Dilemmas of Brazilian Grand Strategy

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Strategic Studies Institute Monograph

DILEMMAS OF BRAZILIAN GRAND STRATEGY

Hal Brands

August 2010

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FOREWORD

Over the past 20 years, Brazil has made great stridesin consolidating a multiparty democracy, taming mac-roeconomic instability, and attacking deep-seated socialissues like poverty and exclusion. It has also becomean ever more important player in the global arena, as-suming a key role in United Nations (UN) peacekeepingmissions, South American economic and political inte-gration, debates over world trade and politics, and other

issues.Given Brazils growing regional and global inu-

ence, it is imperative that U.S. policymakers achieve ane-grained understanding of Brazilian foreign policyand the motivations that drive its leaders. In this mono-graph, Hal Brands critiques Brazilian grand strategy asit has developed over the past 8 years in the administra-tion of President Luiz Incio Lula da Silva. Brands ac-

knowledges the sophistication and accomplishments ofLulas grand strategy, but he argues Brazil still confrontsseveral challenging strategic dilemmasranging frompersistent internal problems to the increasingly competi-tive nature of its relations with the United Statesthatcould negatively impact its geopolitical potential. Deal-ing with these dilemmas, and charting a steady course inU.S.-Brazilian relations, is thus the difcult task that fallsto Lulas successors.

The Strategic Studies Institute is pleased to offer thismonograph as an important contribution to the debateover Brazilian foreign policy and its implications for theUnited States and the global system.

DOUGLAS C. LOVELACE, JR.DirectorStrategic Studies Institute


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ABOUT THE AUTHOR

HAL BRANDS is Assistant Professor of Public Policyat Duke University. He previously worked as a de-fense analyst in Washington, DC. Dr. Brands is theauthor of From Berlin to Baghdad: Americas Search forPurpose in the Post-Cold War World (2008), as well asrecent Strategic Studies Institute monographs on drugtrafcking and radical populism in Latin America. Hisnext book, Latin Americas Cold War, will be publishedin late 2010. He has written widely on U.S. grand strat-egy, Latin American politics and security, and relatedissues. Dr. Brands holds a Ph.D. in history from YaleUniversity.


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SUMMARY

This monograph analyzes Brazilian grand strat-egy under President Luiz Incio Lula da Silva. Dur-ing Lulas nearly 8 years in ofce, he has pursued amultipronged grand strategy aimed at hastening thetransition from unipolarity and Western economic he-gemony to a multipolar order in which internationalrules, norms, and institutions are more favorable toBrazilian interests. Lula has done so by emphasizingthree diplomatic strategies: soft balancing against theUnited States, building coalitions to magnify Braziliannegotiating power, and seeking to position Brazil asthe leader of a more united South America.

This strategy has successfully raised Brazils proleand increased its diplomatic exibility, but it has alsoexposed the country to four potent strategic dilemmas

that could complicate or undermine its ascent. First,issues like poor infrastructure, rampant crime, and ex-cessive taxation and regulation of the economy mayimpede Brazil from attaining the strong economicgrowth and social cohesion necessary to sustain suchan ambitious strategic project. Second, in dealing withSouth America, the Brazilian political class has notreconciled its desire for regional leadership with itsunwillingness to share power or economic benetswith its neighbors. As a result, many of these countriesperceive Brazils diplomacy to be domineering and itstrade policies to be narrowly self-interested, and theyhave thus refused to support Lulas bid for regionalpreeminence. Third, at the global level, the long-termcohesion and effectiveness of Lulas various diplo-

matic partnerships is open to question. Fourth, whileLula has maintained good relations with Washington,his grand strategy unavoidably entails a growing risk


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of conict over issues like Iran, trade policy, and theU.S. diplomatic and military role in Latin America.

Looking ahead, the efcacy of Brazilian grand strat-egyand its consequences for U.S. interestswill becontingent on how Lulas successors address these di-lemmas.


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DILEMMAS OF BRAZILIAN GRAND STRATEGY

INTRODUCTION

Only a few years after Americas post-September11, 2001 (9/11) displays of military might led com-mentators like Charles Krauthammer to opine that thepost-Cold War unipolar moment was on the verge ofbecoming a prolonged unipolar era, the internation-al system seems to be moving toward a more diffusedistribution of power. The United States is widely (ifperhaps debatably) assumed to be in relative decline;a range of second- and third-tier powers are jockeyingfor greater inuence. It is now common to hear thatthe world is moving toward a post-American age,that we have reached the end of American excep-tionalism or the end of American hegemonythe

common themes in these assessments being the ebb-ing of U.S. supremacy and the rise of a new class ofpowers that will rival Washington for inuence in the21st century.1

Few countries have experienced as remarkable animprovement in their international stature over thepast decade as Brazil. Brazil has long had a reputationas a country with a great futureif only it could getthere. As late as 2002, Brazil was wrestling with chron-ic nancial instability, and the election of a presidentwith a distinguished leftist heritage raised fears ofmacroeconomic collapse and resurgent political strife.Since then, however, Brazilian President Luiz IncioLula da Silva has won widespread praise for his eco-nomic and social initiatives. Building on the initiatives

of his predecessor, Brazilian President Fernando Hen-rique Cardoso, President Lula has sought to channelthe growing national condence derived from demo-


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cratic consolidation and macroeconomic stability intoa more forceful diplomacy. Brazil has become more

active in United Nations (UN) peacekeeping mis-sions; it has energetically promoted the India, Brazil,and South Africa (IBSA), and Brazil, Russia, India, andChina (BRIC) forums as alternative centers of globalpower; it has forged economic and technological part-nerships with France, Russia, China, and other keycountries; it has put forward a claim to a permanentseat on the UN Security Council; and it has promotedSouth American economic integration as well as newregional institutions like the Union of South AmericanNations (UNASUR) and the South American DefenseCouncil (CSD). Underlying all this is a sense amongBrazilian policymakers that their country has nallyarrived on the global scene, and that it is destined toreap the benets of the ongoing changes in the in-

ternational system. In this spirit, President Lula hasannounced that Brazil will become a great power inthis century, and Brazilian ofcial discourse is infusedwith a sense of national strength and purpose. Brazilmust think big, said Defense Minister Nelson Jobimin 2009. This is the moment in which its necessaryto be audacious in order to advance. . . . There is nolonger any possibility of asking Brazil, on the interna-tional stage, to take positions that run contrary to itsinterests.2

Purely by dint of its size and economic capacity,Brazil will exert a strong pull on regional and globalpolitics in the coming decades. Even under the mostoptimistic projections, however, Brazil will not pos-sess the economic or military capacity to compete

with other major powersnamely the United States,China, and the European Union (EU)for decades,if then. If Brazil is to achieve what political scientists


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call systemic impactthe ability to shape the globalorder in meaningful waysit will have to do so not

through the inexorable accumulation of geopoliticalweight, but through the resourcefulness of its strat-egy and diplomacy. Accordingly, this monograph ex-amines Brazilian grand strategy as it has developedunder President Lula with an eye to illuminating itscharacteristics, prospects, and implications for the in-ternational system in general and the United States inparticular. The present is a propitious time for suchan undertaking; with President Lula set to leave of-ce at the end of 2010, Brazilian grand strategy maybe approaching an inection point, making a properunderstanding of the strategy pursued over the last8 years all the more important for Brazilian and U.S.observers alike.3

This monograph makes two principal arguments,

one pertaining to the nature of Brazilian grand strate-gy, the second regarding its ramications and chancesfor success. Under President Lula, Brazil has followeda multi-layered grand strategy that emphasizes agradual and peacefulyet nonetheless signicantrevision of the international order. While Brazilian of-cials recognize the benets that their nation has de-rived from the Pax Americana, they still view the currentordercharacterized by U.S. military and strategichegemony and the economic hegemony of the Westas prejudicial to the development, commercial inter-ests, and diplomatic inuence of emerging countrieslike Brazil. The fundamental goal of Brazilian grandstrategy has thus been to hasten the transition fromthe dominance of the developed world to a multipolar

order in which international power balances and insti-tutions are more favorable to the assertion of Brazilsinterests. Because Brazil still faces, and will continue


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to face, a relative decit of economic and militarymight, President Lula has resorted to a strategy com-

monly used by middle powers, countries that relyon multilateralism, coalition-building, and other suchmethods to achieve systemic inuence. At the globallevel, he has sought to strengthen international normsand organizations that can check American power, aclassic soft-balancing technique. He has also forgedoverlapping webs of bilateral partnerships and mul-tilateral coalitions designed to diversify Brazils com-merce, improve its strategic exibility, and augmentits leverage in international negotiations. This has en-tailed embracing players from the entire spectrum ofinternational actors, including countriesIran beingone notable examplethat are deeply hostile to theUnited States. At the regional level, President Lula hascommitted himself to establishing Brazil as the recog-

nized leader of a more united South America, with theaim of expanding his countrys power base and hitch-ing its global ambitions to the aggregate geopoliticalweight of its continent.

