The U.S. has an image problem in Latin America

. Jul 28, 2020
The U.S. has an serious image problem in Latin America Image: GM Stock Studio/Shutterstock

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We’re covering the U.S.’s image problem in Latin America. Brazil’s bold — and uncertain — Amazon railway project. And the fight to control Congress and its agenda.

The Americas no longer ‘for the Americans’

A fresh Gallup poll among 135 countries shows that approval for U.S. global leadership

(33 percent) is virtually tied with rates for China and Russia (32 and 30 percent, respectively). In the Americas, U.S. leadership is viewed very unfavorably by its closest neighbors, Canada and Mexico (22 and 17 percent), but is particularly low in wealthy South American countries, such as Chile and Uruguay (16 and 19 percent). In Brazil, approval for U.S. leadership has remained somewhat stable, at 38 percent.</p> <div class="flourish-embed flourish-map" data-src="visualisation/3308097" data-url="https://flo.uri.sh/visualisation/3308097/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>By the numbers.</strong> Approval of U.S. leadership plummeted to 24 percent during Donald Trump&#8217;s first year in office, but has resurged recently to an overall rating of 34 percent. Meanwhile, 35 percent of citizens in the Americas are in favor of Germany as a global leader; China has 32-percent approval, and Russia is seen positively by 28 percent of respondents.</p> <p><strong>Why it matters.</strong> The poll shows how China has augmented its influence over Latin America by way of investments in infrastructure, energy, and mining — but also through its increased importance as a trading partner.&nbsp;</p> <ul><li>&#8220;For many countries of the region, the Asian giant is either their top or second-biggest partner,&#8221; Mauricio Santoro, an international relations professor at the State University of Rio de Janeiro, tells <strong>The Brazilian Report</strong>. In Brazil&#8217;s case, China is the destination for <a href="https://valor.globo.com/brasil/noticia/2020/06/02/china-compra-mais-do-brasil-e-eleva-participacao-na-exportacao-para-40.ghtml">40 percent of overall exports</a>, mainly comprising basic commodities.</li></ul> <p><strong>What happened. </strong>Over the past decades, U.S. relations with Latin America have shifted significantly. The region was never a priority for presidents such as George W. Bush, Barack Obama, or Donald Trump. The latter&#8217;s term has also been characterized by his aggressive stance toward the region, often warning of a Latino &#8220;invasion&#8221; in the U.S. &#8220;His style [for Latin America] is one of demands, threats, and punishment,&#8221; said Peter Hakim, president emeritus of the Inter-American Dialogue, speaking to our <a href="https://brazilian.report/podcast/2020/07/22/biden-trump-what-changes-brazil-latin-america/">Explaining Brazil podcast</a>.</p> <p><strong>Future relations with Latin America.</strong> As things stand, former Vice President Joe Biden seems poised to win the U.S. presidency in November. While no one should expect Mr. Biden to elect Latin America as a priority, tensions with the region are likely to fall. With one notable exception: Brazil.</p> <ul><li>Brazilian President Jair Bolsonaro has gambled on keeping a close relationship with the Trump White House (not the U.S. per se) as his top foreign policy priority. On multiple occasions, he broke with tradition and openly said he hopes Mr. Trump wins re-election. On Sunday, his son, Congressman Eduardo Bolsonaro, published a pro-Trump ad on Twitter (featuring President Bolsonaro). It sparked a reaction from the U.S. Congress: “We’ve seen this playbook before. It’s disgraceful and unacceptable. The Bolsonaro family needs to stay OUT of the U.S. election,” <a href="https://twitter.com/HouseForeign/status/1287880583918415872">tweeted Eliot Engel</a>, chairman of the Foreign Affairs Committee.</li><li>Mr. Bolsonaro is not popular in the U.S. Congress. In June, 24 Democrats from the U.S. Congressional Committee on Ways and Means voiced their “<a href="https://brazilian.report/power/2020/06/05/us-house-committee-wants-no-business-with-bolsonaro/">strong objections</a>” to any rapprochement with Brazil. A democrat in the White House would spoil Mr. Bolsonaro&#8217;s foreign agenda.</li></ul> <iframe src="https://open.spotify.com/embed-podcast/episode/3ulkklC6bRRy1yXQvDqUjH" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>Brazil begins infrastructure roadshow</h2> <p>This week, the Brazilian government begins its quest to find investors for the Ferrogrão Project —&nbsp;a 933-kilometer railway connecting the heart of Brazil&#8217;s soy-growing country to an Amazon port. Talks begin on Thursday and run through August 7.&nbsp;</p> <ul><li>Confirmed meetings include Spain&#8217;s Sacyr and Acciona, Japan&#8217;s Sumitomo, as well as China&#8217;s CCCC and CRCC. National logistics groups VLI, Ecorodovias, and Hidrovias do Brasil will also meet with government officials.</li><li>Also on the government&#8217;s radar are multilateral organizations that can help with funding, such as the Development Bank of Latin America (CAF) and the New Development Bank (NDB, a.k.a. the <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/16/brazil-new-branch-brics-bank-5g-coronavirus/">BRICS bank</a>).</li><li>On August 10, the Foreign Affairs and the Infrastructure Ministries will hold talks with PIF, the sovereign wealth fund of Saudi Arabia. In October 2019, President Jair Bolsonaro announced that Saudi crown prince Mohammed bin Salman had <a href="https://brazilian.report/newsletters/brazil-daily/2019/10/30/marielle-franco-murder-investigation-reaches-president-bolsonaro/">pledged to invest USD 10 billion in Brazil</a>, by way of a yet-to-be-created sovereign fund —&nbsp;and had cited the railway as a priority project.</li></ul> <p><strong>Why it matters.