G20: Brazil and an attempt at tough love.

“The Brazilian message will be: ‘You have to get your game together and make some decisions’,” claimed David Fleischer, a political scientist from the University of Brasilia.

Brazil is prepared to aid the EU through monetary contributions to the IMF, but needs to see a more detailed report on the intended implementation of resources before committing specific figures. Brazilian authorities and other BRIC country officials held a meeting prior to the beginning of the G20 summit to discuss a coordinated aid effort to the IMF, which would be of substantial help to the IMF. Although Brazil has $350 billion in foreign reserves, China has an estimated $3.2 trillion. China has thus far committed $100 billion, the equivalent of which for Brazil would be $11 billion.

Between the financial crises erupting in Europe and the United States, and the economic slowing of China, Brazil’s greatest trading partner, the concern of impending shockwaves is legitimate. With all this success, it is growing fears of recession “contagion” that has emphasized the need for Dilma’s attempt at tough love.

The Brazilian economy faired the 2008 financial crisis fairly well, dropping from a relatively low level of economic damage and a quick recovery (real GDP growth dropped in 2008 from a fairly steady 5.1-5.7 down to -0.7 in 2009, but then rapidly climbed up to 3.5 in 2010 and continues to grow).

Economically, Brazil’s near future is even brighter: the poverty rate in Brazil has halved over the last two decades, and economic disparity among Brazilians, measured by the Gini coefficient, is continuing to drop. This is largely due to economic and social reforms set forth during former President Lula da Silva’s term, where he expanded the size of the middle class by 29 million people.

GDP per person has been growing steadily, and according to the Economist Intelligence Unit, Brazil’s economy is expected to exceed Britain’s economy this year to become the sixth largest economy in the world this year.

For Brazil, avoiding falling south the way of Europe, encouraging growth of global markets, and improving economic and social conditions at home are of the utmost importance. Although negotiations at the G20 could be said to have produced less-than concrete results thus far, Brazil is willing to give aid where it can, and is in a considerably better position than many of its fellow G20 participants.

- Liana Mitlyng Day