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Until recently, there seemed plenty of reasons to be bullish on Brazil. Having posted record growth for a decade and weathered the financial crisis well, the country looked poised to become a global economic leader. But the would-be giant stands on feet of clay. The economy depends too much on high commodity prices, and as demand falls, so may Brazil.
Brazil's leaders expect a $12 billion iPad manufacturing deal to boost the country's technology sector. It may. But Brasilia should be turning out cheaper, low-end technology, which would be more profitable.
Clean-energy technology is expensive and the United States is spending far too little on developing it. The U.S. government must do more to promote cross-border innovation and protect intellectual property rights.
Brazil's rapid economic growth has transformed the country into a new global heavyweight, but Brazil must not let an overly ambitious foreign policy agenda distract it from lingering domestic challenges.
A major strategic challenge for the United States in the coming decades will be integrating emerging powers into international institutions. To hold the postwar order together, the United States will have to become a more consistent exemplar of multilateral cooperation.
The world’s leading international institutions may be outmoded, but Brazil, China, India, and South Africa are not ready to join the helm. Their shaky commitment to democracy, human rights, nuclear nonproliferation, and environmental protection would only weaken the international system’s core values.
Growing differences over trade and foreign policy threaten to upset the delicate balance in U.S.-Brazil relations. To head off trouble, Washington should lower its expectations, remembering that it has a greater stake in Lula's domestic success than in Brazil's active cooperation on any particular issue.
In the run-up to the October presidential election in Brazil, financial markets panicked at the prospect of a left-wing administration that might want to repudiate national debts. Now that Lula has taken office, will he confirm these fears or embrace prudent policies that will advance the modernization of Brazil? And will the markets even give him a chance?
For the first time, Latin America's two giants, Brazil and Mexico, are both looking for significant international roles -- but they are doing so in very different ways. Mexico has tied its future to economic integration with the United States, whereas Brazil seeks to be a leader in South America.
Under President Fernando Henrique Cardoso, Brazil has finally embraced modern capitalism and broken decisively with a sclerotic old economic model. The country's ambitious reforms are encouraging private investment and loosening state control. Even the 1999 currency crisis eventually ended smoothly. But the world should hold its applause until Cardoso can prove that his reforms will last. If not, his efforts will merely join Brazil's dreary list of false starts and missteps.
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