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**Brazil Economy**




Yes Brazil Economy

Brazil’s economy is good


Ruchir Sharma is the head of Emerging Markets and Global Macro at Morgan Stanley Investment Management, “Bearish on Brazil: The Commodity Slowdown and the End of the Magic Moment” Foreign Affairs, 2012, http://www.foreignaffairs.com/articles/137599/ruchir-sharma/bearish-on-brazil?page=show

Until recently, the consensus view of Brazil among investors and pundits was almost universally bullish. Under the landmark presidency of Luiz Inácio Lula da Silva, the country became known as a paragon of financial responsibility among emerging markets. Having contained hyperinflation and reduced its debt, Brazil weathered the 2008 financial crisis better than most, growing at an average annual rate of nearly four percent over the past five years. And in the last ten years, some 30 million Brazilians have entered the middle class, giving their country, according to Brazil's promoters, the power to expand despite a turbulent global environment and to reduce income inequality even as it grew elsewhere in Latin America.¶ This decade of success has made Brazil one of the most hyped emerging-market nations, with one of the two top-performing stock markets in the world and receiving more foreign direct investment than most other countries. Over the past five years, the amount of foreign money flooding into Brazilian stocks and bonds surged to record levels, with inflows expanding from $5 billion in 2007 to more than $70 billion through this past January. Brazil's rise has solidified its reputation as a leading member of the BRICS -- Brazil, Russia, India, China, and South Africa -- the world's top emerging markets, which many expect to supplant the United States and Europe soon as the largest drivers of the global economy.


No Brazil Economy

Brazil economic growth is dependent on commodity prices


Ruchir Sharma, the head of Emerging Markets and Global Macro at Morgan Stanley Investment Management, “Bearish on Brazil: The Commodity Slowdown and the End of the Magic Moment” Foreign Affairs, 2012, http://www.foreignaffairs.com/articles/137599/ruchir-sharma/bearish-on-brazil?page=show

But problems loomed behind that veneer. For a nation supposedly taking its place as one of the world's major economic powers, Brazil has proved strikingly cautious. To protect its citizens from the economic turmoil that plagued it throughout much of the late twentieth century, the country developed two signature policies -- high interest rates to control inflation and a welfare state to provide a social safety net -- that have placed a hidden cap on expansion. Indeed, since the early 1980s, Brazilian growth has oscillated around an average of 2.5 percent a year, spiking only with increases in commodity prices. Even in the last decade, when Brazilian growth rose above four percent and Lula hailed the arrival of his country's "magic moment," Brazil still grew only half as fast as China, India, and Russia. High interest rates in Brazil stymie the country's growth by making it almost prohibitively expensive to do just about anything. Providing an average return of about ten percent, those rates attract foreign capital, but that influx of investment has driven up the value of the Brazilian real, making it one of the most expensive currencies in the world. As a result, restaurants in São Paulo are more expensive than those in Paris, and office space is pricier there than in New York. Hotel rooms in Rio de Janeiro cost more than they do along the French Riviera, bike rentals are more expensive than in Amsterdam, and movie tickets exceed the price of those in Madrid.¶ At the same time, the expensive real boosts the price of exports from Brazil, undercutting the country's competitiveness in global consumer markets. Although many major emerging-market currencies have risen against the dollar over the last decade, the real is in a class by itself, having gone up 100 percent. This may help manufacturing in the United States, but it harms it in Brazil, where the manufacturing share of GDP peaked at 16.5 percent in 2004 and had fallen to 13.5 percent by the end of 2010. Few developing nations have sustained rapid growth for even one decade, let alone two or three, and virtually all of those that have did so by expanding their share of global manufacturing, not riding the tides of commodity pricesBrazil, however, has taken the latter path. China's growth over the last decade made it by far the world's largest consumer of industrial raw materials, and Brazil has capitalized on that explosion: in 2009, China surpassed the United States as Brazil's leading trade partner. Given China's sustained success, few expected its economy to slow or considered what that would mean for Brazil. But that decline is now under way. This past March, Beijing stated that its growth rate in 2012 could dip below eight percent for the first time since 1998. Unsurprisingly, around the same time, Brasília announced that its growth rate had dropped to under three percent.

