouble reaching common language to frame the issues. For all their instrumental use of notions of multipolarity, soft balancing against U.S. hegemony, South-South solidarity, and their tacit alliance on some multilateral negotiations, there is little common ground.

Neither do the two countries share a common vision. Rhetoric apart, Chinese leaders have a greater stake in existing patterns of global governance. They surely have many qualms about the current state of the world. But since Chinese leaders are happier about their share of power and voice than their Brazilian colleagues, they are likely to turn deaf ears on Brazilian demands for a common reformist front. Here’s where the hopes for South-South communion turn sour. The issue of UN Security Council reform illustrates the point: on Brazil’s single largest proposal for adapting global governance architecture, China is not willing to move. And it is not pressed to worry either.

The China-Brazil disconnect is on full display in two regions where Brazil is now seeking to demonstrate global reach: South America and Portuguese-speaking Africa. In one, Brazil is seeking to show the powers of its own indigenous capitalism, and in the other, its growing diplomatic responsibilities. Both regions have witnessed the phenomenal, fast-pace expansion of Chinese commerce and influence. But the Chinese push in directions that Brazilians often find counterproductive or outright challenging.

Brazilian frustration with the goods China has to offer also coexists with suspicion about its intentions—a spark for anti-China voices at home. They are not a lobby (yet), but have helped shape public attitudes and expectations.

A recurring argument here is that Chinese demand for Brazilian commodities (instead of higher value products) will hurt the indigenous industrial complex that has modernized Brazil. Another is that Chinese land purchases in Brazil are threats to sovereignty over national natural resources. And yet another warns against Chinese direct investment. The argument here is that such investment—politically driven and controlled by an autocratic state—may well conceal spurious geopolitical objectives that will be detrimental to Brazil.

Under normal circumstances, officials in Brasilia could ignore those voices. But due to the lack of institutions to frame Brazil-China relations, they should worry. After all, they lack the tools to control damage or build an agenda that is positive and mutually beneficial.

A continuing challenge is that Brazil’s leaders generally have a hard time making sense of the Chinese political system and have little access to China’s circles of power and influence. The embassy in Beijing remains understaffed and only a handful of officials have the language skills and knowledge to effectively negotiate in a Chinese setting. Academic engagement is practically non-existent and there are no centers of Chinese studies in Brazil to train new generations on the history, politics and culture of that country. Social connections do not help either: existing levels of people expanding ties between the two countries are tiny.

While the obstacles are plenty, none of these trends is irreversible. If she were to act now, President Rousseff could begin to transform the relationship in her first term.

President Rousseff and the large contingent of businesspeople and officials that accompanied her to China should take a moment to pause and take stock of how much Brazil stands to benefits from its China relationship if this growing bilateral inequality persists. There is opportunity for both countries to benefit from their partnership, but the task at hand is figuring out how to do so before it becomes too late.

But even with the signing of 22 cooperation agreements earlier this month in China, Brazil still is at a disadvantage. Without effective channels and tools to make itself heard in Beijing, Brazil will find it extremely hard to reap the potential benefits of jumping on the Chinese bandwagon. Perhaps more important, without a clear China policy, Brazil will increasingly find itself crippled and unequipped to resist mounting Chinese pressure in whatever form it may take.

Brazil: What's Next? - Albert Fishlow

Um veterano brasilianista analisa os desafios da nova presidente do Brasil.
Paulo Roberto de Almeida

Brazil: What's Next?
by Albert Fishlow
Americas Quarterly, Winter 2011 Issue

The post-Lula, or Dilma, era promises both change and continuity.

To virtually no one’s surprise, Dilma Rousseff took office on January 1, 2011, as Brazil’s first female president. She won decisively—by a 12 percent margin nationwide in the second round—through capturing the many voters at the bottom of the income scale who look forward to continuing gains in their daily lives under her presidency.

Dilma’s ascension to the presidential palace is really Lula’s victory, with his popularity exceeding 80 percent upon departing office. The rapid recovery from world recession, increasing employment and stable prices—all achieved during the Lula administration—ensured that Brazilians’ satisfaction would extend to his chosen successor. Lula not only picked her but guided her political campaign and has even influenced the structuring of the cabinet. Lula’s finance minister, Guido Mantega, for example, will remain in his post.

But what happens afterwards? What role will Lula play in their party, the Partido dos Trabalhadores (PT), as leaders of the Left inevitably contest with more moderate forces?

Political Change
The Dilma era will begin with the PT emerging as the largest party in the Chamber of Deputies, as it did in 2002, but with only about one-fifth of all seats. That is typical. Joined with the Partido do Movimento Democrático Brasileiro (PMDB) and its other political partners, the overall majority comes to more than the 60 percent needed for constitutional amendments. This represents a slight increase from its 53 percent control at the time of the last election in 2006.

