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Why is Brazil weighing options on China’s Belt and Road Initiative?
THE HINDU

Why is Brazil weighing options on China’s Belt and Road Initiative?

What has President Lula’s chief adviser on foreign policy indicated with respect to China’s Belt and Road Initiative? What is the status of Brazil-China ties? What reasons did India give when it decided not to join the initiative? Has China’s global infrastructure project hit a roadblock?


The story so far:
 The Brazilian government indicated this week that it may not want to join China’s Belt and Road Initiative (BRI), which would make it the second member of the BRICS grouping (Brazil, Russia, India, China, South Africa) after Indiato decline joining the trillion-dollar Chinese global infrastructure project that was started in 2013.

What may have prompted the decision?

The decision was conveyed in an interview to a Brazilian newspaper by Celso Amorim, Chief Adviser on Foreign Policy to Brazilian President Luiz Inacio Lula Da Silva. The interview has raised questions about Brazil-China ties, as well as about the BRI, which was launched as a modern-day version of the ancient Silk Road.

In the interview to O Globo, Mr. Amorim said that rather than sign an “accession contract” with China, Brazil would prefer to explore “synergy” in various nationally determined infrastructure projects. “The key word is synergy. It’s not about signing something like an insurance policy. We’re not entering into an accession treaty. It’s a negotiation of synergies,” Mr. Amorim said, adding that while China could give the relationship any name, for Brazil any partnership would involve projects defined and decided by Brazil. He did not, however, reject the BRI outright or forswear Chinese funding for a number of projects, mainly on infrastructure, but also in other areas, ranging from solar energy to hybrid or electric cars. Mr. Amorim also suggested that such projects would engage not only Brazil but also other South American countries. Finally, Mr. Amorim pointed to more geopolitical collaborations that Brazil and China can further, such as the six-point peace plan for Ukraine.

Why is the timing important?

Unlike most of its neighbours, Brazil is one of only four South American countries not to join the Chinese initiative. Mr. Lula’s predecessors Jair Bolsonaro and Michel Temer had been positive on Chinese investments but demurred at Beijing’s multiple attempts at getting Brazil to sign an MoU on the BRI. As of December 2023, about 150 countries worldwide have done so, with India and Brazil being notable exceptions in the developing world, especially given their common membership of the BRICS. Russia also has some BRI projects under development for energy and roads, but it has not signed the MoU, only inking a China-Eurasian Economic Union MoU on the BRI.

In July, however, Mr. Lula had told a news conference that Brazil was studying the benefits of joining the BRI. “As China wants to discuss this Silk Road, we will have to prepare a proposal to assess ‘What do we gain? What’s in it for Brazil if we participate in this thing?’,” he said. However, the decision conveyed in the O Globo interview, which comes after the BRICS summit in Russia and a visit to China by Mr. Amorim, appears to indicate that Brazil has concluded that the gains do not outweigh the risks of such a move.

What were India’s reasons to stay out of BRI?

In its decision announced in May 2017 to stay out of the BRI, India was more forthright, and had outlined three issues: the corridor disregards sovereignty and territorial integrity of nations, particularly referring to projects in Pakistan-occupied Kashmir; it would push smaller economies into debt traps and environmental hazards; and there was a lack of transparency, indicating India was wary of the BRI’s larger geopolitical aims. In Brazil, officials say that there is an underlying concern about growing dependence in the CELAC (Community of Latin American and Caribbean States) region on Chinese investment, although Brazil-China trade has reached robust levels of $180 billion and Chinese investment of $3 billion a year in Brazil is the highest in the continent. With all that is at stake, all eyes are on what President Lula says later this month, when he hosts the G-20 in Rio De Janeiro (November 18-19), followed by a state visit by Chinese President Xi Jinping to Brasilia on November 20.

Has the BRI lost its sheen?

More than a decade after it was launched by Mr. Xi, the Belt and Road Initiative is no longer the “project of the century” it was once touted as. Of the 150 countries that have either signed an MoU or contracted for BRI projects, 44 are in Sub-saharan Africa, 17 in the European Union, 17 others in Europe and Central Asia, 31 in East Asia and South East Asia, 22 in South America and 19 in West Asia-North Africa.

One of the reasons the BRI’s charms have dimmed is China’s own slowing economy and Beijing’s unwillingness to be as generous with its loans in the second half of the decade, especially after the COVID-19 pandemic. Another is the discomfort in many countries over the terms for the loans, which involve hiring Chinese companies and engaging Chinese workers, while often demanding heavy collateral, as Sri Lanka found out after losing control of the Hambantota port. The U.S.’s heavy lobbying against the BRI has also had some effect: Italy’s Giorgia Meloni announced in December 2023 that it would not renew the BRI MoU. The Brazilian Foreign Adviser’s statement follows a visit by U.S. Trade Representative Katherine Tai who asked Brazil to think carefully through an “objective lens” before signing on to the BRI. The remarks raised a protest from the Chinese Embassy in Brasilia which called them “disrespectful” of Brazil’s sovereign right to choose its partners. With some ambiguity still apparent in Brazil’s stand, some have suggested that President Lula may be keeping his options open, at least until the outcome of the U.S. elections on November 5.


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