Author Archives: Robson Valdez

About Robson Valdez

Internacionalista, Pesquisador da FEE. International Affairs Researcher at the FEE.

International migration and its contradictory flows

Deisy Ventura is a Professor of International Law and lectures at the International Relations Institute of the University of São Paulo (IRI-USP), Professor at the Public Health Faculty (FSP) of USP and member of the Coordinating Committee of the Graduate Program in Global Health and Sustainability. She holds a Doctor’s degree in International Law and a Master’s degree in European Law from the European University of Paris 1, Panthéon-Sorbonne. She has a degree in Law and a Master’s degree in Latin American Integration from the Federal University of Santa Maria. She also coordinates, at the IRI, the extension project Cosmopolis on migration policies (a partnership between USP and the Municipality of São Paulo).

In an interview to Panorama, Deisy Ventura evaluates the migration policies in developed and developing countries and considers the difference between migrants and refugees more and more tenuous. In the global context, the researcher argues that migration ends up being desired in conditions that attend to the labor market needs, not the migrants’ rights. Deisy also criticizes the role of international powers in the crisis of Syrian refugees and, when it comes to Brazil, she points out the urgent need for an adequate legislation and coordination between the federation units and the different sectors so that migration and asylum do not generate humanitarian or political crises whenever a new migration flow takes place.

Panorama: What is your general view of international migration in the current global geopolitical context?

The current migration cycle, which began in the 80s, is a slow and continuous process, linked to the deepening of the economic inequalities between the countries, the changing forms of production brought about by economic globalization, and some other specific factors, namely armed conflict, ethnic or religious persecution and natural disasters.

Mireille Delmas-Marty refers to globalization as a “factory of migrants”, in the sense that workers move in search of employment and a decent life. However, developed countries have adopted increasingly restrictive immigration policies. Developing countries, on the other hand, do not usually adopt restrictive policies of entry into their territories, but do not encourage migratory regularization and access to rights either. Thus, the right to migrate is the human rights’ poor relative. While only about 40 States have adhered to the 1990 United Nations Convention on the rights of migrant workers and their families, most of the international human rights treaties are signed by well over 100 States. In Brazil, for example, this convention has been processed in Congress for years, and the Foreigner’s Statute, inherited from the military dictatorship, still is the current law.

The non-recognition of the right to migrate seems to be a big contradiction of the economic globalization ideal, which lists, among its touted advantages, an unprecedented freedom of movement of people, made possible by the extraordinary progress in the transportation sector. However, I believe that it is not a contradiction, but a feature: the freedom of movement that actually finds full support in contemporary society is the one linked to tourism and business or to people whose income is high enough that their free establishment in another country is not an obstacle. Thus, for globalization to work, it is necessary to encourage these flows. To the States is reserved, however, the prerogative to interrupt them at any time, for different reasons (economy, security, public health, etc.).

As for the migrant workers, it is not that their migration is unwanted; it may be desired, but under the often precarious conditions that meet the labor market demands and for as long as these workers are needed. Actually, it is the market that is free, not the people. Every time the rights of migrants are enshrined — both the right to migrate and, once the migrants are installed, the “right to have rights” (a phrase by Hannah Arendt, in her remarkable book on the origins of totalitarianism) —, the ability of both market players and States to get rid of unwanted contingent is reduced. This explains why countries with highly restrictive immigration policies keep a vast “black market” in which workers in an irregular migratory situation undergo equally irregular working conditions, which are often inhuman or similar to slavery.

Panorama: When the international migration flows (North-North, North-South and South-South) are addressed, socioeconomic factors are commonly listed to explain this phenomenon. However, when it comes to refugees, the subject is treated as a humanitarian crisis. Do you believe that migration should be treated differently?

The classic difference between asylum seeking and migration refers to the person’s will: in the first case, he/she is unable to stay, while in the second one he/she desires to leave. While the refugees’ international rights are quite consolidated in the Member States’ legislation, the right to migrate, as mentioned before, is still new in most countries. However, the difference between migrant and refugee is becoming increasingly tenuous. Although armed conflicts fully match the idea of the impossibility of staying in a territory, the collapse of a country’s economy, for example, can also easily lead us to believe that our livelihood will soon disappear. I reckon that neither migration nor asylum should be approached from a humanitarian perspective. Obviously assistance should be provided to refugees in their displacement and upon their arrival to the destination country, but the only approach that can effectively respond to the sharp increase in forced displacements is the attainment of peace in conflict regions and the reduction of inequalities between States. One cannot counteract the effects without tackling the causes — and now, on the contrary, developed countries have largely contributed to the deepening of both the armed conflicts in their areas of interest and the economic inequalities.