</strong> Budgeted at BRL 8.4 billion (USD 1.6 billion), the Ferrogrão railway is one of the boldest infrastructure projects in Brazil right now — with an estimated internal rate of return on investment of 11 percent. It would quickly become one of Brazil&#8217;s key routes for grain distribution to foreign markets.</p> <p><strong>Yes, but … </strong>The railway would run through the Jamanxim National Park — an environmental conservation unit — and two nearby indigenous reserves. Many potential suitors to the project fear an image crisis, precisely since Brazil has become the world&#8217;s bogeyman when it comes to the environment. Deforestation rates have run rampant in recent years, and President Jair Bolsonaro&#8217;s nonchalant approach to the <a href="https://brazilian.report/podcast/2020/07/16/explaining-brazil-podcast-deforestation-is-bad-for-business/">environmental crisis has made investors wary of the country</a>.</p> <iframe src="https://open.spotify.com/embed-podcast/episode/3nyYw0CidCtfoMbx5v23yn" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <p><strong>What they are saying.</strong> The government claims that only 0.06 percent of the Jamanxim reserve would be affected. It also claims the railway will be 4 to 5 kilometers away from indigenous land, which in the government&#8217;s estimations is enough to ensure the safety of native groups.&nbsp;</p> <ul><li>The government has signed a partnership with UK organization Climate Bond Initiative, and plans to invest BRL 750 million in socio-environmental compensations.</li><li>Plus, project managers are stressing how more environment-friendly a railway is when compared to roadways — <a href="https://brazilian.report/business/2018/05/25/truckers-protests-brazil-fuels/">Brazil&#8217;s leading mode of transport</a>.</li></ul> <hr class="wp-block-separator"/> <h2>Big Center not that big anymore</h2> <p>On Monday, two parties — the Brazilian Democratic Movement (MDB) and Democratas (DEM) — decided to leave the so-called &#8220;<a href="https://brazilian.report/opinion/2018/07/31/brazil-big-center-2018-president/">Big Center</a>,&#8221; a coalition of moderately conservative forces which band together to give support to any sitting administration and leverage more power for themselves. The move was an act of opposition to the group&#8217;s leader, Arthur Lira — and a clear shot at President Jair Bolsonaro, who has become <a href="https://brazilian.report/power/2020/06/02/jair-bolsonaro-bedfellows-congress-deliver-results-how-long/">close to Mr. Lira in recent months</a>, making him the unofficial government whip in the House.</p> <p><strong>Result.</strong> With the exit of the MDB and DEM parties, the Big Center has shrunk from having 221 seats in the lower house to just 158 (out of a total of 513).</p> <p><strong>Why it matters. </strong>In six months, Congress will elect a new House Speaker and a new Senate President. For the fortunes of the federal government, these elections might actually be more important than this year&#8217;s municipal elections, as the heads of congressional chambers have immense agenda-setting powers.</p> <p><strong>Opposing forces.</strong> Congressman Arthur Lira is vying for the Speaker position himself, while incumbent Rodrigo Maia — who does not see eye to eye with President Bolsonaro — wants someone outside of the government&#8217;s influence bubble to succeed him.&nbsp;</p> <div class="flourish-embed flourish-parliament" data-src="visualisation/2635783" data-url="https://flo.uri.sh/visualisation/2635783/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Revenue. </strong>Between March and June, the state of São Paulo collected 10 percent less from ICMS — its state tax on goods and services. This levy is the states&#8217; <a href="https://brazilian.report/society/2019/07/23/education-brazil-open-universities-private-money/">main source of revenue</a> and helps finance public institutions such as the Universities of São Paulo and Campinas — Brazil&#8217;s <a href="https://brazilian.report/society/2018/07/19/brazil-universities-latin-america-crisis/">top two research institutions</a>.</li><li><strong>Public bank.</strong> The government is reportedly pursuing former Santander executive Conrado Engel to head Banco do Brasil, after current CEO Rubem Novaes issued his resignation. </li><li><strong>Law enforcement.</strong> The Justice Ministry wants to approve a Federal Police ordinance this week to gather Brazil&#8217;s criminal records into a single national database. Today, there are 27 separate state-level databases, between which sharing and transferring information is not easy — and just a handful are connected to the Feds&#8217; records. This project, championed for the last 10 years, would cost BRL 90 million</li><li><strong>Aviation.</strong> Users of tourism platform Trip Advisor have chosen Brazilian Azul Airlines as the world&#8217;s best carrier.</li><li><strong>Impeachment.</strong> Rio de Janeiro Governor Wilson Witzel got a rare — and much-needed — win in his struggle for survival in State Congress. Based on a technicality, Supreme Court Chief Justice Dias Toffoli agreed with Mr. Witzel&#8217;s defense and dissolved the committee overseeing his impeachment proceedings in Rio&#8217;s state legislature, giving him a lifeline. Late in May, the governor was targeted by a Federal Police operation and is <a href="https://brazilian.report/power/2020/06/06/amid-pandemic-rio-governor-worries-about-his-political-survival/">suspected of taking kickbacks</a> from companies that embezzled part of Rio’s coronavirus budget.</li><li><strong>Business.</strong> Construction group Odebrecht ratified its court-supervised recovery process. The <a href="https://brazilian.report/newsletters/brazil-daily/2019/06/18/odebrecht-bankruptcy-bndes-gun-law/">biggest administration process</a> in Brazilian history will restructure BRL 50 billion in debts (another BRL 48 billion were excluded from the process, as they refer to debts between companies within the Odebrecht group).

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