In 2020, Brazil will appoint the next president of the New BRICS Development Bank. A presidency in a financial institution of this scale is not only a great responsibility that is expected from the state, but also a valuable opportunity to demonstrate the ability to achieve results. With the coming to power in Brazil of the far-right leader Jair Bolsonaro, analysts have increasingly begun to turn to the topic of Brazil’s future prospects in the framework of the BRICS bloc. What will wait for the “South American giant” in the next two years? How will the new government regime affect Brazil’s participation in an international association?
Brazil is still a country of not only great regional, but also international importance, regardless of who is in power. The “South American giant” has a great influence on world politics for a number of reasons: demographic composition, size of territory, cultural diversity, energy potential and natural resources, as well as due to other factors independent of political and economic orientation of political leaders. Brazil has always attracted the attention of any analyst or government involved in the development of its foreign policy.
On the international agenda, Brazil occupies a special position, thanks to the “free transit” between the powers of the West and the East, and also has a fundamental strategic influence in the developing world. Many Latin American commentators have noted that the Brazilian government needs to skillfully use this tool, perfecting it, since an asset of opportunities has been created and rooted for decades. In this situation, to put this position at risk through sharp fluctuations to the left or right will undoubtedly lead to a significant deterioration in the situation of Brazil. Neglecting an already conquered place in the international community can adversely affect partnerships, which, despite the economic problems of recent years, are crucial. It is worth emphasizing that during the period from 2001 to 2018, with the exception of 2014, such an indicator as Brazil’s trade balance remained positive.
Unfortunately, on the general background, a crisis of multilateralism and in general of integration processes has been observed for several years. For example, such multilateral organizations of the “highest echelon”, like the UN or the WTO, have weakened their positions due to the proliferation and approval of unilateral initiatives and sectoral strategic partnerships that are intended to replace multilateral instruments. Moreover, the system of international relations itself is experiencing an “existential crisis”.
Such a development of the world scenario gives special emphasis to cooperation between individual countries, and in the case of Brazil makes the group of the BRICS countries even more significant for state foreign policy. In aggregate, the BRICS block occupies about 25% of the land area, in its range more than 40% of the world’s population lives. In addition, the BRICS countries are the undisputed leaders in their regions, not to mention China, which is the second largest economy in the world and currently remains the main trading partner of Brazil. China controls about 10% of Brazil’s energy production. By the way, on this occasion last year, having come to power, the new president Jair Bolsonaro expressed particular concern. It is quite obvious that the expansion of the capabilities of a group of countries of such a global scale must always remain among the main priorities of the Brazilian government.
The constantly changing environment and domestic market conditions in which the South American country lives today should create new perspectives and look for alternative directions for Brazilian partnership relations within the framework of the BRICS block. If the approach to such prospects is guided by balanced pragmatism, the new government will be able to use them successfully. It is worth noting that, starting from the next BRICS summit, to be held on November 13-14, 2019 in Brasilia, the chairmanship of the bloc will go to Brazil.
Speaking about the immediate prospects of Brazil in the framework of the BRICS block, there is another important point that the current government should take into account this year. In 2020, Brazil will nominate the next president of the New Development Bank (BRICS Financial Institution). The presidency in a global financial institution, whose main focus is on investing in large infrastructure projects and sustainable development in developing countries, is not only a high degree of responsibility placed on the country, but also a valuable opportunity to demonstrate the ability to work towards achieving results, occupying leadership positions that are of great importance in international institutions. First of all, we are talking about the IMF and the UN Security Council.
By the way, the political crisis in Venezuela also affected the BRICS partner countries. The Brazilian Foreign Minister Ernesto Araújo on March 8 said that Brazil intends to call on Russia, China and other BRICS states to support Venezuelan opposition leader Juan Guaidó. Minister Araújo informed about the decision to make such an appeal at the meeting of the BRICS at the level of foreign ministers next week. According to him, Brazil has a unique responsibility in the field of foreign affairs, and the Brazilian government considers itself capable of playing a leading role in changing the position of the BRICS countries towards Venezuelan President Nicolás Maduro.
On March 5, Brazilian President Bolsonaro said that his country pays great attention to the development of relations with China and intends to promote the construction and strengthening of the BRICS mechanism together with China. Jair Bolsonaro received credentials in his residence, handed in by the new Chinese ambassador to Brazil Yang Wanming. He stressed that his country was ready to make joint efforts with China to promote the development of bilateral relations. According to him, the 11th meeting of the BRICS leaders will be held in Brazil, and Brazil wants together with China to promote the development of bilateral business cooperation in the framework of the union.
Another ambitious project of the BRICS block for the next two years will be the development of a new payment system “BRICS Pay”. The Russian Direct Investment Fund (RDIF), together with portfolio companies, is actively involved in the creation of this project. Portfolio companies of the RDIF, as well as fund partners from China and India have the expertise and technology necessary for its implementation. Financial analysts note that one of the possible scenarios for the project is the creation of a special online wallet that can combine payment systems of all countries of the BRICS group. The common wallet will work in the same way as the “Apple Pay” or “Samsung Pay” applications. As the creators assume, with the help of the developed application it will be possible to pay for goods in any country of the association, regardless of the currency in the buyer’s account.
The next two years will definitely show whether the BRICS block will be able to withstand the onslaught of the multilateral crisis and deepen the degree of integration. In addition, the development of Brazil’s bilateral relations with other strategic partners, such as the European Union and the United States, is also evident. Many Brazilian experts welcome the initiative of the new government to re-launch a rapprochement with the West. However, these negotiations should still be approached with a certain degree of pragmatism and be very careful about the commitments that the previous Brazilian governments have already taken to China, Argentina and other partners, in order to avoid being involved in a trade war or restrictive sanctions.