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Brazil's foreign-aid programme

Speak softly and carry a blank cheque

In search of soft power, Brazil is turning itself into one of the world's biggest aid donors. But is it going too far, too fast?
Jul 15th 2010 | BRASÍLIA | from PRINT EDITION

ONE of the most successful post-earthquake initiatives in Haiti is the expansion of Lèt Agogo (Lots of Milk, in Creole), a dairy co-operative, into a project encouraging mothers to take their children to school in exchange for free meals. It is based on Bolsa Família, a Brazilian welfare scheme, and financed with Brazilian government money. In Mali cotton yields are soaring at an experimental farm run by Embrapa, a Brazilian research outfit. Odebrecht, a Brazilian construction firm, is building much of Angola’s water supply and is one of the biggest contractors in Africa.

Without attracting much attention, Brazil is fast becoming one of the world’s biggest providers of help to poor countries. Official figures do not reflect this. The Brazilian Co-operation Agency (ABC), which runs “technical assistance” (advisory and scientific projects), has a budget of just 52m reais ($30m) this year. But studies by Britain’s Overseas Development Institute and Canada’s International Development Research Centre estimate that other Brazilian institutions spend 15 times more than ABC’s budget on their own technical-assistance programmes. The country’s contribution to the United Nations Development Programme (UNDP) is $20m-25m a year, but the true value of the goods and services it provides, thinks the UNDP’s head in Brazil, is $100m. Add the $300m Brazil gives in kind to the World Food Programme; a $350m commitment to Haiti; bits and bobs for Gaza; and the $3.3 billion in commercial loans that Brazilian firms have got in poor countries since 2008 from the state development bank (BNDES, akin to China’s statebacked loans), and the value of all Brazilian development aid broadly defined could reach $4 billion a year (see table). That is less than China, but similar to generous donors such as Sweden and Canada—and, unlike theirs, Brazil’s contributions are soaring. ABC’s spending has trebled since 2008.

As Mr Farani says. perhaps. democratic. is thought to be mulling over the idea of a new development agency to raise aid’s profile. Marco Farani. China or Russia. Stories abound of broken promises. Brazil does not impose Western-style conditions on recipients. Its tropical-agriculture research is among the world’s best. its aid programme is eroding the distinction between donors and recipients. Since rising powers like Brazil will one day run the world. in providing HIV/AIDS treatment to the poor and in conditional cash-transfer schemes like Bolsa Família. seems to have been inspired by Lula’s soft spot for leftist strongmen. The effort matters to the world’s aid industry. railways and docks in exchange for access to raw materials (though Brazilian firms are busy snapping up commodities in third-world nations. After all. too—and not only because it helps offset the slowdown in aid from traditional donors. The ABC aid agency is tucked away in the foreign ministry. top-down aid. argues there is a specifically Brazilian way of doing aid. Like China. incompetence and corruption. Dilma Rousseff. The country still has large pockets of third-world poverty. Brazil needs more aid officials. And the exponential increase in aid—the value of humanitarian contributions has risen by 20 times in just three years —means that both people and institutions are being overwhelmed. the head of ABC. of the country as a whole. things are changing. and wants to create a global market in the green fuel. though. they can save trouble later by reducing poverty in developing countries now. with more operational independence and a greater emphasis on policy aims. if elected. just as they do the soft-power ambitions of which aid is part. But. western donors worry less about Brazilian aid than they do over China’s. Luiz Inácio Lula da Silva. Brazilian aid is focused more on social programmes and agriculture. boosts the chances of a global market and generates business for Brazilian firms. not the “Indiana Jones” adventurers required. the presidential candidate from Lula’s party. so legal contortions are inevitable. Brazilian law forbids giving public money to other governments. But Brazil also still receives aid so. argues Samuel Pinheiro Guimarães Neto. at peace with its neighbours—looks more attractive and tractable than. Until it gets those. aspires to. . say. And all this has consequences for the West. thus undermining the old system of donor-dictated. Brazil’s aid programme is likely to remain a global model in waiting—a symbol. a lot will have to change before Brazil occupies the place in the world that its president. and sending money abroad could be controversial. which they think fosters corrupt government and bad policy. he says. Brazil has a comparative advantage. aid makes commercial sense. But if aid is any guide. Brazil—stable. Lavishing assistance on Africa helps Brazil compete with China and India for soft-power influence in the developing world. It also garners support for the country’s lonely quest for a permanent seat on the UN Security Council. For example. for example to Venezuela. based on the social programmes that have accompanied its recent economic success. on the whole. Brazil seems almost ambivalent about its aid programme. not just piecemeal projects. for good or ill. Moreover. the minister for strategic affairs. At least some aid. Spreading ethanol technology to poor countries creates new suppliers. But it cannot do so if it is the world’s only real provider. whereas Chinese aid finances roads. if (as seems likely) emerging markets are to become more influential. too).This aid effort—though it is not called that by the government—has wide implications. Brazil is the world’s most efficient ethanol producer. Some rich-country governments cautiously welcome what Brazilians call “the diplomacy of generosity”. where its officials are looked down on as “Elizabeth Arden” diplomats (London–New York–Paris). Slowly.