Setting its own course, Brazil foreign aid expands and evolves

    Brazilian President Dilma Rousseff, flanked by South African President Jacob Zuma and Mozambican President Armando Guebuza, is greeted by children in Maputo. Photo by: Roberto Stuckert Filho / CC BY-NC-SA

    For many of the 130 world leaders tasked with forging a roadmap for sustainable global development in Rio de Janeiro last month, the choice of Brazil as host was fitting, and not only because it was the 20-year anniversary of the original Rio summit. With what many analysts call the right mix of growth and social progress over the last decade, the country is credited with propelling 40 million Brazilians to the middle class and reducing poverty by half. In recent years, developing countries from Ghana to East Timor have looked to Brazil’s development as “the future we want.”

    In 1996, in a move widely praised by global health experts, Brazil became the first developing country to move forward with large-scale production and distribution of antiretroviral drugs. Within seven years, Brazil achieved universal ARV drug coverage for HIV patients in need of treatment. Today, adopting the Brazilian model and with Brazilian financial and technical assistance, Mozambique is set to become the first country in Africa to produce its own stocks of the lifesaving drug.

    Launched at the municipal level in 1995, Brazil’s globally recognized conditional cash transfer program called Bolsa Familia provides regular cash grants to poor households that invest in the health and education of their children. Among beneficiary families, school attendance for both boys and girls rose by 4 percent. Brazil’s Ministry of Social Development has since organized visits by policymakers from over 30 countries to observe Bolsa Familia in preparation for the rollout of their own CCT initiatives.

    In 2010, Brazil disbursed $400 million in foreign assistance, according to government figures, representing more than a 60 percent increase from 2005. Following an 11 percent drop in 2007, from 2008 to 2010 Brazilian foreign aid grew by an average of eight percent (see chart).

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    Brazil’s emergence as a leader in South-South cooperation – the exchange of resources and expertise among developing countries – has enabled the country to distinguish itself among an increasingly crowded field of both emerging and traditional donors. Brazil’s portfolio of homegrown development interventions, including CCTs and the public production of ARVs, has positioned the Brazilian aid regime to capitalize not only on the country’s improving national balance sheet, but also specific experiences combatting social and economic challenges.

    Brasilia’s health cooperation with Mozambique, the leading recipient country of Brazilian foreign assistance, helps illustrate this potential. In building the first publicly owned antiretroviral factory in Africa, the Mozambican government relied on a $23 million investment from Brazil as well as technology and training from the Oswaldo Cruz Foundation or, FIOCRUZ, the state-run health institute.

    Brazilian government officials claim that the country’s foreign assistance is both untied and demand-driven. Supporting these assertions, a U.N. Development Program review of Brazil’s aid portfolio concluded that no links could be established between the commercial interests of Brazilian firms and the country’s aid flows.

    “Just the opposite, the commitments respond to demands made by the government of recipient countries to the Brazilian Ministry of Foreign Affairs,” Maristela Baioni of UNDP Brazil told the World Bank Institute back in 2009.

    Some experts on Brazilian aid provide more cautious assessments of Brasilia’s motives, including Lídia Cabral, a research fellow at the Overseas Development Institute.

    “I think all development agencies claim to be demand-driven and to put the interests of the recipients first… The extent to which Brazil is different is something that we’re still trying to investigate,” said Cabral in a Devex interview.

    Distancing itself from the practices of traditional donors, Brazil has also been hesitant to embrace key tenets of the global aid effectiveness agenda, even delaying progress on a final outcome document from last year’s high-level aid effectiveness meeting in Busan, South Korea. In lockstep with some other emerging donors, the Brazilian government has stated that it has no plans to report aid flows to the Development Assistance Committee of the Organization for Economic Cooperation and Development.

    Brazil’s technical cooperation is one among several Brazilian aid modalities which also include contributions to international organizations, humanitarian assistance, and scholarships for foreign students. Brazilian spending on technical cooperation approached $49 million in 2009, representing 14 percent of the country’s aid flows, double its share from 2005. Brazilian contributions to multilaterals including the U.N. system, World Bank, Inter-American Development Bank, African Development Bank, and South American trading bloc Mercosur continue to account for above two-thirds of Brazil’s foreign assistance.

    Aid structure still coming into shape

    The Brazilian Cooperation Agency, or ABC, was established in 1987 to manage both foreign assistance for Brazil, as well as Brazilian foreign assistance. Only in the last decade, however, has ABC assumed significant responsibility for overseeing Brazil’s bilateral assistance, which largely consists of its technical cooperation activities. According to a 2010 ODI report co-authored by Cabral and Julia Weinstock, all of the agency’s units are now involved in Brazilian technical cooperation, even those initially conceived to administer incoming aid. The Ministry of External Relations provides policy direction for ABC and also administers Brazil’s cooperation with international organizations.