This grand strategy has clearly beneted Brazilin the short term, raising the countrys internationalprole and creating an array of strategic, commercial,and diplomatic options that President Lulas succes-sors may pursue.4 Yet Brazilian grand strategy alsoentails four key dilemmas that President Lula has notbeen able to resolve, which could obstruct or at thevery least complicate the countrys geopolitical ascent.First, issues like poor infrastructure, rampant crime,and excessive taxation and regulation of the economymay impede Brazil from attaining the strong econom-

ic growth and social cohesion necessary to sustainsuch an audacious strategic project. Second, in dealingwith South America, the Brazilian political class has


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not reconciled its desire for regional leadership withits unwillingness to share power or economic benets

with its neighbors. As a result, many of these coun-tries perceive Brazils diplomacy to be domineeringand its trade policies to be narrowly self-interested,and they have thus refused to support President Lu-las bid for regional preeminence. Third, at the globallevel, the long-term usefulness of President Lulasvarious strategic partnerships and alliances is opento question. The IBSA and BRIC forums are much lesscohesiveand thus less diplomatically effectivethan they appear at rst glance, and pursuing closerelationships with countries like Iran may ultimatelyhurt Brazils democratic image and create more prob-lems than opportunities. Fourth, while President Lulahas maintained good relations with Washington, hisgrand strategy unavoidably entails a growing risk of

conict over issues like Iran, trade policy, and the U.S.diplomatic and military role in Latin America. If notmanaged carefully, these frictions could eventuallypush U.S.-Brazil relations in a tenser, less productivedirection, impairing the interests of both countries.Looking ahead, the efcacy of Brazilian grand strat-egyand its consequences for U.S. interestswill becontingent on how President Lulas successors ad-dress these dilemmas.

The remainder of this monograph consists of foursections. The rst discusses Brazils strategic culture,the issues that have traditionally frustrated its desiresfor global inuence, and the factors underlying thegrowing assertiveness of its foreign policy since the re-turn to democratic rule in 1985. The second describes

President Lulas worldview and details the military,diplomatic, and commercial components of his grandstrategy. The third evaluates this grand strategy, not-


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ing its accomplishments but also emphasizing the fourkey dilemmas mentioned above. The fourth discusses

implications for U.S. and Brazilian policymakers andoffers some brief concluding remarks.

BRAZILIAN STRATEGIC CULTURE AND THEQUEST FOR GREATNESS

When President Lula proclaimed in 2003 that Bra-zil was ready to assume its greatness, he expresseda deeply held tenet of Brazilian national ideology andstrategic culture. Since the formation of the Republicin 1889, a variety of factorsBrazils continental di-mensions, its commanding economic and strategicposition within South America, its relative lack of ter-ritorial threats, and its sense of exceptionalism withinthe Latin American contexthave inspired a belief

that the country belongs among the global elite. Wepossess all the conditions that enable us to aspire toa place among the worlds great powers, said Car-los de Meira Mattos, the Deputy Chief of Staff of theArmed Forces, during the 1970s.5

This belief was at the core of Brazilian diplomacyfor much of the 20th century. During World War II,Brazil was the only Latin American country to con-tribute ground forces to the Allied cause, deployingan entire division to Italy. Following the coup against Joo Goulart in 1964, the military governments thatruled for the next 21 years touted the notion of OBrasil Grande (Greater Brazil). The ideological under-pinnings of authoritarian rulea collection of con-cepts developed at the Escola Superior de Guerra and

known as National Security Doctrineemphasizedgeopolitical thinking and the projection of nationalpower. These administrations pursued a rmly anti-


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communist foreign policy within South America, butsimultaneously sought to expand Brazilian inuence

in Lusophone Africa and the Third World and therebybreak out of the bipolar framework dominated by thesuperpowers. Brazil, announced Foreign Minister An-tnio Azeredo da Silveira in 1975, must achieve anoutstanding position in the world, free from thepaths of hegemonic construction of the past.6 Promi-nent international observers shared this high opinionof Brazils potential. Henry Kissinger privately pre-dicted that in 50 years Brazil should have achievedworld power status, and George Kennan labeled Bra-zil one of several monster countries that might exerta decisive inuence on the global scene.7

Until recently, however, ambition continually out-paced reality. Brazils regional rivalry with Argentinaand its condescending attitude toward its neighbors

prevented it from establishing a strong power basewithin its home continent (and these two factors con-tinue to loom as obstacles to Brazilian strategy today).Political instability absorbed the attention of the Bra-zilian elite; authoritarian rule between 1964 and 1985drained Brazilian credibility abroad. Under the mili-tary governments that ruled during this period, Brazilwas something of a pariah state, as these regimes hu-man rights violations and refusal to renounce nuclearweapons left the country isolated in internationalforums. Recurring economic crises, most notably thehyperination and massive debt burdens of the 1980sand 1990s, further sapped Brazilian strategic potential.These difculties often made Brazil seem more like abasket case than a rising power, and in some interna-

tional economic circles, there remains skepticism as tothe countrys long-term trajectory.8

Over the past 20 years, however, Brazil has steadi-ly increased its international role, rst under three


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democratic presidents in the 1990s, and then morerapidly under President Lula since 2003. In one sense,

this activism was born of necessity. As Brazil openedits economy during the 1980s and 1990s, it becamemore sensitive to patterns of globalization forged bythe leading developed countries and institutions likethe World Trade Organization (WTO) and the GeneralAgreement on Tariffs and Trade (GATT). As a result,the only way to protect Brazilian interests and pro-mote Brazilian development was to take a more activepart in shaping the norms, rules, and organizationsthat governed the global economy and internationalrelations more broadly. As President Fernando Hen-rique Cardoso (1995-2002) put it, the policy of au-tonomy through distance pursued by the militarydictatorships must be replaced by one of autonomythrough participation, within a changing international

reality.9

Brazil took a more participatory attitude to-ward numerous international institutions, contribut-ed to several peacekeeping missions under UN man-date, and led the formation of regional groupings likeMercosul (Common Market of the South) as a way ofincreasing its bargaining power in international eco-nomic negotiations.10

What has enabled and sustained these initiativesis Brazils relatively high degree of recent economicand political progress. The consolidation of a stable,multiparty democracy has calmed the political vicis-situdes that previously intruded upon foreign policyand has given Brazilian leaders greater credibility ininteracting with a world where democratic rule hasadvanced dramatically since the 1970s. In the same

vein, the fact that Brazil has restored macroeconomicequilibrium and made gradual progress in addressingwidespread poverty through conditional cash transfer


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(CCT) programs like Bolsa Familia has permitted itsdiplomats to take a more vocal role in global debates

on poverty and development. As Marco Aurlio Gar-cia, one of President Lulas chief advisers on foreignaffairs, acknowledges, Without the successes of hissocial policy, President Lula would not be as respect-ed internationally.11

Moreover, while macroeconomic growth has beenanemic in recent decades, factors like improved eco-nomic stability, growing purchasing power for thepoor and middle class, and the development of bothinternal and external markets have allowed Brazilto crack the top 10 in rankings of the worlds largesteconomies (as measured in gross domestic product[GDP] at purchasing power parity).12 Prominent com-mentators, including Goldman Sachs, predict that thecountry may climb as high as fth in this ranking in

the next 40 years.13

A thriving biofuels program com-bined with aggressive offshore drilling has addressedBrazils internal fuel needs and increased its interna-tional economic inuence amid concerns about thelong-term cost and availability of petroleum supplies,and the exploitation of the offshore Tupi oil eld willlikely make Brazil a major player in the hydrocarbonmarket.14 These developments have not only increasedBrazilian economic power and diplomatic standing;they have also raised national self-condence after thetrials of the 1980s and 1990s and allowed the foreignpolicy community to argue that progress at home jus-ties and requires expanded ambitions abroad. Presi-dent Lula alluded to this dynamic when he declaredthat Brazil is ready, Brazil is mature, Brazil is aware

of the game which has to be played.15 Understandinghow President Lula has played this game requires acloser examination of his worldview.


