Brazil - Asia Relations and their Perspectives
By Paulo Vizentini
Brazil has 1 million people of Japanese descent and consequently entertains close relations with this country. In the 1970s Brazil launched an important political and economic co-operation with the PR China, and in the last ten years close relations have been developed with the ASEAN nations, South Korea, and India in the field of trade, investments, technological and nuclear projects and in the diplomatic arena. After the creation of MERCOLSUL in 1991, Asian countries stepped up their interest in the region, not because of burgeoning economic possibilities, but also as a strategy to search for alternatives to the growing US hegemony.What is the importance of the relations of Brazil, a Newly Industrialized Country, situated on the other side of the world, with Asia? Brazil is the fifth country in size and population of the world, and the tenth world economy. It is the centre of the only process of integration in the southern hemisphere. The country has a diversified production basis and has the only complete industrial structure south of the equator. Also important, despite the neo-liberal policies of the present government, the country still has the strong frame of reference of a national project.
Japanese investments
Brazil was a European colony for centuries, but is now geopoliticially situated in the North American sphere of influence. For this reason, Brazilian relations with Asia are recent, but important. Diplomatic relations with Japan were established in 1895 and the first Japanese immigrants arrived in Brazil in 1908. Now, this group is the largest Japanese colony outside Japan, with 1 million descendants. This represents about 90% of the Japanese immigration to Latin America. Closer economic co-operation started in the thirties, when Japanese banks and trading companies were introduced into Brazil. Between 1941 and 1951, the contacts were frozen as a consequence of the Second World War but in the fifties, relations got off to a new start at a level of bilateral, direct exchange, thanks to complementary trade. Over and above this, the Japanese government also made a number of direct investments. As a part of its reintegration in the world economy, Japan set up the Usiminas steel-working complex in Brazil. In the sixties, Japanese companies established a number of subsidiaries all over Brazil: the ship-yard Ishibrás in Rio de Janeiro, the Toyota car company in São Paulo, electronic companies Sharp, Toshiba, and Matsushita, and the motorcycle factories Honda and Yamaha in the free zone of Manaus [Amazonas]. By seizing such advantage, trade between Japan and Brazil, increased from 57 million to 1.7 billion dollars, between 1964 and 1974, and Brazil became the second most important trading partner of Japan.
In the seventies, relations with Japan went from strength to strength and this country began to invest in the Brazilian production bases with the objectives of obtaining component parts and of supplying the Brazilian market. New sectors were developed, including petrochemicals, aluminium, steel, cellulose, and soya beans in the Cerrado region, as a reaction to the US embargo on this last product. From 1973 onwards, with the oil-crisis, under the Geisel government which took office the following year, import-substitution of basic components parts grew by leaps and bounds with the II Plan of National Development. Japan then provided technology, equipment, financing and direct investments.
Relations with China
Fine though this situation was, the new Brazilian diplomacy now geared to development, as a reaction to the economic crisis, tried also to find new partnerships. In 1974, diplomatic relations with Taiwan were cut off -- but not the trade relations - so that the former could be established with the PR China. Within a short while, Brazil became the most important trading partner of China in Latin America, exporting iron ore, primary products, food stuffs and consumer products and importing mostly machines and oil.
Besides the obvious trade perspectives, there was an important political-strategic aspect in this relationship. At this time, China was a growing power and a developing country, a permanent member of the Security Council of the UN and integrated into the Nuclear Club, and last but not least, Beijing was the decisive player between the two super-powers. This way, Brazil gained itself a new autonomy in its relationship with the USA, and a world projection.
In the eighties, the international relations of Brazil would be challenged by the technological revolution, and the subsequent international reorganization of production and trade, and by the foreign debt crisis. In this context, the complementarity between Japan and Brazil declined, because the demand for primary products tended to lose importance, while recession, inflation, and internal problems hampered the development of the internal Brazilian market. However, with the endaka, the valorization of the yen, Japan turned to the North American market and invested principally in Mexico and East Asia. Its internal market was even more closed. Furthermore, at a global level, with the crisis of the Soviet Bloc, in Africa, and the Gulf War, Brazilian diplomacy was deprived of a good deal of room for manoeuvre.
While the relations with Japan grew cooler, the exchange with China increased, in spite of the new international pattern. The economic opening up of China and the programme of the four modernizations allowed an accelerated growth of trade, as well as promoting co-operation in scientific and technological areas, including metal -working and nuclear energy, and even joint cultural and educational projects. Brazilian civil engineering companies started building roads and are participating in the mega-project of the hydroelectric dam of the Three Gorges. All this also led to political contacts and mutual visits at a high level.
Southern Common Market
With the opening of the markets, the adoption of neo-liberal policies and the formation of economic blocs, Brazil had to look for new kinds of relationships in the nineties. Trying to prevent isolation and decline in the new world-order, Brazil grew closer to Argentina, a rapprochement which had already begun in the late eighties. This constituted the core of a larger process of integration, which was extended in 1991 to Paraguay and Uruguay, with the creation of MERCOSUL [Southern Common Market]. This was ineluctably a clear reaction to the North American initiative towards hemispheric integration, which would eventually lead to the establishment, as a first step, in 1994, of the North American Free-Trade Agreement, NAFTA.
In 1994, the Economic Stabilization Plan (Real Plan) was launched, to complement all the previous measures taken by the Brazilian government to get Brazil back in the picture. However, while regional co-operation has priority, and an agreement has already been signed between the European Union and MERCOSUL, relations with Asia, the most dynamic economic area of the world, continue to be the principal option for Brazil in its argosy to win a better position in the world order, as an offshoot of the altered relations between Brazil and the USA.