Panorama: How do you evaluate the role of international powers in the Syrian refugees’ crisis?

The international powers have played a shameful role in flagrant breach of their own laws on asylum. Unfortunately, the electoral appropriation of themes regarding migration and asylum by the extreme right wing has led governments of all stripes to address the current flow of Syrian refugees as a problem to be tackled through stricter border control and legislation. Regrettably, we have now exceeded the number of refugees of World War II and the images broadcast from Europe show an open air, real time humanitarian tragedy. This, however, has not made the world powers review their policies on the Middle East and especially their attitude towards Syria. The bomb attacks that took place in Paris in November last year have contributed both to stigmatize Syrian refugees and for France to get further involved in the ongoing conflicts.

Panorama: The refugees’ crisis in the Middle East and Africa has intensified the already complex issue of international migration flows. What is your opinion about that?

In my opinion, the numbers are very helpful in this assessment, although many of the available statistics deserve criticism, especially for their incompleteness. Nevertheless, the figures available allow us to understand that the vast majority of refugees is in developing countries (according to the United Nations High Commissioner for Refugees (UNHCR), 86% of them), most of which living in refugee camps in Turkey, Pakistan and Lebanon (which hosts 30% of all refugees), as well as in Iran, Ethiopia, Jordan and Kenya. In other words, Europe is by no means the region with the largest flow of refugees. It is estimated that today there are more than 60 million forcibly displaced people, more than 20 million of which dislocated to a country that is different from the one in which they used to live (i.e., they are refugees), mainly from Syria, Afghanistan and Somalia. As regards migration, according to the United Nations, 3.2% of the world’s population has remained largely unchanged since 1995, which now accounts for about 250 million people. If the international refugee law were obeyed, the current flow of Syrian migrants would not complicate the migration issue because the destination countries would be required to integrate these people into their societies until the armed conflicts ceased, for asylum, in principle, is a transitional legal status.

Panorama: Brazil has been receiving migratory flows of Syrian and Haitian refugees. How do you evaluate Brazil’s challenges and attitudes towards this issue?

First of all, I would like to mitigate this claim. Compared to other countries, Brazil has hosted few Syrian refugees. In July 2015, according to the UNHCR, Turkey, for example, welcomed 1.8 million Syrian refugees, while Lebanon received another 1.1 million of them. As for Haitian migrants, according to the specialized literature, there are three major migration poles: the Caribbean, North America and Europe. I am concerned about the false idea, often spread by the media, that Brazil has been impacted by a “wave” or an “invasion” of migrants and refugees. It is estimated that in the current migration cycle Brazil has a number of emigrants equivalent to or greater than the number of immigrants it welcomes.

I believe that Brazil has made plenty of progress in managing this issue, but we still have a long way to go. We urgently need an adequate legislation and coordination between the federative units and also between the different sectors so that migration and asylum do not cause humanitarian or political crises whenever a new flow takes place. The arrival of Haitians in Acre and their forwarding to São Paulo, for example, were a real comedy of errors. Migration is a highly positive phenomenon for the host countries, both from a cultural and an economic point of view.  Asylum, on the other hand, is an ethical obligation of any society under the rule of law. Any of us can become a migrant or a refugee by will or by necessity. It is this awareness that the State and the Brazilian society lack, both often unable to overcome the rampant prejudice in our country in order to be able to see, in the black migrants and Arab refugees, the features of our ancestors — mainly Africans, Asians and Europeans, most of which poor and stray like today’s migrants —, who, after all, have built Brazil.

Global migrations: a constant challenge for the international community

Panorama Internacional FEE brings to the debate, in its third edition, the issue of international migration. The phenomenon of human migration has been recurrent in the evolutionary process of societies. Its dimensions, its causes and its effects lie in the fields of politics, economics, religion, the history of climate change, etc. The complexity of the issue is extremely important for the understanding of other historical, political, economic and social phenomena. How can one understand, for example, the formation of national states and their political and economic systems throughout history without taking into account the role of migration flows in the context of all these processes?

Given the complexity inherent to the dynamics of migration movements, assigning to these phenomena the label of “crisis” seems to be redundant considering that migrations represent a daily challenge for countries. Thus, one gets the impression that the potential crisis is inversely related to the ability of states to deal with the influx of foreigners in national territories. On the other hand, one has the perception that the causes are often related to the failure of states in providing the conditions for the permanence of its citizens in their homeland. Thus, taking into consideration that states’ public policies are increasingly conditioned to international investors’ positive expectations towards the management of their national public accounts, the adoption of immigration policies by countries has the challenge, among many others, to fit in the economic scope for a long time designed to the attraction of international capital flows.