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GRAND STRATEGY UNDER PRESIDENT LULA

Brazilian grand strategy under President Lulahas been rooted in a deeply ambivalent view of theinternational system. In one sense, Brazil has benet-ed enormously from public goods that the UnitedStates and its Western partners provided during thepostwarand now the post-Cold Warera. The lib-eralization of global economic and nancial ows hasbeen a boon to Brazilian development, especially asthat country has opened its own economy over thepast 2 decades. For all of Brazils complaints aboutthe International Monetary Fund (IMF) and the WorldBank, these institutions have provided developmentassistance and a nancial safety net of which Brazilhas more than once availed itself. The long-standing

U.S. defense umbrella over the Western Hemispherehas afforded Brazil a degree of free security from ex-ternal threat. Similarly, Washingtons policing of theglobal commons has allowed Brazil to trade aroundthe world without building a Navy capable of protect-ing that commerce. In this sense, Brazil is very much awinner in the Pax Americana.16

Nonetheless, the prevailing global order stillstrikes many Brazilians as fundamentally inequitable.The UN Security Council is controlled by the vepermanent members (P-5), even though this arrange-ment distorts current geopolitical realities and keepslatecomers like Brazil, India, and Japan from rising tothe top echelon of international politics. The geog-raphy of 2009 is different from the geography of 1948

when the UN was created, President Lula has point-edly noted.17 The unipolarity of the current system isalso troubling. There is no meaningful counterweight


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to the unilateral exercise of American power, a factthat became quite clear in the run-up to the Iraq war.

These issues inform a strong undercurrent of anxietyin Brazilian geopolitical analysis. We live in a worldin which intimidation threatens to trample commonsense underfoot, said Strategic Affairs Minister Ro-berto Mangabeira in 2008.18

International trade and nancial arrangements ap-pear similarly ossied from a Brazilian perspective.Because organizations like the IMF, World Bank, andWTO are still dominated by the developed Westerncountries, Brazilian ofcials frequently complain thatthe policies of these institutions are slanted againstthe interests of the developing world. This impressionhas been reinforced by the persistence of U.S. and Eu-ropean agricultural subsidies that inhibit the exportof Brazilian commodities. These subsidies, President

Lula argued at the UN General Assembly in 2006,are oppressive shackles that hold back progress anddoom poor countries to backwardness.19 PresidentLula particularly objects to the 54-cent per gallon U.S.tariff on ethanol imports, and since 2003, Brazil hasrefused to allow the Doha Round of the WTO nego-tiations to proceed until its concerns on agriculturalsubsidies are addressed.20 Brazilian discomfort withprevailing international economic structures becamestarkly evident in a series of comments made by top-level ofcials in 2008 and 2009. Foreign Minister CelsoAmorim compared U.S. trade representatives to Nazipropagandists, and President Lula asserted that theworld nancial crisis was caused by the irrationalbehavior of white people with blue eyes.21

Brazilian strategic analysis thus features a perva-sive sense of dangera fear that the strictures of thecurrent global order might impede Brazils develop-


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We no longer accept participation in international

politics as if we were Latin American wretches; aThird World country of no account; a worthless coun-try with homeless children; a minor country whosepeople only know how to play soccer and dance thesamba. . . . There is no interlocutor anywhere in theworld who respects another who bows his head andacts as an inferior.26

During his time in ofce, President Lula has pur-sued a multi-layered strategy for asserting Brazilianinterests and increasing its global power.

Hard Power and Military Capabilities.

One element of this strategy involves accumulatingtraditional hard-power capabilities. Realists such as

John Mearsheimer predict that rising powers will seekto increase their inuence and challenge the global he-gemon by amassing greater military might, and Presi-dent Lula has indeed laid much stress on strengtheningBrazils armed forces.27 Military spending increasedfrom $9.23 billion to $23.9 billion between 2003 and2009, permitting major technological upgrades.28 Bra-zil has purchased attack helicopters from France andRussia, combat aircraft and military transports fromEuropean suppliers, as well as four French-madeScorpene submarines. There are also plans to develop anuclear attack submarine in cooperation with France,and Brazilian ofcials have arranged to purchase ordevelop short-range missiles, night vision equipment,and thermal and electronic sensors.29 Beyond all this,

the government has presided over the completionand deployment of the Amazon Surveillance System(SIVAM), an extensive network of satellites, ground


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sensors, and radars that can monitor not only Brazilsvast Amazonian hinterland but also parts of Colom-

bia, Venezuela, Bolivia, Guyana, Suriname, and otherneighboring countries.30

Brazil is not simply purchasing equipment; it is alsonegotiating agreements that will allow it to develop itsmilitary-industrial base and eventually eliminate anydependence on foreign suppliers. We are not engag-ing in a shopping festival, says Minister Jobim, butin a festival of national technical improvement basedon the transfer of technology. Brazilian representa-tives have emphasized joint partnerships betweenBrazilian rms and their foreign counterparts and toldEuropean suppliers that they are only interested inpurchases that involve no-strings-attached technolo-gy transfers. Given the eagerness of European suppli-ers to satisfy Brazils appetite for advanced weaponry,

it has not been difcult to negotiate a range of jointprojects that will result in the construction of ghteraircraft, attack helicopters, and, perhaps most notably,the aforementioned nuclear submarine.31

These acquisitions are part of a broader shift inBrazilian military strategy and doctrine. Brazil ismoving away from its traditional defense posture, inwhich the majority of its forces were deployed in thesouthern part of the country, to a newer stance thatfocuses on securing internal portions of the countryfrom criminal urban guerrillas and protecting conict-prone border regions in the Amazon. This latter goalderives from not simply the need to avert instabilityalong Brazils frontiers, but also an exaggerated fearthat foreign powers, particularly the United States,

covet geopolitical space and natural resources in theBrazilian Amazon. Along the same lines, defense of-cials have broached the possibility of patrolling the


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South Atlantic and called for measures to protect thecountrys offshore hydrocarbon resources.32 There are

also plans to develop an asymmetric warfare capabil-ity geared toward frustrating attacks by larger pow-ers, as well as a greater emphasis on rapid nationalmobilization in crises. Brazils armed forces, one plan-ning document states, must be organized around amilitary culture hallmarked by exibility, imagina-tion, and daring, [with] the capacity to surprise andoverwhelm.33

President Lulas military policy is meant to servemultiple purposes, several of which have more to dowith domestic politics than global ambitions. At thelevel of national strategy, however, this buildup isclearly linked to the drive for greater autonomy andinuence. In planning documents and comments byhigh-ranking ofcials, the nations growing military

capabilities are frequently characterized as a means ofshaping events in Brazils neighborhood and a de-fense shield against meddling by hegemonic powers.Just as important, the buildup serves as a symbol ofgrowing national power and a signal to both regionaland global observers that Brazil intends to pursue aserious geostrategic role. In 2008, the Chief of Staff ofBrazils Navy told an interviewer, Those who havenuclear submarines sit on the United Nations SecurityCouncil. All permanent members have the technology,which none of them give up. We have to develop ourown.34 In this same spirit, Brazil has participated innumerous UN peacekeeping missions since the 1990s,and President Lulas government eagerly took thelead in commanding the UN stabilization mission de-

ployed to Haiti in 2004. As Minister Jobim explainedin 2008, What we want is to have voice and vote inthe international arena, and this only goes to countries


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monic power (or powers) or to play a central role inshaping the international system. For middle powers,

achieving global inuence thus necessitates punch-ing above their own weight, generally through astutemultilateral diplomacy. A middle power might forgediplomatic alliances with other rising nations as a wayof magnifying its own inuence; it might use interna-tional norms and organizations to restrain the behav-ior of the hegemonic power; it might seek to establishitself as the leader of a distinct geographic region andthereby harness its ambitions to the combined geo-political weight of its neighbors. As Keohane writes,middle powers cannot act alone effectively, but maybe able to have a systemic impact in a small groupor through an international institution.38 In short, amiddle power strategy is effectively one of coali-tion-building and soft balancing.39

Brazilian ofcials are keenly aware of their sta-tus as a middle poweras well as the strategic im-peratives that ow from that status. Samuel PinheiroGuimares, Secretary General of the Ministry of Ex-ternal Relations ( Ministrio das Relaes Exteriores, orItamaraty)under President Lula, argued that Brazilhas to articulate political, economic, and technologi-cal alliances with peripheral states of the internationalsystem to defend and protect its interests.40 Such astrategy plays to Brazils strengths. Itamaraty is thebest diplomatic service in Latin America, and its rep-resentatives receive rigorous professional and linguis-tic training. (In recognition of this strength, PresidentLulas government decided to expand Itamaraty byseveral hundred diplomats in 2006.) Efforts at multi-

lateral coordination are also facilitated by PresidentLulas charisma and his credibilityespecially amongthe developing countriesin addressing issues like


