Friday, April 18, 2014

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Brazil in Africa: Favourable Forecast?

Brazil is rapidly increasing its involvement in Africa. Is South-South really a panacea?
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Earlier this year, Brazil welcomed its first female president, Dilma Rousseff, a former Marxist rebel who has transformed herself into a pragmatic technocrat never before exposed to an electorate. Whilst talk fixates on the new government’s policies towards the country’s booming economy and its role as a major pillar in the BRIC order, the question of Africa remains sidelined. This should not be the case however: under former President Luis Inácio Lula da Silva, Brazil devoted an enormous amount of its foreign policy energy towards the continent. In eight years the administration visited 27 states on 12 separate occasions (more than all previous presidents combined), doubled the number of embassies and established a network of policies tackling serious social ills. This is likely to have a significant impact on Africa and is worthy of a detailed look.

At first glance, Brazil’s involvement in Africa does not appear impressive when looked at through a purely quantitative lens. It remains the tenth largest trading partner, significantly behind China and India. In 2009, total trade was worth $26bn, around a fifth of China’s $115bn from 2010. Foreign Direct Investment (FDI) remains in the low billions, whilst donor aid is still dwarfed by those supplied via Western states.

This however ignores two important points. Firstly, whilst isolated figures such as those above may not be hugely impressive, the trends are. Only ten years ago, net trade with Africa was worth a fraction of today's, at around $3bn: in a short space of time, therefore, the increase has been enormous. Direct investment follows a similar pattern. The number of Brazilian firms and personnel operating on the continent was previously a trickle, being largely limited to the Lusophone zone centred on Angola. Involvement by companies and governmental agencies has since rocketed, especially in energy-rich states such as Nigeria and Algeria, but also spreading to South Africa and Egypt. Since 2006, the budget for the Brazilian Cooperation Agency (ABC), the organisation responsible for administrating aid provision, has more than tripled.

Secondly, this indulgence in numerical data leads to an overlooking of qualitative elements, as well as the context in which they are taken. Whilst China attaches key conditions to finance and assistance given to African governments, such as with the use of foreign labour at the expense of the local population, Brazil appears happier not to. It has been well-documented that Chinese companies, often state-owned bodies, prefer to bring labourers from China, especially on large-scale construction projects, as part of conditional loans provided. The result has been a huge influx of Chinese workers, with some figures suggesting around a million now residing on the continent. However, Brazilian firms working in Africa have tended to allow greater involvement of the domestic labour force in projects. Odebrecht, a major global player in the construction and engineering sector, is engaged in projects across the region. The company’s Doraleh Container Terminal project in Djibouti features a team which includes local Djiboutians and neighbouring Ethiopians. This can partly be explained by the fact that Brazilian firms are often acting as autonomous private enterprises, rather than state-owned agencies, meaning that there are less politics attached.

The importance of this second point cannot be overstated – it is part of a broad sphere which is often described as Brazil’s ‘soft power’ approach, and in the long-term is likely to have a substantial impact upon Africa. Most visible is the ballooning amount of foreign aid provided over a large number of multi and bilateral contracts – quite a feat considering the country’s own socio-economic problems. Significantly, most of this is given in the form of social programmes. Brazil is a major foreign supplier of HIV/AIDS anti-retroviral medicine, using its own success in controlling the virus by providing the expertise in treatment, an example of what has been termed ‘global health diplomacy’. In social security, the Bolsa Família Program – a system of welfare payments where cash transfers depend upon certain conditions, such as school attendance – is being exported to Africa. A pilot project was set up in Ghana during 2007, with Brazil providing technical assistance and with a rollout forthcoming.

Similar proponents exist in the field of education where proposals such as joint degree programmes and student exchanges have sprouted up across the continent. In total, there are over 250 projects currently running in Africa concerning health, social and educational policies. This aid differs from much coming out of Asia due to the co-operative nature in almost every policy, rather than simply the provision of capital to fund projects. Brazil is to even launch its own television channel, reported to be beamed across 49 nations from a base in Mozambique’s capital, Maputo - although, being broadcast entirely in Portuguese, it remains questionable as to what use this will be to the majority of Africans.

Formal partnerships abound, and nowhere is this likely to have a greater impact than the agricultural sector. Brazilian involvement is not just in terms of financial guarantees, but also the development of institutions capable of networking small farm holdings via co-operation and dialogue. Africa-Brazil is a classic example of such a partnership. The initiative involves the exchange of knowledge, research and skills between African farmers and Brazil’s giant agricultural sector – which itself oversaw a dramatic increase in production – by the establishment of a fluid ‘marketplace’. Crucially, it involves Embrapa, the Brazilian Agricultural Research Corporation, which is a leading institute on tropical science activity and research. By pooling together technical know-how, capital resources and political leadership, it becomes a mechanism which acts as a propeller to the development of agricultural produce. This should not be underestimated: Africa is a net importer of food and the huge potential in boosting agricultural production would not only help combat hunger, but would also assist in reducing government balance of payment deficits. This would free-up state finances to be invested in infrastructure and human capital. Additionally, employment would increase and subsequently diminish the burden on overwhelmed urban centres. Brazil’s success in cultivating the previously under-used ‘Cerrado’ (savannah) is the template which much of Africa could follow due to comparable climates and soils, and similar staple crops such as cassava and yams.

What does the future hold? The short answer is that Chinese financial muscle will continue to speak loudest for now, especially with a number of decades-old dictatorships still in place across the region, which benefit from Beijing’s silence on controversial matters. Little can compare to hard currency and Africa is hungry for capital projects. However, soft power can have large impacts over the long-term, especially if channelled into areas which combat serious social ills, such as healthcare and crime. Perhaps even more important are perceptions. Already, China’s presence in Africa is being viewed negatively by some, with a clutch of articles suggesting that a neo-colonial relationship exists between Beijing and various African states. Rumbles are also surfacing which question the roles of India and oil-rich Gulf States involvement on the continent, over which accusations of displacement due to ‘land grabs’ are being made. So far, such allegations have not filtered their way across the Atlantic, simply because there is no reason to believe them. This is a crucial point. Brazil does not lack land, water or food: it does not need to export surplus workers, or acquire metals and other commodities which Africa produces. The politico-economic dynamics are therefore very different from those of other developing giants. Add this to the demographic and cultural connection between the two regions and a different context emerges. With a heavy focus on health, welfare and education, this could lead to significant future gains for Africa. The region's leaders have to grab it with both hands.

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