In Moscow, Brazil President Talks Economy, But Also Terror, North Korea and Syria

Brazil’s President Michel Temer on Tuesday called on Russian businesses to invest in the development of infrastructure in the Latin American country, including its ports and roads. The Brazilian leader arrived in Moscow to hold a number of visits with the Russian leadership.

“We are implementing a program of privatization of state property and granting concessions. During the visit I will meet with Russian investors and I want to invite them to make their investments more actively into sectors of our economy including energy, roads, railroads, ports and airports,” Temer said during his meeting with Russian lower house of parliament speaker, Vyacheslav Volodin.

According to the Kremlin press service, on Wednesday, Temer will meet Russian President Vladimir Putin and the two leaders will sign a number of bilateral documents. Brazilian Foreign Minister Aloysio Nunes said that the presidents could discuss a number of issues, including counterterrorism and the crises in North Korea and Syria.

“In the year I assumed the president’s office [August 2016], bilateral trade between our countries grew significantly. If we look at the exports and imports, the increase amounted to 40 percent,” Temer said during his meeting with Vyacheslav Volodin, the speaker of the lower house of Russia’s parliament.

The Brazil-Russia agreements are expected to contribute to an increase in bilateral cooperation and will “demonstrate the significant maturity of our bilateral relations,” the Brazilian leader noted.

In the conversation with Volodin, Temer noted that he liked the speaker’s proposal to develop and deepen cooperation between the Russian and Brazilian parliaments.

“It is necessary to move to the wider issues, including economic cooperation,” Temer further added.

As part of the meeting, the Brazilian president invited Volodin to visit Brazil.

Brazil’s Foreign Minister Aloysio Nunes Ferreira said in an interview to Russia’s Rossiyskaya Gazeta newspaper that the two leaders were expected to discuss a wide range of issues including but not limited to the issues of preserving peace, the fight against international terrorism and the situation around both North Korea and Syria.

Two Centuries of Friendship

The relations between Russia and Brazil were initially established on October 3, 1828 and suspended in the wake of the Russian Revolution of 1917. The diplomatic ties were restored for two years in 1945 while their final restoration took place in 1961. Brazil became one of the first countries to recognize the Russian Federation as a successor state to the Soviet Union on December 26, 1991.

In June 2000, Moscow and Brasília signed the Treaty on Partnership Relations. In November 2004, Russia’s President Putin traveled to Brazil marking the first visit by a Russian head of state to the country in the history of the bilateral relations.

In recent years, the Russian-Brazilian relations have been characterized by the positive dynamics. The Russian president visited Brazil in November 2004, November 2008 and July 2014, while the Brazilian leaders came to Russia in January 2002, October 2005, May 2010 and December 2012.

Apart from this, the presidents of Russia and Brazil met on the sidelines of various summits and conferences such as the 2011 BRICS Summit in China, the G20 Summit in Mexico in 2012, the United Nations Conference on Sustainable Development (UNCSD) in Brazil in 2012, the 2013 G20 Summit and the 2015 BRICS Summit in Russia.

In 2015, the BRICS countries’ leaders held an unofficial meeting on the sidelines of the G20 Summit in the Turkish city of Antalya. In 2016, the BRICS heads of state and government met ahead of the G20 Summit in the Chinese city of Hangzhou.

On September 16, 2015, Moscow hosted the seventh meeting of the Russian-Brazilian High-Level Commission on Cooperation, chaired by Russian Prime Minister Dmitry Medvedev and then-Vice-President of Brazil Michel Temer.

The meeting’s agenda was focused on cooperation in such spheres as trade, economy, investment, military equipment, energy, aerospace, agriculture, scientific research and culture.

During his visit to Moscow, Temer also met with Sergey Naryshkin, then speaker of the lower house of Russia’s parliament, and Valentina Matvienko, the head of the parliament’s upper house.

The two countries’ foreign ministries also maintain regular dialogue. On February 16, 2017, Russia’s Foreign Minister Sergey Lavrov had a conversation with then-Foreign Minister of Brazil Jose Serra on the sidelines of the G20 foreign ministers meeting in the German city of Bonn.