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poverty and governance. At the broadest, systemiclevel, a middle-power strategy naturally appeals to

other nations that are uncomfortable with some aspectof American hegemony.41During President Lulas presidency, Brazilian di-

plomacy has featured at least three pronounced char-acteristics of a middle-power grand strategy. The rstof these involves fortifying international norms andinstitutions that can act as a brake on American pow-er. Conscious that U.S. negotiating power is dilutedwhen Washington has to deal with its trading partnersthrough international forums rather than bilateral set-tings, Brazilian ofcials have placed great importanceon broadening the basis of world trade and nancialnegotiations. President Lula has diligently lobbied forthe G-8 to be replaced by the G-20, a larger group thatincludes emerging countries like China, Brazil, India,

and Mexico. Similarly, his government has relied onWTO rules and procedures to restrain what it viewsas unfair trade behavior by the United States and oth-er developed countries, and Brazil has increasinglylooked to this organization as a forum for articulat-ing its economic interests vis--vis the West. This hastaken the form of positive action, as when PresidentLulas representatives led the charge for concessionson the licensing of AIDS drugs, but it has also takenthe form of obstruction, as when Brazil used the WTOframework to rally opposition to Western agriculturalsubsidies and block the Doha Round negotiations.The strengthening of the multilateral trading systemis essential to those with less political and economicleverage, Minister Amorim explained in 2007.42

This same approach has governed President Lulasviews on the UN and the use of force. Alarmed byrecent instances of unilateral U.S. military action,


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Brazilian ofcials have responded by seeking to denyinternational legitimacy to such endeavors. In March

2003, President Lula spoke out strongly against theimpending U.S. invasion of Iraq, saying that it disre-spects the United Nations and doesnt take into ac-count what the rest of the world thinks.43 Since then,a central rhetorical trope of Brazilian diplomacy hasbeen a dogged insistence that the unilateral offensiveuse of force is inherently illegitimate, and that militaryintervention is warranted only when carried out un-der the sanction of international institutions like theSecurity Council. We reject the view of an interna-tional order which favors the use of force and regardsmultilateralism as just one among many options onthe menu, to be selected when it suits the objectivesof the powerful, says Minister Amorim.44 The Brazil-ian government has lent substance to this discourse by

voting against the U.S. invasion of Iraq in 2003, whilealso participating in Security Council-sponsoredpeacekeeping missions in East Timor, Haiti, and else-where. President Lula has frequently used bilateraland multilateral communiqus to call for a revitaliza-tion of the Councils collective security functions.45 Allthis indicates a classic soft-balancing technique, onemeant to set a high threshold for the legitimacy of U.S.military action and thereby raise the diplomatic costsshould Washington decide to employ its overwhelm-ing military might.

A close corollary to this effort has been PresidentLulas bid to win Brazil a permanent seat on the Secu-rity Council. This desire owes mainly to hardheadedcalculations of national prestige and inuence; a per-

manent seat would serve as a symbol of Brazils ar-rival on the global stage and permit it to shape debateson international diplomacy and the use of force. Even


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so, President Lula has shrewdly framed this quest aspart of a broader, more altruistic campaign to make

the international order more consensual and its gov-erning bodies more representative. The need, he saidin 2009, is to build a new international order that issustainable, multilateral and less asymmetric, free ofhegemonies and ruled by democratic institutions.Along these lines, Brazil has played a key role in co-ordinating the activities of the G-4, an arrangement inwhich Brazil, India, Japan, and Germany have agreedto support one anothers bids for permanent seats onthe Security Council.46

President Lulas reliance on the G-4 as the vehiclefor his Security Council ambitions indicates a secondaspect of Brazils middle-power strategy. This aspectinvolves building coalitions that offset the diplomaticand economic asymmetries of a unipolar system and

serve as force-multipliers for Brazilian inuence.President Lula has cultivated strategic partnershipswith a wide range of countries, including developedmiddle-powers like Russia and France, as a means tothis end. Yet the foremost emphasis of his coalition-building strategy has been on expanding cooperationwith other Southern, or developing countries.47According to President Lula and his top advisersnamely Minister Amorim, Marco Aurlio Garcia,and Guimaresthe strategic interests of Brazil andother major developing countries are fundamentallyconvergent. Because Brazil is geographically removedfrom countries like China and India, it need not fearthem as rivals; because these nations share Brazilsinterest in replacing unipolarity with a more exible

international order, they might well be its naturaldiplomatic partners. Despite the differences betweenBrazil and other large peripheral states, Guimares


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of sanctions by the Security Council. While this stancehas occasioned criticism from Brazilian conservatives

and U.S. observers, President Lula appears to see goodrelations with Tehran as a way of asserting Brazils au-tonomy vis--vis Washington, making itself a playerin Middle Eastern politics, and potentially positioningitself as a mediator between Iran and the Westall ofwhich t nicely with Brazils broader middle powerstrategy. As Minister Amorim puts it, Iran is the newgeographic partner in our countrys policy.50

With respect to multilateral arrangements, Presi-dent Lulas focus on South-South diplomacy rst cap-tured global attention at the Cancun summit, part ofthe Doha Round of WTO talks, in late 2003. When theUnited States and the EU pressured the developingcountries to accept the Singapore Package (a raftof measures pertaining to investment, competition,

trade, and transparency in government procurement,which together constituted the core of the Doha agen-da), President Lula seized the opportunity to organizea Third-World revolt. Brazil led more than 20 devel-oping countries in demanding that any progress onthe Singapore Package be accompanied by a rollbackof agricultural subsidies in the United States and Eu-rope. Taking this position lent political cover to thesmaller members of the group, and after U.S. effortsto break this front failed, the meeting ended withoutagreement. More than that, the stalemate created byBrazils opposition led to the breakdown of the DohaRound, with the major participants unable to agreeeven on a framework for continuing the negotiations.(Discussions eventually resumed a year later, but the

core dispute underscored by the failure of the Can-cun summit has not yet been resolved.) This deadlockhardly beneted Brazil economically and it effectively


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stymied the world trade agenda, but it raised Presi-dent Lulas global prole and allowed him to act as

a champion of developing-country interests in subse-quent trade meetings. Afterward, President Lula andhis advisers regularly referred to the Cancun summitas a watershed in Brazilian diplomacy. The worldsaw that Brazil was able to say no, Minister Amorimlater recalled.51

Since 2003, Brazilian ofcials have worked toformalize South-South cooperation through severaloverlapping initiatives. While the BRIC forum is nottechnically a club of developing countries due to Rus-sias inclusion, it embodies the peripheral-state ethosat the heart of Brazilian grand strategy. President Lulaand Minister Amorim have stated on numerous occa-sions that they view BRIC as an emerging trade blocthat will eventually constitute an alternative to the

Western-dominated system led by the United Statesand the EU, and bilateral commerce between Braziland the other members has risen dramatically overthe past several years. Making BRIC a more formalpartnership is central to increasing its internal cohe-sion and overall geopolitical weight, and Brazilian of-cials have played a key role in establishing regularministerial meetings, summits, and working groupdiscussions.52

For all the attention BRIC has received, the IBSADialogue Forum may be the most important piece ofBrazils South-South diplomacy. Founded by Brazilianinitiative in 2003, IBSA represents an explicit attempt,as one communiqu put it, to amplify the collectivevoice of the South.53 The group includes three of the

largest democracies in the developing world, boastinga combined population of over 1.4 billion and an ag-gregate GDP of over $3 trillion, and its leaders have


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laid out an audacious program for strengthening IBSAand increasing its international reach.54 IBSA aims to

increase trilateral trade within the group to $25 bil-lion by 2015 and it has established nearly 20 workinggroups on everything from commerce and investmentto the environment.55 The forum sponsors develop-ment projects in Guinea-Bissau and Haiti as a form ofoutreach to poorer Third-World countries, and in 2008a joint naval exercise raised the prospect of an eventu-al IBSA military capability. I dont think that a groupof sociologists meeting in a room causes such atten-tion, said Minister Amorim, but a group of boatsassembling with their ags causes attention.56 Themembers have also pledged to support one anothersSecurity Council ambitions and advanced commonpositions on issues like nonproliferation and nuclearenergy. Brazilian ofcials argue that IBSA carries ex-

tra legitimacy because its members are all developing,multicultural democracies, and comments by Presi-dent Lula and Minister Amorim leave no doubt thatthey view the group as an emerging axis of geopoliti-cal and economic power. IBSA, said Minister Amorimin 2007, is one of the tools that can improve our nego-tiating capacity and help build a multi-polar world.57