Impact – Economy

The Braziliian economy is critical to the entire Latin American economy, the US Economy, and political and democratic stability in the region –


Donald SHULTZ, Research Professor of National Security Policy at US Army War College, “THE UNITED STATES AND LATIN AMERICA: SHAPING AN ELUSIVE FUTURE,” March, 2000, pg. Online @ http://www.carlisle.army.mil/ssi/pdffiles/PUB31.pdf

What are the major threats confronting Latin America,¶ how do they affect U.S. security interests, and how is this¶ configuration likely to change over the next quarter¶ century? Currently, there are several concerns. One of the¶ most important is the danger posed by economic instability.¶ By late 1998, the international financial crisis that had¶ begun in Asia in 1997, and then moved on to devastate¶ Russia in the summer of 1998, hit Latin America. Brazil¶ seemed to be teetering on the brink of disaster. Capital¶ flight was depleting its reserves, raising questions about the¶ country’s ability to pay its short-term debt. As the eighth¶ largest economy in the world, Brazil accounts for almost¶ half of the output of Latin America, a region which buys¶ roughly a fifth of U.S. exports. If the Brazilian economy¶ went into a deep and prolonged recession, the spillover into¶ other countries might trigger social and political turmoil¶ that could endanger the region’s young and still fragile¶ democracies. Similarly, the impact on the U.S. banking¶ system and economy would be substantial. More than 450 of¶ the Fortune 500 companies do business in Brazil, which¶ receives more direct foreign investment from the United¶ States than any other country except China. 11 Fears about¶ the country’s economic health were already affecting the¶ U.S. stock market.

Solves war


Royal 10 – Jedediah Royal, Director of Cooperative Threat Reduction at the U.S. Department of Defense, 2010, “Economic Integration, Economic Signaling and the Problem of Economic Crises,” in Economics of War and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and Brauer, p. 213-215

Less intuitive is how periods of economic decline may increase the likelihood of external conflict. Political science literature has contributed a moderate degree of attention to the impact of economic decline and the security and defense behavior of interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow. First, on the systemic level, Pollins (2008) advances Modelski and Thompson’s (1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As such, exogenous shocks such as economic crisis could usher in a redistribution of relative power (see also Gilpin, 1981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Fearon, 1995). Alternatively, even a relatively certain redistribution of power could lead to a permissive environment for conflict as a rising power may seek to challenge a declining power (Werner, 1999). Seperately, Pollins (1996) also shows that global economic cycles combined with parallel leadership cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and connections between global economic conditions and security conditions remain unknown. Second, on a dyadic level, Copeland’s (1996, 2000) theory of trade expectations suggests that ‘future expectation of trade’ is a significant variable in understanding economic conditions and security behavious of states. He argues that interdependent states are likely to gain pacific benefits from trade so long as they have an optimistic view of future trade relations, However, if the expectations of future trade decline, particularly for difficult to replace items such as energy resources, the likelihood for conflict increases, as states will be inclined to use force to gain access to those resources. Crisis could potentially be the trigger for decreased trade expectations either on its own or because it triggers protectionist moves by interdependent states. Third, others have considered the link between economic decline and external armed conflict at a national level. Blomberg and Hess (2002) find a strong correlation between internal conflict and external conflict, particularly during periods of economic downturn. They write, The linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic conflict tends to spawn internal conflict, which in turn returns the favor. Moreover, the presence of a recession tends to amplify the extent to which international and external conflict self-reinforce each other. (Blomberg & Hess, 2002. P. 89) Economic decline has been linked with an increase in the likelihood of terrorism (Blomberg, Hess, & Weerapana, 2004), which has the capacity to spill across borders and lead to external tensions. Furthermore, crises generally reduce the popularity of a sitting government. ‘Diversionary theory’ suggests that, when facing unpopularity arising from economic decline, sitting governments have increase incentives to fabricate external military conflicts to create a ‘rally around the flag’ effect. Wang (1996), DeRouen (1995), and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the tendency towards diversionary tactics are greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of weak economic performance in the United States, and thus weak Presidential popularity, are statistically linked to an increase in the use of force. In summary, recent economic scholarship positively correlated economic integration with an increase in the frequency of economic crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels. This implied connection between integration, crisis and armed conflict has not featured prominently in the economic-security debate and deserves more attention.

