While previous G20 meetings have been noteworthy for their disagreements, Brazil has emphasized substance and consensus over geopolitics during its G20 presidency. Felipe Hees, the Brazilian diplomat and sous-sherpa of this year’s G20 presidency, explained this strategy on July 25 at an Atlantic Council conference on the sidelines of the meeting. Brasília, he said, has sought to acknowledge fundamental disagreements on geopolitics between some members, and then to sidestep them entirely at the ministerial level. The big question now is: How long can this approach last?

So far, Brazilian officials have chosen to focus on economic development issues that already enjoy widespread support. Last week, this approach resulted in one of the few joint G20 ministerial-level communiqués in the past two years. Released on July 26, this communiqué displays G20 members’ alignment on launching the Global Alliance against Hunger and Poverty under the Brazilian presidency. It’s an important topic for the host country, since Brazil is the world’s leading producer of soybeans, corn, and meat, and Brazilian President Luiz Inácio Lula da Silva has emphasized his country’s role in alleviating global food insecurity. At the same time, the issue has a wider resonance. At the Atlantic Council conference, Cindy McCain, executive director of the World Food Program, emphasized that “food security is a national security issue, and it should be labeled as one.”

Climate finance and the energy transition were at the forefront in Rio last week as well. Discussions focused on how to mobilize the public and private sector in achieving climate goals. At the Atlantic Council’s conference, Renata Amaral, the Brazilian secretary for international affairs and development in the Ministry of Planning and Budget, formally called for technical assistance from multilateral development banks for catastrophic weather events, such as the floods in southern Brazil this May. Immediately following the summit, US Treasury Secretary Janet Yellen headed to Belém, the capital city of the northern Brazilian province Pará. Located near the mouth of the Amazon River, Belém was a symbolic choice for the unveiling of the US Treasury’s Amazon Region Initiative Against Illicit Finance, which is intended to help combat nature crimes.

Another issue that garnered attention last week was wealth inequality, which the Brazilian president spotlighted in his speech on June 24. “The poor have been ignored by governments and by wealthy sectors of society,” he said. Despite disagreements on whether the G20 is the right forum for the issue, it issued the first ever ministerial declaration on taxation. While Brazil’s ambition was to move the needle on a 2 percent global wealth tax, the declaration simply said that ultra-high-net-worth individuals must pay their fair share in taxes. While this fell short of Brazil’s hopes on this issue, the meetings in Rio have done more on building consensus than the past two presidencies, which have been rife with outbursts over geopolitical issues between member states.

In 2022, the then G20 president, Indonesia, saw its plan to build international cooperation for the post-pandemic recovery paralyzed by Russia’s full-scale invasion of Ukraine in February. When finance ministers and foreign ministers met in April and July of the year, officials from Russia and from the United States and Europe walked out of the room when their counterparts spoke. Ministers failed to agree on a communiqué, and negotiations on climate and education also broke down over criticisms of the war. Ahead of the leaders’ summit in November 2022, Western leaders balked at the thought of sharing a table with Russian President Vladimir Putin, who ultimately did not attend the summit. In the end, the leaders could only agree to a declaration that was a broad, noncommittal summary of approaches to addressing global challenges.

Last year, India focused its G20 presidency on depoliticizing the issue of the global supply of food, fertilizers, and fuels, as well as on addressing climate change and restoring the foundations of negotiations at the forum. Its strategy was to move geopolitics off center stage by highlighting perspectives from the “Global South,” including formally adding the African Union as a full member, and thus shaping the platform as an action and communication channel between advanced economies and emerging markets.

This was difficult. Shortly into India’s presidency, Russia and China withdrew their support for the text in the Bali statement on Ukraine. At the technical level, none of the ministerial meetings produced a joint communiqué, and New Delhi was forced to issue chairs’ statements instead. Since the leaders’ summit in New Delhi, the outbreak of war between Israel and Hamas in October 2023 has made the job of navigating geopolitical tensions all the more difficult for Brazil.

While the Russian and Chinese leaders did not attend last year’s leaders’ summit, the New Delhi Declaration was nevertheless bolder and more specific than its Bali predecessor. It set the agenda for the G20 for the years ahead but offered few specifics on how to achieve these goals.

Will Brazil’s strategy of sidestepping geopolitics work at the leaders’ summit scheduled for November 18-19 in Rio? Finance ministers and central bank governors can ignore geopolitics; presidents and prime ministers often cannot. If Brasília concludes technical negotiations on the various proposals ahead of the leaders’ summit, then consensus-building at the gathering will be easier, as geopolitics will remain just an elephant in the room.

If Brazil is successful, it can end the stalemate that the G20 has found itself in and remake it into a relevant economic coordination body—one that can adequately address the goals of its emerging market and advanced economy members. If Brazilian officials are not successful, however, the forum’s relevance may begin to wane.

It has been in the interest of the last few G20 presidencies to keep up the balancing act between the United States, China, and Russia. Moreover, it is likely that South Africa will follow this approach as it takes on its presidency in 2025. As many of the discussions in Rio noted, however, what happens in the US presidential elections this November could determine both the relevance and the tone of the G20 meetings going forward.

Ananya Kumar is the deputy director, future of money at the Atlantic Council’s GeoEconomics Center.

Mrugank Bhusari is assistant director at the Atlantic Council’s GeoEconomics Center.

The post Dispatch from Rio: Can Brazil set the G20 leaders’ summit up for success? appeared first on Atlantic Council.

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Shaping the global economy: From food security to digital transformation

Shaping the global economy conference will develop a blueprint for the G20 to address the range of challenges facing its member states from global economic governance and digital transformation to food security and hunger. 

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“We’ve lost all the progress that we’ve made in the past fifteen years” on lowering global hunger levels, World Food Programme (WFP) Executive Director Cindy McCain warned on Thursday.

McCain spoke at an Atlantic Council event hosted on the sidelines of the Group of Twenty (G20) meeting of finance ministers and central bank governors in Rio de Janeiro. She pointed out that one in eleven people globally faced hunger last year.

On Wednesday, Brazilian President Luiz Inácio Lula da Silva announced that Brazil—which holds the G20 presidency—will later this year launch the Global Alliance Against Hunger and Poverty to bring countries together in sharing knowledge and resources.

“We have the capability as a planet to feed everybody on the planet—we grow enough food,” McCain said, “but we don’t” due to funding and other coordination issues.

With those challenges, the Global Alliance is “a great opportunity for all of us . . . to get together, exchange ideas, brainstorm” and to “develop science and technology” tools to help, McCain said.

Below are more highlights from the conversation, moderated by Valentina Sader, deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center.

Food security

• Food security is a “national security issue,” and “it should be labeled as one,” McCain argued, pointing out how access to food has shaped broader security crises in Somalia, Sudan, and Yemen.
• Yet, food security “gets kicked down” the list of priorities every time “something else happens in the world,” McCain warned.
• She said that the WFP and United Nations agencies, because they provide critical aid, are “on the front lines” of crises and the “first in and last out.”
• The WFP previously got most of its grain from Ukraine. But it has had to diversify its sources in the wake of the agricultural disruptions caused by Russia’s 2022 invasion of Ukraine. WFP is also working with other countries to help them mitigate the effects of the conflict on global food supplies.
• In the global hunger crisis, “women and children are taking the brunt,” McCain said. “You’ve never seen more of an example of it than in Gaza.”
• She added that equity and gender inclusion are important to factor into food security efforts because “a woman will feed her family,” and while doing so, “she will make sure everybody else eats” before she does.
• Moreover, with women making up around half of smallholder farmers, McCain argued that it is important to make sure that these women have the tools, expertise, seeds, and access to water that they need to farm effectively. “If a woman farms and can feed her family, she will wind up feeding the community,” McCain said.

Farm to negotiating table

• McCain noted that G20 countries include not only the world’s leading economies but also some of the planet’s largest agricultural producers. That, she said, empowers these countries to work together to address the full spectrum of food-security challenges, from poverty to improvements in agriculture.
• She added that the G20 is an optimal forum for raising the urgency around hunger because of how it brings together both governments and civil society organizations from countries that represent 85 percent of the world’s gross domestic product and over 60 percent of its population. “So the voice is huge,” she said, adding that “governments simply cannot do it all. We need everybody in on this.”
• She urged global stakeholders to “continue to elevate the conversation” about the urgency of food security—and advised countries “most affected” by food insecurity to keep conveying the plight they face. “The problem is [that] around the world, people don’t understand what’s going on” or believe that hunger and malnutrition are only problems in Africa rather than globally, she said. “It’s all about. . . making sure that people understand.”

Katherine Walla is the associate director of editorial at the Atlantic Council. 

Watch the full event

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With an expected global population of 10 billion by 2050, the world must adjust to meet growing food demands. Changes to climate and geopolitical disruptions—from war and conflict to trade—have significant implications to food security. Only a few places in the world have the potential to rise to this occasion. Brazil is top of the list.

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Brazil offers a useful case study of China’s strategy—and whether it’s sustainable.

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Over the course of 2023, the value of Chinese BEV exports to Brazil surged eighteen-fold as automakers like BYD expanded their presence in the country. Chinese BEVs accounted for 92 percent of Brazil’s total BEV imports in this period.

This trend has continued durably thus far. As of April 2024, Brazil has surpassed Belgium as the top export market for China’s EVs.

Those aren’t the only numbers pointing to Brazil’s growing prominence as a market for Chinese BEVs, which constitute 88 percent of China’s total exports of electric vehicles, a category which includes both battery and plug-in hybrid electric vehicles (PHEVs).

In fact, Brazil imported $735 million worth of Chinese BEVs in 2023, nearly three times the value of Mexico’s imports of these Chinese vehicles. Despite increasing attention on Mexico as a destination for exports of Chinese BEVs, 2023 marked the second straight year that Brazil has ranked as Latin America’s largest importer of Chinese BEVs.

Furthermore, growth in Chinese exports of BEVs to Brazil far exceeded the overall rate of increase in exports across China’s “new three” industries—electric vehicles, lithium-ion batteries, and solar photovoltaic cells—that are critical pillars of China’s export-driven manufacturing plans. In 2023, China’s worldwide exports of these three industries increased by 30 percent—a significant jump amid sluggish global GDP growth overall, suggesting limited ability for markets to absorb this export growth.  

Whether Brazil can continue to absorb China’s overproduction of BEVs, similarly, is increasingly in doubt.

Strong domestic sales, slacking foreign competition

In recent years, EV sales in China have been robust, with BEVs—which are almost entirely produced domestically—accounting for 25 percent of total car sales in 2023. It is worth noting that this includes foreign firms, however, such as Tesla and Volkswagen.

China’s manufacturing of BEVs has outpaced domestic demand. While this might have resulted in millions of cars sitting unsold in Chinese lots, the overproduction has coincided with Western automakers such as General Motors, Ford, and Volkswagen tempering their EV ambitions amid weakening demand growth in their core markets.

This confluence of trends created an opportunity for Chinese BEV makers to boost sales abroad, as demonstrated by the 70 percent jump in BEV exports during 2023. Chinese BEV firms, and BYD in particular,  are making a concerted effort to expand outside of mainland China, offering products that outcompete peers on price, and sometimes compete strongly with internal combustion engine vehicles.

China’s growth ambitions cause concern

Rather than incentivize consumption, China is doubling down on its investment-driven growth model with an upcoming manufacturing stimulus program. Investment, expressed in World Bank data as gross capital formation, already represents 40 percent of China’s GDP, far above the global average of 25 percent and exceeding the emerging market average of 30 to 34 percent, illustrating China’s reliance on sectors like manufacturing to fuel growth.

China’s decision to expand its export-driven manufacturing sector is causing handwringing in target markets. The Brazilian government has opened a number of probes into China’s alleged “dumping” of goods. The European Union has also opened investigations into potential “non-market practices and policies” adopted by China.

China’s exports of its record surplus of manufactured goods beyond current levels will depend on other countries’ willingness to let China take market share from domestic industry. In an increasingly protectionist era, that seems far-fetched.

Will Brazil absorb China’s manufacturing surplus?

The surge in imports of BEVs from China has been rapid, offering little time to react. However, for Brazil, the stakes for its industrial competitiveness are high, and its tolerance for China’s encroachment on its automotive industry may be limited.

For one, automobiles are a critical cog in Brazilian industry. As of 2020, 89 percent of vehicles sold in the country were domestically produced, although this may have decreased slightly amid a surge of Chinese BEV imports. The car sector accounts for about 20 percent of industrial GDP, an area of critical importance to Brazil, where value-added manufacturing’s share of GDP has declined from 26 percent in 1993 to 11 percent in 2022.

Second, Brazil does not want to deepen its reliance on imports of high-tech and value-added products. In 2021, Brazil’s imports of capital, consumer, and intermediate goods accounted for 93 percent of total goods imports, a symptom of the country’s increasing trade specialization in the export of raw materials, which represented 55.7 percent of Brazil’s exports of goods. The government has expressed its discontent with this status quo, seeking to avoid trade arrangements that “condemn our county to be an eternal exporter of raw materials,” in the words of President Luiz Inácio Lula da Silva.

Furthermore, Brazil has made supporting the domestic auto sector a priority. In May 2023, the Lula administration unveiled a series of measures to promote domestic auto manufacturing via credit lines, tax breaks, and incentives for the use of domestic content.

A continued rise in cheap Chinese EV imports would not align with Lula’s top-down push for re-industrialization, designed to foster formal high-wage employment, innovation, and economic diversification. In fact, his administration has announced new tariffs on electric vehicles, which will ramp up to a 35 percent import tax by 2026.

As such, China will likely need to find more willing buyers of its surplus EVs. Although it is difficult to forecast where the next surge in imports will take place, South and Southeast Asian markets such as India, Indonesia, and Thailand could begin to exhibit stronger uptake, as could markets in Latin America such as Colombia and Mexico.

William Tobin is an assistant director at the Atlantic Council Global Energy Center.

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Severe weather is not a new phenomenon for the state, which has seen record-breaking rainfall in recent years. A foretold tragedy, the flooding in Rio Grande do Sul is the fourth weather-related crisis to hit the state in less than a year. At the end of 2023, Rio Grande do Sul saw a similar situation, when a heat wave exacerbated intense storms and major flooding.

The region is prone to weather-related disasters, and the current flooding has been linked to the periodic El Niño weather phenomenon. In the past few decades, the state’s capital city, Porto Alegre, has adapted to control the extent of the impact of torrential rains on the city. However, the infrastructure in place must be updated to the new reality of extreme weather events, which are more intense due to climate change. Designing suitable financial instruments for resilient infrastructure with support from international and domestic financial institutions will be crucial.

The extent of this disaster is immense. To put it into perspective, about 90 percent of the 497 municipalities in Rio Grande do Sul were impacted by the rain and flooding. Brazilians are bearing the immediate brunt of these floods, including on their economy. There will also be implications for global trade and food security in the weeks and months ahead.

Rio Grande do Sul is an important state for Brazil. It represents 6 percent of the country’s gross domestic product (GDP), the fifth largest state GDP in the country. A major agribusiness state, it accounts for 70 percent of Brazil’s rice production. It is a significant producer of soybeans—of which Brazil is a leading producer and exporter—and an important meat-producing state. And while in Rio Grande do Sul rain continues to fall, not too far from there, in other regions of Brazil, farmers are suffering through a winter drought.

The governor of Rio Grande do Sul, Eduardo Leite, estimates that a yearslong reconstruction plan costing some nineteen billion reais (around $3.7 billion) will be needed in his state. Private sector investments and insurance could play a crucial role in supporting the recovery of the region, implementing adaptation measures and building the resilience of the affected communities. This level of support now will be critical to reduce future losses and tap into the immense economic, social, and environmental benefits of investing in adaptation and resilience. According to one recent estimate, each dollar invested in resilience and adaptation could generate up to twelve dollars in economic benefits.

Local and federal governments must take on the responsibility to put climate adaptation at the core of their strategic plans and development efforts. Countries must prioritize adaptation and resilience investment plans that strategically crowd in private sector investments and ensure that subnational governments and local communities can access insurance and financing to adapt and build resilience. Brazil is in a unique position to do so. With Brazilian municipal elections in October, this is a crucial moment for Brazilians to institutionalize climate mitigation and adaption efforts as part of local governments’ agendas.

At the geopolitical level, the G20 Leaders’ Summit in Rio de Janeiro in November will be an opportunity for Brazil to drive the climate adaptation agenda forward and to obtain buy-in and financing from the largest economies in the world. COP30 in Belém, Brazil, in 2025 is another such opportunity. The site for COP30, located in the Amazon rainforest in Brazil’s north, was chosen in part to showcase the roles of biodiversity, sustainability, and conservation in climate action. The flooding in the country’s south will be a tragic reminder of the importance of adaptation being central to the climate agenda, as well.

Valentina Sader is a deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Brazil, gender equality and diversity, and manages the Center’s Advisory Council.

The post Brazil’s tragic floods should put climate adaptation at the top of the G20 and COP agendas appeared first on Atlantic Council.

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The commitment of “phasing out coal by 2035 or on a timeline consistent with the 1.5 temperature limit” marks a further step in the direction indicated last year by the UN climate summit, known as COP28, to reduce the use of fossil fuels, of which coal is the most polluting. Mentioning the IEA’s Net-Zero Roadmap report, G7 countries say that “phase-out of unabated coal is needed by 2030s in advanced economies and by 2040 in all the other regions, and that no new unabated coal power plant should be built.” This represents the first agreement on a timeline for phasing out coal after the initiative had previously failed due to opposition by some members. However, it should be noted that, despite the positive step towards a common goal, by using the term “unabated” in the communication, members of the G7 leave open a potential path for the use of coal beyond the indicated timeline. 

In addition to the importance of ending coal reliance, it is now widely recognized that the success of the energy transition is linked to a technology-inclusive approach both for reaching climate neutrality and strengthening energy security. The communication of the G7 promotes members’ increasing use of diverse low-carbon energy technologies including renewable energy, energy efficiency, hydrogen, carbon management, storage, nuclear energy, and fusion.

Energy ministers fully committed to the “implementation of the global goal of tripling installation of renewable energy capacity by 2030 to at least 11 terawatts (TW)” and to “double the global average annual rate of energy efficiency improvements by 2030 to 4%,” signaling the intention to create a strong connection with COP28 pledges.

On energy storage, G7 members agreed to a global goal in the power sector of 1500 gigawatts (GW) in 2030, a more than six-fold increase from 2022. Introducing this target for storage is very important to support renewable implementation and ultimately reach the installation capacity target set in Dubai.

The communication highlights the importance for countries to reduce reliance on civil nuclear technologies from Russia and commits to strengthening the resilience of the nuclear supply chain. Countries opting for nuclear energy would work to deploy next generation nuclear reactors.

Fusion made it in the final text with a strong emphasis on the potential of this technology to provide a lasting solution to the global challenges of climate change and energy security in the future, marking an important addition to the G7 joint communication, since in the Hiroshima Communique, fusion was not mentioned.

In order to implement these targets and scale technologies, the G7 countries this year also reaffirmed their commitment to jointly mobilize $100 billion per year until 2025 and their intention to scale up public and private finance. “We stress the need to accelerate efforts to make finance flow consistent with a pathway towards low greenhouse gas emissions and climate-resilient development,” and “we acknowledge that such efforts involve the alignment of the domestic and international financial system.” Attention is now directed toward the upcoming G7 finance meeting, the G20 in Brazil, and the “finance COP” in Azerbaijan.

Finally, convergence and cooperation with countries outside the G7 will play a crucial role in the success of the transition. The joint communication acknowledges that developing countries represent “an important partner in the just energy transition” and recognizes “the great potential of the African continent in becoming a global powerhouse of the future.”

At this year’s energy ministerial meetings, Azerbaijan’s Deputy Minister on Energy Elnur Soltanov (representing the 2024 COP29 presidency), Brazil’s Minister of the Environment and Climate Change Marina Silva (representing the 2024 G20 presidency), and Kenya’s Principal Secretary on Energy Alex K. Wachira, participated along with the G7 partners. This approach shows recognition of the fundamental role that inclusivity plays in a successful transition and the willingness to create strong synergies with the upcoming multilateral forums.

It would be difficult to overstate just how critical pragmatism and convergence are to the energy transition. But this message, in addition to being successfully incorporated in the communication was further reinforced during the Future of Energy Summit, a half-day event hosted by the Atlantic Council Global Energy Center, Politecnico di Torino, and World Energy Council Italy as part of Planet Week on the sidelines of last weekend’s G7 ministerial meeting. Experts and speakers at the Summit emphasized the need to strengthen a technology-inclusive, not exclusive, approach and cooperation among countries.

The IEA’s Net Zero Emissions by 2050 Scenario (NZE) envisages that by 2030, advanced economies would end all power generation by unabated coal-fired plants, making the new G7 historic commitment unfit for purpose. However, the overall success of the transition will not be determined by pledges, but more so by the will of countries to transform pledges into action. Whether G7 countries will be able to succeed in the energy transition will depend on their capacity to create resilient clean energy supply chains, implement diversified energy mixes, promote collaboration with developing countries, scale up public and private finance, and it seems like many steps are being taken in the right direction. 

Elena Benaim is a nonresident fellow with the Atlantic Council Global Energy Center.

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For well over a year, DPI discussions have simmered in capitals around the world, drawing in policymakers, diplomats, and development experts alike. As a quick primer on DPI, think of it as the digital equivalent of laying down highways and bridges, but for the virtual world. Just as physical infrastructure drives economic growth, investing in DPI can propel inclusive development at a societal scale. Identity, payments, and data exchange platforms are often cited as the core building blocks of DPI, mirroring the multilayered structure of India’s famous homegrown technology stack.

India has been a trailblazer in deploying DPI at home and globalizing the DPI model. With its Group of Twenty (G20) presidency in 2023, New Delhi championed DPI on the world stage, securing political buy-in for the concept at the highest levels. G20 digital ministers endorsed a framework to govern the design, development, and deployment of DPI last August. And with the unanimous endorsement of G20 leaders, the New Delhi Leaders’ Declaration from last November set the stage for accelerated DPI development in 2024.

However, as the G7’s foray into the DPI arena reveals, the conversation is far from over. There are still different views of what DPI is and ought to be, as well as how it should shape the way markets function. Contrasting the G7 and G20 ministerial texts on DPI reveal three important areas of contention.

Differing visions

First, there’s the question of scope and purpose: Should DPI focus on enhancing public service delivery by governments or seek to restructure markets and delivery of private services? The G7 ministerial text opts for a narrower focus, solely emphasizing DPI’s role in enhancing citizen access to public services delivered by governments, while the G20 imagines a more expansive canvas, where DPI serves as a conduit for “equitable access” to both public and private services. This distinction is not merely academic; it gets to the core of what makes DPI novel and contested.

What does it mean to use DPI to enable equitable access to private services at a societal scale? It’s an evolving concept, but the basic thrust is to leverage the design, deployment, and governance of DPI to “dynamically create and shape new markets” and advance policy goals. For example, with a market-shaping DPI in place, a system operator, often the state itself, can define technical standards for private service providers to ensure interoperability. It can cap market share to give force to its vision of competition policy. It can influence pricing and business strategies through system rules and design features, with the DPI operator playing the role of “market orchestrator.” This is a different paradigm for the digital economy than a traditional market-led model—and to DPI champions, that’s precisely the point.

Second, consider the motivations for deploying DPI: Should these include advancing competition policy objectives? When describing the objectives for deploying DPI, G7 ministers borrow from the G20 framework but make a notable omission: There is no reference to “competition” as a core rationale for DPI. This omission is fully consistent with the G7’s vision of DPI, narrowly focused on public service delivery by governments. For the G7, the task of building competitive markets for the private sector is left to national regulators and antitrust authorities, not DPI builders and operators.

By contrast, the G20’s framework invokes the role of DPI in promoting competition twice, and that’s no accident. All governments want competitive digital ecosystems, but some see overexposure to Western tech giants as compounding the risks posed by pure market concentration alone. In this context, deployment of DPI serves two related purposes: disrupting entrenched incumbent positions while increasing state capacity to offer core digital services that reduce reliance on Western tech firms.

Third, what about design principles? Should DPI require open-source tech and open standards? The G7 ministerial statement omits all specific references to open source or open standards; instead, it vigorously defends the role of the private sector in building interoperable elements of DPI, presumably using open or proprietary technologies. In comparison, the G20’s DPI framework pointedly and repeatedly emphasizes the need for open software, open standards, and open application programming interfaces (APIs). Ultimately, however, the G20 statement hedges on this question, stating that DPI can be built on “open source and/or proprietary solutions, as well as a combination of both.”

Nevertheless, speak to DPI theorists shaping G20 and Global South thinking on DPI, and it’s clear they see “openness” as a defining principle of well-built DPI, citing the role open architectures, open-source tech, and open APIs play in enabling transparency, scale, interoperability, and reduced risk of vendor lock-in. Still, fuzziness around the term “openness” and its application in some of the largest DPI systems deployed to date suggests there is much left to unpack.

How will the G7 engage with DPI going forward?

It’s clear that the G7’s vision for DPI differs from the G20’s in at least three important areas. The question that remains is what comes next: How will the G7 (or its member states) assert their point of view?

The G7’s ministerial text offers some early clues. It acknowledges that G7 members will have “different approaches to the development of digital solutions, including DPI” and notes that the upcoming G7 Compendium on Digital Government Services will collect “relevant examples of digital public services from G7 members.” The compendium would also summarize factors that have led to “successful deployment and use of digital government services, such as national strategies, investment, public procurement practices, governance frameworks, and partnerships.”

Developing the compendium is a good start. But looking ahead, G7 members will need to weigh in this year at fast-moving multilateral discussions during Brazil’s G20 presidency, for instance, or within the United Nations’ multiple DPI workstreams. In each case, G7 perspectives on corporate governance, privacy, market disciplines, and regulatory best practices will strengthen discussions and outcomes, just as the G20’s and the Global South’s focus on inclusion, competition, and openness help ground the conversation in public interest concerns. The push and pull of the different visions for DPI could yield a better outcome for all—that’s the optimistic case.

A pessimist may insist that the gaps between the G7 and G20 views on DPI are tough to bridge. And it’s true, there is a real difference between a DPI scoped for public service delivery and one intended to shape the structure of digital markets and digital services offered by the private sector. If the latter view of DPI holds, G7 member states may need to find new ways to constructively participate in global DPI discussions. This could involve promoting individual layers of the DPI stack, as the G7 is already doing with digital ID governance, and emphasizing the need for sustainable public-private partnerships for DPI build-out. 

Ultimately, time will tell how the G7 chooses to lean into the global DPI debate. The only certainty is that the G7’s active engagement isn’t optional anymore—it’s essential.

Anand Raghuraman is a nonresident senior fellow at the Atlantic Council’s South Asia Center, where he leads research initiatives on US-India digital cooperation and publishes expert commentary on Indian data governance and digital policy initiatives. He is also director of global public policy at Mastercard.

Mastercard, through its Policy Center for the Digital Economy, is a financial supporter of an Atlantic Council project on digital public infrastructure.

The views expressed in this article are the author’s and do not necessarily reflect those of Mastercard.

The post What should digital public infrastructure look like? The G7 and G20 offer contrasting visions. appeared first on Atlantic Council.

Despite the headwinds, Brazil’s non-aligned, cooperative, and practical approach holds out the promise of a constructive outcome for this year’s G20 meetings—especially if progress is not being measured by joint communiques (which have become irrelevant) but by agreements on concrete global initiatives. Under the overarching theme “Building a Just World and a Sustainable Planet”, Brazil has worked with countries in the Global South as well as developed countries to build consensus in launching a variety of global initiatives by the time of the G20 Summit. These initiatives reflect the key concerns of the Global South but have built on previous international agreements and include practical proposals for implementation.

Brazil’s proposed initiatives

First is the push to reform the United Nations system and the Bretton Woods institutions like the IMF, World Bank, and World Trade Organization. Reforms to the UN Security Council—where five permanent members (P5) have veto power—have been on the international agenda for a long time. While widely acknowledged in principle, no specific proposal has gained any traction. Brazil has put forward the idea that a P5 member should not be allowed to use its veto power in cases directly relating to itself—somewhat similar to the Western judiciary practice of reclusion of judges in cases of conflicts of interest. This would have meant that Russia would not have been able to use its veto power when the Security Council discussed the war in Ukraine. Such a proposal will not get the backing of the P5, especially amid the current geopolitical rivalry. But it could gather support from many countries, and not only within the Global South—keeping pressure on P5 members to respond with counter-proposals.

Calls for reform of the IMF and World Bank have been widely shared by the Global South, reiterated most recently by China demanding a redistribution of quota and voting shares to “better reflect the weight a country carries.” The G24, representing developing countries at the IMF and World Bank, has circulated a paper proposing specific reforms. These and other ideas about quota reform are scheduled be discussed by the IMF in the year ahead.

Second, another of Brazil’s linchpins for this year is launching a Global Alliance Against Hunger and Poverty as a tool for reaching the UN Sustainable Development Goals by 2030. That initiative leverages Brazil’s position as the second biggest food-exporting country. Specifically, the alliance will not be about initiating new funds or programs but finding ways to coordinate numerous existing funds and programs to make them more useful to recipient countries and easier to solicit contributions from developed countries. It also will compile a basket of best practices in anti-hunger and anti-poverty policies to help other countries develop their own programs. In this context, Brazil will showcase its acclaimed Bolsa Familia family welfare program, which has helped significantly reduce the country’s poverty rate and has been adapted in almost twenty other nations.

Third, Brazil will launch a Task Force for the Global Mobilization Against Climate Change to spur the G20 to help create a conducive political environment for a new and robust goal on climate finance to be agreed at this year’s COP 29 in Azerbaijan as well as for countries to present their renewed and more ambitious Nationally Determined Commitments (NDCs) to reach net zero emissions at the 2025 COP30 under Brazil’s chairmanship. Brazil will also advance its proposed Global Bioeconomy Initiative to bring together science, technology, and innovation on the use of biodiversity to promote sustainable development. This initiative will also try to expand developing countries’ access to various fragmented climate funds including the Green Climate Fund, the Climate Investment Fund, the Adaptation Fund, and the Global Environment Facility.

Fourth, leveraging the momentum of the global corporate minimum tax (effective at the beginning of this year), Brazil wants to propose a global initiative to impose a minimum tax on the super-rich which France has endorsed. This will help Brazil rally support from Global South countries as well as others to advance the proposal.

Last but not least, in September 2023 Brazil and the United States signed an MOU for a Partnership for Workers’ Rights (in particular in the gig economy). They pledged to pass necessary national legislation to achieve that goal and hope to use it as an example to get other countries to join.

The themes across these initiatives are practicality, leading by example, and a willingness to bypass time-consuming, top-down international negotiations.

While Brazil’s proposals will not all be adopted at the G20 Summit, especially in their original versions, most probably will be with some modifications. This outcome, with or without a joint communique, would represent a serious contribution by a key member of the Global South to the global reform agenda. And it comes after the achievements of India in its Presidency of last year’s G20. If South Africa keeps up this track record when assuming the G20 Presidency in 2025 (when Brazil will chair the BRICS-10 and COP30), an important step forward will be made in establishing the leadership roles of the major countries in the Global South. They are showing the ability to rally their members and to reach out to developed countries to shape global reform efforts. And if those countries, working with their partners, can sustain the implementation of the initiatives they sponsored, that would begin to make meaningful changes in the current international political and economic system. The main risk, of course, is that geopolitical rivalry will derail cooperative efforts to address pressing global problems. It remains to be seen to what extent that will happen.

Hung Tran is a nonresident senior fellow at the Atlantic Council’s Geoeconomics Center, a former executive managing director at the Institute of International Finance and former deputy director at the International Monetary Fund.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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Table of contents

Evolution of freedom

The evolution of the aggregate Freedom Index in Brazil is clearly hump-shaped. During the first half of the period of analysis, from 1995 to 2013, the freedom score either increased or was relatively stable, driven mainly by improvements in just two indicators of the economic freedom subindex.

The first of these is the women’s economic freedom, which shows a clear step-change in 2002, although the reasons for this are not clear. During that year, there was a change in government, and the Worker’s Party (Partido dos Trabalhadores) took office. They were very much committed, at least in rhetoric, to increasing women’s economic freedom. In 2003, some parts of the civil code were reformed, which did lead to an improvement in women’s rights. However, it seems unlikely that this one legislative change can explain the 17-point increase in this indicator. Around the same time though, married women’s property rights improved, and punishments for sexual harassment—especially in the workplace—increased.

The second positive trend began in 1996, an important year for the stabilization of the economy. The liberalizing reforms introduced by the government of President Fernando Henrique Cardoso led to significant improvements on the trade freedom indicator. Sectors such as telecommunications and energy were opened to competition. There were also proposals for trade liberalization, even if some of these did not pass into law. Even the early years of Lula’s (Luiz Inácio Lula da Silva’s) government were very favorable to trade freedom, and the data seem to suggest that trade freedom did not decrease until after 2018, with the election of President Jair Bolsonaro. Bolsonaro did not create any barriers to trade, but very soon it became apparent that European countries did not want to continue negotiations on a trade deal with Bolsonaro.

In terms of political freedom, elections in Brazil are superb, and this is well captured by the elections indicator. They are fast, efficient, transparent, and the system is very secure. Even in locations where the electoral process is computerized, it is completely offline, decreasing the security risk. There is a slight fall on this indicator, starting in 2015, which is possibly attributable to polarization: when society is very politically polarized, you will always hear claims about the “unclean” electoral process. This is something we have seen recently in the United States and other countries.

Similarly, the political rights indicator shows a decline in recent years that is hard to identify in reality. It may be that, when the level of polarization is high, there are always segments of the population that can feel disenfranchised. And perhaps the indicator is capturing the repression of protests against President Dilma Rousseff’s government in 2015–16, or President Bolsonaro’s rhetoric regarding the Supreme Court, both of which may have caused anxiety about political freedoms. But there has been no obvious objective fall in political rights. The same applies to civil liberties. For example, when President Bolsonaro was elected, he publicly attacked journalists and other groups, but he took no concrete action against them. So, the feeling that political and civil rights have been reduced is understandable, but there have been no substantive changes that would allow us to say that people in Brazil were less free—and certainly not enough to justify a 33-point fall in the score.

Legislative constraints on the executive increased in the last few years, and here the indicator score is an accurate reflection of reality. However, while progress on this indicator is generally intended to be read as a positive shift, in Brazil’s case there are reasons to see greater legislative power as problematic. In 2016, President Rousseff was impeached. People connected to the Worker’s Party would say it was a “legislative coup,” a common accusation in many Latin American countries when similar situations arise. I am not of that opinion, but it is clear that a nontrivial share of the population is. During the President Bolsonaro years, a group of legislators, mostly interested in pork-barrel projects, gained a lot of power, to the point that the Supreme Court had to intervene to shut down their “secret budget”—effectively a slush fund for paying off supporters. The same group of legislators has continued to hold power after Lula’s election. This situation may have increased the impression that political rights were deteriorating, because presidents elected by the people seem, in reality, to be constrained by Congress.

The evolution of legal freedom, especially concerning judicial independence, is easier to agree with. The judicial system has been affected by executive interventions, justifying a deterioration of judicial independence scores. Moreover, the same indicator also measures judicial effectiveness, and here too the worsening situation has been very evident since 2014. Even before this, Brazil’s scores—of between 85 and 90—seem unjustifiably high because the country has long suffered from an ineffective judicial system. Only 10 percent of murders in Rio de Janeiro end up with a trial, and the numbers have been bad since at least the 1990s, when I was looking at crime and social interactions in the city. The fact that the accused do not receive any punishment until the appeals process has been exhausted means that some court decisions are only implemented ten years (or more) after they are handed down.

On top of this structural problem, in the last decade the judicial system in Brazil has become very influenced by politics. As a result, we see the Supreme Court making a decision, only to completely reverse it two or three years later, with essentially the same set of judges. This appears to be captured by the clarity of the law indicator. Laws in Brazil are very badly written—a lawyer’s dream. To give just one statistic, the value of all the unresolved tax claims in Brazil’s judicial system equates to 75 percent of Brazil’s gross domestic product (GDP). The macroeconomic impact of the low level of clarity in the law is serious, but there are always those interested in the obscurity of the law.

From freedom to prosperity

The evolution of the Prosperity Index, and in particular the fall in Brazil’s score in the last decade, seems to be driven by the minority rights indicator, which is proxied by religious freedom. Brazil has been experiencing fast growth in the percentage of its population identifying as evangelicals and, in particular, neo-Pentecostals. This has created at least two sources of friction. Neo-Pentecostals complain about persecution from the Catholic establishment, liberal legislators, mainstream media, and tax authorities. For example, even though there is no income tax on the profits of religious organizations in Brazil, nonprofit organizations are not exempt from paying social security or taxes imposed on purchases. Neo-Pentecostals feel they should enjoy full exemption from tax and regulations such as city codes. Second, Catholicism and Afro-Brazilian religions are often thought to be connected to “progressive” politics in Brazil, while evangelicals are usually more right wing, so the increase in political polarization may also partly explain the evolution of this indicator. As evidence of this tension, there have been attacks on followers of African-rooted religions by some neo-Pentecostal groups, occasionally allied to local drug gangs.

There is no question that income in Brazil stagnated in the last decade. But Brazil’s economic performance has been mediocre for the last fifty years. In the early 1980s, labor productivity was around 55 percent of the US rate. Now it is less than 25 percent. An exception is the agricultural sector, which has experienced remarkable productivity growth. Development means catching up with the technology frontier, and that is something Brazil has been unable to do. Japan, South Korea, Spain, and many others were able to do so. India and China are doing it now. But not Brazil; we can say the country is, in fact, un-developing.

President Cardoso’s government (1994–98) implemented programs to help the poorest in the country. The effort was amplified during President Lula’s administration (2002–06), which explains the overall positive trend in equality. The problem is that Brazil started from a very high initial level of inequality. Short-run fluctuations are likely to be explained by the fact that inequality is counter-
cyclical: when the economy goes down, inequality goes up. Since the COVID-19 crisis, there has been some temporary expansion of social programs, which has helped decrease inequality, but the long-run fiscal sustainability of these programs is by no means clear.

There has been an improvement in health in Brazil since 1995, mainly due to programs aimed at ensuring that the very poorest have access to regular check-ups and vaccinations. These efforts bore obvious fruit during the rollout of COVID-19 vaccines, because the whole system was already in place, so the vaccine program was relatively effective and fast. Health often requires a small marginal investment to generate large benefits, as was the case here.

Finally, it is undeniable that there have been some improvement in terms of years of education and enrollment in Brazil, and these are the metrics captured by the education indicator in the Prosperity Index. However, with the exception of very few states, there has been very little improvement in educational achievement—something that is not captured in the indicator. Progress is even lower in terms of preparing youth for the labor market. This explains why labor productivity is falling despite years of schooling increasing, which may otherwise seem a puzzle. It is worth highlighting one state in particular, Ceará, which clearly outperforms all the others in terms of educational spending effectiveness, despite its relative poverty. My advice to everyone involved in education in Brazil would be to simply copy whatever Ceará is doing, because the results are encouraging. The current minister of education was the governor of Ceará, so we may see some improvements across the country. However, there is reason to remain skeptical because education leaders usually prefer to reinvent the wheel instead of just replicating whatever is working in other places. This seems to be a universal law of decentralized public systems of education.

The future ahead

Labor productivity in Brazil is a clear signal of the economic prospects for the country—though I think it is a symptom of those prospects rather than a cause. Businesses in Brazil face a huge number of hurdles: We have very high and inefficient taxes. Firms are more worried about paying less tax than producing in a more efficient way. Regulations in Brazil are also especially inefficient, and there are important difficulties regarding long-term financing, related to the legal risks and fiscal deficits in the country. The labor market is very rigid, and even if President Temer and President Bolsonaro tried to remove some of these frictions, President Lula has announced plans to impose more labor regulations. These regulations would hurt firms and the overall economic prospects for Brazil.

A second important challenge for Brazil is security. A special concern is the relatively new route for drug trafficking from producers in Colombia, Peru, or Bolivia to Europe, which goes through Brazil. It is similar to a negative technological shock. Gangs fight with each other for control of the new routes, and this increases crime. Some paramilitary groups are also gaining strength, and these are more organized than the gangs and often affect legal businesses. For example, Rio de Janeiro’s largest electricity company, Light SA, may go bankrupt due to the amount of electric supply that is stolen and then resold to consumers and firms. These groups also control the transportation and construction sectors in some urban areas. All these things have large economic effects. And many states in Brazil lack an efficient police force. The police in the states of Rio de Janeiro and Bahia are particularly violent and inefficient. Unless the security situation improves, it is hard to foresee improvements in other dimensions.

What is going to happen with Brazil? Well, some things will help, like the proposed tax reform, which hopefully will simplify the tax code and curb exceptions, loopholes, and litigation. The finance minister is also committed to tackling the fiscal deficit. It is not clear how he will do it, but an improvement of the fiscal situation inherited from President Bolsonaro would greatly help the country.

