Other Rising Powers: Brazil

We now turn our focus to an equally important global power. The economy in Brazil is forecasted to pass all but the largest European countries by the year 2020. Brazil is a developing country with the potential to have great impact on its neighbors, the global market, and the international political system. What will the picture of the global economy and international systems with the emergence of Brazil and other countries as major economic powers be? How will this affect our ideas of the aligned and unaligned, the north, south, and the East/West divide? This afternoon we have three distinguished speakers that were going to help us understand this topic. The first speaker will be Paolo Sotero. He is a Washington correspondent of O Estado de Sao Paolo, a leading Brazilian daily newspaper, and he is as well a commentator for several radio programs in Brazil. He'll be speaking on the topic: Brazil: The Uphill Path from Blessings to Uncertain Greatness. I also would encourage you to look in the program materials for extended biographies in the interest of saving as much time for the questions that we have coming up. I'm just going to be doing a brief introduction on each of the speakers. The second speaker this afternoon is Lincoln Gordon. He's a guest scholar at the Brookings Institution in Washington D.C. Dr. Gordon has served in a variety of government appointments, including U.S. Ambassador to Brazil. He is also the individual that was referred to earlier this morning as being the former president of Johns Hopkins University, and I might say also a person in his nineties, so that we... Beginning a new chapter here, he will speak on the topic Is Brazil Another China: Smaller but Better? Our final speaker for the session is Julia Sweig, the Nelson and David Rockefeller Senior Director of the Latin American Studies Program at the Council of Foreign Relations. She is the author of numerous scholarly articles, opinion pieces, and Congressional testimony on Latin America and American foreign policy, and has also directed several Council of Foreign Relations reports on the Andean region and on Cuba. Her topic is Backlash in and Beyond Latin America: The Global Context. Following their presentations we're going to move to your questions and I guess that if they're not forthcoming there's a reserve of those on China and India that I guess I can draw on. Please pass them to the Council Staff as they go around, and I'll try to raise as many of these as possible and organize them in a manner that hopefully will get the greatest impact by not repeating them. Now, the requisite reminder, if you haven't already turned off your telephones and your pagers and anything that beeps, would you do so now? Please join me in welcoming the first speaker tonight, he will be speaking right there from the table, Paolo Sotero, he's going to speak again on Brazil: The Uphill Path From Bigness to Uncertain Greatness. Thank you very much; it is a great pleasure to be here, to be in California. I am very grateful for the invitation, to have the opportunity to talk a little bit about my country. As Fred said, I am a journalist, and I always find it very challenging, it's very important for us journalists to be confronted and speak to an audience, and to be exposed to asking some questions because normally we sort of writing our own little cubicles and we think we know everything. And we know everything. But I wanted to start by commenting on something that I heard in the China session about this policy that they had to control the demographics and it ended up having a bunch of men and less women. I wanted to tell you as far as Brazil is concerned, we will give up our positions of leadership or anything in the world to keep our women at the numbers we have them now. It's the best thing we have in Brazil, and we are not, that's not negotiable. Brazil is a very big country, and that's what I mention there, but the bigness of Brazil. We are the fifth largest nation on earth in terms of territory, in terms of population we are actually territorially bigger than the 48 states of the United States. We speak one language, we are like you a country of immigrants, immigrants that came to Brazil against their will, the slaves, like you had here, we had them in much greater numbers, about 3 million to Brazil compared to about 800,000 maybe in the United States that came from Africa. We have European immigrants, we have 10 percent of our population is of Arab descent, we are the largest Japanese country on earth outside of Japan, we are the second largest African nation on earth outside of Nigeria. We are a country of many superlatives. Good and bad. Among the good things we have you may have heard about this, we are today, thanks to years of investment in education and research, the largest, one of the largest and certainly the most productive agricultural nation in the world. Although we now are basically a urban country. Brazil is 70 to 80 percent urban now, but our agriculture, we are the first producer of most commodities, first or second producer of most commodities, and we are at the gate of the farm, we are the most efficient. I include we, you may have traveled already in Brazilian made airplanes from Embraer Air, we are the first or second largest, I have a problem with the Canadians on that one, in this class of airplanes from 50 to 100 seats. And we are the world champion not only in soccer but also in renewable sources of energy. Brazil is the largest producer of ethanol from sugarcane and it's a very important thing for us and for the world. Just on that, for each unit of energy you spend, when you use sugarcane to produce ethanol, you spend one unit amp of energy to produce eight on corn, which is the base of the ethanol