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

Security personnel stand near the “Golden Bridge on the Silk Road” decorations for the Belt and Road Forum outside the China National Convention Center in Beijing, China on April 25, 2019. Reuters/Jason Lee | Photo Credit: Jason Lee

the story So Far: The Brazilian government indicated this week that it might not want to get involved. China’s Belt and Road Initiative (BRI)Which will make it the second member of the BRICS group (Brazil, Russia, India, China, South Africa). after indiaRefusal to join trillion-dollar Chinese global infrastructure project Which started in 2013.

What could be the reason behind this decision?

Celso Amorim, chief foreign policy advisor to Brazilian President Luiz Inacio Lula da Silva, informed about the decision in an interview with a Brazilian newspaper. The interview also raised questions about Brazil-China relations as well as the BRI, which was launched as a modern version of the ancient Silk Road.

in the interview hey globoMr. Amorim said that instead of signing an “accession agreement” with China, Brazil would prefer to explore “synergies” in various nationally determined infrastructure projects. “The key word is coordination. It’s not about signing something like an insurance policy. We are not entering into an accession treaty. This is a conversation of synergy,” Mr. Amorim said, adding that while China can give the relationship whatever name it wants, any partnership for Brazil will include projects defined and decided by Brazil. However, he did not reject the BRI outright or exclude Chinese funding for a number of projects, primarily on infrastructure, but also in other areas, from solar energy to hybrid or electric cars. Mr. Amorim also suggested that such projects would involve not only Brazil but also other South American countries. Finally, Mr. Amorim pointed to greater geopolitical cooperation that Brazil and China could pursue, such as the six-point peace plan for Ukraine.

Why is time important?

Unlike most of its neighbors, Brazil is one of only four South American countries not to join the sugar initiative. Mr Lula’s predecessors Jair Bolsonaro and Michel Temer were positive on Chinese investment, but objected to several attempts by Beijing to get Brazil to sign a memorandum of understanding on the BRI. As of December 2023, approximately 150 countries worldwide have done so, with India and Brazil being notable exceptions in the developing world, especially given their common membership of BRICS. Russia also has some BRI projects underway for energy and roads, but has not signed the MoU, only the China-Eurasian Economic Union MoU on BRI.

However, in July, Mr. Lula said in a press conference that Brazil was studying the benefits of joining the BRI. “Since China wants to discuss this Silk Road, we need to formulate a proposal to assess ‘what do we gain?’ If we participate in this thing, what’s in it for Brazil?’,” he said. However, the decision was conveyed hey globo The interview, which comes after the BRICS summit in Russia and Mr. Amorim’s visit to China, appears to indicate that Brazil has concluded that the benefits do not outweigh the risks of such a move.

What were the reasons for India staying out of BRI?

In its decision announced in May 2017 To stay out of BRIIndia was more outspoken, and outlined three issues: that the corridor disregards the sovereignty and territorial integrity of nations, specifically referring to projects in Pakistan-occupied Kashmir; This will push smaller economies into debt traps and environmental hazards; And there was a lack of transparency, indicating that India was wary of the larger geopolitical objectives of the BRI. In Brazil, officials say there is an underlying concern about increasing dependence in the CELAC (Community of Latin American and Caribbean States) region on Chinese investment, although Brazil-China trade remains strong at $180 billion and Chinese investment at $3 billion. Has reached a strong level of. The year in Brazil is the longest in the continent. With everything 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), after which Chinese President Xi Jinping will have a state visit to Brazil. 20 November.

Has BRI lost its luster?

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

One reason for the waning attractiveness of the BRI is China’s own slowing economy and Beijing’s reluctance to be generous with its loans in the second half of the decade, especially after the COVID-19 pandemic. Another discomfort many countries face is the loan terms, which involve hiring Chinese companies and involving Chinese workers, while often demanding heavy collateral, as was the case with Sri Lanka after it lost control of the Hambantota port. Found out. America’s heavy lobbying against BRI has had some impact on Italy as well. Giorgia Meloni announced in December 2023 That it will not renew the BRI MoU. The Brazilian foreign adviser’s statement comes after the visit of US Trade Representative Katherine Tai, who called on Brazil to think carefully through an “objective lens” before signing on to the BRI. The comments were met with protest from the Chinese Embassy in Brasília, which described them as “disrespectful” to Brazil’s sovereign right to choose its partners. With some ambiguity still evident in Brazil’s stance, some have suggested that President Lula may keep his options open at least until the results of the US election on November 5.