Dimanche 21 Avril 2019  
 

N°65 - Premier trimestre 2004

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  S.E.M. / H.E. Sergio SILVA DO AMARAL

Brazil: A New Power Emerges

Luis Inacio Lula da Silva’s election as President of Brazil rekindled hopes for reenergizing the economy and reducing social inequalities in the world’s tenth industrial power. As President Lula calls for fairer trade between the North and the South, putting Brazil at the forefront of a fast-changing Latin America, the Ambassador of Brazil to France, H.E. Sergio Silva do Amaral, describes his country’s ambitious plans.

The Diplomatic Letter: Brazil opened an important new chapter in its democratic development with the election of Luis Inacio Lula da Silva as president in October 2002. Has this political shift brought deep-reaching changes to your country? Could you describe the headway made in Brazil since 1984, when the military dictatorship was brought to an end?

H.E. Sergio Silva do Amaral: Brazil has enjoyed great democratic stability since the military dictatorship came to an end, in 1984. All of our presidents have been duly elected, and have handed over power without incident. We even carried out impeachment proceedings against one president, in strict compliance with constitutional procedures. That said, you are no doubt correct in saying that, for the first time in its history, Brazil has made a power handover that wrought a tremendous political shift. It was the very first time a party that sprung out of unions and workers’ organizations - a party that truly represents workers, without being populist - was brought to power democratically, without the slightest incident, either during the electoral process or the power handover. Leftist pro-worker governments can be found the world over. But Brazil has given birth to a leftist workers’ movement that does not advocate a populist stance. This is a significant shift, all the more so as this administration has displayed great political wisdom, as well as exercising fiscal prudence. It is implementing well balanced policies, while taking care to safeguard vital macro-economic balances.  

T.D.L.: Though elected on a platform advocating social change, President Lula has made fiscal prudence the key ingredient of his program. Now that last year’s inflation scare is over, what is being done to spur strong and sustainable economic growth in Brazil? Could you outline the key goals behind the Brazilian government’s structural reform policy, especially as concerns the retirement and tax systems? How is it going to maneuver around the constraints of a large public debt? What is Brazil doing to attract greater foreign direct investment?