In the Senate, the PMDB retains its numerical lead, followed by the PT. But additional support from allied parties assures the needed super-majority, with overall parties aligned with Dilma now holding a comparable 60 percent of the seats. In 2006 the margin was 54 percent. These totals exclude the Partido Progressista (PP) and Partido Verde (PV), both of which will be inclined to vote with the government on some legislation. In sum, the PT, with less than a fifth of each body, stands better able to manage legislatively than previously.

This ascension of the PT coincides with the strong decline of the Democratas (the former Partido da Frente Liberal and, before that, Partido Democrático Social). At one time, the Democratas benefited from the more-than-proportional representation afforded to the Northeast and occupied a strong position in the national legislature. But that position has now been eroded—a result of long-standing differences between the South and the Northeast. With this power erosion, future realignment becomes a possibility. Already São Paulo Mayor Gilberto Kassab has spoken of defecting.

A restructuring of political parties will be a possible consequence of last fall’s election. More than 20 parties have again won seats in the Congress. The much-reduced Democratas could consider a merger with the Partido da Social Democracia Brasileira (PSDB), now led by Senator Aécio Neves of Minas Gerais. With governors in São Paulo, Minas Gerais, Paraná, Goias, and elsewhere, the PSDB, the party of former president Fernando Henrique Cardoso, will hold sway over more than half the Brazilian population. Federalism counts in Brazil, and any effective opposition to the PT will likely emanate from state capitals rather than Brasilia.

Also on the table is the never-fulfilled possibility of political reform. Lula has suggested an interest in leading the process and calling a Constituent Assembly. Brazil simply has too many individual political parties, which complicates electoral choice and the effectiveness of congressional action. Current rules are oriented to individual appeal and, not immaterially, to past benefits bestowed. Movement toward a closed electoral list for the Chamber of Deputies as well as formal district affiliation within states could lead to more coherent political parties.

The election of Francisco Oliveira Silva, a clown known as Tiririca (Grumpy), with the highest popular vote in the country illustrates the need for changes to the electoral system. After winning on slogans such as “It can’t get any worse,” Oliveira transferred through the proportional voting system the surplus (about 1 million) of his 1.3 million votes to elect four more deputies.

A total of 6,000 candidates from 27 separate parties competed for the Chamber’s 513 seats. Few of the victors owe their place to party platform and many are unlikely to pursue active, long-term careers within the legislature. Several will become members of the baixo clero (or backbenchers) called upon to vote in specific circumstances, before returning to compete for preferred positions in mayoral and state elections.

The result of this dysfunctionality is that Brazilian politics in the New Republic has centered on the executive. The medida provisória, which allows for immediate temporary passage of legislation, subject to congressional overturn, has become an often-used presidential mechanism to enact laws. Although a constitutional amendment has stopped their continued executive extension, the measure remains a potent alternative to passing proposed legislation.

One likely change, now more possible under a Dilma administration, is greater legislative initiative. Political parties no longer need to contend with a president whose personal popularity is far-reaching. They can assert themselves. This is even more likely since Vice President Michel Temer is a long-time leader and former Speaker of the PMDB within the Chamber.

Economic Realities
Dilma has promised to retain the key elements of the economic strategy in place since 1999: inflation targeting with a 4.5 percent increase annually, a variable exchange rate and a primary surplus of 3.3 percent of GDP annually. That will join a commitment to reinforce declining poverty through Bolsa Familia’s social transfers, as well as to assure current high rates of economic expansion. She has promised attention to fiscal discipline and to tax reform and pledged a more efficient expenditure policy.

An immediate issue is the potential increase in the minimum wage, now scheduled to rise by 5.5 percent in 2011, which is more than the inflation rate. Other tasks include restricting government expenditures and dealing with an appreciated real, in addition to responding to unpopular Central Bank hikes in interest rates.

Import substitution may be gone, but greater federal intervention is on its way back. Dilma—along with the PT and many of its allies—believes in a bigger state role in this next phase of Brazilian expansion. She was central to the preparation and management of the Programa de Aceleração do Crescimento (Growth Acceleration Program, PAC) put into effect in 2007.

This means a more aggressive industrial policy to select future winners and a greater willingness to apply state investment (and management) than during the Lula government. There was much talk about this but little practical action for a long time. Not until the crisis of 2009, when the Banco Nacional de Desenvolvimento Econômico e Social (BNDES) assumed a much expanded role, did that begin to change. However, many in the PT would have preferred a greater BNDES effort to strengthen the industrial sector and domestic market rather than agricultural and mining exports. This issue will recur, but Luciano Coutinho’s reappointment as head of BNDES assures him a continued central role.

