Two Parts of a New Gondwana

Emerging South

Financial and technical cooperation agreements between developing countries gained increased recognition during the past decade, moving away from the traditional North–South model of developmental assistance. According to practical research, the traditional North-South approach to developmental cooperation has not succeeded as expected, as it was ‘supply-driven’ with economic and policy reforms dictated by the ‘developed North’ to the ‘poor South’. Technocratic prescriptions usually missed the local realities and did not accommodate cultural, social and economic peculiarities on the ground. A ‘one-size-fits-all’ approach was a norm, rather than an exception.

Since the emergence of the G-20 in 1999, developing economies are playing a stronger role in shaping the new global architecture. The positioning of the BRICS as a group of economically powerful emerging economies has also contributed to a changing of views as to where the axis of power is. Other forums, like the India-Brazil-South Africa (IBSA) Dialogue Forum, are equally contributing to reshaping not only economic, but political, and official relations. Other groups continue to emerge or grow as well, including the Africa-South America Cooperation Forum (ASACOF), the Southern Common Market (Mercosur), and the Southern African Customs Union (SACU).

As UNCTAD’s report Economic Development in Africa 2010 stresses, South–South cooperation is attractive to African countries because it promises an alternative to the problems of the existing foreign aid mechanisms, and represents a new dimension of the international economic, financial, and trading systems, which they can influence. According to the report, South–South connections significantly increase the region’s bargaining power in other international negotiations, such as those related to international trade and climate change.

The vision of the world order of former Brazilian President Luiz Inácio Lula da Silva (2003 to 2010), and his Foreign Minister, Celso Amorim, were closely aligned with forums emerging in the South. While incumbent, Lula da Silva strengthened the principles of Brazilian foreign policy aiming to find new spheres of political expression for an intermediate power such as Brazil, and a more just social order globally. According to this vision, the traditional decision-making centers do not represent the developing world – not even the interests of its emerging economies. During Lula’s presidency, Brazilian diplomatic and economic relations with Africa moved higher on the agenda, contributing to the reinforcement of the new role of the ‘Global South’, and this attitude was shared by some African leaders. In 2007, during trade negotiations between Mercosur and SACU, a high-level government official from Angola highlighted the need to further enhance the concept of the South Atlantic as a strategic space in order to effectively promote South-South cooperation initiatives.

New Africa, old problems

The global view of sub-Saharan Africa has dramatically changed in recent years. Seen traditionally as a lost sub-region with entrenched poverty, corrupt dictators and perpetual conflicts, it is now frequently portrayed in the media as a region of opportunities that should not be missed by global corporations and investors. The persistent GDP growth (4.7% in 2010, 5.3% in 2011, and 4.6% in 2012) coupled with improvements in governance, and a better business environment in some countries, has contributed to the optimism about future developments. GDP is expected to grow by 4.9% in 2013 and by 5.2% in 2015.

But despite these positive trends, there are about 20 fragile states, social and economic inequality has not yet been dealt with across the sub-region, the infrastructural gap remains significant, and the lack of human skills is still weighing against long-term sustainable economic growth. According to the World Bank, there is only one medical school graduate per 117,300 inhabitants of sub-Saharan Africa, compared to one per 54,500 in South Asia. Only 11% of all graduates have natural sciences as their majors and only 7% of them are engineers. In countries like Angola, only 20 petroleum engineers graduate each year, though oil and gas make up 98% of the country’s exports. Malawi has only 22 veterinarians, although 80% of its people are employed in the agricultural sector, which in turn accounts for 80% of the country’s exports.

Heading for rapprochement

Brazil and Africa have strong historic and cultural ties dating back several centuries. Once united in a single landmass, Gondwana, the two sides of the Atlantic were reconnected by the slave trade from the 16th to the early 19th century.

According to José Flávio Sombra Saraiva, Professor of International Relations at the University of Brasília, not only were slaves traded, but also goods, ideas, skills and social norms. After the abolition of slavery and Brazil’s independence from Portugal, the country’s early connections with Africa faded, due partially to the repositioning of the European countries as colonizers of the African continent. Later, in the 1950s and 1960s, when African countries gained their independence, Brazil’s foreign policy towards Africa rose as a priority again – although to a limited extent, due to its anti-colonialist stand in respect of the European presence in Africa, and relations with its former colonizer, Portugal. Progressive movements in some African countries (Angola, Tanzania and Nigeria) in the 1970s and 1980s contributed to a stronger and more formal realignment of Brazil’s foreign policy towards Africa.

During the presidency of Lula da Silva, Africa (and Latin America) became priorities of Brazilian foreign policy. The interest in building closer relations with Africa corresponded not only with common political and economic (Brazil-Africa) strategic interests, but also with the wishes of a huge part of the Brazilian electorate descending from Africa (more than 50% of the total population), as well as with the need to pay more attention to the role of the African Diaspora. During his eight years in tenure, President Lula made 12 visits to Africa. During his first year as president, he visited Angola, San Tomé, Mozambique, Namibia and South Africa. In his visits to Africa, he was frequently accompanied by diplomats and businessmen, showing the renewed orientation of Brazilian foreign policy towards Africa. Between 2003 and 2010, heads of various African states visited Brasília 48 times, and their foreign ministers did so 67 times. These frequent visits, and intensive diplomatic exchange, confirmed the presence of mutual strategic interests on the emerging Brazilian-African agenda.

