Speaker: Dr. Carlos Duarte, Ambassador of Brazil to India August 1, 2012

Chair: Amb. R Rajagopalan (Retd.)

India’s interaction with Latin American and Caribbean (LAC) countries, particularly with, has enhanced over the years. In order to give a better perspective on this developing relationship and to help India augment its capacities in Brazil, Mr. Carlos Duarte, Ambassador of Brazil to India delivered a talk on “India-Brazil Relations” on August 31. Ambassador R Rajagopalan chaired the proceedings.

Amb. Duarte gave the gathering an exhaustive picture of where India-Brazil ties stand today. He started off by sharing some important facts about Brazil which is the largest Latin American country and the 5th largest in the world. With a population of 190 million, it is surrounded by 10 other South American countries. Amb. Duarte pointed out that recent years have seen many positive transformations in Brazil. He singled out figures of Brazil’s solid macro-economic fundamentals in his presentation. Economic elements like consistent positive average growth rate, democratic stability, increasing rate of employment, decreasing fiscal deficit, expansion of credit, control of inflation rate targets, decreasing real interest rate, positive trade balance and important social policies, have all had a profound implication for the consolidation of the new Brazilian reality. He interspersed his presentation with charts and graphs which depicted a clear representation of these points.

He admitted that Brazil still remains one of the most unequal countries in the world. However, because of the reigning in of high inflation since the 1990s, Brazil has managed to reduce the income inequality gap. Today, 50 percent of the Brazilian population falls into the middle class category and 12 percent is below the poverty line calculated as per the Brazilian standards. 35 percent of the country is covered with primary forests and 75 percent of the domestic electricity is produced by hydropower. In terms of output, Itaipu is the largest hydropower dam in the world. In terms of the nature of Brazilian economy, Agriculture contributes 5.5 percent of GDP, almost 30 percent is industrial production and services constitute 67 percent of the GDP. Brazil received FDI inflows to the tune of $ 66.7 bn in 2011, higher than other South American country. Brazil’s important trade partners for 2011 in order of precedence were EU, China, USA and MERCOSUR countries (within MERCOSUR, Argentina constituted the largest player). Upcoming big ticket events like the Football World Cup in 2014 and the Rio de Janeiro Olympics in 2016 will contribute to further elevating Brazil’s global stature and making it a magnet for foreign investments. Brazil is part of some major regional groupings like MERCOSUR (formed in 1991), UNASUR (2008), and CELAC (2010). However, according to Amb. Duarte, regional integration in South America is still an ongoing process and there is a lot which can be done to amalgamate production chains in the region. Important international groupings of which Brazil is an integral part along with India include IBSA, BRICS, BASIC, G-20, and G-4.

As noted by Mr Duarte, Brazilian and Indian Heads of State usually meet frequently on the sidelines of many international events to cement bilateral ties. In 2011, they met four times indicating that they are coordinating with a greater intensity. In the brief time-span since the establishment of diplomatic relations between the two countries in 1948 till the 1990s, Brazil-India relations were relatively lacklustre, except for Prime Minister Indira Gandhi’s visit to Brazil in 1968. India-Brazil relations gained momentum after Brazilian President Fernando Henrique Cardoso’s visit to India in 1996. This was followed by the establishment of India- Brazil Joint Commission in 2002. It was with President Luiz Inácio Lula da Silva’s visit in 2004 that India-Brazil relations received a significant fillip and in 2006, India and Brazil established a “strategic partnership”. President Dilma Rousseff has continued this crucial partnership since coming to power in 2011.

On the trade front, there has been an almost 10-fold increase over the last decade and is expected to reach $15 bn by 2015 (The current figure stands at $ 10 bn). The rise in trade figures, however, conceal some of the vulnerabilities in the economic relationship, when one notices the concentration on only few products, particularly crude oil imports from Brazil and diesel exports from India. Amb. Duarte believes that these products do not posses a value-added component and one of the challenges in the trade relationship is to introduce greater diversification. Brazil and India, he observed, share similar levels of development and therefore have many complementarities in the realm of agriculture, science, technology, education, energy, culture, environment, defence and social policy making. Active cooperation in these fields include a MoU with Brazil for cooperation in agriculture signed in 2008, an agreement between Brazilian Embrappa and Indian ICAR for executing joint agricultural research projects in dairy farming and food processing. There is an ongoing collaboration in the area of science, technology and innovation with the establishment of India-Brazil Science Council in 2005, along with academic cooperation by charting the Science without Borders programme. In the domain of energy, which forms an important component of India-Brazil relations, there is in place a Memorandum of Cooperation in fuel mixture technology signed in 2006 and Petroleum and Gas in 2008. As for the Defence Sector, there is an agreement dating back to 2003, a bilateral strategic dialogue from 2007 and an important programme wherein Indian-built Radars are installed in a Brazilian aircraft which also works as an early warning device. Amb. Duarte concluded his talk with the view that there is tremendous scope for further cooperation between the two countries which share similar political principles and viewpoints on international issues.

Points raised during discussion

• Brazil is very proud of its heritage of maintaining peaceful ties with neighbours for over a century. It is in the process of consolidating this clean record by forging greater regional integration, as manifested by multiple projects which are underway including the tapping of natural gas from Bolivia to Sao Paulo.
• Tension between the competing principles of democracy promotion and non-intervention is a difficult one to resolve. Each case of conflict-torn country should be assessed on its own individual merit, be it Libya or Paraguay. Brazil believes in resolving the conflict by following democratic principles which would entail engendering dialogue between the warring factions and causing the least possible harm to civilians.
• With regards to the impediments faced by the Initiative for the Integration of the Regional Infrastructure of South America in the context of successful regional integration in the South American region, there are complexities being encountered in the execution of this initiative. However, such projects do take time to develop fully and undergo a long process of evolution.
• There were apprehensions raised about IBSA becoming a non-entity in the light of BRICS being a bigger regional organization. However, one group should not seen as challenging the other for both are essentially created for different reasons, that is BRICS for dealing with bigger international issues and IBSA for countries sharing and learning from their own developmental problems.
• India and Brazil share many affinities with regard to international issues and have established robust cooperation on issues like HIV-AIDS and climate change, little disagreements do not account for much. Therefore, the feasibility of both the countries coordinating policies and positions at the multilateral level should not be questioned.
• With respect to developing security cooperation among Latin American countries, as it is practically non-existent except for a small defence committee in UNASUR, it was noted that most of the Latin American countries have adopted a deterrent type of defence doctrine and have the shadow of one big super power looming over them, which automatically engenders cooperation amongst them. They always strive towards decreasing all tensions, which are indeed not very many.
• As for the state of people-to-people contacts between India and Brazil, there was felt a paucity of knowledge about each other since the interaction has been confined to business sectors only. However, the fact that India-CELAC relations are surging is in itself a positive sign and it was felt that this is the right time to give more density to India- Brazil relations.

(Report prepared by Sneha Bhura, Intern at Institute for Defence Studies and Analyses, New Delhi.)

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