H.E.S.S.D.A.: Restoring market confidence has been the government’s biggest concern. World markets were convinced, right or wrong - and as it turned out they were wrong - that the new government was going to shake up the Brazilian economy by launching populist measures and lowering interest rates without bothering to fight inflation or maintain a sound fiscal footing. In fact, the government has stressed fiscal prudence. It has brought down inflation to a fairly reasonable level: around 8% in 2003 and most likely around 6% in 2004. This has created a primary surplus that exceeds 4% of GDP. The exchange rate has been stabilized. The trade balance posted a $24-billion surplus. The basic macro-economic situation has been righted, leaving the Brazilian economy poised to take off. The government and numerous economic experts agree that this year’s growth rate should climb to between 3.5 and 4%. In view of this important gain, we can expect even higher rates in years to come.
The Brazilian government has also launched an important reform program. Governments the world over are facing this same challenge, now that we live in a globalized economic space that forces all the world’s countries to compete against one another. As we move into the new century, most countries are following more or less the same path, with the aim of restructuring their economies to make them more competitive and reforming their social security systems in line with demographic constraints.
We have pushed forward with tax reform, in an effort to reduce the tax load on the production sector. We have also reformed social security contributions (PIS and COFINS), so they don’t weigh as heavily on the sectors with the highest added value. Freeing up more of our budget - now capped at 90% - was key to ensuring more effective management of government spending. We have also continued our reforms in the social security system. We have increased the minimum number of years worked before retirement as well as social security contributions, in order to curb the growing fiscal deficit and spur a sustained economic recovery. The government has nonetheless remained flexible as it tightens the purse strings and enacts these reforms, taking care to safeguard the most important social programs.
Brazil’s debt is not as large as is often said. It currently stands at 57% of GDP, a figure lower than in France, I believe. Once again, credibility and confidence have a role to play here. Brazil’s foreign debt is roughly $200 billion. That is 30% of GDP, which has grown to $600 billion. Our internal debt is, however, larger than France’s, hovering around 40% of GDP. A number of developing countries are seeing heavy outflows of short-term capital, which flees at the first sign of crisis, such as a jump in interest rates in the United States. This can also be a repercussion of financial problems in other regions, as we saw during the 1998/99 Russian crisis. This is why we are working hard to cut the share of the internal debt pegged to the dollar, spreading it out over the medium and long term. We have also instituted an across-the-board policy aimed at increasing exports. Our goal is to boost the trade surplus and reduce the current account deficit, which has climbed to 5% of the balance of payment. The United States has an equally high rate, but the U.S. can finance its balance of payments by leaning on Asian markets, a risky venture for Brazil. Thanks to the large 2003 trade surplus, we managed to bring the current account deficit all the way down to zero. We plan to push forward with this policy through 2004 with the aim of reducing our dependence on foreign capital, as a precaution.
That said, it is clear that no country can get by without foreign investments nowadays. This is a simple reality in a world economy that is becoming increasingly integrated. Countries that have a higher growth rate than we do, such as China, draw the most foreign investments. France, for instance, more than doubled its  investments in foreign lands from 1996 to 2000-2001. Over that period, Brazil took in nearly $2 billion in French investments every year, the equivalent of $10 billion in five years. Thirty-six of the 40  French firms that make up the CAC40 are active in Brazil. A total of 500 French companies have investments in our country. This has obviously brought our countries even closer, building a network of concrete shared interests linking the two economies. Increased French investments also tend to increase the level of French exports to Brazil. While many of these firms work in the service sector, and have low export value, a good many work in the production sector. They helped spur the incredible expansion we have seen in Brazil over the past two years, which has led to a 15 to 20% yearly increase in exports.
When I say that Brazil is relatively open to foreign investments, it surprises many people. But this openness is inscribed in the Brazilian Constitution, which makes no distinction between Brazilian and foreign firms. Our laws, government, and official development banks treat both as equals. I would go so far as saying that foreign firms enjoy special advantages in certain sectors, thanks to bilateral agreements. For instance, until two or three years ago, foreign airline companies didn’t pay fuel taxes, unlike Brazilian companies. A fact which, by the way, was totally absurd. The preferential treatment reserved for foreigners has since disappeared. As for our official development banks, foreign firms are treated exactly like Brazilian firms. Brazil has a development bank that is not very well known abroad: the National Bank of Economic and Social Development (BNDES). It makes loans to all of Latin America, with total yearly disbursements nearly double that of the Inter-American Development Bank (IBD). This is nearly as much money as the World Bank lends to all the developing countries combined, making the BNDES a key financial player. We are also laying out an aggressive policy for attracting greater foreign investments. Last January President Lula and his cabinet brought Brazilian and European business leaders together at a conference in Geneva, in order to familiarize them with Brazil’s main investment projects. We are  working actively to inform foreign firms of the great economic opportunities in Brazil, as well as projects with high potential for foreign capital partners.

T.D.L.: The drive to ensure “zero hunger” is the Brazilian government’s number-one goal, confirming its desire to build a truly egalitarian society. 50 million of Brazil’s 178 inhabitants live in poverty. Can Brazil muster the resources to effectively reduce poverty and spur the creation of new jobs? Has it launched measures to reduce the development gap between the Northeast and the Southeast? Given that 50% of Brazil’s titled land is owned by 2% of the population, does the government have the leeway to implement real land reform? Is it taking steps to combat the high rate of violence in Brazil, by laying more focus on municipal authorities and decentralization?