Brazil now hosts 33 African embassies and there are 38 Brazilian embassies in Africa. This network has become an instrumental platform to promote business development and facilitate knowledge exchange and technical assistance. Brazilian President Dilma Rousseff (January 2011 – present) has reconfirmed Brazilian foreign policy towards Africa. During her first year in office she visited Mozambique, Angola and South Africa, and participated in an India-Brazil-South Africa (IBSA) forum. Brazil’s stronger interest in Africa is attracting other Latin American countries to Africa and vice versa. Mercosur now has two trade and cooperation agreements with African countries: one with Egypt, and the other with a group of Southern African countries. Both African and Latin American governments are increasingly recognizing the importance of the support of cooperation initiatives, for example during the ASA Forum. In 2011, one business forum devoted to agriculture was held in Johannesburg, and another was held in Fortaleza, in the Brazilian state of Ceará, to explore business opportunities for Brazilian firms in Africa and African firms in Brazil. One more South-South cooperation forum is being prepared by the governments of Brazil and Equatorial Guinea, to take place in Malabo in 2013.

With the increasing flow of information and growing internet connectivity between the two regions, increased commercial interactions are expected across the South Atlantic.

South–South cooperation is attractive to African countries because it promises an alternative to the problems of the existing foreign aid mechanisms, and represents a new dimension of the international economic, financial, and trading systems, which they can influence

Partners in similitude

Besides historical and cultural ties, Brazil and Africa share similar climatic and geological conditions. These facts make Brazilian technology and expertise relevant to Africa. The Cerrado eco-region, the Brazilian savanna, has a soil and vegetation regime similar to that of significant parts of sub-Saharan Africa (the tropical belt). Brazil’s important achievements in the agriculture and social sphere – which resulted in a sharp decrease in income inequalities – as well as in the energy sector, continuously draw the attention of many leaders of non-lusophone African countries.

In addition to sharing knowledge and expertise in the power and agricultural sectors with African peers, joint projects are being carried out in education, e-government, public administration, environment, information technology, urban development, sanitation, bio-fuels, air transport, tourism, justice, culture, human rights and sports. Brazil is now providing technical assistance to 25 sub-Saharan African countries.

The Brazilian approach to the sharing of knowledge with African countries offers important lessons to other emerging and developing economies. ‘Structuring projects’ are a key instrument of Brazilian technical cooperation. Such projects are customized to local economic, geological and climatic conditions, a significant amount of time is invested in identifying local needs and priorities, and continued participatory consultations with local stakeholders are carried out during all phases of the projects. They are conceived for the long term, in contrast with traditional development projects with shorter life spans, with a view to fostering social development and building local capacity. They apply cross-sector coordinated approaches aiming to exert a long-lasting influence on the population, the countries, and their policies. Other donor countries have already recognized the importance of Brazilian structuring projects. As a result, trilateral cooperation projects have recently been launched in such areas as tropical agriculture, and some development agencies (for example JICA of Japan and USAID of the USA) are participating in them with financial inputs.

The Brazilian Agricultural Research Corporation (EMBRAPA), collaborating with the Brazilian Cooperation Agency (ABC), have jointly designed and implemented development projects in several African countries in consultation with local African partners. The success reached in the Brazilian savanna (which was transformed into the most productive area in the country) is expected to be repeated in the Nacala corridor in Mozambique, supporting the development of agriculture and business. Two other important ongoing agricultural structuring projects include the Cotton-4 project (with Benin, Burkina Faso, Chad and Mali) and the Rice-Culture Development Project in Senegal. The Cotton-4 project was conceived in 2008 to support the development of the cotton industry. The countries involved in this project face significant losses as a result of subsidies in the international cotton market. The project has been recognized by UN technical bodies as a success, despite the communication and coordination constraints the participating countries face. The Rice-Culture Development Project will help Senegal to become self-sufficient in rice production; rice is the major food product there.

Another area where cooperation between Brazil and Africa is increasing is tropical medicine. Brazil now has 53 bilateral agreements with 22 African countries. The successful experience of Brazil in HIV/AIDS and sickle-cell anemia treatment is in high demand with African partners. A pharmaceutical plant in Maputo, for the production of generic drugs to treat HIV/AIDS and other diseases, is under construction and expected to start operations soon. The plant will provide neighboring countries with low-cost generic drugs.