The third element of Brazils grand strategy takesplace at the regional rather than the global level. Ac-cording to international relations theorists, middlepowers may augment their inuence through a pro-cess known as region formation, whereby they si-multaneously dene their region as a distinct geopo-litical entity and claim leadership status within thatentity. Doing so allows the middle power to act as

an acknowledged regional leader in global forums,thereby improving its diplomatic credibility and ne-gotiating capacity.58 If region formation leads to mean-


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ingful economic or political integration, it can bringabout the pooling of resources and a corresponding

increase in the aggregate geopolitical strength of boththe region and its leading power. This was the strat-egy followed by Charles de Gaulle when he soughtto make France the leader of a united, independentEurope, and the same spirit has animated Europeanintegration schemes since the early Cold War. UnderPresident Cardoso, and more so under President Lula,Brazil has followed this same general template. Brazil-ian ofcials have spoken of creating a solid regionalspace in South America, and Marco Aurlio Garciahas advanced the notion that the continent must be-come an autonomous power centerpresumably un-der Brasilias leadership. We are marching toward amultipolar world, he said in 2009, and South Amer-ica will be one of those poles.59

The imperative of asserting Brazilian leadershiphas become all the more important in view of the con-tested geopolitical environment in South America.Recent U.S. policy toward Latin America has arguablybeen one of benign neglect, but Washington has none-theless signed free trade agreements and strengthenedrelations with key countries like Chile, Colombia, andPeru. More pressing still is the issue of Venezuela,which under President Hugo Chvez has staked itsown claim to regional leadership. Through projectslike PetroCaribe and the Bolivarian Alliance for theAmericas (ALBA, formerly the Bolivarian Alternativefor the Americas), extensive aid to populist politiciansin other countries, and the acquisition of advancedweapons systems from Russia and other suppliers,

President Chvez has shown that he intends to makeVenezuela the dominant power in South America. Inpublic, Brazilian ofcials insist that they do not viewPresident Chvez as a threat, but in private, they


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seem to recognize that his bid for regional leadershipplaces Brazil in a difcult position. Openly confront-

ing President Chvez would polarize the ideologicaland diplomatic climate in South America, destroyingany chance for a more uniedand thus more inu-entialregion. Yet taking too passive a stance risks al-lowing President Chvez to accumulate inuence andisolate Brazil.60

Brazil has therefore taken an indirect approachto containing President Chvez. In public, PresidentLula has placated the Venezuelan leader and soughtto mediate his disputes with Colombias lvaro Uribeand other conservative leaders. More quietly, Brazilhas attempted to consolidate its position in the regionby strengthening ties with a range of countries, in-cluding those that make up President Chvezs corediplomatic constituency. President Lula has called

for a strategic partnership with Argentina, a long-standing rival that has traditionally viewed Brazilianinuence with suspicion. Likewise, his governmenthas expanded counternarcotics assistance to Bolivia,donated decommissioned airplanes or helicopters toParaguay, Bolivia, and Ecuador, and used a SIVAMsurveillance aircraft to help Peru resolve a hostagecrisis in 2003. As part of an initiative begun prior toPresident Lulas presidency, Brazil has also made avirtue of its reliance on natural gas imports. Brazil co-sponsored construction of a gas pipeline running fromBolivia to Brazil, ensuring that the Bolivian gas indus-try has become dependent on the Brazilian market,and President Lula acquiesced in the nationalizationof Brazilian-owned gas assets in Bolivia in 2006. The

list of initiatives goes on; efforts to balance PresidentChvez and expand Brazilian inuence have givenPresident Lulas regional policy a hyperactive qual-ity.61


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As this diplomacy indicates, Brazil is aiming forwhat one scholar calls consensual hegemony.62 Bra-

zilian ofcials seek to portray their countrys diplo-macy as a benign, unthreatening project so as to avoidreviving traditional fears of a hegemonic Brazil andthereby driving South American countries toward Ca-racas or Washington. (How successful they have beenin doing so is open to dispute.) Accordingly, for Brazilto achieve effective regional leadership, it will have toforge consensual arrangements that provide its neigh-bors with economic and political benets while draw-ing them deeper into the Brazilian orbit.

This strategy has driven the central thrust of Bra-zilian regional diplomacy under President Lulahisunceasing emphasis on South American integration.Regional integration is the keystone of consensualhegemonyforging deeper political and economic

ties with South American countries will create a morepowerful continental bloc, while binding these nationsmore closely to the most powerful member of thatbloc. Early in his presidency, President Lula called re-gional integration a strategic option to strengthen theinsertion of our countries in the world, increasing theirnegotiating capacity, and Brazilian ofcials have fre-quently invoked the EU as an example of what theyaim to accomplish.63

The centerpiece of this effort has traditionally beenMercosul, the trade and customs pact originally es-tablished with Argentina, Uruguay, and Paraguay 2decades ago. When President Lula came to power, hesaid that fortifying Mercosul would be a top priority.Since then, his government has broached various op-

tions for deepening economic ties within the pact andcalled for broadening its membership and responsibil-ities. Mercosul now has working groups to deal with


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organized crime, terrorism, and other security issues;it has taken on observers (Mexico) and associate mem-

bers (Bolivia, Chile, Colombia, Ecuador, and Peru);and Venezuela was granted full membership in 2006(pending approval by the Paraguayan and Brazilianlegislatures). This latter decision was highly controver-sial, but President Lulas government deemed it nec-essary to increase the share of South American tradecommanded by the agreement, harness the inuenceprovided by Venezuelan oil reserves, and hopefullymoderate President Chvezs efforts to undercut Bra-zilian diplomacy. President Lula has high hopes forMercosul; he has pushed for a free trade agreementbetween Mercosul and the EU and worked to defeatrival projects like the U.S.-sponsored Free Trade Areaof the Americas (FTAA).64

Due to frictions within Mercosul (discussed in

greater detail below), President Lula has also pursuedparallel integration projects. The Integration of Re-gional Infrastructure in South America (IIRSA) projectfeatures a web of transportation corridors, energy con-duits, and other projects designed to facilitate ows ofgoods and people across the continents rugged ter-rain. While President Chvez has been very active inpromoting this project, Brazilian ofcials appear tocalculate that his enthusiasm will simply defray thecost of an initiative that will inevitably redound to thebenet of the continents largest economy. Comple-menting IIRSA is the Union of South American Na-tions (UNASUR), a relatively new body that Braziliandiplomats view as a forum for dispute resolution and,eventually, cooperation on a range of political and

security issues. UNASUR is particularly attractive toBrasilia because it offers a multilateral forum for man-aging President Chvezs intermittent outbursts and


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provocations, and because it excludes Washingtonand thereby makes Brazil the dominant player.65

Brazilian ofcials thus envision integration as amultistep, multilevel process that will eventually en-compass political and security issues as well as eco-nomic and commercial affairs. The rst stage is com-mercial integration, said one Defense Ministry ofcialin 2004. After that comes the macroeconomic one,and the military stage will be the roof of the edice.66Brazilian ofcials portrayed the UN stabilization mis-sion in Haiti as an embryo for South American defensecooperation, and President Lula was the driving forcebehind the creation of the South American DefenseCouncil (CDS). The CDS is a still-nascent project thatmay eventually lead to more military-to-military con-tacts, more combined exercises, more collaboration ondrug trafcking and other common threats, and less

U.S. inuence in South American defense affairs. Thegeopolitical stance [the region] confronts, Minister Jobim said in March 2008, whether we admit it ornot, is the set of old continental concepts emanatingfrom the U.S. Just as important, Brazil sees CDS as arst step toward creating a regional defense industry.Combined with Brazils growing technological capa-bilities, progress on this front will allow Brasilia to be-come a major supplier to South American militaries,with all the inuence that entails.67

EVALUATING BRAZILIAN GRAND STRATEGY:ACCOMPLISHMENTS AND DILEMMAS

President Lulas grand strategy has thus featured

a sophisticated, multipronged approach to interna-tional affairs. It has also featured a seemingly un-shakeable condence that the geopolitical scales are


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tilting sharply in Brazils favor. Brazil was not bornto spend its whole life as an emerging country, said

President Lula in 2003. I am not going to throw awaythis chance.68Certainly, Brazils geopolitical position is much

stronger than that of just a decade ago, and PresidentLulas diplomatic activism has had much to do withthis. His efforts to coordinate Third World positions inthe WTO have made Brazil an increasingly powerfulplayer in that body, allowing it to block trade mea-sures deemed disadvantageous to its interests and winconcessions on issues such as licensing of AIDS drugs.The G-20 has effectively replaced the G-8 as the pri-mary forum for international economic discussions,and President Lulas outspoken participation in thesedebates is a chief reason why Brazil is set to translateits growing economic power into a larger voting share

in the IMF and World Bank in 2011. In addition, closerattention to relations with China, France, and otherstrategic partners has helped diversify Braziliancommerce and enabled upgrades in Brazils military,technological, and defense-industrial capabilities.

