[Marxism] Brazil

[S. Artesian]

WSJ online BUSINESS
FEBRUARY 6, 2009, 10:04 P.M. ET
Economy Fuels Brazil's Ambitions Beyond South America
By JOHN LYONS
SÃO PAULO, Brazil -- In the years since terrorist attacks refocused U.S. 
foreign policy on the Middle East, Brazil and Venezuela vied to replace the 
U.S. as chief broker of Latin American affairs. Today's plunging oil prices 
may determine a winner: Brazil.

Venezuela relies on its oil wealth to push an anti-U.S. agenda in the region 
through foreign-aid programs that include selling cut-rate oil to several 
nations and lending to Argentina and others at below-market rates. The 
programs are being cut back this year as oil revenue plummets and economic 
growth grinds to a near halt.

While Brazil's commodity-rich economy -- the world's 10th largest -- will be 
hit by the downturn, it is expected to fare better than most, growing 
slightly even as the U.S., Europe and Japan contract, economists forecast.

Unlike the checkbook diplomacy practiced by Venezuelan President Hugo 
Chávez, the sources of Brazil's influence are more diversified and less 
vulnerable to economic woes.

Brazil's diplomatic edge is a welcome development for U.S. policymakers. 
During the Bush years, Washington viewed Brazil as an important 
counterweight to Venezuelan influence, and encouraged the South American 
giant's increased assertiveness.

Under President Barack Obama, that bilateral relationship may develop as the 
U.S. seeks diplomatic alliances to tackle hemispheric issues such as energy 
and drug trafficking. Latin America provides the U.S. with a third of its 
oil -- and is the source of most of its illegal immigrants.

"Cooperation with Brazil is going to be crucial for any progress on the 
Hemispheric agenda," says Michael Shifter, vice president of the 
Inter-American Dialogue, a think tank in Washington.
Brazil, the world's biggest exporter of iron ore, beef, chicken, sugar and 
coffee, wants better access to the U.S. market for its goods. In return, 
Brazil and its charismatic President Luiz Inácio Lula da Silva could help 
the U.S. repair its image in the region, which declined sharply under the 
Bush administration.

Brazil, which recently discovered major offshore oil fields, could also 
become an energy ally as oil output drops in Mexico and Venezuela. Brazilian 
output has jumped 46% to 1.9 million barrels per day this year -- and could 
surge again as new discoveries are brought online.

Mismanagement and declining investment have cut Venezuelan output by 700,000 
barrels a day to an estimated 2.35 million over the past decade.

President Obama has asked a proponent of U.S.-Brazil ties during the Bush 
years, Assistant Secretary of State for the Western Hemisphere Thomas 
Shannon, to remain in his post. In January, Mr. Obama telephoned Mr. da 
Silva, and pledged to advance trade talks. The two leaders plan to meet in 
Washington in March.

To be sure, Brazil is no unconditional ally. Mr. da Silva regularly visits 
Caracas and Brazilian firms, such as construction giant Odebrecht, do 
business in Venezuela. The two leaders share the belief that the U.S. 
shouldn't set the tone for regional affairs.

As Brazil's economic interests expand beyond its borders, the country looks 
to be shifting toward U.S.-friendly positions, such as promoting access to 
markets and regional stability. At a recent regional summit, Brazil 
succeeded in getting harsh anti-U.S. rhetoric stripped from the final 
resolution -- a clear win over Venezuela.

As recently as the 1990s, Brazil's foreign policy amounted to begging for 
financial assistance as it wobbled from one crisis to another. Hard-won 
economic stability and an export-driven expansion changed that.

Brazil's prominence in Latin America grew as the U.S. waged its war on 
terror. Brazilians long have held that their country's sprawling size and 
180 million population warrant it international prominence.

Brazil wants a United Nations Security Council seat, for example, and 
building regional preeminence is one way to lobby for it.

-Peter Millard in Mexico City contributed to this article.
Write to John Lyons at john.lyons at wsj.com