Brazil is Russia’s major trade partner in Latin America accounting for about 40 percent of Russia’s trade in the region.

In 2016, the turnover between Russia and Brazil totaled US$ 4.31 billion, including US$ 1.76 billion in exports and US$ 2.52 billion in imports from Brazil.

Brazil is listed as 23rd in Russia’s foreign trade balance in 2016, down from 22nd place in 2015.

According to media reports, summarizing various data of Russia’s Federal Customs Service, the country’s exports to Brazil in 2016 were dominated by chemical goods forming 72 percent of total exports to Brazil. Among the products, exported from Russia to Brazil, there were also minerals (22 percent), metals and metal products (2 percent), machinery, equipment and transportation vehicles (1.88 percent).

Russia’s imports from Brazil include food and agricultural products (87 percent of total imports from the country), chemical products (5 percent), machinery, equipment and transportation vehicles (4 percent), metals and metal products (3 percent).

Apart from this, Brazil is the largest exporter of food and agricultural products to the Russian market among the countries outside the former Soviet Union. Additionally, it is the top supplier of such goods as frozen meat, pork and cane sugar.

The major Russian companies operating in Brazil include those in the oil and gas sector (Rosneft), electric power industry (Power Machines), nuclear energy (Rosatom), chemicals (Uralkali), pharmaceuticals (Biocad) and agriculture (Sodrugestvo Group). Russian companies have a share in almost all the sectors of the Brazilian market while over fifty Brazilian companies are operating in Russia.

The Intergovernmental Russian-Brazilian Commission on Trade, Economic, Scientific and Technological Cooperation plays the key role in expanding trade and economic relations between the two countries. The tenth regular meeting of the commission was held in May 2017 in Brazil.

Despite the distance separating the two countries, cultural ties between Russia and Brazil have been actively developing.

The increasing number of Russia’s artistic groups on tours to Latin America, the organization of art exhibitions, Russian cinema weeks, and days of the Russian culture contribute to strengthening of the cultural cooperation between the countries.

The opening of the first, and so far the only, school of the Russian Bolshoi Theater in the Brazilian city of Joinville has been the major cultural cooperation project to date. Almost 300 students from across Brazil and a number of neighboring countries are currently studying in the school.

The Brazilian Cultural Center operating since 2013 in Moscow hosts regular lectures, concerts, seminars and other cultural and educational events.