Besides economic opportunities, Brazil is interested in the political and military autonomy which exists in Asia -- phenomena made possible by China -- and also in a number of elements of the so-called Asian style of development. Because of this, Brazil, through MERCOSUL, has tried to participate in Asian processes of integration such as the Asian-Pacific Economic Co-ordination (APEC) and the Asian Free-Trade Area (AFTA).
Brazilian diplomacy has been getting closer to ASEAN countries, having established relations and recently opened an Embassy in its newest member, Vietnam. In relations with Singapore, Thailand, the Philippines, and Myanmar, Brazil is trying to make use of channels that had been established earlier. Special efforts have been set up with Indonesia, but even more so with Malaysia, a country that has invested in Brazil, established joint ventures, and increased bilateral trade. Brazilian civil engineering companies are participating in the construction of the hydro-electrical dam at Bakun and technological and scientific co-operation between the two countries is increasing.
At meetings of ASEAN, Malaysia has defended the establishment of institutional links between this economic bloc and MERCOSUL, and offered to be the redistribution centre for Brazilian products in Southeast Asia. Besides these goals, it is of the utmost importance to Brazil, that Malaysia also tries to foster South-South co-operation, as an alternative to pressures exerted by the great powers on national development projects.
Korea and India
Another partnership that is being developed is that with South-Korea. In recent years Brazil has received a significant number of Korean immigrants, about 50,000, making it the fourth Korean colony in the world. Trade has intensified so much that Brazil has become the first trading-partner of Korea in Latin America. The latter has exported cars and household appliances and imported aluminium, steel, primary products, and food stuffs.
Moreover, Korean investments in Brazil have built up in the sectors of metallurgy, software and hardware, household appliances and the installation of a new car-plant in Brazil is foreseen. The expansion in all these businesses with Korea has compensated for the stagnating Japanese investments over the last decade. This relationship has, however, a solely economic basis, which is not the case with India.
Although Brazil has had little contact with India in the past, this country has assumed an increasing importance in Brazilian diplomacy. Both countries support one another in their quest for a seat as a permanent member of the Security Council of the United Nations. In 1996, President Cardoso went to New Delhi and signed an important agreement on scientific co-operation, principally involving atomic technology. The two countries are of the same mind concerning nuclear disarmament, defending the importance of nuclear research for developing countries. The international position of India, as one of the leaders of the Non Aligned Countries and as one big emerging market is of great interest to Brasília. Also noteworthy is the co-operation that has been building up around the technology of missiles and satellites, which is important to Brazil, as the country does not have enough resources to work alone in both these areas.
Recent and future developments
In the nineties, co-operation with Japan took off with a new lease of life. The perspectives for this resumption are based on three main lines: the highway to the Pacific, the dekassegui, and MERCOSUL. The first point will lead to the establishment of a harbour either in Ecuador or in Peru, linked to Brazil by an Amazonian highway. This project, once finished, will mean a huge reduction in the transportation costs to Asia. At the moment, it is at a stand-still owing to protests by North American and European environmental organizations.
The dekassegui, the Brazilian descendants of Japanese immigrants who are working in Japan, have been the channel for another form of co-operation. At the moment, they number about 200,000 and are responsible for remitting two billion dollars to Brazil, annually. Quite apart from their financial contribution, they play a pivotal part in rekindling Japanese interest for Brazil and a number of new projects have been set up.
MERCOSUL as such has been attracting the attention of Japanese businessmen and members of its government, who are considering co-operation between this economic bloc and APEC. Thanks to this, the Committee of Economic Co-operation Brazil-Japan was reactivated in 1992, and the Keidanren stressed the necessity to make use of the economic complementarity with a number of Latin American countries, mostly members of MERCOSUL.
The problem of relations with Japan depends first on a political aspect, the position of whether to acquiesce in, or not, North American strategies for the new world-order. Japan has not yet decided if it is to be the most western frontier of the USA or the most eastern frontier of Asia. Second, the difference in development between the two countries makes an economic rapprochement between the two of them difficult in the actual world circumstances. The situation with China, on the other hand, is quite another ball-game.
Economic co-operation and trade have grown but not yet to their full potential, principally because Brazil is still adapting its economic production to the stabilization plan adopted in 1994, which made this country, with a long tradition as an exporter, suddenly, an importer. But, even so, the co-operation between China and Brazil has achieved positive results and in 1998, two satellites, the result of collaboration, will be launched, to assist in the aerial exploration of earth resources.
Economic relations will not go far without Brazilian diplomatic strategic initiatives. However, as traditionally these initiatives have been more reactions than actions, future opportunities may, again, not be exploited to their full potential. The Chinese and Brazilian leaders spoke of a strategic partnership between the two countries, which goes much further than just economic interests. China is the only developing country that finds itself at the heart of world power and has fought against the establishment of new hegemonies after the end of the Cold War. Brasília looks for support from Beijing in its candidature to the UN Security Council, and has concurred on the issues of the environment, human rights and democracy, which both consider determined foremost by national sovereignty. Politically, both countries favour South-South co-operation and the principle of non-intervention in internal affairs.
This is very important because, with the end of the Cold War, Washington's major objectives have been centred on the reorganization of the world system, trying to maintain its hegemony at a low cost, avoiding at the same time the emergence of new powers and politico-economic autonomous blocs. Two future scenarios are possible: the building of a multi-polar and stable international system, or the emergence of an uni-polar order, marked by new conflicts and social ruptures. The winning alternative will depend largely on South-South co-operation, mainly among continental states like China, India, and Brazil, also involving developing countries like South Africa and an enlarged MERCOSUL and ASEAN, if possible, with some European support. In contrast to the past, this new relationship is no longer based anymore on idealist political rhetoric, but on the need for survival.