At both extremes of this problem, home country and host country, the indisputable by-products of the capitalist system in which the world economy is inserted become evident: the losers and the winners. In this sense, it has been observed that the international division of labor, which long ago crystallized the role of each country in the global economic system, has been gradually reconfigured by the spreading of the production processes worldwide in what is conventionally called the global chains of value.

The core countries that have already achieved high levels of economic and social development for their people, often at the expense of plunder and colonialism of people in the global periphery (Asia, Latin America and Africa), seek to maintain the “conquered” social welfare. As for the peripheral countries, global holders of strategic raw materials, they follow, inertially at a slow pace, and in totally different conditions, the path traced by the leaders of global capitalism in order to also ensure some economic and social welfare to their nationals. Thus, this economic interdependence enhances the degrees of dependency and vulnerability among countries and strengthens transmission channels that enable, for example, the building of North-North, South-South and South-North migratory bridges.

 

In addressing the immigration issue in the international context, it is also common to give too much weight to wars or to the emergence of ethno-religious conflicts in order to understand the intensity and direction of migration flows. In other cases, extreme weather events (earthquakes, tsunamis, desertification of arable land, prolonged droughts, etc.) are seen as the driving force of great migrations. However, this issue requires a political analysis that sees these variables in a systemic approach that takes into account the complex inter-state disputes over power resources within the international system. In addition, and in a complementary fashion, this analysis should also take into consideration the contradictions of the capitalist system that are leveraged as the globalization process intensifies itself.

Last year, the challenge of the European Union facing the explosion in the number of international immigrants who got to the borders of its member countries has revived the debate on international migration flows. In 2015, many immigrants fleeing the conflicts in Syria and Africa sought asylum in European countries. The direct involvement of the United States and European powers in many of these conflicts has put them at the center of this debate as key players in addressing the refugee crisis.

In Brazil, this discussion had already been made by the federal authorities since 2010, when the country began to receive an influx of Haitian immigrants who left their country after the occurrence of a major earthquake that same year. With the outbreak of the civil war in Syria in 2011, Brazil also began to receive Syrian refugees in national territory.

Both in Brazil and in Europe, the discussion on refugees sparked debates on the countries’ responsibility whether or not to receive these migrants. At the heart of the arguments lie the impacts of the migratory influx in job markets of host countries; the pressure of this migratory influx on the social welfare system of the host states; besides xenophobic issues such as the cultural and religious impact of foreigners over local societies.

In Rio Grande do Sul, a Brazilian state with large foreign influence in its cultural, economic and social formation (Portuguese, African slaves, Italian and German), the migration issue has gained prominence due the fact that the state has become an attraction pole for Haitian workforce that enters Brazil through the state of Acre. Besides the Haitians, it is common to find African migrants looking for jobs and income opportunities in Rio Grande do Sul.

Therefore, considering the complexity and the contemporaneity of this issue at the international, national and local contexts, Panorama International FEE brings this systemic look on the current scenario of international migration and its global interactions in the fields of economics and geopolitics, as well as on the role of Brazil with respect to this challenge. More than finding answers and providing solutions to this issue, this edition discusses the difficulties of this topic, which may be analyzed from various perspectives.

Researcher and economist Jaime Carrion Fialkow reviews, in the first text of the publication, the main processes relevant to international migration nowadays. Based on UN data agencies that deal with international migration, his text considers the main variables in each one of the migratory flows suggested in his search. In the second article, researchers in International Relations Ricardo Fagundes Leães and Bruno Mariotto Jubran analyze the central variable of the current refugee crisis in Europe: the civil war in Syria. Moving away from dichotomous approaches that seek to identify the forces of good and evil, the researchers shed light on the complex web of conflicting geopolitical interests that involve a wide range of international actors in the Middle East region. In the third work of this edition, economist and researcher Iracema Keila Castelo Branco looks at this issue from a national perspective, investigating the impact of the recent international migration flow of the last 5 years on the labor market in Brazil and in Rio Grande do Sul. In the fourth and last article, researcher and historian Álvaro Antonio Klafke analyzes the perception of the press over the discussions that involve migratory inflows in Rio Grande do Sul in three distinct historical moments.

Finally, Panorama Internacional FEE interviews International Relations Professor of the Undergraduate Program at the University of São Paulo Deisy Ventura. Based on her extensive research curriculum on international human migrations, Deisy Ventura exposes her impressions on this important international issue, analyzing the behavior of key international actors as well as Brazil’s attitude facing this challenge.