produced in the United States, you spend one unit of energy to produce one point one units of energy. Energy wise, this is not a very efficient, what you do in the United States, and one of the reasons is probably that you, the taxpayers have to subsidize the activity. I'm not saying and we can discuss about that later, Brazil and the United States together would not produce enough ethanol if the countries of the world would adopt a more sane and rational policy in terms of energy, so the two countries probably have to work together on that one. Now, on the bad side, Brazil is also a country of superlative unfortunately, and it's a country that we are one of the world champions of inequality. Our country, as our former President Fernando Henrique Cardozo used to say, this is a man that studied Brazil before he governed it, and he would say, "Brazil is not an underdeveloped country, Brazil is an unjust country." And it has to do with the legacy of slavery, and it has to do with the many things we did after that that has deepened some policies, some public policies in Brazil that have deepened our inequality, and that's something that we confront in our daily lives, but Brazil has one thing that I always like to remind people of about Brazil, and that is the fact that Brazil is a Western country. We are, it's very interesting I was thinking about this morning, I come from a town that has something in common with Monterey, with Carmel. Sao Paolo Brazil was once a mission. It started as a mission like Monterey, like Carmel. Obviously the growth there went a little bit out of control because now it's at 18 million city and we don't know how to govern it very well, but we are part of the new world, we are a Western country, and for the last 21 years, we have been also struggling to be a Western democracy. We became a democracy in 1985, meaning we went back to electing our leaders. We won that fight in the streets in Brazil, as always in Brazil we negotiated the end of the struggle. We are a country of negotiators, we are very good in negotiating, in compromise, sometimes I think that we do too much of it, but the fact is that in '85, we started back on the path of democracy. Nine years later, we had a great victory for us, which was we finally ended the scourge of inflation in Brazil. And from that point on, Brazil started under the leadership of what in my book is one of, probably the greatest presidents we ever had, to reintroduce ourselves to the world and say, "This is a stable democracy, this is a democracy with a stable economy." And we were going to build our world, we're going to build our Brazil on that basis, and we don't accept an alternative basis, we don't want, we could, we tried in the 60s and in the 70s to grow, to become a powerhouse, as a dictatorship. That was the Brasil Granzi, the Big Brazil. We wanted to build a great Brazil, and the greatness here has to do with democracy. One of the things that I think we have that is an asset for us as a democracy: We are very capable of self-criticism. We are not afraid to look into the mirror and see what's wrong with our country and try to fix it, and I wanted to read to you, just a couple of paragraphs of a book that the former president Cardozo published recently here in the United States, it's called The Accidental President of Brazil. I don't like the title very much, I think his rise to the presidency was not that accidental, but it's something that I think he conveys here much better than I could say, this business of "What is the struggle?" And he's talking about what he saw as his mission as president. He said, "My presidency was at its most basic level about trying to turn Brazil into a stable country. For our entire history, we had lurched from one crisis to another, mainly because of our refusal to follow rules. That was the Brazil of coups, of presidents resigning, of runaway inflation, of bank deposit freezes, et cetera. I believe that the common thread of that instability was an all too frequent disregard for the rule of law. There are many people, Brazilians included, who believe that such change was impossible. They saw Brazil as an incorrigible land of the (word undetermined), the artful little trick for getting around a system. This word, and the concept behind it, were supposedly intractable parts of our national identity, the product of a society that took deep pride in flouting the law. Brazil's refusal to follow rules was in reality just another product of our deeply unjust society. Where others saw random chaos and improvisation, I saw a supremely well-organized effort to maintain the status quo." This is a leader of Brazil speaking about Brazil. I think that there aren't many countries on earth that would have leaders with the courage to talk about their own countries, to diagnose their own countries in those terms. We were lucky to have that president, who is still very active, he has his own equivalent of the presidential library in Brazil, he actually, the idea was directly inspired, as many things are in Brazil, on the American experience of that. Well, we are now months away from the fifth consecutive election for president in Brazil, it will happen in October. It will be a free election. We pride ourselves, because of some bad things that happened in the past about elections, we ended up developing, and this is another Brazilian superlative, we ended up developing one of the best and most efficient electronic systems of voting on earth, and after the election, the presidential election, about 100 million people vote in Brazil, including in the Amazon, in the jungle, after four hours of the last closing, closing of the last polls, we have the results. The margin of error is zero, all votes are counted, and listen to this: We use American technology to do that. So I hope you guys get the idea. You know, what, when we think about the future, you know, when I hear about Brazil is going to be 15 years from now, this amazing powerful nation, my reaction as a journalist is to say, "Are we? Really?" So 18 percent of our kids reach university. Do you build a powerful democracy with only 18 percent of your young going to the university? 