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Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized BRIDGING THE ATLANTIC South-South Partnering for Growth South-South Partneringfor Brazil and Sub-Saharan Africa andSub-Saharan Brazil Bridging the Atlantic Brazil and Sub-Saharan Africa: South–South Partnering for Growth TASK TEAM Susana Carrillo (Task Leader), Senior Governance Specialist, Capacity Development and Partnerships Unit (AFRCP); Fernanda Lira Goes, Researcher, IPEA; Eduarda Passarelli Hamann, Keith Martin, (consult- ants, AFRCP); José Flávio Sombra Saraiva, Professor, University of Bra- silia; Creomar Lima de Carvalho de Souza, Researcher, IPEA; James Augusto Pires Tibúrcio, Researcher, IPEA; under the strategic guidance of Tijan M. Sallah, Manager, AFRCP and Marcos Antonio Macedo Cin- tra, Acting Director, International Relations and Policy Studies, IPEA. This report benefited from the general support of Obiageli Ezekwesili, Vice President, Africa Region, World Bank and Marcio Pochmann, President, IPEA. Contents Foreword vii Preface ix Acknowledgments xi Acronyms and Abbreviations xiii Executive Summary 1 South–South cooperation is transforming development assistance 1 The new Africa and the new Brazil have complementary interests 3 The Past Decade has witnessed unprecedented growth in Brazil's economic relations with Africa 5 The relationship between Africa and Brazil offers useful lessons for the World Bank and other international organizations 7 Report methodology 9 The New Global Financial and Political Architecture 13 The international system of development cooperation 13 The emergence of BRICS 17 Sub-Saharan Africa: A new frontier? 20 Remaining challenges 21 The History of Brazil–Africa Relations 25 Five periods in the history of Brazil–Africa relations 26 The social, political, and cultural history of Brazil–Africa relations: slavery and beyond 27 African descendants in Brazil: contributions to contemporary society 29 From a fickle past to a promising future 31 Brazilian Views of Africa 33 A pendulum swinging from North to South 33 The principles guiding Brazil’s participation in global development 36 Strengthening the links between Brazil and Africa 38 Brazil’s foreign policy toward Africa during the Lula da Silva administration (2003–10) 40 The challenges ahead 43 The Knowledge Connection 47 Tropical agriculture and food security 50 Health and tropical medicine 66 iii ivsBridging the Atlantic Energy 69 Social protection 74 Other areas of exchange 76 Brazilian Foreign Direct Investment and Trade with Africa 79 The role of Brazilian development institutions 79 Brazilian companies in Africa 82 Trade between Brazil and Africa 88 Trends and future prospects 95 Conclusions, Lessons and Policy Recommendations 97 Conclusions 98 Lessons for World Bank Group support for South–South cooperation 101 Policy recommendations and next steps 105 Appendixes 109 Appendix 1. The G-20 members 109 Appendix 2. South–South Forums 109 Appendix 3. Brazil: Main economic indicators 112 Appendix 4. Brazil–Africa official meetings and visits 113 References 117 Figures ES.1 Millions of years ago, Africa and Brazil were joined in a single landmass 2 ES.2 Main areas of Brazil’s involvement in South–South cooperative arrangements, 2009 4 ES.3 Brazilian corporations in Africa, 2010 6 1.1 The BRIC countries versus the G-7 18 3.1 Number of technical cooperation activities coordinated by the ABC, 2003–09 35 3.2 Main areas of Brazil’s involvement in South–South cooperative arrangements, 2009 38 3.3 Brazilian investments in international development projects, share per continent, 2009–10 43 4.1 Brazilian international cooperation in Sub-Saharan Africa, 2000–11 48 4.2 Global land surface temperature and vegetation, May 2011 52 4.3 Comparative map of Brazil and Mozambique 55 4.4 SENAI’s global presence: projects and partnerships 63 4.5 Energy production in Brazil by source, 1970–2010 70 4.6 Productivity and tree density across Brazilian eucalyptus plantations, 1970–2006 73 Contentssv 4.7 Estimated future growth in charcoal demand for Sub-Saharan Africa 73 4.8 Zero Hunger Program: axes and implementing bodies 75 4.9 Bolsa Família’s expansion, 2004–10 75 5.1 Brazilian corporations in Africa, 2010 84 5.2 Brazilian SMEs in Africa 86 5.3 Africa’s share in Brazilian trade 90 5.4 Africa’s share in Brazilian exports 91 5.5 Brazilian exports to Africa by classification 91 5.6 Brazilian exports to Sub-Saharan Africa by classification 92 5.7 Africa’s share in Brazilian imports 93 5.8 Brazilian imports from Africa by classification 94 5.9 Brazilian imports from Sub-Saharan Africa by classification 95 Tables 3.1 Selected cooperation agreements between Brazil and developed countries by year of signature, 1950–2011 34 3.2 General