Brazils international image has also undergone astriking transformation. A decade ago, it was highlyimplausible that Brazil would soon be recognized asan emerging great power. In the time since, PresidentLula has positioned Brazil as a leading moderate criticof U.S. hegemony, raised his countrys prole throughparticipation in forums like BRIC and IBSA, and usedBrazils status as a democratic developing country toaccrue signicant diplomatic capital. Through his fre-netic diplomacy and cultivation of numerous strategic

relationships, President Lula seems already to haveachieved what many past Brazilian leaders aspiredtogeneral recognition that their country is a key


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Economic, Social, and Political Constraints.

The rst of these dilemmas has less to do withthe particularities of President Lulas grand strategythan with the internal dynamicspolitical, social, andeconomicrequired to sustain a forceful, effective di-plomacy. Macroeconomic strength, internal cohesion,and a political system capable of producing these attri-butes are base-level conditions for generating nationalpower in the global system. In certain respects, Brazilseems well positioned to meet this challenge over thelong term, especially when compared to other middlepowers and emerging states. Unlike China or Russia,Brazil has a genuine, multiparty democracy. UnlikeIndia, its society is not blighted by persistent commu-nal or religious violence. While Brazil cannot competeeconomically with China or the United States, the last

two Brazilian presidential administrations have donequite well in maintaining economic stability, loweringpoverty through targeted social spending, and en-abling greater domestic consumption. The validity ofthe Brazilian economic model seemed to be conrmedin 2008-09, as several studies showed that the middleclass had grown to encompass roughly half the popu-lation. More recently, Brazil was one of the last nationsto go into recession as a result of the global nancialcrisis and one of the rst to come out.70

Yet there is a compelling case to be made that Bra-zil has not yet achieved the strong, sustained growthnecessary to match the expansive ambitions that havedriven its grand strategy over the past decade. Sincethe debt crisis of the 1980s, Brazil has been an econom-

ic laggard in terms of overall growth rates. Accordingto the World Bank, GDP grew at just 1.9 percent from1987-97 and 2.8 percent from 1997-2007, considerably


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slower than the average rate for Latin American coun-tries and for the broader developing world.71 Brazilian

growth rates improved in 2007 and 2008 and recent oildiscoveries have fueled immense economic optimism,but the long-term trend lines are still unclear. Projec-tions that Brazil will become the fth-largest economyin the world by 2050 are based on the presumptionthat, through good policy and good fortune, the coun-trys economy will grow substantially faster than ithas over the past 2 decades. According to Roopa Pu-roshothaman, whose 2003 paper popularized the termBRICs, Brazils performance would have to im-prove quite signicantly relative to the past in orderto meet this expectation.72

Brazils slower-than-desired growth is often at-tributed to high interest rates, which have remainedelevated as a guard against ination. The problem,

however, runs much deeper than this. The Brazilianeconomy has traditionally been constrained by a mazeof regulation and red tape, and even with recent re-forms, there remain immense barriers to the sort of en-trepreneurial activity that produces sustained growth.On nearly every major marker of entrepreneurial com-petitivenesstax rates, time spent paying taxes, timespent dealing with government ofcials, the numberof days and permits required to start a business, timerequired to clear direct imports and exports throughcustoms, and many othersthe Brazilian economyrates considerably worse than the Latin Americanaverage. Payroll taxes reach a stiing 60 percent, dis-couraging expansion and pushing many small andmedium enterprises into the informal sector, where

they are locked out of formal capital markets and donot contribute to the governments scal base.73 Theadvantage of high tax rates is that they have allowed


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Brazil to mobilize a comparatively large chunk of GDPfor government use; the downside is that these high

costs and cumbersome regulations have restricted in-novation and allowed the perpetuation of a bloated,inefcient bureaucracy. Additionally, Brazils long-term potential for growth is limited by the fact thateducational reforms have not kept pace with othersocial programs, and so while more children are at-tending school, they are not necessarily acquiring theknowledge or skills that will allow them to becomemore productive than their parents.74

Infrastructural deciencies pose an additionalchallenge. Brazils ability to export efciently, as wellas to develop its large internal market, is hindered bythe immense difculty of transporting goods acrossthe countrys rough terrain. The rail system is under-developed, and as of 2004, only some 10 percent of the

countrys 1.74 million kilometers of roads were paved(and more than half of that 10 percent were one-laneroads). The ports are outdated and over-saturated,despite the modernization program launched underPresident Cardoso, meaning that stocks often sit onthe docks for 3 weeks or more before being shipped.All this deters export-oriented rms from expandingand thereby creating new jobs and greater prosper-ity.75

Economists generally agree that addressing theseproblems will require sizable investments in educa-tion and infrastructure and, more importantly, major structural reforms designed to spur innovation,decrease regulation, and lessen the burdens of doingbusiness. Unfortunately, the current characteristics of

the political system conspire against such measures.The electoral system over-represents small partieswith parochial interests, making it all the more dif-


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cleavages that might limit its internal cohesionandthus its geopolitical potential.78 Oil money may ease

some of these potential dislocations, but given pricevolatility, relying primarily on an expected petroleumwindfall is a gamble, not a strategy.

The economy is not the only internal issue thatcould retard Brazils ascent. The country also faces astern test of its domestic security capabilities in theform of the large, well-armed gangs that dominatehuge stretches of major cities like Rio de Janeiro andSao Paulo. These gangs generally have ties to the drugtrade and a variety of illicit economic networks, andin many favelas they are so powerful that police, re-porters, and other unwelcome visitors enter only atthe risk of death. The potentially devastating impactof this insecurity came into sharp relief in May 2006,when hundreds of attacks by one such gang, the First

Capital Command (PCC) of So Paulo, resulted indozens of deaths and millions of dollars in damages,and threw South Americas largest city into chaos.The sad reality, remarked one observer is that thestate is now the prisoner of the PCC.79

Crime detracts from economic performance, be-cause it forces both public and private institutions tochannel resources to security-related initiatives ratherthan development-oriented endeavors. It also accen-tuates festering social divisions. The rich can affordprotectionliving in gated communities, hiring secu-rity guards, and bulletproong their cars. The poor, bycontrast, must live with insecurity and make accom-modations with whatever criminal group dominatesthe neighborhood. All this reinforces deep-seated so-

cial inequities, lessens the prospects for greater socialcohesion, and detracts from the legitimacy of the dem-ocratic state. If crime continues unchecked, it may be-


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come more common to hear Brazilians ask why theircountry should worry about projecting power abroad

when it cannot even control its territory or protect itscitizens at home. This question will be even harder toanswer if President Lulas successors cannot resolvethe other dilemmas his grand strategy entails.

Region Formation: Costs and Contradictions.

Perhaps the most important of these dilemmasinvolves Brazils region-formation efforts. For all ofPresident Lulas attempts to build a consensus behindthe idea of Brazilian leadership in South America,bilateral disputes and a general sense of unease stillpervade Brazils relations with many neighbors. Thereare recurring tensions with Paraguay over the Itaiphydroelectric project, with Ecuador over Brazilian in-

vestments in that country, and with Bolivia over its oiland gas industries. Venezuela has continually soughtto hijack the regional diplomatic agenda, sometimesthrough meetings of UNASUR and CSD, bodies thatPresident Lula played a key role in creating. Evenmore revealing, key regional players like Colombiaand Argentina have consistently opposed PresidentLulas bid for a permanent seat on the Security Coun-cil, with the Argentine foreign minister calling Brazilsposition on this issue elitist and not very democrat-ic.80 Brazilian ofcials may talk about forging strate-gic partnerships with their neighbors, but PresidentLulas efforts to claim regional leadership still inspiremore hostility than support.

