By Claudia Valenzuela | 22 July 2014
In the enduring hunt for sharing economic opportunities, Brazilian eyes are increasingly turning toward other countries, with a special focus on Africa, says Claudia Valenzuela. Three leaders from across Brazil explain why.
Growth, opportunity and potential have ricocheted across Brazil and the African continent in recent years. While other more mature markets are only just beginning to click into gear after the financial crisis, the economies of Brazil and Africa have enjoyed better times as a result of rising popularity with foreign investors, and burgeoning domestic markets driven by an expanding middle class and abundant natural reserves.
Africa, in particular, is picking up the pace. It’s perceived attractiveness relative to other regions has improved dramatically over the past few years, according to EY’s recent Africa attractiveness survey, moving from the third-from-last position in 2011 to become the second most attractive investment destination in the world. Its total share of global FDI projects has also reached the highest level in a decade, with investors increasingly looking across the continent and to new sectors.
An African horizon
While separated by the vast expanse of the southern Atlantic Ocean, the fact that, millions of years ago, Africa and Brazil were joined in a single landmass, and continue to share similarities in soil and climate, serves as a far more apt geographic metaphor. The increasingly close relationship between the two began during the Presidency of Luiz Inácio Lula da Silva, who himself traveled to Africa 12 times in the 1990s, visiting 21 countries in the process. This pattern has continued under his successor, Dilma Rousseff, who, for example, visited Angola, Mozambique and South Africa during her first year in office.
These travels, it should be pointed out, were hardly a one-way street: Brazil received 47 visits by African kings, presidents and prime ministers from 27 nations during the da Silva Presidency alone. The frequency of such back-and-forth travel reflects the fact that, at the same time as Brazil’s economy was increasingly diversifying and becoming more international in scope, Africa was opening up as a source of growth, new markets and potential. Such visits also enabled African leaders to see for themselves the secrets of Brazil’s success in areas such as narrowing social inequality and accelerated development, which were hugely pertinent to their own domestic challenges.
A broad range of ambitions
The close ties between Brazil and Africa have led to a wide array of development programs, ranging from humanitarian aid to multilateral interventions across sectors such as agriculture, education, e-government, urban development and tourism. Much of this work is overseen and deployed by Brazilian Cooperation Agency (ABC), which is responsible for the Brazilian Government’s development programs around the world. Its Director, Ambassador Fernando José Marroni de Abreu, says that the focus on Africa — “south-south cooperation” — is no temporary phenomenon.
“This is now a permanent concern for Brazilian foreign policy,” he says. “The motivations are strong: the close cultural and historic relationship with developing close cultural and historic relationship with developing speaking African countries. This commitment goes beyond Latin America and Africa, reaching other regions on the planet where cooperation is a necessary tool to foster development. For instance, in 2013, ABC managed the implementation of 1,000 south-south cooperation projects and short-term activities (bilateral and triangular), with approximately 80 countries in Latin America, the Caribbean, Africa, Asia and Oceania.”
He is keen to stress, though, that it’s not about aid. “Our cooperation is motivated by solidarity with other developing countries, demand-driven, nonprofit and free from conditions, and aimed at helping our partners to strengthen their institutions and human resources,” he says. “The focus of the Brazilian south-south cooperation is capacity development. Through that focus, we believe that partner countries benefit from an effective transfer and absorption of knowledge, and from an exchange of experiences developed in Brazil under quite similar socioeconomic circumstances.”
The Ambassador also believes that south-south cooperation is markedly different to the type of development practiced by more Northern countries. “Unlike the north-south model, Brazilian cooperation does not offer solution packages,” he says. “Instead, after preliminary examination by ABC, the proposals are negotiated in conjunction with the technical input from institutions, including the viewpoint of the foreign government and based on successful Brazilian experience in order to formulate work plans that meet the specific needs of the country applicant. The objective of the projects is usually to strengthen the institutional capacity in a specific sector of the partner country.”