Sputnik

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It seems the future never arrives in Brazil What Lies Ahead in Brazil? Brazil Has No Exemplary Past or Present. But What Lies Ahead for the Country? Europeans, US, developed country, developing country. Bolsonaro, future B. Michael Rubin For years, experts have debated what separates a developing country from a developed one. The GDP (Gross Domestic Product) of a country is one simple way to measure its economic development. Another way to measure a country's progress is the extent of public education, e.g. how many citizens complete high school. A country's health may be measured by the effectiveness of its healthcare system, for example, life expectancy and infant mortality. With these measurement tools, it's easier to gauge the difference between a country like Brazil and one like the U.S. What's not easy to gauge is how these two countries developed so differently when they were both "discovered" at the same time. In 1492 and 1500 respectively, the U.S. and Brazil fell under the spell of white Europeans for the first time. While the British and Portuguese had the same modus operandi, namely, to exploit their discoveries for whatever they had to offer, not to mention extinguishing the native Americans already living there if they got in the way, the end result turned out significantly different in the U.S. than in Brazil. There are several theories on how/why the U.S. developed at a faster pace than Brazil. The theories originate via contrasting perspectives – from psychology to economics to geography. One of the most popular theories suggests the divergence between the two countries is linked to politics, i.e. the U.S. established a democratic government in 1776, while Brazil's democracy it could be said began only in earnest in the 1980s. This theory states that the Portuguese monarchy, as well as the 19th and 20th century oligarchies that followed it, had no motivation to invest in industrial development or education of the masses. Rather, Brazil was prized for its cheap and plentiful labor to mine the rich soil of its vast land. There is another theory based on collective psychology that says the first U.S. colonizers from England were workaholic Puritans, who avoided dancing and music in place of work and religious devotion. They labored six days a week then spent all of Sunday in church. Meanwhile, the white settlers in Brazil were unambitious criminals who had been freed from prison in Portugal in exchange for settling in Brazil. The Marxist interpretation of why Brazil lags behind the U.S. was best summarized by Eduardo Galeano, the Uruguayan writer, in 1970. Galeano said five hundred years ago the U.S. had the good fortune of bad fortune. What he meant was the natural riches of Brazil – gold, silver, and diamonds – made it ripe for exploitation by western Europe. Whereas in the U.S., lacking such riches, the thirteen colonies were economically insignificant to the British. Instead, U.S. industrialization had official encouragement from England, resulting in early diversification of its exports and rapid development of manufacturing. II Leaving this debate to the historians, let us turn our focus to the future. According to global projections by several economic strategists, what lies ahead for Brazil, the U.S., and the rest of the world is startling. Projections forecast that based on GDP growth, in 2050 the world's largest economy will be China, not the U.S. In third place will be India, and in fourth – Brazil. With the ascendency of three-fourths of the BRIC countries over the next decades, it will be important to reevaluate the terms developed and developing. In thirty years, it may no longer be necessary to accept the label characterized by Nelson Rodrigues's famous phrase "complexo de vira-lata," for Brazil's national inferiority complex. For Brazilians, this future scenario presents glistening hope. A country with stronger economic power would mean the government has greater wealth to expend on infrastructure, crime control, education, healthcare, etc. What many Brazilians are not cognizant of are the pitfalls of economic prosperity. While Brazilians today may be envious of their wealthier northern neighbors, there are some aspects of a developed country's profile that are not worth envying. For example, the U.S. today far exceeds Brazil in the number of suicides, prescription drug overdoses, and mass shootings. GDP growth and economic projections depend on multiple variables, chief among them the global economic situation and worldwide political stability. A war in the Middle East, for example, can affect oil production and have global ramifications. Political stability within a country is also essential to its economic health. Elected presidents play a crucial role in a country's progress, especially as presidents may differ radically in their worldview. The political paths of the U.S. and Brazil are parallel today. In both countries, we've seen a left-wing regime (Obama/PT) followed by a far-right populist one (Trump/Bolsonaro), surprising many outside observers, and in the U.S. contradicting every political pollster, all of whom predicted a Trump loss to Hillary Clinton in 2016. In Brazil, although Bolsonaro was elected by a clear majority, his triumph has created a powerful emotional polarization in the country similar to what is happening in the U.S. Families, friends, and colleagues have split in a love/hate relationship toward the current presidents in the U.S. and Brazil, leaving broken friendships and family ties. Both presidents face enormous challenges to keep their campaign promises. In Brazil, a sluggish economy just recovering from a recession shows no signs of robust GDP growth for at least the next two years. High unemployment continues to devastate the consumer confidence index in Brazil, and Bolsonaro is suffering under his campaign boasts that his Economy Minister, Paulo Guedes, has all the answers to fix Brazil's slump. Additionally, there is no end to the destruction caused by corruption in Brazil. Some experts believe corruption to be the main reason why Brazil has one of the world's largest wealth inequality gaps. Political corruption robs government