March 5, 2013 -- Updated 1846 GMT (0246 HKT)
More Latin America
Is Brazil ready for center stage?
March 5, 2013 -- Updated 1101 GMT (1901 HKT)
The Arena Castelao is the first
stadium ready for the eight-nation Confederations Cup in June 2013. The
competition, which is a dress rehearsal for the the 2014 World Cup, will
bring together four former world champions.
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Brazil prepares for World Cup and Olympics
STORY HIGHLIGHTS
- Brazil continues preparations to host next year's World Cup and 2016 Summer Olympics
- It's crunch time for the South American giant, says Parag Khanna
- An economic boost is essential, says Khanna
- Politicians are yet to live up to their continental scale ambitions, he says
Parag Khanna is a Senior Research Fellow at the New America Foundation and Senior Fellow at the Singapore Institute of International Affairs. His books include "The Second World," "How to Run the World," and "Hybrid Reality."
(CNN) -- The upcoming World Cup and Olympics
guarantee that Brazil's international visibility will continue its rapid
ascent. The country just has to ensure there are seats for all of the
guests. Brazil may be emerging from its reputation as the permanent
"land of tomorrow," but Parag Khanna suspects it will likely get there
only at the last minute.
Parag Khanna
As Brazil's annual
Carnival hangover fades, a more serious road lies ahead. It's crunch
time for the South American giant as it prepares to host next year's
football World Cup and 2016 Summer Olympics. The country definitely
needs an economic boost given the recent downgraded forecast of barely
over 1% growth for 2013. Hosting these mega-events was seen as an
essential spark to get Brazil to overhaul its dilapidated
infrastructure, but despite the advance notice, politicians aren't yet
living up to their continental scale ambitions.
Brazilians excel at
throwing massive parties, but so much is at stake beyond the Games. Can
Brazil really become the "America of South America," unchallenged and
indispensable to all its neighbors? Brazil wants to be the first
superpower from the global south, yet with the equator just crossing a
sliver of the country's north, it has quite a long climb still to join
the league of the wealthy, not just the large.
Brasilia's technocrats
have been aggressive, even creative, in recent years, using pro-poor
policies and monetary intervention to deliver growth and stability. Yet
lower interest rate policy has failed to drive stronger investment, and
business confidence is down due to government intrusions large and small
in banks, car companies, and other sectors. Even the major offshore oil
discoveries haven't yet borne fruit for energy major Petrobras due to
local content requirements that favor less sophisticated domestic
suppliers. While its currency control policy has effectively been
blessed by the IMF, the still massively overvalued Real currency has
undercut exports in what has been an increasingly diversified economy.
Latin America in general,
and Brazil in particular, has been the most urbanized region long
before cities became the dominant meme of global socio-economic studies.
Sao Paulo very much feels like the second-largest city in the world,
but unlike even larger Tokyo, its airport feels third world and public
transportation can scarcely cope with demand. It ranks alongside New
Delhi, Moscow, Beijing and Mexico City in IBM's aptly named Commuter
Pain Index. And with close to 1,000 new cars joining the traffic jams
each day, it's no surprise that the rich take to the air: Paulistas have
the highest rate of private helicopter usage in the world. Overall, the
World Economic Forum's most recent Global Competitiveness Report ranks
Brazil a measly 107 (out of 144) for quality of infrastructure.
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Since taking office just
over two years ago, President Dilma Rousseff has regularly announced
massive infrastructure investment schemes. Airports, roads and railways
have been slated for privatization, hundreds of new airports are planned
to link the vast interior, the country's development bank has pledged
an immediate $10 billion in related spending, private banks are planning
greater lending in the infrastructure space, a Sao Paulo to Rio bullet
train has been announced for completion by 2020, and $26 billion has
been allocated to modernize the country's 34 ports which are responsible
for more than 90% of the country's annual $482 billion in trade. Taken
together, the government promises $100 billion in infrastructure
spending over the next decade, while raising $65 billion in
privatization and auctions.
Discuss these numbers
with any Brazilian, however, and they are apt to stare blankly and
demand, "But where is all the money going?" As popular a figure as
former president Lula was -- and deservedly so for his innovative and
transformative policies such as the targeted cash transfer program
"Bolsa Familia" -- corruption allegations still dog his still-dominant
Workers Party (PT). O Estado de Sao Paulo, the leading daily newspaper,
recently added a "corruption library" to its website
to track the steady tide of suspicious contracts and spending. With the
opposition parties fragmented and scattered, however, the PT may well
be in power long enough to be held accountable to its plans.
As Brazil focuses on its
overhauling its cities, it must remember that urbanization itself won't
drive meaningful growth, but rather empowering the tens of millions in
the urban underclass. Cities like Sao Paulo are designed for an
industrial age while the urban economy has become 85% related to
services. The key question then is how to humanize such mega-cities, the
theme of the upcoming New Cities Foundation summit that Sao Paulo is
hosting in June. (Full disclosure: I serve on the NCF board of
trustees.) The reinvention of Sao Paulo will begin right at its center
with projects such as the URBEM Foundation's Casa Paulista. Multiple
mixed used social and commercial developments designed to be affordable
and professional could help to reintegrate a population that has grown
accustomed to gated communities. In such neighborhoods, Brazilians
should find apprenticeships, vocational training, and more public
libraries that promote literacy, social inclusion, and citizenship, all
topics debated by world-famous architects and experts and locals
together in a new series called Arq.Futuro being held around the country.
There is an opportunity
to conduct this urban regeneration in a way that embodies Brazil's
amazing cultural depth. Like China, the more modern it gets, the more
Brazilian it gets; its identity is enhanced rather than diluted. There
is no higher symbol of this than fabled architect Oscar Niemeyer's
buildings, which manage to be both angular yet still in harmony with
nature. But there are also efforts to restore the lifestyle of Carnival
in Rio, a tradition of street culture and music, rather than just an
annual bonanza, and connecting Rio's favelas closer to its beaches
through cable cars. In Sao Paulo, soccer pitches are being hastily laid
in the outskirts to remind the nation that its best players have come
from conditions of socio-economic adversity. The message is clear:
Brazilians should resist overly consumerist temptations; when they
become too showy, they (especially their soccer stars) get distracted
and under-perform.
In the coming years,
Brazil's image will also be shaped by a new set of stars and issues.
Banks like Itau Unibanco have a healthy balance sheet and appetite to
expand across Latin America and beyond. Secondary regions like Bahia are
now rivaling Rio for visitors reveling in Carnival culture, while
Pernambuco's capital Recife is attracting innovative industries to
relocate. Given that Brazil holds approximately one-third of the world's
biodiversity and 20% of its fresh water in the Amazon rainforest, it is
also becoming a leader in fields ranging from combating deforestation
(which has dropped by 80% since 2004) to plant genetics. And Brazil has
become a leading and positive investor in Africa, as the country's
eloquent foreign minister Antonio Patriota reminded participants at the
recent Munich Security Conference.
The upcoming World Cup
and Olympics guarantee that Brazil's international visibility will
continue its rapid ascent. The country just has to ensure there are
enough seats for all of the guests. Brazil may finally be emerging from
its reputation as the permanent "land of tomorrow," but it will likely
get there at the last minute.
The opinions expressed in this commentary are solely those of Parag Khanna.
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