INTERNATIONAL RELATIONSOF THE CARIBBEAN

Brazil emergence and its presence in the Caribbean

Dr. Jacqueline LAGUARDIA MARTINEZ

Economic perspective is vital to understand the BRICS

• BRICS: originated from an economic perspective

• Economy is still as a central pillar in integration process

• Dynamic economic relations between BRICS and the Caribbean in the XXI century

Brazil’s Economic figures (%) (2000-2012)

Fuente: IBGE; CEPAL

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

GDP 4.3 1.3 2.7 1.1 5.7 3.2 4.0 6.1 5.2 -0.3 7.5 2.7 0.9

GDP per c. 2.8 -0.2 1.2 -0.2 4.4 2 2.9 5.1 4.2 -1.2 6.6 1.8 0.4

Inflation 6.0 7.7 12.5 9.3 7.6 5.7 3.1 4.5 5.9 4.3 5.9 6.5 5.8

Unemployment 7.1 6.2 11.7 12.3 11.5 9.8 10.0 9.3 7.9 8.1. 6.7 6.0 4.9

Source: IBGE; CEPAL in Jonathan Quirós Santos

Evolución y proyección de Coeficiente de Gini 1995-2015

Fuente: IPEA Source: IPEA in Jonathan Quirós Santos

Macroeconomic problems• Inflation: High (around 6% since 2010)• Middle class growth, but still poverty and social

inequality• Gross Fixed Capital Formation/GDP: Still

insufficient (around 19% since 2000) • Surplus in Trade Balance since 2001, but

manufactured goods diminish participation rate (59% in 2000 and 37% in 2012) REPRIMARIZATION?

• Increased participation of imported goods needed by the industrial sector

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Brazilian Exports (millions USD)

Source: SECEX in in Jonathan Quirós Santos

Participation of Brazilian exports in world exports

Source: SECEX in in Jonathan Quirós Santos

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Jonathan Quirós Santos, El mundo emergente y los BRICS en la situación actual: Brasil, November 2013

Brasil en el mundo: producción y exportación de productos seleccionadosBrazil: An export leader

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Thomaz Ferreira Jensen, Brasil: conjuntura econômica recente e desafios estruturais à inovação e ao desenvolvimento

Main Brazil exports destinies (2011)

Fuente: SECEX del MDIC

Source: SECEX in in Jonathan Quirós Santos

Also• Inadequate infrastructure (roads, ports and airports)• Insufficient FDI• Rapid capital inflows (especially portfolio equity

investments)• Crime and public security • Lack of access to quality public services (healthcare)• Gaps in education and skills: Brazil faces a shortage of

8 million skilled workers over the next years (data from 2012)

• Poor competitiveness and innovation (economy being dominated by large actors)

• Regional disparities(São Paulo 33% of national GDP)

Brazil and the Caribbean before XXI C.1. Strong cultural links: African heritage and

colonial past

2. Low intensity economic and political relations: Preference for other international actors and regions

3. Perception as a regional imperialist power: Brazilian monarchy (19th century), cooperation with German Nazis (20th century)

MISTRUST AND SUSPICION

What changed?1. Rising global demand for commodities and high

commodity prices2. Brazil external projection focus, specifically towards

Latin American and the Caribbean3. USA and EU facing majors economic problems4. Previous world hegemony questioned from foreign

policy and international roles: Middle East, Climate Change

5. History of continuous intervention the USA in Latin America and the Caribbean

6. The Obama administration has not materialized an active policy to the Caribbean, in spite the announced intentions

Carlos Federico Domínguez Avila – en Cadernos PROLAM/USP (ano 8 - vol. 1 - 2008), p. 41 - 65.

• In St Lucia, since 2007, the Brazilian State Oil Company ( Petrobrás) has made an agreement with Hess Oil St Lucia Limited HOSLL, in order to store oil for export to third markets

• Because of that agreement, 99% of Brazilian exports to St Lucia are of crude petroleum oil (óleos brutos de petroleo)

• Due to the agreement, Petrobrás has been able to negotiate with refineries in the Gulf of Mexico, US’s east coast and the Caribbean, reducing the costs of exporting oil to the US market

Imbalance in Trade Flow CARICOM-BRAZIL

http://www.iadb.org/intal/aplicaciones/uploads/publicaciones/e_INTAL_ICM_165_CARIBE1_2010.pdf

CARICOM countries exporting to Brazil

In Jorge Mario Sánchez Egozcue, L’influence des puissances émergentes latino-américaines dans la Grande Caraïbe: les cas du Venezuela et du Brésil

Bienes de mediana y alta tecnología: Sectores automotriz (y aéreo), químico, plásticos, electro-electrónicos, metalmecánica, material médico-quirúrgico, maquinaria agropecuaria, fertilizantes, material de escritorio, juguetes, y papel

