Ricardo Guerra: Brazil Cannot Count on China for Its Exports as Much as It Did

Novinite Insider » DIPLOMATIC CHANNEL | Author: Angel Petrov |November 24, 2014, Monday // 12:00| Views: | Comments: 1
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Bulgaria: Ricardo Guerra: Brazil Cannot Count on China for Its Exports as Much as It Did Ricardo Guerra de Ar?ujo, the Brazilian Embassy's Charg? d'Affaires in Bulgaria. Photo: Embaixada do Brasil em S?fia - Facebook Page

Novinite.com has interviewed Ricardo Guerra de Ar?ujo, Charg? d’Affaires at the Brazilian Embassy in Sofia.

Ricardo Guerra de Ara?jo is a senior diplomat at the Brazilian Ministry of External Relations. During his more than twenty-year-long career as a diplomat he has worked for and represented Brazil in a number of Embassies and institutions, having been Minister-Counsellor at the Embassy in Paris prior to being appointed to Sofia.

The second part of the interview, held on the occasion of the re-election of Dilma Rousseff as President of Brazil is about Brazil's challenges and positioning in the global system nowadays, while the first focused on bilateral relations during the President’s first term in office.

What was the biggest challenge Brazil came across all over the last decades of its democratic consolidation?

The biggest challenge was that to establish democracy in a country, and to consolidate the political institutions along the years. This is not an easy task: all the three powers (executive, legislative and judiciary) should interact with each other to make democracy a stable and efficient system. Regulatory agencies have also an important role to play, but with regard to the political sphere the three independent powers are very essential. Before democracy, during the military government, the executive had a clear predominance in the political arena. Legislative and judiciary powers only followed suit. Now the three powers have reinstated their role in Brazil's democracy. Another challenge was that after re-democratization (and we saw that in another countries in Latin America and also in Europe after the fall of Communism) we had to decide how to deal with people who suffered during the authoritarian years and those responsible for this authoritarian government. There was a huge debate whether to punish or not punish the military, because it is well known they tortured, killed and kidnapped people on the one hand. On the other, the people they called "terrorists" also killed and hijacked officials, ambassadors, bankers; they robbed banks and did other bad things, but in the name of freedom and in the name of the fight against the military regime. So how to make these two ends meet in a peaceful way? The government in the first years of transition made a general waiver for both the military and the resistants. So they said, "We erase everything so that we should not start the delicate debate about who is guilty and who is innocent, who should or should not be punished." As for the revolutionaries, they were also given a waiver. The idea was to make sure the society could come together again in a more peaceful way. We saw that after WWII in France, when about half of the population had collaborated with the Nazis and the other half had been part of the Resistance. This problem is still very alive, since some people on the revolutionary side are still demanding that some of the military who were responsible for torture and killings be put on trial.

What is the biggest challenge now? Does it have something to do with what demonstrators on the streets were protesting at earlier this year?

No, it has nothing to do with this. Demonstrators are much more pragmatic. They are claiming for better public services, better education, better health and public transportation. They say: "Listen, my salary may be better than it was some ten years ago, but I still have to pay expensive transport tickets." Public hospitals are not very good. Education must be improved a lot, because poor people are not sending their children to private schools, but to public schools. Private schools in Brazil are very expensive and only the upper class could afford them. So protesters are very much concerned about their day-to-day life. They want cheaper fares and better quality of public services. Months before the World Cup people in the streets were asking, "How come the government spend so much money building football stadiums? We have other priorities. You should invest this money in education, health and transport mobility, this is much more urgent to do that rebuilding football stadiums." This new generation is not looking back at the past, but at the present and the future. Brazil's income taxes are among the highest in the world, but on the other hand our quality of services is not compatible with the the high taxes Brazilians pay every year. But I believe this second term of President Rousseff will be very much dedicated to tackle this specific problem, especially in the big cities. In a city like Sao Paulo, where the population numbers 20 million people, it could take a two-hour drive just to go to work and then again to come back home.

Overnight Ms Rousseff said the Petrobras scandal could change the Brazilian society forever. Do you agree and if yes - how will this happen?