Mercosur: far beyond the economic integration

In 2016, the Southern Common Market (Mercosur) celebrates its 25th anniversary amid uncertainty and criticism in Brazil and speculations about its extinction. Among the main alleged reasons for such a pessimistic view is, firstly, the bloc’s ineffectiveness in promoting closer economic ties between the countries; secondly, the persisting losses to Brazil; and, finally, the structural constraints when conducting negotiations with other countries or blocs.

Although criticism of Mercosur is pertinent, it is noteworthy to stress that integration should be more broadly viewed and issues beyond trade should also be considered. Although highly relevant, trade is not the only object of regional integration, which also involves security, culture and education. Moreover, the bloc has progressed at different paces in each sector, similarly to other regional integration mechanisms, including the European Union (EU).

Regarding the first criticism, the bloc is said to have failed in promoting economic integration among its member countries and the recent drop in intra-bloc trade, at least in relative terms, has been highlighted. The main reason seems to be the protectionist attitude of the Government of Argentina. In fact, both for Brazil and the State of Rio Grande do Sul, the Mercosur countries have significantly reduced their share in recent years due to the exceptional performance of exports to China.

However, stating that Mercosur has been ineffective or has lost its relevance is not totally true, especially when the historical data are expanded. Despite sharing borders which extend for more than 1,200km, Brazil and Argentina, until the 1990s, lacked relevant and lasting economic cooperation. For decades, Brazil’s main trade partners were the United States and West Germany. Moreover, the dynamics of bilateral relations between Brazil and Argentina has always been marked by ephemeral cooperation initiatives and the persistence of a rivalry logic.

The figure below shows that bilateral trade between Brazil and Argentina reached historic levels after the creation of Mercosur in 1991. In addition, a rise in trade can also be traced back to the early 1960s, which was subsequently discontinued. The creation of the Latin American Free Trade Association (LAFTA), a tripartite initiative between Brazil, Argentina and Mexico, explains that inflection. However, as governments lacked interest in maintaining the project, regional trade turned back to previous standards, which can be a warning to the proposers of the dissolution of Mercosur.

Share of Argentina in Brazilian foreign trade — 1953-2013

Mercosur was a path for the consolidation of multi-sectoral efforts of rapprochement between Brazil and Argentina initiated by the end of the Brazilian civil-military dictatorship. Actually, moments of greater optimism can be outlined, such as in the early 1990s, during the formalization of the bloc, as well as other critical phases, such as the devaluation of the real (the Brazilian currency) in 1999, which deeply disappointed the other Mercosur members, and shortly after that, when Argentina experienced a severe economic and social crisis. The recent stagnation in terms of value of trade flows certainly causes apprehension, but it is worth observing that the imposition of import quotas on Brazilian products by the Government of Argentina is a measure of trade protection in accordance with the rules of the World Trade Organization (WTO) in case a sudden surge in imports harms a given sector of the economy or its balance of payments, if proved the causal nexuses between them.

Beyond the trade issue, an institutional framework has been gradually established for implementing cooperation projects in several issues such as policy, education, culture, security, among others. In addition, the institution of the democracy clause by means of the Ushuaia Protocol (1998), and more recently the creation of the Mercosur Parliament, denotes the political commitment of governments to the democratic values and institutions, bringing together citizens in a more effective fashion. Although the deadline for parliamentary elections by direct vote has been extended to 2020, in Paraguay two elections have already been held (2008 and 2012).

Regarding the issue of costs, “mercopessimists” assert that Brazil is the most affected nation in the bloc. However, it should be noted that in many of the cases of formation of regional coalitions, the most powerful nations (in economic, political or military terms) are the proponents of regional integration initiatives, such as in the Franco-German condominium in the EU, Russia in the Eurasian Union, the United States in the North American Free Trade Agreement (NAFTA) and China in the negotiations of the Comprehensive Economic Partnership for East Asia. In all these cases, larger nations have granted some tangible or immediate advantages to smaller partners so as to increase the attractiveness of the bloc. For example, in the European Community and in Mercosur, the headquarters of the integration mechanisms lay outside the territory of the major nations: Brussels (Belgium) and Montevideo (Uruguay), respectively, attend to this function.

The benefits or concessions directed to smaller countries in any process of economic integration is usually explained by the fact that the economies of these countries, in many cases, lack the degree of competitiveness of the enterprises of the larger ones, which typically operate on a much larger scale and can explore opportunities faster than their counterparts. Another argument advanced by Uruguayan and Paraguayan politicians and negotiators is that their countries are more prone to trade diversion after the imposition of a common external tariff. According to this view, smaller countries tend to be more damaged, because their economies are normally more dependent on foreign trade than those of the bigger ones.

