The New Brazil: A Viable Partner for the United States

Abstract

The New Brazil: A Viable Partner for the United States Ambassador Melvyn Levitsky (bio) Back in September 1994, barely three months into Brazil’s Real Plan to stabilize the currency and promote economic growth, I heard one of the best explanations of how it was working from the owner of a small tire repair stand on the outskirts of Manaus, far into the Amazon. Holding up a fistful of new coins, he smiled broadly and said: “We used to throw these centavos away. Now you can buy a beer with them.” Three years later the plan is still in place, and the country’s leadership is now preparing to lead Brazil into the 21st century. The tire repairman in Manaus understood something different was afoot early on in this process. His response to my question about how things were going under the new currency and the resultant dramatic drop in inflation imparted a practical sense of the impact reform was beginning to have on public attitudes about the plan. By the Presidential election of October 1994, the inflation-fighting program was so popular that a candidate named “Senhor Plano Real” would have won hands down. As it turned out, that election was easily won by the architect of the plan, Fernando Henrique Cardoso. Swept into office by economic success and new found public optimism, Cardoso and his team have been pressing forward vigorously—but as they often point out, through gradual, consensus-building methods within a democracy—in an effort to bring stable, lasting reform to Brazil. As I write, there is a new and growing interest in Brazil in the United States, within government, the private sector, and among [End Page 51] academics. I hope this article will contribute to our understanding of this huge country and demonstrate Brazil’s importance to U.S. national interests. To do so, I offer some thoughts on present day Brazil from the perspective of an American diplomat who served there in the late sixties, had little to do with the country for the next 25 years, and then returned as Ambassador in the mid-nineties, during a surge of modernization that promises to dispel the adage that “Brazil is the country of the future and will always be so.” The Stakes for the United States The Clinton Administration’s policy in this hemisphere is based on three broad goals: strengthening democratic government as a means to promote peace and stability, strengthening U.S. economic security by promoting improved conditions for U.S. trade and investment, and strengthening our partnerships with other countries to advance our interests in global issues such as environmental protection, human rights and humanitarian affairs, and the fight against drug trafficking, crime and international terrorism. Brazil is of major significance to us in each of these areas. Larger than the continental United States, with a population of 160 million (the world’s fifth largest) and a gross domestic product of over $750 billion (the tenth largest economy), Brazil is an increasingly important market for US commerce. The state of São Paulo alone has a population and economy larger than Argentina’s. Brazil has also often acted as a bridge between the developed and developing worlds. Its voice in global affairs has been influential. It has long taken an activist position in international organizations and in recent years has participated vigorously in UN peacekeeping operations. As an often struggling democracy with a large portion of its citizenry at the subsistence level, Brazil is also a potentially significant model for countries undergoing similar efforts to break with the past and find new ways to satisfy their people’s aspirations for better civic, social and economic lives. The success of Brazil’s current experiment with reform is important for the U.S. economy. A stronger, more stable and more economically viable Brazil will be a better market for US trade and investment. The fact that three years of the Real Plan have lifted [End Page 52] some 13 million Brazilians—equal to the population of Chile— from poverty to consuming status has had much to do with a doubling of US exports from less than six billion to over 12 billion...