Brazil’s achievements in vocational training are also in very high demand in African countries. SENAI, the Brazilian National Service for Industrial Apprenticeship, has provided technical support to build training centers in Cape Verde, Guinea Bissau, Mozambique and San Tomé, and is also partnering with Angola, South Africa, Congo and Zambia in that area. The innovative programs developed by SENAI – distance learning, mobile training units, and onboard training for coastal and riverside communities – are especially relevant for Africa. SENAI also supports Brazilian private sector firms operating in Africa to build the technical skills of local workers and develop social programs for poor and disadvantaged people through the Social Industrial Service (SESI). Along with SENAI, this is one of the two Brazilian institutions supporting the industrial sector. Youths’ skills development is critical for many African countries, therefore the application of successful Brazilian practices can help African governments to design their policies and implement quick-win approaches to address the lack of professional skills.

Energy breakthrough

Future investments and business opportunities will further evolve between Brazil and Africa in the biofuel and energy sectors. One of the challenging areas of development in Africa is the power sector. Only about a quarter of the population uses electricity. Power consumption amounts to one tenth of that of developed countries. To address this issue, private and public investment will be needed. According to a World Bank study on infrastructure in Africa, $38 billion a year will be required to address Africa’s infrastructural deficit; operation and maintenance will take a further $37 billion.

Brazil has managed to develop alternative sources of energy, and that whets the interest of African governments. In 2006 Brazil was able to declare oil self-sufficiency, because the country is the world’s most efficient producer of biofuels. With the recent discovery of pre-salt deposits, Brazil’s Petrobras (a state oil company) is further developing its deep-sea drilling technology. Petrobras now operates in 28 countries including Angola, Benin, Gabon, Nigeria, Namibia, Senegal and Tanzania. Brazil also has one of the largest hydroelectric dams in the world; Itaipu is located on the border of Brazil and Paraguay and supplies zero-emission electricity, with most of the power going to Paraguay.

Other energy initiatives include the signing of a memorandum of understanding on biofuels with the West African Economic and Monetary Union (UEMOA) to conduct feasibility studies to analyze bio-energy production in Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. Brazil can also share its expertise in the areas of efficient charcoal production, charcoal gasification and cogeneration, power crisis management, power sector reform, the operation of large hydrothermal systems, and concessions for water use. There are other areas in which Africa and Brazil can develop to mutual benefit, such as second-generation ethanol, efficient cooking stoves, rural energy saving, greenhouse gas emissions, hydro-reservoirs, regulatory mechanisms to foster wind-power production, solar water-heaters, and uranium enrichment.

Social protection programs in Brazil, like the Zero Hunger program (implemented by 12 ministries and agencies in Brazil), and its four pillars – access to food, strengthening family agriculture, income generation and articulation, and mobilization and social control – are being widely analyzed by African governments. Some countries are already implementing some of the components of the program. Angola, Kenya, and Senegal are adapting it to help to build conditions for more inclusive growth. Other countries, such as Ghana, are focusing on strengthening family agriculture. Brazil is the only BRICS country managing to maintain economic growth while decreasing social inequality.

Trade, investment and risks

Between 2000 and 2010, Brazil’s trade with Africa increased from $4 billion to $20 billion. In respect of sub-Saharan Africa, it jumped from $2 billion to $12 billion over the same period. This is partially a result of political measures taken in Brazil, such as the Integration with Africa program (for which $360.5 million was spent in 2010), intended to boost exports, and a foreign policy strategically oriented towards Africa. The Brazilian Development Bank (BNDES) is also supporting the expansion of trade and investments in Africa. Diversification of Brazilian exports to Africa is at the core of an agreement between the BNDES and the Brazilian trade and investment agency APEX.

Brazilian private sector investment in Africa started in 1980 covering only lusophone countries, but expanded to almost every country of sub-Saharan Africa. The investment is directed mainly towards infrastructure and the mining and power sectors. Hiring local workers and investing in the development of local facilities are among the approaches used by Brazilian firms investing in Africa, such as Vale (mining), Odebrecht (infrastructure, housing, agribusiness), Camargo Corrêa (infrastructure), Queiroz Galvão (infrastructure), Andrade Gutierrez (infrastructure), and Petrobras (oil and gas). Other Brazilian companies, like Marcopolo – the third-largest manufacturer of bus bodies in the world – has built two plants, in Egypt and South Africa.

It is expected that more Brazilian companies will do business in Africa and that some will even move there. APEX supports small and medium enterprises (SMEs) willing to invest in Africa. However, SMEs still perceive Africa as a challenging environment and most of them are not in a position to manage the risks associated with doing business in Africa. More efforts are required to make information about Africa available to Brazilian small and medium investors, and vice versa.

With the upcoming implementation of the 12,800-gigabyte ocean bottom cable connecting Southern Africa with the north of Brazil, the flow of information between the two sides of the Atlantic will improve. However, both sea and air transportation between Brazil and Africa remain costly, and therefore limited. First of all, this is because all the available flights go through Europe. For example, it takes about 30 hours to fly from Accra to Sao Paulo (through Frankfurt), while a direct flight from Dakar to Recife (in northern Brazil) would take only three hours, and from Dakar to Rio de Janeiro – only five. The Brazilian government and some African governments are working to improve the situation.