While the United States and Europe are leading a coalition to boycott Russia over its invasion of Ukraine, President Luiz Inácio Lula da Silva’s government has expanded economic cooperation with Vladimir Putin’s Russia over the last year, in the midst of the war.
(ADNN) For the first time since the relationship was elevated to the status of a strategic partnership two decades ago, trade exceeded the target of US$10 billion, reaching US$11.3 billion by 2023. The move, according to analysts, reflects the Lula administration’s bet on the “Global South” – which is risky.
This “Global South”, the focus of President Luiz Inácio Lula da Silva’s foreign policy, has resisted the call from Kiev and its allies to isolate Moscow. It has thus emerged as an alternative route for Vladimir Putin to circumvent sanctions while benefiting from cheaper fuel from Russia.
Brazil, for example, has become the biggest buyer of Russian diesel, with 6 million tons imported by 2023. This represents an increase of 6,000% on the previous year and a total of US$ 4.5 billion. This is followed by fertilizers, which account for the other major slice of trade with Russia and totaled US$ 3.9 billion for the year, according to data from the monitor Trading Economics.
The reason for not endorsing the punishments is that the country has historically opposed unilateral sanctions and only considers embargoes validated by the UN – which would not happen in this case because Russia has the power to veto any punishment it might suffer.
“There is a pragmatic aspect that is preponderant, of importing oil derivatives, especially diesel, from a relevant producer under favourable conditions to stabilize prices domestically,” says FGV International Relations professor Pedro Brites.
But there’s also the political aspect. “Condemnation of Russia for the war in Ukraine is very strong among the countries of the Global North, but it hasn’t spread as effectively to Asia, Latin America, Africa and the Middle East. There is a division on how to deal with Russia. And in Brazil you have the Lula government trying to get closer to these countries of the Global South, which favors Russia politically,” adds Brites.
In his back and forth on the conflict, Lula has been criticized for equating the responsibilities of Ukraine (the invaded country) and Russia (the invading country) for the war by saying that “when one doesn’t want to, two don’t fight”.
The president also suggested that Putin could come to Brazil without fear of arrest, even though he is the target of an arrest warrant by the International Criminal Court (ICC). To pave the way, the government endorsed the idea of immunity for heads of state to receive him in November at the G-20 Summit. The Russian leader, who has avoided traveling, is evaluating the invitation.
The PT leader has tried to present himself as a mediator in the conflict, but has given the impression of alignment with Moscow to Kiev and its allies in the West. An example of this was when the White House accused Lula of “parroting Russian propaganda” by saying that the United States and Europe were prolonging the war – a reference to the supply of arms to Ukrainian troops.
More recently, Lula said that he “doesn’t have to be as nervous” as Europeans are about the war because Brazil is geographically far from the conflict. He made the statement alongside French President Emmanuel Macron, who alarmed even NATO allies by stating and reaffirming the possibility of sending troops to Ukraine.
Against sanctions
The positions of Lula and Macron illustrate the divergence between the “North” and the “Global South”, which is also reflected in figures. Dependent on Russian energy, the European Union mainly bought natural gas, oil and fertilizers. Imports peaked in the month following the invasion, when they amounted to 22.2 billion euros. Since then, they have plummeted: they amounted to 10.2 billion euros in December 2022 and less than 4 billion at the end of last year.
“The European Union has ceased to be an important trading partner for Russia,” said the head of the Russian mission to the EU Kirill Logvinov in a recent interview with the state news agency RIA. “Brussels has taken the path of economic warfare, introducing endless sanctions against our country,” he complained.
In the same vein, the United States has also closed in on the Russian economy. In the last round alone, during the two years of war, sanctions hit 500 companies and individuals who supplied Moscow’s industrial and military production.
“With the sanctions, Russia has a limited number of countries it can do business with. This makes Russia more committed to expanding business and ends up favoring commercial relations with countries that are open. Brazil has benefited from this,” says analyst Daniel Buarque.
Despite the efforts led by the US and its NATO allies, the Russian economy recovered quickly from the contraction recorded in 2022, the year of the invasion, and grew by 3.6% in 2023. For this year, the International Monetary Fund predicts that Russian growth will be 3.2%, beating the forecasts for G7 countries such as the United States (2.7%), the United Kingdom (0.5%), Germany (0.2%) and France (0.7%).
