What Brazil’s Comeback Means for the Caribbean

[dropcap]T[/dropcap]he Caribbean will forever have a special relationship with the Americas. Our region has its own unique identity, but also shares similar political traditions, and cultures with a number of nations north and south of us. In the south especially, we’ve shared with a shift from European rule to governance and growth in our own right. For many years, Brazil was a leading light of a new era in Latin America. It all went wrong economically in 2013, but now a comeback is on the cards. What does this new chapter in Brazil’s economic growth mean for our region? And where can the Caribbean grow ties with South America’s biggest economy? Let’s look now.

WHERE BRAZIL HAS BEEN

To discuss where Brazil is today, it’s necessary to first recap where it’s been. For much of the early 2000’s, it was a great economic success story. Appearing to usher in a new era of promise for the nation and all of Latin America, at one point in 2012 Brazil even overtook the UK to be the world’s sixth largest economy.

The turn towards democracy in 1988 has been cited as the beginning of this new era of prosperity. The high demand for commodities in growing economies around the world was a key draw, and so too its agricultural sector, which amassed a $75 billion trade surplus in 2015.

This growth has been severely tested in other areas of the economy and national life however.

Throughout this period accusations and corruption charges flew back and forth among the political class. Growth slowed in 2013, a recession came in 2014, and suddenly Brazil’s readiness to host the Rio 2016 Olympic Games – an event that was intended to signal Brazil’s emergence as a real global leader on the world stage – was thrown into grave doubt. That was then; the economy tanked, the Olympics embattled, and Brazilians ready to turn the page.

There are signs now that’s occurred, with Brazil’s economy projected to grow 1.5 per cent in 2018. Brazil’s state bank BNDES forecasts it’ll be closer to 3 per cent, and maybe even more. Either way, even the conservative estimate is a big boost on the projected growth of just 0.5 per cent for 2017. So now growth is returning, what can Brazil bring anew to the Caribbean?

BRAZIL AND THE CARIBBEAN

As two areas with a number of developing nations, South America and the Caribbean have often been drawn to regional bodies as the best way to focus on building ties and growing trade. Though Brazil’s recent economic turbulence has seen its national focus at home, previous to this period Brazil had been a key growth area for CARICOM.

So much so, trade more than doubled (the balance of which in Brazil’s favour) from US$ 530,600 in 2003, to US$ 1,183,000 by 2012. This in the same period Brasilia was seeking to open an embassy in every CARICOM member state. Brazil’s work shows while the economic and political history of the Caribbean largely resides in the north, it intends to entice us into looking south.

The Brazilian government has also been active beyond trade, joining the Caribbean Development Bank in 2016. Though Brazil is a non-lending member (alongside Mexico, Colombia and Venezuela), it’s addition to the Bank’s membership provides it a strong voice in our locale and beyond for shared goals like sustainable development and reducing poverty.

It also illustrates a key element of Brazil’s relations with our nations. Given the massive size of Brazil’s economy, Brasilia can be a leading voice for Latin America, and act independently of it.

Recognising Brazil’s capacity to build ties between South America and the Caribbean, and build relations independently with regional groups and nations, is key to its future and ours.

POLITICS AND ECONOMICS

With new growth comes a return to ‘business as usual’, right? Not exactly. For its a reality Brazil’s is not an isolated event as much as part of an ongoing phenomenon. As well as economic turbulence, the Brazilian people have also experienced great political instability in recent years.

President Dilma Rousseff was impeached in 2016 for alleged corruption. Her critics contend she got her due for presiding over a government beset by many scandals, and her own conduct, including alleged ‘creative accounting’ of economic indicators, a practice that the Brazilian federal court ruled illegal.  Supporters contend charges were trumped up, and the impeachment was really about class warfare in a nation with one of the greatest rich-poor gaps in the world.

The present case against Rousseff’s predecessor and fellow Workers’ Party leader Lula Da Silva – who was planning to run for president once again in the upcoming election – is viewed by Lula’s supporters in this same vein. To make matters worse, mid-2017 saw current Brazilian President Michel Temer accused of taking bribes from meatpacking company JBS.

Temer denied the allegations and continues to serve, but this episode was another blow to the confidence in Brazilian leadership at home and abroad. Ultimately, across each of these presidents, such political instability has been no help to Brazil’s economic growth and business confidence, and even its soft power, is damaged hugely by it.

BUILDING BLOCKS WITH BRIC

The proximity and cultural ties Brazil holds with the Caribbean are advantages to its prospects, but it’ll also face increasing competition from other growing nations. Especially India, China, and Russia, the other members of the BRIC bloc. These economies are growing with a central focus on their own neighborhood first, and for now, on building business links in the rapidly growing Asian market.

The Caribbean may have long been identified by Brazil as a logical area to expand its trade and diplomatic influence in future – but that future will soon be contested by rival nations. As a result, Brazil can’t afford to think our region is just one that will simply always be there ready for growth, as the investment of China alone in the Caribbean has shown it to be a contested space.

This also adds a new dynamic to the future work of BRIC and other regional bodies, as Brazil does aspires to a more powerful Latin America – but not at the expense of its national standing.

CORE TAKEAWAYES

Brazil has many challenges. Its economy can grow independent of the government, but its real potential will benefit greatly by a return to political stability. It is also clear neither the Caribbean, nor other more rapidly growing global economies will wait for Brazil.

In the Caribbean and globally, many people cheer the chance Brazil can begin again in 2018. It’s hurdles to doing so are not small, but a new generation of Brazilians experienced the recent era of enviable growth in their country. Such history can be a strong guiding star for the path ahead.