The boys in the basement and Brazil-Canada relations

With their Anglosphere friends, a bunch of irresponsible boys playing computer games with their expensive toys have done lots of damage to Canada’s relations with Brazil. After years of childish confrontation around planes, beef and petty criminal affairs and thanks to a large diplomatic effort, the bilateral relationship had become “normal.” Two countries with distinct outlooks and increasingly divergent paths in global arenas (Brazil up, Canada down) were finding ways to work together in a variety of fields, while investments and trade, in both directions, were increasing, sometimes significantly.

The spying scandal matters, but not because that relationship is important for either country. Notwithstanding the hues and cries of the Globe and Mail, trade with Brazil remains marginal for Canada, representing less than 1% of this country’s imports and exports (see the graph below). Don’t get sidetracked by the big numbers: trade with Brazil was worth $6.5bn in 2012 (down 2.7% from 2011, by the way), but in a sea of $916bn, this is nothing. Investment is a similar story. Don’t let the number of companies involved fool you: most of the value is linked to a very small number of investments. Were Vale to sell Inco–which they would do for economic not political reasons–Brazil would disappear from the top ranks of foreign investors in this country.

In fact, it is the very thinness of the relationship that makes this scandal so damaging: with so little at stake, good will and trust become critical, and this is what has been damaged here. From that standpoint, in other words, tapping Paulo Cordeiro’s phone is at least as bad as penetrating the mining ministry’s computers, for he was as good a friend of Canada as you would find in Brazil’s diplomatic service. If he could be treated like this, everybody is fair game.

Manners matter where stakes are low. Obviously, manners have never been the forte of the gaming crowd…

Canada-Brazil trade 2003-2012

Jean Daudelin

Hamster Wheel Diplomacy

As originally published at OpenCanada.org

Over the last eighteen months, Latin America has been one of our ministers’ favorite destinations: Ed Fast spent three days in the region in March 2012, and nine more in April; Diane Ablonczy, on Fast’s behalf, visited for five days in November; John Baird for ten in February 2013; Stephen Harper traveled South for three days in May; and John Baird is just back from another thirteen days trip to the region. Colombia was visited four times, Peru three times, Chile and Mexico twice, and Panama, the Dominican Republic, Cuba, Costa Rica, Nicaragua, Argentina, Paraguay, Uruguay, and Brazil once each. Of the hemisphere’s significant countries, only Bolivia, Ecuador, and Venezuela were left out, the latter dropped at the last minute as the scheduled visit overlapped with Hugo Chavez’ death. There is clearly nothing flimsy to this government’s commitment to the region, which it identified as a priority almost as soon as it was elected. That simple fact is no doubt welcome in a region that has seen Canada’s interest flutter wildly over the years. But at some point, both Latin Americans and Canadians will be wondering what all these trips are about. And that point may well have been reached.

The Conservatives’ agenda, like the Liberals’ before them, focused mostly on free trade. But now that agreements have been signed with virtually all the governments interested, there is little of substance left to do. Those who haven’t jumped on the bandwagon won’t do it soon. Indeed, it is hard to see any hint of free trade in the political debates of Brazil and its Mercosur partners, which now include anti-liberal Venezuela, and soon Bolivia and Ecuador. Some would like Canada to join the Pacific Alliance, but with free trade agreements already signed with all its members and support from them for Canada’s Asian/Transpacific Partnership strategy already secure, there simply is nothing substantial to gain without a readiness to liberalize immigration – something this government is not willing to contemplate.

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Brazil’s diplomats and the Canadian model

Canadian International Council head Jennifer Jeffs has an intriguing piece in the August 7 Globe and Mail. She argues that Canada should look to Brazil for lessons on how to engage the world effectively. I am not sure I agree, when I look at the very few hard results that Brazil got from all its efforts of the last decade. Clearly however, Foreign Minister John Baird, who is arriving in Rio for a two-day visit, will not be impressed with his hosts’ “efficiency” when he hears the latest news about Brazil’s diplomatic machinery.

Brazil’s Federal Account Tribunal, best thought of as an auditor general with judicial power, has just told Itamaraty, Brazil’s foreign ministry, that the top salary of his diplomats could not exceed $28,000 Reais per month (about C$14,000 or C$ 182,000 dollars a year as Brazilians are paid on a 13-months European schedule). This will come as a shock to Brazilian diplomats, some of whom currently make up to $60,000 Reais per month, or about C$ 390,000 a year…

Perhaps, reversing Jeff’s advice, Brazil’s rank-and-files diplomats will be keen to “import” the tactics of their much, much poorer Canadian counterparts, who have been delaying the treatment of visa applications and refusing to take phone calls in foreign countries to get better salaries. For his part, and in keeping with his customary modesty, Baird may well try to sell his rigid stance in the face of those demands.

