Bolsonaro’s mixed policies in China could burn Brazil and himself

Editor’s note: Ken Moak taught economic theory, public policy and globalization at the university level for 33 years. He co-authored the book “China’s Economic Rise and Its Global Impact” in 2015. The article reflects the views of the author, and not necessarily the views of CGTN.

Brazilian President Jair Bolsonaro appeared to be in a quandary, wanting to cooperate with China at the recent BRICS summit in 2020, but doing his best to ban COVID-19 vaccines made in China and Huawei. These contradictory positions could exacerbate the economy and the pandemic.

At the twelfth BRICS summit in November, Bolsonaro pledged to work with the leaders of Russia, India, China and South Africa to curb the COVID-19 pandemic for economic recovery in the post-pandemic period. It was a “wise” choice because Brazil, more than ever, needs the cooperation of China, the first being the third most affected by the pandemic in terms of infections and the second in terms of deaths, after the United States and India.

The Brazilian economy was hit hard by the pandemic, contracting almost 10 percent in the second quarter of this year, according to World Bank figures. But thanks to increases in agriculture and industrial production and trade, the economy enjoyed positive growth in the third quarter, prompting the government to revise the contraction to just 4.7 percent for 2020. But this one “Optimism” could “evaporate” if Bolsonaro succeeds in banning Huawei. 5G equipment and Chinese vaccines.

Banning Huawei could cause significant economic damage to the economy and a risk of financial disaster for Brazil’s four main telecommunications companies: Telefónica Brasil SA, Groupo Oi SA, Tim Participacoes SA and Claro. According to a Reuters report on December 9, the equipment of the Chinese company represented more than 50 percent of the total equipment of the four telecommunications companies, 65 percent, 60 percent, 55 percent and 45 percent for Telefónica Brasil SA, Groupo Oi SA, Claro and Tim. Participacoes SA, respectively.

Dismantling and replacing Huawei’s equipment with those made by Ericsson, Nokia, or Samsung would take a long time, incur significant costs, and delay the launch of 5G. This explains why telecommunications companies threatened legal action if Bolsonaro continues to ban telecommunications equipment made in China. Furthermore, there is no guarantee that Brazil’s national security will not be violated by the use of Ericsson, Nokia and Samsung equipment because some parts of the products of these companies are produced in China or are integrated into the same ecosystem.

Equally, if not more importantly, banning Huawei would hurt Brazil’s economic prospects because the company’s 5G equipment provides rapid information gathering and dissemination. For example, Reuters reported that the Chinese company’s team increased agricultural production due to its “fast broadband communication and real-time cloud data processing,” allowing farmers to collect information on infestation and disease. Crop handling in one hour compared to three days without Huawei 5G.

Applying the same logic, banning Huawei would put the Brazilian economy at a disadvantage. The rapid collection and dissemination of information is essential for making timely and efficient business decisions in an increasingly competitive world. It is important for companies to know consumer preferences as quickly as possible, allowing them to produce and distribute goods in a timely and efficient manner.

It could be for these reasons that many Brazilian politicians, such as Vice President Hamilton Mauro, opposed the Huawei ban, particularly when the decision was made for no other reason than to “idolize” Donald Trump. Bolsonaro is reported to have visited Trump many times and is impressed with the US president’s version of populism.

On banning Chinese COVID-19 vaccines with the lame excuse that because the virus “originated” in China, they would be “unreliable,” Bolsonaro could risk further damaging the economy and charging more. human lives. Indeed, the British daily The Guardian reported on December 13 that local news portal Folha de São Paulo accused Bolsonaro of “homicidal negligence,” the government of abandoning people and letting them die out of ideological and personal prejudices.

Brazilian citizen Natalia Pasternak, founder of the Science Question Institute, also affirmed that the president boycotting CoronaVac, the Chinese vaccine “is absurd.” One reason is that relying heavily, if not solely, on the Oxford-AstraZeneca vaccine would not be enough to contain the rising mortality rate because 100 million doses were offered, which is not enough to vaccinate more than 212 million people. inhabitants, particularly when two doses are required. or recommended or necessary.

The fact is that Brazil needs the help of China to get out of the economic stagnation of the former and control COVID-19. Export opportunities to the West, India and Japan will not come in the near future as their faltering economies worsen from rising infection and death figures, forcing these markets to take tougher and longer locks.

China, on the other hand, is the only major economy that is expected to register growth of more than 2 percent and 8 percent in 2020 and 2021, respectively, due to its anticipated reopening of the economy, stimulus packages and strategy. of “dual circulation”.

It calls for boosting domestic demand through urbanization and investment in infrastructure and will require China to import huge amounts of food and other natural resources over the next five years and beyond.

Building new cities and high-speed trains requires large amounts of steel, thus requiring large imports of iron ore, for example.

Moving tens of millions of people from the countryside to the cities will require more food from abroad to mention another export prospect that countries like Brazil can exploit.

In this context, Bolsonaro’s loyalty to Trump and ideological or personal prejudices could “burn” Brazil, taking his political fortune with them. The Brazilian president has only 37 percent approval, after all.

Now that Trump is leaving the White House, Bolsonaro should work with China to enhance Brazil’s national interests. Biting the hand that feeds you, on the other hand, only leads to economic disaster; ask Australian Prime Minister Scott Morris. Furthermore, China did nothing to Brazil except help it develop.

(If you want to contribute and have specific expertise, please contact us at [email protected].)