Top firms in Brazil are excellent and, if the cost of doing business in the country was smaller, they could truly contribute to growth. Brazil has the cleanest energy mix of any country, and should be able to deal effectively with the illegal deforestation in the Amazon. Reforestation of the Amazon forest could be a source of cheap carbon capture at scale. This could make Brazil a big exporter of goods that have an excellent climate footprint—an exceptional opportunity for the country. Brazil missed an opportunity in the 1980s, when they could have educated their growing labor force, and now it is presented with a similar opportunity again. But the country needs to deal with all of the challenges discussed here.

José A. Scheinkman is Charles and Lynn Zhang Professor of Economics at Columbia, professor of economics (emeritus) at Princeton, and research associate at NBER. Scheinkman is a member of the National Academy of Sciences, recipient of a Guggenheim Fellowship, docteur honoris causa from Université Paris-Dauphine, and board member of Cosan S.A. Scheinkman’s current research focuses on the economics of forest preservation in the Amazon.

Trackers and Data Visualizations

Jun 15, 2023

Freedom and Prosperity Indexes

The indexes rank 164 countries around the world according to their levels of freedom and prosperity. Use our site to explore twenty-eight years of data, compare countries and regions, and examine the sub-indexes and indicators that comprise our indexes.

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Fast forward fifteen years and Brazil and India continue to share views on key global issues. For the first time since its inception in 1999, the Group of Twenty (G20) will have four consecutive emerging economy presidencies (Indonesia in 2022, India in 2023, Brazil this year, and South Africa in 2025). As G20 foreign ministers kick off their meeting in Rio de Janeiro on Wednesday, expect to see the shared views of India and Brazil reflected in a high degree of continuity between their G20 agendas.

The members of the G20 collectively account for more than 80 percent of global gross domestic product, three-quarters of world trade, and two-thirds of the world’s population. Moreover, the forum remains the world’s premium platform for coordinating international policy. Over the next year, the Atlantic Council’s G20 programming and research will track how Brazil leads this group in addressing four key areas (presented below) and will work to promote continuity with South Africa’s presidency in 2025 and the United States’ in 2026.

Food security and hunger elimination

Both New Delhi and Brasília have sought to highlight the needs of emerging markets and developing economies through their agenda-setting role at the G20. Perhaps no need stands out as urgently and pervasively as food insecurity. According to the World Food Programme, 783 million people worldwide faced chronic hunger in 2023, and most are in emerging markets and developing economies.

Under the Indian G20 presidency, the New Delhi Declaration was adopted by all members at the leaders’ summit. Among other provisions, it committed members to cooperate on agriculture research, access to fertilizers, capacity-building, and market transparency to foster food security among vulnerable populations. In particular, India emphasized the export and provision of millets, aligning with the “International Year of Millets” initiated by the United Nations General Assembly. Indian Prime Minister Narendra Modi was even nominated for a Grammy award for his appearance in a song titled “Abundance in Millets.”

Brazilian President Luiz Inácio Lula da Silva has doubled down on the social dimension of development, with a focus on combating poverty, inequality, and hunger. Food security is front and center in his domestic and foreign policy. As president of the G20, he has announced Brasília’s intention to launch a Global Alliance Against Hunger and Poverty at the leaders’ summit in November. Brazil is the world’s second-largest exporter of agriculture and is central to global supply chains—and in particular supply chains for emerging markets and developing economies. Expect to see Brazil leverage its weight in global markets to build consensus on the path forward in addressing food insecurity this year.

Climate and development finance

On climate and sustainable finance, Brazil’s G20 presidency appears poised to build on the legacy of India’s, while offering notable innovations and customizations. The four priorities of 2024’s Sustainable Finance Working Group are illustrative of Brazil’s particular interests and this G20’s overall mandate of “Building a Just World and a Sustainable Planet.” For example, financial instruments for nature-based solutions are rightfully receiving greater attention than ever in Brazil, which should not be a surprise in a country that contains two-thirds of the Amazon rainforest and 15-20 percent of the world’s biodiversity.

Leveraging Brazil’s active participation in various international financial institutions, the Brazilian finance sherpas are also placing a sharp technical focus on streamlined coordination among multilateral development banks and vertical funds. The troika of India-Brazil-South Africa G20 presidencies will press on with key Global South development financing priorities, such as just transition plans and blended finance for adaptation (see Atlantic Council’s related work on this here). In addition, Brazil has a unique opportunity to bridge this year’s G20 with the UN climate change conference known as COP30, which it will host in Belem in 2025. Brazil can coordinate its presidencies of both platforms to spur continued progress in Belem on landmark accomplishments from recent COPs, including the Loss and Damage Fund announced during last year’s COP28, held in Dubai.

Digital public infrastructure

Another area of continuity and compatibility between the G20 presidencies of India and Brazil is the provision of digital public infrastructure through payments, identity, and other digital networks created by the state to digitize and upgrade the provision of public services. Through Brazil’s Pix and India’s Unified Payments Interface (UPI), for example, both countries have seen tremendous success in building digital payments ecosystems and increasing digital and financial connectivity. 

Through the payments working group, G20 member states set targets for payments modernization for central banks and multilateral institutions. These targets address the cost, transparency, and speed of global payments. In 2023, the cost of retail payments to businesses and individuals across countries exceeded the previously set 3 percent target in a quarter of jurisdictions around the world. Similarly, the average cost of remittances is more than twice the goal of 3 percent. These metrics benchmark the G20’s progress and lay out the actions that member states still need to undertake to achieve these targets by 2027 (for cross-border retail payments) and 2030 (for remittances). 

Both India and Brazil position themselves as leaders among emerging markets in the provision of digital public infrastructure, and the G20 provides a platform to showcase their digital payment and identity models to the rest of the world. While both countries view the adoption of these platforms as a mechanism to increase financial inclusion and digital democratization, the wider adoption of digital public infrastructure will also present challenges. The G20 will have to come together to provide robust frameworks on data privacy, consumer protection, cybersecurity, competition, and public-private collaboration. These are going to be ongoing discussions, to be reflected in targets to come in the future. 

International financial institutions

During its G20 presidency, India initiated a set of processes and frameworks through the New Delhi Declaration that committed to “pursue reforms for better, bigger, and more effective Multilateral Development Banks.” The Declaration also included provisions to improve the multilateral development banks’ capital adequacy frameworks, which could yield an additional two hundred billion dollars in lending headroom over the next decade. India’s efforts focused on the quality and quantity of financing provided by international financing institutions and were supported by the United States, the largest shareholder at the International Monetary Fund (IMF) and the World Bank.

Brazil is adding to India’s priorities with a focus on governance and on augmenting the influence of emerging markets over decision-making at international financing institutions. However, divergent interests between the United States and China, the world’s two largest economies, and heightened geopolitical tensions between Russia and Western economies will make meaningful progress on economic global governance difficult.

India learned as much late last year in negotiations regarding an increase in IMF quotas—or the capital a country contributes to the institution, which correlates with that country’s voting power. The United States had proposed an increase in the quotas that would leave voting shares unchanged—a proposal that drew criticism from China and other emerging market economies who feel underrepresented at the IMF. Ultimately, the countries agreed to the US-backed “equiproportional” increase in quota resources that, in effect, pushed the issue of expanding voting power in the IMF for emerging markets to a future date.

Just like the Indian G20 presidency, Brazil’s achievements in this area will likely be incremental yet important. For example, Brazil might advance innovative ideas for increasing private finance partnerships and for making measurable improvements in international financial institutions’s operations and development impact assessments. These increments will accumulate, particularly as the G20 presidency moves in 2026 to the United States, by far the largest shareholder of various international financial institutions. Reform is a current priority for the United States, as stated by US Treasury Secretary Janet Yellen at the Atlantic Council in April 2022 and elsewhere, and the subject will be high on the agenda when G20 finance ministers meet next during the April IMF-World Bank Spring Meetings in Washington, DC.

Mrugank Bhusari is assistant director at the Atlantic Council’s GeoEconomics Center.

Ananya Kumar is the associate director for digital currencies at the GeoEconomics Center.

Pepe Zhang is a senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center.

Valentina Sader is a deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center.

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Brazil’s breadbasket to the Global South

Beginning in the 1970s, both the Brazilian government and private entities invested heavily in agricultural innovations, leading to the development of more resilient crop varieties. Along with the expansion of farmland and widespread adoption of double cropping, the investments significantly enhanced agricultural productivity and gave Brazil an edge over other farming nations.

Fast forward to 2022 and Brazil has become the world’s second-largest exporter of agricultural products. It leads the world in soy, meat, coffee and sugar exports and is the second-largest exporter of oilcake and corn. Several large economies, emerging markets in particular, now heavily rely on Brazil to secure their food needs.

The benefits granted by MERCOSUR, a regional trade bloc within South America, make Brazil a prime source of agriculture for Argentina. Many Asian and African countries in the G20 are large consumers of soybeans, corn, and meat—all commodities where Brazil has a large market share. The United States, Mexico, and Canada in turn barely source any agriculture from Brazil as they source the majority of their food imports from one another as a result of the benefits granted by USMCA. Most European countries similarly import the majority of their agriculture from other European countries in the single market. 

Across the G20 economies, China is the most reliant on Brazil for agriculture, buying up a quarter of all Brazilian exports including most of its soy and beef. Brazil’s rise as an agripower since the 1970s aligned neatly with the population boom in China and the growing concern of the Chinese Communist Party over how to secure food for its population. But the real push came in the last decade as Beijing looked for agriculture suppliers other than the United States following intensification of trade tensions. 

To help Brazil increase its capacity and to reduce logistical costs, the state-owned China Oil and Foodstuffs Corporation (COFCO) invested over $2.3 billion, amounting to about 40 percent of its worldwide investments, in Brazil’s agricultural infrastructure since 2014. A key investment is at the Port of Santos, where a terminal expansion will take the company’s own capacity from 3 million to 14 million tonnes. Further cooperation in Brazilian railways, waterways, and farmland restoration is on the agenda.

Lula’s leverage is his history 

By itself, influence in the agriculture sector vis-a-vis emerging markets doesn’t provide a pathway to leadership of the Global South. Agriculture is not like semiconductors; food is an absolutely necessary resource for physical survival. Russia’s sudden blockage of the Black Sea in 2022, for instance, led to massive global grain shortages that created significant price spikes for food around the world. Moreover, the United States remains the world’s largest exporter of agriculture and for several countries in the G20, it remains the largest supplier. Lastly, although Brazil supplies about a fifth of global corn exports, it has relatively little weight in the global market for grains like wheat and rice, two critical food items for developing economies.

But Lula and Brazil nevertheless bring unique credibility with developing and advanced economies on the subject of food security.  

When he first came to office in 2003, Lula launched the ‘Fome Zero’ (Zero Hunger) programme, a series of coordinated large-scale government interventions that resulted in Brazil’s removal from the United Nations’ Hunger Map in 2014. Throughout the 2000s, Lula’s Brazil also mobilized budgetary, legislative, organizational, and narrative channels to orient its foreign policy toward hunger-reduction abroad. 

Since his return to power in 2023, Lula has once again made hunger a domestic priority. He has consistently raised the issue internationally. Now, his moment has come. As President of the G20, he has announced Brasília’s intention to launch a Global Alliance Against Hunger and Poverty at the Leaders Summit in November.

Both Brazil and the global economy have evolved since Lula was last in power. But the country possesses decades of trade and technical assistance relationships with developing economies, the know-how in the sector, and a track-record in hunger-reduction. Chronic hunger and famine remain real prospects for a tenth of the global population and developing countries will likely see Lula’s Brazil to act as a reliable representative in trying to bring together a global consensus on the path forward.

In recent years, China and India have both positioned themselves as leaders of the Global South. Now, the leader of the former is focused on his troubled domestic economy and the leader of the latter has an election on his hands. Meanwhile Lula is about to host the world twice—once for the G20 this year and then again for COP30 in 2025. If Brazil delivers tangible, material, and clearly observable benefits on food security, it will cement its position as a key leader of the Global South.

Josh Lipsky is the senior director of the Atlantic Council GeoEconomics Center and a former adviser to the International Monetary Fund.

Mrugank Bhusari is assistant director at the Atlantic Council GeoEconomics Center focusing on multilateral institutions and the international role of the dollar.

This post is adapted from the GeoEconomics Center’s weekly Guide to the Global Economy newsletter. If you are interested in getting the newsletter, email SBusch@atlanticcouncil.org

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Private firms around the world are the ultimate decision makers regarding the international use of the dollar and they respond to the incentives facing them, namely access to and costs of dollar financing. And, for the first time in nearly 20 years, it is substantially cheaper to conduct short-term borrowing in renminbi (RMB) rather than dollars. In other words, a portion of the dedollarization trend is driven not only by geopolitics but also by interest rate differentials.

Fluctuations in the dollar’s global dominance is not a recent phenomenon. As a reserve asset, for example, the dollar composed nearly 80% of global reserves in 1970. By 1980, that number fell below 58 percent. It then plummeted to 47 percent in 1990. The dollar recovered to around 71 percent of global reserves in 1999, though it has since declined gradually to 59 percent in 2020—not in favor of any replacing currency, but a number of smaller currencies including the RMB.  Current trends in dedollarization in global payment must be seen with this historic context. While this is an important trend for policy makers to watch, given its underlying drivers, they should be careful not to attribute all the motivation to geopolitical tension, possibly leading to wrong policy conclusions.

The dedollarization story so far

The reluctance to use the dollar has not been driven by the rise of a competing currency such as the RMB, but more importantly by the growing trend of using local currencies in bilateral cross-border payments. However, because of China’s large footprint in international trade and investment, the RMB’s usage in international transactions has captured increasing attention as the primary challenger to the dollar, following a rapidly growing number of bilateral cross-border payment arrangements. 

Analysts, including our Dollar Dominance Monitor, have pointed to a range of signs indicating a growing risk to the dollar. Last year, global payments settlements using RMB nearly doubled, albeit from a low base of 1.91 percent at the start of 2023 to 4.61 percent in November 2023. The SWIFT data may underestimate the RMB’s true international usage because it may fail to reflect uses of RMB in bilateral cross-border payments facilitated by central banks’ currency swap arrangements. On the other hand, about 80 percent of the use of RMB outside of China takes place in Hong Kong—without Hong Kong, the international use of the RMB remains quite small. More importantly for China, about half of its bilateral cross-border trade and investment transactions are now settled in RMB, reducing its vulnerability to US financial sanctions.

Some of this shift is in response to G7 sanctions imposed following Russia’s illegal invasion of Ukraine in early 2022. Those measures reanimated concerns across global capitals around the risks of overreliance on Western financial infrastructure and the US dollar and generated urgent demand for alternatives to the US-led financial system. But this is not the only explanation and too much focus on it can lead analysts to overestimate the costs of those sanctions. In fact, the dollar was also facing macroeconomic headwinds and its use in cross-border payments likely would have declined to some extent even without the Russia sanctions.

Macroeconomic headwinds for the dollar 

Countries at risk of sanctions, like China and Russia, are the largest individual contributors to dedollarization but they are not alone. As Bloomberg’s Gerard DiPippo points out, Russia-China trade accounts for only 27 percent of the increase in trade settlement in RMB. The remaining 70 percent is likely RMB-denominated trade with Beijing’s neighbors primarily in Asia, but also abroad such as Argentina, Brazil, and the Gulf countries. Without the imminent threat of US sanctions on Beijing, this shift to RMB trade is likely motivated more by lending costs and availability. 

It’s important to understand the integral role trade finance plays in facilitating global commerce. Payments are not made instantaneously; there is a gap from the time firms receive payments for the goods they ship and when they need to pay suppliers for those same goods. Firms often turn to banks to provide loans to help bridge the gaps. Because of this, firms seeking to minimize financing costs pay close attention to the relative cost of capital and available dollar liquidity. Rate hikes by the US Federal Reserve (Fed), which coincidentally began to take full effect in the months after Russia’s invasion of Ukraine, have caused borrowing in dollars to become more expensive and scarcer, encouraging emerging market firms to seek dollar alternatives—namely the RMB. 

Relative costs of capital 

For the first time in nearly 20 years it is substantially cheaper to conduct short-term borrowing in RMB rather than dollars. Borrowing costs, as measured by the proxy of a one-year government bill, imply short-term borrowing in RMB is around two percentage points cheaper than analogous borrowing in dollars. This is pushing firms, particularly those engaging with Chinese individuals and firms on either end of the transaction, towards RMB-denominated debt for trade financing to take advantage of efficiency gains.

This surge in dollar borrowing costs reflects the US Federal Reserve’s rapid rate hike campaign to rein in US inflation, which had hit 8.5 percent. China has not experienced the same sort of surging inflation, so was able to leave its short-term rates largely constant. Notably, this flip in relative financing costs happened in close proximity to Russia’s invasion of Ukraine. This may have caused some commentators to solely attribute firms shifting their trade finance arrangements from dollars to RMB to the overuse of US sanctions. 

Dollar liquidity squeezes

A second, related, macrotrend disincentivizing dollar use in international trade is the appreciation of the dollar and its impact on dollar liquidity in emerging markets. In early 2022 the value of a dollar against a basket of global currencies jumped 19.8 percent from right before the start of the invasion to its peak in October 2022. While its value has dropped in the year since, the dollar’s value still remains elevated by around 10 percent compared to its pre-invasion average. This was also caused by Fed rate hikes; higher rates increased the value of dollar-denominated assets, which created strong incentives for global investors to buy dollars to buy those assets. The war amplified this. Investors also increased their dollar holdings as they view the dollar as a “safe haven asset” and expect the currency to retain, or even gain value during periods of global instability and economic downturn.

An appreciating dollar severely restricts dollar funding availability, particularly for emerging market firms who are more reliant on dollar-denominated credit. This is because a stronger dollar comes with incentives for lenders with large dollar liabilities to curb their willingness to provide new short-term dollar loans (such as the borrowing required for firms seeking to finance trade) and raise the rates they are willing to lend at—further amplifying the relative cost of capital effects discussed earlier. 

The Bank for International Settlements (BIS) finds that after the dollar appreciates, “banks with high reliance on dollar short-term funding reduce supply of credit more to the same Firm relative to banks with low short term dollar funding exposures.” The BIS continues, pointing out, “firms that borrowed from short-term dollar-funded banks will suffer a greater decline in credit following dollar strengthening.” 

Without abundant dollar financing alternatives, such as during the 2008 financial crisis, the impact of this would have subdued global trade. However, following concerted efforts by Beijing to promote RMB-denominated lending, firms seeking short-term finance can now turn to RMB lenders or RMB-denominated debt markets. Indeed, in the past year overseas units of Chinese firms, as well as Western companies like BMW and Crédit Agricole, have raised a record 125.5 billion RMB ($17.33 billion) selling RMB-denominated bonds during the January-October 2023, a 61 percent increase from the same period last year.

As rising dollar borrowing costs and decreasing dollar liquidity push firms to adopt the RMB for their trade financing needs, they are also more willing to engage with the alternative global financing infrastructure China is developing. In 2015, Beijing launched the Cross-Border Interbank Payment System (CIPS) to connect and control its own plumbing in the global financial system. The intention was to construct a new financial architecture to clear and settle transactions in RMB and facilitate the use of the currency in international business. Since 2015 CIPs has rapidly grown, settling just over 480B RMB ($75 billion) in Q4 2015 to 33.4T RMB ($4.6 trillion) in Q3 2023. While CIPS’ utilization growth has been largely steady since its inception, it does seem to experience substantial spikes following contractions in dollar lending availability. And though geopolitical trends may be integral in informing the strategic thinking around firms’ actions, outside of firms engaging with Russia, availability of liquid debt and efficient markets are a more likely proximate explanation for recent trends among emerging-market dedollarization.  

Importantly, geopolitics and macroeconomic trends can work together to support dedollarization efforts. One example is China’s push to denominate more of its Belt and Road Initiative (BRI) lending in RMB. Since its inception in 2013, China has hoped to use the BRI as a tool to promote the international use of its currency. In its first five years Beijing had mixed success at best, with the majority of BRI debt denominated in dollars. This can be explained in part by discrepancies in borrowing costs over the same period. Similar to the large difference in short term lending which provided a cost advantage to US denominated debt throughout most of the 2010s, longer term borrowing was also skewed in the dollar’s favor. A $5 billion loan Beijing offered to Indonesia in 2017 demonstrates this. The loan is split between RMB and dollars with 60 percent denominated in US dollars, carrying a 2 percent interest rate, and 40 percent in RMB, carrying a 3.4 percent rate. 

However, as rates converged in 2018 and onward, China had more success encouraging RMB-denominated debt. By 2020 loans in the Chinese currency overtook dollar denominated debt. While a convergence in interest is not the sole explanation for Beijing’s success, it’s undoubtedly easier to encourage countries to adopt debt in RMB if they cannot point to high opportunity costs by not borrowing in dollars. 

The future of dedollorization 

There are important structural limitations to the international use of the RMB. Prime among them is that the RMB is not freely convertible. Foreign firms that hold RMB or RMB-denominated assets are operating under the direct oversight of the Chinese government, whose interests may not always align with their own. This will give pause, particularly to firms based in advanced economies. China’s legal system also gives firms pause. As Chinese President Xi Jinping has centralized authority, the Chinese system has become increasingly opaque and volatile, offering little protection or recourse for firms who are harmed by central government actions. Finally, China’s financial markets remain less well developed and supervised than their Western counterparts. In particular, China’s bond markets are still far less developed and less liquid than US treasury markets. Though they have been valued at around $8 trillion in recent years, they pale in comparison to the US which is pushing $30 trillion.

Even so, in the coming year macroeconomic trends will likely continue to push emerging market firms towards RMB-denominated debt for trade financing in particular, amplifying the use of the RMB in international trade. While the Fed will likely begin to cut key rates later this year, decreasing the cost of US capital and borrowing, it’s unlikely Washington returns to the near-zero target rates that supercharged cost advantages for borrowing in dollars. 

It will be key for policy makers to disaggregate these macro effects from the very real geopolitical backlash against sanctions and similar tools that are also pushing countries to explore dollar alternatives. Without understanding the relative importance of both trends, US and allied policy makers risk overestimating global sanctions backlash, possibly imperiling the G7 economic response to Russia’s illegal invasion of Ukraine. 

Niels Graham is an associate director for the Atlantic Council GeoEconomics Center where he supports the center’s work on China’s economy and US economic policy.

Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, a former executive managing director at the Institute of International Finance and former deputy director at the International Monetary Fund.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

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Following global trend lines, significant shifts in Latin America and the Caribbean—including presidential elections in Ecuador, Guatemala, and Argentina, unprecedented agreements with the Venezuelan government, a worsening security situation in many countries, and a pressing focus on climate change—set the stage for even more change to come in 2024.

Join the Adrienne Arsht Latin America Center as we explore top questions that may shape this upcoming year in the hemisphere.

What will the region’s newest presidents accomplish? How might Latin America’s ties with countries such as China and Russia evolve? What might be the role of the United States in an election year? Will the Caribbean see new, international attention to the specific threats faced by major climatic events?

Take our quiz to find out if you agree with what we’re predicting!

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Below, Atlantic Council experts explore the communiqué and other milestones from the G20 Summit, along with the new diplomatic frontiers that lie ahead.

Click to jump to an expert analysis:

Kapil Sharma: India forges a new model of inclusive diplomacy

Michael Schuman: Modi cemented his leadership of the Global South, while Xi ‘contained’ himself

Rama Yade: As it joins the G20, the African Union could accelerate its own reforms

Josh Lipsky: Don’t expect Xi to snub the G20 again next year

Jonathan Panikoff: New rail plans mark the end of a tumultuous US-Saudi period

Hung Tran: Modi delivers useful, if not spectacular, results

Nicole Goldin: The G20 communiqué was ambitious, but had a few major holes

Olga Khakova: G20 leaders should have called out Russia for global food and energy insecurity

Joseph Webster: Coal is the greater climate problem, but hydrogen takes center stage

Mark Linscott: India pulled off a well-managed G20 that found a way forward on trade

India forges a new model of inclusive diplomacy

In the lead-up to the 2023 G20 Summit, there was much focus on Putin and Xi choosing not to attend the meeting. Observers believed that their absence was a direct affront to India and would ultimately overshadow India’s presidency and its G20 objectives. But as the summit came to an end, it was clear that India’s objectives were not derailed, and three key themes emerged: consensus, inclusiveness, solutions.  

Consensus: Russia’s war in Ukraine loomed throughout India’s presidency and had divided G20 countries. It was unclear if and how the conflict would be addressed and whether it would prevent the agreement of a final G20 communiqué. However, after three hundred bilateral meetings, two hundred hours of negotiations, and fifteen drafts, Modi and his team were able to bring consensus on the Russia-Ukraine paragraphs in the final G20 communiqué.    

Inclusiveness: As part of India’s positioning to be the voice of the Global South, India shepherded the African Union’s inclusion as a permanent member of the G20. India also pushed for, and countries agreed to, major reforms at global institutions such as the World Bank and International Monetary Fund.  

Solutions: India successfully promoted its Digital Public Infrastructure plan as an exportable tech solution for financial inclusion. While it’s unclear whether other countries are capable of replicating India’s digital plan, it has found a niche that goes above and beyond simple capital financing.      

With more than two hundred meetings in over sixty Indian cities, Indian officials were intent to make their presidency about representing marginalized voices and the Global South. While India was disappointed not to have Putin and Xi present, this G20 Summit was not about how diplomacy has been done, but rather how diplomacy can be done. In the end, India’s diplomacy demonstrated its ability to take on current geopolitical disagreements and represent those countries who have felt marginalized for decades.   

—Kapil Sharma is the senior director of the Atlantic Council’s South Asia Center.

Modi cemented his leadership of the Global South, while Xi ‘contained’ himself

This year’s G20 summit will be remembered not for who was there and what they did, but for who wasn’t: The absence of Xi was the big story and will cast the longest shadow over world affairs. Xi’s decision not to attend was likely an attempt to discredit the G20 as a forum for international cooperation and represents his intensifying opposition to the established world order and resistance to multilateral cooperation. Setting Xi’s G20 snub next to his appearance at the August summit of the BRICS economic grouping of Brazil, Russia, India, China, and South Africa, and the planning of the third Belt and Road Forum in October, suggests that he intends to promote alternative and competing organizations that he can more easily manipulate or control to serve China’s global interests.

This G20 also represents an acceleration in the contest between China and other major powers for influence in the Global South. Modi proved that he is becoming a more important figure in the Global South and a counterweight to Xi within the developing world. While Xi apparently plans to rally the developing world in support of China’s anti-American agenda, Modi is offering an alternative vision of North-South relations that is focused on enhancing the voice of developing countries in global governance while at the same time cooperating—rather than confronting—the West. Modi’s advocacy of G20 membership for the African Union was a wise geopolitical maneuver that makes the forum even more inclusive.

In that way, Xi turned out to be the biggest loser of the summit. By vacating the scene, he allowed Modi and Biden to promote their own views and influence. Rather than Xi’s snub spoiling the summit, the G20 went on without him. Chinese leaders seem to fear being “contained” by the United States and its partners; with his withdrawal, Xi is doing a pretty good job of containing himself.

The summit, therefore, highlighted China’s growing isolation from most of the world’s major powers. In that way, it could also be a worrisome sign that international cooperation on key issues such as climate change could become even more challenging.

 —Michael Schuman is a nonresident senior fellow at the Atlantic Council’s Global China Hub and a contributing writer for the Atlantic magazine.

As it joins the G20, the African Union could accelerate its own reforms

The first decision of the G20 Summit held in New Delhi under the chairmanship of Modi was to admit the African Union (AU) as a member of the group. For India, it is a success: The country has proved its ability to promote the so-called Global South at the highest level. After almost a decade of advocacy, the AU, with its 1.4 billion people and three-trillion-dollar gross domestic product, will be seated at the same table as another regional organization, the European Union, and the world’s richest countries. 

According to the G20 communiqué released by India: “We welcome the African Union as a permanent member of the G20 and strongly believe that inclusion of the African Union into the G20 will significantly contribute to addressing the global challenges of our time.”

Bola Tinubu, Cyril Ramaphosa, and William Ruto—the presidents of the leading African economies, Nigeria, South Africa, and Kenya—as well as the current chairman of the African Union (Comoros President Azali Assoumani), were present for this “historic moment,” as Senegal’s Ministry of Foreign Affairs put it. “Congratulations to all of Africa!” added Senegalese President Macky Sall, who chaired the African Union in 2022 and has never stopped being a vibrant advocate of AU integration with other multilateral institutions.

Until now, only South Africa, a permanent member of the club, could represent the continent, and the African Union was only invited as a guest. Africa’s entry into the G20 is a true success, coming a few days after the enlargement of the BRICS group. Given their strong presence in both the BRICS and the G20, Africans are embracing their culture of geopolitical neutrality that they have been advocating for in recent years, while also reaching a central position in multilateral discussions.

As a full member, the African Union will weigh in on G20 commitments and prioritize its primary interests, such as debt restructuring, the reform of the international financial architecture, and climate funding—as long as African countries, like European countries, overcome their divisions. It may take a stronger AU Commission to harmonize African countries’ various positions. AU Commission Chairperson Moussa Faki should be able to be a credible interlocutor for European Commission President Ursula von der Leyen.

The necessity to bring a more unified African voice in these international gatherings could accelerate African integration and stronger reforms of the African Union as the organization celebrates its twentieth birthday. The AU is still too dependent on foreign support, which makes up 65 percent of its budget. How can it occupy the G20 seat and make its own choices without budgetary sovereignty? The G20 is only a step, as Africans know that only a seat at the United Nations Security Council will position their continent to wield true political sovereignty. The charge is historic for African Union leaders. But anything less would do a disservice to a continent that, by 2050, will have 2.5 billion citizens emerging on the world stage. 

 —Rama Yade is senior director of the Atlantic Council’s Africa Center and senior fellow for the Europe Center.

Don’t expect Xi to snub the G20 again next year

The G20 proved its relevance and resilience this weekend. From World Bank reform to adding the African Union as a member to climate commitments, the group made progress on the issues it laid out over one year ago. US President Joe Biden stepped into the void left by Xi and secured new infrastructure deals aimed at connecting India, the Middle East, and Europe. The United States was even awarded the 2026 G20 presidency, reportedly over China’s objections. 

But to be truly successful long-term, the question of what China wants from the G20 will have to be answered. In the wake of Xi’s decision to skip India’s G20 Summit (the first ever no-show from a Chinese leader), there’s speculation about what China’s engagement will be like for Brazil’s G20 presidency year—which officially begins Monday. 

But it’s actually unlikely Xi will skip next year’s leaders summit. Why? Look at the numbers:

No one knows quite why Xi didn’t show in India. It could be the need to be seen focusing on domestic problems, or China-India rivalry, or a broader signal about how China wants multilateralism to work after BRICS expansion. But one thing is clear: Xi didn’t think there was a price to pay for missing the meeting.

Next year, when Brazilian President Luiz Inácio Lula da Silva convenes world leaders, Xi may not be able to make the same calculation.

—Josh Lipsky is the senior director of the Atlantic Council’s GeoEconomics Center.

This reaction is adapted from the GeoEconomics Center’s weekly Guide to the Global Economy newsletter. If you are interested in getting the newsletter, email SBusch@atlanticcouncil.org.

New rail plans mark the end of a tumultuous US-Saudi period

This weekend saw the announcement of the India-Middle East-Europe Economic Corridor (IMEC)—a ship-to-rail transit network that will connect India and Europe through the United Arab Emirates, Saudi Arabia, Jordan, and Israel. The plan is not just a win for US allies in Europe, for the Middle East, and for India. It also provides the most concrete effort to date by the West to counterbalance China’s economic investments in the Gulf.

Those in the region who remain concerned about the United States’ commitment to the Middle East may minimize the impact of such an agreement; perceptions can be harder to change than reality. If implemented fully in the coming years, however, IMEC has the potential to shift both.

It also should be seen as unofficially marking the end of one of the more tumultuous periods in US-Saudi relations since September 11, 2001. Just over a year ago, it was not clear that the relationship between Washington and Riyadh would improve much before the end of US President Joe Biden’s term, and the July 2022 fist bump between Biden and Crown Prince Mohammed bin Salman did little to calm tensions. Three months later, in October, relations appeared to get worse upon Saudi Arabia’s decision to cut oil output ahead of the US midterm elections.

But as engagement between Riyadh and Beijing heated up, and as Saudi Arabia sought to calm tensions with Iran to try to ensure its Vision 2030 would not be undermined by security threats, new US efforts to engage Saudi leaders also emerged. Most prominently, efforts toward a deal that would result in Saudi-Israeli normalization continued. That endeavor and a bevy of behind-the-scenes bilateral tracks, on issues such as 6G networks and space exploration, kept the relationship moving forward, albeit slowly.

The US strategic focus will remain on China and on Russia’s war in Ukraine. But the Biden administration clearly, and rightly, recognizes that the Middle East cannot be geographically wished away; this is reflected not only by IMEC but also, for example, by additional efforts to negotiate a deal to work with Saudi Arabia to secure lithium and other metals in Africa. The result may be a more realpolitik approach to the region than Biden promised when he campaigned in 2020. But it’s also one far more likely to ensure the United States’ economic and national security interests in the years to come.

—Jonathan Panikoff is the director of the Scowcroft Middle East Security Initiative at the Atlantic Council’s Middle East Program.

Modi delivers useful, if not spectacular, results

The 2023 G20 Summit, without Xi and Putin, has delivered practically everything Modi had wanted, with many compromises. Those include a consensus declaration (by not mentioning Russia in the section about the war in Ukraine), the admission of the African Union as a permanent member (a good step forward), continued efforts to deal with climate change (but no hard commitments in phasing out fossil fuels), support for climate financing to assist developing countries (but no hard targets except extending the 2010 pledges by developed countries to transfer $100 billion a year to developing countries to 2025). 

The G20 also took on reforms to the multilateral development banks (MDB) to include climate financing in their core missions (no capital increases now but optimizing the MDB balance sheets so they can lend $200 billion more over the next decade) and support for the improvement of the Common Framework for Debt Treatment to facilitate the restructuring of low-income countries’ debt. But the Common Framework remains vague without a roadmap specifying a sequence and timeline of steps to be taken once a debtor country asks for a restructuring. In addition, the group adopted several concrete and potentially helpful initiatives such as mapping the global value chain to help countries identify risks, the digitalization of trade documents to expedite trade transactions, and the development of public digital infrastructures to promote financial inclusion and productivity. Also notable is the launch of an India-Middle East-Europe economic corridor connected by railways and ports—in direct competition with China’s Belt and Road Initiative.

Overall, the outcomes of the G20 Summit will bolster India’s claim to be the voice of the Global South—being able to articulate the demands of developing countries and to engage in negotiations with developed countries to produce useful, if not spectacular, results. This is a good template for Brazil to take up the G20 presidency in 2024 and South Africa in 2025.

—Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, a former executive managing director at the Institute of International Finance, and a former deputy director at the International Monetary Fund.

The G20 communiqué was ambitious, but had a few major holes

With expectations high, the G20 delivered a comprehensive communiqué with wide-ranging, ambitious commitments from digital infrastructure to debt treatments, climate finance to cultural preservation. The outcome is so broad that what is not included could be seen as more notable than what is—though certain detailed elements such as care infrastructure for women’s economic empowerment and the creation of an international reference classification of skills and qualifications did not go unseen. 

For example, despite a focus on poverty reduction, inclusive growth, and jobs, the communiqué has no mention of informal work, which accounts for a significant share of employment in lower- and middle-income countries—especially among women, migrants, and marginalized populations. Similarly, the communiqué devotes ample attention toward reducing inequality generally and improving the economic and social wellbeing of women and girls, but is devoid of concrete discussion of generational demographic dynamics of older persons and youth who account for the majority of populations. This omission comes even as the G20 is expanding to include the African Union, representing the youngest continent where more than 60 percent of the population is under the age of twenty-five. By 2035 there will be more young Africans entering the workforce annually than in the rest of the world combined. 

The addition of the African Union is nonetheless significant, bringing more voice from and relevance to the Global South, especially as the BRICS grouping expands in an effort to counter ‘Western’ economic dominance and bring more balance to the international order. Achieving—or even getting closer to—the United Nations sustainable development goals, inclusive prosperity, and peace will require inclusive governance at all levels, and India’s G20 took many welcome if not high-level steps in this direction. Whether we see real action to reach the destination remains to be seen as the conversation moves to the United Nations General Assembly and the G20 baton passes to Brazil.

—Nicole Goldin is a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center and global head, inclusive economic growth at Abt Associates.

G20 leaders should have called out Russia for global food and energy insecurity 

The G20 leaders united around the importance of addressing food and energy insecurity as part of a broader fight against poverty in their declaration coming out of the summit in New Delhi. But no consensus was reached in calling out Russia’s outsized role in exacerbating these global challenges—derailing energy markets and triggering food insecurity to reach its genocidal agenda for Ukraine. This glaring gap in the statement is a missed opportunity to address Putin’s evident intention to cause economic and social harm to communities around the world. Europe has spent more than a trillion dollars addressing the energy crisis, money which should have gone to climate action at home and abroad.

Meanwhile, developing nations were outcompeted for energy supplies on the global market thanks to artificial supply shortages orchestrated by Moscow. Moreover, Russia’s sabotage of Ukraine’s agricultural exports will continue impacting access and affordability of food for millions, spreading famine in the most vulnerable communities. These developments are just the tip of the iceberg in the total bill of Moscow’s atrocities. Weak political statements, such as the G20 leaders’ declaration, embolden bad actors to continue pursuing egoistic geopolitical agendas at cost of the world’s poorest.

—Olga Khakova is the deputy director for European energy security at the Atlantic Council’s Global Energy Center.

Coal is the greater climate problem, but hydrogen takes center stage

Coal is a far dirtier and emissions-intensive fuel than oil or natural gas and accounted for approximately 44 percent of global emissions from fuel combustion in 2021. One might therefore anticipate that the official communiqué from the G20 convening would discuss coal at length. One would be wrong.

Coal remains too politically sensitive for the G20 to come to a consensus. While coal burn is widely acknowledged as a major contributor to climate change, as well as a cause of certain cancers and asthma, it is also cheap, reliable, and available. Consequently, many countries regard coal as a necessary evil for their energy mix. 

The G20 statement’s only mention of coal states that it “recognizes the importance . . . [of] accelerating efforts towards phasedown of unabated coal power, in line with national circumstances and recognizing the need for support towards just transitions.” 

The G20’s call for a “phasedown” of coal—versus a more aggressive “phase out”—is notable and a continuation of previous climate statements, including at the twenty-sixth United Nations Climate Change Conference of the Parties (COP26) summit in 2021. 

Hydrogen earned an entire section in the G20 statement, but its prominence in the communiqué outstrips its importance in fighting climate change. Let’s be clear: Hydrogen is a vital decarbonization technology with many viable use cases, including for the refining sector, fertilizers, steelmaking, shipping, inter-seasonal electricity storage, and more. World leaders need to be talking about hydrogen and other decarbonization pathways. Yet hydrogen also has several limitations, while scarce decarbonization resources are often better deployed in removing coal and greening the electricity grid. That is especially true for China, which accounts for more than half of world coal consumption. 

While energy access is undeniably critical for combatting energy and economic poverty, future generations will not be pleased with the G20’s failure to address coal more systematically.

—Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center, where he leads the center’s efforts on Chinese energy security, offshore wind, and hydrogen.

India pulled off a well-managed G20 that found a way forward on trade

While the G20 is not renowned for transformational outcomes, except when the occasional global economic meltdown occurs, it is the crucial forum for annual engagement among the world’s top economies. In the run-up to the leaders’ meeting, it appeared that the hoopla of the August 22-24 BRICS Summit might have stolen the show already, but India and Modi pulled off an extremely well-managed series of ministerials, working group meetings, and private sector engagements that deserve more attention.

The results on trade were respectable but limited. The consensus on World Trade Organization (WTO) reform is familiar and will have virtually no impact on what happens in Geneva. Beyond this, the trade ministers highlighted the importance of global value chains, but it is difficult to see real progress when one group aims to shift value chains away from a fellow G20 member (China). Transparency is welcome in assistance and facilitation programs for micro-, small-, and medium-sized enterprises, but there are no game-changer results in this area. However, the outcomes related to digitalization of trade-related documents could be important.

Trade facilitation and the digitalization of trade documents and importing and exporting procedures have been one of the few bright spots in the deteriorating environment of trade relations and trade negotiations for several years now. In 2014, WTO members concluded an historic agreement—the Trade Facilitation Agreement. The initiative pushed by India on digitalization builds on the WTO agreement and seeks to take it forward in collaborative ways. As the world’s major economies continue to fragment and regroup in their trade relationships, G20 efforts on trade facilitation show that there still can be common ground.

—Mark Linscott is a nonresident senior fellow with the Atlantic Council’s South Asia Center and former assistant US trade representative for South and Central Asian Affairs.

The post Experts react: Did India’s G20 just crack the code for diplomatic consensus? appeared first on Atlantic Council.

