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Issue No.: 559 | January 2014

India and Latin America: ‘The Big Thing in the Making’ – Part Two

B. Ramesh Babu
A new brand of popular leaders across the continent is demonstrating that capitalism should and can be regulated; and genuinely inclusive growth is possible in electoral democracies!

Even a brief look at the bilateral relationships India has been forging with the Latin American (LA) countries since 1990s testifies to the primacy of the India-Brazil equation. Historically however, our equation with the largest nation in LA went through a very rough patch. The Government of Brazil championed the cause of Portugal in India and officially represented the country during the anti-colonial struggle for the liberation of Goa and its integration in the Indian Union. Naturally India did not appreciate Brazil’s posture and policy on this issue of crucial importance for the country. But, now all that is part of the bygone era.

President Fernando Henrique Cardoso’s (1994-2002) "new global strategy” envisioned stronger ties with developing countries like India and that was the beginning of a new chapter in the bilateral equation between the two countries.  However, it was under the inspiring leadership of President Inacio Lula da Silva, the dynamic and the most popular public figure in Brazil (2003-2010) that everything changed at home and abroad. His strategy of genuinely inclusive growth galvanized the marginalized millions and deepened and widened Brazilian democracy. Lula’s transformative economics and politics influenced developments in other countries in Latin America, where ordinary people are showing that a better world is possible. A new brand of popular leaders across the continent is demonstrating that capitalism should and can be regulated; and genuinely inclusive growth is possible in electoral democracies! Corruption free and transparent governance for the welfare of the masses is attainable! India has a great deal to learn from Brazilian experience in this regard!

Bolsa Familia 

Recently (in November 2013), Brazil celebrated the tenth anniversary of Lula’s most famous and revolutionary programme called "Bolsa Familia” (Family Grant), which lifted 50 million people out of poverty. According to an impartial research study, endorsed by the UN, Bolsa Familia "helped poor to put money on the table, money in the bank, and children in the school.” Hunger, poverty, and primary education were targeted at one stroke.  This innovative, brave, and massive programme inspired social welfare policies in scores of countries, including India. 

President Lula also transformed India-Brazil relations irreversibly. It was his vision that broke the usual dilemma in foreign relations: trade first or politics first? He envisioned political alliance as a starting point from which trade links would be fostered and he did so at the right time. He understood that Brazil and India see the world through the prism of North vs. South, West vs. non-West, and colonisers vs. colonised. President Lula took the initiative to forge strong political and economic relations with India, which responded with commendable enthusiasm. President Lula visited India thrice. He was conferred the prestigious Jawaharlal Nehru Award for International Understanding for 2006 and the Indira Gandhi Prize for Peace, Disarmament, and Development for 2010.

Mutual Benefits

Brazil and India are committed to and have been working closely for more democratic global governance. The two are cooperating closely with Germany and Japan for the membership of an expanded UN Security Council. Brazil and India are members of the intercontinental organizations like BRICS and IBSA. The two (along with other nations) are working closely to strengthen the role of the developing countries in the IMF and the World Bank. Together with  China, the two countries are seeking to establish the BRICS Bank with a view to create an alternative global monetary and financial order to contain the dominance of the dollar and to negate the impact of sanctions America imposes on Asian and African countries that stand in the way of its global hegemony.

India and Brazil are multi-national societies of continental dimensions and are huge "emerging economies.” India is the third and Brazil is the seventh largest economies in the world. Working together they can pioneer a more equitable development agenda for the world. Under the rubric of BRICS they should tackle the global economic slowdown. At home both countries are confronted with many obstacles to equitable development and have much to learn from each other. 

There is a unique opportunity for mutual benefit in the field of agriculture. Brazil has vast cultivable land and plenty of water. Brazil’s agricultural knowledge will go a long way in increasing our farm productivity. Indian farmers can go there in large numbers and expand Brazil’s land under cultivation on a large scale (as is being done in Africa). Indian companies could enter agri-business in Brazil (and Argentina). The two countries can do wonders in promoting food security in Africa. India is already providing "adaptable, appropriate, and affordable” technologies in the agricultural sector to many countries in Africa. Brazil has launched food security initiative throughout Africa. Together the two could supply inputs in the form of affordable services and the much needed technical expertise. An African collaboration between India and Brazil would indeed be a marvellous example of South-South cooperation for the benefit of people in the three continents.  