H.E.S.S.D.A.: The government has launched two different kinds of measures. The first seeks to remedy the immediate situation by distributing food to the neediest Brazilians, mainly through school meal programs. Every single one of the 34 million children from ages 7 to 14 attending public school receives three meals a day. We  have enrolled 96% to 97% of our children in school, which means that an entire generation of Brazilian schoolchildren are now eating a healthy diet. This tactic will not, however, resolve the basic problem. The only way to overcome hunger and poverty is to ensure that people have access to health care, education, professional training, and jobs. With that in mind, the government has also launched structural measures, disbursing income support to the  neediest Brazilians with the aim of getting them involved in government social programs. The School Stipend, for instance, is designed to encourage parents to keep their children in school. People who do not contribute to the social security fund still qualify for income support. In fact, all government services aimed at reducing social inequalities have been bunched together under one single mechanism, which disburses funds to the underprivileged and serves as the foundation of our fight to end hunger. On a concrete level, all of these services are grouped together on a family card similar to a credit card, which allocates a preset sum to each service. We are also striving to create new jobs by bolstering family farms, supporting SMEs via the development bank, and pouring a good deal of effort into spurring an economic revival.
The development gap between the Northeast and the Southeast did indeed pose a grave problem a few decades ago, but growth rates in Northeastern states have climbed above the national average in years since. Despite these economic gains, the region still receives special development funding. It takes the form of project financing at preferential interest rates, assistance for SMEs, and  support for agriculture, the leading industry in Northeast Brazil. The Ministries of Education and Health are also carrying out special programs in Brazil’s poorest states, including those in the Northeast, which social indicators show are still lagging behind.
The government has proposed a significant compromise on agrarian reform. The Workers Party (PT) has always had strong ties with the Landless Workers Movement (MST), with the two organizations jointly operating numerous associations. But it will obviously take a good deal more than this, as the Landless Workers Movement still has wide autonomy. The government, for its part, is deeply committed to solving this particularly difficult problem. As we head into the 21st century, Brazil is undergoing a rural exodus similar to the one witnessed in Europe in the late 19th century, during the industrial revolution. That problem was only resolved, as it were, by massive immigration and two world wars. Over the past 50 years, roughly 50% of Brazil’s rural population has migrated to cities. No country could create, in so little time, the social and public facilities needed to support such a large group of people. Ever since this shift, the outskirts of Brazil’s big cities have had more social problems than the countryside, or even the Northeast. The problem has been compounded by the breakdown of the family, sparked by hardships caused by the rural exodus. This obviously presents a considerable challenge, but I think we are moving steadily forward toward finding an effective remedy.
If there appears to be a bigger problem with insecurity in Brazil, it is because the change was much swifter and the country’s needs are much greater. The only way to solve this problem is to create social programs, economic growth, and above all jobs and earnings, especially for young people. Here again, we are facing a problem tied to underemployment and unemployment, which can be found in the outskirts of big cities the world over. Apart from Rio and Sao Paulo, where the level of violence and crime is higher, the situation in other parts of Brazil is perfectly normal, that is to say, more or less the same as in other regions of the world. Societies as varied as France and Brazil are facing this very same problem. If Brazil is tackling it in a different manner, it is because our state structure is somewhat decentralized. Brazilian police, for instance, do not fall within the competence of the federal government. Every one of Brazil’s 27 states exercises wide political and economic powers. Funding has obviously been a problem, but I don’t believe it is the key to the fight against insecurity. On the other hand, working in partnership with civil society, NGOs, and parent-student associations has helped put the police in a better position to meet these challenges. Ensuring that children are in school, for instance, and not out in the street, has aided in the fight against drug trafficking. An association like “The Children of Morumbi” - which I happen to know well, since Morumbi is one of the largest stadiums in Sao Paulo - tries to interest children in playing in a samba band. 3,000 children are now studying music with the association, but they cannot take part in the program unless they are attending school. Brazil is therefore concentrating first and foremost on ensuring that children stay in school, a considerable challenge in and of itself. We have managed to enroll 96%-97% of thirteen- and fourteen-year-olds in school. This public-private partnership, focusing not on economics but on civic responsibility, has enabled us to come up with solutions at both the local and neighborhood levels.

