By Paulo Sotero, Special to CNN
Editor’s note: Paulo Sotero is director of the Wilson Center Brazil Institute. The views expressed are his own. This is the latest in the '14 in 2014' series, looking at what the year ahead holds for key countries.
Three consecutive years of disappointing economic performance, with an average GDP growth of barely 2 percent and deteriorating fiscal and external accounts, should be enough to convince President Dilma Rousseff to move Brazil away from the inward policies and micromanaging style she introduced after succeeding her popular mentor, Luiz Inácio Lula da Silva, in January 2011. The same mindset has affected Brazil’s international affairs, with similar results.
A leader with little appetite or patience for diplomacy and focused by necessity on domestic challenges, Rousseff implemented a modest foreign policy agenda when compared to her predecessor and became the first Brazilian president to fire a foreign minister, over a preventable incident. There are both negative and positive incentives for Rousseff to change course as she faces reelection in October 2014.
The consensus among market and political risk analysts is that the Brazilian economy, the world’s seventh largest, will get worse before it gets better. An expected lowering of Brazil’s sovereign debt risk rating to just above the investment grade arduously obtained in 2008 will make capital more expensive for Brazilian companies. This is likely to happen at a time when the Central Bank will be dealing with the adverse consequences of the end of the U.S. Federal Reserve policy of monetary easing, which Rousseff once compared to a “monetary tsunami.” Her finance minister, Guido Mantega, criticized it as a weapon in a “currency war” that made the Brazilian real overvalued and uncompetitive. The problem now is the reverse, as the real loses value against the dollar and adds pressures to an economy tormented by an inflation of 5.8 percent that is kept below the 6.5 percent upper limit of the Central Bank target thanks mostly to government containment of prices under its control, such as gasoline and diesel. Signs are that, in a deteriorating environment, Rousseff could have problems raising enough campaign contributions for herself and her multiparty coalition from a clearly unhappy business community.
Back in 2001, Goldman Sachs’ Jim O’Neill coined the term BRICs to describe the key fast growing developing economies of Brazil, Russia, India and China. But a dozen years later, is the focus on the BRICs misplaced? Indeed, is the group “broken,” as Morgan Stanley’s Ruchir Sharma has suggested?
“Although the world can expect more breakout nations to emerge from the bottom income tier, at the top and the middle, the new global economic order will probably look more like the old one than most observers predict,” Sharma wrote earlier this year. “The rest may continue to rise, but they will rise more slowly and unevenly than many experts are anticipating. And precious few will ever reach the income levels of the developed world.”
Each day this week, a leading analyst will assess the prospects of a BRIC nation and weigh in on whether it still deserves its place in a group of economic high flyers. Today, Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars, looks at the prospects for Brazil.
By Matias Spektor and Ryan Berger, Special to CNN
Editor’s note: Matias Spektor is an assistant professor at the Fundação Getulio Vargas in Rio de Janeiro. Ryan Berger is a visiting researcher at the Fundação Getulio Vargas. The views expressed are the authors' own.
Brazil’s easygoing and upbeat international image has been upended in recent weeks. Popular demonstrations burst into the mainstream last month, when resentment over a nine-cent increase in bus fares intensified into an outpouring of anger on the nation’s streets at insufficient public services and rampant political corruption.
The protests continued last week in Rio de Janeiro to coincide with the first international trip of Pope Francis’s papacy. And they seem to have broad support among the public – a recent survey by Ibope indicated that 89 percent of Brazilians support the demonstrations.
What is happening in Brazil has undertones of discontent seen in Chile, where students have staged ongoing rallies for education reform, and Turkey, where mostly young protestors initially occupied a park over urban redevelopment plans and then railed against heavy-handed governance.
By Carl Meacham, Special to CNN
Editor's note: Carl Meacham is director of the Americas Program at the Center for Strategic and International Studies (@CSIS). The views expressed are his own.
When Americans think of Brazil, protests are the furthest thing from their minds. Rather, soccer and carnival – and more recently, the FIFA World Cup and the Olympics – have, for better or worse, been the images most closely associated with the South American giant.
Imagine, then, Americans’ surprise upon being presented with images of massive and sustained protests – some violent – all across Brazil.
Americans have heard of policemen throwing their weapons into protesters’ bonfires and joining the movement; of thousands of Brazilians turning their backs during the singing of the national anthem at the Confederations Cup on Wednesday; of a young Brazilian woman reaching out to Americans on YouTube, asking them to consider the protesters’ demands.