Adhering as minority partners, the more fragile nations in economic, demographic or territorial terms need to rely on tangible and immediate benefits to bring to bear their participation in the regional integration project. In the case of Mercosur, it is observed that the main political gains could only be obtained by Brazil, the only one that can rise to a global player status. If the integration process is proven to be successful, the Brazilian companies would be the most favored ones, Brazil would be a global power and in a better position to own a permanent seat at the United Nations Security Council. Therefore, it is expected that the actor with higher stakes in Mercosur should bear a greater part of its costs, in order to mitigate regional disparities and promote intra-bloc economic growth. It is not reasonable to imagine that Uruguayans, Paraguayans, Venezuelans and Argentines would desire to take part in a group led by Brazilians without obtaining material advantages in return.

A third set of criticism argues that Mercosur has hampered negotiations of trade agreements with other countries or blocs because of alleged low willingness of some of its members to strengthen relations with other countries. From this perspective, Brazil should abandon its regional commitments and alone conduct negotiations with the European Union and the United States. However, in this case, a complex yet common dilemma in international politics can be pointed out. Actually, it is possible to admit that any agreement between Brazil and the European Union may be more comprehensive in terms of content, but it is also likely that its terms will be more unequal than those of an agreement between blocs. The bargaining power tends to be higher when its actors prefer acting together to negotiating separately, but it is also likely that the final agreement will exhibit a more limited thematic scope.

This way, the 25 years of existence of Mercosur should be evaluated concurrently from both political and economic perspectives, considering their synergies. Analyzing its dimensions separately means viewing it as the individualized strategies adopted by each of its members in a zero-sum game. Although the economic dimension of Mercosur has been used as a gauge of its success due to how easy it is to measure the volumes and values ​​of its trade flows, it is imperative to highlight that any economic agreement is preceded by some sort of political understanding to mitigate the differences inherent in the integration process. For this reason, the political dimension of integration in Mercosur plays an important role. As its institutions are consolidated as integration and conflict resolution forums in the different areas of their respective governments, opportunities are created both to reduce costs and to increase the gains from the integration between its member countries.

The challenges of Rio Grande do Sul in the emerging nations era

Luciano D’Andrea

Luciano D’Andrea is International Relations and Foreign Trade manager of the Federation of Industries of the State of Rio Grande do Sul (FIERGS). He holds a Bachelor’s Degree in Business Management from Virginia Commonwealth University (VA) and a Master’s Degree in International Strategic Studies from the Federal University of Rio Grande do Sul (UFRGS).

In an interview to Panorama, Luciano D’Andrea comments on the current trends of the international environment, Brazil’s insertion into the global market and the activities of the BRICS — a group gathering Brazil, Russia, India, China and South Africa. Our interviewee also makes observations on the exporting sector of Rio Grande do Sul and on the activities of the Brazilian Development Bank (BNDES).

Panorama:The last two decades have been characterized by an intense geopolitical and economic dynamism in the globe. In this sense, there are several government and private research centers dedicated to a systemic analysis of the international scene. At the local level, what can be learned from these analyses for the decision-making process of private companies and government institutions?

Research into and analyses of political and economic data on the international scene are of key importance for any actor aiming at developing a global strategy and/or a particular form of relationship with other economic blocs or countries. Likewise, the study and the systemic framing of information are regarded as essential for a country that aspires to qualify and prepare its industry and trade for an increasingly competitive and globalized scenario. Knowledge is one of the central aspects of the decision-making process, both for government institutions and for private companies, but the organization framework of the government and private actors does not always allow for the collection and the analysis of strategic data. Therefore, diversifying agencies that produce knowledge and, especially, share intelligence through an accessible and transparent fashion is indispensable for the national or the local development, either collectively or individually. By understanding the international conjuncture, it becomes possible to set objectives, goals and fields of operation and also guide the strategic planning proccess and implement it in a safer and more assertive way.

Panorama:Besides the international protagonism of traditional actors, such as the United States, Europe and Japan, countries such as Brazil, China, Russia and India have been achieving international preeminence in various issues on the international agenda. How do you evaluate Brazil’s recent international presence? To what extent can this integration provide opportunities for Rio Grande do Sul?