Bienes primarios: alimentos, particularmente soya, así como ciertas semillas, maderas y aceites

Bienes de capital y de consumo duradero, de buena calidad y con precios competitivos

Apoyo de la Agência de Promoção de Exportação e Investimentos (APEX-Brasil)

Exports to the Caribbean

• Petróleo y derivados (Venezuela, México, T&T)

• Productos de media y alta tecnología (especialmente informática procedente de México y Costa Rica, o bien reexportados desde islas anglófonas y Panamá)

• Automóviles y repuestos (México)

• Medicamentos y biotecnología (Cuba)

Imports from the Caribbean

Brazil Investments in the (Greater) Caribbean• Recent data

• Economic dynamism in the region: growing demand

• Exports platforms: Brazil is taking advantage of BTA between third countries and the USA (NAFTA / CAFTA). Ex: Santista Têxtil investments in Honduras and Dom. Republic

• Participation of the Brazilian State: Credit facilities by Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and the Programa de Incentivo aos Investimentos Brasileiros na América Central e Caribe (PIBAC)

• Economic infrastructure: Panama channel, Nicaragua alternative channel, transport infrastructure –highways, ports, airports-, hydro electrical, refineries, telecommunications, gas lines… Ex: Obedrecht, Andrade Gutierrez, Camargo, Corrêa, Queiroz Galvão, Intertechne, Alusa

• Brazil-Cuba project in Mariel

http://www.youtube.com/watch?v=jDZ5FeWVrbE

Other Brazilian Investment in: Cayman Islands, Panama, Bahamas, Virgin Islands, but•Hard to quantify due to dubious origins or clearly illegal.•Estimated in more than 3 000 millions USD

Investing in Brazil

Mexican capital: more than US$ 3 000 millions

Public Bilateral Debt

Nicaragua: Partial cancellation in 1998 (95% )

Brazil´s Foreign Policy• Defined as: Western, Developing, south

American, Amazonian, “Platino”, Mercosurian, Caribbean

• Middle Power: BRICS• Pacific, cooperative projection (Soft Hegemony)• Regional integration• Tradition of linking foreign policy initiatives with

development objectives• PROMOTION OF ITS NATIONAL INTERESTS

Brazil Horizontal / South-South CooperationMain Brazilian Actors•Agencia Brasileira de Cooperação •Governmental institutions: EMBRAPA, EMBRATUR, CNPq, IBAMA, FIOCRUZ, ESAF, universities and research centers•NGOMain sectors•Postgraduate studies (Scholarships)•Sports, Health (Pan Caribbean Partnership Against HIV/AIDS)•Technology transfers (producing ethanol from sugar cane in El Salvador, Haiti, Dominican Rep., Saint Kitts and Nevis)•Natural disasters: Civil defense training in Brazil in 2006•Agriculture and biofuels: export ethanol to the USA•Military cooperation: Guyana and Suriname

Brazil-HaitiAfter January, 2010•Militar forces (UN Stabilization Mission in Haiti, MINUSTAH)•Health sector: TRIANGULAR COOPERATION

BRAZIL

CUBAHAITI

Political dialogue (Government levels)• Bilateral: Mexico, Colombia, Venezuela, Cuba• Multilateral: Brazil-SICA and Brazil-CARICOM• Observer member of the AECMain subjects• Democracy• Human rights: diaspora living in the USA and Canada• Poverty and social exclusion• Environment and Sustainable Development: Climate Change• Natural disasters management• Peace and security• Regional integration and coordination• Reforming international institution: UN Security Council

(Brazil competes against Mexico and Argentina in the region)

Brazil-CARICOM SummitFirst Summit: April 26th, 2010, Brasilia•Stress on solidarity, sovereignty, democracy•More than 40 Agreements: health, education, culture, agriculture, energy, tourism, defense, environment•Mechanism of political consultations•New embassies•Brazil represents CARICOM in G20

CARICOM interests• To secure commitment from Brazil for the need for

special and preferential treatment as small states• To move to increase trade • To pursue partnership in areas such as bio-fuel• To ensure mutually beneficial engagement without

the perception of a new form of dependency emerging

Mark Kirton , Building a New Caribbean with a BRIC nearby: CARICOM-Brazil Relations in the 21st Century

Interesting fact

“ (…) las reservas descubiertas en el campo marítimo Tupi equivaldrían a entre 5.000 y 8.000 millones de barriles de petróleo y gas. Esto es igual al 50% de las reservas que ese país encontró en los últimos 50 años”

Augusto Varas, Brasil en Sudamérica: De la indiferencia a la hegemonía

Brazil, as a BRICS

“With its abundance of land, freshwater, food and energy, and its comparative freedom from regional conflicts and tensions, Brazil is perhaps best-placed of the emerging powers in terms of the array of opportunities and lack of constraints before it.”

Brazil rising. The prospects of an emerging powerAlfredo Cabral & Priya Shankar