November 22, 2024

Dispatch from Brazil G20

Hello and welcome to the 24th edition of the Polycrisis Dispatch. Tim wrote most of this while in Rio during the G20 this week, and is now in Bahia. Our contact details are at the end if you’d like to email or follow us, or join our Discord!

Diplomacy frenzy

Right on the back of the US election, the G20 became the hub of frenzied diplomatic activity for a week—not only multilateral meetings, but dozens of bilateral meetings between countries as they got together to discuss what to do with the Trump shock. 

From Reuters:

“We are experiencing a major, major change in global structures,” German Chancellor Olaf Scholz said on the sidelines of the summit, noting the growing weight of major developing economies. “These are countries that want to have their say. And they will no longer accept that everything will continue to be the way it has been for decades.”

I (Tim) was at a workshop in Rio organized by the Brazilian Center of Analysis and Planning (CEBRAP) and Phenomenal World. CEBRAP has been the secretariat of the Climate Taskforce Expert Group during the G20 which produced the Mazzucato-Songwe report (aka the Group of Experts commissioned by the Climate taskforce created by Brazil as part of its G20 presidency).

My presentation was a status report on how the last three years of G20 reform efforts by southern countries – Indonesia, India, Brazil – to promote green and equitable development are going. As Dani Rodrik wrote: "With advanced economies increasingly focused inward, middle powers like India, Indonesia, Brazil, South Africa, Turkey, and Nigeria have become the natural champions of global public goods.”

I argued that the G20 is trying to manage the ‘Crisis of the Bretton Woods Institutions’, but that it is perhaps better seen as a crisis of the post-Cold War Order dating back to the 1990s. These institutions were created to solve problems: the UN to promote global security, the World Bank to promote global development, the IMF to promote financial stability, and the WTO to promote liberal trade – and are failing to meet their core objectives. 

The G7-G20-BRICS diplomacy circuits are playing on two tracks: 

1. Reformist: Within the G20 by Brazil, India, South Africa and Indonesia, which hosted the last three G20s and have seen limited gains. 

2. Burn down and rebuild: Russia and, perhaps, China, which is now articulating a new set of institutions.

Brazil’s President Lula (along with the G77 coalition) has stated quite plainly that the protectionist measures of the Global North are in conflict with the developmentalist goals of the Global South:     

“We cannot accept a green NeoColonialism that imposes trade barriers and protectionist policies under the pretext of protecting the environment.”     

From Isabella Weber’s presentation at CEBRAP:

The Rio Earth Summit in 1992 was where a lot of this began: North-South conflict over financing and technology; East-West conflict over free trade and industrial policy. Only fitting, then, that the G20 that marks the beginning of a new phase of sustainable development, led by the Global South and China, is in Rio .

Over to South Africa

This was the third consecutive G20 hosted by an emerging middle power (after India and Indonesia). Next year South Africa will host the G20; it’s the first time an African country has assumed the presidency:

How successful have these countries been at sharping the agenda?

Brazil, meanwhile, will still be in a key diplomacy role, chairing both the UN climate summit and the BRICS summit in 2025.

Hunger

“Hunger and poverty are not the result of scarcity or natural phenomena,” Lula said. “Hunger is the product of political decisions,” further stressing: “In a world that produces almost six billion tons of food per year, this is unacceptable.” Lula’s launched at the G20 a “Global Alliance Against Hunger and Poverty”

In Brazil, food accounts for a fifth to a quarter of expenditure in the poorest households. Food prices have surged this year amid rising exports and the worst drought in the country’s history. Rice prices had shot up after the Rio Grande de Sol floods earlier this year devastated devastated Brazil’s chief rice-growing region. Is there another alternative to the Central Bank just hiking interest rates to arrest inflation?     

Meat and rice have the same totemic significance in Brazil as the price of gasoline in the US and onions in India. The recent politics of food prices in Brazil have parallels to the Biden administration – which in 2022-23 accused the domestic oil and gas industry on charges of war profiteering, and threatened windfall taxes. In Brazil, it is the agribusiness giants that are “the state behind the state”. The beef, soy and meatpacking industries have made Brazil into a meat superpower in the last 20 years, just as the frackers turned the US into a fossil superpower. Lula too may turn to controlling agribusiness market power in a bid to bring prices under control.

But Brazilian agribusiness is only growing more powerful at the prospect of incoming US-China tariff war. When China stops buying soybeans and meat from the US, it buys more from Brazil. That’s why Brazil was a big winner from Trump’s first tariff war in 2017-18, as we laid out in our 2022 essay, Cash, Cars, Chemicals (and Corn): China retaliated to US moves by shutting down its imports of American soy, Brazil soy sales shot up; agribusiness profited.

China’s Charm Offensive

While lame duck President Joe Biden defended US record of multilateralism, Chinese President Xi Jinping used his G20 speech to announce a charm offensive to the global south. Xi outlined a 8-point agenda designed to support the developing economies of the Global South, from scientific cooperation with Brazil and African nations to lowering trade barriers for least developed countries. He also used both the G20 and the earlier APEC summit in Lima to call for calm and support for free trade; throughout meetings with world leaders Xi “repeatedly sought to win assurances that nations would uphold the international free trade system”, Bloomberg News notes, adding that it’s not the threat of Trump administration tariffs that worries China: “It’s also that other nations will follow suit.” and poverty”

Is it all hot air? Tim is in Bahia to investigate a microcosm of the global energy and hegemonic transition. Two American giants of the 20th century hydrocarbon industrial age — Ford and GE — have sold their Bahia plants to BYD and GoldWind, the world’s largest EV and wind turbine manufacturers respectively.

• Tim, Kate and Lara

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