India has much to learn from Brazil in the foreign policy arena. Snowden’s scandalous revelations of the unprecedented global snooping by America’s National Security Agency (NSA), which did not spare even close allies and leaders of friendly countries, shocked the world beyond belief. While India’s response was guarded, President Dilma Rouseff of Brazil cancelled her State Visit to the US and demanded a public apology from President Obama. After blasting the US at the UN General Assembly, she announced a plan to host an international summit of governments, industry, civil society, and academia in April 2014 on internet governance. 

In the era of globalization it is preposterous to allow WWW to be an exclusive American lagoon. Her principled and brave stand forced India to publicly support Brazil. At the end of the sixth meeting of the India-Brazil Joint Commission in Brazil in October 2013, India’s External Affairs Minister Salman Khurshid was constrained to say that India was working with Brazil on cyber security. He declared that "many countries would want to work together to find an appropriate system and architecture to protect privacy, freedom of expression, sovereignty, and security of cyber space.” There was a time when India was leading the Third World in such initiatives for non-hegemonic global governance!

Economic Relations

Coming down from cyber space to commerce and investment, it is necessary to note that trade between India and Brazil has been growing rapidly. It has grown steadily from the low of US $ 400 million in 1999, to 2 billion in 2005, 7 billion in 2010, 9.3 billion in 2011, 10.62 billion in 2012, and is expected to cross 15 billion by 2015. India is dependent on Brazil and Argentina for edible oils and pulses. We also import sugar and wheat (!) from Brazil whenever domestic production falls short. 

The growing commercial relations have gone hand in hand with increasing frequency of mutual visits by top leaders from both sides. Indian Prime Ministers P V Narasimha Rao (1992), Manmohan Singh (2006 and 2012), Presidents K R Narayanan (1998), and Prathibha Patil (2008) visited Brazil. Brazilian Presidents Fernando Henrique Cardoso (19996), Inacio Lula da Silva –popularly known as Lula – (2004, 2007, and 2008), and Dilma Rouseff (2012) currently in office, visited India. Several Ministers dealing with external affairs, defence, commerce, and agriculture etc. of both nations paid official visits to each other’s countries in large numbers. Besides, leaders in business and industry from both countries interacted with their counterparts on many occasions. 

India’s major exports to Brazil are: diesel oil, coke of coal, peat, equipments related to wind energy, engineering, electricity, cotton and polyester yarns, naphtha, pigments, pharmaceuticals, and chemicals (not necessarily in that order of importance). Our main imports from Brazil are: crude oil, copper sulphate, soya oil, raw sugar, denatured alcohol, copper, asbestos, valves, motor pumps, airplanes, wheat, precious and semi-precious stones (nor necessarily in that order of importance). 

The two way investment also has been growing. Brazilian companies invested in automobile, IT, mining, energy, bio-fuels, and footwear sectors. From the Indian side investments in Brazil are in IT, pharmaceutical, energy, agri-business, mining, engineering, and automobile sectors. 

India and Brazil have set up a bilateral Trade Monitoring Mechanism for periodic consultations. India has also signed a framework agreement with MERCOSUR, a regional international organization, in June 2003. This entered into force in June 2009. Under this arrangement 450 items from each side are eligible for 10% to 100% duty reductions. Efforts are underway to broaden and deepen the scope of this agreement and link IBSA and SACU. In addition India-Brazil Chambers of Commerce based in Sao Paulo and Belo Horizonte work in close cooperation with the Embassies and Consulates in both the countries. On top of all this are the cultural exchanges galore between the two countries. 

The multi-dimensional India-Brazil equation is discussed at some length because it, in a way, typifies our bilateral relations with many other Latin American countries. The trade and investment mix varies from country to country. But, the overarching political/ ideological ambiance is similar. All of them are struggling in their own ways to shape a new and independent path of inclusive politics and development. We should learn from their success.

DR. B. RAMESH BABU is a specialist in International
Relations, American Politics and Foreign Policy. He was a
Visiting Professor, University of Hyderabad in 2012. Formerly
he was the Sir Pherozeshah Mehta Professor of Civics &
Politics, University of Mumbai.





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