This month’s topline events

US, Japan, and South Korea Trilateral Commitments. President Joe Biden’s first Camp David Summit brought together Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol to discuss trilateral security cooperation in the face of an increasingly aggressive China and assertive North Korea. The first high-level convening between Washington, Seoul, and Tokyo came on the heels of a rapprochement between Japan and South Korea. The trio of leaders committed to new areas of cooperation across security, technology, and the economy including establishing security-related information-sharing networks, collaborating on ballistic-missile defense, and conducting annual joint military exercises. They agreed to hold annual summits and reaffirmed a commitment to maintaining stability in the Taiwan Strait as well as addressing China’s economic coercion. The White House clarified that, although the three countries have not agreed to a formal mutual defense agreement, they have agreed to a “three-way hotline” for government administrations to more effectively communicate and “engage in critical circumstances.”

• Shaping the order. The trilateral should, if realized, advance Japanese, South Korean, and American interests and security in the region. The three-way partnership adds to others that the US has forged in the region (e.g., the Quad) to shore up the international order and counter Beijing. The Camp David summit signals that the free world can organize and coalesce in the face of authoritarian threats.
• Hitting home. Trilateral U.S.-South Korean-Japanese cooperation can be another means to constrain Chinese efforts to impose hegemony, both security and economic, in East Asia. It may strengthen US efforts to reach a sustainable set of norms with Beijing, including on trade, hopefully avoiding both confrontation and a weak position.
• What to do. The Biden administration should maintain momentum coming out of the Summit by executing agreed immediate next steps. Chief among these will be scheduling and planning for the first of what are promised to be regular, named, multi-domain trilateral exercises to enhance coordinated military capabilities and cooperation.

Expanding BRICS. At its summit in Johannesburg, BRICS leaders from Brazil, Russia (Putin only remotely), India, China, and South Africa announced they would expand the group by inviting Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates to join in January 2024. This comes as Russia and China push to establish the partnership as a counterweight to Western groups such as the G7, and emphasize the group’s geopolitical ambitions, as a champion for the Global South. Unsurprisingly, Russia and China used the meeting to push for anti-Western moves, including calling for increased intra-BRICS coordination to decouple members’ economies from the dollar. Saudi Arabia pursued BRICS membership despite efforts by the US and other Western nations to convince them not to join the grouping.

• Shaping the order. The potential BRICS expansion signals that Russia and China continue to push for a counterweight to Western alliances like the G7. But it is not yet clear whether an expanded BRICS that includes both archrivals Saudi Arabia and Iran would be functional.
• Hitting home. The expanded BRICS would collectively represent 43% of global crude oil production and control a combined 29% of global GDP as well as large portions of global critical mineral supplies, including 75 percent of manganese and 28 percent of nickel. Increased energy trading among the BRICS members could further bifurcate the oil market. BRICS nations, which have used individual critical mineral export restrictions over the last decade, could adopt a more coordinated response and thereby reduce American access to these raw materials.
• What to do. While an expanded BRICS has potential power, previous efforts to develop counterweights to Western-oriented groups, like the G-77, have generally fallen short. The Biden administration should continue to deepen its relationships with India and Brazil. Doing so advances American trade and security interests and, as a secondary byproduct, can undermine collective action with the BRICS. US engagement with Saudi Arabia should include steps to prevent Riyadh from more closely aligning with Moscow.

Ukraine’s Southern Push. Ukraine continued its counteroffensive against Russia, with the Zelensky government committing significant troops across the South and, as a result, slowly pushing back Russian forces, like in liberating the Southeastern settlement of Robotyne. Ukraine achieved this progress despite not having the ability to provide air cover to its advancing troops. Leaked intelligence reports indicated that the US and others are frustrated with how Ukraine has executed the counter-offensive, including its approach to allocating forces. Despite purported Western misgivings about Ukraine’s strategy, however, the counteroffensive resulted in several military setbacks for Russia. Reports continue of frustration among elite Russian circles that the war is headed in the wrong direction; the apparent assassination of Evgeniy Prigozhin, head of the Wagner military group, two months after his mutiny, also suggests a brittleness within the Putinist system.

• Shaping the order. The Ukrainian counteroffensive appears to be working, albeit slowly and at significant cost. It has helped the Zelensky government reclaim key territories, dealt military losses to Moscow, and seemingly is feeding discontent across elite circles in Russia. A successful offensive could change the balance of the war.
• Hitting home. A successful Ukrainian counter-offensive would boost US policymakers and public confidence in support for Ukraine. A failed or only marginally successful counter-offensive would sharpen the US debate as the Presidential election campaign intensifies.
• What to do. The US and allies must remain united in their support for Ukraine’s strategy, keep misgivings and questions behind closed doors, and focus on giving Kyiv the weapons it needs to win. The US was smart to greenlight F-16 fighter aircraft transfers from the Netherlands and Denmark and needs to make sure pilots have the training needed to operate the equipment when they arrive in 2024.

Quote of the Month

“Today’s world is increasingly complicated and condensed, and one in which humanity faces both peril and promise. We are in a transformative era marked by strategic competition, rapid technological change, and increasingly worrisome transnational threats.”
– CIA Director Bill Burns, reacting to the release of the 2023 National Intelligence Strategy for the Intelligence Community. August 10, 2023

State of the Order this month: Unchanged

Assessing the five core pillars of the democratic world order    

Democracy ()

• In Thailand, Srettha Thavisin, real estate tycoon and populist Pheu Thai Party candidate, won the backing of parliament to become the country’s 30th Prime Minister. The eleven-party government formed to rule the country and end a months-long political deadlock, however, noticeably excluded the progressive Move Forward Party, which won the most votes in the national election.
• Fernando Villavicienco, an Ecuadorian presidential candidate who vocally denounced gangs and corruption, was assassinated weeks before the country’s elections. The elections head to a run-off in October, featuring leftist Luisa González—who secured 33% of votes—and center-right Álvaro Noboa—who secured 24% of the votes.
• Bernardo Arévalo, son of a former president of Guatemala, won Guatemala’s presidential election, defeating former first lady Sandra Torres. However, hours before Arévalo’s victory, Guatemala’s electoral registry suspended his Seed Movement party, a move that could hinder the transition to an Arévalo government.
• Zimbabwe’s President Emmerson Mnangagwa, who deposed President Robert Mugabe in a 2017 coup, won a second term in office. The opposition, however, claimed the presidential election was beset by “gigantic fraud.” International observers, civil society groups, and even the African Union cast doubt on the validity of the election.
• Military officers seized power in Gabon and placed President Ali Bongo Ondimba under house arrest. The president, whose family has been in power for half a century, recently won a third term in a heavily disputed election.
• Vladimir Putin extended the prison sentence of democracy activist and opposition leader Alexei Navalny by nineteen years. This follows the Putin government introducing trumped-up charges that Navalny was guilty of founding and funding an extremist organization.
• On balance, the democracy pillar was unchanged.

Security ()

• Niger remains at an impasse following last month’s military coup. ECOWAS threatened military intervention to restore democratic order but has not followed through. Mali and Burkina Faso pledged their support to Niger’s coup leaders.
• The Netherlands and Denmark, in a move approved by the United States, announced they will deliver F-16 fighter jets to Ukraine, likely in early 2024.
• Yevgeny Prigozhin, Wagner paramilitary group chief, reportedly died in a mysterious plane crash in the northwest region of Moscow. US intelligence officials report that preliminary findings indicate that, although the plane was not shot down by a surface-to-air missile, it did crash as a result of an assassination plot.
• The Ukrainian navy announced a “humanitarian corridor” in the Black Sea to allow safe passage to cargo and civilian ships trapped in ports since the outbreak of the war. Ukrainian officials stressed that the corridor is a voluntary “humanitarian mission and has no military purpose.”
• Eleven Russian and Chinese naval ships conducted joint patrols near the Alaskan coast. The Chinese and Russian ships did not enter US territorial waters but were flanked by US destroyers and aircraft until their departure.
• President Biden issued an executive order restricting American investment in specific Chinese companies involved in the development of emerging technologies.
• For the second time, North Korea failed to successfully launch its Malligyong-1 spy satellite into orbit. The regime is committed to trying again, however, as the spy satellite program is a critical part of Kim Jong Un’s five-year weapons strategy initiative.
• On balance, the security pillar was unchanged.

Trade ()

• US Secretary of Commerce Gina Raimondo visited Beijing to discuss US-China commercial ties and address challenges faced by US businesses in China. While the US and China did not announce any major breakthroughs, reports indicate Raimondo and her counterpart agreed in principle for Washington and Beijing to exchange export control information and establish a bilateral forum for dialogue on other economic and commercial issues.
• The American credit rating agency Fitch downgraded the US rating from the highest rating, AAA, to AA+, based on the growing US debt burden, recession concerns, and erosion of governance relative to other top economies in recent decades.
• Negotiations surrounding the Indo-Pacific Economic Framework—a fourteen-country trade deal—were jeopardized by US pressure to have Japan accept anti-commercial whaling provisions. While both governments refused to comment on the issue, one senior Japanese official said the subject was a “non-starter” and “issue of contention” for Tokyo.
• On balance, the trade pillar was unchanged.

Commons ()

• Recent wildfires ravaged parts of Hawaii, Greece, and Canada. The Maui wildfires claimed over a hundred lives—with over 1,000 still unaccounted for—and displaced thousands more. The fire in Greece is the biggest in Europe this century.
• India is the first country to successfully land a spacecraft on the moon’s south pole, days after Russia’s attempt ended in an unsuccessful crash on the lunar surface.
• Record high temperatures and environmental catastrophes induced by the climate crisis are pushing up food prices and exacerbating global inflation. Olive oil, certain grains, and soybeans are only some of the commodities already being impacted.
• On balance, the global commons pillar was unchanged.

Alliances (↑)

• President Joe Biden’s first Camp David Summit brought together Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol to discuss trilateral security cooperation in the face of an increasingly aggressive China and assertive North Korea. The leaders agreed to cooperate on a range of issues across the security, economy, and technology spheres.
• Mongolian Prime Minister Oyun-Erdene Luvsannamsrai visited Washington in an attempt to strengthen the country’s economic ties with the United States and diversify away from its autocratic neighbors, China and Russia. While in Washington, Prime Minister Luvsannamsrai and US Secretary of State Antony Blinken committed to a new Economic Cooperation Roadmap, as well as signed an Open Skies Agreement.
• Finland’s defense ministry announced that it would spend 2.3% of its GDP on defense in 2024. This followed all NATO members, in July, re-committing to spending a minimum of 2% of their GDP on defense. Prior to the July re-commitment, only seven NATO members had met this target.
• Vladimir Putin confirmed to Indian Prime Minister Narendra Modi that he will not be attending the G20 Summit in Delhi in September due to a “busy schedule”. Xi Jinping also confirmed he would not be attending the Summit.
• Ahead of the upcoming G20 Summit in Delhi, Indian Prime Minister Narendra Modi proposed inviting the African Union to join the group. This is part of the Prime Minister’s vision to enhance the “inclusiveness” of the bloc.
• Saudi Arabia convened senior officials from nearly 40 countries to discuss potential avenues to reach a peaceful end to the war in Ukraine. Notably, Russian representatives did not make an appearance, but counterparts from the four other BRICS countries attended. While the meeting produced no significant breakthroughs, it does showcase Saudi Arabia’s rising prominence on the global stage.
• On balance, the alliance pillar was strengthened. 

Strengthened (↑)________Unchanged ()________Weakened (↓)

What is the democratic world order? Also known as the liberal order, the rules-based order, or simply the free world, the democratic world order encompasses the rules, norms, alliances, and institutions created and supported by leading democracies over the past seven decades to foster security, democracy, prosperity, and a healthy planet.

This month’s top reads

Three must-read commentaries on the democratic order     

• C. Raja Mohan, in Foreign Policy, argues that the expansion of the BRICS alliance will likely galvanize increased Western engagement in the Global South, threatening China’s largely uncontested influence in key strategic regions.
• Kelly Sims Gallagher, in Foreign Policy, contends that, despite their respective differences, the United States and China can pragmatically collaborate to advance green financing and development in the Global South.
• Hannah Rae Armstrong, in Foreign Affairs, argues that the United States, unlike its European allies, must preserve the relatively positive reputation it has in the Sahel by pushing for peaceful mediation, rather than military intervention, in the aftermath of the coup in Niger.

Action and analysis by the Atlantic Council

Our experts weigh in on this month’s events

• Dan Fried, in The Ripon Forum, makes the case for Ukraine’s inclusion into the NATO Alliance, citing its shared interests in the West in defeating Russia and Putin.
• Matthew Kroenig and Emma Ashford, in Foreign Policy, debate the impetus of coups in fragile states, using the 2023 Niger coup as an emblematic case study.
• Andrew Michta, in the New Atlanticist, opines that the United States must reassess its strategy towards Europe to be more future-oriented and reflective of US interests on the continent.
• Imran Bayoumi, in the Globe and Mail, argues for the need to update Canada’s National Security Strategy to accompany the country’s newly created National Security Council.
• Aleksandra Gadzala Tirziu, in a Geopolitical Intelligence Service (GIS) report, details how India and China’s infrastructure-building competition along their disputed border region is heightening risks of conflict between the two nuclear-armed powers.

__________________________________________________

The Democratic Order Initiative is an Atlantic Council initiative aimed at reenergizing American global leadership and strengthening cooperation among the world’s democracies in support of a rules-based democratic order. Sign on to the Council’s Declaration of Principles for Freedom, Prosperity, and Peace by clicking here.

Patrick Quirk – Nonresident Senior Fellow
Dan Fried – Distinguished Fellow
Soda Lo – Project Assistant

If you would like to be added to our email list for future publications and events, or to learn more about the Democratic Order Initiative, please email pquirk@atlanticcouncil.org.

The post State of the Order: Assessing August 2023 appeared first on Atlantic Council.

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On August 26, Transatlantic Security Initiative nonresident senior fellow Stefano Stefanini wrote in Formiche arguing that the West should keep a close eye on the enlargement of the BRICS bloc (text in Italian).  

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Stefano Stefanini

Nonresident Senior Fellow

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

English Europe & Eurasia

The Transatlantic Security Initiative, in the Scowcroft Center for Strategy and Security, shapes and influences the debate on the greatest security challenges facing the North Atlantic Alliance and its key partners.

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The post Stefanini featured in Formiche arguing that the West should keep a close eye on the enlargement of the BRICS bloc appeared first on Atlantic Council.

Click to jump to an expert analysis:

Hung Tran: With six new members, BRICS is tilting toward China

Jonathan Panikoff: New Middle Eastern BRICS members highlight shifting geopolitical winds

Rama Yade: BRICS has big ambitions, but it also faces new challenges

Colleen Cottle: Beijing’s vision for the bloc is driving BRICS expansion

Michael Bociurkiw: On the ground in Johannesburg, Putin’s absence stuck out

Valentina Sader: The summit may have pushed US and Brazil further apart

Kapil Sharma: For the BRICS to be effective in the long term, India and China must resolve their disputes

Holly Dagres: With BRICS membership, Iran is furthering its ‘Look to the East’ strategy

Mrugank Bhusari: Expansion is a double-edged sword for BRICS’ ambitions

With six new members, BRICS is tilting toward China

At the BRICS Summit, the group has just agreed to admit six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE; and to consider other prospective countries. Strongly supported by China and Russia, the inclusion of Iran has strengthened the anti-US axis in the BRICS—probably making it more antagonistic and more challenging for the United States and the West to deal with it as an organization which contains two internationally sanctioned members. This decision reflects the sway of China together with Russia in the group and could not be very comfortable for moderate members like India and Brazil.

Saudi Arabia and the UAE would add important economic heft to the group, which now includes several important Organization of Petroleum Exporting Countries members as well as Russia—giving it a relevancy in the geopolitics of the global oil market. Saudi Arabia and Argentina, both members of the Group of Twenty (G20), could enable the BRICS to help coordinate the views of most of the emerging market G20 members. In this sense, the group could serve as an informal counterpart to the G7, which coordinates developed countries’ positions in advance of G20 meetings. However, with a strong China-Russia-Iran axis, the group may end up pushing for anti-Western positions, making compromises in the G20 more difficult to reach.

The fact that Saudi Arabia, Iran, and the UAE will be members would have been unthinkable until recently and shows another facet of the diplomatic reconciliation among the three countries—with intermediation by China.

The BRICS also agreed at the summit to accelerate the use of their local currencies to settle trade and investment transactions among themselves—continuing to reduce their reliance on the US dollar-based global payment and financial system.

Given these outcomes, it is understandable for Chinese leader Xi Jinping to say that “this is a historic occasion . . . that brings new rigor to the bloc.”

—Hung Tran is a nonresident senior fellow with the Atlantic Council’s GeoEconomics Center.

New Middle Eastern BRICS members highlight shifting geopolitical winds

The decision by the BRICS nations to invite four Middle East countries to join their ranks—Saudi Arabia, the UAE, Egypt, and Iran—highlights shifting geopolitical winds as much as it reflects an opportunity for closer economic integration with those states.

For Saudi Arabia and the UAE, inclusion in the group is potentially symbiotic, as both are looking to engage and deepen cooperation with non-Western countries and diversify their economic partnerships as an additional hedge against the United States. Riyadh and Abu Dhabi would probably view a decision to join as furthering their goal to be viewed as not just important regional leaders, but global ones. For the BRICS states, the inclusion of Saudi Arabia and the UAE would bring new investment and trade opportunities as the former seeks to quickly diversify and scale up its economy across a range of new, non-fossil fuel industries and the latter is home to the region’s leading financial hub in Dubai.

Egypt, which currently faces a massive financial and economic crisis, would not appear to be a prime candidate for inclusion on paper, but Moscow and Beijing probably view inviting Cairo as akin to taking a flier—enhancing relations now in hopes of being able to strategically leverage Egyptian assets in the coming decades. Cairo’s key strategic location, control of the Suez Canal, and newly discovered gas fields are all probably viewed by the BRICS group as potentially lucrative, both economically and politically, over the coming decades.

The decision to include Iran was almost certainly driven by Russia and China, as the country’s massive gas and oil reserves were likely a selling point for Beijing in convincing Brasilia, Pretoria, and New Delhi to go along with the invitation, knowing it will further fuel tensions with Washington. Inclusion in the BRICS won’t transform Iran’s economy overnight. Iran views relations with China as providing an economic lifeline, given the poor state of the economy, which continues to reel from a bevy of US sanctions. But over time, groupings such as the BRICS have the potential to undermine Washington’s power when it comes to punishing or isolating countries pursuing policies that contradict US interests, especially if they seek alternative systems and methods for trade and payment over which Washington lacks the same leverage that it has today over SWIFT, for example. 

In the view of the BRICS states, including the newly invited members, reducing global US economic and financial leverage would create a more level playing field, while countries such as Iran would view it as a way to further reduce the impact of sanctions. For Washington, it should be a warning: the need to strengthen and renew relationships with allies has never been more important. The emerging world might be multipolar, but some poles will be closer than others.

—Jonathan Panikoff is the director of the Scowcroft Middle East Security Initiative at the Atlantic Council’s Middle East Program.

BRICS has big ambitions, but it also faces new challenges

They will be eleven now. Six new countries, including two African countries, Egypt and Ethiopia, will be added to the five BRICS members on January 1, 2024. It was a priority of this fifteenth BRICS Summit in Johannesburg. “The BRICS are starting a new chapter,” said South African President Cyril Ramaphosa, who hosted the summit.

The current five-member BRICS group represents a quarter of the world’s wealth and brings together 42 percent of the world’s population. But now, the BRICS will face new challenges. First, this group is very diverse, with unequal growth and rivaling interests. The importance of China, which represents 70 percent of the group’s gross domestic product, is a problem for India. Some of the BRICS countries, including South Africa, want to save its trade relations with the United States and don’t want to be dragged into the Cold War strategy pursued by Russia. Meanwhile, Putin decided not to join the summit in person, most likely due to an international arrest warrant for alleged war crimes committed in his brutal invasion of Ukraine. And with the new membership of authoritarian regimes such as Iran, the question arises: Do Africans really need the Middle East’s problems brought into this group? If they want to do business with Israel, what will Iran say?

Beyond this membership issue, the BRICS group should be taken seriously. The high-level attendance, from Xi to Modi, reveals a lot of the bloc’s big ambitions to build an alternative multilateralism, starting with challenging the dollar and strengthening the New Development Bank without conditionality. Washington is monitoring the situation closely: at the opening of the  summit, the Biden administration announced its willingness to strengthen the financing capacities of the International Monetary Fund and the World Bank on the occasion of the next G20 summit in India on September 9 and 10. US National Security Advisor Jake Sullivan explained on Tuesday: “Our IMF and World Bank proposals will generate nearly $50 billion in lending for middle income and poor countries from the United States alone. And because our expectation is that our allies and partners will also contribute, we see these proposals ultimately leveraging over $200 billion.” The emergency will probably require much more.

 —Rama Yade is senior director of the Atlantic Council’s Africa Center and senior fellow for the Europe Center.

Beijing’s vision for the bloc is driving BRICS expansion

With the addition of six new members and a ninety-four-paragraph leaders’ statement teeming with coverage of priority issues for emerging and developing countries, the BRICS grouping is trying to cement its position as a platform for and champion of the Global South. This aligns particularly closely with Beijing’s vision for the grouping, and the six new members—Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE—probably also accommodate Chinese preferences. Representation from the economic heavyweight region of Southeast Asia is notably missing, potentially reflecting Beijing’s strained ties in the region. Indonesia would have been a logical choice, having attended the “Friends of BRICS” event in June. Instead, four of the six new members hail from the Middle East, a region into which Beijing has steadily expanded its economic, military, and political ties in the past few years.  

Ironically, the expanded BRICS group will make it harder to operationalize its mission of advancing Global South interests. The BRICS has always been a grouping heavier on symbolism than on substance. Even its tangible outputs, such as the painstakingly negotiated and coordinated New Development Bank, have not notably shifted the global governance landscape in the ways the group hoped. Adding more diverging voices to the BRICS will only increase the challenge of reaching agreement on key areas the group hopes to make progress on, such as reducing the use of local currencies in trade and expanding their correspondent banking ties. 

Nonetheless, the group is clearly gaining traction across the Global South, with more than forty countries interested in joining the BRICS, according to this year’s chair, South Africa, and with BRICS leaders leaving open the possibility for further expansion in their joint statement. Perhaps simply offering developing countries the chance for a seat at the table—regardless of whether that seat comes with tangible benefits—will be enough for the group to continue appealing to and garnering support from the Global South.

—Colleen Cottle is the deputy director of the Atlantic Council’s Global China Hub and previously spent over a dozen years at the Central Intelligence Agency serving in a variety of roles covering East and South Asia.

On the ground in Johannesburg, Putin’s absence stuck out

Wednesday had delegates at the BRICS Summit—the first to be held in person since the outbreak of the COVID-19 pandemic—here in Johannesburg looking up and down. With a proud Indian Prime Minister Narendra Modi present, they applauded the landing of the Chandrayaan-3 spacecraft on the moon. And hours later, news broke of the crash of a private jet in Russia said to be carrying Wagner Group boss Yevgeniy Progozhin and his deputy.

While Russian President Vladimir Putin’s absence stuck out like a sore thumb, not to be outdone by the India lunar fest and Xi showering host country South Africa with money, he managed to steal the news cycle by neutralizing a main opponent just as leaders were sitting down to dinner yesterday. One wonders if any of them had food tasters present.

Fireworks aside, the summit managed to generate headlines on Thursday with an expansion that would more than double the group’s membership. Saudi Arabia and the UAE will be appreciated for their financial heft and ability to inject cash into the New Development Bank, the bloc’s lending facility. The expansion also furthers Saudi leaders’ efforts to become a global heavyweight and powerwash their image after the ghastly 2018 murder of journalist Jamal Khashoggi. The admittance of Argentina, Egypt, and Ethiopia gives South America and Africa more representation. Iran’s membership helps burnish BRICS’s image as an all-inclusive club—one that lets in countries no matter how appalling their human rights record. Indonesia was expected to join, but is said to have asked for more time to prepare.

Over the longer term, BRICS leaders have pledged to sort out intra-African trade. Trade among African countries makes up only 14.4 percent of African exports, and there’s a push to get that to increase by facilitating trade between countries in their own respective currencies. For instance, if Kenya wants to trade with Djibouti, why does a third currency like the US dollar have to be involved? If BRICS can sort that out in a continent that uses more than forty different currencies, it will be a major achievement. 

Finally, with the G7, G20, and Asia-Pacific Economic Cooperation degenerating into boxing rings for tantrum diplomacy, where final communiques either get watered down or not issued at all, perhaps it is worth giving BRICS a chance to reinvent multilateral cooperation. This reinvention cannot come soon enough—especially for poorer countries who need help the most.

—Michael Bociurkiw is a nonresident senior fellow at the Atlantic Council’s Eurasia Center. He is in Johannesburg, South Africa, for the BRICS Summit.

The summit may have pushed US and Brazil further apart

Brazilian President Luiz Inácio Lula da Silva has been walking a fine line in his foreign policy. The BRICS Summit might have just pushed Brasília and Washington further apart.

Lula’s foreign policy approach is consistent with priorities from his past two terms in office. These include the need for a more democratic global order in which countries such as Brazil, India, and South Africa have equal footing. But the current geopolitical dynamics have shifted significantly.

Lula and Finance Minister Fernando Haddad publicly defended the role of the BRICS not as a counterpoint to the United States or the hegemony of the G7, but as a contributor to a more diplomatic and inclusive global order. However, given current geopolitical sensitivities, to what extent aren’t alliances—as indirect as they may be—with countries such as Russia and Iran not harming Brazil’s credibility abroad further?

The expansion of the BRICS to include countries like Iran is challenging. Earlier this year, Brazil allowed Iranian warships to dock in its coast, which caused discomfort in Washington. And that is heightened by Brazil’s position with regard to Russia’s war on Ukraine, seen as not strong enough for Washington, and its friendly relationship vis-à-vis China.

Lula’s positions are consistent with Brazil’s long-term nonalignment and noninterventionist principles. Brazil was the only country of the BRICS to condemn Russia’s invasion of Ukraine at the United Nations last year; China is Brazil’s main trading partner and former President Dilma Rousseff is the new president of the BRICS’ New Development Bank. On the other hand, Brazil pursues stronger ties on trade, investment, climate, and other mutual priorities with the United States, which Lula visited within his first month in office. Brazil has also been pursuing stronger ties with Europe, with continued negotiations of the Mercosur-EU trade agreement.

As Brazil pushes for a reshaped UN Security Council, Lula’s possible upcoming meeting with US President Joe Biden in New York becomes even more significant. What’s on Washington’s agenda?

—Valentina Sader is a deputy director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Brazil, gender equality, and diversity, and manages the Center’s Advisory Council.

For the BRICS to be effective in the long term, India and China must resolve their disputes

In the run-up to the BRICS Summit, Indian leaders had continually expressed their intentions for the platform, including issues like the response to the COVID-19 pandemic, the supply chain and energy crisis, the impact of the invasion of Ukraine, and the inability of Western-led multilateral platforms to manage global crises. For countries like India, the BRICS represent an important bloc that reflects 40 percent of the global population and $27.7 trillion of the global economy. However, with the concentration of economic power in Western-led institutions since World War II, India and other members of the Global South felt largely overlooked. Indian leaders believe that the BRICS Summit could be the platform that can bring a new and more equitable perspective to global cooperation and problem solving. Thus, India would position the 2023 BRICS Summit to raise the de facto voice of the Global South.

The timing of the BRICS Summit could not have been better for Modi. Nestled between his state visit to the United States and India’s G20 presidency, Modi has used the global stage to declare and reinforce India as the “voice of the Global South” and the new growth engine of the world.

Before this year, generally speaking, the BRICS was a grouping in name only. There was some headline overlap between the countries, but they diverged to different degrees in their long-term strategic and economic interests. The expansion of BRICS from five countries to eleven may result in India and the group gaining leverage (at least optically), as the expanded bloc includes a greater concentration of energy-producing countries, as well as potential collaboration on shifting trade transactions away from the dollar. The members will try to use the expansion to push for changes at the United Nations and other global institutions. However, for the BRICS to be effective over the long term, India and China will need to resolve their border challenges and collaborate on tough global issues as well as the deployment of capital for developing economies. If India is truly to take on the role of the “voice of the Global South,” managing these disparate interests with one voice may prove to be a greater task than what it bargained for.

—Kapil Sharma is the senior director and a senior fellow at the Atlantic Council’s South Asia Center.

With BRICS membership, Iran is furthering its ‘Look to the East’ strategy

“Neither West nor East” was an ethos adopted by the founder of the Islamic Republic of Iran, Ayatollah Ruhollah Khomeini. However, Tehran leaned West after signing the 2015 multilateral deal known as the Joint Comprehensive Plan of Action (JCPOA). When the Donald Trump administration withdrew from the JCPOA in 2018—despite Tehran not violating the deal at the time—it quickly became apparent that Iran could not rely on the West—that is, on European countries—to help circumvent reimposed US sanctions.

Tehran has since adopted a “Look to the East” strategy, which incorporates increased economic, political, and defense ties with China and Russia. Just this July, Iran joined the Shanghai Cooperation Organization (an Eurasian political, security, and economic organization founded by China and Russia) after obtaining observer status in 2005. It’s not surprising that a BRICS membership would follow suit. 

—Holly Dagres is a nonresident senior fellow with the Atlantic Council’s Middle East Programs.

Expansion is a double-edged sword for BRICS’ ambitions

Expansion will alter the fabric of the BRICS institution in two major ways. First, it could change the structure of negotiations internally. The new members vary tremendously in economic size, macroeconomic context, and their ties with non-BRICS economies. BRICS makes decisions through consensus, and achieving consensus among eleven countries with diverse economies, geographies, and interests is far more difficult that achieving it among five. The members may all agree on principles, such as increasing trade in non-dollar currencies. But the addition of new members will significantly slow down some of their more ambitious aspirations once they begin negotiating the nitty-gritty of those projects, for instance, that of a shared currency. To ensure utility and coherence of the institution over the longer term, BRICS may instead choose to stick with low-hanging fruit.

Second, the addition of new members could move the institution away from its geoeconomic origins of five countries on similar growth trajectories to a more geopolitically charged organization made up of different kinds of economies. Russia and China led the calls for accelerated expansion, and attempts to position BRICS as a counterweight to the G7 will make countries such as India and Brazil, which are already walking a delicate balance with the West, uncomfortable.  

The addition of six new full members will nevertheless make BRICS the premier convening for emerging markets, at least in the short term, when the disadvantages of scale will not yet be apparent. More than twenty countries had already formally applied to join BRICS prior to this year’s summit, and more will likely be interested for fear of missing out.

—Mrugank Bhusari is an assistant director at the Atlantic Council GeoEconomics Center.

The post BRICS is doubling its membership. Is the bloc a new rival for the G7?   appeared first on Atlantic Council.

Together, the BRICS countries have already overtaken the Group of Seven (G7) advanced economies in terms of their contribution to global gross domestic product, with the group now accounting for almost a third of worldwide economic activity measured by purchasing power parity. The consequences of this economic rise have reverberated through a number of areas, including trade. While trade between Russia and the G7 has fallen by more than 36 percent since 2014 under the weight of economic and financial sanctions, trade between it and the other BRICS nations has soared, increasing by more than 121 percent over the same period. China and India have become the largest importers of Russian oil following bans imposed by the European Union. China’s trade with Russia hit a record of $188.5 billion dollars last year, a 97 percent increase from 2014 and around 30 percent greater than in 2021. The surge occurred as Russia more than doubled its rail exports of liquefied petroleum gas as part of a drive to diversify its exports under the harsh sanctions regime.

By opting not to comply with western-led economic and financial sanctions, the solidarity of BRICS has been a balm for Russia. The bloc has offered trade diversion and other relief to one of its founding members and, in the process, weakened the effectiveness of US-led sanctions as a tool for advancing economic and geopolitical interests.

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A multipolar magnet

Thwarting the sanctions regime has had consequences that reach far beyond the impact of the crisis in Ukraine. Bolstered by their success on the economic and geopolitical fronts, the BRICS group is increasingly viewed by a growing number of countries in the Global South as an attractive agent of multilateralism. More than forty nations—including Algeria, Egypt, Thailand, and the United Arab Emirates, but also key Group of Twenty (G20) countries such as Argentina, Indonesia, Mexico, and Saudi Arabia—have formally expressed their interest in joining the BRICS in the lead-up to this week’s summit.

If the effectiveness of trade diversion by BRICS nations in weakening the impact of western sanctions against Russia is any indication, sanctions could become less effective as a tool for advancing the economic and geopolitical interests of the G7 after the admission of new BRICS members. In a zero-sum global trading environment, the bloc’s expansion would also accelerate the diversification of demand away from G7 countries and reduce members’ exposure to future geopolitical risks.

The focus in Johannesburg will certainly be on the admission of new members, as well as trade and investment facilitation in a challenging global environment where the escalation of trade and tech wars—along with the “friendshoring” of supply chains—has increased the risk of global growth deceleration and a hard landing in China. BRICS members are likely to discuss sustainable development in the climate change era, global governance reform, and an orderly process of increasing trade in local currencies. On the latter point, more and more emerging economies are exploring ways to conduct trade in non-dollar currencies following the imposition of sanctions against Russia.

The dollar remains the global reserve currency, and the pace at which other currencies have chipped away at its dominance has been incremental. But a growing number of experts, including senior US government officials, recognize that the aggressive use of economic and financial sanctions to advance US foreign policy could threaten the dollar’s hegemony in the years ahead. US Treasury Secretary Janet Yellen recently emphasized this point: “There is a risk when we use financial sanctions that are linked to the role of the dollar that over time it could undermine the hegemony of the dollar.”

A new reserve currency?

The significance of dedollarization takes on greater importance in light of rumors that the bloc might attempt to develop a BRICS-issued reserve currency to be used by members in cross-border trade. While the BRICS nations—which collectively enjoy a comfortable balance of payment surplus—have the financial wherewithal to establish such a currency or unit of account, they lack the institutional architecture and the scale to sustainably achieve this end.

Even assuming that its members are fully aligned geopolitically and more inclined to co-operate than to compete, adopting a common currency presents several challenges. As the creation of the euro, now the world’s second largest reserve currency, illustrated, hurdles will include: achieving macroeconomic convergence, agreeing on an exchange rate mechanism, establishing an efficient payment and multilateral clearing system, and creating regulated, stable, and liquid financial markets.

The United States was able to persuade other countries to use the dollar owing to its hegemonic position as the world’s industrial powerhouse and single-largest trading nation following the end of World War II, reinforced in the decades since by the size of the market for US treasuries, which are often considered to be the world’s leading reserve asset. If they wish to provide a competitive alternative, the BRICS countries would need to agree upon a state-of-the-art bond market. It would need to be big enough to absorb global savings and provide assets with low risk of default where surplus funds could be parked when not used for trade.

Reflecting on these challenges, Anil Sooklal, South Africa’s ambassador-at-large to BRICS, reiterated in July that a BRICS currency will not be on the agenda during the summit, though expanding trade and settlement in local currencies will be. In fact, BRICS countries are already making strides in the use of local currencies in cross-border transactions. Their use is helping to sustain and boost cross-border trade between members, even amid a challenging operating environment of heightened geopolitical risks. It is also loosening the balance of payments constraints associated with dollar funding, bolstering local economies.

Although China and India may have diverging security interests, they each stand to benefit from the increased use of local currencies. BRICS nations are already using their own currencies for some bilateral trade payment settlement, and Saudi Arabia is considering signing a deal with China to settle oil transactions in renminbi. Meanwhile India is expanding the use of local currencies for bilateral trade payment and settlement beyond the BRICS group, inviting more than twenty countries to open special vostro bank accounts to settle trade in rupees. In a history-making move, India made its first oil payment to the United Arab Emirates in rupees earlier this month.

If the BRICS group expands its membership, then it could increase the risk of a divergence of interests and raise more coordination challenges—but it could also dramatically expand the group’s consumption power, with significant economic and geopolitical implications. Expansion could create scale and enhance the transition from bilateral to multilateral clearing, and perhaps ultimately toward a common BRICS currency. This would address one of the major challenges associated with the use of local currencies for bilateral trade payment settlement: the difficulty of deploying these currencies once imbalances arise. Lately, such challenges led to the suspension of bilateral trade arrangements that had allowed India to settle imports of Russian oil in rupees, with Russia accumulating billions of Indian rupees that it could not use.

Meanwhile, membership expansion could further weaken the effectiveness of US-led economic sanctions and accelerate the multipolarization of the global monetary order. Several members of the Organization of Petroleum Exporting Countries have already said they wish to join the BRICS group, which would increase the shared benefits associated with the use of local currencies for cross-border transactions and could further curtail the volume of global trade conducted in dollars.

To be sure, the stickiness of institutional arrangements, along with the breadth and depth of US financial markets is such that dollar dominance will remain a key feature of the global financial architecture for some time. But following membership expansion, the BRICS group could set in motion its transformation into an even more powerful geopolitical coalition that could accelerate the process of dedollarization and the transition to a multipolar world.

Hippolyte Fofack is the chief economist and director of research at the African Export-Import Bank (Afreximbank).

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Nearing the first year of his latest term, Brazilian president Lula da Silva has solidified an eyebrow-raising foreign policy meant to restore Brazil’s standing on the world stage. Whether it be his refusal to arm Ukraine against Russia, efforts to normalize relations with Venezuela’s Nicolás Maduro, or the decision to authorize the docking of Iranian naval ships, Lula has signaled a willingness to break convention in pursuit of “the creation of a multipolar world”—a far cry from the isolationist approach of his predecessor, Jair Bolsonaro. However, as much friction as these one-off encounters have generated, the brunt of Brazil’s current strategy lies in its empowered relationship with China and economic initiatives across Latin America. Combined, these factors have the potential to not only cement Brazil as a powerbroker in the region but also to upend the role of Bretton Woods Institutions (BWIs) when international polarization is at an all-time high. If BWIs fail to adapt to this changing landscape, they risk diminishing relevance and influence, paving the way for alternative financial institutions to dominate the global economy.

Since outpacing the United States as Brazil’s largest trading partner in 2009, China has invested more than $36 billion towards projects related to the country’s infrastructure, utilities, and natural resources. These investments transformed Brazil into a cornerstone of China’s engagement with Latin America—all while the momentum surrounding BRICS affirmed the country’s influence over the global economy. Even as Bolsonaro’s presidency chilled Brazil’s diplomatic ties, Chinese investments totaled $20 billion over the span of his administration. Although the United States has maintained a dominant financial presence in Brazil, with annual investment inflows surpassing $60 billion for the past decade, the acceleration of China’s investment signifies a strategic evolution in a bilateral relationship once defined by trade alone.

Lula made this evolution clear during his long-anticipated trip to Beijing this April, signing agreements with President Xi Jinping to bolster bilateral efforts in trade, innovation, and social development. Specifically, the state visit culminated in commitments to promote mutual investments in infrastructure, energy, and agriculture, to facilitate scientific and technological exchanges, and to deepen collaboration in the digital economy. On the heels of renewed negotiations over a free trade agreement between Brazilian-backed Mercosur, the South American trading bloc, and the European Union, Xi expressed interest in engaging with the bloc to deepen China’s ties with the rest of Latin America.

The most consequential moment of the visit came when Lula shared the spotlight with protégée-turned-successor Dilma Rousseff during her inauguration as president of the New Development Bank (NDB). Describing the multilateral bank as a tool to “finance infrastructure, sustainable development, as well as social and digital inclusion,” Rousseff framed the NDB as an alternative to BWIs for emerging economies that “respects and reaffirms the sovereignty of each country.” Less willing to parse his words, Lula hailed the bank for its potential to free countries from “submission to traditional financial institutions,” comments that resonate with the $822 million he has secured from the NDB since taking office.

As Brazil maneuvers the international stage with its “multipolar” approach, the rest of Latin America is also witnessing a rise of leftist administrations, a phenomenon known as the Second Pink Tide. For BWIs, the implications are two-fold. First, these governments have expressed more interest in diversifying their trade and financing options, including beyond the current geopolitical fault lines. Second, while remaining interested in multilateralism, many Latin American leaders have voiced frustration with BWIs due to their governance structure and lack of country-specific policy flexibility. For BWIs to remain relevant and effective in this changing scenario, they must do three things:

Flexible lending protocols: The traction gained by institutions like the NDB highlights the allure of financial organizations that offer terms acknowledging the unique challenges of each member country. Recognizing the economic dynamism of countries like Brazil, BWIs ought to introduce countercyclical lending. Such a system would tie loan repayments to a country’s GDP performance or export earnings, serving as a buffer against economic volatility. This would not only make loan portfolios more resilient, but also enhance the role of BWIs as stabilizers in the global economy.

Collaborative financing: Brazil’s burgeoning relationship with China and stake in the NDB signal its move towards diversified financial sources. BWIs should respond in kind by creating instruments that pool resources. For instance, the World Bank and the NDB could jointly finance sustainable infrastructure projects in the region, combining their expertise and financial resources. Likewise, financial packages that combine grants, equity, concessional loans, and non-concessional financing would allow BWIs to cater to the specific needs of countries. Beyond direct financing, sharing data and analytical tools would foster a deeper understanding of market trends, risks, and opportunities—enhancing the predictive power and response time of these institutions.