18 percent, one-eight? South Korea, that was at the same level of development of Brazil in 1975 sends today, 80, eight-zero percent of their young to the universities. South Korea and Brazil spent more or less the same share of their GDP in education, so it looks like we have a challenge there. Is... There are problems, for instance, in our tax systems. In Brazil, if you are a citizen, a taxpayer, or if you are a company, you pay around 54 different types of taxes. There is nothing on Earth that has been invented that probably our bureaucrats there didn't find a way of taxing. We tax everything, including our, if you write a check in Brazil, there is a federal tax on every single one of them you pay. This is obviously something, can you really be in the market economy, can you be efficient, can you actually grow that way? So we have doubts about it. Our labor laws in Brazil that come directly from the Carta del Lavoro, it's something that dear Mussolini started in Italy, we had a dictatorship in the 30s and 40s that imported some of those ideas, they became really part of the system, and have been struggling to change those, they're very protective of labor rights, they make hiring and firing very difficult, and the end result of that is they protect the workers so much that they ended up not protecting workers, because 50 percent of employment now is informal. People will not hire. So this is another issue that I present to you as one thing, one of the challenges that we have to resolve in order to really claim our place, that we believe we have that place in the future as a country that can really realize its potential and not only for ourselves, but for our neighbors, and for the world, frankly. There is one thing though that's very positive about the way we do this and when you hear Julia speak you probably will, the picture will be more complete. In the 60s, and Ambassador Gordon knows all about this, in the 60s and the 70s, we love to blame others for our problems. Anything that happened, we would immediately, and you guys are always the preferred target. What happened here in Brazil? Oh, the Americans are doing something, et cetera. There were some choices made at that point related to your own interests on the Cold War that sort of reinforced that idea, but there is a basic difference, I don't believe that anything that happened in Brazil in the past is really because of the United States or caused by the United States, but there is a difference today: If a leader of Brazil, if any of the candidate, presidential candidates in Brazil right now would tell us, would go to the people in Brazil and say that the problems of Brazil are caused by the United States, by the Europeans, et cetera, we would laugh, because we know that our problems are caused by us. We know the problems in Brazil were born in Brazil, we raised them there, and now they are very big problems and we have to deal with those. Your president is not that popular in Brazil as he is not very popular anywhere in the world that I know of, but let me say the true target may be a surprise to you. President Bush has, as far as Brazil has concerned, has conducted himself very well, we have very correct relationships that were started by President Clinton and President Cardozo, and they, I think opened some ways and the people in Washington were wise enough to continue this relationship even though President Bush is this right-winger and our President is supposed to be this left-winger President, Luiz Inacio Da Silva, but here is another thing that I think is important to us, we recognize that the challenges that we have are up to us to fix, they are our challenges. I think this is very healthy now, our attitude, and we are learning. The current government of Brazil did something that I am very critical of. It started to play, after President Cardozo started to say that this stable, this democracy with a stable economy has a role in the region, but he played that role very carefully, knowing that Brazil is not a country that has accidents of power. Very carefully to play our role, because we are a very big nation, we have 10 neighbors and we have been at peace with all of them for 140 years, but we are very careful on how we asserted that role. The current government decided to proclaim Brazilian leadership, and our whole insertion as a regional leader now is being tested. Last week, I really felt like an American last week, the whole week, because the Bolivians decided to occupy the Brazilian oil company facilities in Bolivia, militarily, and nationalize the gas, and so I feel like a gringo, they're expropriating things for Brazil, and so it's really, and it doesn't feel very good actually, but it's a challenge. Do you want to be a world leader? Do you have, really, what it takes to do that? Do we know how to do that? Wouldn't we come across a little bit too arrogant? We're not sending our military might anywhere, well, we are in Haiti, we had I think a very constructive role, we are leading the challenge there in Haiti to try and stabilize Haiti, I think it's a very positive thing, we don't know the outcome of that, America had for many years what 20,000 troops there, and it didn't help much, we don't know if our mission of Brazil leading the nation, the UN nation with Chileans, Argentines, and others, Chinese, Japanese, will help but we have that, we can have that positive