principles of Brazil’s role in global development cooperation 37 3.3 African countries visited by Brazilian presidents, 2000–10 41 4.1 Brazil’s global market share projections (%) 51 4.2 Selected small-scale health projects implemented in Africa, with support from the Brazilian government, 2011 67 4.3 Structuring projects focused on health: Brazil–Africa development cooperation 67 4.4 Sources of energy: Potential areas for collaboration and knowledge exchange between Sub-Saharan Africa and Brazil 71 5.1 Brazilian trade with the world, Africa, and Sub-Saharan Africa, 2000–10 (US$) 80 5.2 PROEX funding of exports to Africa, 2007–08 81 5.3 Brazilian investment abroad, 2001–09 (US$) 82 5.4 The Brazilian private sector in Africa, by country and sector 87 5.5 Breakdown of Brazil’s global trade, 2000–10 (%) 89 5.6 Sub-Saharan Africa’s share in Brazilian trade with Africa (%) 89 A3.1 Brazil: Main economic indicators 112 A4.1 African countries visited by Foreign Minister Celso Amorim, 2003–10 113 A4.2 Visits from African heads of state and government to Brazil, 2003–10 114 A4.3 Visits to Brazil of African foreign ministers as share of visits by all foreign ministers, 2003–10 115 A4.4 Brazil–Africa multilateral meetings, 2003–10 116 A4.5 Meetings of the Community of Portuguese Language Countries (Comunidade dos Países de Língua Portuguesa) and Africa–South America Initiative 116 visBridging the Atlantic Boxes 4.1 Seeds for life: Brazil–Africa 60 4.2 Youth skills and entrepreneurial development in Soweto 64 4.3 SENAI in numbers 66 4.4 Oswaldo Cruz Foundation 68 5.1 Marcopolo: Brazilian manufacturing in Africa 85 Foreword Africa and Brazil were united by geography eons ago and by shared history since the sixteenth century, when they were linked by the transatlantic slave trade until slavery’s abolition. A hiatus in relations developed until African countries gained political independence, when a new relationship began to develop be- tween Brazil and especially the Lusophone African countries. With Brazil’s rise as one of the world’s largest economies and with the advent of strong growth and dynamism in African economies, the relationship between Brazil and Af- rica has continued to burgeon, even beyond Lusophone African countries to other countries on the continent, and spans trade, investment, and knowledge transfer. Bridging the Atlantic—Brazil and Sub-Saharan Africa: South–South Partnering for Growth describes this growing engagement. Under the leader- ship of President Lula da Silva, ties between Brazil and Africa deepened and under the new Brazilian President, Dilma Rousseff, these ties are continuing to strengthen. From the African side, leaders have continued to engage and deepen partnership with Brazil. For us at the World Bank, this report is timely because it comes on the heels of our newly approved Africa strategy, “Africa’s Future and the World Bank’s Support to It.” Our strategy highlights leveraging partnerships, knowledge, and finance, particularly with emerging growth-pole countries such as Brazil. We envisage this report as crucial in providing the knowledge base that will enable us, African governments, and the Brazilian government to continue to forge concrete partnerships that will generate win-win outcomes for the two regions—in, for example, areas of social protection, tropical agriculture, energy/bioenergy, vocational training, and tropical medicine. We look forward to the lively discussions and concrete partnerships that dissemination of this important work will bring. Obiageli Ezekwesili Vice President, Africa Region World Bank vii Preface The international economy is going through great changes. Developed econo- mies—Japan, the European Union, and the United States—face a reduction in economic dynamism—for different reasons. Developing countries—led by China, India, Brazil, Argentina, Turkey, South Africa, and Russia—have growth accelerating, with prospects of further expansions in income, domestic employ- ment, and investment between the main emerging economies. In recent years, there has also been a revival on the African continent, albeit patchy. The International Monetary Fund estimates that the economies of Sub- Saharan Africa, having grown 5.4 percent in 2010, will expand 5.2 percent in 2011 and 5.8 percent in 2012. The Middle East and North Africa, having grown 4.4 percent in 2010, should expand 4 percent in 2011 and 3.6 percent in 2012. In this reconfiguration of the global economy, Brazil has promoted a policy of diversification of its international integration, engaging with developing countries in Latin America, Southeast Asia, and Africa. The former president, Luiz Inacio Lula da Silva, made 12 trips to Africa, visiting 21 countries. In the opposite direction, Brazil received 47 visits