Since the mid-1990s, the bilateral and multilateral relations of Brazil have been expanding, following a global process of international openness and consolidation of foreign relations driven by the end of the Cold War. In the last fifteen years, there has been a clear shift in the Brazilian foreign policy, and the country has been making political efforts to consolidate partnerships in Latin America, Asia and Africa. This new approach invests in multilateralism and in non-traditional markets with high potential. Altogether, this current foreign policy has been positive for the trade of goods and services with these nations and for new investment projects. Undoubtedly, China is the most prominent case, becoming the main trading partner of Brazil and of Rio Grande do Sul thanks to its extraordinary economic growth over the past decades and to its astonishing demand for commodity goods, such as iron ore, soybeans, meat, and other products that our country has to offer. On the other hand, imports from China have been of great concern for the Brazilian industry due to the flood of Chinese goods into the country, facilitated by the excessive overvaluation of the Brazilian Real in the last decade.  Thus, based on this scenario, we can conclude that China has strongly contributed to the overall positive trade balance of Brazil in recent years, but, on the other hand, has caused a huge deficit of more than a hundred billion in the balance of the manufactured goods in this period, given its exports of machinery, equipment and intermediate and consumer goods. In this paradoxical context of threats and opportunities, Rio Grande do Sul has been one of the most successful Brazilian states for offering products strongly demanded by the Chinese, especially soybeans, meat and tobacco. The exports of these commodities have also benefited from their high prices in the international market. Africa was the first origin of the state’s imports due to the Petrobrás (Refap[1]) purchase of fuel and derivatives, especially from Nigeria, Algeria and Angola. In 2014, the imports from Africa accounted for 23% of the state’s purchases, totaling US$3.52 billion. Therefore, the establishment of stronger ties with the other BRICS members has been positive due to their booming economic performance, which took place particularly between 2000 and 2008. However, while progress has been observed within the BRICS, a relative setback can be noticed between Brazil and the advanced markets, such as the U.S. and the European Union, whose markets remain as the backbone of the world economy, accounting for almost half of the global GDP. Right now, an effort to recover the interaction with these players through bilateral agreements and free trade as well as other initiatives have been outlined within the National Plan for Export issued by the Brazilian Ministry of Development, Industry and Foreign Trade on June 24, 2015.

[1] Refinaria Alberto Pasqualini, an oil refinery located in the State of Rio Grande do Sul.

Panorama: Notwithstanding the contradictions among the BRICS members, the group has been consolidating itself as a counterpoint to the current international system established in the post-World War II era (UN, WTO, World Bank and IMF). How do you evaluate the dynamism of this ongoing process?

A more cohesive action of the BRICS depends on central issues in political, economic and security terms. The position of the participating countries on these issues is considerably divergent due to their national interests, which follow opposite paths, thus hindering the political consolidation of the group. However, the increasing trade between these countries has been gaining more and more representation in the international scene and can be a facilitating vector of cooperation. Furthermore, the establishment of the BRICS Development Bank is somehow consistent with these countries’ strategy to reduce their dependence on funds and international banks controlled by the developed countries. Although the bloc still lacks a common established agenda — albeit bilateral agendas have been strengthening — the fact that countries with such representation in the world economy are gathering and willing to discuss joint guidelines is an important step towards their consolidation and strengthening through effective economic development actions.

Panorama: In 2014, the remaining BRICS countries accounted for around 27% of the state’s total exports. In your opinion, how can the state exporters and the local government defend their interests in the context of the BRICS negotiations?

Back to the question concerning the relevance of analyzing the international scene, it is necessary for both the government and the entrepreneurs to understand the potentialities that the BRICS market has to offer to Rio Grande do Sul. Studies on commercial and strategic intelligence can guide the companies’ perspective on the BRICS. Moreover, the government, by understanding both the local reality and the bloc itself, can develop an approach to defend the interests that are in line with the potentialities of the private sector, that is, agriculture, industry and services.

Panorama: Soybeans are the leading export products of Rio Grande do Sul, and China, South Korea, Vietnam, India and Thailand are the main purchasers of this commodity. Besides soybeans, tobacco, poultry, rice, leather and agricultural machinery are shipped to emerging countries in Africa, Asia and Latin America. How do you view the economic dynamics of these regions on the state’s exporting sector? What measures can the private sector and the local government take to increase the volume of the state’s exports to these countries?