role, nd we had under President Cardozo, we sent troops to Angola, always under the UN flag, but this business of the regional leadership, we are struggling right now. My paper is very, very critical of our current foreign policy because it has, we did something that's almost un-Brazilian about this, we started boasting about our leadership, and the result is that the neighbors kind of didn't agree much with us, and we are kind of isolated right now, so we have to revisit this issue, but those are the main things that I wanted you to keep in mind about Brazil is that one: We are a democracy. Two: Our problems are generated by us; we are not blaming you for anything. We are in the learning curve of leadership, and certainly there are, finally: there are certain things that are certain as far as Brazil and the U.S. that we can do together, we should do together. One of them is that the United States would practice a little bit more its own preaching in terms of liberal economics, and allow us to sell to you the stuff where we are competitive, and room for cooperation, yes, let's explore that in particular, I think that is fundamental, on renewable sources of energy, Brazil and the United States together can kind of re-advance the world on that issue. Thank you. Thank you, Paolo, we'll next hear from Ambassador Lincoln Gordon on: Is Brazil Another China, Smaller but Better? I thought I was going third, but Julia has a wonderful way of manipulating things to her benefit, and I respect it. Well, you've heard of course, a brilliant exposition of what Brazil is like nowadays, contemporary Brazil, and what it hopes, some of its hopes, at least, are for the future. Paolo didn't tie this down specifically to the date that is supposed to govern our program here, which is 2020. I must say, I think that's kind of a joke, I feel a little bit the way the Correspondent of the New York Times who spoke on the platform of the opening session last night, said that when he was asked what forward as a New York Times correspondent, if he could look forward for as much as 48 hours, that was quite a triumph in itself, and the idea of looking forward, what would it be, 15 years, was somewhat beyond him. It's certainly to anybody who follows Brazilian politics, what the situation will be like in 2020, will certainly depend in considerable measure on what happens this October in the presidential election of 2006. Brazil has copied us in going for a two-term limitation on the presidency, but also two-term directly possible, in the old days there had to be a space in between filled by somebody else, the president could not succeed himself directly, but since the constitution of '48, not '48, '88, our procedure in that respect has been copied. What Brazil didn't do, constitutionally, and I don't understand why somebody didn't suggest this at the time, they probably did, but I don't know the history that well, was to make the President and the Vice President candidates run on a single ticket. WE learned a lesson in the election of 1800, when there was a tie in the electoral votes for the President because the other people voting for the Vice President, it created a major crisis in early American politics. Brazil in the constitution of 1945, that was, 48, that was written shortly after some decades of dictatorship, which started in the Great Depression, the worldwide depression of the late 1920s and early 30s, they had the president and the vice president elected on separate ballots and nominated on separate ballots, and that created a real crisis in the years that I was serving as Ambassador there, 1960-1964, because well basically in 1961, President elected at the end of 1960, almost simultaneously with John Kennedy in the United States, inaugurated in Brazil on New Years Day, here January 20th, so they seem to be similar, had a vice president who came from an opposition party, with quite a different set of ideas, John Gular by name, President Cuadros apparently thought that he could manipulate things to increase his powers at the expense of the other branches of the government and he was going to do this first by sending Gular off on a trade mission to Communist China which Brazil at that time didn't recognize, at that time, we were still recognizing the so-called Republic of China as the China, and Brazil was following our example, so this vice president was sent off to a country Brazil didn't recognize, and then one morning after having been in office for roughly seven months, so this was in, was it August or September? (August) August. (August 24, 1961) August 24, 1961, the elected president resigned. It was an astounding resignation because there were no reasons stated for it, no real reasons, there was some very general (word undetermined) generalities that didn't mean anything. He kept his intention to resign out of the mind of any of his advisors, it happened to be Army Day in Brazil, something that happens every year, they have parades and nice dress up in uniforms and so on, and they move the capital to Brasilia, the top Army parade is in Brasilia, now the national capital, and the President attended it and presided over it in the usual way for a president on Army Day, went back to his office, consulted with his minister of justice, and showed him a letter, hand-written letter, to the public. And he said he was instructing the minister of justice to go to the Parliament at about 11:00 in the morning. He meanwhile would have taken the presidential plane and started to fly from Brasilia to Sao Paolo, which in that plane I guess takes two or three hours isn't it? (One and a half). One and a half, anyway, it's time enough, when he arrived, the minister of justice tried to persuade him to desist, he said, "This is a crazy idea," and Cuadros wouldn't