Some of this resistance is simply a residue of long-

standing diplomatic rivalries. Given Brazils history ofpredominance in South America, it is only natural thatPresident Lulas counterparts have been uncomfort-


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economic development, the majority have shownlittle interest in schemes that would divert Brazilian

resources to fostering the development of neighbor-ing countries. Brazil still offers much less in the wayof economic aid or preferential trade deals than doesVenezuela. Brazilian ofcials have also sought tokeep the price that Brazil pays for Bolivian gas andParaguayan hydroelectric power below market rates,despite the frustration this policy has produced inthose countries. Even as Brazilian diplomats havecalled for closer commercial ties with South America,the industrial and manufacturing communities haveresisted tariff reductions (within Mercosul as well asin bilateral trading relationships) that would open theeconomy to greater competition and thereby impingeupon their own interests. The net result of all this hasbeen to ensure that even as President Lula argues that

economic and political integration will be good for theregion as a whole, many of Brazils neighbors remainunconvinced.82

This situation is most pronounced within Merco-sul, where Brazil has strongly resisted demands forgreater power sharing and a more equitable distri-bution of economic gains. Since its founding, Merco-sul has been plagued by a fundamental asymmetry:Because Brazils economy dwarfs that of the othermembers, these countries run huge trade decits withBrasilia. This original sin has long provoked dis-content within the group, but Brazilian ofcials havebeen understandably loath to assuage these concernsif it means surrendering their countrys economic ad-vantage.83 Brazilian industrialists decry any proposal

to make trade concessions to other Mercosul mem-bers. A convergence fund known as the Fundo paraa Convergncia Estrutural e Fortalecimento Institucional


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do Mercosul (FOCEM) was recently created to pay fordevelopment projects within the bloc, but it is widely

acknowledged to be inadequate.84

President Lula didtake a meaningful step toward righting persistenteconomic asymmetries when he signed an agreementgiving Paraguay a greater share of the benets fromthe Itaip dam, but it soon became clear that the Bra-zilian Senate had no intention of approving the pact.Nor has Brazil agreed to the establishment of strongarbitration mechanisms that would wield suprana-tional authority over Mercosul members, somethingthat Uruguay and Paraguay insist is crucial to ensur-ing a fairer distribution of trade and economic gains.85When it comes to regional integration, President Lu-las diplomats talk in terms of the common good, buttheir actions bespeak a more parochial commitment toBrazilian self-interest.

As a result, Mercosul has hardly lived up to itsbilling as the centerpiece of President Lulas regionaldiplomacy. With Brazil unwilling to take the lead inredressing inequities within the pact, there has beenregress rather than progress in efforts to deepen re-gional economic integration. Nontariff barriers are onthe rise and Mercosul members have carved out excep-tions to tariff reductions to protect favored economicsectors. Paraguay refuses to do away with the doublecharge (charging a tariff on goods that entered thetrade zone through another member country) becauseits leaders reason that Brazil and Argentina will nothelp them compensate for the loss of customs reve-nue.86 There is no effective mechanism for resolvingintra-bloc disputes; Mercosuls governing institutions

are so weak that Argentina and Uruguay took a recenteconomic disagreement to the International Court of Justice for adjudication. Not surprisingly, dissatis-


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faction with the pact is mounting among its smallermembers. Uruguayan ofcials have openly discussed

leaving Mercosul in favor of a free trade agreementwith the United States, and Paraguayan commenta-tors have called Mercosul fat, useless, and interfer-ing. Argentina has also expressed displeasure withBrazilian trade policies.87 In concept, Mercosul may bethe foundation for Brazils consensual hegemony proj-ect, but in practice, it is an increasingly fractious andhollow organization.

The same dynamic is playing out across the region,where there is a strong sense that Brazil is trying toestablish a dominant position without providing any-thing in return. The leaders of Chile and Argentinavoiced precisely this complaint when they quit a Bra-zilian-led summit in 2005. According to one account,Argentine President Nestor Kirchner stormed away

from the meeting room with loud complaints aboutBrazils unwillingness to shoulder the costs of lead-ing.88 Because Brazil is not seen to be contributing tothe common good, South American ofcials tend tosee its drive for greater international power as threat-ening rather than reassuring. Several countries alongBrazils Amazonian frontiers have expressed concernwith President Lulas military buildup; Bolivian vice-president lvaro Garcia Linera said that it was Brasilia,rather than Washington, that posed the greatest threatto his country.89 Brazilian ofcials have exacerbatedthe bad feelings with a series of missteps, includingaccidental military incursions into Paraguay and theholding of a war game clearly meant to intimidate theParaguayan government around the time of the Itaip

negotiations in mid-2009.90Because Brazil has failed to bring its mooted SouthAmerican constituency into line, it has struggled to


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defeat rival leadership projects in the region. WhilePresident Chvez is not well liked in many South

American countries, discomfort with President Lulasforeign policies has helped create a vacuum that theVenezuelan leader has been able to ll with his pe-troleum diplomacy. Bolivia and Ecuador have becomemembers of ALBA, and President Chvezs purchaseof billions of dollars of Argentine debt has given himsome inuence with that country. On the other sideof the political spectrum, a group of nations led byPeru, Colombia, Chile, and Mexico is pursuing a proj-ect known as the Pacic Arc, which can be seen as aneffort to balance against both Venezuela and Brazil.91Many of these same countriesmost notably Colom-bia and Peruhave also moved closer to the UnitedStates, and Uruguayan president Tabar Vzquez senta shock through Mercosul in 2006-07 when he indi-

cated that he wished to sign an FTA with Washing-ton (he ultimately settled for a trade and investmentframework accord).92

In short, Brazilian ofcials can hardly claim thatSouth America is united, much less that it is united be-hind Brazilian leadership. If President Lulas succes-sors do not make Brazils bid for regional hegemonymore attractive to its neighbors, they too will nd itdifcult to establish a strong power base in Brazilsbackyard.

Global Coalitions and Strategic Partnerships:Tensions and Limitations.

The third dilemma has to do with the strategic

partnerships and global coalitions that President Lulahas sought to establish. As discussed previously, therationale for this activity has been that these groups


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will broaden Brazils strategic options, provide lever-age in dealing with the United States and the West,

and allow Brazilian ofcials to position themselves asspokesmen for the developing world. This strategyhas racked up some initial successes over the pastseveral years. Looking ahead, however, there are seri-ous questions as to whether these partnerships will becohesive or effective enough to serve as meaningfulforce-multipliers for Brazilian diplomatic inuence.

Consider, for instance, President Lulas efforts tobuild international support for his Security Councilcampaign through a variety of bilateral and multilat-eral endeavors. Groups like the G-4 and IBSA havemade Security Council reform a dening theme oftheir diplomacy, and individual countries like Franceand the United Kingdom have pledged their backingfor Brazils candidacy. Yet Brazil still faces consider-

able challenges in achieving permanent membership,and not only because Security Council reform is inher-ently fraught with difculty. Brazils bid lacks cred-ibility due to the fact that major Latin American coun-triesMexico, Argentina, and Colombiaoppose it,and President Lula has encountered foot-draggingand obstinacy from several of his strategic partnersas well. The Russian government is loath to dilute itsglobal inuence by expanding one of the relativelyfew elite international clubs to which it still belongs.93China is unalterably opposed to the program of theG-4, owing to Beijings long-standing antipathy to-ward Japan and its continuing rivalry with India. Sofar, Brazilian diplomats have failed to budge Beijingfrom this stance. When President Lula designated

China a full market economy in 2004 in order to easerestrictions on Chinese imports, the expected payoff,Chinese support for Brazils Security Council bid, was


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India, Russia, and China are natural rivals rather thannatural partners, given their geographic proximity to

one another, and competition within this subgroup isalready on the rise. Many Russian strategists see thegrowing strategic, economic, and demographic chal-lenge from China as more threatening than anythingin Moscows relations with the United States.97 Indianofcials are hardly sanguine about Chinas search fora port on the Indian Ocean (especially given that thissearch is leading Beijing toward Indias rival, Paki-stan, and its authoritarian neighbor, Myanmar) andthe need to obtain oil supplies from Africa could soonemerge as another point of friction.98 As the individualBRIC countriesespecially China and Indiabecomemore powerful, they will probably become more as-sertive in pressing their particular national interests,which may bode ill for intra-group harmony. Peering

out over the next decade and beyond, BRIC looks likea shaky foundation upon which to base any coalition-building strategy.