Overhaul of Governance Structures: The power dynamics of BWIs, primarily determined by economic contributions, have historically favored high-income countries. To account for the rise of emerging economies like Brazil, China, and India, BWIs should recalibrate voting rights to allow these countries more significant influence over decisions. Similarly, leadership roles within BWIs have traditionally come from the internal deliberations of their respective Executive Boards. To foster trust and global collaboration, leadership positions should be open to candidates from a broader range of member countries, ensuring representation from different regions and economies.

With Brazil embracing multipolarity and deepening its alliances with global powers, the landscape of international finance is poised for a seismic shift. The onset of the Second Pink Tide across Latin America emphasizes the region’s turn to diversified economic partnerships and departure from the conventions of BWIs. For these institutions to remain impactful, they must adapt—prioritizing flexible lending protocols, promoting collaborative financing, and ensuring more inclusive governance. Only by acknowledging and addressing the evolving attitudes of countries like Brazil can BWIs hope to sustain their relevance in an ever-changing global order.

Jack Tapay-Cueva is a former Next Gen Fellow with the GeoEconomics Center’s Bretton Woods 2.0 Project.

David Dong is a former Next Gen Fellow with the GeoEconomics Center’s Bretton Woods 2.0 Project.

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The post What Brazil’s “multipolar” foreign policy means for the Bretton Woods institutions appeared first on Atlantic Council.

On August 22, Transatlantic Security Initiative nonresident senior fellow Stefano Stefanini was interviewed in Adnkronos, discussing the BRICS Summit and the future of the bloc (text in Italian).  

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1. What does Lula come away with from Beijing?

In addition to the fifteen agreements signed between Brazil and China, Lula also leaves Beijing with a path toward greater cooperation even beyond trade. Given that China is Brazil’s number one trading partner, this visit was an important seal for Lula, wrapping up his first hundred days in office having visited Brazil’s top three economic partners: Argentina, the United States, and now China.

Recent comments by Brazilian Finance Minister Fernando Haddad reflect Brazil’s intent to deepen economic relations with both China and the United States. “Brazil has the size to make bilateral agreements,” Haddad told journalists during the China trip.

—Valentina Sader is an associate director and Brazil lead at the Atlantic Council’s Adrienne Arsht Latin America Center.

2. During the trip, Lula called for BRICS countries to trade in their own currencies and end the dollar’s trade dominance. How real is this threat?

In calling for an end to the dollar’s dominance in world trade during his China visit, Lula was singing to a choir whose theme song is renminbi (RMB) internationalization. His advocacy of a “BRICS currency” to replace the dollar in settling trade transactions among leading emerging-market countries (Brazil, Russia, India, China, and South Africa make up the informal BRICS group) likely won’t come to much—at least in the foreseeable future. Nonetheless, it does underline the opportunities for Beijing to increase the international use of the Chinese currency. As Brazil’s trade with China hit a record $150 billion last year, the RMB emerged as the country’s second-largest reserve currency (representing 5.37 percent of foreign-exchange holdings). That’s an indication of a trend of increasing RMB-real transactions, which likely will continue in the future as the two countries have signed several agreements aimed at expanding trade. However, Brazilian imports and exports continue to be settled overwhelmingly in dollars, and the US currency still occupies over three-quarters of Brazilian reserves.

At the end of March, a Brazilian bank (controlled by a Chinese parent) became the first financial institution in Latin America to join China’s Cross-Border Interbank Payment System, which settles trade deals in the Chinese currency. But most Brazilian companies continue to use the dollar-based SWIFT messaging system. Even as the RMB’s global share of trade transactions doubled to 4.5 percent in 2022, the dollar remained the currency of choice in 84 percent of all trade deals worldwide.

—Jeremy Mark is a nonresident senior fellow with the GeoEconomics Center. He previously worked for the IMF and the Asian Wall Street Journal.

3. What did China gain from this visit?

From what we have seen thus far, Lula and Xi gained crucial “wins” from their bilateral meeting. The two signed fifteen bilateral agreements in everything from agriculture to technology, demonstrating further development of the China-Brazil comprehensive strategic partnership. Lula even visited a Huawei technology development center and received a presentation about how 5G can revolutionize telemedicine and education; this suggests Lula’s willingness to accelerate China’s 5G expansion in Brazil, despite US efforts to slow China’s 5G advance in the region due to espionage concerns.

Both leaders also successfully projected themselves as champions of the Global South, professing their desire to “balance world geopolitics,” advocating for their countries as mediators in Ukraine, and upholding the BRICS mechanism as a counterweight to the US-dominated international system. However, Lula’s most inflammatory statement that BRICS countries ditch the US dollar and trade in their own currencies was likely bluster, especially given the fact that the US dollar still accounts for 60 percent of global central bank reserves.

—Leland Lazarus is a nonresident fellow at the Global China Hub and associate director for national security at Florida International University’s Jack Gordon Institute of Public Policy. He formerly served as special assistant and speechwriter to the commander of US Southern Command and as a US State Department foreign service officer in China and the Caribbean.

4. What do Lula’s visits to both Washington and Beijing reveal about his foreign policy approach?

Differently from the trip to Washington in February, Lula’s visit to Beijing had a more clear and concrete purpose. The trip to Washington was aimed at reestablishing relations and discussing cooperation on common challenges, such as democracy and climate. The visit to Beijing had an important business component. Both were significant in consolidating Lula’s foreign-policy goals.

Brazil will continue its traditional non-alignment, non-interventionist approach to foreign policy, seeking to maintain close diplomatic relations with strategic partners, which include both the United States and China. At the same time, Lula will continue to push for the rethinking of the global order to reflect current times, carving out that relevance for Brazil. A few examples include Lula’s interest in leading peace conversations between Russia and Ukraine, hosting the Group of Twenty (G20) summit in 2024, questioning the reliance on the dollar, proposing changes to the United Nations Security Council, and sending a special foreign policy advisor to Venezuela for meetings with the Maduro regime and its opposition. The question that remains is whether or not Lula is picking the right battles—and if he will have the support, domestically and internationally, to be successful.

—Valentina Sader

5. How can the Lula visit be seen within the context of Xi’s renewed outreach to the Global South?

Lula’s visit to China and meeting with Xi reflects Lula’s desire to again—as in his previous times in office—be at the center of the global stage. And it is a visit that is squarely within China’s priorities to deepen ties with Brazil as part of its quest for greater leadership in the Global South. China is Brazil’s number one trade partner. And this visit is a clear signal that those economic ties will only deepen in the years to come.

What cannot be missed is the difference in pomp and delegation size between the China visit and Lula’s trip to Washington two months earlier. Whereas the US visit was a short, two-day stop without a business contingent, the China trip is twice as long with a large delegation of businesspeople looking for new commercial opportunities now that China has reopened after its COVID-19 lockdowns. It’s also reflective of Lula’s inauguration: China sent then Vice President Wang Qishan—a close ally of Xi—to lead its delegation, while the US delegation was led by Interior Secretary Deb Haaland.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

The post What the Lula-Xi partnership means for the world appeared first on Atlantic Council.

In politics and positions of power, the lack of equitable representation of women is striking. Women represent 49.7 percent of the world population, yet only twenty-seven countries have a female leader as of February 2023.2 Brazil, which elected its first and only woman president in 2011, has seen slow progress in ensuring greater female participation in politics. Political violence against women, among other factors, is a deterring factor for women’s political participation.

Political violence is not a new phenomenon, nor it is exclusive to women. However, evolving analysis has identified differences between political violence generally and political violence against women. The latter is directed at women with the intent of restricting their political participation and active voice, while also generalizing women’s participation as “wrong.” In the Brazilian context, political violence against women is a “physical, psychological, economic, symbolic, or sexual aggression against women, with the purpose of preventing or restricting access to and exercise of public functions and/or inducing them to make decisions contrary to their will.” As such, political violence against women plays an important role in deterring women’s active participation in politics—and even more daunting for black, indigenous, or LGBTQI+ (lesbian, gay, bisexual, transgender, or queer) women.

Brazil has a unique opportunity to adjust its legislation and reframe the incentives in the political sphere tackle this issue now, ahead of municipal elections in 2024. Doing so will ensure greater and more equitable political participation, enrich the political debate, strengthen the legislative agenda, and further solidify the country’s democratic ethos, even if other challenges to democracy remain. This report presents solutions Brazil could take to reach this more representative and resilient version of democracy.

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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These actions are welcome, given the troubling environmental legacy of the prior administration. Deforestation rates surged under former President Jair Bolsonaro’s term, reaching the highest levels in 2021 since 2008. The Bolsonaro administration weakened environmental agencies intended to protect the Amazon rainforest, eased protections on protected land, and fired the head of Brazil’s National Institute for Space and Research (INPE) after it released data showing that deforestation rates had increased. Lax environmental policies resulted in land robbery and the increase of illegal activity, particularly related to logging and mining. Illegal mining saw a 46 percent increase in the Yanomami Indigenous territory in northern Brazil from 2020 to 2021, raising environmental justice concerns as the uniquely impacted Yanomami community experienced increased violence and diseases due to polluted rivers as a result of ore processing.

Lula’s return to office marks a return to the protection and conservation of the Amazon and its people while balancing the sustainable development of the region. The president created the country’s first Ministry of Indigenous Peoples, representing 307 indigenous groups. Lula also welcomed Marina Silva back to the federal government as Minister of Environment, the position she held during Lula’s first term as president. A well-known environmentalist from the Amazon state of Acre, Silva’s return to the Ministry signals Lula’s commitment to prioritizing environmental protection.

The return of the Amazon Fund

Deforestation of the Brazilian Amazon has made the forest a net carbon emitter since 2016, accelerated by Bolsonaro’s policies and the shuttering of the Amazon Fund. Soon after Lula’s victory, however, Brazil’s Supreme Court ruled to reactivate the fund, which he signed on his first day back in office.  With this reversal, Brazil is taking steps to once more be a clean energy and decarbonization leader in the region. But in order to reach these goals, expanding and diversifying funding is crucial.

Deforestation is a major factor in driving up greenhouse gas emissions, with tropical deforestation being responsible for roughly 20 percent of annual emissions. The Amazon rainforest holds 48 billion tons of carbon and its preservation is essential in the global fight against climate change and reaching ambitious net-zero goals. To assert low-carbon leadership in the region, Brazil should take advantage of the momentum behind the Amazon Fund right now.

The fund has historically been supported by Norway and Germany, but its support is set to grow. The Norwegian government—after backing out of the fund while Bolsonaro was in power—is keen on resuming donations immediately, and Germany signed a new pledge committing to donations following Lula’s October win. Additionally, following President Lula and Biden’s meeting this month, the two leaders released a joint statement in which Biden committed to work with the US Congress to contribute funds to conserve the Brazilian Amazon, including directly to the Amazon Fund. France, the European Union, and the United Kingdom have also announced their intentions to contribute to the fund.

While the addition of some of the world’s wealthiest countries are a significant step to broaden the fund’s scope, it is not enough. At COP27 in Glasgow, over one hundred world leaders representing more than 85 percent of the world’s forests pledged to halt deforestation by 2030, but little momentum has been seen since. As governments raise their ambition in forest preservation and funding, the focus must next turn to industry whose spending power and contributions in technology will be vital to expanding conservation efforts.

Private-sector participation in conservation funding would prove beneficial for Brazil, where although early satellite data shows deforestation in the Amazon has been declining since Lula’s return to office, experts say it may take years to show major progress following environmental setbacks under Bolsonaro. This progress will more effectively be accomplished with a suite of multi-sectoral funders. The fund’s potential for impact should be marketed to a broad coalition of funders from government, finance, and industry alike, with the option to contribute using verifiable carbon credits.

Building an even cleaner energy mix

Brazil’s environmental leadership need not be confined to the management of its ecosystems, however. Brazil already has one of the world’s highest shares of renewable energy in primary energy consumption, where clean energy sources meet 46 percent of total energy supply—not just electricity—in Brazil. By such a measure, Brazil is a clean energy powerhouse. Nonetheless, there are areas for Brazil to expand its low-carbon leadership.

Much of Brazil’s high share of clean energy in its energy supply is owed to biofuels, which are used in the industrial and residential heat, and transport sectors, at 50 percent and 25 percent, respectively. The country has been a pioneer in the use of biofuels for transportation, and in 2017 issued the RenovaBio policy which links the use of biofuels in transportation with Brazil’s Nationally Determined Contribution (NDC) under the Paris Agreement to reduce its emissions by 43 percent from 2005 levels by 2030. The country has committed under its NDC to increase the use of bioenergy, with high blending standards to support this. However, as an alternative to biofuels, Brazil could benefit from more targeted investment and policy support for electromobility, which does not pose the same concerns associated with the carbon intensity of land use. Brazil surpassed 100,000 cumulative electric vehicle sales in 2022, but deployment is limited by a lack of charging infrastructure. The country has less than 5,000 charging stations, while Germany, for instance, has over 1 million.  

Furthermore, the country has a genuine opportunity to increase the share of clean energy in the power grid above 86 percent. Much of this share is owed to hydropower, which accounts for about 65 percent of total generation. Brazil is being eyed as a prime destination for wind development, with a potential of 1.8 terawatts (TW) onshore and offshore. The Ministry of Mines and Energy has taken steps to clarify the regulatory and legal frameworks for offshore wind development, which are severely lacking across Latin America, and could be catalytic for investment beyond the 17 GW of offshore wind already planned in Brazil.

However, the integration of intermittent renewables onto the electric grid will require more power system balancing to ensure generation matches demand. This comes amid a troubling outlook for hydropower in Brazil, historically a reliable baseload energy source, but whose generation is forecast to be more variable, as climate change leads to abnormal weather patterns. Increasingly frequent droughts and less predictable rainfall may increase the need for energy storage or gas peaker plants, if necessary, to ensure the consistent delivery of electricity to consumers.

Another area for Brazil to lead is by modernizing Petrobras and orienting it towards the energy transition. Petrobras is the largest oil company in Latin America and Brazil’s flagship state-owned enterprise. Prior to Lula’s victory, core energy advisors expressed a desire to make Petrobras more active in investing in renewable energy assets. After his election, Lula appointed Jean Paul Prates to the role of CEO, a senator and political ally of Lula. Prates has a history of introducing sustainability-focused legislation, even during Bolsonaro’s term. This background could bode well for the management of Petrobras at a critical juncture. Debt-constrained Petrobras will need to find innovative models if it desires to pair energy-transition ambitions with returns for the Brazilian public, but if it succeeds, it could offer lessons for national or state-owned oil company modernization on a global scale.

Bolstering Brazil’s environmental and clean energy leadership will require careful planning in the years ahead. The re-emergence of Lula does not seal this fate.  While it can showcase its clean electricity sector, Brazil will need to balance using resources for conserving the Amazon and expanding electrification amid competing domestic economic and political priorities. For instance, Brazil will need to invest to maintain its social welfare state, amid a high benchmark interest rate of 13.75 percent and conflict between the Lula administration and the Central Bank of Brazil over fiscal policy, challenges which will impact the investment climate and Lula’s domestic political efficacy in tandem. Despite these challenges, Brazil has the potential to act as a first mover among emerging markets in making progress towards net-zero.

Lizi Bowen is associate director for digital communications and community engagement at the Atlantic Council Global Energy Center.

Maia Sparkman is an assistant director at the Atlantic Council Global Energy Center.

William Tobin is a program assistant at the Atlantic Council Global Energy Center.

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Maia Sparkman

Former Associate Director, Climate Diplomacy

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Assistant Director

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The post Lula is back. Are Brazil’s climate credentials? appeared first on Atlantic Council.

​​​​​What you should know

• Nicaragua: On February 9, the Ortega-Murillo regime released and expelled 222 political leaders, priests, students, and other dissidents to the United States.
• US-Brazil relations: Presidents Biden and Lula da Silva met on February 10, during which they underscored the importance of strengthening democracy, promoting respect for human rights, and addressing the climate crisis.
• Ecuador: Ecuadorians rejected all eight items on a constitutional referendum backed by President Lasso, signaling anti-incumbent sentiments and the clout of pro-Correísmo opposition political forces.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Annual inflation reached 98.8 percent, while activities in the construction and manufacturing sectors continued to decline.  
• Brazil: The government met with Mexico, Germany, Colombia, Chile, the World Bank, and the Inter-American Development Bank (IDB) to explore issuing green bonds this year. 
• Belize: The government launched two new projects in cooperation with Taiwan, a business support program focused on women and micro, small, medium-sized enterprises (MSMEs), and a flood warning system for disaster prevention.  
• Colombia: 2022 GDP growth is estimated to be 7.9 percent, down from 2021’s 10.8 percent growth. In 2023, growth is expected to further decline to 1.05 percent. 
• Peru: Continuing protests and supply shortages have led several mines to suspend or reduce operations, threatening copper production.  
• Suriname: President Santokhi expressed willingness to collaborate with neighboring Guyana on oil and gas exploration and development to position the Caribbean as an energy hub. 

In focus: Inflation and infighting

As regional inflation continues, political pressures are leading to criticism of central bank policy in Brazil and Colombia. Recently-elected presidents Lula and Petro have both questioned rate hikes as a method to tackle inflation, suggesting more flexible targets and alternative policies. The governor of Colombia’s Central Bank, Leonardo Villar, expects the region to require continuing tight monetary policy, which critics argue may complicate other policy goals such as growth. Roberto Campos Neto, president of the Central Bank of Brazil, has expressed his willingness to coordinate with the Lula administration to achieve growth and control inflation. 

Despite the public clashes, central bank policy in both countries remains independent. In Brazil, a 2021 law protects central bank autonomy and is unlikely to be repealed. In Colombia, the central bank has maintained a course independent of presidential advice for two decades. 

Health + Innovation

• Colombia: President Petro presented a health reform to Congress that seeks to improve primary care, expand access to treatment, raise healthcare worker salaries, and fight corruption by eliminating private sector management of payments.
• Brazil: Nearly three years since COVID-19 claimed the life of its first victim, the country has for the first time registered zero pandemic-related deaths in a day on February 12.
• Jamaica: The Bureau of Standards launched the Jamaican Standard Specification for Telemedicine, which provides the framework through which telemedicine may be safely practiced while upholding the integrity of the medical profession.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 18, 2023 appeared first on Atlantic Council.

1. Lula pitches a global sustainability fund

Lula proposed the creation of a new global fund for sustainability, which would designate funds from developed nations to sustainable efforts across the world. There seems to be a willingness from the United States’ side to contribute to the existing Amazon Fund, joining Norway and Germany, on efforts to protect the Amazon rainforest.

Brazil is home to the largest portion of the Amazon and is an indispensable partner for the United States on climate and sustainability. As Biden prioritizes sustainable infrastructure and equitable clean energy domestically and more ambitious climate goals abroad, Brazil is an important ally in the hemisphere. Of Brazil’s available energy resources, around 80 percent are from renewables, and, as an agricultural powerhouse, it has the potential to be an even greater asset in solving the global food crisis. The US-Brazilian cooperation on climate and the environment is expected to deepen as the United States Special Envoy for Climate John Kerry plans to visit Brazil soon.

2. UN Security Council reforms are on the table

Lula has proposed to be a peace broker in Ukraine by pushing the rhetoric around the conflict to be about finding peace rather than continuing the war. He told reporters after the meeting that he and Biden discussed “the need to create a group of countries that are not involved directly or indirectly in the war with Russia in order to find a way to make peace.”

In this context, Lula also advocated for the need to reform the United Nations Security Council to become more representative of current geopolitical dynamics—a long-standing demand of the Brazilian president—to which Biden seemed to agree, Lula said.

3. Lula embraces progressive stardom

Lula met with prominent progressives on Friday morning before heading to the White House. With Senator Bernie Sanders (I-VT), Lula discussed ways to increase international cooperation to protect the Amazon rainforest and preserve the environment for future generations. The Brazilian president also met with Reps. Alexandria Ocasio-Cortez (D-NY), Pramila Jayapal (D-WA), and Ro Khanna (D-CA). They discussed shared commitments to environmental, social, and economic justice—and US-Brazil cooperation to fight authoritarianism and strengthen relations between the two countries’ legislators. The meetings represent an important effort to extend cooperation beyond the executive level, but in order to be effective and long-lasting, this kind of outreach must be bipartisan.

4. The presidents have a small window for cooperation

Lula’s Washington visit opens a new chapter as he seeks to position Brazil as a critical player regionally and internationally. Next month, he will travel to China, and he is also planning a trip to Angola, Mozambique, and South Africa.

But both Lula and Biden face challenges at home, as expectations rise for Lula to deliver on key campaign promises and Biden prepares for the 2024 elections. The window of opportunity for furthering cooperation is slim, but the stage is set for both countries to capitalize on new momentum. Particularly on the environment, Friday’s visit was a promising start.

Caroline Arkalji is a Young Global Professional with the Atlantic Council’s Adrienne Arsht Latin America Center.

The post What came out of the Lula-Biden meeting? appeared first on Atlantic Council.

“It’s a good incentive… to invest in all these green infrastructures,” Pouyanné said at an Atlantic Council Front Page event on Thursday.

Pouyanné agreed with many Europeans that the IRA is protectionist and undermines the transatlantic relationship, saying that this is part of a “trend” in which the United States, by creating its own rules, seems to be believing less and less in the multilateral trading system built on World Trade Organization agreements. But he also said that the law is a “clear political decision by the United States” made because “they want that green industries will take place on their territory.” For example, he noted, nearly 90 percent of solar panels are manufactured in China, creating “another problem of dependency” for both Europe and the United States in the future.

According to Pouyanné, the United States took advantage of an “opportunity” in the energy transition by passing the IRA, so “let’s do the same in Europe.” To avoid a future in which Europe relies heavily on imports, he said, the continent “must take decisions” to guarantee “that green industries [will] be located in Europe.”

Below are more highlights from the event, moderated by Atlantic Council President and CEO Frederick Kempe, where Pouyanné discussed the role of oil and gas in the energy transition and the energy impacts of Russia’s war in Ukraine.

“No way to escape” natural gas

• Pouyanné said that because this year’s United Nations Climate Change Conference of the Parties (COP28) in the United Arab Emirates is being hosted by a major oil-producing country, “it raises the bar for the whole oil and gas industry… [We have] to engage, as a lot of stakeholders are expecting us to do.”
• At COP26 in Glasgow, US President Joe Biden released a plan to tackle methane emissions from the oil and gas industry; Pouyanné said that TotalEnergies can lower methane emissions by 80 percent by 2030, while keeping an eye on lowering all other emissions from the production process. “If I can produce oil and gas with no emissions, I’ve done my job in production” to cut emissions, he argued.
• “Natural gas is a fundamental energy for the transition” because it emits half the methane that coal does, Pouyanné explained. Natural gas, he added, will also help provide a consistent source of energy to fill the gaps of intermittent wind and solar power while new infrastructure to support energy storage and transmission is brought up to scale.
• This year, with Russia’s war in Ukraine raising questions about the global energy supply, Pouyanné said that the world discovered how important energy reliability, affordability, and sustainability are—and how much reliability depends on gas. “On one side, the Biden administration [said] one year ago, ‘you need to diminish your emissions,’ and then we hear ‘you need to drill more.’” That, Pouyanné said, shows how the world will “need gas for very long.”

The global divide

• While TotalEnergies had invested fifteen billion dollars in Russia, it has begun withdrawing from its Russian investments. “We have impaired almost all of our Russian assets,” Pouyanné explained. “We have step-by-step progressively retracted from almost all of our business in Russia.”
• As Russia’s war in Ukraine continues, Pouyanné warned, the West must “be careful” to avoid believing that the rest of the world sees the conflict as a fight between democracy and autocracy. “It’s not the dominant [narrative] today in the Middle East, in Asia, [or] in Africa,” he said, explaining that leaders in the Global South are more focused on developing their economies than the war. He recalled how there have been mixed responses from countries to imposing sanctions on Russia and to voting on condemning Russia in the United Nations.
• Pouyanné noted that he sees a similar division between the West and the rest in the climate debate with each passing COP. “It should not be” so divided, he said, “Let’s avoid antagonism. Let’s keep humility. Let’s listen to these [Global South] leaders.”

Investing in renewables—and fossil fuels

• A day after TotalEnergies posted a record yearly net profit, Pouyanné talked about the French oil major’s plan to spend the increased profits. The company plans to invest sixteen to eighteen billion dollars of its capital, with around five billion going toward low-carbon energies and about twelve billion going toward hydrocarbons. “With twelve billion dollars,” Pouyanné explained, the “objective is to continue to maintain… stable production for this decade and continue to grow our liquefied natural gas business.”
• But, he noted, it will be “very important” to “continue to invest in oil and gas” to keep profits and investments high across the energy sector: “If I can invest five billion dollars in low-carbon energy in 2023, it is because I have made money from oil and gas,” he explained.
• Pouyanné said that the biggest investment opportunities lie in emerging economies such as Brazil, India, and African countries. TotalEnergies, he explained, has invested in new oil fields in Brazil and new projects, including a $3.5-billion pipeline, in Uganda.
• While people in the West “complain about the Chinese influence in Africa,” he said, that influence is growing because of China’s more long-term approach to investing in the continent—rather than exporting natural resources right away.
• The TotalEnergies head said the company will take some of the profits made in Uganda, Mozambique, and elsewhere to “invest in Africa.” That includes the electric grid. “When you don’t have electricity in the country, it is difficult to [improve] economic growth,” he said.
• Pouyanné explained that with technologies such as electric vehicles gaining in popularity, “the oil market at a certain point will begin to decline… this is why we invest in electricity, because this is a growing market.”

Katherine Walla is an associate director of editorial at the Atlantic Council.

Watch the full event

The post TotalEnergies’ CEO: Europe should pass its own green subsidies to compete with the US appeared first on Atlantic Council.

While it is simplistic to compare the two, such public threats to democratic stability may have created a shared concern that could realign US and Brazilian foreign-policy objectives and ultimately the bilateral relationship. With Lula’s visit with US President Joe Biden at the White House on Friday coming just weeks before March’s Summit for Democracy, the leaders should talk through ways to address the common threats to democracy they face, such as cooperation and knowledge-sharing on legal and defense issues related to Brazil’s January 8 investigations. That conversation can also be a jumping off point for discussing other shared priorities including grappling with the changing geopolitical landscape, protecting the environment and addressing climate change, and increasing trade across the Americas.

The synergies are there, but the window of opportunity for Biden and Lula to capitalize on the moment is disappearing as ordinary citizens, amid rising polarization, are losing the sense that democracy is valuable. That makes the strength of the US and Brazilian democracies—collectively serving almost seven hundred million people—all the more important.

The geopolitical agenda

Lula’s reemergence onto the regional and global stage can turn Brazil into the United States’ preferred partner in the Western Hemisphere. Brazil could prove a valuable diplomatic and trade entry point to a region where Washington has faced challenges—and even downright hostility—in pursuing its interests. Lula, who has the support of both the emerging and older generations of left-wing leaders and touts a pragmatic approach to the economy and foreign relations, has the type of clout that can convene Latin American and Caribbean leaders for frank discussions on the future of the hemisphere. One of Lula’s top foreign-policy priorities will be to strengthen ties across Latin America and Caribbean. This could also present an opportunity for Brazil to play a mediating role with regard to the Venezuela crisis, for example.    

In addition, Brazil’s number one trading partner is China, with the United States a close second. Recently, US foreign-policy positions toward Latin America have prioritized outcompeting China in the region. But in that competition, the United States has been losing. It is important for the United States to present Latin American and Caribbean countries such as Brazil with alternatives to some of China’s key investments, particularly in renewables and technology.

Lula is positioning Brazil as a potential diplomatic force in proposing peace negotiations on the Russia-Ukraine war. Bringing to mind the negotiating role that Brazil played in the Iran nuclear deal, Lula proposed a club of non-aligned nations to find peace through diplomatic means, although that is not a very popular option in Western capitals. Lula could be an important ally in eventual conversations about Russia’s war in Ukraine, especially because Brazil will take the Group of Twenty (G20) presidency in 2024.

Progress on the environment

Beyond the geopolitical sphere, Biden and Lula should discuss how they can work together to protect the environment and address the effects of climate change. In one of the Biden administration’s first moves, the president issued the Executive Order on Tackling the Climate Crisis at Home and Abroad. But doing so abroad requires partners, and in Lula, Biden may have found one. These two leaders should work together immediately and with urgency, as the Western Hemisphere is significantly affected by the climate crisis: Latin America and the Caribbean is the region second-most prone to natural disasters (behind the Asia-Pacific), and the United States is a frequent target of intense hurricanes that result from warming waters.

The fact that Lula is bringing Minister of Environment Marina Silva with him to Washington is a sign of how much he is prioritizing the issue. There is great expectation that under Lula, Brazil can push forward efforts to address the climate crisis, particularly because the country houses the “lungs of the Earth”—the Amazon, which is one of the most biodiverse zones on the planet. Protecting the forest while also sustainably developing the region is a key element in capping and potentially reducing carbon emissions while also furthering the country’s—and the region’s—economic prosperity. The United States could take a big step forward by contributing to the Amazon Fund, which Norway and Germany already do.

The first leader-to-leader meeting between Biden and Lula is full of symbolism. It shows the resumption of stronger US-Brazil relations, a willingness to leverage opportunities for cooperation on the environment, and the United States’ recognition of Brazil as a more strategic partner—and a more significant actor in the region and the world. And, following the January 8 events, the meeting shows that the United States and Brazil are a united pro-democracy front invested in strengthening their democratic institutions and promoting democratic values globally.

Valentina Sader is an associate director and the Brazil lead at the Atlantic Council’s Adrienne Arsht Latin America Center.

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​​​​​What you should know

• PAHO: Dr. Jarbas Barbosa took office on February 1 as the health organization’s new director, pledging to work in partnership with member states to end the pandemic and ensure that the region’s health systems recover stronger than before.
• IMF: The organization raised its global growth forecast to 2.9 percent, up from its original 2.7 percent. The outlook is also better for the region’s two major economies: up 0.2 percent for Brazil, to 1.2 percent, and a half point for Mexico, to 1.7 percent.
• Migration: The 250,000 migrants that irregularly crossed into Panama through the Darien Gap in 2022 represents a record high that is nearly double the 133,000 entries recorded in 2021.

Monitoring economic headwinds and tailwinds in the region

• Mexico: The national statistics agency reported that the economy grew 0.4 percent in Q4 of 2022 compared to the previous quarter.
• Argentina: The government will leverage new gas exports to Chile, and potentially Brazil, to improve its trade balance and pay down debt.  
• Brazil: Alongside Argentina, the government is floating the development of a common currency linking the two countries to facilitate trade. 
• Colombia: The Minister of Mines and Energy Irene Velez announced at Davos that the country will no longer approve new oil and gas exploration contracts.
• Jamaica: Third-quarter GDP grew by 5.9 percent over 2022 due to a resurgent tourism sector, which has boosted hotels, restaurants, and services, among other sectors.  
• Peru: Ongoing protests and road blockades have cost the country $550 million since the ousting of President Pedro Castillo last December. 
• Transatlantic ties: German Chancellor Olaf Scholz visited Argentina, Brazil, and Chile, to discuss the EU-Mercosur trade agreement and support for Ukraine. 

In focus: Energy expansion in Trinidad and Tobago

On January 24, the United States licensed Trinidad and Tobago to develop a natural gas project off the coast of Venezuela in the Dragon field region. The project will support overall Caribbean energy security, with a requirement that some of the produced gas must be exported to Jamaica and the Dominican Republic. To comply with US sanctions, Trinidad will pay for the gas with humanitarian aid. 

Atlantic Council experts reacted immediately, emphasizing the importance of this move towards meeting Caribbean energy demand. You can read more here. 

Health + Innovation

• Haiti: As of January 17, the Ministry of Public Health and Population has reported over 24,400 suspected cholera cases.
• Education: A World Bank study shows that by 2045, nearly 5 million people across LAC would fall into poverty due to pandemic-induced learning losses.
• Brazil: The Health Ministry announced that it will roll out bivalent COVID-19 booster shots as early as February 27.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: February 6, 2023 appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: The Supreme Court will investigate whether former President Jair Bolsonaro incited the January 8 attack on Congress and other government buildings in Brasilia.
• Peru: People—mainly from remote Andean regions—descended on the nation’s capital to protest against President Dina Boluarte in support of her predecessor and demand elections and structural change in the country.
• Trade: The value of goods exported from Latin America and the Caribbean (LAC) increased at an estimated rate of 18.8 percent in 2022, a downward trend from 27.8 percent in 2021, due to higher prices and low volumes.

Monitoring economic headwinds and tailwinds in the region

• Argentina: The government will buy back overseas bonds equivalent to over $1 billion to improve its debt profile, looking to send a positive signal to markets despite low reserves levels.
• Brazil: Vice President Alckmin said that Lula’s administration wants to remove a key tax on manufacturing and importing, the IPI, as part of a broader tax reform package. 
• Guyana: The government announced $43.4 billion in funding for a new natural gas power plant, alongside distribution infrastructure improvements, to promote business and development. 
• Multilaterals: During his inauguration, new Inter-American Development Bank (IDB) president Ilan Goldfajn announced three key priorities for the bank: social issues, climate change, and sustainable infrastructure. 
• Mexico: The 2023 North American Leaders Summit concluded with new agreements to promote sustainability, strengthen supply chains, and respond to migration. 
• Peru: The national statistics institute (INEI) said the economy expanded 1.7 percent year-on-year in November, marking a slight slowdown from the rise of 2.0 percent in October.

In focus: LAC in Davos

Latin American and Caribbean public- and private-sector leaders gathered alongside their counterparts from across the world in Davos, Switzerland, for this year’s Global Economic Forum. Colombia’s finance minister Jose Antonio Ocampo used the opportunity to push for a stronger agreement on minimum taxes for multinational companies. Brazil’s finance minister, Fernando Haddad, and environmental minister, Marina Silva, discussed Brazil’s positive economic outlook, environmental stewardship, and desire for regional integration. 

Spanish prime minister Pedro Sánchez also delivered a speech, in which he emphasized Spain’s role in building ties between Europe and Latin America, as Spain prepares to take over the Presidency of the Council of the European Union later this year. 

Health + Innovation

• Vaccines: The Canadian government will donate $33.4 million to the Pan American Health Organization (PAHO) to increase access to COVID-19 immunizations for populations across the region. This donation is in addition to a prior contribution of $40 million in 2021.
• Belize: The country will celebrate 34 years of relations with Taiwan through the construction of a new general hospital in San Pedro.
• Nutrition: A new United Nations report found that 22.5 percent—or 131.3 million people—of the region’s population cannot afford a healthy diet, citing a country’s income level, the incidence of poverty, and level of inequality as contributing factors.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 21, 2023 appeared first on Atlantic Council.

We don’t see them, but they’re out there. 

Rare, elusive, and well-camouflaged, snow leopards are exceptionally hard to spot. When sighted, these majestic cats seem to have come out of nowhere. And yet they were around us all along.  

In the discipline of global foresight, as the Atlantic Council’s Peter Engelke wrote last year, a “snow leopard” is “a known but underappreciated—perhaps even forgotten—phenomenon” that has the potential to change the world and shape its future even though appearances might suggest otherwise.  

The snow leopards discussed here are not predictions, but rather prompts for us to scrutinize overlooked phenomena. A technological breakthrough, for example, may not seem world-changing when still in development. Other phenomena might be so woven into our daily lives that they’ve become invisible to us, as with the recommendation algorithms highlighted below. The actors involved also influence how much weight we give to events and trends: If a head of state were to announce a country’s economic disengagement from China, we would sit up and pay attention, but companies deciding one by one to proceed with such “decoupling” may fly under the radar.  

Our next-generation foresight experts at the Scowcroft Center for Strategy and Security brought a fresh perspective to the task of spotting the hard-to-spot. Check out their list of six snow leopards to watch closely in the year ahead. 

Algorithms are everywhere yet almost invisible, serving as the silent sifters and sorters of our lives. Their influence is baked into everything from email and smartphones to GPS and government services. On search engines and social media, “recommendation algorithms” leverage user data and history to curate information for billions of people. In their simplest form, algorithms are instructions or sets of rules—often used by computers—for completing a task. At their most complex, they drive machine learning and enable artificial intelligence (AI) to grow smarter and more sophisticated by the second. 

With such sweeping capacity to shape how individuals and societies order and consume information—from the mundane recommendations of photo feeds and shopping lists to the grave amplification of extremist conspiracy theories that cause real-world terror—algorithms (and their designers) hold some responsibility for the social and political consequences of the content they propagate and the decisions they advance. 

The need for AI governance, particularly to rein in algorithms, is increasing—and policymakers have demonstrated an appetite for it. This October, the White House published an AI Bill of Rights with a blueprint for addressing “algorithmic and data-driven harms” and potential remedies. Lawmakers in the US Congress have proposed legislation to limit algorithmic promotion of extremist content by holding social-media platforms liable if certain forms of amplified content lead to offline violence, with other bills on the subject under consideration as well. China implemented a law in 2022 to reduce algorithmic influence on public opinion by enabling users to decline algorithmic recommendations on websites and apps. (The law was part of China’s pursuit of “positive energy” online, under the country’s aggressive censorship.) The EU’s Artificial Intelligence Act, the first major, still-pending regulatory framework for AI that could set global standards, strives to curb algorithmic bias. The EU’s General Data Protection Regulation (GDPR) also offers guidelines on when companies can and can’t use algorithmic automated processing for decision-making—for example, regarding who to offer a loan to or at what interest rate.  

Regulating algorithms is a broad and complex challenge, and pushback by the tech industry along with legal hurdles could halt even the most ambitious regulators. The public, and even policymakers, often lack the conceptual clarity to identify, define, and classify algorithms. And because it can be difficult to prove causation between algorithmic decision-making and the behavior or opinions of individuals influenced by it, accountability is hard to track. 

Further breakthroughs may happen below the national level. New York City is reviewing the use of algorithms in decision-making across its government agencies and offices. The City Council curtailed the use of AI algorithms in decisions about hiring and promotion. And these steps are just the beginning, as state houses and activists energetically join the race to shape this new frontier. 

Danielle Miller, Assistant Director, Scowcroft Strategy Initiative

Prior to joining the Atlantic Council, Miller worked in the US House of Representatives and was a research assistant at the University of California Berkeley’s Institute of European Studies.

In the days after the Kremlin launched its illegal war on Ukraine, Western companies based in Russia started fleeing the market, fearing unprecedented transatlantic sanctions, consumer backlash for continuing to do business with an invader country on an imperialist bender, and investor pressure to maintain profit margins. Now, as tensions between the West and China escalate, wary investors and multinational corporations may be starting to preemptively shift their market presence, supply chains, and investments away from China to insulate themselves from similar future impacts should the Sino-transatlantic relationship deteriorate.  

Among the most interesting early developments: Apple, which has a huge production footprint in China, has decided to shift production of its iPhone 14 model to India, while some of Google’s production for the new Pixel phone will likely be heading to Vietnam. Another space to watch is pension funds, as growing concerns about political risks are prompting discussions about potentially exiting or at least reducing exposure to the Chinese market.   

While it’s still early to call such decisions formal decoupling, these signs point to Western companies’ unease about the state of the Sino-transatlantic relationship, as well as a preemptive, corporate-led fragmentation of markets and supply chains in case tensions between China and Western countries bubble over. The private sector’s concerns about China’s restrictive zero-COVID policies, which have led to recurring lockdowns and disruptions at factories, may also be a factor in these developments, but the roots of these corporate moves can be traced back further to extensive tariffs and other economic tit-for-tat measures between China and the West—as well as nervousness about China’s own pursuit of self-sufficiency via efforts such as its “Made in China 2025” initiative. At stake in how these trends play out is nothing less than the future of globalization as we know it, along with the shape of the multipolar geoeconomic order, in which countries such as India will likely play an enhanced role.   

Anca Agachi, Associate Director, Transatlantic Security Initiative

Previously, Agachi worked for the EU’s European Defence Agency on defense capability development projects in the information security and space domains, and served as a United Nations Youth Representative for Romania, focusing extensively on the UN 2030 Agenda and sustainable development goals.

The two main reasons why consumers are reluctant to buy electric vehicles? They cost a lot and can’t get very far on a charge. But a battery that could make electric cars cheaper, more efficient, and thus more popular may be on the horizon. The next breakthrough could come not by way of an updated lithium-ion battery—the kind that powers most electric vehicles on the road today—but rather by using current battery technology in different form through structural batteries built into a car’s frame. This has the effect of reducing the car’s weight (a chassis made of battery cells isn’t as heavy as a chassis plus a separate battery) and a lighter car can travel farther on a single charge. The potential benefits go far beyond increasing range. Integrating the battery into a car’s chassis could also cut down on manufacturing costs and make cars cheaper, while strengthening the body of the car as well.  