cease and desist, he said that was what he wanted to do, so the minister, a loyal, loyal minister decided he would do it and he did it. Cuadros got into the plane, just he and the pilot, they set for Sao Paolo which was where Cuadros came from, and while they were in the air, the minister of justice went to the chamber of deputies, asked the speaker to let him take the floor, and he said he had a letter from the president of the republic which he wanted to read to the deputies, which he did, and the congress was absolutely shocked by this letter. For some reason I've never been able to understand. Gular was not listening to these proceedings on his radio. I presume he would have been able to hear his own speech being read, he didn't. He arrived in Sao Paolo at the military air field, the commander of that field, as always, when there was a presidential landing came to the door of the plane, climbed up the steps to greet the president, of course, he'd heard, and everybody by then had heard the news on the radio, and Gular stepped out and said, "Good morning, how are you," or words to that effect, and he said, "Mr. President I don't understand what's happening here while you were in the air." The minister of justice came to the chamber of deputies and read what seems to be a letter of your resignation. And the president nodded and said, "Yes that's correct, that's what I ordered," and of course that set forth a national crisis. One of the big questions, the central question was in that crisis, whatever the reasons were that motivated Cuadros, what was going to be done about the Vice President who now, under the constitution, would succeed to the presidency? He couldn't succeed to the presidency while outside of Brazil, because of a long-standing constitutional arrangement, it had to be on Brazilian soil, so the question was would he be allowed to come back onto Brazilian soil, he was still in the far east, and the three military ministers, in those days there was no civilian minister of defense as there is now, or the equivalent of what we call Secretaries of the Army and Navy and Air Force, that's all been changed now, but in those days they were all high military officers, the commander of the army, he was a general in uniform. The commander of the air force, was they called them Brigaderos, the equivalent of an air force general. The commander of the navy of course was an admiral. The three of them joined together in a if they can avoid them, and a leading socialist Deputado, member of the lower house of Parliament, devised a solution. The solution was, convert the Brazilian government from a presidential system to a parliamentary system, so that there would be a new office called Prime Minister, and the Prime Minister would be nominated by the President but he had to be confirmed by the Senate. I think he had to be confirmed by the Chamber of Deputies too, didn't he, in order to take office. And so hence the majority of the deputies and the senators were in both cases not very friendly to Gular, especially, after this performance on the part of Cuadros, it looked like a wonderful way of saving the constitution, avoiding possibly a civil war. Cardozo's, I'm sorry, Gular's brother-in-law was then the governor of Rio Grancha del Sol, the southernmost state in Brazil. That state has the reputation of being somewhat like Argentine cowboys, they're called Gauchos, which is the same word that's used for the Argentines of the plateau, cowboys, and they often don't take the niceties of legalities completely seriously, and the governor, the bother-in- law of this vice president had conspired some with the local commanders. It was the largest Army unit in Brazil because the old Brazilian tradition was we have only one significant enemy on our frontiers, that's Argentina. All the other countries with whom we have common borders are tiny little countries, they couldn't make any sort of show against Brazil, but Argentina, that's a big country, a pretty advanced country, a strong educational system, so they might. The crisis was resolved, Gular came back, he accepted the constitution with this reduction tremendously, reduction in his nominal powers, because there would be a prime minister. He nominated a reasonably, an ex-governor of the state of (word undetermined) a reasonably, generally respected man who became the first prime minister. Now, let's leave this old history behind, it was what led to the crisis on 1968 which Paolo's already referred to, and it came in the middle of my own term. So I want to turn to the question that I put in the menu. Is Brazil another China? That's an interesting comparison. In two respects they're quite similar: the land area of Brazil and the land area of China are within reach. In populations, of course, they're as far apart as you could expect to get. I calculated the ratio somewhere here: six and 2/3, the population of Brazil, population of Brazil at the last census: 184 million, of China: 1 billion, 226 million, that's a ratio of six and a half to one. And I think it's unlikely that in the period we're supposed to be looking at, which is only 14 years, that there will be anything remotely like equalization. The Brazilian birth rate may be a little higher, and there may be some drawing up, but I don't think Brazilians would like the idea of trying to sustain without environmental damage a population of six and a half billion, to say nothing of what in another 20 years it might come to be. In terms of geographical development, there are some differences and some similarities, there's a great variety of terrain of course in both countries, both are importing petroleum. Brazil, of course, is a leading country in deep-water petroleum right off shore, without that Brazil would be heavily dependent on