T.D.L.: Turning to the diplomatic arena, President Lula has made the Mercosul regional integration project his highest foreign policy priority. Could you share your thoughts on Mercosul’s emergence as a key growth pole in South America? On a practical level, is President Lula’s proposal to create a common Mercosul currency and parliament feasible? Will the Brazil-Argentina partnership play a key role in the regional integration process?

H.E.S.S.D.A.: Pushing forward with Mercosurl is indeed the government’s highest foreign policy priority. In our increasingly globalized world, worldwide integration goes hand in hand with regionalization. The European Union offers the best example of a successful regional integration process. Mercosul is working towards this same goal within our region, as is South America on a broader level. Mercosul’s beginnings proved to be rather difficult, with Brazil and then Argentina running into economic troubles. Now, for the first time, both countries are full-fledged democracies implementing economic policies that are helping spur growth. Argentina’s economic recovery has helped reenergize Mercosul. But we didn’t stop there: we signed a free-trade agreement with the other countries of South America at the end of 2003. This is extremely important, as it will boost trade between South American countries, along with foreign investments. A French firm that sets to work in Sao Paulo or Lima, for instance, has a continent-wide market at its doorstep, which is no little thing. The Mercosul process is thus vital in order to increase trade, attract investments, and build an economic base that will serve as the foundation for more concerted political actions between the countries of South America. I therefore believe we have excellent reasons for making the region our top foreign policy priority.
I also believe that politics must be built on dreams as well as reality, and not only when it comes to world affairs. We have concrete steps to take, such as rekindling Mercosul and signing a free-trade agreement with Andean countries. But we have to keep our eyes on the horizon, and beyond that, on a vision. Our vision is a Latin American Parliament, or at the very least a South American Parliament. Our national assemblies are all in agreement on this point. I should also add that Mercosul is more a political than an economic initiative. The business leaders who supported and rounded out this political project are not the ones who put it together, as was the case with the European integration process. The idea to create a single currency is part of this same vision. Countries the world over are being rocked by unstable exchange rates, which I believe is pushing every region of the world in this same direction. The euro is a good example of this. And even if this vast project does not come together anytime soon, it is time to start giving it serious thought, and to start laying the groundwork.
This integration process does indeed have a backbone, one made up of South America’s two great economic powers: Argentina and Brazil. Our two countries are very complimentary. More importantly, both have always been firmly committed to the construction of Mercosul. Our partners - Paraguay, Uruguay, Chile and Bolivia - are all equally committed to this project. Let me just add that France, which has always been a key political and economic partner, also believes that strengthening Mercosur is a positive step forward.

T.D.L.: During their 2003 meeting in Miami, trade officials from 34 American nations confirmed the January 2005 deadline for creating the Free Trade Area of the Americas (FTAA). In light of recent trade differences between Brazil and the United States, how should we interpret the compromise struck by the two countries in Miami? How does the South American integration process fit into the FTAA project?

H.E.S.S.D.A.: The American market is of great important to us. It purchases 25% of our exports, the equivalent of our exports to Europe. The United States and Latin American countries together account for 50% of our exports. The negotiations have run into a sticking point: Brazil’s average tariff is higher than that of the U.S. The average customs duty in the United States stands at 4%. In Brazil, it hovers between 12 and 13%. But the sectors where Brazil is the most competitive account for 10% of trade. As it so happens, American customs duties are as high as 40-50% for this very 10%. The problem is compounded by protective measures, such as antidumping duties or health department bans. Consequently, for us, a trade agreement that excludes the group of products where we are the most competitive is not a balanced agreement. If we lowered our average customs duty, from an average rate of 12 to 6%, it would be a big boost for U.S. exports to Brazil, given they export a much wider range of products than we do. If we see that the U.S. has no intention of putting issues like agricultural subsidies or antidumping measures on the table during the FTAA negotiations, wanting instead to negotiate these matters through the WTO, we would have a hard time signing any agreement that does not cover these points. This is why we have suggested, as has the United States, that the most contentious products be negotiated separately, or within the WTO. The most important thing is ensuring that the outcome of the FTAA negotiations is balanced. When the United States is ready to negotiate all of the issues, and not exclude what we consider to be the most important points, there will be nothing to stop us from moving forward.
Furthermore, I consider Mercosul a very important goal in and of itself, with or without the FTAA. I believe that South American integration can be strengthened in both the near and medium term, as it revolves around not only customs duties but also around investments by firms from Brazil and neighboring countries.

