What is Brazil’s position in the world?

“Time and tide wait for no one.”

Popular Portuguese proverb.

Time and space are two key categories in socio-political analysis, and should not be disregarded by Marxists. What time is it on the “clock of history”? History matters a lot. But so does geography. Where do we stand in the dispute unfolding within the international system of states? What is Brazil’s position in the global market in this third decade of the 21st century?

These questions have strategic importance. We live in the era of imperialism: a world order in which a few states are at the center and the majority of humanity is at the periphery. The world was divided into areas of influence at the end of World War II. A new stage opened between 1989/91 with the end of the USSR, capitalist restoration, and the consolidation of US supremacy.

However, thirty years later, the slow decline of the United States and the rise of China, along with Russia, outline the potential danger of a conflict of catastrophic proportions, evidenced by the war in Ukraine.

A socialist strategy for the 21st century cannot be based solely on analyses of the social balance of forces within Brazilian society. It must take into account the dramatic challenges posed by the inter-imperialist rivalry between the hegemonic powers, the Triad of the US and the European Union, organized within NATO associated with Japan, and the emerging powers, China and Russia.

The hypothesis of this article is that Brazil is a historical hybrid: a privileged semi-colony and a regional sub-metropole. Understanding the role each nation plays in the world is a central problem, though not a simple one. Nation, State, and Country are not synonymous concepts, if we are precise. The notion of a nation refers to the historical process of societal formation and is conditioned by objective factors but has derived from the political dominance of nationalism. When a people recognize themselves as a community of shared destiny, as per Benedict Anderson [1]. The State is an apparatus of coercion and representation of political power. The country is a synthesis of the nation-state.

Brazil, an independent State in form, emerged in the second decade of the 19th century. As in the ex-colonies of Latin America and even in some European societies, the State was the instrument for nation-building. In colonial Brazil, society was merely the embryo of a nation. Nearly half of the population were slaves.

An important portion of the Brazilian left identifies Brazil in the periphery of the capitalist world market. They are not wrong. Another segment emphasizes the sub-imperialist role in its relationship with neighboring countries. Throughout our tradition, there have always been those who interpreted this hybrid identity, often by hastening comparisons with Argentina’s status, which entered decline half a century before Brazil, primarily from an economic perspective.

However, the more accurate interpretation of this hybrid hypothesis would be the reverse. In other words, in Brazil, the political strength of imperialist domination has always been greater than economic vulnerability. This asymmetry has not diminished.

Therefore, it should not surprise us that the continent-wide external debt crisis and hyperinflation in the 1980s were more pronounced in Argentina than in Brazil. For instance, Brazil did not experience a moratorium on the scale of Argentina in 2002.

Until the end of World War II, Brazil was solely a semi-colony. The process of hybridization became clearer from the 1970s onward, when Brazilian-origin companies began to attain the status of multinational corporations. Some of these were state-owned at the time, such as Petrobras, Vale do Rio Doce, and Banco do Brasil, while others were private, like Gerdau, Odebrecht, Andrade-Gutierres, Itaú, and Bradesco. More recently, we cannot overlook the significance of agribusiness companies and investment funds.

This characterization of hybrid acknowledges that there were quantitative oscillations that led to repositioning. What was the dynamic? In some phases, semi-colonization increased, while in others, external vulnerabilities decreased, accentuating the role of a regional sub-metropole.

The challenge of the analysis is to identify these trends and counter-trends and, ultimately, determine whether the variations were merely quantitative or if any qualitative changes occurred. We will argue that, up to this point, the oscillations have been quantitative. The graph below illustrates the secular-scale fluctuations in Brazil’s share of the global economy:

I n the 1990s, recolonization trends advanced, and the country was seriously threatened by the ALCA (Free Trade Area of the Americas) project. In the first decade of the 21st century, the previous trend was reversed: Brazil’s influence in its region increased, and reserves accumulated significantly, reaching current levels that fluctuate between 350 billion and 400 billion U.S. dollars, roughly 20% of GDP, or two years’ worth of imports. Ultimately, Brazil was neither recolonized nor transformed into a powerhouse. However, Brazil, much like Latin America, faced a serious threat from an imperialistic project of recolonization due to the alignment of the Bolsonaro government with the Trump administration in the United States. Fortunately, this danger has been temporarily averted. Yet, it remains eliminated, as the far-right remains influential in Brazil, and the outcome of the upcoming U.S. elections is uncertain.