It is true to say that Rio Grande do Sul meets the demands of the emerging markets in the south-south trade with its traditional range of products of the soybean complex, meat and tobacco. However, there is no doubt that there are innumerous opportunities for exporting other products to these countries. In order to intensify the dynamism of the exporting sector, it is mandatory to diversify the supply of products through the expansion of knowledge about the quick transformations that have been going on in terms of consumers’ habits and export needs in these markets. China, for instance, after years extensively importing basic products, such as food, iron ore and oil, is now not only demanding larger amounts of consumer goods, but is also being urged to provide wealthier and more demanding consumers with higher value-added goods. In this sense, in order to take advantage of this expanding consumer market not only in China, but also in other booming nations in the region, such as Vietnam, Malaysia and Thailand, the exporting sector of Rio Grande do Sul must be competitive and knowledgeable about the market and the specific characteristics of its respective industries. The introduction of free trade zones in China, for example, reflects the implementation of recent economic and financial reforms intended to boost the domestic consumption of imported products. The Chinese case opens new possibilities for higher value-added Brazilian items, such as premium food, for example. In relation to Latin America, a strategic market for manufactured products made in Brazil and in Rio Grande do Sul, the region must be urgently revitalized, improve its payment mechanisms and create effective means for the integration of high-value productive chains, focusing on productive specialization. Nevertheless, this region requires investments in infrastructure and logistics to reduce its foreign trade operating costs, so that it can catch up with other markets in terms of competitiveness, especially the Asian ones. Economic and political instabilities and recurring crises are also obstacles that governments and private companies must overcome.

Panorama: In the 21st century, Africa has stood out due to its high economic growth rates, in contrast to its poor performance in the previous decades. As many countries across the continent have been developing largely owing to agriculture, what can be done for Rio Grande do Sul to seize this opportunity and expand the sales of agricultural machinery to Africa?

Exports of agricultural machinery to Africa represent a very important niche to the state’s companies. According to 2015 data from the Brazilian Ministry for Development, Industry and Trade, 42% of the overall Brazilian exports to Africa consist of manufactured goods, and the level of technological intensity used in these products has risen in the last three years. Thus, Rio Grande do Sul may also take advantage of the idiosyncrasies in the process of agricultural development in Africa by adapting and designing equipment that can better suit its market needs. According to 2014 data from the International Labour Organization, agriculture in Africa can and must be boosted through integrated solutions involving industries, rural areas, and services. Another very important measure aiming at expanding this sector’s exports involves lines of credit provided by the government through the Banco do Brasil, directed primarily to the African countries that are granted funds for acquiring agricultural machinery and equipment made in Brazil. Therefore, the long experience of the government and the business community of Rio Grande do Sul along with the extension of lines of credit can serve as a competitive asset in the African market.

Panorama: In all the countries that have been successful in boosting their exports — such as the United States, Japan, Germany and China —, we notice the presence of a specialized bank to internationalize their national companies, in order to promote their investments and foreign sales. In what ways can the Brazilian Development Bank contribute to the integration of the national companies into the global market?

A bank dedicated to promoting international trade is a fundamental mechanism for increasing the Brazilian investments and exports abroad. The role of the Brazilian Development Bank in international trade involves both granting credit for the export-driven production of goods and services and for the overseas commercialization of Brazilian goods and services, providing special maturity dates, interest rates and payment conditions consonant with the size of the company. The Brazilian Development Bank also supports projects abroad, financing not only the acquisition of capital goods, but also the working capital of the companies. These policies expedite the opening of new markets, the insertion of Brazilian companies into global value chains and the growth of the Brazilian trade flow. Additionally, it is paramount to be up-to-date on the financial policies offered by the export credit agencies of other countries, such as the U.S. and Germany, to adjust the resources management of national funding to the level of the competition, allied with the real needs of the companies and their respective exporting profiles.

The Relevance of the BRICS for the State of Rio Grande do Sul

Understanding and systematically monitoring the dynamics of the relations between Brazil, Russia, India, China and South Africa (BRICS), as well as the international insertion of these countries, is something that should be important not just for the Presidency and the Ministry of Foreign Affairs of Brazil (MRE). Given the links between these markets and the export basket of Rio Grande do Sul, understanding the BRICS should also be a task for the government of the State of Rio Grande do Sul.

The BRIC acronym was originally coined by the Goldman Sachs’s English economist Jim O’Neill in his study Building Better Global Economics, which pointed out the influence of the emerging economies of Brazil, Russia, India and China on the future of the global economy as a whole. As the projections on the BRICS were being confirmed, another study from the same financial institution (BRIC’s and Beyond) went on to make economic predictions for a group of eleven countries that became known as the Next Eleven (Bangladesh, South Korea, Egypt, Philippines, Indonesia, Iran, Mexico, Nigeria, Pakistan, Turkey and Vietnam).

Although this economic focus on the BRICS keeps reverberating among international financial market analysts, it is worth mentioning that this is a market approach to this group of countries.

Thus, it is believed that to better understand the role and the influence of the joint action of these countries in the international arena more broadly, it is advisable to analyze this variable geometry group from its members’ own point of view.

In the political and diplomatic field, in spite of their differences and contradictions, the BRICS countries have taken advantage of the international attention to launch projects of political and economic coordination in the international arena, as well as international cooperation programs in areas which are sensitive to these countries: education, economic development, energy, food security, environment, defense, etc.