T.D.L.: South America has been hit by repeated financial crises over the past decade, compounded by a rise in conflicts linked to drug and weapons trafficking. What is Brazil doing to help build greater regional stability?  As more and more of the Amazon’s economic resources are being drained off, is your country crafting an environmental policy to protect this vital resource?

H.E.S.S.D.A.: Let me give you an important but little known fact about Brazil: we share borders with every country in South America, except Chile and Ecuador. We have eleven countries as neighbors, including France, and have not had even the slightest conflict with any of them for the past 150 years. South America does have a certain amount of political and economic instability, but this has not turned it into a conflict zone. I would even call South America a peaceful zone, since the only disagreement that threatened to degenerate into a conflict - between Peru and Ecuador - was easily resolved through dialogue. Brazil is very proud of having played a role in resolving this problem. Neither is South America  a terrorism zone. It is, however, faced with the problem of drug trafficking and the organized crime activities linked to it. While Brazil is not a drug-producing country, drugs do pass through our country, which has a relative amount of drug use. We are cooperating with our neighbors at the regional level, to prevent Brazil from becoming another drug trafficking hub. We are keeping a close watch on the Amazon and its air space, where trafficking is most likely to take place. These efforts require considerable means. We currently in the process of installing a very sophisticated aerial surveillance system, working in partnership with France among others. This radar surveillance system is backed up by local police and aircraft set aside specifically for this task. Thanks to this new setup, we can now spot aircraft trying to sneak unnoticed through Brazilian air space, which they have managed to do until now. We are still ironing out problems tied to Brazilian law, which prevents us from shooting these aircraft  down. Military aircraft force them to land, then the federal police step in to inspect the aircraft and make arrests if warranted. This system has reduced the amount of drugs transported through Brazilian territory, forcing the traffickers to take other routes. Now we must crack down on other problems linked to drug trafficking, such as the sale of heavy weapons, which can be found in our big cities. The film “City of the Gods” offers an excellent illustration of the nature of the problem. Fortunately, it is confined primarily to Rio de Janeiro and  Sao Paulo.
The Amazon is one of nature’s great gifts, and Brazil was lucky enough to receive it. The new generation of Brazilians realize it is up to them to safeguard this natural heritage. Environmental awareness is very high in Brazil. This issue is under constant debate, with equally constant pressure applied on the government. I would even contend that our commitment to the environment is stronger than that of countries who are finding it hard to implement agreements like the Kyoto Accords, which Brazil did by the way sign. In recent years, for instance, we have laid out vast conservation areas to protect the Amazon forest. Certain Amazon states have even gone a little overboard: two-thirds of the state of Roraima have been made into reserves that protect either Indians or forest lands. But while the various state governments are championing this environmental policy, they must also allow enough economic activity to support the local population. Few people realize that over 17 million Brazilians live in the Amazon. The city of Manaus, for instance, has some 1.5 million residents as well as an industrial zone with an annual output of over $10 billion. And so our greatest challenge, and biggest concern, is finding a way to harmonize our commitment to protecting the environment with a viable economic policy, because both are equally necessary. In order to protect the Amazon forest, we have set up a program that incorporates cutting-edge technology. It uses a satellite surveillance system to spot potentially large fires as soon as they break out. We are also working to identify economic activities that are incompatible with environmental conservation. Speaking as the former Deputy Minister for the Environment, I think the most important thing is making people realize the great value of this environmental legacy, especially its economic value. In other words, protecting the forest will enable us to expand our tourism economy and explore Brazil’s great biodiversity. There are countless examples of this heightened awareness. State governors, for instance, are now taking into account the potential benefits from tapping into this biodiversity and biotechnology. Children and adults of voting age are also more aware of the problem. I think the days of general indifference are behind us, with the Brazilian people now committed to protecting the environment. As an example, let me mention the cooperation between France and Brazil in the construction of a bridge over the Oyapock River, which separates Brazil and French Guiana. I hope this will not be an isolated case, but that this joint work will be expanded into a full-scale program that creates jobs and boosts cooperation, especially in the environmental arena. Brazil has carved out a vast forest reserve, Tumucumaque National Park, on its side of the border. Brazilian and French authorities ar now trying to convince the Guyanese of the initiative’s advantages, especially from an economic perspective.