And as U.S. media has aired more and more footage of empowered Brazilians demanding substantive change, many Americans can’t help but wonder where this all is coming from. Answering that question, however, has not proved simple.
When U.S. media began covering events after Monday’s protests, reports focused on the bus fare hike as if it were the primary – if not the only – driver of popular dissent and demonstration. But as has become increasingly clear, the fare increase was just the tip of the iceberg.
By Ravi Agrawal, CNN
Editor’s note: Each day this week, GPS Senior Producer Ravi Agrawal will assess what’s in store for the world in 2013. On Monday, he began with Asia. Today, he takes on Latin America. The views expressed are his own. You can follow him on Twitter @RaviAgrawalCNN.
Who are the most positive people in the world? Well, at least according to the responses in a recent Gallup poll, eight of the top 10 countries whose citizens feel happiest are in Latin America – Panama, Paraguay, El Salvador, Venezuela, Trinidad&Tobago, Guatemala, Ecuador, and Costa Rica. Such results could in part be down to a cultural predisposition to looking on the bright side. But if Latin Americans have taken a moment to reflect on their financial situation, they will also see tangible reasons to be positive about the future.
While the rest of the world has become more unequal in recent years, Latin America is the only region in the world to reverse that trend. According to a World Bank report, 50 million people joined the region’s middle class between the years of 2003 and 2009. Poverty rates have plummeted; more women are working; safety nets have become stronger.
This is the first in a series of entries looking at what we can expect in 2013. Each weekday, a guest analyst will look at the key challenges facing a selected country – and what next year might hold in store.
By Paulo Sotero, Special to CNN
Editor’s note: Paulo Sotero is director of the Brazil Institute at the Woodrow Wilson International Center for Scholars, in Washington D.C. The views expressed are his own.
In her first two years as Brazil’s first female president, Dilma Rousseff did the improbable. A neophyte in elective politics seen by many as a mere extension of her revered predecessor and mentor, Luiz Inácio Lula da Silva, Rousseff is today more popular at home than her creator. Remarkably, she gained the trust of the Brazilian people while her economic team and policies lost investors’ confidence – GDP growth moved in the opposite direction of her approval rating, shrinking from 7.5 percent in 2010 to 2.7 percent in 2011, and somewhere around 1 percent this year.
By Fareed Zakaria
I’ve been in London this week, and I couldn’t help but catch the Olympics bug. The Games are the ultimate meritocracy – or so it seems. But why do some countries win lots of medals? Do they have more talented people than others? We’ve spent some time looking at the data.
A few trends are clear.
Countries with large populations tend to do well. Logic suggests that the more people you have, the more likely you are to have a few excellent athletes. In the 2008 Beijing Games, China was the runaway leader with 51 gold medals. The United States came second, but it won the most medals overall with 110. The two countries are of course among the three most populous in the world.
By Chris Brown, Special to CNN
Editor’s note: Chris Brown is professor of international relations at the London School of Economics. The views expressed are the writer’s own.
The resignation of Kofi Annan from his role as U.N. envoy to Syria does no more than recognize what has been clear for most of the past three months, namely that in this case, the standard peacemaking model of a ceasefire followed by talks between the parties to produce a compromise has no chance of success.
A year ago, such an initiative might have worked. But too much blood has now been spilled, and, crucially, the conflict has become overtly sectarian in a way that wasn’t the case in its early stages.
Annan, in his valedictory message in the Financial Times yesterday, is still inclined to blame disunity in the Security Council for the failure of his plan. “Only a united international community can compel both sides to engage in a peaceful political transition,” he argues. This should, I think, be revised to “not even a united international community can compel both sides to engage in a peaceful political transition if neither side conceives it to be in their interest to do so.”
By Fareed Zakaria
This past week, Los Cabos, Mexico, was quite literally turned into a global public square. Leaders from 19 top economies plus the European Union gathered to discuss the world's major crises: the euro, global growth, Syria. But the G-20 summit, as it's called, also shed light on a few crucial relationships.
Take the U.S. and Russia, for example. Much was made of how Presidents Barack Obama and Vladimir Putin leaned away from each other during talks. Commentators said it felt as chilly as a Moscow winter. Contrast that with Obama and Chinese President Hu Jintao: a warm handshake and big smiles.
But the meeting that really got me thinking was the one between two Latin American leaders: Mexico's Felipe Calderon and Brazil's Dilma Roussef.
Why? FULL POST