[Thanks to Fabricio Chagas Bastos for the tip on salaries]

Jean Daudelin

Who is bleeding and who notices? Iraq through a Latin American lens

“Iraq is Bleeding and the world has barely noticed” writes Scott Taylor in Embassy Magazine: 500 deaths this month, 3,000 this year.

Awful? Yes, awful. But how awful?

Sorry to get into bleak death accounting, but if the point is for the world to notice, context matters.

Yesterday, Vanda Felbab-Brown sent me a report just published by Brazil’s Institute of Applied Economic Research (IPEA) showing that homicides in Brazil between 1996 and 2000 have been under-reported by about 18%. Instead of the roughly 700,000 homicides that we thought had taken place in the country over these fourteen years, Daniel Cerqueira’s study suggests that the true number is in fact about 850,000.

So we are talking about 60,000 homicides per year, or 5,000 per month, year after year after year. Obviously, Brazil is larger than Iraq, six times larger. But 6 times 500 is still “only” 3,000. In other words, as bleeding goes, Iraq looks like a mild case. Oh, and by the way, 15 to 16,000 people are murdered every year in the US, or 1250 per month…

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Brazil’s Season of Discontent

As posted on OpenCanada.Org

The weakness of Brazil’s political leadership has been revealed. For ten or so days at the end of June, angry middle-class citizens took to Brazil’s streets, spewing rage against shoddy and expensive public services, corrupt politicians, a slow and inefficient justice system, and the government spending orgy on sport facilities in the lead up to the 2014 World Cup and the 2016 Olympics. Increases in public transportation fares in several cities sparked the protests but the demonstrations quickly became an outpouring of disgust at the abuses of power that have come to define the behaviour of the country’s entire political class.

Governments and politicians were stunned. Mayors and state governors quickly retreated and canceled the fee increase. Reactions at the federal level, however, fed the chaos: President Rousseff immediately committed billions to public transportation and asked Congress to devote all the forthcoming oil royalties to education (about $140 billion). She further announced that a constitutional assembly would be convened to change key components of the electoral system. Legislators also pitched in. Congress rushed through a law that made corruption a grave crime and voted – partly against Rousseff’s will – to use oil royalties for education and health care, and the Senate even adopted a law making public transportation free for students.

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Brazil’s rough patch

This piece was first published on OpenCanada.org under the title “Off Its Game”

Dilma Rousseff came to power three years ago as the heiress of Brazil’s most popular president ever and in the wake of a decade that truly stands as a golden age for Brazil. She remains extremely popular, surpassing in fact the numbers of her mentor at a similar point in his first mandate, and she will most probably win the next elections. And yet, neither her government nor Brazil itself is doing very well right now. In fact, one is left wondering if the past decade will stand as another one-time “miracle” from which the country, in spite of its huge size and tremendous potential, will go back to the mediocre routine that has been the hallmark of most of its XXth Century history.

Rousseff’s Workers’ Party (PT) remains rattled by the condemnation of Lula’s closest advisers in the “mensalão”[1] scandal, which saw Congress members receive regular payments in exchange for their support for the government’s legislative agenda. The fact that those most severely sanctioned–who also happen to be closest to Lula himself–could still escape prison terms feeds a growing disenchantment with the sole major party that truly stood apart from old-style corrupt and clientelistic politics. Current electoral manoeuvering does not help as Rousseff gets ever closer to the old political establishment to contain the threat represented on the left by widely respected–and ex-PT–Marina Silva and by the increasingly credible governor of Pernambuco, Eduardo Campos.

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Why Venezuela matters for Brazil

Some may have been surprised by the swiftness with which the Brazilian government recognized the victory of Nicolás Maduro in Venezuela. Along with Venezuela’s closest allies, from Cuba and Argentina to Bolivia and Ecuador, Brazil congratulated Maduro Sunday night, even before the chavista-dominated National Electoral Council even declared him president-elect, early Monday morning. Why would Brazil, which has in fact been the target of Venezuela’s claims to regional prominence under Chavez, be so keen to secure the sympathy of his successor?

Ideology played its part, with Lula himself openly rooting for Maduro’s victory and the knee-jerk leftism of the  Workers’ Party (the PT’s) core constituency predictably pushing for the a quick and strong affirmation of solidarity, especially once the United States had expressed reservations.  As Paulo Sotero has pointed out, however, most leaders of Brazil’s ruling Workers’ Party were to stay the very least measured in their praise of Chavez[1] and the disputed election provided an opportunity to play out the global “seriousness” that the country’s elites, right and left, so strongly strive for.

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