The allegations were that Petrobras, the biggest state-owned Brazilian company, was financing political campaigns not only of the governing political parties itself, but also of the allies in the government. The Petrobras scandal was very much commented during the campaign. At that time President Rousseff promised she would investigate and would put every person involved in prison. Nowadays if you read the Brazilian press, this is exactly what is happening. Of course this had a huge economic and financial impact on the company, because Petrobras shares went down very quickly, and the company is highly indebted. My personal opinion is that [Ms Rousseff] is very determined to do that. But we are now to see how this is to unfold this year and the next year, because there are huge political interests in the affair.

Over the years Brazil has emerged as a key player both internationally and on a regional level. What is your country's vision of that role both in the region and on the global scene during this new term of Ms Rousseff as President?

Brazil is part of the BRICS group and also a member of the G-20. The country is also very much involved in the United Nations and is part of the G-4 group [Germany, Japan, India and Brazil] of countries requiring a reform of the Security Council and demanding permanent seats within the council. For the last 15 years Brazil has been striving to change the balance of power in the United Nations, in the IMF and the World Bank by proposing increased participation of developing countries in these institutions created during the Bretton Woods Conference after WWII. Brazil is at the origin of the creation of G-20. We believe it was a major step, because before G-20 the world was dominated by the G-7 countries, with the most industrialized countries deciding the agenda of the world. G-20 is still a restricted number of countries, but is more representative, more democratic than the previous configurations. The developing countries have finally become more an “agenda setter” than “agenda taker”. In the WTO Brazil is also very active in proposing trade relations more favorable to developing countries. These international organizations were again dominated by the EU, US and Japan, who used them to decide on the future of international trade without taking into consideration the opinion and interests of developing countries. We even managed, with the support of the majority of the Contracting Parties of the Organization, to elect a Brazilian citizen [Roberto Azevedo] as the General Director, the first Brazilian to run the WTO. We are one of these countries saying we cannot go on with the status quo. For example there is a tacit agreement between the US and the EU that the head of the World Bank should be American and the head of the IMF should be an European. We don't understand how this still can function sixty years after the Bretton Woods meeting, in spite of the fact that the world has changed and there are emerging economies responsible for a significant part of the world's trade and GDP. It is high time to think about adapting these institutions to the new international reality.

What is the role of China in Brazil's huge economic expansion over the past years? All countries to which China is a significant trade partner or investor are flourishing...

It is the biggest role. China has been our first trade partner for a few years already. For the last ten years the growth of the Brazilian economy was very much related to the foreign sector, because we exported a lot to the Chinese market. There was a real economic boom a few years ago, of course after the crisis this economic boom is coming to an end. China is not growing as much as it did a few years ago, they also have growing environmental concerns. So, of course, we cannot count on China as we used to do a few years ago, since we are exporting less to the country. This is why it is so important to have diversified trade: we cannot put all our eggs in the same basket. Even if China is a huge market for the Brazilian exports and by far our main trade partner, the other part of the Brazilian trade is very diversified. The US and the EU come right after China with a big share of our trade, followed by Latin American countries like Argentina and Brazil's partners from the MERCOSUR. Of course there are other problems with China, because what we mainly export are commodities with a very low added value (coffee, iron ore, soybean) and import industrial goods with greater value-added and services. . This is a historical problem, because we are used to follow this pattern with the US and the EU. Of course, China is part of the BRICS so we have close economic ties with this country At the last BRICS summit in Fortaleza it was decided to create this BRICS development bank and an emergency fund. They are the first step to create institutions not designed to compete the IMF or the World Bank, but to create a sort of “ World public good” capable of providing financial resources to developing countries on a more favorable basis and without strings attached. But alongside China India and South Africa are also important partners within the BRICS. Russia is a more complicated trade partner due to the crisis in Ukraine, notwithstanding it is still a very important one for us..

 

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Tags: Dilma Rousseff, WTO, Brazil, BRICS, G4, IMF, World Bank, Petrobras, Russia, China, MERCOSUR, Bretton Woods
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» To the forumComments (1)
#1
Jerry - 24 Nov 2014 // 23:45:29

Ricardo,

You have to look closely at a divided Brazil between the Have and Have Nots.

The North and Northeast divided with the South.

As you know Sao Paulo, Parana, Santa Catarina and Rio Grande do Sul supports the North and Northeast in its social programs through taxes paid by the South.

The legal process concerning the Petrobras litigation started in the South (Parana).

Will we see a unified Brazil in the next four years or a complete disarticulated Brazil?

The disarticulation of Rural Brazil with Urban Brazil are mecanisms of division that leads to a long divide.

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