Tesla has experimented with structural batteries in its Model Y cars and GM used them in the electric model of its Hummers, but their versions have yet to yield broader adoption. Yet technical development among automakers and other actors is ongoing and promising. Researchers at Sweden’s Chalmers University of Technology, for example, recently developed a more efficient structural battery that performs ten times better than its predecessors. Right now, electric vehicles are driven mostly by the wealthy: In the United States, for instance, 78 percent of federal electric-vehicle credits go to those with incomes over $100,000. If structural batteries can deliver on their promise, it will result in many more electric vehicles on the road around the world, democratizing ownership.  

Imran Bayoumi, Assistant Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

An uneven post-COVID-19 economic recovery has stoked a labor-rights movement in the United States and efforts to unionize in some of the country’s largest corporations—from Starbucks to Amazon to Trader Joe’s. Around the world, meanwhile, similar fallout from the pandemic has produced another phenomenon: Platform workers—those who work for organizations that provide services directly to consumers through an online platform—are leading efforts to create better working conditions for themselves. Strikes and other protests from Brazil to the United Kingdom to the Philippines and beyond speak to rising unrest among these workers. The causes for disputes and the types of protest vary across regions, but concerns about pay are often a primary driver of the activity.  

Such developments are significant in part because platform workers are a subset of the informal economy, which encompasses economic activities that are not monitored by the state. These activities include a wide range of work—from domestic labor to rideshare driving to market stands. More than 60 percent of the world’s adult labor force operates, at least part-time, in the informal sector, and on average that sector represents 35 percent of gross domestic product in low- and middle-income countries. In many cases, particularly in emerging markets and developing economies, platform workers are not aiming to formalize their economic activities. But their budding efforts to improve their working conditions could alter the world of work for the better, more strongly linking them with government protections and helping curb global poverty and precarious employment. 

Caroline Multerer, Deputy Director of Operations, Scowcroft Center for Strategy and Security

Prior to joining the Atlantic Council, Multerer was a program associate at Jones Group International, a global consulting firm owned by General James L. Jones.

One approach to combating climate change is geoengineering, or deliberate, large-scale, technologically based interventions in the environment to mitigate some of the effects of climate change. These include removing carbon dioxide from the atmosphere and reflecting the sun’s rays back into space. Futuristic though it may sound, geoengineering is already here. China and the United Arab Emirates have undertaken efforts to “seed” clouds by artificially increasing the amount of precipitation they hold and creating rain. Researchers from the UAE’s National Center of Meteorology have looked into creating an artificial mountain that would induce cloud formation and rain. Other countries, including China, India, and the United States, are making steady progress in advancing their geoengineering capabilities. The 2022 federal appropriations act, for example directed the US Office of Science and Technology Policy to develop a multi-agency group for coordinating research on solar geoengineering. This form of climate engineering, where sunlight is sent back into space, seems most likely to have the biggest impact on limiting the consequences of climate change and thus most likely to be pursued. 

But along with its promise solar geoengineering also brings numerous risks, including the potential alteration of regional weather patterns. There’s also the increasing likelihood that, given the pace of climate-driven impacts such as floods, droughts, severe storms, and heat waves, a country or multiple countries will attempt to geoengineer the planet unilaterally, before the underlying science is solidified and before adequate global governance mechanisms are in place. 

Imran Bayoumi, Assistant Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

Although Japan and South Korea normalized diplomatic relations in 1965, their relations have continued to be complicated by the legacy of Japan’s colonization of Korea from 1910 to 1945, memories of World War II, and disputes over how to compensate Korean women who were forced into wartime sexual slavery by the Japanese military. 

Despite this history, deeper reconciliation between the two countries, while politically difficult, is not an impossibility. In one indicator of a coming thaw, a meeting between South Korean President Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida on the sidelines of the 2022 United Nations General Assembly, framed as a brief, informal gathering to avoid setting off domestic opposition at home, marked the first bilateral meeting between the leaders of these nations in three years. In another sign, the Japanese and South Korean publics are coalescing around concern about China. Were such a rapprochement to occur, it would dramatically alter the geopolitical environment in Asia while delivering significant benefits to both countries. Japan and South Korea face common and acute threats from China, North Korea, and Russia. With better relations, the two countries could pursue closer bilateral military ties, reach mutual understandings of regional threats, and develop responses to crises as they emerge. South Korea, one of the world’s leading advanced economies, could get more involved in the Quad grouping of Australia, India, Japan, and the United States. The United States would be able to count on both nations to counterbalance China’s influence in the region, while the three could promote shared values throughout the Indo-Pacific. 

Imran Bayoumi, Assistant Director, Scowcroft Strategy Initiative

Bayoumi graduated with his master’s degree in global affairs from the Munk School at the University of Toronto where he held a Joseph-Armand Bombardier Canada Graduate Scholarship. He also holds a BA from Queen’s University in political studies.

Global Foresight 2023

In this year’s edition of Global Foresight, the Atlantic Council’s senior experts identify the top risks and opportunities for 2023. Our foresight team spots “snow leopards” that could have major unexpected impacts in 2023 and beyond. And we share findings from our survey of global strategists and foresight practitioners on how human affairs could unfold over the next decade.

Learn more Full survey

Atlantic Council Strategy Paper Series Jan 9, 2023

Welcome to 2033: What the world could look like in ten years, according to more than 160 experts

To survey the future, we polled global strategists and foresight gurus on our most burning questions about the biggest drivers of change over the next decade. Check out their forecasts on everything from the prospect of nuclear proliferation to the probability of great-power war to the potential for more global volatility.

Read More

Atlantic Council Strategy Paper Series Jan 20, 2023

Six ‘snow leopards’ to watch for in 2023 

Atlantic Council foresight experts spot the underappreciated phenomena that could have outsize impact on the world, driving global change and shaping the future.

Brazil China

Atlantic Council Strategy Paper Series Dec 23, 2022

The top 23 risks and opportunities for 2023

The war in Ukraine changed the world in 2022. How will it continue reshaping global affairs in 2023 and what else looms on the horizon? The Atlantic Council’s top experts brought their globe-spanning expertise to the task of forecasting the near future.

Africa Americas

The post Six ‘snow leopards’ to watch for in 2023  appeared first on Atlantic Council.

The Biden administration is under increasing pressure from progressive leaders in Latin America and the US Congress to compel Bolsonaro to leave the United States. While the Biden administration needs to demonstrate moral leadership in upholding democracy and the rule of law, acting too hastily could fuel the flames of Brazil’s increasingly polarized politics and do more damage to democracy in the long term. In order to navigate this politically sensitive situation, the US government must follow established legal processes and ensure Bolsonaro does not undermine Brazilian democracy from US soil.

Ideally, Bolsonaro—who may have entered the United States on a diplomatic visa, which would have expired when his successor was sworn in on January 1—would simply return to Brazil voluntarily. He has said he plans to accelerate his planned departure at the end of January, which would resolve the problem.

Should Bolsonaro not leave voluntarily, it may take years to compel his departure, as the history of high-profile extradition requests to the US government shows. However, today there is hope that Bolsonaro will be persuaded to leave the United States of his own accord because of the possibility that he could face years of shameful publicity trying to stave off the extradition the Brazilian government, when it decides the time is right, is almost sure to seek.

While Bolsonaro would have ample opportunity to challenge the evidence against him in US courts before any action is taken to extradite or remove him, the Brazilian government would have an equal opportunity to make the case for Bolsonaro’s responsibility for the riots before the world’s media. The US government also would have the opportunity under US law to provisionally arrest Bolsonaro for at least several months, an indignity he may prefer to avoid.

Since 1964, the United States and Brazil have agreed by extradition treaty that each country must “deliver up” those charged with or convicted of certain enumerated crimes—which include destroying government property, as happened in Brasília—when committed within the territorial jurisdiction of the requesting country and when criminalized in both countries.

While there are some exceptions for when the offense is of a “political character,” the treaty notes that “[c]riminal acts which constitute clear manifestations of anarchism or envisage the overthrow of the bases of all political organizations will not be classed as political crimes or offenses.” It is unlikely that a court would rule that the exception for acts of a “political character” would apply in Bolsonaro’s case, if he is found culpable, because the incitement resulted in violence.

To avoid getting mired in political sensitivities, the Biden administration would be wise to pursue three immediate priorities.

1. Follow the law—even if it moves slowly

First, the White House should demonstrate what the rule of law looks like. If Bolsonaro chooses to stay in the United States, the Biden administration should urge the Brazilian government to initiate a formal extradition request. While it could be appealing to swiftly end Bolsonaro’s presence in the United States by exercising the authority that the president and the secretary of state have to declare him persona non grata (if he actually entered on a diplomatic visa) or to revoke his visa and have the Department of Homeland Security remove him, Bolsonaro would still have the right to contest that in court. In the end, little time would be saved if Bolsonaro wants to delay his return.

The question over Bolsonaro brings to mind one faced by the Obama administration in 2016, when Turkey’s government requested the extradition of Fethullah Gülen, a Turkish religious leader living in Pennsylvania, following a failed coup against Turkey’s government by some of Gülen’s supporters. However, despite repeated urging (including from then-Vice President Joe Biden) and expert-level consultations in which the Department of Justice explained US extradition requirements to Turkish counterparts, the Turkish government never presented evidence sufficient to convince a US magistrate to turn Gülen over to Turkey for trial.

Insistence on following established legal processes in the Gülen matter allowed the US government to navigate a politically sensitive situation without eroding the rule of law, even under serious pressure from the Turkish government.

While a formal extradition process for Bolsonaro would take several years to unfold, starting with the issuing of a warrant and a hearing to establish whether sufficient evidence exists to sustain the charge, this would keep Bolsonaro out of Brazil and, perhaps, allow for restrictions on his access to media and electronics that could be used to incite supporters to further violence.

From there, the process involves several layers of preliminary review by the US Department of State and a probable cause determination by the US Department of Justice before the case is forwarded to the US attorney for the district where the individual is located. An extradition order is not appealable, but Bolsonaro could petition for a writ of habeas corpus to ensure that he gets a hearing. The US secretary of state then makes the final decision whether to extradite.

The Biden administration should be clear that the length of the process is not any indication of US government reluctance to turn Bolsonaro over or interest in delaying the process. Bolsonaro’s status as a former head of state does not privilege or penalize.

2. Provide US law enforcement and intelligence support to Brazil

Second, the Biden administration should also support efforts to hold those responsible for the January 8 attack accountable for their assault on democracy by promising total cooperation from US law enforcement and intelligence agencies to share what they know, including any information regarding Bolsonaro’s role in instigating, directing, or supporting it.

A public announcement of US law enforcement’s full cooperation would have a chilling effect on Bolsonaro’s capacity to machinate disruptions to Brazil’s democracy from his current location in Orlando, Florida, given the ability, and obligation, of US law enforcement and intelligence agencies to prevent acts of violence or crime emanating from a foreign national on US soil.

3. Allow civil cases to run their course

Third, Bolsonaro no longer holds any official position, so in the United States, he is subject to US laws for civil damages—and the Biden administration should not shield him from culpability. His assets can be tied down or even frozen while US courts decide whether he is liable for the January 8 riots and subsequent events. He could also be required to give depositions and provide evidence about his own actions even outside of any criminal or extradition proceedings.

Life in the United States could quickly look less and less attractive for Bolsonaro. The threat of being cut off from his supporters while under the watchful eye of US law enforcement agencies may be the deciding factor in whether Bolsonaro decides to stay in the United States or go home. Either way, he will face justice.

Gissou Nia is a human rights lawyer and director of the Strategic Litigation Project at the Atlantic Council. Follow her on Twitter: @GissouNia.

Tom Warrick is a senior fellow at the Scowcroft Center for Strategy and Security’s Forward Defense practice at the Atlantic Council. He served in the Department of State from 1997 to 2007 and as a deputy assistant secretary in the Department of Homeland Security from 2008 to 2019. Follow him on Twitter: @TomWarrickAC.

The post As Brazil investigates Bolsonaro’s role in anti-democratic riots, should the US kick him out? appeared first on Atlantic Council.

It’s a shock to the system. One week after new Brazilian President Luiz Inácio Lula da Silva was sworn into office, thousands of supporters backing former President Jair Bolsonaro—who falsely claimed that October’s election had been stolen from him—descended upon the country’s Congress, Supreme Court, and presidential palace, leaving shattered windows and overturned furniture in their wake. Now that authorities have cleared the protests and launched an investigation into security failures, our experts break down what’s to come.

• Jason Marczak (@jmarczak): Senior director of the Adrienne Arsht Latin America Center
• Iria Puyosa (@NSC): Senior research fellow at the Digital Forensic Research Lab
• Valentina Sader (@valentinasader): Associate director and Brazil lead at the Adrienne Arsht Latin America Center

Failures abound

• Brazil’s January 8 triggered comparisons to the United States’ January 6 attack. “But that is an oversimplification,” Jason says. “In Brazil, rioters were focused on absolute destruction of Brazil’s legislative, judicial, and executive buildings without the ability to disrupt the democratic order.”
• Iria points out that Bolsonaro’s supporters had been planning publicly for days, and the call to action “was not made on fringe or secret sites but in public groups and channels” on TikTok, YouTube, Telegram, and WhatsApp. Security forces “had the chance to take preventive measures,” she says, calling it “inexplicable” that Brazilian authorities never “established strong security controls.”
• Calls rose on Sunday for stronger regulation of social media, Iria tells us, even though Brazil has one of the more “vigorous” regulatory regimes in the region. One way Brazilian policymakers can tackle the problem, she says, is to improve intelligence agencies’ capabilities to monitor open-source data that provides “early warnings” about extremist threats—but in a way that doesn’t “limit freedom of expression and association of citizens.”
• While Lula wasn’t even in Brasília at the time, Jason says that the riots are still a “wake-up call” for the Lula government because they highlight the risks that lie ahead for “the continued peaceful functioning of Brazil’s institutions.”

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Lula’s moment

• “Democracy prevailed, but it’s cracked,” Valentina tells us. While Brazil’s democratic institutions have proven resilient, “they still must be strengthened.”
• According to Valentina, the fact “that some police forces, officials, and financial backers appear to have enabled this anti-democratic vandalism underscores the danger to Brazil’s democratic system.”
• But politicians from across the political spectrum have responded to the riot with an “eagerness to defend democracy,” a rare moment of “common ground,” Valentina says. “Lula must seize the opportunity to pacify the country and gain political power in Congress” to show the strength of democracy, punish wrongdoers, and enact key planks of his policy agenda. 

Friends in need

• US President Joe Biden quickly condemned the attack on Sunday. Jason tells us that next, his administration should “take action to reassure the new Lula government that US support will not be in statements alone.”
• That could take the form of a Lula visit to Washington early this year. “That visit should be prioritized and scheduled as soon as possible,” Jason says, “to show Lula and allies around the hemisphere that the United States is here to help when partners are in need.”
• Valentina says the United States can view January 8 as “yet another failed attempt by the extreme right to undermine democracy.” But “amid global trends of declining democratic freedoms and political instability across Latin America and the Caribbean, which country is the next target?”

The post How Brazil can respond to its democracy stress test appeared first on Atlantic Council.

Click to jump to an expert reaction:

Jason Marczak: January 6 comparisons are an oversimplification, but the US has a role to play now

Valentina Sader: It’s Lula’s time to show strength as democracy is challenged

Iria Puyosa: Brazilian intelligence agencies failed. Here’s what they can do now.

January 6 comparisons are an oversimplification, but the US has a role to play now

Brazil is a divided nation. But hopefully, unlike in the United States, those divisions do not play out in holding accountable those responsible for Sunday’s attacks. Leaders across the Brazilian political spectrum have condemned the violence; what is needed are swift actions to hold responsible those directly and indirectly complicit in the ransacking of Brazilian institutions. That started on Sunday with the arrest of hundreds of looters and the order by Supreme Federal Court Justice Alexandre de Moraes calling for the ninety-day removal of Federal District Governor Ibaneis Rocha following the absolute failure of Federal District security.

Comparisons will continue to be made to January 6. But that is an oversimplification of what happened in Brazil. The January 8 rioters took their cues from the United States, but, in Brazil, rioters were focused on absolute destruction of Brazil’s legislative, judicial, and executive buildings without the ability to disrupt the democratic order. Lula had taken office one week earlier and was not even in the capital city at the time. Still, for the Lula government, the Brasília violence is a wake-up call regarding the forces that will continue to undermine the continued peaceful functioning of Brazil’s institutions.

What should the United States do? Unlike the reaction to the recent self-coup in Peru, from left to right, governments across the Americas and Europe voiced a loud and resounding condemnation of the Brasília attacks. Multiple US officials, including President Joe Biden, forcefully spoke out. This is the moment for the United States to take action to reassure the new Lula government that US support will not be in statements alone. A potential Lula visit to Washington is in the cards for early in the year. That visit should be prioritized and scheduled as soon as possible to show Lula and allies around the hemisphere that the United States is here to help when partners are in need.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

It’s Lula’s time to show strength as democracy is challenged

January 8, 2023 will go down as an ugly day in Brazilian history. The past few months have been clouded by the fear that a January 6-like event would take place in Brazil, and that fear sadly came to fruition on Sunday. One week separates Lula’s inauguration, a celebratory moment for the democratic process and the peaceful transition of power, and this weekend’s violence.

Inspired by the United States’ January 6 riots, the attacks in Brasília targeted all three branches of government. The fact that some police forces, officials, and financial backers appear to have enabled this anti-democratic vandalism underscores the danger to Brazil’s democratic system. The repercussions of this day will be long-lasting.

The United States and the West should see what happened in Brazil as yet another failed attempt by the extreme right to undermine democracy. But amid global trends of declining democratic freedoms and political instability across Latin America and the Caribbean, which country is the next target?

In Brazil, democracy prevailed, but it’s cracked. The country proved that its democratic institutions are resilient, but they still must be strengthened. Lula has an even greater opportunity to do that now. The horror of the day and the eagerness to defend democracy pushed politicians from across the political spectrum to find common ground. That’s a rarity in Brazilian politics, and Lula must seize the opportunity to pacify the country and gain political power in Congress, backed by a pro-democracy front, to show the strength of his government and of Brazilian democracy, to punish those involved, and to move the needle forward on key policy priorities.

—Valentina Sader is the associate director and Brazil lead at the Adrienne Arsht Latin America Center.

Brazilian intelligence agencies failed. Here’s what they can do now.

Brazil’s security and intelligence agencies failed to take effective measures to prevent the assault on the National Congress, the Federal Supreme Court, and the Presidential Palace. They are not the first security forces taken off guard by a popular uprising or an attempted coup d’état. But they had a chance to take preventive measures, given the amount of open-source data available.

Contrary to what typically occurs in attempted coup d’états, the assault on the Brazilian government was publicly announced. The call was not made on fringe or secret sites but in public groups and channels with thousands of followers. Videos, flyers, and texts indicating places and times of departure for Brasília, age requirements to participate, necessary supplies for the trip, and the objective of the mobilization circulated on TikTok, YouTube, public Telegram groups, and public WhatsApp groups for several days.

It is inexplicable that the Brazilian authorities have not investigated these calls and established strong security controls to prevent pro-Bolsonaro extremists from taking over the Square of the Three Powers.

On Sunday, calls began to rise for greater regulation of social media and messaging platforms, even as Brazil has been among the more vigorous countries in Latin America in restricting the circulation of misleading or polarizing content on messaging platforms. Policymakers should consider how intelligence agencies can activate resources for open-source monitoring that do not limit freedom of expression and association of citizens but provide early warnings about actual threats from extremist activities.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Digital Forensic Research Lab.

The post Experts react: Brazil has suffered its own attack against democracy. Here’s what the government and its allies can do next. appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: On January 1, Luiz Inácio Lula da Silva was sworn in as president for a third term after defeating incumbent Jair Bolsonaro.
• Outlook: According to the Economic Commission for Latin America and the Caribbean (ECLAC), economic growth will continue to slow in 2023 and reach 1.3 percent.
• Venezuela: The opposition-led legislature dissolved the interim government led by Juan Guaidó. The vote signaled that members of the opposition had lost faith in Guaidó’s ability to oust Maduro. The United States will continue recognizing the 2015 National Assembly as the last remaining democratic institution in Venezuela.

Monitoring economic headwinds and tailwinds in the region

•  Brazil: In 2022, trade surplus reached a record high of $62.3 billion. Total exports also reached a 335 billion high, helped by a boost in prices in the agriculture and livestock sector.
• Argentina: The IMF disbursed a tranche of $6 billion from its $44 billion program with Argentina, citing positive indicators including falling inflation, a better trade balance, and foreign reserves. 
• Colombia: Minimum wage will increase by 16 percent this year, to $242.7 per month. President Petro said the move would boost an economy slowed by inflation. 
• Dominican Republic: The S&P upgraded the country’s credit rating from “BB-“ to “BB,” highlighting its strong recovery from the pandemic and long-term growth potential. 
• El Salvador: The government will receive a $150 million loan from the CAF development bank, designed to strengthen its education system in the wake of the pandemic.  
• Peru: The government launched a $1.6 billion plan to increase welfare and investment in regions gripped by protests following the ouster of former president Pedro Castillo. 

In focus: Nearshoring opportunities in the Americas

With the next North American Leaders Summit (NALS) set for this incoming week (January 9 and 10), nearshoring – the relocation of supply chains closer to the United States – is rising in importance.

Rising costs of and delays during shipping, coupled with the pandemic, have made businesses in the United States wary of relying on supply chains across the Pacific. As a result, some 400 companies explored reshoring to Mexico from Asia in 2022. Mexico’s manufacturing sector is now larger than it was before the pandemic, and Mexican exports to the United States have rapidly increased. Firms such as Walmart have already relocated some business to Mexico, while Tesla is planning a new factory in northern Mexico. NALS will pay particular attention to the electric vehicle production chain in North America.

Health + Innovation

• Chile: In an effort to curb the spread of the BF.7 COVID-19 subvariant, travelers coming from China are now required to show a negative PCR test.
• Haiti: Over 14,700 suspected cholera cases have been reported since December. Nine in every ten cases are from areas hit hard by food insecurity.
• PAHO: Most countries in LAC invest less than the minimum 6 percent of GDP in health and allocate less than 30 percent of the health budget to the first level of care as recommended by the regional health organization.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: January 7, 2022 appeared first on Atlantic Council.

While many countries are still on the rebound from the COVID-19 pandemic, new crises—and their effects—are emerging, and are expected to continue into the next year. From global inflation to a costly energy crisis, and from food insecurity to new political shifts, how can the region meet changing dynamics head-on? And how might risks turn into opportunities as we enter a highly consequential 2023?

Join the Adrienne Arsht Latin America Center as we look at some of the key questions that may shape the year ahead for Latin America and the Caribbean, then take our signature annual poll to see how your opinions shape up against our predictions.

How might new regional collaboration take shape across Latin America and the Caribbean with a wave of new leaders? What decision points might shape government policy? Will Bitcoin continue to see the light of day in El Salvador? Are the harmful economic effects of Russia’s war in Ukraine in the rearview mirror for the region, or is the worse yet to come? Will China’s new foreign policy ambition translate to closer relations with LAC?

Take our ten-question poll in less than five minutes!

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Experts react: As the US eases oil sanctions, is Venezuela coming in from the cold?

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The post What might be ahead for Latin America and the Caribbean in 2023? Take our ten-question poll and see how your answers stack up appeared first on Atlantic Council.

​​​​​What you should know

• Peru: President Castillo was ousted by lawmakers after he sought to dissolve Congress ahead of an impeachment vote.
• Brazil: The Economy Ministry rejected assertions by President-elect Lula’s transition team that Bolsonaro’s outgoing administration was leaving government finances “bankrupt.”
• Social outlook: A recent Economic Commission for Latin America and the Caribbean (ECLAC) report projects that by the end of 2022, LAC will have 201 million people living in poverty – an increase of 15 million compared to the pre-pandemic situation.
• ICYMI: On December 7, the Atlantic Council launched a paper on improving tax policy in LAC. Read it here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: signed a new information-sharing agreement with the US designed to root out tax evasion. It could increase tax revenue for Argentina by $1 billion US.
• Barbados: concluded new funding arrangements with the IMF, $113 million US to continue its fiscal reform package and $189 million US towards its climate change response.
• Brazil: President-elect Lula announced that Fernando Haddad, former minister of education and mayor of São Paulo, would be his finance minister.
• Mexico: announced that additional consultations on the USMCA energy dispute would be held through early January, to ensure continued investment and confidence.
• Peru: was placed under a state of emergency after protests gripped the country. Political upheaval led S&P to lower the country’s economic outlook to “negative.”
• Transatlantic relations: Argentina called for reviewing the potential EU-Mercosur trade agreement, highlighting threats to local auto industry and barriers to agricultural exports.
• Uruguay: criticized Mercosur’s inaction on trade agreements with large economies, drawing criticism for its own independent negotiations with China and to join the TPP.

In focus: Guyana’s carbon credits

Guyana is the first country to issue carbon credits designed to prevent forest loss and the first under the ART’s REDD+ Environmental Excellence Standard to ensure integrity and independent verification. The Hess Corporation, which is a partner in an oil consortium led by ExxonMobil that operates in Guyana, will purchase $750 million US of these credits. This move reflects how resilient growth, balancing between the opportunities in the energy sector and protecting its valuable environment, has become a priority in light of climate change and stresses like the COVID-19 pandemic.

These credits will support Guyana’s Low Carbon Development Strategy, with 15 percent of the revenues set aside for indigenous communities. With some 18 million hectares of forest, Guyana is a major carbon sink, and has previously worked with Norway to protect this resource. The new credits reflect Guyana’s status as a “High Forest, Low Deforestation” country, another first.

Health + Innovation

• Argentina: Transport Ministry officials recommended all passengers travelling on public transportation to return to wearing face-masks amid a spike in COVID-19 cases.
• Universal Health Day: The Pan American Health Organization (PAHO) director called on the region to redouble efforts towards achieving universal health as they begin to rebuild from the pandemic.
• Mexico: The state of Nuevo Leon reintroduced the mandatory use of face masks in closed public spaces as the number of COVID-19 infections and other respiratory diseases rise.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 17, 2022 appeared first on Atlantic Council.

​​​​​What you should know

• Economic outlook: The head of the UN Economic Commission on Latin America and the Caribbean (ECLAC) said that the region’s stagnation is ”worse than the 1980s” due to weak investment, low productivity, and inadequate education.
• Mexico: Remittances sent from workers abroad surpassed $5.35 billion in October, beating economists’ forecast on US job strength.
• #ProactiveLAC: On Wednesday, December 7, the Atlantic Council will host a virtual conversation on LAC’s economic outlook, fiscal policy, and small and medium-sized enterprises in uncertain times. Register here.

Monitoring economic headwinds and tailwinds in the region

• Argentina: Upcoming legislation is set to encourage investment in its liquified natural gas sector, as demand, driven by the war in Ukraine, continues to grow. 
• Bolivia: The country lowered its 2023 growth forecast from 5.1 to 4.8 percent, as an ongoing strike in Santa Cruz has led to over $780 million in losses.  
• Chile: During the recent high-level dialogue with the United States covering migration and sustainable development, both parties agreed to relaunch their bilateral Science, Technology, and Innovation Council. 
• Dominican Republic: The United States will block sugar imports from Central Romana, the Caribbean nation’s largest employer, accusing it of using forced labor. 
• Ecuador: The government is considering a new financing deal with the International Monetary Fund (IMF) for 2023, as its current agreement is set to expire at the end of 2022.  
• Guyana: According to new ECLAC data, the country recorded the highest FDI growth in the Caribbean in 2021, and now accounts for half of all Caribbean FDI, thanks to its booming hydrocarbon sector.  
• Peru: Farmers and truckers set up roadblocks to protest rising gas and fertilizer prices, driven up by the war in Ukraine.  
• FDI: In a 2022 ECLAC report, Foreign Direct Investment (FDI) in Latin America and the Caribbean (LAC) rose by 40.7 percent in 2021 but fell short to achieve pre-pandemic levels.

In focus: Venezuelan thaw

Last weekend, the United States granted Chevron a six-month license to expand operations in Venezuela after the Maduro government agreed to resume talks in Mexico City with the country’s opposition. The two sides signed an agreement to use frozen Venezuelan assets for humanitarian relief as well.  

The United States has framed this policy shift as a “targeted” response to promote “concrete steps” forward by the parties meeting in Mexico City. At the same time, the energy crisis driven by Russia’s war in Ukraine has elevated Maduro’s–-and Venezuela’s –-importance in a time of rising oil demand.  

Health + Innovation

• ICYMI: On November 16, the Atlantic Council launched a report with actionable recommendations for improving immunization program outcomes and financing in the region. Read it here.
• Uruguay: Health authorities issued a recommendation that immunocompromised patients and over 50 year-olds should take their fifth dose of the COVID-19 vaccine.
• Food insecurity: An ECLAC report found that 56.5 million people in LAC are impacted by hunger.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: December 3, 2022 appeared first on Atlantic Council.

The Global South won, but did the climate? Negotiators at the UN climate-change conference known as COP27 extended their stay in Sharm el Sheikh, Egypt to hammer out a final agreement that will create a loss and damage fund to compensate developing countries harmed by climate change. But the deal barely addresses other urgent topics such as reducing greenhouse-gas emissions, even as the consequences of climate change become clearer by the day. Have negotiators done enough to help save the planet and the people on it? What other surprises cropped up at COP? Our experts, who were on the ground in Sharm el Sheikh, are here to weigh in.

• Kathy Baughman McLeod (@KBMcLeodFLA): Senior vice president and director of the Adrienne Arsht-Rockefeller Foundation Resilience Center
• Jorge Gastelumendi (@Gasteluj): Director of global policy at the Adrienne Arsht-Rockefeller Foundation Resilience Center and former climate negotiator for the government of Peru
• Landon Derentz (@Landon_Derentz): Senior director of the Global Energy Center and former director for energy on the US National Security Council and National Economic Council

A damaging loss?

• While the creation of the loss and damage fund was “immensely welcome,” Kathy tells us, the lack of new emissions-reduction commitments by the countries gathered at COP27 represents an “utter failure” that is “devastating to plans to keep global heating to no more than 1.5 degrees Celsius” above pre-industrial levels, as pledged in the 2015 Paris Agreement.
• Jorge says ”current major emitters” such as China, India, Brazil, and Indonesia are let off the hook by the lack of those commitments—and by the fact that, as developing nations, they won’t have to contribute to the loss and damage fund, “which could have been one other leverage point to” make them cut emissions. As a result, countries like these are poised to replace developed countries as the primary cause of climate-related loss and damage.
• The structure of the loss and damage fund “also lacks a clear focus on the most vulnerable, which poses fundamental questions about the future use of the funds by recipient countries,” Jorge notes.

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Fossil flip-flop

• Kathy attributes much of the conference’s failures to attack global warming to the fact that “the fossil-fuel industry is still so deeply influential over country delegations,” with more than six hundred fossil fuel-tied delegates in attendance according to the advocacy group Global Witness.
• Vladimir Putin had a say too: Russia’s invasion of Ukraine has contributed to a near-term global energy crisis that at times has sidelined long-term climate concerns. The COP results “did not match the level of urgency many in the climate community were hoping for,” Landon tells us, because “climate action appears to have an energy-security problem.”  
• Fossil-fuel geopolitics also helped deliver the Global South’s big win. “Europe’s present hunt for conventional oil and gas resources in Africa and Latin America,” a major break from the West’s recent anti-fossil fuel stance, may have “served to disarm” long-running Western efforts to block a loss and damage fund, Landon says. 
• That’s because this year’s mad hydrocarbon dash is forcing Western countries “to grapple with the consequences of failing to move more swiftly to abate global emissions,” Landon adds.

Adapt or die

• For real progress, Kathy says, you have to look beyond the negotiators: “NGOs and civil society, young and indigenous activists, philanthropy and the private sector (particularly the finance and insurance sectors), and mayors and governors played their largest role yet in driving new solutions for climate mitigation and adaptation.”
• One example, as Jorge points out, is the Sharm el Sheikh Adaptation Agenda (SAA), a commitment from non-state actors to build climate resilience for four billion of the world’s most vulnerable people. The Resilience Center team helped secure a commitment in the SAA to mobilize some three thousand insurance companies to finance climate-adaptation projects. “In short, we managed to elevate a business-led effort into a global policy platform,” Jorge adds.
• Next year’s COP will be a short hop away in the United Arab Emirates, and Kathy says the agenda “will need to focus on adaptation and resilience, and taking the next steps in detail on the loss and damage facility.” But once again, she adds, the formal negotiations will only be part of the story: “I expect action by the non-state actor community, especially around finance, to outpace the official process.”

The post The big success and bigger failure of COP27 appeared first on Atlantic Council.

It’s back to the future. Left-wing former Brazilian president Luiz Inácio Lula da Silva defeated right-wing President Jair Bolsonaro on Sunday in a closely contested runoff election that portends a huge policy shift for Latin America’s largest country on everything from protecting the Amazon rainforest to social justice. How will Brazil reposition itself on the world stage? Our experts peer into the future that awaits.

• Jason Marczak (@jmarczak): Senior director of the Adrienne Arsht Latin America Center
• Tatiana Prazeres: Director of trade and international relations for the Federation of Industries of the State of São Paulo and columnist for the Folha de São Paulo newspaper
• Valentina Sader (@valentinasader): Associate director and Brazil lead at the Adrienne Arsht Latin America Center

Left turn?

• Lula joins a growing set of left-leaning leaders across the continent, including Andrés Manuel López Obrador in Mexico, Gabriel Boric in Chile, Gustavo Petro in Colombia, and Alberto Fernández in Argentina. But Jason says that “characterizing Lula’s election as part of a shift to the left in the region oversimplifies the state of regional politics.”
• Instead, the voters’ verdict is about the need for leaders who can deliver. “People want leaders who they think will govern with a deeper interest in making the average person’s life better, especially as inflation and high food and energy prices take hold,” Jason adds. The “clear frustration in Brazilian society with the status quo”—reflected in the fact that Bolsonaro has now become the first president since Brazil transitioned to democracy to not win re-election— mirrors results “in democracies around the world.”

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Southern hospitality

• When he was in office the first time, from 2003 to 2010, “Lula cast himself as the leader of the Global South,” Jason tells us, and we can expect a return of that brand of “South-South diplomacy.” But at the same time, look out for a Lula-led Brazil to deepen its partnerships with the United States and Europe “in the areas of trade and environmental cooperation,” he adds.
• Tatiana predicts that Lula will see the BRICS grouping of emerging economies—Brazil, Russia, India, China, South Africa—as “an important platform not only to improve dialogue among its participants but also to influence global discussions,” though she notes that “it is unclear how the new administration will see China’s push to expand BRICS and shape it as a counterweight to the West.”
• While Tatiana expects more cooperation between Brasília and Beijing relative to the Bolsonaro years, she said the jury is out on whether Brazil will join China’s Belt and Road Initiative (BRI): “Brazil could consider collaborating with or supporting BRI projects, including in other countries, without formally joining the initiative, in a [show of] somewhat hedged support.”
• More broadly, “a key challenge for Lula is to leverage Chinese investments and technologies to help reinvigorate Brazilian industry,” Tatiana adds.

Sigh of relief—for now

• While there were outbreaks of violence late in the campaign that had the world “on edge,” Jason notes that election day “passed without major incidents.”
• And Valentina said the biggest winner may have been Brazil’s electronic voting system. “It allowed for confidence in the results being released within hours of voting sites closing, effectively constraining any credible questioning of the result,” she says.
• The results showed that Lula won with about 51 percent of the vote, a margin of some two million votes, but as of this writing Bolsonaro had yet to concede—after intimating for months that he planned to challenge any loss at the ballot box.
• US President Joe Biden issued a congratulatory statement within minutes of the election being called in Lula’s favor by the Superior Electoral Court, helping legitimize the result. It was, Jason tells us, “an important step” to “shore up the importance of US-Brazil ties.”
• To seal the deal, Jason hopes that the Biden administration will “send a steady stream of high-level representatives” to meet with the incoming administration, just as it has done in Colombia.

The post Lula is back in Brazil. Here’s what’s coming. appeared first on Atlantic Council.

This post will be updated as the news develops and more reactions come in.

Jump to an expert reaction

Jason Marczak: A critical moment to shore up US-Brazil ties

Tatiana Prazeres: Expect closer cooperation between Brazil and China

Valentina Sader: The biggest winner? Brazil’s electronic voting system

Abrão Neto: Lula’s environmental stance will bring closer US ties

A critical moment to shore up US-Brazil ties

Brazilians and the world were on edge on Sunday, uncertain of how voting would play out following violence and polarization during the campaign. While there were a few incidents—which included highway police making it difficult to get to the polls in certain Lula strongholds—the day passed without major problems.

Lula’s win by over two million votes is a major development for Brazil: Bolsonaro is now the first president in the democratic history of Brazil to not win re-election. The rejection of an incumbent president—although by smaller margins than expected—shows the clear frustration in Brazilian society with the status quo, which continues to play out in democracies around the world.

When Lula becomes president again on January 1, 2023, his third term will signal a likely return to the South-South diplomacy that characterized his previous terms, in which Lula cast himself as the leader of the Global South. It is expected that he will increase collaboration between Brazil and other governments with similar perspectives such as those in Argentina, Chile, Mexico, and Colombia. Characterizing Lula’s election as part of a shift to the left in the region oversimplifies the state of regional politics. Rather, the shift is a sign that people want leaders who they think will govern with a deeper interest in making the average person’s life better, especially as inflation and high food and energy prices take hold. 

As in Colombia, the Biden administration will hopefully send a steady stream of high-level representatives to Brazil to meet with Lula and his team. It’s an essential moment to shore up the importance of US-Brazil ties. The White House took an important step in that direction with a quick statement congratulating Lula soon after he was declared the winner. With concerns about whether the results would be as expected, this was an important move by the United States; many European and Latin American governments have done the same. Lula has made it clear that he sees the United States and Europe as valuable partners for Brazil, especially in the areas of trade and environmental cooperation. In the next administration, Brazil’s engagement with Latin America and the Caribbean will depend on ideological affinity but also on pragmatic areas of collaboration. 

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

Expect closer cooperation between Brazil and China

Under Lula, two new priorities are likely to emerge in Brazil’s foreign policy: sustainability, from a substantive standpoint, and South America, from a geographical one. Both priorities mark a departure from Bolsonaro’s worldview; both reflect Lula’s understanding that Brazil needs to rebuild its international reputation as well as its ability to influence global and regional discussions. Lula’s narrative is likely to put significant emphasis on restoring Brazil’s credibility abroad.

In addition, Lula is expected to take a different approach to China-Brazil relations, deepening bilateral relations in areas beyond the economy. 

Despite negative rhetoric against China during the Bolsonaro administration, trade and investment between the two countries evolved largely undisturbed. However, the political noise generated by the anti-China discourse prevented the deepening of bilateral relations in other policy areas, such as science and technology. The strong economic relationship between the two countries does not match their less intense political relationship; this deepened in Bolsonaro’s years. Under Lula, we can expect Brazil and China to explore other areas for cooperation.

The future of the BRICS grouping of developing economies may also take a different turn under Lula. While Bolsonaro has never rejected fellow BRICS countries, his priorities focused elsewhere, particularly on promoting Brazil’s accession to the Organisation for Economic Co-operation and Development. It is unclear how the new administration will see China’s push to expand BRICS and shape it as a counterweight to the West. It is clear though that the Lula administration will see BRICS as an important platform not only to improve dialogue among its participants but also to influence global discussions. 

Some analysts are betting that, under Lula, Brazil would join the Belt and Road Initiative (BRI). It remains to be seen how far Lula would go in that regard. It may well be that Brazil takes a more positive approach toward the Chinese initiative. Having said that, Brazil could consider collaborating with or supporting BRI projects, including in other countries, without formally joining the initiative, in a somewhat hedged support.

Lula’s efforts to promote Brazil’s reindustrialization may cause some friction with China but, by and large, that should not derail bilateral relations, in part because of the powerful agribusiness sector. A key challenge for Lula is to leverage Chinese investments and technologies to help reinvigorate Brazilian industry. Sustainability also provides renewed opportunities for cooperation with China, which Lula would be keen to explore.

—Tatiana Prazeres is director of trade and international relations for the Federation of Industries of the State of São Paulo and a columnist for the Folha de São Paulo newspaper.

The biggest winner? Brazil’s electronic voting system

With a two-million-vote difference between Lula and Bolsonaro, Brazil is clearly split down the middle. The hyperpolarization that marked the months leading up to the election was reflected in tonight’s results. As such, the biggest winner tonight may not have been Lula, but Brazil’s electronic voting system. It allowed for confidence in the results being released within hours of voting sites closing, effectively constraining any credible questioning of the result. The once again newly elected President Lula will be tasked with uniting a country that is split in half, and he must confront much more difficult economic and political circumstances than he faced when he was first elected in 2002. But if there is anything Brazilians should appreciate tonight, it is the efficiency and reliability of their voting system.

—Valentina Sader is the associate director and Brazil lead at the Adrienne Arsht Latin America Center.

