Academic journal article Brazilian Political Science Review

The Role of Brazil in the Multilateral Financial System: An Analysis of Domestic and Structural Factors (2003-2015) *

Academic journal article Brazilian Political Science Review

The Role of Brazil in the Multilateral Financial System: An Analysis of Domestic and Structural Factors (2003-2015) *

Article excerpt

In the early 21st century, some actors who used to be less influential on the world political stage came to acquire greater relevance. This is the case, for example, of Southern countries, private sector institutions, and social networks and movements (DEGNBOL-MARTINUSSEN and ENGBERG-PEDERSEN, 2003; HURRELL, 2007; LANCASTER, 2007; MAWDSLEY, 2012; MILANI et al., 2015; NARLIKAR, 2010). The change occurred with different degrees of intensity in several international regimes, such as trade, aid/cooperation for development, climate change and human rights. In the financial system it was no different. At first, the impact of the 2008 financial crisis was felt mostly by countries of the North, thus raising doubts about the credibility of the existing international norms created by them (DOCTOR, 2015). The emergence of Southern countries (e.g. Brazil, India, South Africa, Turkey, and specially China) prompted a considerable redistribution of power in the world order (Milani et al., 2015). Historical claims for reforms of the international system, which would allow for greater plurality in norm development, were thereby legitimised (BRANCO et al., 2012).

In addition to the relaxation of systemic restrictions on emerging countries' agency, the Brazilian political and economic domestic scene at the beginning of the millennium also contributed positively to boost its foreign policy autonomy. The macroeconomic stabilisation of the 1990s, the equalisation of foreign debt, the rise in commodity prices, and the electoral victory of a left-leaning party in the early 21st century - all helped to increase the country's material, political and symbolic resources, which were then used to implement a more autonomous foreign policy in the financial regime too (Maringoni et al., 2014). The presidential diplomacy of Luiz Inácio Lula da Silva and his close relationship with Chancellor Celso Amorim ushered in an era of sustained reflection about Brazil's role in the world (LIMA and DUARTE, 2013). The combination of favourable environments, both internationally and domestically, had a direct influence over the Brazilian position in international forums (such as the IMF and the G20), and in the political dynamics of foreign policy formulation. The Brazilian government decided that it was time to turn its attention to the multilateral financial arena. In order to facilitate and strengthen the option for multilateralism, the Brazilian government sought to link up with other emerging countries (LIMA, 2005), and to aim for institutional reforms in the agencies' operation (DUARTE, 2013).

However, along with the second decade of the millennium the reversal of that favourable moment has come, both at the domestic and the systemic levels. The new reality brought about a change in the Brazilian government's foreign policy strategy. It is important to analyse what were Brazil's real gains (e.g. political, economic, institutional and symbolic) in the 2000s, as well as to discuss the Brazilian foreign policy strategy arising from the adverse scenario of the 2010s. This article is not intended as a detailed study of the Brazilian position in the various international forums dedicated to financial issues; it focuses, rather, on a wider debate about the Brazilian government's strategy in the financial system and the factors that influence it. The argument here is that the Brazilian government decided to take advantage of the favourable circumstances at the beginning of this century in order to emphasise actions at the multilateral level, but given the difficulty of maintaining its chosen strategy, its foreign policy began to favour other gameboards, without detriment to the advances gained in multilateralism.

The article is divided into three parts, in addition to this introduction: 01. a description of the international scene in the immediate post-crisis and the debate about the Brazilian option for multilateralism; 02. an overview of the systemic and domestic factors that led to the retraction of incentives to multilateralism and to a consequent shift of emphasis; and 03. …

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