Brasília, July 29, 2003 (Agência Brasil - ABr) - In an exclusive interview with Agência Brasil, Marco Aurélio Garcia, one of the Administration's chief strategists in the international area, spoke about Brazil's new project in the international field. He cautions that projects in the area have "long maturation periods," but, in his view, in negotiations such as the one that involves the policy of opening Europe to agricultural products from the Mercosur, concrete results may appear by the end of the year. Garcia also pointed out the mistakes of the past, and he harshly criticized the Administration of Fernando Henrique Cardoso, whose policies in this field are, in his view, symbolized by the R$ 1.99 stores, which spread across the country like wildfire in the '90's, at the expense of "eliminating jobs here in Brazil." The following are portions of the interview:
Agência Brasil - The Administration's initial months were marked by intense contacts by President Lula in the international arena. What is the role of foreign policy in this Administration?
Marco Aurélio Garcia - One of the main axes of the Administration is precisely Brazil's sovereign presence in the world. For this reason, foreign policy comes to play an important role. Moreover, it has an immediate dimension. The fundamental problem with Brazil's economy is its vulnerability to outside forces. We need to reduce this, so that we can in fact assume greater command of our decisions. Obviously, this includes economic policy measures, but it also implies a stronger Brazilian world presence.
ABr - You refer to the resumption of a daring foreign policy. What has kept the country from doing this up to now?
Garcia - For 20 years we have been in a period of economic regression and stagnation, with grave social consequences. There has been an increase in the number of poor people, unemployment, extreme poverty, exclusion, etc. A country with these characteristics cannot acquire a significant world presence. The country appears through its soccer and its joyfulness, but these are not the only things that characterize the Brazilian nation.
ABr - How do you rate the government's performance vis-à-vis the rest of the world in recent years?
Garcia - In the last 8 or 10 years the country has been dismantled. With the adoption of liberal policies, we were capable of selling patrimonies worth nearly US$ 100 billion. However, instead of strengthening the country, Brazil adopted a populist policy, and the most irresponsible populist pólicy, which is exchange rate populism, especially until 1999.
Through the manipulation of the exchange rate to control inflation, together with high interest rates and the opening to foreign trade, a false sense of well-being was created in the country, levered by large-scale popular consumption, which we can symbolize by the R$ 1.99 stores. Every one of these foreign products, from Danish butter to Argentinean cheese to the baubles from Southeast Asia was, in reality, a form of eliminating jobs here. I am not espousing a protectionistic position, but, in reality, at that moment, we adopted a policy of total disprotection of the nation's productive base.
ABr - Does the country already possess economic conditions to resume the project of a vigorous foreign policy?
Garcia - I have no doubts about this. All I would like is for these sacrifices we made in the first six months to have been made in the previous Administration. When people say that we are continuing the policy of Fernando Henrique's Administration, I reply: "No, sir. We are making the policy that FHC should have made and didn't." If he had resolved these macroeconomic problems that we are currently resolving at great expense, with high interest rates and slow growth, we would be in a different situation. The "growth spectacle" could be getting underway immediately.
ABr - But didn't Fernando Henrique's policy open paths for foreign policy to take off today?
Garcia - It opened them and closed them. He ended inflation at a certain moment, but he created a phenomenon as grave as inflation. He took over the country with a debt of R$ 60 billion, and he left the country with a debt of R$ 800 billion. He took over the country with an extraordinary trade surplus, and he left the country with an extraordinary loss of importance in terms of international trade. He left us with an economy that is extremely vulnerable and an expectation of 40% annual inflation. If he had continued, it would have been 50% or 60%, and we could have entered a cycle of hyper-inflation. We had to face these things. Currently, the estimate is that inflation will run below 7%. We had to pay the full price of combatting inflation: mediocre growth, higher unemployment, lower participation by salaries in the nation's income. This is what we have to counter.
ABr - What was that Administration's big mistake?
Garcia - The previous Administration had a mistaken view of the international situation. They believed that the situation was rosy for Brazil. They said that the world was experiencing a new rebirth. The world was not experiencing any new rebirth. It was undergoing an extremely difficult moment, as it still is, and, therefore, it was a period in which we should have been celebrating less and concerning ourselves more with defending national interests, protecting them more.
ABr - President Lula has used the maxim "There is force in unity" to propose partnerships to emerging countries, in bilateral relations and bloc negotiations. Does the Administration think it will topple giants like and United States and the European Union?
Garcia - In our relations with large and small emerging countries, we have two aspects: first, the fact that we are trying to intensify bilateral relations, be they commercial, economic, cultural, or social.
Now, when you establish a bilateral or multilateral relation, you have to consider how it may affect changes in the world's relations. In concrete terms, we are calling for a multilateral world that is more democratic, less asymmetric, and more equitable than it is today. We have this double dimension: the benefits that the two countries can obtain from this bilateral relation and the gains that we can, as a group of countries, obtain in relation to the world order - or the world disorder, if you'd prefer.
ABr - How would you evaluate the changes in the Common Agricultural Policy (CAP) announced during President Lula's trip to Europe?
Garcia - We and the Itamaraty are still studying this matter. In any case, this could speed up a Mercosur/European Union agreement, which might perhaps be adopted by the end of the year. Possibly, this is a little bit easier today, if changes in the CAP create a favorable setting for greater approximation. This was a strangulation point.
ABr - To what extent can the Brazilian proposal for a "light" FTAA be successful?
Garcia - I don't say it will be successful. It is an alternative we have, if the negotiations are paralyzed. Because some entrenched themselves in the WTO, and others, outside the WTO. With respect to the FTAA, we obviously have a major interlocutor in the United States.
Relations with the United States have evolved very positively in recent months. The conversations we had during the two trips we made were highly favorable. This doesn't mean that we don't have difficulties and differences. In negotiations over the FTAA, this appeared very forcefully. We want access to American markets. The Americans have been very resistant to this access, through protectionist measures. On the other hand, they want to discuss matters related to investments, government purchases, services, intellectual property, all of which are themes we would prefer to have discussed in other negotiations.
ABr - President Lula is praised in all the countries he visits. What can you say that Brazil really gains from this?
Garcia - If we want to play an essential role in the world, we have to fight for this role. I can't just proclaim myself the leader of the world, the good guy. I have to work to change international relations. Our foreign policy pursues changes in the current international correlation of forces, so we can favor not only Brazil, but all countries that, in one way or another, share Brazil's problems of exclusion, illiteracy, democratic fragility, etc. It was this that turned Lula, an apparently national leader, into a leader of much larger dimensions.
Diplomatic activity is very ungrateful. It looks like an agreeable, extremely pleasurable activity, but it is very difficult. People in Brazil have become geared to the short run. Everything has to be accomplished in a weekend, and these matters require long periods of maturation. For example, we have this project to create a large infrastructure of communications and highways in South America. You must be able to attract foreign companies, as we attempted to do, with some success, in Spain and Portugal. For this to begin to signify a flow of productive investments, it takes a long time, at least three or four years.
ABr - The Administration's discourse in the international arena has been that Brazil is a country with problems, but not a charity case that approaches the rich to beg alms. What is the message?
Garcia - Brazil will play an important role in terms of international relations, if it manages to resolve its internal problems. The world is aware of our internal problems. If for no other reason, because these problems appear every day. It is a country with huge inequalities, hunger, children who live in the streets, devastation of natural resources. This is what must be changed. Even if it is carried out on a world scale, it is a change we ourselves have to make here at home. We are the ones who have to do it, so we can't complain if we are unable to do so. (DAS)