The Historical and Political Dimensions of Dependency

Brazil ceased being a Portuguese colony in 1822 to become a British semi-colony until the 1929 crisis. Independence was a highly incomplete process. It sought support in London for emancipation from Lisbon. The ruling class proved incapable of executing a bourgeois revolution. The long 19th century was a lost century. It is not controversial that the key to understanding this severe backwardness was the delayed end of slavery.

Brazil’s integration into the international system of states was contested in the 1930s. It transitioned into a North American semi-colony during World War II. The political dimension of dependency, as we have seen, is deeply rooted in history. During the Estado Novo [New State] dictatorship, Getúlio Vargas had pursued a foreign policy of neutrality, even entertaining some flirtations with the Axis powers. [2] Negotiations extended from 1939 to 1942.

The agreements established a 100 million dollars loan for the implementation of the Brazilian steel project, along with the purchase of $200 million worth of military material. These agreements were pivotal for the creation of CSN [National Steel Company] in Volta Redonda and the Vale do Rio Doce Company. Natal [the capital of the state Rio Grande do Norte] received a naval base, and the largest American military airbase outside the U.S. territory. The city hosted a contingent of up to 10,000 American soldiers. The Brazilian Expeditionary Force sent 25,000 soldiers to Italy from 1944, out of an initially planned total of 100,000 [3]. Due to its realignment, Brazil was one of the first countries to join the institutions that emerged from the Bretton Woods negotiations [4].

During the historical-political phase after the end of the war, between 1945/1991, Brazil maintained a strategic relationship with the United States. The Washington agreements were preparatory for the Rio de Janeiro Treaty of 1945 [5] and the formation charter of the OAS (Organization of American States) in 1948 [6]. Throughout this phase, Brazil’s international relations with the U.S. experienced oscillations. Initiatives such as the nuclear agreement with Germany, for instance, caused friction. However, fundamentally, the relationship remained largely intact.

The political history of Brazil has been an expression of the domination of American imperialism over the nation. The Brazilian bourgeoisie decided to associate themselves in a way that aligned their destiny with the defense of U.S. interests. The military dictatorship between 1964 and 1985, a dramatic two-decade interval, emerged as a response to the shockwaves caused by the impact of the Cuban revolution.

The first factor of this privileged dependent status was, therefore, a close alliance established with the U.S. during the war, unlike Argentina. History matters, history holds great significance. These political-diplomatic relations with the U.S. are an undeniable key to explaining the country’s recent history. Brazil also took on a role as a regional sub-metropole in South America, collaborating with the U.S., thus becoming a sub-platform for capital exports.

The concept of semi-colony aims to illustrate the economic dependence of an economy oriented, or even specialized, towards exporting primary products to the global market while importing capital and higher value-added manufactured goods. Brazil primarily exported coffee, cocoa, cotton, sugar, and minerals. The first major steel company, CSN, was only built starting from the 1940s, eighty years after the beginning of the second industrial revolution.

“Privileged” should be understood as “special” or “favored.” The unequivocal demonstration of this status was being the first destination for U.S. foreign investments after World War II, except for capital movements within the triad of the United States, Western Europe, and Japan. It lost this position as the largest capital importer in the global market periphery to China from the 1990s onward.

Brazil has a population of approximately 203 million people, making it the largest Portuguese-speaking country in the world. It has one of the top ten GDPs in the world when using the PPP (Purchasing Power Parity) criterion.

This insertion as a privileged semi-colony can be explained by several factors: the high profitability of investments in a country that urbanized and industrialized relatively late but very rapidly; the size of its GDP; the scale of its internal market for durable goods consumption; the extent of its natural resources, such as being the world’s largest producer of grains and various minerals; and, more recently, oil and gas production from pre-salt reserves.

Brazil has many peculiarities. Unlike its neighbors in the Southern Cone, it was predominantly an agrarian society until the 1930s, but it had two megalopolises, among the largest and most dynamic in the world, São Paulo and Rio de Janeiro, which were disproportionately large considering the archaic and sparsely populated interior. The agricultural and livestock sectors have high levels of productivity, among the most competitive in the world.

However, what is most surprising is the enormous concentration of its proletariat – over 60 million people – with more than 86% residing in urban centers, within twenty cities with one million or more inhabitants.

