Open Zeitgeist: Brazil's Geopolitical Pickle
A piece by Leo Torres Co-founder at I'm No Economist
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For the past few weeks, Nat Vasconcellos and I have been writing about how Brazil positions itself in the global picture. Turns out Brazil is still - since the 1800s - the biggest farm in the world, exporting agricultural commodities and little else. But the importance of this giant farm has been increasing with time. Because important geopolitical powerhouses are investing more capital, time, and energy in the region and fearing something bad could happen to their investment. Brazil is only 6th in military power and far away from the countries in position #1 and #2 - the U.S. and China respectively.
A quick overview of the new world order
Oh boy, that will sound so much like conspiracy theory, I already know. But believe it or not, this is the closest I've found as an explanation of how the global geopolitical and economic works.
Before diving in, I can't stress enough that the explanation below is so high-level, so simplistic, that you can't avoid looking it up for yourself later. I advise you don't take my word for granted and you should verify the information. This is the best explanation I (MYSELF) have come to find as the most complete. But the info below is just the tip of the iceberg.
The 3 driving forces
The West is represented by the meta-capitalists. In the 80's-90's they were mainly dominated by bankers like Soros, Rothschild, and their State pawns, presidents, and prime ministers of the West. Today, bankers are still there, but they're accompanied by the tech friends of the kings: Elon, Mark, Sam, Bill - you know them. They're called "meta" capitalists because they've used their money to transcend the power of the free markets. They use the money to create their own regulations and laws via strong lobbies - but pose as agents of liberty and anti-regulation. See Elon and Trump. Not hypocritical at all, right?
Then, you have the representatives of the East: Russia and China. They're driven by the old Bolshevik story of egalitarianism, but use the power of nationalism - and the revenue generated by state-owned oil & gas companies - to expand their geographical power (see China and Taiwan, Russia and Ukraine). It's all about expanding power through Gramsci's playbook of cultural hegemony and the military. Pretty smart.
Last, but not least, you have a third driving force in the Middle East, radical Islam. This is a religion-driven ideology that contrasts and rivals Western culture. We often are bombarded (pun intended) with news of the violence used by radical Islamists to reinforce their power in the Middle Eastern region. But often forget about their cultural power of expansion.
All three are agents only worried about keeping and augmenting their power and influence for themselves. We can't fool ourselves into thinking that these three have others' well-being and best interests in mind. Popular well-being may converge with their interests sometimes, but it's secondary, at best.
Brazil's Place In This Mess
The Russian-Chinese interest in Brazil
One of the agents above takes a deep interest in Brazil as the supplier of food and raw materials such as iron ore and oil. Because, well, imagine if one day a strong Western force imposes sanctions on their main exports… oops, that happened. Thankfully for Mother Russia, China, and the BRICS came to the aid.
China and India especially became customers of Russian oil & gas. India is now one of the biggest oil & gas suppliers of Europe… because they bought it from Russia to be sold back to Europe.
Look at the data in the image below:
Just kidding, here it is:
Russian-Chinese interest in Brazil goes the same way. Nat Vasconcellos explored it beautifully in her article Beyond Carnaval: China’s Strategic Bet on Brazil:
"[...] China has invested significantly in Brazil, particularly in infrastructure and energy. Chinese companies, both state-owned and private, have acquired stakes in Brazil’s electricity grid, ports, and oil fields. The China Three Gorges Corporation, for example, has made substantial investments in Brazil’s energy sector, contributing to the country's renewable energy expansion."
Brazil's Middle-Eastern Best Friend: Mubadala
It's easy to see the Middle-Eastern interest in Brazil by simply typing "Mubadala Brazil" into Google's search bar. You'll see news like these:
Reuters – "Mubadala-backed Zamp to buy Starbucks brand rights and stores in Brazil" (June 2024) - Source
Financial Times – "Mubadala to launch new stock exchange in Brazil" (2023) - Source
Mubadala Investment Company: Alongside Trafigura, Mubadala acquired a 65% stake in Porto Sudeste in 2014 - Source
Mubadala Capital, on the other hand, is the asset management arm of Mubadala Investment Company (Abu Dhabi's sovereign wealth fund), established to oversee a segment of the sovereign fund’s global portfolio. While it is part of the larger Mubadala group, Mubadala Capital operates as an asset manager, managing Mubadala’s investments in certain sectors and even attracting external investors for its private equity funds, which broadens its impact and reach.
In Brazil, Mubadala Capital serves as the operational branch of Mubadala Investment Company, responsible for executing and managing its investments in the country, such as the ones cited above.
They're an important and aggressive investor in Brazilian companies. The size of the checks can be as big as $500Mn and are usually connected to infrastructure. Not to be taken for granted.
The U.S. Jealousy
To avoid missing a piece of the Brazilian pie (or coxinha), the U.S. did what the English Royal Navy did in Brazil in the 1830s to assert dominance: they ported their military ships to Rio de Janeiro. That's old, guys (hi CIA!).
Jokes aside, the U.S. has been trying to strengthen its economic relationship with Brazil by investing in the financial, energy, and commerce sectors. But the apple of the eye has been its soil, especially the ones producing soybean, coffee, and meat.
In the "Agribusiness: The Apple (Soy, Coffee, Meat) Of The Eyes" of my last article I explained that:
"According to the U.S. Government, Brazil has actively pushed for modernization across agribusiness, introducing favorable policies and incentives to attract foreign capital. With U.S. investors backing technology advancements in precision agriculture and digital monitoring systems, Brazilian farms are becoming more efficient, scalable, and globally competitive."
What's weird is that although the U.S. seems to be one of the biggest investors in Brazil (via foreign direct investment), it's still out of the news. That's probably why they kindly reminded the Brazilian government of their military power earlier this year.
I'm flattered that the biggest economies and military powerhouses in the world are trying to be friends with Brazil. But it's also worrisome, isn't it? Who do you think is going to bomb us first if our government chooses one or the other side?
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