It’s an approach closely replicated by SENAI, which is Brazil’s National Industrial Apprenticeships Association, with the support and coordination of ABC. Founded in 1942, SENAI provides formal vocational training for specialized workers across a range of different sectors and industries. While it is still fully focused on promoting professional and technical education, innovation and technology transfer in Brazil, it is now increasingly active in African countries as well.
“This type of work is in our DNA,” says Frederico Lamego, its Executive Director of International Relations. “In the 1970s and 1980s, we supported many Latin American institutions as they sought to improve their vocational training. Ever since we were created, we have been receiving technical cooperation and offering it, so it seemed a natural progression to operate in Africa as well.” Lamego is a firm believer in the cumulative benefits that occur from working in Africa, citing stronger international influence as a key advantage. “Closer ties between Brazil and Africa help to project Brazil’s role in international affairs,” he points out. “It is very important to open relationships with African countries in a broader sense. Closer diplomatic ties help project our role in the world and strengthens our international relations.”
When it comes to job creation, which is, of course, a huge priority across the African continent and around the world, Lamego says that a huge amount rests on the availability of a highly skilled and qualified labor force. “You can only get this if you organize training and education in line with industrial and market demand,” he says. “We are trying to strengthen the Brazilian companies which are becoming more international and thus help create jobs as they do so. Our focus is not the political context. Our focus is primarily one of capacity building — we want to help Brazilian companies leave a sustainable legacy.”
He goes on to underline the link that exists between development projects and Brazil’s strategic economic interests in Africa. “We can’t pretend that technical and development cooperation isn’t connected to broader social and economic issues,” he says. “It’s not a sustainable position to hold. For example, we had a request to build a school in the capital city of an African country. But when we analyzed the context, it made much more sense to do so in the north of the country because there were Brazilian companies already operating there and the social impact would be also be much higher.” On the other hand, ABC believes that south-south cooperation is all about sharing experiences and has as a principle to work according to the beneficiary country demands and needs.
Sharing experiences
Sharing experiences is another aspect of African development where Brazilian organizations are coming to the fore. Caixa Econômica Federal, a Brazilian bank, acts as an agent of technical cooperation in Africa following guidelines from the Ministry of Foreign Affairs. Its work is coordinated by ABC and is based on the bank’s accumulated experience in areas such as housing and social benefits.
By implementing technical training programs and prioritizing knowledge transfer, there has been great success in local capacity building, says Maria Letícia Macedo, Head of International Relationship Division at Caixa. “We act as a partner of the federal Government in implementing its foreign policy and this contributes to international development,” she says. “This enables effective and sustainable results to be achieved and in the process we strengthen the external reputation and presence of Caixa and Brazil in Africa.”
Looking ahead
The current budget for Africa exceeds US$70m in signed projects, representing about 60% of the total resources committed by ABC. However, this level of funding, while substantial, has proven to be insufficient to meet rising demand — its budget has been fully utilized, with 100% implementation over the last four years. However, it’s not just about funding, according to Marroni de Abreu.
“The challenges also include efforts for effective coordination between the performance of Brazilian cooperating institutions and their local counterparts in the beneficiary countries,” he says. “South-south cooperation should be mainly implemented by way of a project aimed at achieving structural results. Consistency and sustainability can only be ensured within a framework of projects with durable and long-standing impacts. Efforts have also been made to assess the relevance, impact and effectiveness of the demands made by fellow developing countries, in order to avoid the temptation of providing temporary and unsustainable solutions. It goes without saying that a successful outcome of a south-south cooperation initiative will be limited without the continuous involvement of the different segments of the civil society in its implementation. There is no real south-south cooperation without clear local ownership and leadership.”
It is clear that the links forged between Brazil and Africa — rooted in history and encompassing geographic, cultural and development similarities — mean that the south-south cooperation is here to stay. Fast forward 10 or 20 years, and these links are only likely to have broadened and deepened — so watch this space.
This feature was first published in the June edition of EY's Dynamics magazine