T.D.L.: The Lula administration is determined to right the international trade balance in favor of the Southern hemisphere, starting with the creation of the Group of 20 emerging market countries at the 2003 WTO Summit in Cancun. In light of Brazil’s new cooperation agreements with South Africa and India, signed in November 2003 and January 2004, do you expect to see the emergence of a strong trading block among southern countries?

H.E.S.S.D.A.: The G20 is an initiative that merits further study. Everyone familiar with trade negotiations, especially negotiations within the former GATT and the WTO, knows that delegation heads have a favorite slogan: «When the United States and Europe aren’t getting along, we’ve got trouble. When they are getting along, we’re scared to death.» The United States and Europe are the world’s two great trade powers, and have always formed the backbone of trade agreements. In view of this, and because the developing countries were dissatisfied with the outcome of the Uruguay cycle, the Doha negotiations were dubbed the «development cycle» to ensure that the developing countries’ aspirations were indeed taken into account. But the agreement reached between the United States and Europe prior to Cancun gave us little reason to believe these aspirations would be fulfilled. In my own opinion -  one shared by the Brazilian government - the G20 gave the developing countries a tool for expressing their strong desire to discuss the real issues, and to make the round live up to its name as the “development cycle.” I believe we sent out a very strong signal, and that the G20 can do a great deal to help ensure that the Doha cycle does indeed produce balanced results.
We cannot forget that all G20 countries share at least one common denominator: the need to ensure that agriculture is negotiated in full detail, since agricultural products account for a large share of exports from Brazil and the developing countries. What’s more, intellectual property restrictions cannot outlaw the production of drugs needed to safeguard public health, such as drugs used to fight AIDS. The new rules cannot prevent us from doing the very same things done by industrialized countries during their own development phase, so that we can bolster vital sectors that create new jobs and serve as the driving force behind economic growth. In addition to this platform of shared demands, each country has its own specific interests that may well be raised as the negotiations move forward. The fact nonetheless remains that the G20 shares a common base, which is why the group has continued to exist even after the close of Cancun. This shared goal should, hopefully, allow us to play an active role when the trade negotiations start up again.
Along with the G20, Brazil is keenly interested in building a vast network of economic, trade, and investment ties with other large countries similar to our own, and is working to that end. I was involved in the signing of a trade agreement with Mexico that has enabled us to more than double our automobile exports. Our trade with China is expanding very quickly. We have several opportunities to cooperate with India in a wide variety of areas, such as pharmaceuticals and spirits. We share genuine interests with these countries, as well as a common political stance in trade negotiations and a commitment to multilateralism. I personally traveled to China along with 120 business leaders. As for India, some 80 corporate heads have realized that this country offers concrete opportunities. These partnerships are being steered not by ideology, but by practical considerations. In fact, European countries are seeking to build ties with China for the very same reason: because there is money to be made there.