Sanctions have limited Russia’s access to technology, points out the IMF, which is making its economy less competitive. But the increase in spending by the Kremlin, which is investing heavily in its war machine, and the ability to maintain exports, especially to China and India, are driving the growth seen so far.
“One of the things that NATO, under the leadership of the US, most hoped for was the isolation of Russia, and that hasn’t happened. Russia didn’t have the drop in GDP that was expected, which could have accelerated the exit from Ukraine, precisely because of this articulation with other countries,” points out Pedro Brites. “Russia managed, despite all the economic interdependence it had with Europe, to redirect exports, both by increasing the flow with traditional partners and through new partners, expanding the diplomatic offensive,” he adds.
An example of this diplomatic offensive are the visits that the experienced Sergei Lavrov, for two decades the Kremlin’s name for Foreign Relations, has made to Latin America, with stops in Brazil.
On the most recent of these, for the G-20 meeting in February, Lula told the Foreign Minister that he would be attending the BRICS Summit in Kazan, Russia – which was later branded a mistake by Ukrainian President Volodmir Zelenski. “We have to isolate Putin politically,” he said when asked about the possible meeting between the presidents of Brazil and Russia.
Dispute over influence in Latin America
In general, Latin Americans have condemned the invasion of Ukraine and voted against Russia at the United Nations, but they haven’t completely closed their doors to Moscow, as Kiev is demanding. And it is precisely this idea of neutrality or non-alignment that Russia seeks to maintain as it tries to increase its influence in Latin America, according to analysts.
Without a robust economic presence, as Beijing has, Moscow’s way forward in the region could be through energy, points out analyst Ivan Klyszcz, in an article for the Program for New Approaches to Research and Security in Eurasia (Ponars), a network of researchers linked to George Washington University.
An example of this would be the increase in diesel exports to Brazil and the strengthening of cooperation with former allies Cuba and Venezuela, as well as contracts for Russian companies to explore for oil in Mexico and the construction of a nuclear complex in Bolivia, points out Klyszcz, who researches Russia’s relations with the “Global South”.
In the case of Brazil, analyst Daniel Buarque points out that the diplomatic service, Itamaraty, has historically been critical of sanctions, although foreign policy can be more volatile.
On the other side, former president Jair Bolsonaro also avoided criticizing Russia for the invasion of Ukraine. When he visited Moscow on the eve of the attack, while still in office, Bolsonaro even said that he was “in solidarity” with Russia and repeated arguments that Moscow used while positioning troops for what would become the invasion of Ukraine. Days later, with the war underway, he stated that Brazil would be neutral. At the time, the concern was dependence on fertilizers.
Daniel Buarque believes that Brazil has managed to maintain a certain equidistance that benefits the country at a time when the United States and its allies are boycotting Russia’s economy, as in the case of diesel. “Brazilian foreign policy has followed a traditional line. Lula’s comments deviate from that, but Lula’s comments don’t necessarily reflect what is being done,” he says.
‘Global South’, a risky bet
In Lula’s case, there is a clear attempt to lead the so-called “Global South”, which reflects the bets Lula made on foreign policy in his first terms. The question is whether in such a bellicose and polarized world, very different from twenty years ago, there is room for this idea of multipolarity.
“This has been Brazil’s top priority since Lula came to power. The government has a very strong belief in multipolarity, in the idea that there would be room for other nations to expand their international status. And it is betting that it will be able to do this through the leadership of the Global South,” says Buarque, noting that this “Global South” has sought a more independent position from the US.
But this bet on multipolarity is risky. “In the past, this worked, it helped to expand our voice in international forums, to expand foreign trade, but it was a time when the world was favoring the idea of multipolarity,” he says.
Now, the world seems to be much closer to a polarization between the US and its allies versus China, which has a declared “unlimited partnership” with Russia, than to opening up to possible emerging powers. “Brazil is betting on a world that doesn’t seem to be what it’s drawing up. That’s the biggest risk. Betting on multipolarity is very risky because there is no evidence that there will be room for new powers,” concludes Buarque.
*** Translated by DEFCONPress FYI Team ***