In some ways, IBSA seems to be a more realisticoption. Its members are all multicultural democracies,and the geographical distance between them damp-ens potential intragroup rivalries. Here too, rhetorichas outpaced reality in terms of both internal cohe-sion and concrete diplomatic or economic accomplish-ment. It is highly questionable whether IBSA can gainacceptance as the voice of the developing nations;calls to democratize international institutions ringhollow with many of the Third World countries thatthe group claims to represent. The prospect that theIBSA three might achieve permanent standing on the

Security Council seems decidedly undemocratic andeven threatening to countries like Nigeria, Pakistan,Argentina, and Colombia.99


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On the economic front, trade between membershas soared over the past decade, and there is room

for greater cooperation on issues like energy and in-vestment. There are also, however, high barriers tomeaningful economic or trade integration. The dearthof transportation links between the three countriesmakes shipping expensive and lessens comparativeadvantage.100 While this issue can potentially be re-solved over time, it may be more difcult to overcomethe policy differences that separate the IBSA coun-tries. Indias economy is protected by much highertariff barriers than either Brazils or South Africas,and despite Minister Amorims claim that IBSA canspeak with one voice on economic matters, Indiaand Brazil have conicting interests on issues like ag-ricultural policy. This has already led to splits withinthe group, with these two countries coming down on

opposite sides of the issue at the failed Doha Roundtrade talks in 2008.101

To its credit, IBSA has been able to minimize dis-putes over issues like nuclear energy and nonprolif-eration. These compromises give some hope that thegroup will be able to maintain its internal cohesion andfocus on the overriding objective of diversifying theglobal power balance. As with BRIC however, thereis a degree of long-term strategic divergence at workwithin IBSA. The current Indian government clearlycalculates that a closer partnership with the UnitedStates is important to achieving Indias regional andglobal aims, as shown by the recent U.S.-India nuclearagreement and the subsequent tightening of relationswith Washington. Moreover, as the breakdown in

IBSA solidarity at the Doha Round talks in 2008 dem-onstrated, to the extent that these rising powers feelstrong enough to stake out independent positions in


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international negotiations, they will probably feel lesscompelled to sacrice their own interests in the name

of Third-World cohesion. This does not mean thatIBSA is doomed to irrelevance, but it does mean thatsolidifying this partnership will demand signicantcommitment and concessions from the three members.

As for President Lulas burgeoning relationshipwith Iran, the putative benets of this initiativeagreater voice in Middle Eastern diplomacy, an oppor-tunity to serve as a mediator between Tehran and theWest, a chance to strengthen Third-World solidarityand assert Brazils diplomatic autonomy vis--vis theUnited Statesare more compelling in theory thanin practice. It is hard to image that President Lulaswarm treatment of President Ahmadinejad will leadto greater Brazilian inuence with the Sunni Muslimand Arab states that occupy the vast majority if the

Middle East. Nor is this partnership good for Brazilsimage. The more President Lula defends the humanrights practices and electoral legitimacy of the Iranianregime, the more he risks compromising the demo-cratic credentials that have served him so well.102 Thenthere are the implications for what is still Brazils mostimportant diplomatic relationshipits conictedpartnership with the United States.

Brazil-U.S. Relations: Partnership or Rivalry?

Since the mid-20th century, U.S.-Brazilian rela-tions have typically featured a mix of conict and col-laboration. During World War II, Getulio Vargas sentBrazilian troops to ght alongside the Allies in Italy,

albeit after securing promises of U.S. economic aid asthe price for doing so. In the 1960s and 1970s, the pro-nounced anti-communism of Brazils military govern-


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ments (particularly that of Emilio Garrastazu Mdici)conduced to a common interest in keeping the radical

Left out of power in Latin America. I wish he wererunning the whole continent, Richard Nixon said ofMdici in 1971.103 At the same time, Brazilian lead-ers were wary of being seen as Washingtons lackey,compelling them to put distance between themselvesand their U.S. counterparts. They chafed at Americanefforts to interfere in Brazilian politics, especially criti-cism of the military governments, as well as Washing-tons attempts to slow the postwar diffusion of globalpower. Brazilian governments refused to sign thenuclear Non-Proliferation Treaty through the 1980s,resisted American pressure on human rights issuesunder the Carter administration, and found numerousother ways to assert their diplomatic autonomy.104

A similar ambivalence characterizes current U.S.-

Brazil relations. At the strategic level, the two coun-tries have broadly congruent interests. Both Washing-ton and Brasilia desire stability in Latin America andin the larger international arena. Both countries be-lieve in the benets of a liberal economic order, even ifthey differ on what exactly that order should look like.Both nations have democratic political systems, andboth would be threatened should authoritarian statesin Europe or Asia come to dominate the internationalorder. With respect to the contemporary setting inLatin America, both Brazil and the United States havea vested interest in containing authoritarian populismand seeing that Chvez does not emerge as the pre-eminent regional statesman.

These shared interests have led to bilateral coop-

erationor at least accommodationon several im-portant issues. Collaboration on counterterrorism andorganized crime issues has generally been good. In


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are prejudicial to their countrys development, andthat these rules are thus in need of revision. And in

the broadest geopolitical sense, Brazil simply cannotachieve the increased inuence it seekswhether inSouth America or the larger global systemwithoutweakening that of the dominant power in these envi-ronments. Ten years ago, Brazilian ofcials tended tomake this point obliquely; under President Lula, theyhave made it more explicitly. In 2008, AmbassadorAntonio Patriota told a U.S. audience that the daysof the Monroe Doctrine are over, and other com-mentators have taken an even more confrontationaltone. Brazil is at war, opined the Folha de Sao Paulo,a nationalist newspaper. A diplomatic war, with aclear strategy and coherent tactics, against the unipo-lar world. Nothing personal against the United States,but entirely against a single power hovering above all,

in every area.109

Quietly but unmistakably, this strategic tensionhas moved to the center of U.S.-Brazil relations. Asdiscussed above, Brazilian diplomats have emerged asfoils for their U.S. counterparts in international tradeforums, often serving as focal points for resistance toWashingtons proposals. President Lula seized theIraq war as an opportunity to rally diplomatic oppo-sition to U.S. hegemony, a project he has since con-tinued through IBSA, BRIC, and other forums. At thebilateral level, President Lula continually proclaimsthe injustice of the U.S. tariff on ethanol imports, andthis issue intrudes on virtually every encounter be-tween high-level ofcials. As Brazil has become morecondent, it has also become more deant, and this is

ineluctably causing friction with the United States.110This same tendency is also apparent within SouthAmerica, where the shared imperative of containing


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President Chvez has masked the increasingly com-petitive tenor of U.S.-Brazilian relations. President

Lulas opposition to the FTAA derived largely fromthe fear that the project would link South Americancountries to the U.S. economy and thereby break upthe solid, regional space that his administrationaimed to construct.111 Similarly, the creation of institu-tions like UNASUR and CSD must be seen as effortsto balance U.S. inuence in South America by makingBrazil, rather than Washington, the regions dominantinterlocutor on political and defense matters. Alongthese lines, Brasilia has worked to limit the U.S. de-fense presence in the region. President Lula sharplycriticized the U.S.-Colombia basing deal signed in2009, and at a UNASUR meeting shortly thereafter,he led several countries in trying to limit the type ofactivities that could be carried out at the bases. Dear

friend Obama, he remarked, we dont need U.S.bases in Colombia to ght drug trafcking in SouthAmerica. We can take care of ghting drug trafckingwithin our borders and you must take care of yourdrug users.112 The reactivation of the U.S. 4th Fleetin 2008 also caused a strong response, with PresidentLula speculating that American naval forces consti-tuted a threat to Brazils offshore oil reserves.113 Brazilseeks to displace the United States as the dominantpower in South America, and this objective bringswith it an elevated risk of bilateral conict.

This budding rivalry has recently spilled over intoCentral America, even though Brazil has little hope ofcompeting with U.S. economic and political sway onthe isthmus. In 2009, President Lula took exception to

what he perceived as Washingtons insufcient inter-est in reversing the coup against Manuel Zelaya inHonduras.Marco Aurlio Garcia criticized President


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Obama for declining to put more pressure on theputschists, and President Lula eventually assumed

a key role in the crisis by permittingperhaps reluc-tantlyZelaya to take refuge in the Brazilian embassyin Tegucigalpa. U.S. ofcials believed that this deci-sion simply complicated pros

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Dilemmas of Brazilian Grand Strategy