T.D.L.: With his November 2003 tour of nations, President Lula brought Brazil closer than ever to the world’s Portuguese-speaking countries. What is the underlying goal behind this initiative? Is the Portuguese-speaking community a key element of Brazilian foreign policy? As your country steps up its role on the African continent, why do you think African countries have had such a hard time overcoming poverty and political instability?

H.E.S.S.D.A.: We are an integral part of the Portuguese-speaking world, which shares the same origins, history, and language. Portuguese is the 3rd most widely spoken European language on the planet. To my great surprise, there are actually more Portuguese speakers than French speakers in the world. Brazil has worked hard to keep these ties alive. We have kept a strong presence in Angola since it declared independence, which is true of Mozambique as well. Our trade ties and mutual investments with these countries are quite substantial, especially in Angola, where we have launched technical cooperation programs as well. In another part of the globe, Brazil supported East Timor’s drive for independence.
While the Portuguese-speaking community doesn’t have the financial means of the French-speaking or English-speaking communities, it is beginning to display a real commitment to its own development. Working in France has given me to opportunity to meet the Portuguese Ambassador. We now get together on a regular basis with other Portuguese-speaking ambassadors, looking for ways to promote our common language as well as the countries whose culture is built upon it. As we gear up for the Brazil Season in France in France, which will take place in 2005, I plan to keep the Portuguese-speaking community in France informed of the scheduled activities. Maintaining close contact with this community is of vital importance, as Portugal has done for a good many years now. I would also like to underscore the fact that South America is showing greater interest in the Portuguese language and in expanding its knowledge of Brazil. This is true in both the political and cultural arenas.
As for African countries’ development woes, we cannot forget the significant shift by financial institutions. In the 1980s, they advocated a very naive solution: «open up your economies, and the market will do the rest.»  We now realize that development requires strong institutions as well as a strong state. Not an omnipresent state that employs everyone, but a state that can intervene to bolster the economy. It also requires institutions able to ensure that investors receive a warm welcome. Obviously, these things cannot be created overnight. Most African countries won their independence just fifty short years ago. They are not doomed to stagnate indefinitely, but they must work hard to build sounder institutions. I am very pleased to see that the World Bank has recognized this fact. It is now working with countries like France, a key player in Africa, to bolster these countries’ efforts and help their economies grow even faster.
This reminds me of a very surprising fact from back in the days when I served as president of the Association of Coffee-Producing Countries in London: the weekly income of a smalltime coffee producer in Ethiopia was equal to the price of a cup of coffee in London. Ethiopia produces a great deal of coffee. Some countries draw as much as 60% of their export revenues from one single raw material. In an effort to do away with managed trade, countries were told to open up their markets, which they did. As a result, in the case of coffee, producing countries are now paid just 10% of the final price. The four largest traders receive 25 to 30%,  roasting companies get 20%, while the distributors receive 15%. The countries that generate this trade earn just 10% of the product’s final value. What’s more, they have been forced to diversify their products to offset their export problems. Those who opt for producing cotton, for instance, run up against a highly subsidized U.S. market. How can a country attract investments, if its domestic market is still weak and its production doesn’t have access to the  world’s biggest markets? This is why the Millennium Development Goals were put forward. And while they are extremely important, I believe there is no goal more important than opening up the world’s agricultural markets. The greatest challenge is enabling producers in the poorest countries to sell their products to consumers in the richest countries, with the aim of spurring lasting development.

T.D.L.: President Lula has stepped up Brazil’s diplomatic efforts considerably, with an view to increasing the country’s role on the international stage and helping democratize multilateral bodies. Can you tell us what prompted Brazil to seek a seat on the UN Security Council? Will your country step up to play a key role in the new world order that has taken shape since the end of the Cold War?