    Technical cooperation requests from developing countries are forwarded to ABC which then mobilizes government bodies and civil servants with relevant expertise. For every Brazilian real (the Brazilian currency) spent by ABC for its aid activities, 15 reals are spent by over 100 government institutions also involved in the country’s foreign assistance. In addition to a roster of line ministries, the Brazilian Agricultural Research Corporation, or EMBRAPA, and FIOCRUZ, both state-run institutes, play key roles in Brazilian aid.

    Under the leadership of Marco Farani, who has served as director of ABC since 2008, the agency’s staff has more than doubled from 70 to 160. Currently, the agency has staff located in both its headquarters in Brasilia, as well as about 10 Brazilian embassies worldwide. But even Farani concedes that ABC’s aggressive hiring has not been enough to keep pace with growing demand for Brazil’s technical expertise. From 2008 to 2009 alone, the number of technical cooperation activities coordinated by ABC jumped from 256 to 413, an increase of 61 percent.

    In 2010, prior to her election as Brazil’s president later that year, Dilma Rousseff reportedly considered the idea of a beefed up and autonomous development agency, potentially alleviating the strain on Brazil’s current structure. Some analysts say that political pressure from the Ministry of External Relations has constrained ABC’s ability to set its overall strategic objectives and design sustainable aid programming. Cabral laments that a more independent aid agency has lacked support within the ministry and “that there’s hasn’t been any other sort of organized initiative to take forward that idea.”

    Africa front and center

    As president from 2003 to 2010, Luiz Inácio Lula da Silva pursued an activist foreign policy – especially toward Africa – that proved instrumental in generating interest from developing countries in Brazilian foreign assistance. While in office, Lula traveled to 27 African countries on 12 different occasions, more than all of his predecessors combined. His 2005 tour of the continent included a stop in Ghana, the first African country to formally request assistance from the Lula administration to implement programming modeled on Brazil’s poverty reduction initiatives. Brazilian bilateral cooperation agreements have often followed diplomatic exchanges between Brasilia and its aid recipient countries.

    Shedding light on the history underpinning Brazilian aid to Africa, Lula told West African leaders in 2010, “There is no way to pay back our historical debts to Africa. We are debtors in our ways of being, our culture, our arts.”

    The then outgoing president was alluding to the millions of Brazilians descended from African slaves, elaborating that “Brazil – not just me – took a political decision to make a re-encounter with the African continent.”

    Late last year, Rousseff embarked on her own whirlwind tour of Africa. While in Luanda, Angola, the new Brazilian president described the African country as a “brother” of Brazil, signaling Brasilia’s continued commitment to one of its leading development partners. Rousseff has also announced the creation of an Africa working group aimed at renewing Brazil’s involvement across the continent.

    In line with the Brazilian government’s gestures and rhetoric, Africa has emerged as the top recipient of Brazilian aid. In 2010, the continent garnered 57 percent ($22 million) of ABC’s project expenditures, up from 50 percent ($9.6 million) the year before. While Brazilian cooperation with Africa has been concentrated on its fellow Portuguese-speaking countries (Angola, Cape Verde, Guinea Bissau, Mozambique, São Tomé and Príncipe), Brasilia has pledged to deepen its development partnerships with the roughly 35 other countries where it also provides smaller-scale technical and financial assistance. Farani recently pointed to Benin, Tanzania and Kenya as examples of sub-Saharan African countries where Brazil is strengthening its bilateral relations.

    Despite its focus on Africa, Brazil has also pursued an aggressive aid agenda in Latin America consistent with its standing as a regional power. The region received 37 percent ($14.4 million) of ABC project expenditures in 2010. While the country’s aid programming spans 30 countries across Latin America, Brazil’s technical cooperation programming is most extensive in Jamaica, Guyana, Suriname and Haiti. In Haiti, where Brazil continues to lead the military component of the U.N. peacekeeping mission, the emerging donor is second only to the United States in contributions to relief efforts in the earthquake-ravaged country.

    Capitalizing on strengths in agriculture, health and education

    Taking advantage of the country’s renowned research and learning institutes, agriculture, health, and education are priorities for Brazilian aid. These three sectors accounted for just above half of Brazilian technical cooperation from 2003 to 2010.

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    At a recent food security conference in Washington, U.S. Secretary of State Hillary Clinton suggested that delegates draw lessons from Brazil’s successes.

    “Look at the school lunch program in Brazil, which provides nutritious food every day to every Brazilian child, all grown by smallholder farmers,” she said.

    Fifty-six countries and foreign institutions already appear to be heading down that path, signing 78 technical cooperation agreements with the Brazilian Agricultural Research Corporation, or EMBRAPA. From 2003 to 2010, agriculture claimed the largest portion (22 percent) of Brazilian technical cooperation programming.