Impact – Proliferation

Brazilian economic stability is critical to avert Brazilian nuclearization and multiple scenarios for nuclear conflict


Donald SHULTZ, Research Professor of National Security Policy at US Army War College, “THE UNITED STATES AND LATIN AMERICA: SHAPING AN ELUSIVE FUTURE,” March, 2000, pg. Online @ http://www.carlisle.army.mil/ssi/pdffiles/PUB31.pdf

While we are in a speculative mode, it may be useful to¶ raise the issue of whether, two or three decades from now,¶ the United States might have to deal with a regional¶ hegemon or peer competitor. The most obvious candidate for¶ such a role would be Brazil, which already accounts for¶ almost half of Latin America’s economic production and has¶ by far the largest armed forces in the region (313,250 active¶ troops).53 That country could very well assume a more¶ commanding political and military role in the decades¶ ahead.¶ Until recently, the primary U.S. concern about Brazil¶ has been that it might acquire nuclear weapons and¶ delivery systems. In the 1970s, the Brazilian military¶ embarked on a secret program to develop an atom bomb. By¶ the late 1980s, both Brazil and Argentina were aggressively¶ pursuing nuclear development programs that had clear¶ military spin-offs.54 There were powerful military and¶ civilian advocates of developing nuclear weapons and¶ ballistic missiles within both countries. Today, however, the¶ situation has changed. As a result of political leadership¶ transitions in both countries, Brazil and Argentina now¶ appear firmly committed to restricting their nuclear¶ programs to peaceful purposes. They have entered into¶ various nuclear-related agreements with each other—most¶ notably the quadripartite comprehensive safeguards¶ agreement (1991), which permits the inspection of all their¶ nuclear installations by the International Atomic Energy¶ Agency—and have joined the Missile Technology Control¶ Regime.¶ Even so, no one can be certain about the future. As Scott¶ Tollefson has observed:¶ . . . the military application of Brazil’s nuclear and space¶ programs depends less on technological considerations thanon political will. While technological constraints present a¶ formidable barrier to achieving nuclear bombs and ballistic¶ missiles, that barrier is not insurmountable. The critical¶ element, therefore, in determining the applications of Brazil’s¶ nuclear and space technologies will be primarily political.55¶ Put simply, if changes in political leadership were¶ instrumental in redirecting Brazil’s nuclear program¶ towards peaceful purposes, future political upheavals could¶ still produce a reversion to previous orientations. Civilian¶ supremacy is not so strong that it could not be swept away¶ by a coup, especially if the legitimacy of the current¶ democratic experiment were to be undermined by economic¶ crisis and growing poverty/inequality. Nor are civilian¶ leaders necessarily less militaristic or more committed to¶ democracy than the military. The example of Peru’s¶ Fujimori comes immediately to mind.¶ How serious a threat might Brazil potentially be? It has¶ been estimated that if the nuclear plant at Angra dos Reis¶ (Angra I) were only producing at 30 percent capacity, it¶ could produce five 20-kiloton weapons a year. If production¶ from other plants were included, Brazil would have a¶ capability three times greater than India or Pakistan.¶ Furthermore, its defense industry already has a substantial¶ missile producing capability. On the other hand, the¶ country has a very limited capacity to project its military¶ power via air and sealift or to sustain its forces over long¶ distances. And though a 1983 law authorizes significant¶ military manpower increases (which could place Brazil at a¶ numerical level slightly higher than France, Iran and¶ Pakistan), such growth will be restricted by a lack of¶ economic resources. Indeed, the development of all these¶ military potentials has been, and will continue to be,¶ severely constrained by a lack of money. (Which is one¶ reason Brazil decided to engage in arms control with¶ Argentina in the first place.) 56¶ In short, a restoration of Brazilian militarism, imbued¶ with nationalistic ambitions for great power status, is not¶ unthinkable, and such a regime could present some fairly¶ serious problems. That government would probably need¶ foreign as well as domestic enemies to help justify its¶ existence. One obvious candidate would be the United¶ States, which would presumably be critical of any return to¶ dictatorial rule. Beyond this, moreover, the spectre of a¶ predatory international community, covetous of the riches¶ of the Amazon, could help rally political support to the¶ regime. For years, some Brazilian military officers have¶ been warning of “foreign intervention.” Indeed, as far back¶ as 1991 General Antenor de Santa Cruz Abreu, then chief of¶ the Military Command of the Amazon, threatened to¶ transform the region into a “new Vietnam” if developed¶ countries tried to “internationalize” the Amazon.¶ Subsequently, in 1993, U.S.-Guyanese combined military¶ exercises near the Brazilian border provoked an angry¶ response from many high-ranking Brazilian officers. 57¶ Since then, of course, U.S.-Brazilian relations have¶ improved considerably. Nevertheless, the basic U.S./¶ international concerns over the Amazon—the threat to the¶ region’s ecology through burning and deforestation, the¶ presence of narcotrafficking activities, the Indian question,¶ etc.—have not disappeared, and some may very well¶ intensify in the years ahead. At the same time, if the¶ growing trend towards subregional economic groupings—in¶ particular, MERCOSUR—continues, it is likely to increase¶ competition between Southern Cone and NAFTA countries.¶ Economic conflicts, in turn, may be expected to intensify¶ political differences, and could lead to heightened¶ politico-military rivalry between different blocs or¶ coalitions in the hemisphere.¶ Even so, there continue to be traditional rivalries and¶ conflicts within MERCOSUR, especially between Brazil¶ and its neighbors, and these will certainly complicate the¶ group’s evolution. Among other things, the past year¶ witnessed a serious deterioration of relations between¶ Brazil and Argentina, the product partly of the former’s¶ January 1999 currency devaluation, which severely¶ strained economic ties between the two countries. In part,¶ too, these conflicts were aggravated by Argentina’s¶ (unsuccessful) bid to join the North Atlantic Treaty¶ Organization (NATO), which Brazilians interpreted as an¶ attempt to gain strategic advantage. The upshot was that¶ relations soured to the extent where questions have been¶ raised as to the continued viability of MERCOSUR itself. In¶ light of these problems, one cannot but wonder what impact¶ a resurgence of Brazilian authoritarianism, combined with¶ a push for regional hegemonic status, would have on¶ Argentina, currently a “non-NATO ally” of the United¶ States.¶ Finally, closer to home, there is the difficult problem of¶ U.S. border defense. One suspects that the years ahead will¶ witness growing pressure to use Department of Defense¶ personnel and resources to bolster law enforcement¶ agencies patrolling U.S. frontiers to prevent illegal¶ immigration and drug smuggling. (Indeed, legislation has¶ already been proposed authorizing the deployment of up to¶ 10,000 more troops on the Southwest Border. In late 1998,¶ however, the bill was rejected by the Senate.) Since 1990,¶ the military has been engaged in several thousand¶ operations along the frontier, running listening posts to¶ assist the Border Patrol in tracking drugs and migrants,¶ building fences and barriers, repairing roads, and helping¶ law enforcement agencies in counternarcotics operations.¶ Yet, notwithstanding this aid, civilian agencies continue to¶ be stretched thin. The amount of drugs coming over the¶ border has not been significantly reduced, and law¶ enforcement officials often find themselves outgunned and¶ outmanned by their adversaries. Consequently, there is an¶ increasing temptation to look to the military for answers. 58