Inevitably, Petrobras, Brazil’s semi-public energy company, will be the lead actor. There is an understandable preference for counting the gains rather than recognizing the costs deriving from the sub-salt oil deposits found some 250 kilometers (160 miles) offshore from Rio de Janeiro. This goes beyond the technical risks inherent in exploration and development that BP brought to the forefront in the Gulf of Mexico. Brazilian oil deposits are 50 percent deeper than the Gulf deposits, and the difficulties in extracting them are undetermined.

A great deal of expenditure is promised in the coming years—much of it committed domestically rather than internationally—to develop these petroleum riches. This means larger investment, but it is not clear that domestic savings will rise to finance it. Recent years—with the exception of 2009—have been good for Brazil, and especially for the rising lower-middle class. But growth via internal consumption, bolstered by rising terms of trade, has limits. Continued spending is also ahead for the 2014 World Cup and the 2016 Olympic Games in Brazil.

In the midst of talk about the primary surplus, it is easy to forget that Brazil still faces an overall fiscal deficit. Although its increase in 2009 undoubtedly helped recovery, the deficit became larger in 2010. During the 1950s and the 1970s, the state invested, and the private sector saved—both contributing voluntarily and involuntarily—through what amounted to an inflation tax that fell most prominently upon the poorest. No one wants a repetition of inflation now.

To grow at a steady 5 percent a year implies a much higher investment rate of close to 25 percent. Domestic savings now amount to about 17 percent. Foreign savings can help, but by no more than 3 percentage points or so. That limit emerges not only from the lessons of the debt crisis of the 1980s, but from more recent downturns in Mexico and Argentina. Savings ought to come from the public sector to guarantee their continuity. Eliminating the annual deficit—now greater than 3 percent of GDP—in the pension system is one way to do that.

A larger state must be financed somehow. The Brazilian public is unlikely to want even higher tax rates, so reducing the social security deficit and not spending the surplus provides a way out. Will Dilma be inclined to confront that problem and to procure the necessary broad support in Congress? It happened before in a PT government: Lula’s first constitutional amendment in 2003 dealt with social security.

In these good years, Brazil must also deal with an appreciated exchange rate that is beginning to hinder its industrial sector. It is easy to accuse the U.S. and China of creating the problem, while portraying Brazil as an innocent victim. Capital flows come in response to high domestic interest rates. Eliminating the fiscal deficit—which social security reform would do—would lead to lower interest rates. Higher taxes on capital inflows can work only in the short run.

Foreign Policy
Lula was quite popular internationally. During his presidency, he traveled widely and gained plaudits—and wider markets—for Brazil with a foreign policy that transcended Latin America. The search for a permanent position on the UN Security Council has been emphasized, along with a desire for greater status on such issues as the environment, nuclear weapons, peace in the Middle East, and conclusion of the Doha Round at the World Trade Organization.

Dilma cannot, and will not, match this record. Satisfying Iranian President Mahmoud Ahmadinejad and U.S. President Barack Obama simultaneously, as well as Chilean President Sebastián Piñera and Venezuelan President Hugo Chávez closer to home, is a daunting effort that requires first-class diplomatic skills. Lula managed to be a star at meetings of the World Economic Forum as well as the Social World Forum. But few expect her to try to duplicate Lula’s foreign policy initiatives.

Dilma may be able to depend on others to a greater extent. The foreign ministry has been shifting and becoming fully aligned to active participation in world affairs. Foreign policy has become more attuned to domestic politics, mirroring the experience of other major powers. At the same time, the PT is now integrated into the foreign ministry.

Dealing with the world is no longer a choice but a necessity. Brazil has become too important globally to slide back to a more regional focus. But, for Dilma, defining an effective strategy may take more time and effort than many have yet considered.

The Road Ahead
Following the election, Dilma expressed her immense gratitude to Lula for his help during her campaign. She suggested that she will continue to consult and depend upon him. But Lula’s advice may turn out to be more of a burden than a blessing. In the recent past, former Brazilian President Itamar Franco [1992–1994] created problems for his successor, Fernando Henrique Cardoso. That is why a former president’s “exile” to diplomatic service is so appealing.

Lula is too central and active a participant in recent Brazilian history to simply become a mute observer. Already he is speaking of a Constituent Assembly next year. Perhaps that will work. After the death of Néstor Kirchner, some mentioned the possibility of him becoming the new Secretary-General of the Union of South American Nations (UNASUR). He rejected that, much as Chávez might have liked Brazil under the aegis of Venezuela. The possibility of a future UN role remains.

In the meantime, Lula is staying. Having Brazil successfully develop at a high rate, more equally and more democratically, and with a PT dominant position, is what he cares about.