By the end of 2015, Brazil had a total of 48.06 million formally employed workers, which was lower than in 2014 (49.57 million) and 2013 (48.94 million).[7] Today, there are 38 million. Brazil has over two million federal public servants.[8] The number of municipal civil servants throughout the country increased by 37.4% in a decade. In 2005, municipalities employed 4.7 million people, a number that rose to 6.5 million.[9] Available data from IBGE for 2014 indicated the existence of 3.1 million state public employees.[10] Considering that some data might not be updated, we can round it to approximately 13 million public employees across all three spheres. An industrial working class of 12 million corresponds to 20% of the proletariat, which is a relatively high rate.[11]

It is also true that the Brazilian bourgeoisie is the most powerful in the periphery of the capitalist system. The degree of concentration of the working class magnifies the potential social force of its struggle, as long as it regains subjective self-confidence. Above all, any socialist project will depend on the internationalist capacity of the Brazilian left to play a role in building Latin American unity.

We do not have much time to construct it. Geography matters.

Notes:

[1] ANDERSON, Benedict. Imagined Communities. Companhia das Letras.

[2] “Since the beginning of 1941, the United States was determined to cut off the supply of Brazilian raw materials to the Axis. To do so, they signed a contract with Brazil for the purchase of all its production of strategic materials – bauxite, beryl, chromite, iron-nickel, industrial diamonds, manganese ore, mica, quartz crystals, rubber, titanium, and zirconium. In these negotiations, special emphasis was given to rubber, a product that had become scarce after the Japanese advance in Southeast Asia.”

http://cpdoc.fgv.br/producao/dossies/AEraVargas1/anos37-45/AGuerraNoBrasil/NegociacaoAlinhamento Accessed 12/19/2016.

[3] No other country in South America sent troops. Peru, Chile, Bolivia, Paraguay remained neutral until 1944. Argentina also prioritized neutrality and only broke diplomatic relations with the Axis powers in 1944, with a declaration of war coming later, in April 1945.

[4] The Bretton Woods Conference took place in July 1944 in the U.S., before the end of the war, to design the regulation of the future of capitalism. Three organizations were born, and one was restructured at the Bretton Woods Conference: the International Bank for Reconstruction and Development (now the World Bank), the IMF (International Monetary Fund), and the WTO (World Trade Organization), previously known as the General Agreement on Tariffs and Trade (GATT). The fourth was the Basel BIS (Bank for International Settlements). It was in Bretton Woods that the dollar was established as the international reserve currency, with a fixed convertibility to gold.

[5] https://neccint.wordpress.com/legislacao-internaciona https://drive.google.com/file/d/0BwbnJ2EXfmcDNjQ3ZGUyNjUtMzJmNi00YzMyLThmOGItYjY4MTE2ODA4MTk2/view Accessed 12/19/2016.

[6] https://drive.google.com/file/d/0BwbnJ2EXfmcDYTRhOGZkOTctNjRhZC00MzliLTg0NDYtODBmNWY2MDY1ZDdm/view Accessed 12/19/2016.

[7] Brazil lost 1.51 million formal jobs in 2015, according to data from the Ministry of Labor. It is the worst result in 31 years, since 1985 when the survey began. It is also the first time in 24 years that the country experienced a reduction in formal job positions. In 1992, 738,000 jobs had been lost.

http://www1.folha.uol.com.br/mercado/2016/09/1813988-brasil-perdeu-15-milhao-de-vagas-com-carteira-assinada-em-2015-pior-marca-em-31-anos.shtml. Accessed 12/13/2016.

[8] In the Executive Branch, 46.5% have a college degree, 2.6% have some specialization, 4.9% have a master’s degree, and 8.4% have completed a doctorate, making it the segment of workers with the highest level of education.

http://www.planejamento.gov.br/assuntos/gestao-publica/arquivos-e-publicacoes/BEP. Accessed 12/13/2016.

[9] http://www.correiobraziliense.com.br/app/noticia/economia/2016/04/16/internas_economia,527657/numero-de-servidores-municipais-cresce-37-em-10-anos.shtml. Accessed 12/13/2016.

[10] http://www.ebc.com.br/noticias/2015/08/municipios-brasileiros-empregam-62-milhoes-de-servidores-publicos-diz-ibge. Accessed 12/13/2016.

[11] Employment in the industry has been declining for four years. It fell in 2012 (-1.4%), 2013 (-1.1%), 2014 (-3.2%), and 2015 (-6.2%). The decline in the industry’s share of GDP confirms a trend of relative deindustrialization. The share decreased from 46.3% in 1989 to 26.5% of GDP in 2000. In the first half of 2015, it reached 21.9% of GDP. http://www1.folha.uol.com.br/mercado/2016/02/1740663-emprego-industrial-cai-62-em-2015-aponta-ibge.shtml. Accessed 12/14/2016.