AT: Brazilian Economy

Economy resilient – diverse and shielded from downturns.


Associated Press 08 September 30, “Fitch: Brazil GDP to fall in 2009” Lexis

Fitch Ratings forecasts that Brazil's economy will grow by 3.3 percent next year, down from its earlier predictions of a 5.1 percent expansion, the firm's Brazil director said Tuesday. The global economic crisis is behind the revision. On Friday, JP Morgan Chase & Co. also reduced its 2009 forecast for Brazilian gross domestic product, to 3.2 percent, from 3.8 percent, analysts said. But Rafael Guedes, Fitch's Brazil director, put a positive spin on the news. "The question is, 'Why is Brazil still growing given Brazilian economic history?'" Guedes told The Associated Press, adding that "3.3 percent growth in an adverse environment is still very good for Brazil." During financial crises in the 1990s, Brazil's economy was at the mercy of external factors. "What is happening right now is quite the opposite," Guedes said. "Brazil will certainly be effected, but less so." Brazil's economy is less reliant on exports than it used to be they represent about 10 percent of Brazil's GDP now. Since Brazilian President Luiz Inacio Lula da Silva took office in 2002, Brazil's economy has become more closed, Guedes said, shielding it from downturns in the U.S., Europe and China. And most important has been the rise of the Brazilian consumer, making the domestic economy "vibrant and dynamic," with Brazilian firms relying less on foreign consumers, Guedes said. On a more positive note, Fitch revised upward this year's growth forecast for Brazil, from 4.6 percent to 5.1 percent. While the financial crisis will certainly effect Brazil's fourth-quarter results, the first three quarters were good enough to warrant the increase, Guedes said.