coffers of desperately needed funds for education and infrastructure, in addition to creating an atmosphere that encourages everyday citizens to underreport income and engage in the shadow economy, thereby sidestepping tax collectors and regulators. "Why should I be honest about reporting my income when nobody else is? The politicians are only going to steal the tax money anyway," one Brazilian doctor told me. While Bolsonaro has promised a housecleaning of corrupt officials, this is a cry Brazilians have heard from every previous administration. In only the first half-year of his presidency, he has made several missteps, such as nominating one of his sons to be the new ambassador to the U.S., despite the congressman's lack of diplomatic credentials. A June poll found that 51 percent of Brazilians now lack confidence in Bolsonaro's leadership. Just this week, Brazil issued regulations that open a fast-track to deport foreigners who are dangerous or have violated the constitution. The rules published on July 26 by Justice Minister Sérgio Moro define a dangerous person as anyone associated with terrorism or organized crime, in addition to football fans with a violent history. Journalists noted that this new regulation had coincidental timing for an American journalist who has come under fire from Moro for publishing private communications of Moro's. Nevertheless, despite overselling his leadership skills, Bolsonaro has made some economic progress. With the help of congressional leader Rodrigo Maia, a bill is moving forward in congress for the restructuring of Brazil's generous pension system. Most Brazilians recognize the long-term value of such a change, which can save the government billions of dollars over the next decade. At merely the possibility of pension reform, outside investors have responded positively, and the São Paulo stock exchange has performed brilliantly, reaching an all-time high earlier this month. In efforts to boost the economy, Bolsonaro and Paulo Guedes have taken the short-term approach advocated by the Chicago school of economics championed by Milton Friedman, who claimed the key to boosting a slugging economy was to cut government spending. Unfortunately many economists, such as Nobel Prize winner Paul Krugman, disagree with this approach. They believe the most effective way to revive a slow economy is exactly the opposite, to spend more money not less. They say the government should be investing money in education and infrastructure projects, which can help put people back to work. Bolsonaro/Guedes have also talked about reducing business bureaucracy and revising the absurdly complex Brazilian tax system, which inhibits foreign and domestic business investment. It remains to be seen whether Bolsonaro has the political acumen to tackle this Godzilla-sized issue. Should Bolsonaro find a way to reform the tax system, the pension system, and curb the most egregious villains of political bribery and kickbacks – a tall order – his efforts could indeed show strong economic results in time for the next election in 2022. Meanwhile, some prominent leaders have already lost faith in Bolsonaro's efforts. The veteran of political/economic affairs, Joaquim Levy, has parted company with the president after being appointed head of the government's powerful development bank, BNDES. Levy and Bolsonaro butted heads over an appointment Levy made of a former employee of Lula's. When neither man refused to back down, Levy resigned his position at BNDES. Many observers believe Bolsonaro's biggest misstep has been his short-term approach to fixing the economy by loosening the laws protecting the Amazon rainforest. He and Guedes believe that by opening up more of the Amazon to logging, mining, and farming, we will see immediate economic stimulation. On July 28, the lead article of The New York Times detailed the vastly increased deforestation in the Amazon taking place under Bolsonaro's leadership. Environmental experts argue that the economic benefits of increased logging and mining in the Amazon are microscopic compared to the long-term damage to the environment. After pressure from European leaders at the recent G-20 meeting to do more to protect the world's largest rainforest, Bolsonaro echoed a patriotic response demanding that no one has the right to an opinion about the Amazon except Brazilians. In retaliation to worldwide criticism, Bolsonaro threatened to follow Trump's example and pull out of the Paris climate accord; however, Bolsonaro was persuaded by cooler heads to retract his threat. To prove who was in control of Brazil's Amazon region, he appointed a federal police officer with strong ties to agribusiness as head of FUNAI, the country's indigenous agency. In a further insult to the world's environmental leaders, not to mention common sense, Paulo Guedes held a news conference on July 25 in Manaus, the largest city in the rainforest, where he declared that since the Amazon forest is known for being the "lungs" of the world, Brazil should charge other countries for all the oxygen the forest produces. Bolsonaro/Guedes also have promised to finish paving BR-319, a controversial highway that cuts through the Amazon forest, linking Manaus to the state of Rondônia and the rest of the country. Inaugurated in 1976, BR-319 was abandoned by federal governments in the 1980s and again in the 1990s as far too costly and risky. Environmentalists believe the highway's completion will seal a death knoll on many indigenous populations by vastly facilitating the growth of the logging and mining industries. Several dozen heavily armed miners dressed in military fatigues invaded a Wajãpi village recently in the state of Amapá near the border of French Guiana and fatally stabbed one of the community's leaders. While Brazil's environmental protection policies are desperately lacking these days, not all the news here was bad. On the opening day of the 2019 Pan America Games in Lima, Peru, Brazilian Luisa Baptista, swam, biked, and ran her way to the gold medal in the women's triathlon. The silver medal went to Vittoria Lopes, another Brazilian. B. Michael Rubin is an American writer living in Brazil.

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