[Marxism] Nationalism threatens Brazil's regional interests

["Fred Fuentes" <fred.fuentes@xxxxxxxxx>]

Nationalism threatens Brazil's regional interests
Raymond Colitt. Reuters. December 12, 2008
http://www.reuters.com/article/reutersEdge/idUSTRE4BB55Y20081212

Brazil's center-left government for long hoped that the new generation of
socialist leaders in South America would help it emerge as the dominant
regional power by challenging U.S. influence.

Instead, Brazil's own political and economic interests in South America are
being challenged by a wave of economic nationalism in the countries it has
courted as allies.

Ecuador's threat to default on a Brazilian loan and its earlier expulsion of
privately held Brazilian construction firm Odebrecht over a contract dispute
sparked widespread concern among Brazil's business leaders and diplomats.

"It's very worrying, there's an increasingly negative view of Brazil in
several countries," said Roberto Abdenur, a former Brazilian ambassador to
Ecuador. "This idea of a unified, leftist South America was an illusion and
Brazil erroneously fomented it."

Paraguay's government is pushing for a debt renegotiation on the jointly
owned Itaipu hydroelectric dam on its border with Brazil. Paraguayan
peasants have also been protesting against Brazilian farmers, threatening to
drive them out of the country.

Brazil's state-owned oil giant Petrobras has been strong-armed into contract
changes in Ecuador, Bolivia and Venezuela. Petrobras was also forced to sell
two refineries at below-market prices after Bolivia nationalized its gas
industry in May 2006.

Brazilian companies have invested heavily in South America since trade
barriers fell with the end of military rule in the region in the 1980s.

President Luiz Inacio Lula da Silva, a former union boss once called "my big
brother" by Bolivian President Evo Morales, has financed roads and bridges
and granted trade concessions to his neighbors in the cause of regional
integration since taking office in 2003. Now he is reconsidering.

"We need to rethink. If we have to be more cautious, that in itself will
slow integration," Foreign Minister Celso Amorim told Reuters in an
interview.

RESENTMENT AND MISTRUST

As a regional powerhouse with growing global clout and a major foreign
investor all over South America, Brazil is often viewed with resentment by
its smaller neighbors.

Brazil runs a trade surplus of $13 billion in the region, and in the case of
Argentina, the imbalance is a frequent source of political tension.
Bolivia's total budget roughly equals Petrobras' annual investments.

"When Brazil grows too much, it becomes a threat -- that's a widespread
attitude in the Andes and beyond," said Jose Flavio Saraiva, professor of
international relations at the University of Brasilia. "With such mistrust
it's hard to integrate."

Leftist leaders like Morales in Bolivia, Paraguay's Fernando Lugo and
Ecuador's Rafael Correa are under pressure to deliver results to the mostly
poor supporters who elected them, and imposing tighter control over natural
resources is a popular policy.

Venezuelan President Hugo Chavez, who often rivals Lula for leadership in
the region, helped Bolivia nationalize its gas industry to the detriment of
Petrobras and is encouraging Correa and Lugo to challenge Brazil, some
analysts say.

"We made ourselves more vulnerable by bragging about our leadership
ambitions and Chavez exploited this," said Abdenur.

Venezuela hit privately-held construction firm Odebrecht with a $282 million
tax bill just after Ecuador expelled the firm over a contract dispute.

Lula's government is unlikely to abandon its push for economic integration,
which it believes opens doors for its businesses and gives it greater clout
in international trade negotiations, but it says its neighbors are making a
mistake.

"We need to have a mix of patience and resolve," said Amorim. "I think they
may be choosing the wrong target because in the current situation Brazil is
one of the few countries that has been trying to help."

Critics say Brazil should be tougher.

"We don't need to burn bridges -- they're our neighbors -- but let's put
integration into the freezer until they're ready and do more business in a
less volatile region," said Saraiva.
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