Lula’s environmental stance will bring closer US ties

The election of Lula as president for a third term will lead, among other things, to a substantial change in Brazil’s environmental agenda. As a consequence, this is likely to benefit Brazil’s external image and improve its relationship with several countries, including the United States.

US-Brazil economic relations will continue to be driven by pragmatic mutual interests. The fact that bilateral trade and investment flows are so important to each of the countries is favorable for continuous and constructive engagement. A renewed stance from the Brazilian government on climate change and other environmental issues might offer an extended avenue for bilateral cooperation, with positive spillovers for the overall political and economic relationship between the United States and Brazil.

—Abrão Neto is a nonresident senior fellow at the Adrienne Arsht Latin America Center, executive vice president of Amcham Brasil, and former secretary of foreign trade of Brazil.

The post Experts react: Lula defeats Bolsonaro in Brazil. What should the region and the world expect? appeared first on Atlantic Council.

​​​​​What you should know

• Regional recovery: Of the 20 million people in Latin America who fell into pandemic-induced poverty, only 7 million have escaped it during the recovery.
• Nicaragua: The United States announced new sanctions on its mining industry in response to continued repression, targeting its largest export, gold.
• Brazil: Incumbent President Bolsonaro and former President Lula de Silva will face off in a second-round run-off election this Sunday. Join us Monday for post-election analysis.

Monitoring economic headwinds and tailwinds in the region

• Brazil: The government nominated its former central bank director, Ilan Goldfajn, for the presidency of the Inter-American Development Bank. Also nominated is Alicia Bárcena, former head of ECLAC, by Mexico.  
• Cuba: The United States granted $2 million in humanitarian assistance to assist in the country’s  recovery from Hurricane Ian last month. 
• Ecuador: The government secured joint IDB-EU funding for an energy interconnection project with Peru, estimated to save $61 million annually through reduced fossil fuel use. 
• Jamaica: The country welcomed a $300 million investment by Huawei in an effort to double down on its goal of digital transformation.
• Peru: Ongoing political instability prompted a new negative rating for its credit outlook, attributed to cabinet reshuffling and impeachment attempts against President Pedro Castillo. 
• ECLAC: This week, the Economic Commission for Latin America and the Caribbean (ECLAC) redoubled its commitment to transform development models for productive regional transformation during its thirty-ninth session.

In focus: Transatlantic ties

A recent report highlights the potential for strengthening European investment and connections with LAC, focusing on three main pillars: digital connectivity, cybersecurity, and digital rights. Emphasizing the key opportunity of Spanish leadership through Spain’s upcoming presidency of the EU, the report also explores the potential of the EU-LAC Digital Alliance planned for 2023. 

At the same time, the EU High Representative for Foreign Affairs, Josep Borrell, attended the fourth EU Investment Forum in Montevideo this week. He used the opportunity to reaffirm European commitment to a free trade agreement with Mercosur.  

Health + Innovation

• Ecuador: The latest country to drop all travel restrictions and return to pre-pandemic entry policies for foreigners.
• Brazil: Brazilians paid tribute in São Paulo to COVID-19 victims. To date, Brazil has lost 680,000 lives to the pandemic.
• Recovery: The World Bank granted Guatemala a recovery loan for healthcare and social services in the wake of the COVID-19 pandemic.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: October 30, 2022 appeared first on Atlantic Council.

What do the first-round results, with Bolsonaro closer to Lula than polls had indicated, tell us about the runoff?

If there is a winner from this first round of presidential elections in Brazil, it is Bolsonaro. Polls indicated that Lula could get close to winning in the first round by securing 50 percent of the vote. Not only did he not—which is not necessarily a surprise—but Bolsonaro had higher percentages than some may have anticipated. In addition to the presidential race, Bolsonaro’s former ministers and key supporters were successfully elected. Marcos Pontes and Damares Alves were elected senators to São Paulo and the Federal District, respectively; General Eduardo Pazuello was one of the highest vote-getters among federal deputies for the state of Rio de Janeiro, and Tarcísio de Freitas, although not elected, is leading heading into the second round for governor of São Paulo against Fernando Haddad from the Workers’ Party—ending almost thirty years of the Brazilian Social Democratic Party’s reign in the state. These results may ignite more energy for Bolsonaro’s supporters, increasing his chances on October 30. Lula will likely appeal to Simone Tebet of the Brazilian Democratic Movement for support after she finished in third place with about 4 percent of the vote. But if Lula is elected, with these newly elected Bolsonaro supporters in Congress, it could be challenging for him to pass legislation and govern effectively.

—Valentina Sader is an associate director and Brazil lead at the Adrienne Arsht Latin America Center. 

What are the primary differences between the two candidates’ platforms?

We’ll know the night of October 30 who will be the next president of Brazil. Even though Lula received nearly 5 percentage points more votes tonight, that is by all means not an indication that he will have the same margins later this month. With a highly contentious electoral cycle, which will become even more polarizing in the next few weeks, Bolsonaro and Lula will each take extra steps to show differences in how they would govern.   

On the economic front, Bolsonaro proposes a continuation of his economic priorities, doubling down on a business-friendly, open-market economy and diminishing the size of the state through privatizations. Lula’s campaign has focused on how he would bring back the prosperous economic times under his watch when in office. His economic approach will aim to tackle hunger and poverty levels.

For both, regardless of who wins on October 30, the priority should be on fostering economic growth and sustainable development, while also maintaining fiscal responsibility. Guaranteeing a stable political environment and an attractive business climate will be critical for attracting foreign investment and advancing long-term prosperity.

—Jason Marczak is the senior director of the Adrienne Arsht Latin America Center.

How would each candidate likely work—or not work—with the United States, Europe, and Latin America and the Caribbean once in office?

If the polarization that marked this electoral cycle is indicative of the next four years, what’s clear is the extremely different ways in which Bolsonaro and Lula would govern—and foreign policy is no exception. International affairs were not a central topic in this year’s debates, and the lack of attention to the implications of global developments is a testament to the inward gaze of Brazil in recent years. Don’t expect that to change as the campaigns dig in deeper for the second round.

Looking back to the prosperous economic times under his watch, Lula would again prioritize cooperation across the Global South and would work to regain the prominent role Brazil once had internationally. Lula would often prioritize a mutually beneficial relationship with the United States and Europe, but, as during his previous presidency, moments of tension are likely to arise. Common ground would certainly be found when it comes to adopting more ambitious climate commitments.

Bolsonaro would continue to lead Brazil’s foreign policy with an economic focus, prioritizing steps focused on an open-market economy. In Latin America and the Caribbean, where recent elections have shifted the political tendencies to the left, Bolsonaro’s right-leaning approach would be met with skepticism from some of the region’s newest leaders. Bolsonaro would have to either compromise to find common ground regionally or risk being an outlier. The next president must align his foreign policy to meet domestic demands and international challenges.

—Jason

Bolsonaro has already sowed seeds of doubt in Brazil’s electoral integrity. What can we expect to see from him during this runoff, and what does that say about Brazil’s democratic trajectory?

Bolsonaro’s questioning of the political system has ignited democratic institutions in Brazil to double down on their efforts to raise awareness and regain public confidence in their proper functioning. The United States and the international community have also recommitted their trust in Brazil’s electoral system and in the legitimacy of results. Sunday’s first round was a testament to how the Electoral Superior Court, among other institutions, have been getting ahead of any potential crisis by tackling disinformation and bringing in international observers at polling stations. These efforts will continue in the runoff. As democracies across the world experience declines in democratic freedoms and questioning of democratic principles even beyond elections, this is an opportunity for Brazil to strengthen its democratic institutions to ensure an even more robust democracy.

—Valentina

The post Lula vs. Bolsonaro: Your expert breakdown of Brazil’s presidential election runoff appeared first on Atlantic Council.

​​​​​What you should know

• Brazil: Incumbent Jair Bolsonaro and former President Luiz Inácio Lula da Silva will face off in presidential elections this Sunday, October 2. See more below.
• 4.1 million: The number of people facing food insecurity in the English and Dutch-speaking Caribbean. This amounts to 57 percent of the total population.
• Diplomatic relations: Colombia and Venezuela reopened their border to vehicles transporting goods following several years of politically-induced closure.

Expert take: Looking ahead at Brazil’s presidential election

From state-level representatives to Congressional members to the next president, Brazilians have their work cut out for them this Sunday. Brazil’s economy is rebounding but new challenges still lie ahead. Political leadership and the innovative economic policies that come with it will be vital to navigating these challenges, particularly in an uncertain and evolving global context.

Clouded by an extremely polarizing political campaign, polls suggest the contest will be between former President Luiz Inácio Lula da Silva and incumbent President Jair Bolsonaro. On the economic front, President Bolsonaro proposes a continuation of his economic priorities, doubling down on a business-friendly, open-market economy. On the other hand, former President Lula will adopt a pragmatic approach with a focus on a social agenda, targeting hunger and poverty levels. The challenge, regardless of who wins on October 2 or October 30 (if there is a second round), is in Congress, which will likely be highly fragmented. In that regard, the pandemic will continue to play a role in politics with the economy – and fiscal responsibility – at the top of the priority list for the next administration.

Staff

Valentina Sader

Deputy Director, Impactful Programming and Brazil Lead

Adrienne Arsht Latin America Center

Brazil Corruption

Monitoring economic headwinds and tailwinds in the region

• Honduras: The Central American Bank for Economic Integration (CABEI) issued a $200 million loan in order to mitigate fuel price pressures.
• Brazil: Despite a boost in activity as COVID-19 infections drop worldwide, real GDP growth projections for 2022 and 2023 are set to slow from 2.5 percent to 0.8 percent, respectively.
• Cuba: Hurricane Ian made landfall as a Category 3, knocking out power for the whole island. This comes after several months of intermittent blackouts due to failing power generators. 
• Mexico: AMLO announced an agreement with companies to freeze prices on key foods as the country battles inflation of 8.8 percent. 
• Paraguay: Officials met with the US for the first trade and investment council under their bilateral Trade and Investment Framework Agreement (TIFA) to discuss ways to deepen trade ties along intellectual property, agriculture, and the digital economy.  
• Ecuador: The government announced it reached a debt agreement with Chinese lenders, delivering $1.4 billion in debt service relief over the next three years. 
• Argentina: The International Monetary Fund (IMF) reached an initial agreement on reviewing the country’s debt restructuring, and is set to make $3.9 billion available upon completion. 

In focus: LAC-Europe Relations

Several meetings covering transatlantic relations with Latin America and the Caribbean convened on the sidelines of last week’s United Nations General Assembly, including the Fifth Forum on Latin America, the United States, and Spain in the Global Economy, and AALAC’s side event “From Ukraine to the Americas: Fortifying recovery against global shocks.”  

Spain’s Prime Minister, Pedro Sánchez, spoke with Colombian president Gustavo Petro about issues affecting both Latin America and Spain, including climate change and supply chains. Spain is set to hold the next presidency of the European Union, and hopes to revitalize EU-LAC ties. At the Atlantic Council’s event, Josep Borrell, Vice President of the European Commission, spoke about the EU’s willingness to work with LAC on key issues worsened by the Russian invasion of Ukraine, such as food insecurity and gas shortages. Both discussions focused on the importance of relocating supply chains to ensure stability. 

Health + Innovation

• Argentina: A laboratory manufacturing Russia’s Sputnik V COIVD-19 vaccine announced it would halt the production line to target other types of diseases.
• PAHO: Ministers of Health and other high-level authorities from around the Americas met on September 26 for the organization’s 30^th Pan American Sanitary Conference. At the conference, Dr. Jarbas Barbosa da Silva Jr. of Brazil was elected new Director for PAHO.
• COVID-19: Life expectancy in LAC for 2022 fell 2.9 years, from 75.1 years in 2019 and 72.7 years in 2021.

Geopolitics of vaccine donations: US vs. China

• The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.

The post Aviso LatAm: October 1, 2022 appeared first on Atlantic Council.

Table of contents

Introduction
The case of Brazil: A young, yet resilient democracy
A stronger democracy in the long run
The role of the United States and the international community
Conclusion
Acknowledgements

Brazil—Latin America’s largest economy and the fourth-largest democracy in the world—will elect its next president, governors, congress, and state-level assemblies in October 2022. This is one of the most momentous elections in recent years, a result of the inflection point that Brazil faces alongside concern about what may transpire on the day of the election and in the days afterward. This uncertainty, combined with global trends of declining democratic freedoms in recent years, suggests that in the aftermath of the October elections, Brazil has an opportunity to reinforce efforts to strengthen its institutions and recalibrate its democracy to meet domestic and global challenges. This issue brief compiles actionable recommendations for Brazil to do just that. 

Introduction

At the 2022 Summit for Democracy, President Joe Biden noted that democratic backsliding is the “defining challenge of our time.”¹

Democracy, as a system of government, is ever evolving. However, democratic freedoms have been waning worldwide for the past sixteen years.² In 2021, twice as many countries lost civil liberties and freedoms compared to those that improved them.³ Today, more than two-thirds of the world population lives in nondemocratic regimes, or in countries that have seen democratic backsliding in recent years.⁴ 

This trend also holds true in Latin America and the Caribbean. Authoritarian regimes in Venezuela, Cuba, and Nicaragua have survived for years. Other countries in the region have seen a dramatic decline in civil liberties. According to 2021 data, half of the countries in Latin America and the Caribbean are experiencing some degree of democratic erosion.⁵ 

Brazil is no exception to these global trends. The October elections offer an opportunity to begin addressing concerns about the resilience of its democracy. From the state to the national level, Brazilians will have an opportunity to choose the future trajectory of their democracy. The challenges that Brazilian democracy has confronted in recent years—beginning with the massive demonstrations of 2013 and continuing through questioning of the democratic model among some sectors in recent years—suggest that, regardless of which parties and politicians are elected, Brazilians must prioritize strengthening their democratic institutions now, and in the years to come. 

The case of Brazil: A young, yet resilient democracy

As the world undergoes a wave of democratic questioning, and even backsliding, Brazilians head to the polls as the country is at a crossroads, making it important to shift its gaze from the headlines of the day to thinking about longer-term solutions to the country’s political crisis.

Brazil is a young democracy. It was not until 1989 that the country held its first direct presidential elections, after the end of the military dictatorship. Since then, Brazilian democracy has made great strides, establishing a well-regarded electoral system, overcoming hyperinflation and economic crises, and consolidating around a vibrant party system.

The October 2022 elections are a crucial test for Brazilian democracy. Although the elections will be another opportunity to see democracy in action, increasingly high levels of polarization and disinformation have contributed to extremist narratives, episodes of violence, and the questioning of democratic principles. 

The Brazilian electoral process has been regarded as one of the fastest and most reliable in the world. But the turbulent run-up to the election has raised concerns that the transparency and fairness of democratic processes may be undermined, and that the resiliency of the electoral process and democratic institutions will be tested. Ensuring the integrity of this process, while also mitigating the risk of political violence, is imperative. Any action to further strengthen the resilience of Brazil’s democratic system is contingent upon an electoral process that fosters the proper function of institutions, and protects civil society and an independent media. This critical moment presents a unique opportunity for Brazil to further bolster its democratic system and public trust in its democracy in the years to come.  

Over the past generation, Brazilian democracy has fluctuated between moments of high confidence in the democratic system and periods of political and institutional crisis, in which the strength and resilience of its democracy were in doubt. In recent years, Brazilian democratic institutions have risen to the challenge of recalibrating their capabilities to face new challenges. 

Three examples illustrate their resilience. First, in response to the COVID-19 pandemic, Brazil was able to delay the electoral process and shift the date of municipal elections, all within the bounds of its constitution.⁶ Further, state and local governors adopted a variety of strategies to respond to the pandemic, with democratic federalism contributing to a panoply of experiments for addressing isolation and lockdown measures.⁷ Second, following antidemocratic protests in September 2021 that included messages threatening the Supreme Court and elections, a variety of representatives of democratic institutions (such as the Supreme Court, the House of Representatives, the Senate, civil-society organizations, and the media), came together to publicly condemn such proposals.⁸ The backlash forced President Jair Bolsonaro to change his tone and back down from his more extreme positions.⁹ Lastly, the manifestation of professors, jurists, students, civil-society representatives, business leaders, and former and current government officials, through a letter with more than nine hundred thousand signatories in favor of democracy in Brazil, is yet another example of the esteem for democratic principles and respect of civil liberties, especially when institutional credibility is questioned.¹⁰

Brazilian institutions are already taking concrete steps to fortify their capabilities ahead of, and beyond, the upcoming electoral cycle. Such efforts are, and will continue to be, important to ensure a healthy democracy. But as we look ahead, even beyond the October elections, what mechanisms are needed to prevent backsliding and foster the resilience of democratic institutions and the strength of Brazilian democracy in the coming years? 

A stronger democracy in the long run

In July 2022, the Atlantic Council held individual consultations and convened a group of key Brazilian and international experts from civil-society organizations, the public and private sectors, academia, the press, and others to discuss concrete ways in which Brazil could further support its democratic system ahead of, and beyond, the upcoming elections. Below are actionable recommendations for next steps, including suggestions for the role the United States and the international community could play to support a prosperous Brazilian democracy in the long run. 

Institutionalize unwritten democratic norms that ensure independence. In recent years, many unwritten democratic norms have been taken for granted and, in some cases, flaunted. One example is the nomination of the prosecutor general of the republic (PGR), the lead of the federal prosecutorial service (Ministério Público Federal, MPF). Constitutionally, the nomination of the PGR must follow a process that includes presidential nomination and approval by the Senate.¹¹ Customarily, however, since 2003 the president selects a name from a list of three names chosen by prosecutors. The benefit of this so-called lista tríplice is that it ensures some coherence within the MPF, as well as ensuring that the prosecutor general is more independent from the other branches of government. 

To reinforce checks and balances, institutionalizing such norms and consolidating the autonomy of institutions with political oversight is imperative. The practice of selecting the PGR via a lista tríplice guaranteed an initial layer of independence to the prosecutor general’s role. This was especially important because the MPF should remain autonomous given its oversight role, including in the electoral process.¹² Thus, institutionalizing such norms would ensure the impartiality of the prosecutor general’s nomination and foster the autonomous role of the MPF within the political system, while also reaffirming the independence of the Brazilian judiciary and its prosecutors. Using the example of the lista tríplice for the MPF, instilling processes in other democratic organs—such as the Federal Police, the Federal Accountability Office (TCU), and the Comptroller General of Brazil (CGU)—could be internal mechanisms to guarantee checks and balances, and the appropriate indepence of these offices from established political forces and interested groups. 

Address challenges for effective rule of law. To ensure a vibrant democracy, the rule of law must be effective. In Brazil, 17.6 people were killed daily by police forces in 2020, with such violence rarely leading to consequences.¹³ Data show that 28 percent of federal officeholders have been investigated or indicted for criminal behavior, while only a handful have been held accountable.¹⁴ In the case of the state of Rio de Janeiro, for example, members of militias and organized-crime groups also have ties to the political system.¹⁵ These data imply that strengthening the rule of law remains a key challenge. Better trainings for police forces to address abuses, reforms to oversight agencies to improve the accountability of Brazil’s judicial system, and fostering a lawfulness culture through the school system and civil-society activism could help ensure the effectiveness of the rule of law, while also targeting the younger generations as positive agents of change, and promoters of democracy and the rule of law. 

Depoliticization of the armed forces. The armed forces are a state institution responsible for protecting the sovereignty of the state, the order of the democratic system, and the safety of citizens, while also guaranteeing the ability of the three branches of government to properly function.¹⁶ As such, the armed forces must remain impartial in politics. In recent years, active military officials have taken civil positions within the Brazilian political system. As a way of example is Minister Eduardo Pazuello, a three-star general, as Minister of Health.¹⁷ Even in the constitution, deepening and solidifying the impartiality of the armed forces is imperative for the proper control of powers within the democratic system. Congress should take a more active role in ensuring this impartiality, as it began to do with a bill introduced in 2021 that aims to clarify the role of the armed forces and active military in the political system.¹⁸ It is critical for the military, the police, and members of any state institutions to refrain from any interference in political and political party-based activities—including, but not limited to, the elections. 

Ensure equitable political representation. There has been long-standing dissatisfaction with the lack of representativeness of the political system. Women represent more than 50 percent of the Brazilian population, yet account for only about 15 percent and 13 percent of representatives in the House and the Senate, respectively. The data are just as concerning for other groups. Ensuring better representation and equal participation in politics by women, indigenous communities, black Brazilians, and other marginalized groups would be a first step in having a better representation of Brazilian society at the decision-making table and, thus, more effective public policies to target their needs. More ambitious goals and affirmative action would help to move Brazil in that direction. However, enforcement is also imperative. Brazil has a gender quota requiring that women make up 30 percent of candidates for political parties. But lack of incentives for further engagement of women in politics, in addition to the high number of cases of violence against women in politics and structural imbalances, limit the potential for women’s equitable participation.¹⁹ New legislation that aims to punish violence against women in politics, in effect for the 2022 elections, is a first step in that direction.²⁰ Civil society has an important contribution to make in monitoring and denouncing cases of violence against women in politics, including those happening virtually. In addition to monitoring, electoral agencies should follow through on the enforcement of this legislation. Establishing the means through which more women could take on leadership positions in political bodies and parties could help push Brazilian politics toward more realistic representation and actual participation.

Safeguard a welcoming environment for a vibrant civil society. Among many actors in healthy and vibrant democracies, civil society and the media play key roles in ensuring a healthy public debate and a democratic political system. In Brazil, journalists and activists often face dangerous threats against their activities, and even their lives. Journalists Conrado Hubner and Patricia Campos Mello faced intimidation for criticizing political figures, while journalist Dom Phillips and activist Bruno Pereira were killed in 2022 during an excursion in the Brazilian Amazon, apparently for photographing illegal fishing in the area.²¹

In addition to further bolstering safeguards for press freedom, respect for and inclusion of perspectives from civil-society organizations, among other stakeholders, is imperative to promote effective public policies—and a democratic system that delivers to its citizens. Further cooperation among civil-society organizations, domestically and internationally, could boost the role and significance of these voices within Brazil. More coordinated efforts—from local associations to leading international civil-society organizations in country—would help promote a louder and more cohesive voice for civil society in Brazil. This was recently done through a letter with more than three thousand signatories, including former Supreme Court justices, actors, musicians, and even executives, expressing their support for democracy and trust in the Brazilian voting system.²² In addition, guaranteeing penalties for intimidation against civil-society representatives, as well as members of the media, is also imperative to safeguarding a prosperous environment for independent civil society and media.  

Further strengthening institutional capabilities to manage the challenges of disinformation. Disinformation and misinformation are global challenges. As such, Brazil’s Electoral Supreme Court (TSE, in Portuguese) has prioritized disinformation as a challenge to the electoral processes in 2022 and beyond. Brazilian institutions, civil-society organizations, fact-checking bodies, and news outlets should work together to mitigate impact and risks. Based on the developments that unfolded after the US elections in 2020—including, but not limited to, January 6—as well as the role that disinformation played in Brazilian elections in 2018 and 2020, TSE established partnerships with social media and messaging platforms, creating a united front to mitigate risks and raise awareness to the known challenge of disinformation.²³ This is a proactive initiative to promote and endure the credibility of electoral bodies. To go one step forward, Brazilian news outlets could use already-established COVID-19 data-gathering strategies and go directly to local and state governments to identify disinformation and its sources. This strategy could facilitate and speed up the work of fact-checking institutions in explaining disinformation, of the media (and TSE itself) in countering and spreading it, and of social media platforms in removing it, as appropriate. Overall, having a more coordinated civil society and safeguarding an independent media will result in greater checks against authoritarian tendencies.

Re-establish trust in the political system and foster civic engagement beyond electoral cycles. In recent history, corruption cases among politicians, disinformation, misinformation, and other factors have exacerbated distrust in political institutions in Brazil.²⁴ Polarization has also deepened political and social divides. Regaining confidence in the democratic system is an uphill battle. However, in the long run, revigorated trust in the political system is imperative to foster civic engagement beyond electoral cycles. As a fundamental principle of democracy, broad and active civic engagement is essential to fortify an established and well-functioning democracy in Brazil. This educational effort must begin in schools, to educate the next generations to be active and engaged citizens, and to tackle the question of what democracy means.

But developing a comprehensive awareness-raising campaign—led by government agencies, in coordination with civil-society organizations and other key actors—could be a first step in the right direction to clarify the roles and responsibilities of elected officials and other public figures, as well as individuals’ rights and duties. In a country where voting is mandatory (with a few exceptions), society must have the tools to make well-informed decisions about its political representatives. Most importantly, only a well-educated society with access to transparent and accurate information, and comprehension of the political game, can hold politicians and democratic institutions accountable. 

The role of the United States and the international community

Support immediate recognition of results and quick confirmation of the legitimacy of the electoral process. Given Brazil’s electronic-voting system, electoral results are determined and announced on the same day elections are held. The agility of the system and the seal of credibility given by international recognition curbs potential unrest in the expectation of results. As such, the international community, represented by individual countries and international organizations, must be able to recognize the legitimacy of results immediately after their announcement. 

Continuing the long tradition of welcoming international electoral-observation missions, the upcoming elections will include missions from the Organization of American States, Mercosur’s Parliament, and the Inter-American Union of Electoral Organizations (Uniore).²⁵ These missions should aim to release their verdicts on the freedom and fairness of the electoral process quickly, ideally no more than forty-eight hours following Election Day. Beyond the electoral cycle, countries should be explicit in recognizing the historical respect of Brazil toward its democratic system and principles, as well as efforts to improve their capabilities. The United States, for example, recently endorsed trust in the Brazilian electoral system, following questions about the legitimacy of this process.²⁶ 

Establish a US-Brazil high-level dialogue on democracy promotion. In the context of recent commitments made by both the United States and Brazil on the occasion of the Summit for Democracy, both countries restarted the US-Brazil Human Rights Working Group. This is one step forward in both countries’ efforts to strengthen their own democracies and promote the principles of a rules-based order globally. Given similarities and the strong, historic partnership between the United States and Brazil, both countries could benefit from a more direct dialogue in terms of best practices and lessons learned with regard to common challenges to democracy, and potential common solutions. More broadly, high-level cooperation on this front would safeguard principles of a rules-based democratic order, in addition to deepening the bilateral relationship and fostering similar practices across the hemisphere. Within this framework, further cooperation with the US Department of State, and even the US Departments of Justice and Defense, could help move the needle forward, while also including civil-society and private-sector representatives from both countries.

Conclusion

The next Brazilian government will face a critical moment to strengthen the country’s democracy and its institutions to prove effective in addressing citizens’ needs, especially in challenging times both economically and socially. A key ingredient for democratic crisis is the growing belief that democratic government does not serve citizens’ needs. Addressing this issue and rebuilding trust in the political system are vital for long-term domestic stability in Brazil. 

This issue brief aimed to suggest a path forward to begin this task. 

Beyond Brazil itself, the country’s democracy is a bellwether for democratic health in the Western Hemisphere. The polarization, concerns of electoral violence, marginalization of minority voices, and other patterns occurring in Brazil must be addressed and condemned. Only through systemic analysis and prevention can all stakeholders work to guarantee democratic health presently, and in the years to come. 

Acknowledgements

Many of the ideas in this spotlight were informed by a July 27 strategy session organized by the Atlantic Council, which featured the participation of key Brazilian and international experts from civil-society organizations, the public and private sectors, academia, the press, and others. We thank the many participants in the strategy session, including those who gave permission to be publicly acknowledged: President Laura Chinchilla, Ambassador Michael McKinley, Ambassador Liliana Ayalde, Miriam Kornblith, Feliciano Guimarães, Patricia Campos Mello, Flávia Pellegrino, Guilherme Casarões, Bruno Brandão, Emilia Carvalho, Thiago Esteves, Cintia Hoskinson, and Francisco Brito. This document is also a product of independent research and consultations carried out by the Atlantic Council’s Adrienne Arsht Latin America Center. We thank those who took the time to share their insights with us, including Daniela Campello and Cesar Zucco. A special thank you also goes to our Brazil nonresident senior fellow, Ricardo Sennes, for the countless advice through the years and during the production of this publication. Isabel Bernhard provided invaluable writing and editorial support. Thank you to Jason Marczak, senior director of the Adrienne Arsht Latin America Center, and Maria Fernanda Bozmoski, deputy director for programs, for their guidance. Finally, the Atlantic Council would like to thank Action for Democracy for the partnership and generous support, as well as the Brazilian Center for International Relations (CEBRI) for its continued collaboration, as an institutional partner to this initiative.

About the author

Valentina Sader is associate director at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the center’s work on Brazil, gender equality, and diversity, and manages its advisory council. She has co-authored publications on the US-Brazil strategic partnership and coordinated events with high-level policymakers, business leaders, and civil-society members in both Brazil and the United States. Valentina provides regular commentary in English and Portuguese on political and economic issues in Brazil to major media outlets. Prior to joining the Atlantic Council, Valentina worked at the Eurasia Group, the embassy of Brazil in Washington, DC, and the mission of Brazil to the Organization of American States (OAS). Valentina holds a bachelor’s degree in international studies from American University. Originally from Brazil, Valentina is a native Portuguese speaker, fluent in English, and proficient in Spanish.

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

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This month’s topline events

NATO Moves to Expand. NATO leaders, meeting at a summit in Madrid, formally agreed to invite Finland and Sweden to join the Alliance, paving the way for the admission of NATO’s newest members since 2020. The move came after Turkish president Recep Tayyip Erdogan dropped his objections to the accession process when the two Nordic nations agreed to take certain actions to restrict terrorist groups, including PKK, a Kurdish pro-independence group against which the Turkish government has sought to clamp down.

• Shaping the order. Sweden and Finland’s momentous decision to seek NATO membership, after decades of official neutrality, reinforces NATO’s critical role as an alliance of democracies aimed at defending its members against aggression. The move also represents a strategic setback for Russian president Vladimir Putin, who has been seeking to weaken and divide NATO and had warned against admitting the two nations, but now faces an Alliance that is perhaps more unified and determined than ever.
  
• Hitting home. The addition of Sweden and Finland to NATO will bring in two new highly capable partners to help the United States defend against threats to American security, including those posed by Russia.
• What to do. The Biden administration and other NATO governments should work with lawmakers in their countries to ensure swift ratification of the accession protocols required to admit the two new Alliance members.

EU Aligns on Ukraine. On a historic visit to Kyiv, the leaders of France, Germany, and Italy stood together with Ukrainian president Volodymyr Zelenskyy as they pledged to bolster assistance for Ukraine and announced their support for Ukraine’s bid to become a member of the European Union. The EU followed by granting the country “candidate status,” marking the beginning of what could potentially be a years-long process for accession. The European leaders later joined President Biden and other G7 partners for a summit in Germany at which they agreed to strengthen penalties against Russia, including banning Russian gold, cracking down on the Kremlin’s efforts to evade sanctions, and considering a price cap on Russian oil.

• Shaping the order. The joint visit to Kyiv by the three European leaders showcased a remarkable degree of alignment with Ukraine, after it appeared that France and Germany were resisting Ukraine’s efforts to join the EU and pushing Ukrainian territorial concessions. The move to begin accession talks on EU membership marks a significant milestone, and, if approved, could deeply undermine Putin’s efforts to bring Ukraine into Russia’s economic orbit.
• Hitting home. America benefits from working closely with the EU – which has a combined economy larger than the United States – to help support frontline democracies and stand up to autocratic aggression.
  
• What to do. The Biden administration should continue to work closely with its European and G7 allies to provide military and economic assistance to Ukraine, while supporting Ukraine’s efforts to meet the requirements to become a member of the EU.

BRICS Stand with Putin. Vladimir Putin joined the leaders of China, India, Brazil and South Africa at a virtual BRICS summit meeting organized by Chinese president Xi Jinping, giving Putin his most high-profile international engagement since Russia’s February invasion of Ukraine. Putin used the occasion to cite the “deepening cooperation” among BRICS members, as the five leaders signed a “Beijing Declaration” pledging to work together on supply chain resilience and digital trade. Iran and Argentina reportedly submitted applications to join the BRICS as well.

• Shaping the order. The participation by the leaders of three rising democracies – India, Brazil, and South Africa – highlighted the failure of Western efforts to isolate Putin in the wake of his invasion of Ukraine. As India continues to increase its purchases of Russian oil, Putin suggested that Russian trade with BRICS countries jumped 38% in the first quarter of this year, providing the Kremlin with an important conduit to undercut Western sanctions.
  
• Hitting home. Though they have led to higher gas prices for Americans, sanctions on Russian oil are serving to pressure the Kremlin to end its brutal war in Ukraine and constrain Russia’s ability to challenge US security interests.
  
• What to do. Washington should seek new ways to incentivize India and other developing nations to join the West in penalizing Moscow for its invasion of Ukraine. Building on the global infrastructure initiative announced at the G7 summit, the administration should consider launching an ally shoring partnership that could reorchestrate supply chains to democracies willing to limit economic engagement with Russia and China.

Quote of the month

“At a time when the world is threatened by division and shocks, we, the G7, stand united. We underscore our resolve to, together with partners, jointly defend universal human rights and democratic values, the rules-based multilateral order, and the resilience of our democratic societies.” 

– Statement by the leaders of the G7, June 28, 2022

State of the Order this month: Strengthened

Assessing the five core pillars of the democratic world order    

Democracy ()

• In a visit to Hong Kong to mark the 25th anniversary of the British transfer of the territory to China, Xi Jinping commended the city’s incoming Chief Executive John Lee, who oversaw the crackdown on political dissent that has left Hong Kong’s democracy in a state of disarray.
• In Colombia’s presidential election, Gustavo Petro defeated Rodolfo Hernandez, a right-wing populist who once praised Adolf Hitler. But Petro, a former leftist guerrilla leader, is likely to pursue warmer relations with Cuba and Nicaragua and could strain the close US-Colombia security partnership.
• Despite a boycott from Mexico and a few other nations, President Biden stuck to his decision to exclude the leaders of the hemisphere’s three autocratic dictatorships – Cuba, Venezuela, and Nicaragua – from a Summit of the Americas that he convened in Los Angeles to discuss regional issues.
• On balance, the democracy pillar was unchanged.

Security ()

• Ukrainian forces withdrew from the city of Severodonetsk in eastern Ukraine, marking a significant gain for Russia as it continues its brutal war of aggression.
• NATO agreed to strengthen its military presence in eastern Europe by deploying additional forces to Poland and the Baltics, and its invitations for Sweden and Finland to join the Alliance could help defend against security threats in northeastern Europe and the Baltic Sea.
• China is building a secret naval facility in Cambodia, along the Gulf of Thailand, its second such overseas outpost (the other located in Djibouti) and the first in the Indo-Pacific region, a potentially important element of China’s expanding global military presence.
• Iran switched off surveillance cameras used by the IAEA to monitor activity at the country’s key nuclear facilities and began installing advanced centrifuges at an underground enrichment plant, as multilateral negotiations to revive the Iran nuclear agreement struggle to make progress.
• During a visit by Venezuelan president Nicholas Maduro to Tehran, Venezuela and Iran signed a 20-year cooperation agreement, aimed at boosting strategic ties between the two anti-Western nations.
• On balance, the security pillar was unchanged.

Trade (↑)

• The EU granted candidate status to Ukraine and Moldova, a significant step in what is likely to be a long process as both nations prepare to meet the criteria for joining the bloc’s common economic market and political institutions.
• China has proposed a free-trade bloc among the five BRICS countries in a bid to enhance economic ties, as Russia suggested that the bloc create an international reserve currency as an alternative to the dollar.
• G7 leaders agreed to explore a price cap on Russian oil, a measure aimed at limiting the Kremlin’s oil revenues and potentially holding down global oil prices.
• Amidst an exacerbating food crisis caused by Russia’s blockade of Ukrainian ports in the Black Sea, G7 leaders announced that they will contribute over $4.5 billion to address global food security, while calling on Russia to end its blockade.
• With the prospect of EU membership for Ukraine and Moldova, the trade pillar was strengthened.

Commons ()

• The CDC lifted the requirement of a negative COVID-19 test result before entering the United States, but a new more contagious Omicron variant began to spread around the world.
• NATO released a report assessing the global security risks of climate change and announced a decision by allies to reduce gas emissions by at least 45% by 2030, and to net zero by 2050.
• Overall, the global commons pillar was unchanged.

Alliances (↑)

• In addition to inviting two new members to join the Alliance, NATO adopted a new Strategic Concept that calls Russia “the most significant and direct threat” to peace and security, and for the first time, cites China as a strategic priority.
• The leaders of Australia, Japan, New Zealand, and South Korea also joined the meeting in Madrid – their first time participating in a NATO Summit – marking a significant elevation in efforts to strengthen cooperation between the transatlantic Alliance and its Indo-Pacific partners.
• Demonstrating solidarity with Ukraine, the leaders of France, Germany, and Italy made a historic visit to Kyiv, before joining the United States and other allies at a G7 Summit to bolster support for Ukraine.
• The leaders of India, Brazil and South Africa joined Vladimir Putin at a virtual BRICS summit meeting, undermining Western efforts to garner support from other democracies to isolate Russia for its invasion of Ukraine.
• On balance, the alliance pillar was strengthened.

Strengthened (↑)________Unchanged ()________Weakened (↓)

What is the democratic world order? Also known as the liberal order, the rules-based order, or simply the free world, the democratic world order encompasses the rules, norms, alliances, and institutions created and supported by leading democracies over the past seven decades to foster security, democracy, prosperity, and a healthy planet.

This month’s top reads

Three must-read commentaries on the democratic order     

• Ivo Daalder and James Lindsay, in Foreign Affairs, call for a new G-12 to institutionalize security cooperation among the US and its democratic allies across the Atlantic and Pacific and reinvigorate the rules-based order.
• Michael Kofman, in The Economist, warns that NATO should avoid underestimating the threat of Russia as a long-term strategic competitor, despite its lackluster campaign in Ukraine.
• Paul Poast suggests, in World Politics Review, that analysts may one day point to the 2022 BRICS Summit as the dawn of an alternative to the Western-led liberal international order. 

Action and analysis by the Atlantic Council

Our experts weigh in on this month’s events

• Ash Jain and Matthew Kroenig co-authored two new Atlantic Council reports as part of a project on Shaping a New Democratic World Order. The first, A Democratic Trade Partnership: Ally Shoring to Counter Coercion and Secure Supply Chains, proposes an integrated framework for leading democracies and other partners to reduce strategic dependency on revisionist autocracies, coordinate on economic challenges, and foster free, fair, and secure trade. The second, Toward a Democratic Technology Alliance: An Innovation Edge that Favors Freedom, outlines the need for a Democratic Technology Alliance that would help the free world prevail in the race for advanced technologies by jointly investing in innovation, countering unfair practices, and developing rules and norms consistent with democratic values.
• Fred Kempe, in CNBC, urges Western and Asian allies to work together through military, economic, and political means to stop Putin’s brutal war in Ukraine and ensure rule of law triumphs over rule-of-the-jungle.
• Matthew Kroenig and Dan Negrea joined a panel discussion at the 2022 Copenhagen Democracy Summit and launched the Atlantic Council’s new Freedom and Prosperity Indexes.
• Amanda Rothschild and Jeffrey Cimmino, in an Atlantic Council issue brief, present key recommendations for how US diplomacy can be strengthened in the twenty-first century.
• Daniel Fried and Brian O’Toole, in the New Atlanticist, lay out a long-term strategy that the United States and its G7 allies can take to sustain economic pressure against Putin and his regime.
• Melinda Haring, in the New Atlanticist, warns that, while Ukraine has succeeded in the first phase of the war, Russia has not abandoned its goal of crushing Ukrainian statehood.

__________________________________________________

The Democratic Order Initiative is an Atlantic Council initiative aimed at reenergizing American global leadership and strengthening cooperation among the world’s democracies in support of a rules-based democratic order. Sign on to the Council’s Declaration of Principles for Freedom, Prosperity, and Peace by clicking here.

Ash Jain – Director for Democratic Order
Dan Fried – Distinguished Fellow
Jeffrey Cimmino – Associate Director
Danielle Miller – Program Assistant
Otto Hastrup Svendsen – Georgetown Student Researcher

If you would like to be added to our email list for future publications and events, or to learn more about the Democratic Order Initiative, please email AJain@atlanticcouncil.org.

The post State of the Order: Assessing June 2022 appeared first on Atlantic Council.

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The year 2022 will be one of change across the Western Hemisphere. From presidential elections in Brazil and Colombia to newly elected presidents taking office in Chile and Honduras, regional leaders will be looking at new ways to rebuild economies from the COVID-19 pandemic while balancing mounting social pressures. So, what might or might not be on the horizon in 2022?

Join the Adrienne Arsht Latin America Center as we look at some of the key questions that may shape the year ahead for Latin America and the Caribbean, then take our signature annual poll and see how your opinions shape up against our predictions.

How might key presidential elections shake out? Will regional economies recover to pre-pandemic growth rates? What might be the outcome of the US-hosted Summit of the Americas, and will Caribbean voices play a larger role than in previous gatherings? Will the region expand its ties with China?