Economy resilient – diversified and insulated from global shocks


ETF Trends 08 Exchange Traded Funds, “Brazil ETFs Reflect Strong Economy on a World Stage” http://www.etftrends.com/2008/08/brazil-etfs-reflect-strong-economy-on-a-world-stage.html

According to Alexei Barrionuevo for The New York Times, Brazil’s growth has been fueled through a combination of respect for financial markets and targeted social programs, which are lifting millions out of poverty. With a history of unequal wealth, Brazil has shrunk its income gap by 6% since 2001, diminishing the unequal distribution of wealth. This is evident in income among the lower classes in Brazil. The bottom 10% of Brazil’s earners saw their income jump nearly 58% from 2001 to 2006 while the top 10% of earners only saw an increase of 7%. Despite the numbers speaking for themselves, this economic expansion is expected by many experts to last. Nonetheless, a strong currency and inflation that has been kept in check for the most part has Brazilians spending rapidly, which acts as the motor for the economy. With the United States and Europe struggling with recession and housing crises, Brazil’s economy does not show the vulnerabilities of other emerging markets. It grew 5.4% last year. Brazil’s economy is greatly diversified, as it has opportunities to expand its booming agricultural sector into new fields. It also has many untapped natural resources. Furthermore, new oil discoveries will push Brazil up into the top echelon of oil producers within the next decade. Brazil’s national oil company, Petrobras, expects to be producing 100,000 barrels of oil per day from one of its oil fields by 2010, and hopes to produce a million per day within 10 years. Similarly, Petrobras believes that anywhere between five and eight billion barrels of oil exist off the Brazilian coast. As the slowdown of the global economy was originally thought to affect Brazil, this country has been surprisingly resilient and has showed no signs of a hangover from the economic problems the US and Europe face. Don Hanna of Citibank may put it best when it comes to the Brazilian economy, “What makes Brazil more resilient is that the rest of the world matters less.”

Economy resilient – historically proven.


Simon Romero, 99, former Times correspondent based in São Paulo, former senior correspondent based in Rio de Janeiro for America Economia, April 6, 1999, New York Times, “Brazil, Though Struggling, Proves Surprisingly Resilient,” http://www.crab.rutgers.edu/~goertzel/brazilresilient.htm

When the price of imported wheat rose more than 50 percent earlier this year, Lawrence Pih, the president of Brazil’s largest flour mill, anticipated the worst. “We expected many of our clients to go bankrupt so we prepared ourselves legally to get anything we could from them, like machinery,” said Pih, whose company, Moinho Pacifico, caters to a range of companies from the corner bakery to large food processors. To his surprise, clients have shown unexpected willingness and creativity to negotiate ways out of such outcomes. In March, Pih, a naturalized Brazilian from Shanghai, took legal action to recoup losses against only seven insolvent bakeries, fewer than he had expected. In fact, Brazil has had far fewer bankruptcies and business closures than analysts expected, even as the country struggles with its deepest recession since the early 1990s. In Sao Paulo, the nerve center of the economy, there were 1,035 court-ordered requests in March to close companies, in a process similar to U.S. bankruptcy. That’s up only slightly from 982 in the same month last year, said the Sao Paulo Commercial Association, a trade group. In March 1996, the number totaled a record 1,455. These figures, combined with other data on inflation, foreign trade and industrial production, produce a picture of the Brazilian economy a lot less bleak than that painted by economists a month ago, when the country was ostracized after the chaotic devaluation of the currency, the real. Now, instead of cautioning investors of the possibility of a domestic debt default, economists are working to convince people that a recovery could be swifter and stronger than initially thought. For instance, after shrinking at a 3 percent rate in the first quarter compared with the last quarter of 1998, the gross domestic product should grow by half a percent in the second quarter and by as much as 2 percent in the fourth quarter of this year, said Alexandre Azara, an economist at Banco BBA Creditanstalt. As predictions of a return to hyperinflation and of an exchange rate spinning out of control have given way to slower price increases and a strengthening real, Brazilian stock and bond markets have responded with rallies over the last several weeks unmatched by markets anywhere else. Explanations vary for this turnaround in mood, which is rooted in better-than-expected economic indicators. Emilio Alfieri, the economist for the Sao Paulo Commercial Association, said many companies had been made resilient by a history of recessions that have winnowed the weaklings and made survivors wary of taking on risky levels of debt. “Unlike the Southeast Asians, we’re used to repeated, traumatic recessions and high interest rates,” Alfieri said. “Surviving these crises has resulted in Darwinian selection.” To be sure, the recession of 1999 comes after a year in which the economy barely grew. This recession is the fourth large contraction in Brazil since the early 1980s. One other perspective on why Brazilian companies have survived this latest bout with a rough economy may have to do with what is known in Portuguese as the “jeito” (pronounced JAY-too), a term that describes the ability of Brazilians to find clever solutions to legal, bureaucratic or financial quagmires. “The jeito provides more space for negotiating,” said Roberto da Matta, an anthropologist at the University of Notre Dame who is considered an authority on the subject. “It is a bridge between two worlds, one in which old ways and common sense hold sway and another in which the new framework of society isn’t just or rational.” Held virtually as a national characteristic in Brazil, a country with a large and intricate bureaucracy, the jeito, or its diminutive “jeitinho,” is now being employed by many companies as their only means of survival.