H.E.S.S.D.A.: The United Nations was created in the postwar period to meet the new threats to peace in a world that had been split into two large blocs. That world is now a thing of a past. I think that our experiences in Iraq, where Brazil and France worked alongside one another, have made it very clear just how important the United Nations truly is. It also showed us the new role the U.N. is destined to play in places like Iraq, Cote d'Ivoire, and even Haiti.
If we wish to increase the United Nations’ operational capacity, if we want to give it new powers that go beyond encouraging cooperation between states, and even allow it to intervene on occasion in member states, then the United Nations must be truly representative of its members. Member states cannot be expected to simply hand it a blank check. What’s more, there must be greater regional representativeness within the U.N. The United Nations has given considerable thought to the new threats to peace, as well as ongoing conflicts, terrorism, organized crime, etc. It has created a special panel - which includes Mr. Robert Badinter and Brazilian representative Ambassador Baena Soares - to examine these issues and recommend effective solutions. It has also been tasked with finding the best way to transform or reform the United Nations. Any reform of the United Nations must lead to greater representativeness. If we want the U.N. to play a stronger role, then there must be greater representativeness on the Security Council. Currently unfolding events and new world realities will require the United Nations to play an even greater role in the future.

T.D.L.: The strong, deep-reaching diplomatic ties between Brazil and France have led them to play a key role in the Mercosur-EU rapprochement process. As advocates of a multilateral world, do our countries share other common goals and stances? Are you hoping that the «Brazil Season in France,» scheduled for 2005, will heighten appreciation of Brazilian culture in France and across the continent?

H.E.S.S.D.A.:  I cannot remember a time, in all the long years our two countries have maintained ties, when we shared as many common stances and affinities. This is reflected in the excellent personal relationship between our current heads of state. We see the world in the same way. We agree on the importance of multilateralism and multipolarity, and the need to strengthen and reform the United Nations. Both countries are firmly committed to the fight against hunger, an issue close to President Lula’s heart. France also tends to have Brazil’s ear on several pressing issues on the world agenda.
We have strong economic ties, both in terms of bilateral trade, which could be stepped up even further, and in terms of French investments in Brazil, where there are still a great deal of opportunities to be snapped up. We obviously see things differently when it comes to agriculture. We are nonetheless carrying on an important dialogue that has opened up many new opportunities, despite this apparent obstacle. French firms are moving into the Brazilian agricultural sector, while Brazilian companies have the possibility of going to work in France. In fact, our agricultural sectors are quite complimentary: France produces food products with high added value, while Brazil is a leading exporter of commodities. There is thus great potential for forming profitable alliances in this arena.
We also have numerous cultural affinities, as Brazil’s cultural path has been closely intertwined with that of France. The very first cultural missions to Brazil were French: St. Hilary, Debret, and many other French artists and intellectuals. The Gamelin mission helped reorganize the Brazilian Army. The Republic of Brazil was proclaimed under the direct influence of Positivism.  Indeed, we are the world’s last remaining positivists. The Auguste Comte House in Paris is directly supported by Brazil’s Positivist House. The University of Sao Paulo was founded with help from a French cultural mission, with Levi-Strauss, Roger Bastide and Pierre Monbeig all lending a hand. Numerous French intellectuals have made Brazil their home, led by Bernanos. On the other side of the coin, many of our most important artists have studied in Paris, including Heitor Villa Lobos, Oscar Niemeyer, the great painter Cicero Dias, and renowned photographer Sebastiao Salgado, who lives in Paris.
This close cultural and intellectual interaction provides an excellent backdrop for the Brazil Season in France, set for 2005. This event will be far more than a showcase for Brazilian culture. It will be a celebration of the cultural interplay, affinities, and shared views that have long linked our two countries. The Brazil Season in France will present a wide program of cultural events in museums all across France. We will also take to the streets of Paris, staging public performances showcasing our folklore and religious traditions. There will a church square washing ceremony, for instance, an Afro-Brazilian tradition still practiced in Salvador de Bahia. There will also be a large exhibition on Brazil’s religious syncretism, which melds various belief systems. In fact, most Brazilians are not even aware of belonging to different religions, since they believe in the Candomble as well as Catholic precepts. This is another common denominator between France and Brazil: our cultural diversity has translated into religious diversity as well.

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