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Official development assistance

Emerging outreach

13/04/2012 – by Elton Hubner

Essays

Lula in Maputo in late 2010: policy has not changed, but his successor Dilma Rousseff does not share the former president’s faible for “political show”

Lula in Maputo in late 2010: policy has not changed, but his successor Dilma Rousseff does not share the former president’s faible for “political show”

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Brazil, the biggest economy in Latin America, is attracting more and more attention because of its domestic economic achievements. At the same time, the government in Brasilia is becoming more assertive at the international level and increasingly en­gaging in cooperation with less advanced countries. By Elton Hubner

In recent years, social and economic change has allowed millions of Brazilians to break the historical shackles of poverty and exclusion. According to the Organisation for Economic Co-operation and Development (OECD), poverty has declined by half since 1993. The country has experienced strong labour market performance, successful redistribution policies and overall economic growth.

For Brazil’s political leaders, such progress represented an opportunity to review their approach to international affairs. Since the turn of the millennium, Brazil’s foreign policy has become “more comprehensive, more multilayered and more complex,” according to Claudia Zilla, a researcher at the SWP (Stiftung Wissenschaft und Politik – the German Institute for International and Security Affairs). She says a South-South orientation was one of the main characteristics of Brazil’s foreign policy under President Luiz Inácio Lula da Silva (2003 – 2010), as became evident, for instance, in the intensification of technical cooperation with other countries from South America and Africa.

Zilla recently said she expects that President Dilma Rousseff will stay on the same track. She acknowledges the new leader’s different style, however, arguing that Rouseff favours “technocratic discretion”, whereas Lula liked “political show”.

Today, the biggest economy in Latin America acts as a bilateral partner with more than 70 countries. The official Brazilian figure for expenditure on development cooperation between 2005 and 2009 is $ 1.4 billion, of which almost $ 1.1 billion was contributions to international organisations. Brazil used $ 126 million for technical cooperation (TC), $ 139 million for scholarships and $ 79 million for humanitarian relief. The technical assistance budget rose from $ 11 million in 2005, to $ 49 million in 2009, almost doub­ling its total share of the development ­cooperation budget from 7.2 % to 13.5 %. According to the Brazilian Cooperation Agency (ABC – Agência Brasileira de Cooperação), TC is the country’s greatest strength.

The ABC is in charge of development cooperation in two senses. It administers ODA Brazil receives as well as ODA Brazil grants. The agency is in charge of nego­tiation, coordination, implementation and follow-up of technical cooperation projects. When acting as a donor agency, its overarching goals are to
– contribute to the deepening of Brazil’s relations with developing countries,
– transfer and disseminate technical know­ledge,
– promote capacity building, and
– strengthen the state institutions in developing countries.

Marco Farani, the director of the ABC, avoids the terms “aid” and “donation” when he speaks of South-South cooperation. Brazil’s TC is carried out by se­conded civil servants, who respond to specific needs in specific projects. As a general rule, Brazilian support is based on domestic Brazilian experience and tailored to the needs of the partner country. Relevant sectors include agriculture, education and public safety.

In the view of the ABC, this approach has two advantages:
– It is not expensive since there are hardly any costs beyond seconding civil servants.
– It serves the exchange of experience, knowledge and know-how among de­veloping countries by networking experts at the international level.

The foreign policy dimension

In an essay published by the German De­velopment Institute (2010), Sarah-Lea John de Sousa argued that Brazil aims to project its image at a global level and to increase its impact in international relations. “The geographic division of technical cooperation expenditure aligns tightly with Brazilian efforts to lead South America (recipient of 23 % of assistance), increased penetration of Central America and the Caribbean (12 % of assistance), and the building of new re­lationships in Africa (50 % of assistance) with a heavy concentration on Portuguese-speaking countries.”

Britain’s Institute of Development Studies (IDS) equally suggests that Brazil’s cooperation programme is not just about aid, but serves as “a foreign-policy instrument”. According to an article published on the IDS website in November, “it is likely that there is some alignment between public and private sector interests.”

In this context, Brazil’s development bank BNDES (Banco Nacional do Desenvolvimento) plays a crucial role. In a recent study, Zilla and her SWP-colleague Christoph Harig (2012) wrote that it has become one of the strongest forces of its kind internationally in terms of the loans it grants. As the SWP paper elaborates, this bank, which only ran domestic operations even in the 1990s, does not use much money for ODA, even though some of its activities, which Brazil does not consider ODA, are of particular relevance to developing countries. That is the case, for instance, when the bank grants tied loans for projects in which Brazilian companies hold stakes. BNDES supports Brazilian companies from both the private and public sectors to expand abroad. The German scholars note that resource extraction is a prominent sector.

Latin American neighbours view BNDES policy with scepticism. Zilla and Harig pointed out that they consider it an attempt to expand Brazil’s economic in­fluence unilaterally. On the other hand, this kind of lending makes a difference to developing countries, because it makes them less dependent on direct foreign investments from industrialised nations. Whereas Brazil runs TC programmes in an independent manner, BNDES lending is closely aligned to Brazil’s economic interests.

Zilla and Harig wrote that established donors should cooperate with Brazil nonetheless, for instance in triangular programmes that involve a poorer developing country as the third partner. Their paper points out that Brazil does not officially endorse all OECD standards, but tends to observe them in TC. The authors stress, moreover, that Brazil tends to live up to pledges – unlike some established donors that pay lip service to international guidelines, but tend to neglect them for practical purposes.

Triangular cooperation

Brazil is indeed engaged in many triangular partnerships with foreign governments and international organisations. This kind of combination of efforts is meant to enable two or more external partners to optimise the use of infrastructure as well as ­financial and human resources. Interventions carried out in triangular cooperation tend to be more aspirational than bilateral ones.

Many established donors are currently engaged in trilateral cooperation with Brazil and a developing country. They include Germany, France, Italy, Spain, Britain, Norway, Australia, Japan and the United States.

Otávio Briones from the ABC considers a project in which Brazil, Germany and Mozambique are cooperating an example of success. It concerns the institutional development of the Maputo-based National Institute of Metrology, Standardisation and Industrial Quality (INNOQ). It is being implemented by Brazil’s National Institute of Metrology, Standardisation and Industrial Quality (INMETRO) along with Germany’s Agency for International Cooperation (GIZ) and Physikalisch-Technische Bundesanstalt (PTB – the national metro­logy institute) since 2010.

Brazil promises to expand its TC. At the High Level Forum on Aid Effectiveness in Busan late last year, Brazil questioned the effectiveness of vertical relationships, urging other participants to consider the advantages of South-South cooperation. In a document distributed to other parti­cipants in Busan, the ABC pointed out specific characteristics of South-South cooperation, including
– the principle of non-intervention in ­internal affairs,
– the absence of political conditionality,
– the respect for local sovereignty and
– the demand-driven approach.

The ABC expressed itself in favour of “more adequate and functional answers to fight poverty and hunger on a global scale.”

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Print Edition no. 5 2012, 2012/05, Page 214

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