AT: Brazilian Prolif

No prolif – unequivocal nonprolif credentials


Roberto Abdenur 04, Ambassador of Brazil, November 7, 2004, New York Times, “Brazil’s Nuclear Program,” p. Lexis

‘‘Nuclear Secrets: If Brazil Wants to Scare the World, It’s Succeeding’’ (Week in Review, Oct. 31) did not mention some important facts demonstrating Brazil’s unequivocal nonproliferation credentials: Brazil’s Constitution states, ‘‘All nuclear activity within the national territory shall only be admitted for peaceful purposes and subject to approval by the National Congress.’’ Brazil was central in creating the world’s first nuclear-weapons -free zone, in Latin America. Brazil and Argentina took the innovative step of creating, in 1991, the bilateral Agency for Nuclear Account and Control, which, with the International Atomic Energy Agency, applies inspections in both countries. All nuclear facilities and materials in Brazil have been under comprehensive safeguards since 1994. Brazil has become a champion of the integrity and universality of the Nuclear Nonproliferation Treaty -- so much so that a senior Brazilian diplomat is due to preside over the next treaty review conference.


No prolif – regional integration and lack of motivation


Dr. Peter Lavoy, Director and Senior Lecturer in National Security Affairs at the Center for Contemporary Conflict, and Robin Walker, Research Associate in National Security Affairs at the CCC, July 29, 2006, online: http://www.ccc.nps.navy.mil/events/recent/NuclearWeaponsProliferation2016Jul06_rpt.asp, accessed February 20, 2007

``Both Argentina and Brazil have taken nuclear weapons production options off the table, and while both maintain civilian nuclear programs, they are about technology and modernity, not military power. Historically, Brazil sees itself as a potential power, and it uses this quest for greatness as a rationale for many of its actions. Despite that, Latin America is an isolated security environment and historically militaries in the region have been more of a threat to their own countries than to foreign powers. The regional integration of South America, both economically and in security cooperation, further decreased the likelihood of international conflict. However, Argentina and Brazil maintain their nuclear expertise and capabilities. The governing left-center coalitions have nationalistic tendencies and view nuclear power as a way to demonstrate power, modernity and technology. Through its nuclear program, Brazil has achieved energy autonomy. The possibility also remains for either Argentina or Brazil to export technology in order to earn reciprocity in other matters.


No prolif and wouldn’t use nukes


Ira Chernus 04, Professor of Religious Studies at the University of Colorado at Boulder, January 2, 2004, Common Dreams, “Brazil: The Next Nuclear ‘Threat’?” http://www.commondreams.org/views04/0102-04.htm

In other words, don’t treat Brazil like the axis of evil. Brazil is a good guy, a U.S. ally. Shouldn’t different rules apply? Yes, they should, in the opinion of James Goodby, a former arms control negotiator in the Clinton administration. “Similar programs in Libya, Iraq, Iran, and North Korea have rightly been seen as either direct or indirect threats to international peace and security,” he explained in the International Herald Tribune. “Unlike Brazil, they harbor hostile intent toward the United States,” and Bush is right to make them stop. But Brazil “presents the case of an undoubtedly friendly nation.” Brazil would never use the weapons, Goodby concludes: “Brazil’s nuclear aspirations lie in the fields of economics and status.”



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