November 10th brought much attention to Brazil as a blackout in Rio de Janeiro and Sao Paulo shrouded Brazilians in darkness. The rest of the world on the other hand is starting to see Brazil in a new light as the BBC World Service reported the announcement of the first steps towards physically accessing massive oil reserves on Brazil’s coast. Brazil’s coastal reserves will possibly make it one of the largest oil fields to be developed globally in the last twenty years.
While signs of this oil find have been known since 2007, the positioning of Brazil as the third BRIC to become a significant economic power has become the focus of many economic success stories since the economic crisis began this time last year. The fifteen-minute blackout in Brazil’s two largest cities was nothing compared to the day long blackout of the Eastern US and Ontario Canada in 2003. While many weary Brazilian’s might see this as a sign of poor government control or a lack of proper infrastructure, the economic heart of the world has also blacked out for much longer periods of time and will remain strong despite electrical and economic issues in the past.
Brazil on the heels of the Olympic win might be able to claim a medal in the near future as the third BRIC to develop to its full economic potential. What is of more importance than being the third country of the four to grow into its own media hype, is the ability to stay in the running to become the most stable BRIC nation in the long run. Brazil is not a typical BRIC as its growth did not come about in the same fashion as Russia, India or China. Due to the resilience of its economy, diversity in its global position, and ever growing positive reputation outside of Brazil, the South American giant will likely become the next Super Economy.
Unlike the other BRIC nations, Brazil has grown to its current potential through a series of economic failures and lessons and has made diverse growth a part of its overall growth policy, in addition to a little luck. Politically, there have been many debates in the country and criticisms of policy and the new constitution since the 1990s, but the growth of the country from right of centre to left of centre governments have tried to maintain the same prudent growth strategy while addressing poverty reduction. Poverty reduction and community development combined with economic success has been a slow climb to bring Brazil into a position where its internal issues do not hinder its ability to position itself abroad.
In comparison to the other BRIC nations it must first be noted that the relation between the BRIC nations comes from some simple measures, mostly the physical and population size of the country, its relative economic weight, and political importance in its respective region. Success in these large developing economies could plausibly lead to another combination of four or more nations, which despite their size have little in common when considering growth and poverty reduction. Countries such as Mexico, Indonesia, Ukraine, Iran, Nigeria and Egypt could possibly become future BRICs, but have stronger similarities to a China or Brazil, Russia or India. In the future, the positive and negative growth trends of the original BRICs will likely become the typical measure for different developing countries that are large and emerging economically but have little in common with each other.
When referring to Brazil, it must be noted that its economic diversity and policies addressing poverty reduction outright is notably different than those growth policies in the other BRIC nations. Latin America only competes with Africa with regards to inequality between rich and poor, and this inequality is the historical and structural burden of every Latin American country and citizen. For this reason, when luck arrives in the form of a previously undiscovered oil field, the use of its revenues to grow the economy for the whole of society can be relatively balanced with equitable policy or the expectations of such revenues for Brazil as a whole. Structural problems in places like Nigeria or Iran simply turns its vast oil wealth into a source of wealth for few and is used as political leverage against its own citizens. Russia, one of the co-BRICs, also is a country with large amounts of oil and gas, but often it is used to leverage itself politically against its neighbours and maintain its own security position in the region. The lack of diversity in the Russian economy and its link to oil and gas as its main commodity might bring in a lot of economic successes in good times, but it can harm the Russian economy when oil or other commodities are hurt in poor times. Russia becomes a BRIC however as the potential of a diverse economy and a large population could make it into a large economic power as opposed to a significant country for solely security reasons and cultural influence. Brazil’s long term policies and diverse training and economy has been able to balance its resources with other economic leverages, oil simply supports the Brazilian economy, but is not the economy itself.
With regards to China and India, links to Europe and North America has played a large role in the rapid growth of both these economies. Chinese growth is completely linked with the US consumer and other Western consumers who purchase much of their lost cost items from factories in China. These factories sell directly to US and European companies who choose to move their manufacturing to China and delegate production to small manufacturing concerns in China. Quality and safety becomes an issue for many large multinationals as they can only monitor production by second hand means, and growth in China also becomes dependent on many workers with artificially low wages to grow the country. Legal measures and equality are limited for the sake of growth, and this medium term strategy may likely fail in the long term if wages do not rise or few Chinese are allowed to benefit in the long term. It is not to say that China’s growth is limited, but policy approaches to balance growth with benefits must be addressed to make China into what the pre-2008 media hype believes it to become.
India has tried to address policy concerns and poverty reduction to some degree and might become a more stable economy in the long term, due to its large labour force, basic legal development of employment concerns, and diversity of economic growth as seen in its diversity in production, services, and technological training. India also has strong ties to the UK traditionally and may become a source for UK wealth as the financial sector in the UK continues to finance and fund growth in India due to their close relationship. India’s influence economically is also strongly tied to security issues and concerns as its growth is challenged by China’s economy and Pakistan’s and Afghanistan’s internal security issues which often brings India into the debate.
Media impressions of Super Economies are often done via a lens of paranoia that the US, the EU or Western countries will become the underdeveloped nations of the future. The likely outcome is that the US and EU will remain as strong economies as they have links abroad and are large and influential and will remain so for a long time. BRICs nations often do not involve themselves in other regions beyond a trading relationship or the need for resources. Brazil is balanced economically and resource wise to maintain its influence in Latin America, yet not come in conflict with other BRICs or Western Economies. While the Eastern US may not become an economic blackout in the long run, trends and policy concerns should create strong ties among strong neighbours economically and create decisive and strong coalitions between current or future BRICs and Western powers if economic hubs will grow or remain at their current levels of importance. Brazil is likely not going to be limited by 15 minutes of fame or of darkness, but will grow slowly and surely over the next few years.