    EMBRAPA is widely credited with developing a variety of innovative farm technologies, including “no-till” agriculture and new soya varieties, which have transformed Brazil from food importer to agriculture development pioneer in the span of just three decades. According to agriculture specialists, similarities in soil and climate between Africa and Brazil mean that these technologies can easily be adapted to African farms. EMBRAPA opened an office in Ghana in 2006 to coordinate requests for technical assistance from across Africa.

    In a presentation before a conference of the U.N. Food and Agriculture Organization in Rome last year, the Brazilian government highlighted its rice station development project in Senegal. The $2.4 million initiative also serves Guinea-Bissau, Mali and Mauritania.

    The focus of 16 percent of the country’s technical cooperation from 2003 to 2010, health is another priority for Brazilian aid. Brazil is currently involved in a total of 111 health projects in 38 countries in Africa and Latin America. The bulk of the country’s technical assistance in the health sector is carried out by FIOCRUZ, a health institute attached to the Brazilian Ministry of Health. In 2008, following the footsteps of EMBRAPA, FIOCRUZ opened a regional office in Maputo, Mozambique.

    Brazil’s initiatives on HIV/AIDS treatment – including its support for Africa’s first publicly run antiretroviral factory in Mozambique – have attracted the most praise from the global health community. In addition to these efforts, Brazil is also engaged in malaria treatment and maternal and child care activities, among other sub-sectors. In Busan last November, FIOCRUZ’s development of human milk banks in 18 Latin American and Caribbean countries was touted by both Brazil and the Pan-American Health Organization as a “best bet” for public health. Brazil claims the largest network of human milk banks in the world.

    Finally, the education sector received the third-largest share of technical cooperation programming from 2003 to 2010 at approximately 12 percent. Brazil’s National Service of Industrial Learning, or SENAI, is currently sharing its expertise on vocational training with 31 countries. Interestingly, both engineering conglomerate Odebrecht and mining giant Vale have tapped SENAI to provide vocational training for local staff in Angola and Mozambique, respectively. The World Bank has called SENAI’s partnership with the two Brazilian firms an “excellent example” of cooperation for the development of local content.

    Though agriculture, health and education continue to be areas of excellence for Brazil and consequently priorities for its aid program, the emerging donor is keen to make a mark in other sectors. As more countries claim positive health and education outcomes from CCTs, demand for Brazil’s expertise in social protection is likely to grow.

    Meanwhile, the energy sector is emerging as a new priority for Brazilian aid. This is of no surprise, say analysts, given the country’s efforts to position itself as a renewables leader. Brazil has signed cooperation agreements with 11 African countries to study and support the introduction of bioenergy and biofuels.

    Forming a triangle

    With an understaffed development agency and a $400 million aid budget on par with Luxembourg and New Zealand, Brazilian aid officials admit that the country’s aid regime is already stretched too thin. In a bid to augment its human and financial resources, Brazil is redoubling efforts to partner with Western aid donors to help scale up and expand programming. Known as triangular cooperation, this form of donor partnership typically involves the use of funding and expertise from both a traditional and emerging donor to provide development assistance to a third country.

    Japan, the United States, Germany, France, Canada, Argentina and Spain are Brazil’s main partners in triangular cooperation projects, which currently number around 30. UNDP, which acts as a procurement agent for ABC, is also a strategic partner for Brazilian development cooperation. In a guest opinion for Devex, Akio Hosono, the director of the Japan International Cooperation Agency’s research institute cited JICA’s partnership with EMBRAPA to transform Mozambique’s savanna into farmlands as a case study of inclusive, dynamic development.

    Even private donors are beginning to partner with Brazilian aid. In 2011, the Bill & Melinda Gates Foundation announced a $2.5 million grant for the Africa-Brazil Agricultural Innovation Marketplace, which supports agricultural innovation to promote African development. EMBRAPA also helped structure the initiative.

    To date, Brazil has generally relied on its civil servants to deliver technical cooperation programming, but as the scope and scale of Brazilian aid evolves, there may be opportunities for international development consultancies and nongovernmental organizations.

    “Brazilian institutions are very open and very accessible usually. So there are plenty of opportunities to engage. I think there’s openness to have discussions,” says Cabral.

    For international aid organizations, one avenue for engagement is to monitor triangular cooperation arrangements and activities. Successful bidders for a recent USAID tender on food security cooperation with Brazil were expected by the agency to liaise with Brazilian government officials at some stage during project implementation.

    Lorenzo Piccio contributed to this report.

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    About the author

    • Pete Troilo

      Former director of global advisory and analysis, Pete managed all Devex research and analysis operations worldwide and monitors key trends in the global development business. Prior to joining Devex, Pete was a political and security risk consultant with a focus on Southeast Asia. He has also advised the U.S. government on foreign policy and led projects for the Asian Development Bank and International Finance Corp. He still consults for Devex on a project basis.