It’s a persistent question – is this new large emerging economy a member of the group – Rising BRICSAM – and if so, how? Brazil is frequently subjected to this inquiry. Paulo Sotero and Leslie Elliott Amijo undertook exactly that inquiry in the formerly mentioned Asian Perspective on the BRICS. The article by Paulo Sotero and Leslie Elliott Armijo, “Brazil: To be or not to be a BRIC?” pp. 43-70. An equally insightful analysis on Brazil has been prepared recently for Heiligendamm + O5 Project by Denise Gregory and Paulo Roberto de Almedia of the Brazilian thinktank, CEBRI. Their Brazil paper is entitled, “Brazil and G8 Heligendamm Process.” As Denise and Paulo suggest: “The big question is: does this South American “giant” want to be part of an enlarged club? Or would it prefer to pursue options outside of G8, including championing the traditional solidarity with the developing world or its favorite South American regional associations? How ready is Brazil to engage itself in full adherence to the international set of governance norms and values that define the big power process?”

The authors examine the two critical variables – economic leverage and diplomatic leverage, though they don’t reference it as such. And the answer is surprisingly qualified (in this blog post we look at economic leverage). Both papers examine Brazil’s material capabaility. Brazil is a large growing economy. Interestingly Sotero and Armijo point out that Brazil does not have the torrid rates of growth of say a China or India. In fact they note that Brazil had high sustained growth earlier than either of these two Asian giants. In fact from the the mid- 1940’s through the mid-1970’s Brazil’s growth averaged 7.4%. In the years from 1968 to 1973 Brazil’s GDP grew at a torrid 10.6%. Since that period Brazil has maintained, however, an average and rather volatile 3.7% (obviously good but nothing to write home about.)

Gregory and Almedia raise the same economic question. Is it growing fast enough to put it in the BRICSAM club? As they suggest, “Based on statistics from the last ten years, it is not difficult to acknowledge that the three other countries, the “RICs” are much more dynamic in the economic scenario than Brazil, in terms of economic growth, domestic transformations in infrastructure and information technology, as well as in technnological and capital flows.They further point out that while they are 10th on the list of economic size, this ranking partly reflects a relative overvaluation of its currency. Moreover, Brazil has only around 1% of worlds exports, holding again , according to Gregory and Almedia, 25th position as an exporter and importer.So the two conclude by suggesting Brazil is the least dynamic economy of the BRICs though they do suggest that of the BRICs Brazil has the best market structures of any of the 4 BRICs.

And it may well be that its is this deep market development that is partly responsible for the picture of Brazil’s economy today. According to Matt Moffett in the The Wall Street Journal in his article, “Brazil Joins Front Rank Of New Economic Powers,” (May 13, 2008) he declares Brazil, “…has turned a big corner.” For Moffett the indications are in the growth of GDP. As he points out Brazil has grown at 5% per year for the last two years. And this growth has enabled Brazil to avoid a debt default that appeared likely in 2002. Indeed Brazil for the first time in its history, according to Moffett, has become a net creditor nation. So while a two-year robust economic growth is not necessarily a trend, there is evidence that at least on economic power Brazil is growing into the circle of the large emerging powers occupied by China and India.

We’ll turn to Brazil’s diplomatic leverage in an upcoming blog post to complete our BRICSAM picture.