From an International Political Economy perspective, one can understand the reasons that explain, for example, the role played by South Africa in this bloc of emerging economies. Although lacking the economic weight of the other partners, South Africa’s leadership and influence on the African continent and its regional weight in the various international forums would give the then BRIC legitimacy to its demands and proposals in various issues on the international agenda.

In this sense, the reasons that led the other partners to include the African country in the group during its 3rd Summit, in 2011, become more evident. The addition of the “S” to the acronym (BRIC “S”) then shows that there is a clear distinction between the connotation given by Jim O’Neil in the early 2000s and the sense that the members themselves give to the BRICS.

Since its first meeting of foreign ministers, in Russia, 2008, six annual Summits of Heads of State have already occurred. In 2014, the BRICS gathered in Fortaleza, Brazil. This year the seventh meeting took place on July 9 in Ufa, Russia.

The important fact about the BRICS concerns the scope of its economic and political insertion in a variety of issues of the international agenda. The geopolitical weight of each country in their respective regional areas of influence around the globe and their joint actions make them a counterpoint to the current international system established after the Second World War — World Bank, International Monetary Fund (IMF) and the United Nations (UN).

Last year, the six countries announced the creation of their own Development Bank with a starting capital of $50 billion, which could reach $100 billion. The BRICS Bank plans to set up credit financing lines for infrastructure projects as well as a fund to help member countries in case of international financial turmoil. Thus, as the BRICS consolidate themselves as a reality in which Brazil is one of the protagonists, it is up to society as a whole, especially the people from Rio Grande do Sul, to understand this whole dynamics.

The striking feature of the BRICS regarding the state of Rio Grande do Sul is the fact that they have relevant domestic markets for the products of the state’s export basket. In this sense, Rio Grande do Sul needs to plan ahead of time the best way to improve the relationship between local companies and these markets. Although a considerable part of the export basket is composed of primary products, cooperative efforts among the BRICS may generate export opportunities for products with higher added value such as footwear, agricultural machinery and tools.

Rio Grande do Sul’s exports accounted for 18.2% (approx. $18.7 billion) of the state’s GDP in 2014. Out of this total, the BRICS partners accounted for 27.23% of the market for the local companies (approx. $5.1 billion). The export average growth rate to these countries in the last 14 years was 20.2%, as shown in the table.

The BRICS as a market for Rio Grande do Sul’s exports — 2001-14

 

When the share of each country as a market for the state’s exports is analyzed individually, the results are: China (87.52%), Russia (6.94%), India (3.04%) and South Africa (2.5%). According to data from the Brazilian Ministry of Development, Industry and Foreign Trade, in 2014, about 300 companies based in RS exported to China, 200 to South Africa, 130 to India and 100 to Russia, as shown in the chart.

Destination and export value of Rio Grande do Sul’s main exporters to the BRICS — 2014

COUNTRY

VALUE COMPANIES MAIN ACTIVITY

Russia

Over $50 million Philip Morris Brasil

Tobacco

Russia

Between $10 and $50 million Universal Leaf Tabacos Ltda. Tobacco
Alibem Comercial de Alimentos Ltda. Pork
India Over $50 million Petrobras Oil
Bunge Alimentos S/A

Food

India

Between $10 and $50 million Bianchini S/A Soybeans
China Over $50 million Bunge Alimentos S/A Food
Noble Brasil Grains, oilseeds
Vale S.A.

Ores

China

Between $10 and $50 million Souza Cruz S/A Tobacco
Brf S/A Food
Epcos do Brasil Ltda Electrical and electronic material
South Africa Over $50 million Scania Latin America Ltda. Trucks
South Africa Between $10 and $50 million Souza Cruz S/A Tobacco
Dana Indústrias Ltda.

Automotive suspension and axles

RAW DATA SOURCE: BRAZIL. Ministry of Development, Industry and Foreign Trade (MDIC). Foreign Trade Secretariat (Secex). Exporting companies by countries and subnational units: Rio Grande do Sul 2014. 2015. Available at RAW DATA SOURCE: <http://www.mdic.gov.br//sitio/interna/interna.php?area=5&menu=1444&refr=603>. Retrieved July 15 2015.

Thus, this scenario reinforces the need for the state government to defend the interests of the state entrepreneurs institutionally (from the industry to agribusiness) in Brazil’s commercial relations policy-making. In the case of the BRICS, defending the interests of Rio Grande do Sul demands a strategic and systemic view of the political and economic relations within the bloc and partnerships that these countries have with the rest of the world.