Take our ten-question poll in less than five minutes!

Question #1: Caribbean – Will Vice President Kamala Harris make her first trip to the Caribbean in 2022?

Question #2: Central America – Will the United States have confirmed ambassadors in all three northern Central American countries (currently only Guatemala) by year-end 2022?

Question #3: Chile – Will the new Chilean constitution be approved when put to a referendum?

Question #4: China and Latin America – Considering Nicaragua’s newly established China ties, will the three other Central American countries that currently recognize Taiwan—Belize, Guatemala, and Honduras—also switch recognition to China?

Question #5: Colombia – Will Colombia’s presidential election go to a second round?

Question 6: Economy – Can the region recover pre-pandemic growth rates in 2022?

Question #7: Mexico – Will Mexico remain the United States’ top trading partner throughout the next year?

Question #8: Bitcoin – Following in El Salvador’s footsteps, will support for Bitcoin tender grow in the region?

Question #9: Venezuela – Will Nicolas Maduro return to the negotiating table in Mexico City?

Question #10: Brazil – Will President Jair Bolsonaro win another term this year?

Bonus Question: Will Latin America and the Caribbean be represented in the final of the World Cup?

Our answer to question #1: YES

In 2022, the Biden-Harris administration will look for big wins and opportunities to expand its leadership in the Americas. This is achievable in the Caribbean with a high-profile visit, which would optimally be accompanied by a major policy announcement from Vice President Harris. President Joe Biden was the last vice president to visit the region, where he focused his time discussing the Caribbean Energy Security Initiative.

The stage is set for a similar visit to occur with Vice President Harris. Economic recovery is slow, vaccine hesitancy is increasing, and other actors, such as China, are playing a more active role in the Caribbean. Regional leaders often note that US attention is inconsistent, and that few high-profile US officials travel to the Caribbean. A visit and subsequent policy announcement that aids the Caribbean in its time of need would build on recent conversations between the Vice President and Prime Minister of Trinidad and Tobago Keith Rowley (virtual) and Prime Minister of Barbados Mia Mottley (in person).

Our answer to question #2: NO

Given President Nayib Bukele’s recent personal attacks against President Biden and other US government officials, including Ambassador Jean Manes and current Charge d’Affaires Brendan O’Brien, it is unlikely that the United States will confirm all ambassadors to the Northern Triangle countries. President Bukele’s attacks were a response to the Biden administration’s decision to add Osiris Luna Meza, the chief of the Salvadoran penal system and vice minister of justice and public security, and Carlos Marroquin, chairman of the Social Fabric Reconstruction Unit, to the Specially Designated Citizens and Blocked Persons List. Both Salvadoran officials are accused of having a direct relationship with gangs, including MS-13. In Honduras, however, a new administration under President-elect Xiomara Castro provides a renewed sense of cooperation between the United States and the Central American country.

Our answer to question #3: YES

Once the constitutional draft is finalized by summer 2022, the Constitutional Convention will vote to approve or reject the new legal charter. If the body rejects the new constitution, Chile will keep its current one. However, if it is approved, the group will present the document to the newly elected head of state, who, in turn, will issue a call for a national referendum in which Chileans will vote to approve or reject the new constitution. Voting will be mandatory, and the new constitution will move forward only if an absolute majority is achieved.

While 78.3 percent of voters cast their ballot in favor of a new constitution in 2020, rising polarization and inefficiencies within the Constitutional Convention have left thousands of Chileans disenchanted with the reform process. However, the desire for fundamental changes remains high. If the new legal charter is approved by Chilean voters, it will be put into effect shortly after the vote through a formal ceremony. However, if Chile votes to reject, the 1980 Constitution written under Augusto Pinochet will remain in place. With just one opportunity to get the new constitution approved, the convention will attempt to generate a moderate bill that will stimulate consensus among the political left and right.

Our answer to question #4: NO

It is unlikely that all three of Taiwan’s Central American allies will switch recognition to China in 2022. But, considerations of international benefits, domestic political agency, or both may prompt a change in at least one of the countries. Internationally, US COVID-19 vaccine donations far outstripped those of China, sending a reassuring message to Taiwanese allies in the region.

But, Chinese vaccine diplomacy—including early, well-publicized vaccine sales and shipments—and broader medical, humanitarian, and economic assistance could still prove alluring for countries in need. Despite running with a pro-China message, Honduran President-elect Xiomara Castro recently declined to switch diplomatic recognition from Taiwan to China. Absent any external shocks, Belize, Guatemala, and Honduras will likely attempt to maintain the status quo for as long as possible, favoring Taiwan while leaving the door open for closer ties with China. This delicate balancing act has served to remind larger countries not to take their allegiances for granted and will continue to do so. But, it will be increasingly tested, as seen with Nicaragua, in the critical and uncertain year ahead.

Our answer to question #5: YES

There has yet to be an election in Colombia’s history in which a president is elected in the first round. Senator Gustavo Petro, who served as mayor of Bogotá (2012–2014), leads the left-wing political party Colombia Humana, and was the runner-up in the 2018 presidential election against incumbent President Ivan Duque. With nearly 42 percent of the vote, Petro has positioned himself as the candidate with the greatest support from Colombian voters.

However, Petro currently polls at 25.4 percent, which is not enough for an absolute majority that will grant him the presidency in the first round. Petro will most likely go to a second-round vote against a center-right or center-left candidate, potentially former Mayor of Bucaramanga Rodolfo Hernández or former Governor of Antioquia Sergio Fajardo. To date, Hernández polls at 11 percent and Fajardo at 7 percent. As recommended by the Atlantic Council’s US-Colombia Task Force, co-chaired by Senators Roy Blunt and Ben Cardin, strengthening the alliance between Colombia and the United States ahead of 2022 presidential elections is paramount to safeguard Colombia’s gains in terms of development, rule of law, and democracy. Regardless of election results, the United States should continue to position itself as Colombia’s strongest ally, advancing stability and prosperity at home and abroad.

Our answer to question #6: YES

Led by its five major economies, regional gross domestic product (GDP) is on track to return to pre-pandemic levels in 2022, though per-capita income will likely not recover until 2023. Key uncertainties may alter this outlook: the extent of success in vaccination and pandemic management, stimulus trade-off between continued support and fiscal discipline, labor markets (currently experiencing slower recovery than GDP), inflation, electoral outcomes, and external conditions including evolving investor appetite and commodity prices.

The region as a whole is not expected to return to pre-pandemic growth trajectories in the coming years, signaling permanent output losses due to COVID-19. In a divergent recovery, smaller and vulnerable states, such as those in the tourism-dependent Caribbean, are experiencing an even slower return to normal. Lastly, Latin America and the Caribbean (LAC) should set an ambitious agenda beyond “recovery”—given unimpressive pre-pandemic growth rates and patterns—and, rather, seek ways to accelerate development and build forward in a more inclusive, productive, and sustainable way.

Our answer to question #7: YES

It is likely that Mexico will remain the United States’ top trading partner throughout 2022. Mexico currently holds the top position—overtaking China in February 2021—with Canada in the second spot, lagging behind by $2.9 billion in total trade. COVID-19 significantly hindered US-Mexico trade—which largely relies on land trade via trucks and railcars—due to the pandemic-induced land-border closures to “non-essential” traffic. As of November 8, 2021, however, the United States reopened its borders to non-essential traffic and booming commerce is expected along the border. Moreover, US-Mexico trade topped $545 billion through October 2021 (the most recent data available), an increase of over 24 percent from one year earlier. Given the highly integrated nature of US-Mexico trade in the automotive and energy sectors, coupled with the efforts in border cities and ports to increase capacity and efficiency, trade is likely to continue to grow between the United States and Mexico.

Our answer to question #8: YES

Bitcoin presents an attractive option for countries in Latin America and the Caribbean, yet those countries will not replicate El Salvador’s approach. The government of El Salvador claimed that adopting Bitcoin would reduce financial exclusion and high remittance fees. These issues also affect the entire region. The World Bank predicted that remittances to Latin America and the Caribbean rose 21.6 percent in 2021, costing roughly $6.9 billion in remittance fees. According to the International Monetary Fund (IMF), financial inclusion in the region falls below global averages, and is exacerbated in the Caribbean due to the de-risking of correspondent banks. The worsening effects of climate change will also likely generate support for a decentralized virtual currency, as remittances typically increase following natural disasters, alongside decreased access to financial institutions.

Despite Bitcoin’s allure, its implementation in El Salvador has been marred by technological unreliability, weak financial regulations, and high price volatility. Politicians in Paraguay, Mexico, and Panama have already introduced legislation to regulate Bitcoin’s use as legal tender, and more will follow in 2022. As support for Bitcoin rises, so will debates on its social and environmental risks. Countries across the region will chart their own paths instead of following El Salvador’s playbook.

Our answer to question #9: YES

Although, the latest round of negotiations in Mexico has been suspended since October 2021, a combination of long-term incentives will likely propel Maduro to negotiate with the Venezuelan Unitary Platform—the umbrella organization encompassing the main political opposition parties in the country. Maduro seeks access to capital, legitimacy, guarantees against prosecution, and division within factions of domestic opponents—all of which he can accomplish through negotiations.

However, these factors are not the only ones at play in determining Maduro’s negotiation participation. After the highly visible diverging strategies within the opposition during the recent regional elections—and Julio Borges’ recent resignation and call for the interim government’s dissolution—Maduro might decide to simply wait out further erosion of opposition unity, instead of engaging with it directly. The success of such a strategy, if taken, would enhance the regime’s monopoly on power.

Our answer to question #10: Too early to call.

The odds are not in his favor, but it’s too early to say. Recent polls suggest that President Bolsonaro and former President Luiz Inacio Lula da Silva will face each other in a second round of elections, repeating the 2018 Bolsonaro versus Workers’ Party (PT) duel. However, this time around, former President Lula, as the PT candidate, is leading the way in early polling. Both candidates have a strong support base, but former President Lula’s history with corruption and President Bolsonaro’s mismanagement of the pandemic and current economic hurdles also give them significantly high rejection rates.

Third-way candidates, such as President Bolsonaro’s former minister of justice, Sergio Moro—famous for leading the Car Wash Operation that put President Lula in jail—is running on an anticorruption, center-right platform. Those Brazilians who in 2018 voted for President Bolsonaro as a “vote against corruption” might be more inclined to seek other alternatives. Current high inflation and unemployment rates might also play against President Bolsonaro’s reelection. Having said that, it will likely be a close race, and there is still a long way to go until elections in October 2022.

BONUS QUESTION ANSWER: YES

Brazil and Argentina are the only Latin American counties that have already qualified for the 2022 World Cup. In the Caribbean, Jamaica seems to be the only country with a chance of qualifying. While it is impossible to know who will be in the final (RIP Paul the Octopus), Brazil and Argentina are always strong contenders.

The post Spotlight: Latin America and the Caribbean – Ten questions for 2022 appeared first on Atlantic Council.

On September 10, Foreign Policy published a biweekly column featuring Scowcroft Center deputy director Matthew Kroenig and New American Engagement Initiative senior fellow Emma Ashford discussing the latest news in international affairs.

In this column, they discuss Belarus’ attempt to inundate Eastern Europe with migrants, threats to democracy in Brazil, and the newly announced Taliban government in Afghanistan.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

Former staff

Emma Ashford

Former Resident Senior Fellow, New American Engagement Initiative

New American Engagement Initiative Scowcroft Center for Strategy and Security

Conflict Economic Sanctions

The post Kroenig and Ashford discuss the brewing refugee crisis in Eastern Europe and the new Taliban government appeared first on Atlantic Council.

Successfully concluding these talks will require both parties to navigate some difficult issues over the next six-seven months. This post recaps the situation at hand and the key issues that require resolution.

National security tariffs on steel and aluminum

Section 232 of the Trade Expansion Act of 1962 authorizes the president of the United States (and, thus, the US Trade Representative) to impose tariffs on imports if it is found that the imported items in question constitute a threat to US national security. Section 232 tariffs therefore assume a highly globalized economy generates vulnerability for the domestic economy based on factors other than the terms of trade. The factors all seek to ensure that the US Government can acquire necessary materials from domestic sources in the event of a national emergency. When the Trump administration in 2018 imposed tariffs on steel and aluminum imports under Section 232 of the Trade Expansion Act, it triggered widespread fears of a global trade war. The controversy arose over (i) the foundation for the tariffs on national security grounds and (ii) the global scope of the tariffs, which included traditional transatlantic allies in Europe while exempting the United States’ bordering neighbors in Canada and Mexico pursuant to tariff-free commitments under the United States-Canada-Mexico Agreement.¹ Global trade war fears escalated further when the European Union threatened retaliatory action.  Fortunately, trade tensions simmered down in 2019 with no further action. The May 17, 2021 joint statement by the US Trade Representative and the EU Commission acknowledged these concerns by highlighting that “as the United States and EU Member States are allies and partners, sharing similar national security interests as democratic, market economies, they can partner to promote high standards, address shared concerns, and hold countries like China that support trade-distorting policies to account.” Even as the announcement of negotiations focused on eliminating tariffs between the US and the EU, the joint statement also indicated that both the United States and the European Union face damage from steel dumping and overcapacity in the global steel market. However, they may find it difficult to eliminate the tariffs despite best intentions.

Metals trade: Key data points

Policymakers on both sides of the Atlantic frequently assert that Chinese steel and aluminum production generate the majority of adverse competitive effects on the global steel market. The actual import data in the United States tells a slightly different story. Department of Commerce data shows that the top 10 sources of steel imports into the United States do not come from China. Steel imports dropped significantly following the imposition of Section 232 tariffs, including even from Canada that had been exempted from the tariffs.

The data also indicate that the dispersion of importers is far from even. The top three steel importers (Canada, Brazil, and Mexico) account for 50 percent of steel imports. Germany only accounts for 4 percent; Italy for even less.

The import structure for aluminum is more concentrated. Canada accounts for over two-thirds of US aluminum imports. The next three largest importers are the United Arab Emirates, Argentina, and Russia. Aluminum imports from China to the United States are limited to a small set of products (such as rods, wire, and bars). European imports to the United States are minimal.

Finally, the imposition of an import tariff does not mean the tariffs remain in place without the possibility of change. The United States permits US firms to request exclusions from the tariffs, and the Congressional Research Service indicates that the Department of Commerce to date has granted roughly 60 percent of all exclusion requests regarding aluminum.  At the end of 2020, the Department of Commerce further announced that 105 steel and fifteen aluminum products would become eligible for a “general exemption.”

European exports of steel and aluminum also are similarly muted. Italy’s exports to the United States are dominated by pharmaceuticals products (17 percent), machinery (12 percent) and aircraft (7 percent). Germany’s exports to the United States follow a similar structure.

In other words: the economic significance of the aluminum and steel tariffs for transatlantic trade is not as large as media headlines might suggest. Similarly, claims that Chinese steel and aluminum distorts import markets are less impactful than asserted. Rather, the symbolic and geopolitical significance of aluminum and steel tariffs is much higher, particularly in the context of global market dynamics.

Two key issues for 2021

The Joint US-EU Statement this week makes clear that policymakers on both sides of the Atlantic seek to join forces to combat a larger, persistent problem in the global market for steel: Chinese over-production. Powered by state subsidies, Chinese steel production alone has increased 418 percent since 2000, making it responsible for nearly 50 percent of all global production by 2019. The success of the Chinese steel market seems to have also inspired many large emerging steel markets (India, South Korea, Russia, Taiwan, Brazil, and Mexico) to scale up rapidly, supported by state subsidies and market intervention.

Transatlantic policymakers must now grapple with two very difficult issues if they are going to successfully eliminate the Section 232 tariffs applied to European producers.

• State subsidies: On the surface, a joint US-EU effort to address Chinese overcapacity could take the form of challenging state subsidies provided by Beijing to local firms. The challenges could include bilateral initiatives as well as more formal complaints within the World Trade Organization (WTO).

This will not be an easy transatlantic conversation. Certain EU member states currently provide significant subsidies to their domestic steel and aluminum manufacturers. Market intervention also is not uncommon. Pandemic-era industrial policy spending priorities focused on preserving and creating jobs by funding the transition to a green economy mean that traditional manufacturing companies are likely to receive even larger shares of government funding to facilitate changes in their production processes that decrease their carbon emissions.

European efforts to pressure China to decrease state subsidies for steel and aluminum may not be as effective as policymakers might like. If the elimination of Section 232 tariffs for European steel and aluminum becomes contingent on Chinese action, the prospects for a deal by year end dramatically decrease.

• National security: US policymakers could certainly decide that no national security issues arise from European steel and aluminum imports based solely on the nearly minimal amount of such imports relative to other trading partners. European policymakers certainly will seek to promote the perspective that they should at least be treated on a par with the largest importer of both products (Canada), which already receives a large exemption due to the USMCA’s tariff terms.

Eliminating the Section 232 tariffs would certainly go a long way towards assuaging the diplomatic insult of being deemed a national security threat to the United States. But making this decision based on geopolitical grounds potentially undermines the ability to make progress regarding state subsidies that distort global markets.

Transatlantic policymakers have thus created a potentially problematic framework for discussion. If US officials lift the Section 232 tariffs on EU steel and aluminum imports, they effectively determine that European state subsidies and market intervention in this sector is not as important as geopolitical priorities. In other words, they suggest that the problem with the tariffs were not state subsidies themselves – but who was giving them.

Prioritizing preferential treatment for allied nations makes it far more difficult to persuade China by making arguments about substantive market distortion. Any such move instead could backfire, incentivizing China to call out the various government subsidies being distributed as part of the pandemic-era recovery process. Pursuing all these initiatives outside the WTO umbrella potentially further weakens the global trade body. How Europe and the United States resolve the steel and aluminum tariffs issue will thus tell us a great deal about the shape of global trade policy over the near- to medium-term.

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The post Transatlantic tariffs, national security, and geopolitical priorities appeared first on Atlantic Council.

The Leaders Summit brought together forty world leaders, including seven from Latin America and the Caribbean, representing Antigua and Barbuda, Argentina, Brazil, Chile, Colombia, Jamaica, and Mexico. The Americas are a crucial player in coordinated efforts to tackle global climate change, so we asked experts from the Atlantic Council and elsewhere to lay out what’s next.

What were some of the most ambitious commitments made by Latin America and the Caribbean in mitigating climate change? Are they aligned with the expectation put out by the Biden administration and COP26? How will the international community contribute to these regional efforts? 

Jorge Gastelumendi is the global policy director at the Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center. He is also a COP26 high level climate champions co-lead for the Race to Resilience.

Putting nature-based solutions at the core of the efforts to fight climate change was the most outstanding, though not surprising, feature of commitments advanced by Latin American and Caribbean representatives—from Brazil’s president, Jair Bolsonaro, indicating the country’s commitment to end illegal deforestation in the Amazon by 2030, to Mexico’s president, Andrés Manuel López Obrador, committing to implement one of the largest reforestation programs in the world. Peru went even farther by committing that 50 out of the 150 actions in its climate plan will be nature-based solutions in sectors such as water management, land use, and forests. The main obstacles to materialize these commitments is the lack of implementation capacity in the region and the lack of financial resources from both public and private actors, particularly the financial sector. The international community, with the leadership of the United States, is critical in helping overcome these two obstacles. Colombia, for example, highlighted exploring innovative financial mechanisms, such as debt-for-adaptation swaps, which could avoid deforestation in the Amazon (a priority of Brazil, Colombia, and Peru) and protect the oceans (a priority for Chile).

President Bolsonaro, in his speech, raised the need for the right to development of current and future generations, also mentioning the Amazonian Paradox. What is the Amazonian Paradox and in what ways can a collaborative approach with the international community, the private sector, civil society, and indigenous communities help address it?  

Rodrigo Lima is a lawyer with expertise in international trade, non-tariff barriers and sustainable development. He is the director of Agroicone, a Brazilian sustainable agribusiness organization.

The Amazonian Paradox emerges from the immense contradiction between the assets and potentials from a mega-biodiverse forest that covers almost five million square kilometers over nine countries, and the social realities and inequalities among its more than twenty-three million inhabitants. The possibility to provide effective value to the forest, generate profits from its services, promote its sustainable use, and allow its population to thrive from the economic benefits and environmental services reflects the challenge of the Amazonian Paradox.

It is reasonable to compare the Amazon to a puzzle that needs time and effort to be assembled. The Amazon is home to 329 indigenous lands, covering almost one million square kilometers—local communities, family farmers, medium and large farmers. About 640,000 square kilometers are non-designated public lands, which should be designated as national parks, private areas, indigenous land, or for other uses.

To organize the territory and create policies to enable a low carbon economy, while considering different actors and interests, depends on federal and state governments. But it also relies on cooperation from multiple sources. In this regard, climate finance can play a critical role not just in promoting Reducing Emissions from Deforestation and forest Degradation (REDD+) projects, but more broadly in creating and sustaining a flourishing nature-based economy.

The completed puzzle relies on fostering a thriving economy based on natural resources, tourism, sustainable agriculture, forest management, and conservation activities. Bioeconomy opens a huge possibility to build upon this challenge, connecting extractivist producers to processing facilities and the market, generating social co-benefits from REDD+ projects, harnessing sustainable agriculture production based on innovation and good practices, and generating cosmetics and medicines, among other activities that could transform the Amazonian Paradox into the Thriving Amazonia.

International cooperation, as discussed at the Leaders Summit on Climate and other forums, has a fundamental role to play to support assembling this puzzle. The Amazon cannot be seen as a pure protection area; it must enable and promote social, economic, and environmental benefits for its population while it generates environmental goods to all society.

President López Obrador, in mentioning Mexico’s reforestation program, suggested its expansion to the South of Mexico and into Central America, generating jobs. He also suggested temporary work-permits and residency in the United States for those committed to this program, as a mechanism to address the migration crisis. How could the climate crisis be a greater challenge to the current border crisis? In what ways could addressing climate issues also be an opportunity to solve migration?

Maria Fernanda Bozmoski is the deputy director for programs at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Mexico and Central America.

Hurricane season in Central America is right around the corner, and back-to-back natural disasters may bring the region to the breaking point. The number of migrants will likely increase in anticipation of hurricane season, as well as in the aftermath. While migration from the dry corridor—which stretches from Guatemala to Costa Rica—is likely, hurricanes also greatly affect the Caribbean coast. The Central American Integration System (SICA) estimates that up to eight hurricanes may form in the region this year. Four of the eight may be intense, according to the organization.

Climate change is both a long-term push factor for migration and an accelerant. The United Nations estimates more than 7.3 million people were directly impacted by hurricanes in 2020, and there are more than 8 million starving people in Honduras, Guatemala, and El Salvador—up from 2.2 million in 2018. While the nearly four-fold increase in starvation is not all a result of the climate crisis, the destruction of crops and villages is a factor in this increase. In fact, experts find that climate change is a major factor explaining in the current surge in hunger.

The consequences of climate change are being felt now by current generations and the Caribbean nations are particularly impacted. Like other heads of state, the leaders of Antigua and Barbuda, and Jamaica reinforced the need for support and collaboration on addressing climate change. How could the international community support Caribbean nations in adapting to the existing and upcoming consequences of the rise in global temperatures?

Vicki Assevero is a former senior fellow for the Adrienne Arsht Latin America Center’s Caribbean Initiative.

The international community can support Caribbean nations and other small island developing states (SIDS) by acknowledging the World Meteorological Association’s 2020 Report that sea level rise has doubled, and hurricanes have intensified, so the imperative to finance climate adaptation is urgent. Prime ministers Gaston Browne of Antigua and Barbuda, and Andrew Holness of Jamaica urged acceleration of the pace of implementation of existing accords. This would mean not only funding the financing mechanisms foreseen in the original Paris Climate Accord but also those outlined in the Warsaw Mechanism and the Samoa Pathway. More importantly, multilateral institutions must continue to mobilize capital for greater investments in renewable energy and green technologies. The Caribbean SIDS are also urging new metrics in the form of a multi-dimensional vulnerability index that would facilitate access to concessional financing. 

Commitments on energy transition and renewable energy were popular among leaders at the summit. In terms of transitioning to cleaner energy, how close is Latin America and the Caribbean to reaching that goal and significantly reducing its greenhouse gas emissions? What key steps could be taken to accelerate an energy transition in the Americas?

Randolph Bell is the director of the Atlantic Council’s Global Energy Center, and Reed Blakemore is the deputy director of the Atlantic Council’s Global Energy Center.

Though the reaffirmation and raised ambitions for climate action last week from across Latin America and the Caribbean were encouraging, regional progress to meeting climate goals has thus far been inconsistent. That said, growing electricity demand and the cloudy forecast for hydropower (long the prevailing baseload electricity source in the region) presents an important opportunity for countries to take significant steps to transform their energy mix and kickstart their climate goals. Accelerating the introduction of a mix of variable renewables, low-carbon natural gas resources, and in some cases nuclear energy, will offer alternatives to bioenergy, diesel, and coal in order to fulfill new electricity demand while also replacing potential declines in hydropower output. Additional efforts to decarbonize the transportation sector will also further electrify the region and support reduced emissions. Taken together, this makes investment into accompanying grid infrastructure as well as digitalization and energy efficiency important next steps in maximizing the emissions-reducing potential of regional electrification and energy transition.

Valentina Sader, is assistant director and Brazil lead at the Adrienne Arsht Latin America Center.

AfricaSource Apr 23, 2021

Climate change will not be fixed without Africa

By Rama Yade

When Congolese President Félix Tshisekedi spoke at the virtual Leaders Summit on Climate this week, he had the force of the continent behind him. And his message was that developed countries must do more. As the summit comes to a close, the world still has so much to learn from Africa about how to tackle the climate crisis—if the world would only listen.

Africa Climate Change & Climate Action

Fast Thinking Apr 13, 2021

FAST THINKING: Why economic development is key to addressing the migration crisis at the US border

By Atlantic Council

On this episode of Fast Thinking, Atlantic Council experts Rebecca Scheurer and Jason Marczak dive into the root causes of mass emigration from Guatemala, Honduras, and El Salvador, and offer recommendations for long-term solutions to the underlying push factors that drive people from their homes—including crime, gang violence, corruption, and climate change.

Migration Northern Triangle

New Atlanticist Apr 25, 2021

Climate diplomacy can help turn action into results: UAE minister

By Larry Luxner

Al Jaber, the United Arab Emirates’ minister of industry and advanced technology, reflected on the connection between climate partnerships and economic results.

Climate Change & Climate Action Energy & Environment

The post Raising ambitions: How Latin America and the Caribbean is tackling the climate crisis appeared first on Atlantic Council.

As we approach one year since the first COVID-19 case in Latin America and the Caribbean, we look ahead at what might or might not be on the horizon for the region over the next year.

Join us as we look at some of the key questions that may shape the region, then take our informal poll and see how your opinions shape up against our analysis.

Will the region see mass vaccinations? How will regional economies fare? What might be on the agenda for the US relationship with Brazil and Mexico? US President Joe Biden’s administration has entered office with a full inbox: how will developing trends in the region affect the new administration’s agenda?

Here are the eleven questions that the Adrienne Arsht Latin America Center is answering to map the rest of the year.

Question #1: COVID – Will Latin America and the Caribbean achieve widespread vaccination in 2021?

Question #2: Economy – Will regional economies outpace growth forecasts in 2021?

Question #3: Central America – Given the extent of damage from the 2020 hurricanes in Central America, will the region see more climate migrants?

Question #4: Mexico – Will joint security challenges top the list of priorities in the US-Mexico relationship under Biden?

Question #5: Stability – Latin America has faced sporadic, but massive, waves of protests and national strikes prior to and during the pandemic. Will 2021 be a year of even greater social unrest?

Question #6: Venezuela-EU – Will the European Union (EU) resume conversations with Nicolás Maduro’s regime to monitor Venezuela’s regional elections in 2021?

Chapter #7: Brazil – Will the Biden administration and that of Brazilian President Jair Bolsonaro find ways to cooperate on a climate agenda?

Question #8: Colombia – Will the United States and Colombia reform the underlying premises of their anti-narcotics policies?

Question #9: China and the Caribbean – Will the five Caribbean nations and two Central American countries that still recognize Taiwan shift to recognizing the People’s Republic of China (PRC)?

Question #10: Caribbean – Will the Caribbean Community and Common Market (CARICOM) achieve its goal of a Caribbean Single Market and Economy (CSME) in 2021?

BONUS QUESTION: In the 2016 Summer Olympics in Rio de Janeiro, Brazil (#13), Jamaica (#22), and Cuba (#23) were the only Latin American and Caribbean countries to finish in the top twenty-five in the medal count. Assuming the Olympics are held, will more countries from the region finish in the top twenty-five this summer?

OUR ANSWER TO QUESTION #1: NO

The first case of COVID-19 in Latin America and the Caribbean was reported in Brazil on February 26, 2020. Since then, the region has reported nearly 17.5 million cases and more than 550,000 COVID-19-related deaths, accounting for one third of global deaths. Countries have actively worked to secure vaccines through bilateral and multilateral arrangements, including agreements with Pfizer, Moderna, AstraZeneca, Russia’s Sputnik V, and China’s CoronaVac. Nevertheless, widespread vaccination requires not only adequate planning for vaccine acquisition, but efficient and equitable distribution. Recent incidents in Germany and the United States show that even more resourceful countries are experiencing hiccups in massive vaccine rollouts, such as logistical challenges (especially the required temperature-controlled supply chain), personnel shortages, and vaccine hesitancy. Latin American and Caribbean nations may face these hurdles at a greater scale, due to resource and capacity constraints.

As of January 19, 2021, eleven Latin American and Caribbean countries have authorized emergency use of COVID-19 vaccines: Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Panama, and Venezuela.  On December 24, 2020, Mexico, Chile, and Costa Rica became the first countries in Latin America to begin mass vaccination. Despite moving quicker than most others in the region, Mexico aims to inoculate only 75 percent of its population by March 2022. For most countries in Latin America and the Caribbean, definitive delivery and mass vaccination timeframes remain unclear, and could be delayed over time.

Some low-income countries in the region may be able to vaccinate, at most, 20 percent of their populations in 2021, a figure considerably lower than the 65-percent theoretical threshold for herd immunity. Of added concern, the COVAX initiative—a key global initiative launched to secure vaccine doses for poor countries—currently faces a $4.9-billion funding gap. This could potentially complicate the initiative’s goal of helping inoculate 20 percent of each low-income country’s population against COVID-19 by the end of 2021. With stark disparities in vaccine access across and within countries, widespread vaccination is a distant prospect for Latin America and the Caribbean in 2021.

OUR ANSWER TO QUESTION #2: YES

In July 2020, a month after Latin America and the Caribbean became the global epicenter of the coronavirus pandemic, Alicia Bárcena, head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), cautioned that the region should brace for a “lost decade.” By the end of 2020, the economic contraction in Latin America reached 7.7 percent—its steepest contraction ever, albeit 1.4 percent less than ECLAC’s earlier forecast. Can the region rebound in 2021 and exceed current growth forecasts?

After experiencing its worst economic crisis ever in 2020, the regional economy is expected to grow 3.7 percent in 2021. But, it’s also possible that the region can outpace this forecast, if it can manage a strategic balancing of expanded fiscal support for social-protection programs and small businesses, investment in job-generating productive sectors, and structural reforms to tackle long-standing challenges in the rule of law, equality, productivity, and climate. To accelerate economic reactivation, the region must leverage international investment and cooperation from global institutions such as the World Bank and the International Monetary Fund (IMF), as well as from regional organizations such as the Inter-American Development Bank. The private sector, at the national and international levels, must also play a central role in revamping growth, but will require strong incentives from local governments and risk-mitigated business climates.

Eyes will be on Brazil, Mexico, and Argentina (the region’s three largest economies) as well as Peru, which has had one of the best developing-world growth rates in the past decade, to recover from their 2020 economic downturns. In comparison to these four countries, Chile and Colombia suffered less devastating declines and could be positioned for stable growth over the year, but the migration crisis in Venezuela will continue to pose a heavy burden on neighboring countries’ already-strained public resources.

OUR ANSWER TO QUESTION #3: YES

This year will almost certainly see a surge in Central American migrants and refugees trekking north to the US southern border, due to a unique confluence of the devastation caused by Hurricanes Eta and Iota, as well as the myriad effects of the coronavirus pandemic and other long-standing migration pressures. Days before Biden’s inauguration, a caravan of more than nine thousand Hondurans created international headlines. The caravan was fueled, in part, by the promise of a revamped immigration policy in the United States.

The back-to-back hurricanes—which made landfall in Central America less than two weeks apart—wreaked havoc across Nicaragua and the Northern Triangle (Guatemala, Honduras, and El Salvador), affecting more than five million people and forcing at least 350,000 Hondurans and Guatemalans into emergency shelters. With hundreds of thousands of Central Americans internally displaced, shelters lacking basic services and sanitation quickly became new ground for rapid coronavirus infection. The destruction to essential infrastructure—such as bridges, roads, buildings—and entire communities was a heavy blow to a region that saw a 6.5-percent economic decline in 2020.

Food insecurity in Nicaragua, Guatemala, and Honduras is expected to rise significantly, due to the destruction of large swaths of agricultural lands, livestock, and infrastructure. In a region with long-standing pre-pandemic challenges around rule of law, insecurity, and economic opportunity, the most likely outcome from these push forces is a novel wave of “new” climate refugees seeking better livelihoods in the United States.

In 1998, Hurricane Mitch, the second-deadliest Atlantic hurricane, caused a massive surge in Central American migration to the United States. If history is any indication of the future, Hurricanes Eta and Iota—Category 4 and 5, respectively—can trigger a similar scenario in 2021.

OUR ANSWER TO QUESTION #4: NO

Security cooperation will be an important, though complicated, part of the US-Mexico relationship. In the days leading up to Biden’s inauguration, Mexican President Andrés Manuel López Obrador’s (AMLO) administration decided to stop investigations into former Mexican Secretary of National Defense General Salvador Cienfuegos—who was arrested in Los Angeles at the end of last year, and then sent for prosecution to Mexico. AMLO then released more than seven hundred pages of confidential evidence and intelligence, prompting an unusual rebuke by the US Department of Justice. The General Cienfuegos saga is just the latest example of a strained US-Mexico security relationship.

The Mexican Congress passed a new law in December 2020 that limits and deters the work of foreign enforcement agents in Mexico. Under the law, all communications—at all levels—with foreign enforcement agents will need to be reported, meetings with foreign agents must be approved in advance, and senior federal officials will need to be present at said meetings. Failure to do any of the above may result in expulsion of foreign agents. The law has prompted serious concerns that international cooperation with Mexico on the security front will be henceforth paralyzed. Most of the intelligence on criminal groups and illicit activities comes the United States.

AMLO has sought to double down on addressing the root socioeconomic causes of crime, and has moved away from the drug-kingpin strategy of past administrations. These actions also reflect a desire to move away from a “war” with cartels and other powerful criminal organizations in Mexico. But, security cooperation goes beyond reduction of homicides and combating drug trafficking—a stable security climate is a requisite for business and commerce to thrive. The Biden administration will have to navigate this complex scenario in Mexico.

OUR ANSWER TO QUESTION #5: YES

Protests in Bolivia, Chile, Colombia, Ecuador, Peru, and Haiti that began in 2019 were expected to continue into 2020, but extended lockdowns to control the spread of the pandemic led to the suspension of protests in the first half of 2020. Despite the lockdowns and the inherent risk of public gatherings, citizens gathered in large numbers last fall in Argentina, Chile, Colombia, Costa Rica, Guatemala, and Peru for reasons ranging from a rejection of government austerity plans to calls for racial equality, better social and economic protections, increased transparency, and free elections.

As vaccines become available and social activities resume, protests will most likely resume in 2021 as citizens will air new grievances. The pandemic has increased inequality in the region, pushing an additional forty-five million people below the poverty line. As governments struggle to fund social-protection programs, discontent with ruling governments will rise. Costa Rica will likely see protests as President Carlos Alvarado Quesada’s administration resumes negotiations with the IMF to secure a much-needed loan. In 2020, the Costa Rican government quickly retracted proposed tax measures after protestors blocked major roads. Colombia may also continue to see protests as long as marginalized groups, including Colombia’s indigenous and Afro-Caribbean groups, feel the government has failed to address their demands.

Finally, as Nicaragua heads toward an election in November in which the opposition will be unable to run, protestors against Nicaraguan President Daniel Ortega’s regime should be expected to return to the streets. Protests may also gain momentum in Chile, Ecuador, Honduras, and Peru, as they also head toward elections.

OUR ANSWER TO QUESTION #6: YES

The EU will continue to promote a democratic transition in Venezuela. In September 2020, a European mission was sent to Venezuela in a failed attempt to promote minimum democratic conditions ahead of legislative elections. High Representative of the EU for Foreign Affairs and Security Policy Josep Borrell, who announced the EU’s rejection of Venezuelan election results, asked Maduro to “chart a path towards national reconciliation.” Borrell also reiterated the EU’s commitment to supporting Venezuela’s transition to democracy.

In 2021, municipal and regional elections are set to occur according to the Venezuelan Constitution. This will open a new opportunity for the EU and a multilateral coalition to continue engaging in close dialogue with the Maduro regime, the opposition, academia, non-governmental organizations, and other civil organizations to seek to promote conditions that allow for the participation of all political parties in a competitive electoral process. However, conversations aside, the Maduro regime is unlikely to see any upside in allowing elections that are transparent or fair.

OUR ANSWER TO QUESTION #7: MAYBE

In past years, the synergy between the United States and Brazil has led to the signing of the Alcântara Technological Safeguards Agreement, advancing scientific and technological cooperation; support from the United States for Brazil to join the Organisation for Economic Co-operation and Development (OECD); and, at the end of 2020, the signing of a protocol to facilitate trade and investment between the two largest economies in the Western Hemisphere. Despite some diverging views at the presidential level, stronger bilateral relations between Brazil and the United States are mutually beneficial, and opportunities could still exist for advancing on a common agenda.

Brazil has been criticized for recurrent fires in the Amazon rainforest and Pantanal wetlands, environmental disasters such as the Brumadinho dam collapse, and high levels of deforestation, heightening pressures on the Brazilian government to take action to protect its environment.

For Bolsonaro, the economy and structural reforms are top priorities. The government has pursued trade agreements with the EU, South Korea, and Canada, as well as the United States. However, with increasing pressure from the EU, and now the United States, failing to advocate for strong democratic principles and a concrete plan for sustainable development can isolate Brazil in the global arena, undermining possibilities for cooperation with the United States and other countries. To advance on the trade and investment fronts, which are priorities for the Bolsonaro administration, Brazil will need to double down on its efforts to reconstruct its image and role abroad, particularly regarding the climate agenda.

OUR ANSWER TO QUESTION #8: YES

In December 2020, the Congressional Western Hemisphere Drug Policy Commission (WHDPC) unveiled a bipartisan report recommending that the United States rethink many of its historical anti-narcotics policies. The report found that while Colombia has made remarkable progress in strengthening state authority in marginalized areas, the United States’ $11.6-billion Plan Colombia was unsuccessful in meaningfully curbing coca cultivation. Despite having significantly increased manual eradication efforts in Colombia, coca cultivation and cocaine production remain high; it is unlikely the current strategy will allow the United States and Colombia to reach their joint objective of decreasing coca cultivation and cocaine production to half of 2017 levels. As discussed in the report “The Untapped Potential of the US-Colombia Partnership,’’ the United States and Colombia must take measures to reduce coca cultivation and also target other stages of the drug market, including cocaine production, trafficking, and consumption.

Entering office with a profound understanding of the Americas and a track record of advancing policies fundamental to the region’s prosperity, Biden will prioritize strengthening the United States’ ties to the region—particularly the US-Colombia partnership, which he has referred to as the keystone of US foreign policy in the region. In light of the WHDPC report, the new administration has new thinking on how to reorient the US counter-narcotics policy in Colombia away from mass eradication and toward a more holistic approach, placing renewed emphasis on providing physical and economic security to rural Colombians and demobilized rebels. There is also new momentum for the United States to develop a whole-of-government strategy to counter transnational criminal organizations (TCOs) and the international drug trade, per the report’s recommendations.

OUR ANSWER TO QUESTION #9: NO

It is unlikely that all five Caribbean countries that currently recognize Taiwan—Belize, Haiti, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines—will instead recognize the PRC in 2021. However, the Dominican Republic’s switch to establish diplomatic ties with the PRC in 2018 puts significant pressure on Haiti, with whom it shares the island of Hispaniola. In its overtures to Haiti, the PRC recognizes the country’s extreme poverty and holds out a promise of building the kind of capacity that allowed China to lift 850 million of its citizens out of extreme poverty, but only if Haiti recognizes the “One-China” policy. The other Caribbean countries have long, and sometimes ethno-cultural, histories with Taiwan, which has been a loyal and generous partner. Nevertheless, the geopolitics playing out between Washington and Beijing will put pressure on these small island nations to choose—not necessarily in their own developmental interests, but in the interest of alignment with one great power.

