Brazil’s foreign-aid programme

Speak softly and carry a blank cheque

ONE of the most successful post-earthquake initiatives in Haiti is the expansion of LŠt Agogo (Lots of Milk, in Creole), a dairy co-operative, into a project encouraging mothers to take their children to school in exchange for free meals. It is based on Bolsa Fam¡lia, a Brazilian welfare scheme, and financed with Brazilian government money. In Mali cotton yields are soaring at an experimental farm run by Embrapa, a Brazilian research outfit. Odebrecht, a Brazilian construction firm, is building much of Angola’s water supply and is one of the biggest contractors in Africa.

15 times more than ABC’s budget

Without attracting much attention, Brazil is fast becoming one of the world’s biggest providers of help to poor countries. Official figures do not reflect this. The Brazilian Co-operation Agency (ABC), which runs “technical assistance” (advisory and scientific projects), has a budget of just 52m reais ($30m) this year. But studies by Britain’s Overseas Development Institute and Canada’s International Development Research Centre estimate that other Brazilian institutions spend 15 times more than ABC’s budget on their own technical-assistance programmes. The country’s contribution to the United Nations Development Programme (UNDP) is $20m-25m a year, but the true value of the goods and services it provides, thinks the UNDP’s head in Brazil, is $100m. Add the $300m Brazil gives in kind to the World Food Programme; a $350m commitment to Haiti; bits and bobs for Gaza; and the $3.3 billion in commercial loans that Brazilian firms have got in poor countries since 2008 from the state development bank (BNDES, akin to China’s state-backed loans), and the value of all Brazilian development aid broadly defined could reach $4 billion a year (see table). That is less than China, but similar to generous donors such as Sweden and Canada-and, unlike theirs, Brazil’s contributions are soaring. ABC’s spending has trebled since 2008.

Aid industry

This aid effort-though it is not called that by the government-has wide implications. Lavishing assistance on Africa helps Brazil compete with China and India for soft-power influence in the developing world. It also garners support for the country’s lonely quest for a permanent seat on the UN Security Council. Since rising powers like Brazil will one day run the world, argues Samuel Pinheiro Guimaraes Neto, the minister for strategic affairs, they can save trouble later by reducing poverty in developing countries now.
Moreover, aid makes commercial sense. For example, Brazil is the world’s most efficient ethanol producer, and wants to create a global market in the green fuel. But it cannot do so if it is the world’s only real provider. Spreading ethanol technology to poor countries creates new suppliers, boosts the chances of a global market and generates business for Brazilian firms.
The effort matters to the world’s aid industry, too-and not only because it helps offset the slowdown in aid from traditional donors. Like China, Brazil does not impose Western-style conditions on recipients. But, on the whole, western donors worry less about Brazilian aid than they do over China’s, which they think fosters corrupt government and bad policy. Brazilian aid is focused more on social programmes and agriculture, whereas Chinese aid finances roads, railways and docks in exchange for access to raw materials (though Brazilian firms are busy snapping up commodities in third-world nations, too).
Economist