For Guatemala, Honduras, and Nicaragua—the three Central American countries that still recognize Taiwan—pressing domestic issues around the pandemic, natural disasters, citizen and food insecurity, and the economic downturn will prevail over the diplomatic issue of recognition. In addition, the new administration in the United States will move away from a bilateral and mostly stick approach to the isthmus, and toward a more regional and balanced carrot-and-stick approach, in which the question of China can be a powerful bargaining chip. A ramping up of conditionality on foreign aid and support to the region from the United States can be highly persuasive, and can discourage Central American leaders from switching sides.

Caribbean and Central American recognition of China versus Taiwan also hinges on the intensity of Chinese outreach efforts. This, in turn, is often dictated by the state of play in cross-strait relations between China and Taiwan. Since 2016, Taiwan under Tsai Ing-wen’s leadership—in alignment with former US President Donald Trump’s administration—has shifted to a more explicitly competitive stance vis-à-vis Beijing. As cross-strait relations soured, both sides became more aggressive in maintaining or courting new diplomatic allies (e.g., the Dominican Republic, El Salvador, and Panama). In this context, China will likely continue its soft-power diplomacy in the region. The PRC’s staunch verbal support for multilateralism also has the potential to tilt more Caribbean countries toward its orbit. However, much of this could change in the next four years, contingent upon new dynamics in the US-China-Taiwan triangle, as well as Biden’s promised return to global, non-transactional cooperation and a renewed focus on the Americas.

OUR ANSWER TO QUESTION #10: NO

Although the CARICOM has operationalized the single market, the prospect of a single economy remains unlikely. A little history will help. CARIFTA was formed in 1965, shortly after anglophone Caribbean countries achieved independence. CARIFTA removed tariffs and other non-tariff barriers to regional trade. CARICOM was formed in 1973 to implement the Treaty of Chaguaramas, which replaced the free-trade area with a single market. The intended free movement of people, goods, and capital is still not a reality because there is not a “regional body with powers and accountability that can help transform community decisions to binding laws in individual jurisdictions is a key impediment,” according to a 2020 report from the IMF.

In 1989, the CARICOM heads decided that further economic integration was required in an era of globalization. The Treaty of Chaguaramas was revised in 2001 to accelerate the implementation of the CSME, which started in 2006. The 2008 global financial crisis further delayed what former Managing Director of the London-based Caribbean Council David Jessop called “a process plagued by rhetoric and inaction.”

COVID-19, however, may have done what neither of the two best-known analyses of the Caribbean’s challenges, the Golding Report and the Ramphal Commission, could: show the fragmented Caribbean nations the real benefits of integrated, unified coordination when faced with externalities. As she relinquished the CARICOM chair In June 2020, Barbadian Prime Minister Mia Mottley praised the regional architecture for its sterling performance in organizing and supporting the region during the pandemic.

Current Chairman of CARICOM and Prime Minister of Trinidad and Tobago Keith Rowley called for 2021 to be “the year of CARICOM,” and challenged the region to live up to its promise: “Let this be the year that we make CARICOM work for us and construct the resilient society that will provide a safe, prosperous and viable community for all of us.” He boldly called for the CSME to become the principal framework for recovery. Despite the real obstacle of establishing a single currency and its attendant institutions, CSME got a shot of energy from the COVID-19 crisis.

BONUS QUESTION ANSWER

Assume the Olympics occur this summer. Several factors contribute to a country’s medal-count prospects—population size, the promotion of women in sports, national investment in sports, etc. While no single factor explains a country’s success or failure, decisions and investments made by Latin American nations over the past four years could be an indication of a strong Olympic showing.

Brazil has made the strategic decision not to prioritize one sport, and has instead sought to be in the competition for as many Olympic slots as possible, securing one hundred and eighty so far. Cuba, in comparison, has focused on boxing and baseball to achieve its Olympic medal goals. Mexico’s Olympic team is also looking promising, with a fairly gender-balanced team (forty-nine men and thirty-seven women). AMLO also announced a financial stimulus for athletes who participated in the 2019 Pan American Games and are now preparing for Tokyo 2020+1 amid the COVID-19 pandemic. Jamaica is also investing in its Olympic athletes, despite the economic constraints of the pandemic, providing $40 million in funding for its athletes’ preparation and qualification.

With all eyes hopefully on the Summer Olympics, the authors predict that countries that provided the most comprehensive support to their athletes during the pandemic will come out on top in the upcoming games. 

The post Spotlight: 10 Questions for Latin America and the Caribbean appeared first on Atlantic Council.

On this week’s #DFRLabCoffeeBreak, Assignment Editor and Research Associate, Luiza Bandeira sits down with Heloisa Massaro, Head of Research at InternetLab. InternetLab is a Brazilian think tank focused on law, technology, and internet policy. The two explore COVID-19 disinformation inside the country and the resulting outbreak that has made it a global hot spot. Massaro explains the disinformation’s resulting effect on Brazil in the wake of COVID-19 and the country’s hastily put together bill meant to combat “fake news.”

The DFRLab Coffee Break is a video series meant to discuss how disinformation and digital change affect industries, policy making, and society with a community of experts, academics, and leaders from around the world.

The Atlantic Council’s Digital Forensic Research Lab (DFRLab) has operationalized the study of disinformation by exposing falsehoods and fake news, documenting human rights abuses, and building digital resilience worldwide.

learn more

The post #DFRLabCoffeeBreak with InternetLab Head of Research Heloisa Massaro appeared first on Atlantic Council.

As Brazil and the United States grapple with the devastating effects of the coronavirus pandemic, both countries are trying to chart paths to economic recovery. And according to officials from both countries, the road to renewed growth could include deepening their trade and investment relationship.

In a June 4 webinar titled “The Next Phase of the US-Brazil Relationship,” US Ambassador to Brazil Todd Chapman and Nestor Forster, chargé d’affaires at the Brazilian Embassy in Washington, described how their respective jobs have evolved as the pandemic worsens.

The virtual event was hosted by the Atlantic Council’s Adrienne Arsht Latin America Center, moderated by the center’s associate director, Roberta Braga, in partnership with the Brazilian Trade & Investment Promotion Agency (Apex-Brasil) and in collaboration with AmCham Brasil.

As of June 8, Brazil has confirmed 691,758 coronavirus cases, up 31 percent since June 1 and now second in the world after the United States. Brazil, with 212 million people, has now also passed Italy, France, and Spain to rank third in total COVID-19 deaths (36,455) after the United States and Britain.

“When anticipating my arrival in Brazil, we had a very expansive dialogue and agenda to pursue, from economics to education to health,” said Chapman, who began his post March 30 in Brasília. “But with the advent of COVID-19, the health situation is now my first, second, and third priority—and also to attend to the 1,500 staffers at the US mission and the 275,000 resident Americans in Brazil—as we focus on how to address the pandemic and loss of life.”

Forster defended the approach toward the pandemic taken by President Jair Bolsonaro. “There’s a clear division between the role played by the federal government and the guidelines enforced by state and local governments,” said Forster. “From the onset, our president has said that in a country as large and regionally diverse as Brazil, it’s very hard to have a one-size-fits-all solution.”

Forster added: “This is a public health emergency, but it’s not only a health issue. It has tremendous repercussions for society and the economy, and the view of our president has been that we should tackle all these fronts at the same time.”

Braga, noting that both Bolsonaro and US President Donald J. Trump have compared COVID-19 to the flu, explained that on May 27 the Trump administration began banning the entry of non-US citizens who had recently traveled to Brazil. Forster said the restrictions are a measure to address the spread of the pandemic.

“Brazil had taken the same measure on March 27, when we established restrictions on all foreigners coming by plane,” he said, noting exceptions to this rule. “Those measures are temporary. They should go away as soon as the numbers start to improve.”

Chapman, a career diplomat and former US ambassador to Ecuador, said he’s set a target of doubling the value of US-Brazil trade from the current $105 billion to $210 billion over the next five years. By comparison, annual trade between the United States and Mexico—which has only 60 percent of Brazil’s population—exceeds $600 billion.

“At 15 percent growth a year, it’s possible,” Chapman said. “You get there by improving the overall business climate here in Brazil to make it more attractive, and by reducing every barrier possible. Our economic teams are meeting constantly to look at very specific issues—and the more specific the dialogue, the more progress we’ll make. That’s the objective that’s been set for us.”

Even though Brazil’s travel and tourism industry has been devastated by COVID-19, Forster believes the crisis will pass.

“Brazil just had its largest agriculture harvest ever,” he said. “Even during the pandemic, Brazil has been the country least affected by foreign trade among the [Group of Twenty]. We’re showing resilience in our trade performance.”

In 2019, Brazil received $78 billion in foreign direct investment (FDI), making it the world’s fourth-largest recipient. It seeks to join the Paris-based Organization for European Co-operation and Development (OECD)—an effort the United States formally supported this year—and would also like to enact a free-trade agreement with the United States.

“It’s the ultimate goal that both our countries think is worth pursuing, though how soon it can happen is not clear, because there are questions and legal requirements,” Forster said in addressing when a US-Brazil free trade agreement might come about.

“Instead of thinking when we can have an FTA, we should work on the goal of doubling trade between Brazil and the US. There’s a tremendous potential here, and I think we should add to that the goal of doubling bilateral investment both ways,” he said, estimating that Brazilian investment in the US economy has grown by 350 percent over the past decade.

“Our minister of economy, Paulo Guedes, said the pandemic should not be an excuse to do less or procrastinate,” Forster said. “By year’s end, we can tackle tax reform and put Brazil in a better shape to face the dire economic situation. We’re not sitting idly by. On the contrary, we’ve been extremely busy.”

To that end, Forster said, “we’ve made lots of progress regarding trade facilitation—getting rid of red tape and inefficiencies, and streamlining the process of imports and exports—and we’ve had ongoing talks on e-commerce and regulatory practices. We have just begun talks on an anti-corruption package and a dialogue on intellectual property issues.”

In response to concerns raised by members of the US House of Representatives’ Ways and Means Committee regarding environmental protections and labor rights in Brazil, Forster added: “This administration is as committed to environmental protection in Brazil as any other. What’s different is that President Bolsonaro has expressed a big concern about the 25 million Brazilians who live in the region. We need to bring sustainable development to these people, and economic opportunities for those who need it badly.”

Larry Luxner is a Tel Aviv-based freelance journalist and photographer who covers the Middle East, Eurasia, Africa and Latin America. Follow him on Twitter @LLuxner.

Further reading:

New Atlanticist May 21, 2020

Guatemalan president criticizes US over lack of COVID-19 assistance

By Larry Luxner

“Guatemala is an ally of the United States, but I don’t believe the US is an ally to Guatemala, because they don’t treat us like one,” he said. “We’ve seen how they’ve assisted other countries with ventilators, and we haven’t even gotten a dime from them—not even one single mask from the United States. We don’t feel appreciated.”

Coronavirus Migration

New Atlanticist Jun 2, 2020

Costa Rica legalized same-sex marriage. Where does the rest of Latin America stand on marriage equality?

By Isabel Kennon

As Costa Rica becomes the first in Central America to take this step toward equality, it remains to be seen who will be next to turn the Inter-American Court on Human Rights’ opinion into action.

Civil Society Human Rights

New Atlanticist May 20, 2020

The day after COVID-19 and saving emerging markets

By Mohammed Soliman and Francisco Campos

While developed markets have responded with historical levels of fiscal stimulus, globally there is immediate fiscal need in the emerging markets to tackle the health and economic fallout.

Africa Coronavirus

The post Where the US-Brazil relationship is going next appeared first on Atlantic Council.

On May 12, 2020, the Atlantic Council’s Adrienne Arsht Latin America Center hosted a timely conversation on the implications of the coronavirus on Sino-Brazilian relations. The event also marked the launch of the new China-Latin America Policy and Business Consultation Group, which will discuss some of the most pressing issues around China’s relationship with countries across the region.

The conversation featured Julie Chung, principal deputy assistant secretary (PDAS) in the US Department of State’s Bureau of Western Hemisphere Affairs; Thiago de Aragão, a partner and director of intelligence at Arko Advice; Ambassador Marcos Caramuru de Paiva, currently a partner and manager of KEMU Shanghai and former Brazilian ambassador to China; and José Roberto Martins, partner at Trench Rossi Watanabe Advogados. Jason Marczak, director of the Adrienne Arsht Latin America Center, gave opening remarks, and Pepe Zhang, associate director and lead on Latin America-China affairs for the Adrienne Arsht Latin America Center, moderated the conversation.

PDAS Chung opened the dialogue by calling for increased bilateral, regional, and global cooperation to combat the economic and public health crises. “The more we can pool our resources, the better we can overcome and fight this current situation,” she said. She also encouraged long-term capacity building and bilateral coordination efforts through capital investments, regulation coordination, and trade collaboration.

Ambassador Caramuru de Paiva noted that Brazil’s response to COVID-19 has been distributed between federal and local governments. In his view, states and municipalities have played a larger role against the pandemic, partly because of the size and diversity of the country, but also because the federal administration has followed a more lenient public health strategy. According to Ambassador Caramuru de Paiva, “the local governments took the right steps to protect people [and the] federal government was efficient in approving measures to protect businesses.”

Transitioning to external affairs, Caramuru de Paiva shared that trade with China has flourished despite the pandemic. Martins spoke on the mutual respect between the Brazilian and Chinese business communities. Both countries, he explained, have developed a “business infrastructure”—China has been Brazil’s major trading partner for at least ten years, and there is a strong bilateral business community. Caramuru de Paiva and Martins agreed that the active trade and infrastructure investment that characterize Brazil’s relationship with China are both beneficial and necessary.

Offering the political perspective on the Brazil-China relationship, de Aragão explained that there have been aggressive comments against China coming from individuals in government and Congress. However, these narratives have not transformed into concrete actions. De Aragão stated that while the Sino-Brazilian political relationship has suffered from these comments, the commercial relationship has thrived. This contrast between political and trade relations can be managed, he said, but political narratives can eventually materialize and contaminate the commercial relationship.

Therefore, according to de Aragão, China has several concerns regarding its relations with Brazil. First, the perceptions that Brazilian decision-makers have about China; second, US influence in Brazil—for example, a suspicion toward Huawei and 5G investments; and third, non-trade opportunities that could pose a problem for operations due to regulations of mergers and acquisitions. Therefore, de Aragão stated, China’s short-term goals are to understand the presidential decision-making process; to increase strategic partnerships in infrastructure; and to counteract the negative portrayals of China within the Brazilian government.

When asked if there is political pressure to impose tariffs on Chinese products, de Aragão asserted that Brazilian imports from China reflect the nature of free trade and supply chains. He stated that due to its complex tax system and labor laws, Brazil has been unable to boost local production at competitive prices.

The panelists compared the Chinese and US approach to Latin America. PDAS Chung encouraged Brazil and Latin American countries to be careful of China’s intentions, given their lack of transparency, predatory lending tactics, and strict government control over the Chinese business sector. Caramuru de Paiva responded that Brazil is not facing a dilemma between China and the United States, even if both powers have different economic models. “We have to have a decent dialogue with both,” he stated.

Chung explained that Brazil does not face “a choice between the United States and China,” but a choice about what Brazilians want and what values they want to import and integrate into their nation. Caramuru de Paiva mentioned that many Brazilians favor democracy, multilateralism, free trade, and international health cooperation; however, he expressed confusion over the values that are leading current US foreign policy.

To close the conversation, Martins observed that “Brazil doesn’t have the luxury to choose investors,” and noted that “any restriction to investors, whatever country, would be unconstitutional and unsustainable.” He lauded Brazil’s recent regulatory efforts and acknowledged that Brazil should continue to build upon this platform.

Observing that Brazil received more foreign direct investment in the first four months of 2020 than in the entirety of 2019, Martins shared that Brazil has a privatization plan to open the market further after the pandemic. He looked toward the future with optimism, declaring, that despite challenges, Brazil has institutions that will continue to attract foreign investments. “I would love to see investors from everywhere, to challenge, participate, and contribute in [the Brazilian] market,” Martins concluded.

The post China-Brazil relations under COVID-19 appeared first on Atlantic Council.

Since February, when the first case of COVID-19 was confirmed in Latin America, leaders have begun directing citizens on the best course of action to reduce the spread and loss of life. But whether to assuage fears or to assert their own political interests in a time of crisis, some heads of state have also been the culprits of spreading disinformation and misinformation. In Brazil and in Venezuela—two very different countries but both with oversaturated, highly polarized online information environments—thousands could end up paying for the spread of disinformation and misinformation with their lives.

At this moment of uncertainty and too many “expert voices,” societies are desperately seeking reliable, trustworthy sources of information. The COVID-19 pandemic is the first global health crisis in the age of social media—in countries where conversations on social media are hyperpolarized, governments must work even harder to create an atmosphere of confidence and reliability.

The number of COVID-19 cases in Latin America had surpassed 12,000 as March turned to April. As the situation worsens, it is imperative that governments be able to effectively implement national public health measures with which societies will comply. Yet the more governments send clouded, confusing, or outright inaccurate messages, the less likely it will be that their populations will heed mandates or warnings. In Brazil’s case, for example, the president himself is urging citizens to go back to work for the sake of the economy, contradicting health experts advocating for social distancing around the world and prompting the legal system to legally prohibit Jair Bolsonaro from amplifying directives against social isolation.

Disinformation and misinformation, especially circulating within the biggest economy in Latin America (Brazil) and the country with the worst man-made humanitarian crisis in the hemisphere (Venezuela), can foment national catastrophes that will be felt well beyond the realms of the online information space and national borders.

Two of the region’s most polarized countries, whose leaders espouse nearly opposite ideologies, provide stark glimpses into the very real effects of disinformation and offer a warning for how we should proceed.

Brazil 

In Brazil, President Jair Bolsonaro has failed outright to recognize the sheer potential of the virus—he has on various occasions called the coronavirus a “gripezinha,” (a small cold), as well as a fantasy amplified by the media. On March 29, he took to walking the streets of a market outside Brasilia, the capital, in an attempt to encourage Brazilians to keep the economy going rather than heed lockdown directives coming from health experts. Just days before, in a YouTube announcement streamed live on March 24, he affirmed that he will not sacrifice Brazil’s economy, and again referred to the virus as a small cold—going so far as to say it would not affect him as he is healthy and athletic, prompting enraged responses from scientists and some local government officials.

And, thanks in part to some encouragement from the president himself, mass gatherings like the pro-government protests that took place on March 15 brought together thousands of people at a time when social distancing was the recommended course of action by the World Health Organization. On the streets of São Paulo, some protestors called the virus a “hoax to discourage protesting.”

Confusing directions from the top, combined with the rising tide of disinformation spreading through Brazilian social media and messaging platforms, means millions of Brazilians are taking inappropriate, or outright ineffective, measures to contain the virus’s spread.

Brazilians, and most visibly the country’s most vulnerable populations, cannot afford to be put at risk by disinformation, misinformation, or the minimization of the seriousness of the virus. The first cases of coronavirus were confirmed on March 21 in the City of God favela. With low levels of access to health care services and high exposure to poor sanitary conditions, these are the populations that will suffer the most from this pandemic.

Venezuela

Nowhere is the information environment more conducive to the spread of disinformation than in Venezuela—the regime of Nicolas Maduro controls all of the major channels of communication, and independent media and civil society organizations struggle to make their voices heard within an environment replete with censorship, persecution, torture, and extrajudicial killings. Additionally, no epidemiological information has been publicly reported since Maduro took office in 2014, with one exception. In December 2016, then Minister of Health Antonieta Corporale published an epidemiological report, and the following day, the regime fired her.

In the middle of the COVID-19 crisis, on March 26, the US Department of Justice charged Nicolás Maduro and fourteen other former and current officials with drug trafficking, corruption, money laundering, and narco-terrorism. Hours later, Juan Guaidó, interim president of Venezuela recognized by more than fifty countries including the United States, called for the creation of a national emergency government to face the pandemic, excluding Maduro.

More than any other country in the region, the coronavirus pandemic could hit Venezuela at its very core. Just after Maduro ordered mandatory social quarantine in Venezuela, social media videos emerged from the streets of Petare, the country’s largest slum, showing hundreds heading to street markets to access basic goods. In a country where “59 percent of households have insufficient income to buy food” according to the Food Security Assessment published on February 2020, its unlikely that people could follow social distancing regulations.

The political stalemate in Venezuela and the US “maximum pressure” campaign is opening the door for the Maduro-controlled military to reinforce regulations exposing the population to larger violations of human rights, as well as political violence, persecution, and chaos.

As the online information environment in Venezuela continues to evolve, monitoring the digital engagement space with an approach to countering false narratives is increasingly necessary. #AlertaVenezuela, an Adrienne Arsht Latin America Center and Digital Forensic Research Lab effort, is paving the way for a deeper understanding of the complexities of the information environment in and around Venezuela. On March 27, we hosted a virtual discussion with key partners in Venezuela to look at the impact of COVID-19 disinformation in the country. By exposing and explaining disinformation in this context, the Atlantic Council has and will continue to shed light on the path ahead for combatting disinformation during this crisis.

A call to action

From the highest echelons of government to those sitting at home interacting with these developments from their phones or computers, there is a joint responsibility to stick to the facts, to verify everything, and to think twice before sharing.

Fact-checkers, media, and civil society have quickly mobilized to counter the rapid spread of disinformation. Technology companies launched control centers to help counter the spread of false news. And media outlets across the world opened bureaus focused on coronavirus reporting. 

But, these efforts alone are not enough if leaders are contributing to the infodemic. Disinformation, misinformation, or misleading information coming from the top will not do the region any favors—at this time of uncertainty, the countries’ leaders must stick to the facts and avoid minimizing the dangers of this pandemic.

Roberta Braga is an associate director at the Adrienne Arsht Latin America Center of the Atlantic Council, where she focuses on Brazil and disinformation, and co-leads the organization’s #AlertaVenezuela work focused on countering disinformation in Venezuela with the Digital Forensic Research Lab.

Diego Area is an associate director at the Adrienne Arsht Latin America Center of the Atlantic Council, where he leads the Center’s work on Venezuela that covers themes including illicit activities, democracy and governance, crisis management, depolarization, and countering disinformation.

Further reading:

New Atlanticist Mar 25, 2020

What Mexico’s response to H1N1 can teach us about coronavirus and future pandemics

By Pablo Reynoso Brito

While the A(H1N1) and novel coronavirus (COVID-19) crises are different in magnitude and were caused by viruses with different levels of lethality, Mexico’s experience with the A(H1N1) can offer valuable lessons for current disruptions.

Coronavirus Mexico

New Atlanticist Mar 23, 2020

What Latin American countries are doing to confront coronavirus

By David A. Wemer

As governments in North America, Europe, Asia, and around the world continue to combat the spread of the novel coronavirus (COVID-19), Latin American leaders are stepping up their efforts as cases are beginning to be documented in their countries. Although the number of cases across the region remains mostly lower than the epicenters in Europe and the United States, “we are not letting our guard down,” El Salvador’s Minister of Foreign Affairs Alexandra Hill Tinoco said on March 23. “No one can guarantee us that it is not going to hit us,” she explained, so every Latin American government is taking the threat seriously.

Colombia Coronavirus

New Atlanticist Mar 16, 2020

Addressing the coronavirus “infodemic”

By David A. Wemer

“Information, including disinformation and misinformation about the novel coronavirus is spreading faster than the pandemic itself,” Atlantic Council President and CEO Frederick Kempe explained. The sheer amount of information on the outbreak means that government and business leaders need to take specific actions to ensure that their citizens and employees receive important credible information.

Disinformation Economy & Business

The post The coronavirus infodemic in Latin America will cost lives appeared first on Atlantic Council.

In October 2020, Brazilians will head to the polls to elect new mayors and city counselors in thousands of municipalities across the country. For the first time in history, Brazil’s thirty-five individual political parties will be required by law to allocate at least 30 percent of their campaign funding toward the election of women candidates. As the deadline for candidates to register with their respective parties approaches, the moment is ripe to elevate women’s participation in politics in a country where the playing field for women remains severely unequal.  

Brazil has one of Latin America’s largest gender gaps. It ranks twenty-second out of twenty-five countries in the region. The main drag on the country’s overall performance is political empowerment—ranking 104^th in the world, behind other Latin American countries, such as Nicaragua (third), Costa Rica (sixth), Argentina (twenty-second), Bolivia (twenty-seventh), Colombia (thirty-third), and even Venezuela (seventy-sixth).

Diversity, Equity, and Inclusion

Mar 10, 2020

Venezuela’s democratization: Leading with women to achieve peace

By Cristina Guevara

In order for Venezuela to transition to a more democratic, inclusive, and peaceful society, the interim government must strengthen women’s political participation and decision-making power.

Democratic Transitions Venezuela

With regards to local governments, only one of the twenty-six states and the federal district is governed by women. In 2016, when the last municipal elections took place in Brazil, 11.6 percent of Brazil’s 5,568 municipalities elected women mayors, while 1,286 municipalities did not even elect a woman as city councilor. Only twenty-four cities had majority women on their city council.  

Women represent nearly 52 percent of Brazil’s voting population. However, as of June 2019, two positions in Brazil’s twenty-two-member cabinet were held by women (Teresa Cristina, Minister of Agriculture, Livestock and Supply, and Damares Alves, Minister of Human Rights, Family and Women). In addition, only 15 percent of federal deputies and senators are women.

Though Latin America has made strides for women’s advancement over the last decades, women in the region still face significant hurdles to inclusion and prosperity. Leadership is an area where we can observe not only women’s modest yet visible progress but also the clear need for mechanisms to sustain and expand female representation. Today, only Barbados and Trinidad and Tobago have elected women heads of states, and Bolivia has a woman interim president. 

As Brazil prepares to hold municipal elections in October 2020, the country should aim to increase women’s political participation and learn from its fellow Latin American countries.

Why should Brazil aim to increase women’s political participation?

The UN Sustainable Development Goals, to which Brazil is a signatory, highlight key urgent global challenges that must be addressed for a better and more sustainable future. Goal 5 highlights the importance of gender equality.

According to the United Nations, “equal access to education, health care, decent work, and representation in political and economic decision-making processes will fuel sustainable economies and benefit societies and humanity at large.” Having women in political positions facilitates the representation of women’s interests in politics, helping implement “new legal frameworks regarding female equality in the workplace and the eradication of harmful practices targeted at women,” for example, gender-based violence, such as femicide.

Research proved that in India, the number of drinking water projects in areas with women-led councils was 62 percent higher than in those with men-led councils; and in Norway, the presence of women in municipal councils had a direct causal relationship with regard to childcare coverage.

Women, like men, have “proven abilities as leaders and agents of change, and the right to participate equally in democratic governance.”

What can Brazil learn from other Latin American countries?

Argentina was the first country in the world to introduce a gender quota into law, in 1991. Since then, other countries in Latin America have adopted similar legal requirements.

Nicaragua ranks third in the world for political empowerment. Unlike Brazil, Nicaragua has a unicameral political system, but the country’s gender quotas apply for both the lower house and the subnational level. Implemented in 2012, the legislation enforces a 50 percent rate for women candidates in legislative elections, and gender balance of elected officials. Today, forty-three out of ninety-one seats (47 percent) in the National Assembly are held by women.

Colombia ranks thirty-third in the world for political empowerment. Even though there is space for improvement, under President Iván Duque, Colombia has a woman vice president and its first ministerial cabinet with gender parity. The country’s gender laws are more aligned with those of Brazil, also requiring a minimum 30 percent of women candidates, but these regulations apply not only to the Lower House and subnational level, but also to the Senate.

Diversity, Equity, and Inclusion

Mar 10, 2020

Colombia ¿Cómo vamos?: Women’s political and economic empowerment

By Camila Hernandez

Closing gender gaps in economic and political empowerment will move Colombia forward in its path toward sustainable development. Greater female participation in the economy and in politics will not only boost the country’s economy (by increasing productivity, diversifying the economy, reducing income inequality, increasing organizational effectiveness, among others), but will also contribute to more inclusive, democratic, and sustainable policies.

Colombia Women

Brazil instituted “gender quotas” in 1995, establishing a 20 percent minimum quota for women candidates in local elections. In 1997, a new electoral law determined that each party or coalition had to put forward a minimum 30 percent women candidates. These quotas, however, only apply to positions elected through a proportional representation system—therefore, the quota does not apply to presidents, governors, and senators.

For the 2020 elections, slight changes apply regarding gender quotas. The end of party coalitions will now require individual political parties to meet the 30 percent minimum requirement for women candidates. In addition, to guarantee greater participation, political parties are now required to allocate at least 30 percent of their campaign funding towards women candidates. In the case the number of women candidates exceeds the minimum requirement, the funding allocated should be proportionate.

These changes in regulations can make a difference in electing more women to political positions at the local level. But to shrink the gender gap in Brazil, clear mechanisms must be in place to enforce and punish those not compliant with these regulations, avoiding additional cases of misappropriation of campaign funding.  

Beyond 2020, gender quotas for the Senate could also be helpful in guaranteeing greater women participation throughout the political system.

Valentina Sader is an assistant director at the Adrienne Arsht Latin America Center. Follow her on Twitter @valentinasader.

Related reading:

Diversity, Equity, and Inclusion Mar 10, 2020

Colombia ¿Cómo vamos?: Women’s political and economic empowerment

By Camila Hernandez

Closing gender gaps in economic and political empowerment will move Colombia forward in its path toward sustainable development. Greater female participation in the economy and in politics will not only boost the country’s economy (by increasing productivity, diversifying the economy, reducing income inequality, increasing organizational effectiveness, among others), but will also contribute to more inclusive, democratic, and sustainable policies.

Colombia Women

Diversity, Equity, and Inclusion Mar 5, 2020

Venezuelan women: The unseen victims of the humanitarian crisis

By Angela Chavez

Although gender inequality is not a novel issue in Latin America and especially not in Venezuela, the current humanitarian crisis has made women more vulnerable financially, politically, and socially, and made sexual violence and discrimination commonplace. According to a recent report by Venezuelan non-profit organization Center for Peace and Justice (CEPAZ), the crisis has increased women’s vulnerability through the lack of governance and weakened institutions, impoverishment, lack of access to food and medicine, and the rising forced migration, among other factors.

Migration Venezuela

Diversity, Equity, and Inclusion Feb 24, 2020

Women protest for their lives: Fighting femicide in Latin America

By Isabel Kennon and Grace Valdevitt

Femicide continues to claim the lives of Latin American women on a daily basis. In Mexico, they are standing up to say something about it.

Civil Society Human Rights

The post Ahead of Brazil’s municipal elections, novel legal requirements can elevate women’s participation in politics appeared first on Atlantic Council.

Growing cooperation between the United States and Brazil has created “a very unique moment in our bilateral relations,” as both sides move closer to a potential deepening of their economic relationship, Ambassador of Brazil to the United States Nestor Forster said on March 5.

Joe Semsar, acting under secretary of commerce for international trade at the US Department of Commerce, agreed, saying that it “feels like there is some momentum behind this bilateral relationship,” Semsar suggested that both the United States and Brazil are now focused on continuing to “build the foundations for a potential free trade agreement.”

Semsar and Forster spoke at the Atlantic Council on March 5 to mark the launch of a new Atlantic Council report “US-Brazil trade and FDI: Enhancing the bilateral economic relationship.” The report, authored by Brazilian and US experts, offers a new vision for strengthening US-Brazilian trade and foreign direct investment, with the ultimate goal of a free trade agreement between both countries.

Read the report:

Issue briefs and reports

Mar 5, 2020

US-Brazil trade and FDI: Enhancing the bilateral economic relationship

By Abrão Neto, Roberta Braga

The United States and Brazil would benefit from a closer and stronger trade and foreign-direct-investment-relationship that would amplify growth and prosperity, in both the short and long terms. Deepening the economic relationship would pay dividends in other areas as well, translating into greater opportunities for strategic bilateral cooperation. This paper recognizes that the moment is now and that 2020 is a pivotal year to substantively advance bilateral economic ties.

Brazil Economy & Business

According to Sergio Segovia, president of Apex-Brasil, the report does not just advocate for pursuing a free trade agreement, but “creates a strategy for a way forward.” Forster agreed, praising the report for suggesting achievable goals for the short term that both countries can utilize “as building blocks towards longer-term objectives.” Semsar argued that the report will help provide leverage as a “focusing document to move [the US-Brazilian relationship] forward.”

The time is ripe for real progress on building economic ties between both countries, as years of hard work have provided a chance for breakthroughs. The US government and their “Brazilian counterparts have worked together for many years to prevent, reduce, and remove barriers to bilateral trade,” Semsar said, adding that “through years of engagement under our bilateral mechanisms, such as the US-Brazil commercial dialogue, we have been able to have productive and meaningful discussions.” According to US Representative Darin LaHood (R-IL), who co-chairs the Brazil Caucus in the US Congress, there has been “growing recognition” in both the United States and Brazil that economic cooperation “can help both countries.”

LaHood also credited the personal relationship between US President Donald J. Trump and President of Brazil Jair Bolsonaro as having “spurred where we are at today.” He further suggested that the successful completion of the United States-Mexico-Canada Agreement (USMCA) “showed our allies around the work that we can negotiate a trade agreement” successfully that is beneficial to all sides.

But while LaHood agreed that a free trade agreement should be a long-term goal for both the United States and Brazil, he cautioned that “there are a number of things that have to be met before we get to this next step.” He stressed the need in Brazil for tax reform, pension reform, and more significant anti-corruption measures as requirements for a serious push toward a free trade agreement. Semsar agreed, stressing that “if this were easy, we would have done it a long time ago.” For the United States, he continued, “details matter. There are fundamental issues that we need to work through before an agreement is possible.”

Forster acknowledged these continued challenges and argued that these make the intermediate steps outlined in the Atlantic Council report more important as an alternative to simply “throwing obstacles on the course” before beginning the race. He also warned against either side becoming too obsessed with potential economic competition between both countries, who often export similar goods. “I think it is about time that we overcome this logic of competition for market access; trying to get a larger slice of each other’s pie,” he said. “I see so much we can do to increase the size of the pie so we all end up with a large slice.”

One intermediary step, Semsar explained, will be to boost US investment into Brazil’s growing infrastructure construction. “US companies are only involved in 2 percent of infrastructure projects in Latin America,” he reported, while Spain accounts for nearly 19 percent and China 7 percent. By working to close this gap and taking other small steps to strengthen the underlying economic relationship, Semsar argued that both sides can “continue to build the foundations for a potential free trade agreement.” LaHood agreed, stressing that both sides should focus on “meeting the goals that we have put in place,” as maintaining progress “internally in Brazil will pay the best dividends down the road.”

“We all agree that we have a tremendous opportunity before us,” Forster said. But he warned that “we cannot keep opportunity for later. This is a unique moment; we should grab the moment.”

David A. Wemer is associate director, editorial at the Atlantic Council. Follow him on Twitter @DavidAWemer.

Further reading:

Issue briefs and reports Mar 5, 2020

US-Brazil trade and FDI: Enhancing the bilateral economic relationship

By Abrão Neto, Roberta Braga

The United States and Brazil would benefit from a closer and stronger trade and foreign-direct-investment-relationship that would amplify growth and prosperity, in both the short and long terms. Deepening the economic relationship would pay dividends in other areas as well, translating into greater opportunities for strategic bilateral cooperation. This paper recognizes that the moment is now and that 2020 is a pivotal year to substantively advance bilateral economic ties.

Brazil Economy & Business

New Atlanticist Dec 3, 2019

Brazil and Argentina surprised by tariff announcement: What comes next?

By Jasper Gilardi

On December 2, US President Donald J. Trump announced that he would impose new tariffs on Brazilian and Argentinian steel and aluminum coming into the United States, a retaliation for alleged currency manipulation, which he claimed was hurting US farmers.

Brazil Latin America

Report Apr 11, 2019

Spotlight: Five key economic avenues for strengthening US-Brazil trade and FDI

By Daniel Marteleto Godinho, Abrão Neto

In what five key ways can the United States and Brazil work more effectively together to strengthen bilateral trade and foreign direct investment?

Brazil Economy & Business

The post The path forward for the US-Brazil economic relationship appeared first on Atlantic Council.

Foreword

The year 2020 marks the turning of a page for the Western Hemisphere, a region that in 2019 saw uncertainty dominate headlines as new governments came in and out of office, trade tensions grew, and citizens took to the streets to voice their concerns with the status quo.

For years, the opportunities that could come with a stronger bilateral relationship between the United States and Brazil have been underestimated. Significant potential exists to produce sizeable benefits for both societies. That potential must be maximized.

While US and Brazilian governments and businesses have begun to seize the benefits of the synergies the two countries share, hurdles remain that prevent a full and successful commercial reality.

The United States and Brazil would benefit from a closer and stronger trade and foreign-direct-investment-relationship that would amplify growth and prosperity, in both the short and long terms. Deepening the economic relationship would pay dividends in other areas as well, translating into greater opportunities for strategic bilateral cooperation. This paper recognizes that the moment is now and that 2020 is a pivotal year to substantively advance bilateral economic ties.

Building upon the successes and progress made over the years, this paper incorporates the input and expertise of the US and Brazilian private sectors and policymakers to offer a renewed vision and new momentum for strengthening US-Brazil trade and foreign direct investment (FDI), supporting concrete steps toward deepening the commercial relationship, and laying the foundation for a potential free trade agreement (FTA) between the United States and Brazil.

As the global balance of power shifts, as the world faces new hurdles that could slow growth, and as Latin America must contend with more uncertainty amid new external shocks, the two countries strategically and economically have countless reasons to deepen commercial relations. Stronger ties will ultimately provide additional certainty at this critical time.

Jason Marczak
Director, Adrienne Arsht Latin America Center Atlantic Council

Table of contents

Executive Summary

1. A New Chapter for US-Brazil Relations
2. Deepening US-Brazil Trade and Investment
3. Institutional Hurdles and Potential Opportunities
4. The US Perspective
5. The Brazil Perspective
6. Working Toward Greater Foreign Direct Investment
7. Domestic Reforms Paving the Way for Greater Investment
8. Bilateral Pathways for Deepening Investment
9. Key Recommendations
10. Conclusion
11. Acknowledgments
12. About the Authors

Executive summary

Scan the global horizon today and one can’t help but note the trends that are fundamentally reshaping the world order. New global players are taking center stage, as countries reconsider their approaches to collaboration and cooperation. Changes in technology are evolving at unprecedented speeds—changes that have brought forward a fourth industrial revolution that has generated new questions about how best to solve global challenges not confined by borders. These transformative trends are affecting the world, and the marketplace. But, change also brings immense opportunity.

In this environment, the United States and Brazil are uniquely positioned to advance momentum for a more robust bilateral economic relationship. As the United States and Brazil look at delivering on such a goal, the Atlantic Council’s Adrienne Arsht Latin America Center, alongside intellectual partners in both countries, lays out the benefits that a closer economic relationship may offer. The goal: provide new ideas and reinforce momentum for deepening the bilateral relationship at a time of great synergy between the countries’ leadership.

An open, transparent, inclusive, and international rules-based bilateral trading system is key to sustainable growth and prosperity for the United States and Brazil.

This paper, authored by two US and two Brazilian experts, showcases the scope for the United States and Brazil of deepening trade and FDI ties. In particular, it highlights the institutional hurdles and opportunities for lowering trade barriers and enhancing convergence in the near term, while articulating the benefits of a comprehensive free trade agreement in the long term, as well as what the two countries can do to achieve even stronger investment ties. To highlight the potential benefits of a stronger US-Brazil partnership and increased investment in different sectors of the economy, this paper, from a bilateral and non-partisan perspective, proposes short-term and long-term approaches to seizing on opportunities for greater engagement. It also highlights, through call-out boxes, the authors’ perspectives on key themes and opportunities for particular industries.

Throughout 2020, the United States and Brazil have the chance to focus on key, practical, short-term wins that could pave the way for next steps toward a comprehensive long-term free trade agreement.

In the areas of trade, recommendations include a multi-chapter trade enhancement agreement that could encompass bilateral rules on customs administration and trade facilitation, good regulatory practices, technical barriers to trade, and digital trade, among other areas. Working closely with the private sectors of the two countries, the United States and Brazil should continue to identify specific bottlenecks to reduce trade uncertainty, and work to finalize a mutual recognition agreement between national trusted traders or Authorized Economic Operator (AEO) programs. Key to short-term success will be expanding digital documentation in bilateral trade and expanding upon sharing good regulatory practices, including conducting impact analyses and public consultations, and implementing a whole-of-government approach.

The two countries should work to move beyond the pilot program to establish a full-fledged Global Entry Program for pre-approved Brazilian travelers entering the United States, start negotiations to avoid double taxation, and consider the implementation of a high-level mechanism at the vice presidential level to oversee the bilateral relationship (in coordination with existing dialogues and groups). The United States and Brazil can also increase policy cooperation in third countries and international fora in areas of investment and trade policy coherence.

The United States should continue to support Brazil’s process of accession to the Organisation for Economic Co-operation and Development (OECD), which would energize and consolidate important economic domestic reforms in Brazil.

Beyond 2020, and using momentum of short-term progress, the United States and Brazil should work toward launching and concluding negotiations for a comprehensive free trade agreement (FTA) and bilateral investment treaty (BIT).